EXHIBIT 10.19
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT between UroCor, Inc., a Delaware corporation (the
"Company"), and _______________________________________ (the "Employee") is
effective as of this ____ day of ______, 19__ (the "Effective Date"). Certain
capitalized terms used herein are defined in Section 21.
W I T N E S S E T H:
WHEREAS, the Company considers it to be in the best interests of its
stockholders to encourage the continued employment of certain key employees
of the Company notwithstanding the possibility, threat or occurrence of a
Change in Control of the Company; and
WHEREAS, the Employee is a key employee of the Company; and
WHEREAS, the Company believes that the possibility of the occurrence
of a Change in Control of the Company may result in the termination by the
Employee of the Employee's employment by the Company or in the distraction of
the Employee from the performance of his duties to the Company, in either
case to the detriment of the Company and its stockholders; and
WHEREAS, the Company recognizes that the Employee could suffer
adverse financial and professional consequences if a Change in Control of the
Company were to occur; and
WHEREAS, the Company wishes to enter into this Agreement to protect
the Employee if a Change in Control of the Company occurs, thereby
encouraging the Employee to remain in the employ of the Company and not to be
distracted from the performance of his duties to the Company by the
possibility of a Change in Control of the Company;
NOW, THEREFORE, the parties agree as follows:
SECTION 1. OTHER EMPLOYMENT ARRANGEMENTS.
(a) This Agreement does not affect the Employee's existing or future
employment arrangements with the Company unless a Change in Control of the
Company shall have occurred before the expiration of the term of this
Agreement. The Employee's employment with the Company shall continue to be
governed by the Employee's existing or future employment agreements with the
Company, if any, or, in the absence of any employment agreement, shall
continue to be at the will of the Board of Directors or, if the Employee is
not an officer of the Company at the time of the termination of the
Employee's employment with the Company, the will of the Chief Executive
Officer of the Company, except that if (i) a Change in Control of the Company
shall have occurred before the expiration of the term of this Agreement and
(ii) the Employee's employment with the Company is terminated (whether by the
Employee or the Company or automatically as provided in Section 3) after the
occurrence of that Change in Control of the Company, then the Employee shall
be entitled to receive certain benefits as provided in this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, if following the commencement of any discussions with any person
that ultimately results in a Change in Control of the Company, (i) the
Employee's employment with the Company is terminated, (ii) the Employee is
removed from any material duties or position with the Company, (iii) the
Employee's Base Salary is reduced or (iv) the Employee's annual bonus is
reduced to an amount less than the Benchmark Bonus, then for all purposes of
this Agreement, such Change in Control of the Company shall be deemed to have
occurred on the date immediately prior to the date of such termination,
removal or reduction.
(c) Nothing in this Agreement shall prevent or limit the Employee's
continuing or future participation in any plan, program, policy or practice
of or provided by the Company or any of its Affiliates and for which the
Employee may qualify, nor shall anything herein limit or otherwise affect
such rights as the Employee may have under any contract or agreement with the
Company or any of its Affiliates. Amounts which are vested benefits or which
the Employee is otherwise entitled to receive under any plan, program, policy
or practice of or provided by, or any contract or agreement with, the Company
or any of its Affiliates at or subsequent to the date of termination of
the Employee's employment with the Company shall be payable or otherwise
provided in accordance with such plan, program, policy or practice or
contract or agreement except as explicitly modified by this Agreement.
SECTION 2. CHANGE IN CONTROL OF THE COMPANY. A "Change in Control of
the Company" shall have occurred if, after the Effective Date:
(i) a report on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) shall be filed with the Commission
pursuant to the Exchange Act and that report discloses that any person
(within the meaning of Section 13(d) or Section 14(d)(2) of the
Exchange Act), other than the Company (or one of its subsidiaries) or
any employee benefit plan sponsored by the Company (or one of its
subsidiaries), is the beneficial owner (as that term is defined in Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of 20 percent or more of the
outstanding Voting Stock;
(ii) any person (within the meaning of Section 13(d) or
Section 14(d)(2) of the Exchange Act), other than the Company (or one
of its subsidiaries) or any employee benefit plan sponsored by the
Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any Voting
Stock (or any securities convertible into Voting Stock) and,
immediately after consummation of that purchase, that person is the
beneficial owner (as that term is defined in Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act),
directly or indirectly, of 20 percent or more of the outstanding Voting
Stock (such person's beneficial ownership to be determined, in the case
of rights to acquire Voting Stock, pursuant to paragraph (d) of Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act);
(iii) the consummation of:
(x) a merger, stock exchange, consolidation
or reorganization of the Company with or into any
other person if as a result of such merger, stock
exchange, consolidation or reorganization, 50 percent
or less of the combined voting power of the
then-outstanding securities of such other person
immediately after such merger, stock exchange,
consolidation or reorganization are held in the
aggregate by the holders of Voting Stock immediately
prior to such merger, consolidation or
reorganization;
(y) any sale, lease, exchange or other
transfer of all or substantially all the assets of
the Company and its consolidated subsidiaries to any
other person if as a result of such sale, lease,
exchange or other transfer, 50 percent or less of the
combined voting power of the then-outstanding
securities of such other person immediately after
such sale, lease, exchange or other transfer are held
in the aggregate by the holders of Voting Stock
immediately prior to such sale, lease, exchange or
other transfer; or
(z) a transaction immediately after the
consummation of which any person (within the meaning
of Section 13(d) or Section 14(d)(2) of the Exchange
Act) would be the beneficial owner (as that term is
defined in Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act),
directly or indirectly, of more than 50 percent of
the outstanding Voting Stock;
(iv) the stockholders of the Company approve the dissolution
of the Company; or
(v) during any period of 12 consecutive months, the
individuals who at the beginning of that period constituted the Board
of Directors shall cease to constitute a majority of the Board of
Directors, unless the election, or the nomination for election by the
Company's stockholders, of each director of the Company first elected
during such period was approved by a vote of at least a two-thirds of
the directors of the Company then still in office who were directors of
the Company at the beginning of any such period.
SECTION 3. TERM OF THIS AGREEMENT. The term of this Agreement shall
begin on the Effective Date and shall expire on the first to occur of:
(i) the Employee's death, the Employee's Disability or the
Employee's Retirement, which events shall also be deemed automatically
to terminate the Employee's employment by the Company; or
(ii) the termination by the Employee or the Company of the
Employee's employment by the Company.
The expiration of the term of this Agreement shall not terminate this
Agreement itself or affect the right of the Employee or the Employee's legal
representatives to enforce the payment of any amount or other benefit to
which the Employee was entitled before the expiration of the term of this
Agreement or to which the Employee became entitled as a result of the event
(including the termination, whether by the Employee or the Company or
automatically as provided in this Section 3, of the Employee's employment by
the Company) that caused the term of this Agreement to expire.
SECTION 4. EVENT OF TERMINATION FOR CAUSE. An "Event of
Termination for Cause" shall have occurred if, after a Change in Control of
the Company, the Employee shall have committed:
(i) gross negligence or willful misconduct in connection
with his duties or in the course of his employment with the Company;
(ii) an act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the Company;
(iii) intentional wrongful damage to property of the
Company;
(iv) intentional wrongful disclosure of secret processes
or confidential information of the Company; or
(v) an act leading to a conviction of a felony or a
misdemeanor involving moral turpitude.
For purposes of this Agreement, no act, or failure to act, on the part of the
Employee shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done, or
omitted to be done, by the Employee not in good faith and without reasonable
belief that his action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated as a result of an "Event of Termination for Cause" hereunder
unless and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the Board of Directors then in office at a meeting of the
Board of Directors called and held for such purpose (after reasonable notice
to the Employee and an opportunity for the Employee, together with his
counsel, to be heard before the Board of Directors), finding that, in the
good faith opinion of the Board of Directors, the Employee had committed an
act set forth above in this Section 4 and specifying the particulars thereof
in detail. Nothing herein shall limit the right of the Employee or his legal
representatives to contest the validity or propriety of any such
determination.
SECTION 5. AN EVENT OF TERMINATION FOR GOOD REASON. An "Event of
Termination for Good Reason" shall have occurred if, after a Change in
Control of the Company, the Company shall:
(i) assign to the Employee any duties inconsistent with the
Employee's position (including offices, titles and reporting
requirements), authority, duties or responsibilities with the Company
in effect immediately before the occurrence of the first Change in
Control of the Company or otherwise make any change in any such
position, authority, duties or responsibilities;
(ii) remove the Employee from, or fail to re-elect or appoint
the Employee to, any duties or position with the Company or any of its
Affiliates that were assigned or held by the Employee immediately
before the occurrence of the first Change in Control of the Company,
except that a nominal change in the Employee's title that is merely
descriptive and does not affect rank or status shall not constitute
such an event;
(iii) take any other action that results in a material
diminution in such position, authority, duties or responsibilities or
otherwise take any action that materially interferes therewith;
(iv) reduce the Employee's annual base salary as in effect
immediately before the occurrence of the first Change in Control of the
Company or as the Employee's annual base salary may be increased from
time to time after that occurrence (the "Base Salary");
(v) reduce the Employee's annual bonus to an amount less than
___% of the Employee's Base Salary (the "Benchmark Bonus");
(vi) relocate the Employee's principal office outside of the
metropolitan area of Oklahoma City, Oklahoma;
(vii) fail to (x) continue in effect any bonus, incentive,
profit sharing, performance, savings, retirement or pension policy,
plan, program or arrangement (such policies, plans, programs and
arrangements collectively being referred to herein as "Basic Benefit
Plans"), including, but not limited to, any deferred compensation,
supplemental executive retirement or other retirement income, stock
option, stock purchase, stock appreciation, or similar policy, plan,
program or arrangement of the Company, in which the Employee was a
participant immediately before the occurrence of the first Change in
Control of the Company, or any substitute plan adopted by the Board of
Directors and in which the Employee was a participant immediately
before the occurrence of the last Change in Control of the Company,
unless an equitable and reasonably comparable arrangement (embodied in
a substitute or alternative benefit or plan) shall have been made with
respect to such Basic Benefit Plan promptly following the occurrence of
the last Change in Control of the Company, or (y) continue the
Employee's participation in any Basic Benefit Plan (or any substitute
or alternative plan) on substantially the same basis, both in terms of
the amount of benefits provided to the Employee (which are in any event
always subject to the terms of any applicable Basic Benefit Plan) and
the level of the Employee's participation relative to other
participants, as existed immediately before the occurrence of the first
Change in Control of the Company;
(viii) fail to continue to provide the Employee with benefits
substantially similar to those enjoyed by the Employee under any of the
Company's other employee benefit plans, policies, programs and
arrangements (the "Other Benefit Plans"), including, but not limited
to, life insurance, medical, dental, health, hospital, accident or
disability plans, in which the Employee was a participant immediately
before the occurrence of the first Change in Control of the Company;
(ix) take any action that would directly or indirectly
materially reduce any other non-contractual benefits that were provided
to the Employee by the Company immediately before the occurrence of the
first Change in Control of the Company or deprive the Employee of any
material fringe benefit enjoyed by the Employee immediately before the
occurrence of the first Change in Control of the Company;
(x) fail to provide the Employee with the number of paid
vacation days to which the Employee was entitled in accordance with the
Company's vacation policy in effect immediately before the occurrence
of the first Change in Control of the Company;
(xi) fail to continue to provide Employee with office space,
related facilities and support personnel (including, but not limited
to, administrative and secretarial assistance) (y) that are both
commensurate with Employee's responsibilities to and position with the
Company immediately before the occurrence of the first Change in
Control of the Company and not materially dissimilar to the office
space, related facilities and support personnel provided to other
employees of the Company having comparable responsibility to the
Employee, or (z) that are physically located at the Company's principal
executive offices;
(xii) require the Employee to perform a majority of his duties
outside the Company's principal executive offices for a period of more
than 21 consecutive days or for more than 90 days in any calendar year;
(xiii) fail to honor any provision of any employment agreement
Employee has or may in the future have with the Company or fail to
honor any provision of this Agreement;
(xiv) give effective notice of an election to terminate at the
end of the term or extended the term of any employment agreement
Employee has or may in the future have with the Company in accordance
with the terms of any such agreement; or
(xv) purport to terminate the Employee's employment by the
Company unless notice of that termination shall have been given to the
Employee pursuant to, and that notice shall meet the requirements of,
Section 6.
SECTION 6. NOTICE OF TERMINATION. If a Change in Control of the
Company shall have occurred before the expiration of the term of this
Agreement, any subsequent termination by the Employee or the Company of the
Employee's employment by the Company, or any determination of the Employee's
Disability, shall be communicated by notice to the other party that shall
indicate the specific paragraph of Section 7 pursuant to which the Employee
is to receive benefits as a result of the termination. If the notice states
that the Employee's employment by the Company has been automatically
terminated as a result of the Employee's Disability, the notice shall (i)
specifically describe the basis for the determination of the Employee's
Disability, and (ii) state the date of the determination of the Employee's
Disability, which date shall be not more than ten (10) days before the date
such notice is given. If the notice is from the Company and states that the
Employee's employment by the Company is terminated by the Company as a result
of the occurrence of an Event of Termination for Cause, the notice shall
specifically describe the action or inaction of the Employee that the Company
believes constitutes an Event of Termination for Cause and shall be
accompanied by a copy of the resolution satisfying Section 4. If the notice
is from the Employee and states that the Employee's employment by the Company
is terminated by the Employee as a result of the occurrence of an Event of
Termination for Good Reason, the notice shall specifically describe the
action or inaction of the Company that the Employee believes constitutes an
Event of Termination for Good Reason. Each notice given pursuant to this
Section 6 (other than a notice stating that the Employee's employment by the
Company has been automatically terminated as a result of the Employee's
Disability) shall state a date, which shall be not fewer than thirty (30)
days nor more than sixty (60) days after the date such notice is given, on
which the termination of the Employee's employment by the Company is
effective. The date so stated in accordance with this Section 6 shall be the
"Termination Date". If a Change in Control of the Company shall have occurred
before the expiration of the term of this Agreement, any subsequent purported
termination by the Company of the Employee's employment by the Company, or
any subsequent purported determination by the Company of the Employee's
Disability, shall be ineffective unless that termination or determination
shall have been communicated by the Company to the Employee by notice that
meets the requirements of the foregoing provisions of this Section 6 and the
provisions of Section 9.
SECTION 7. BENEFITS PAYABLE ON CHANGE IN CONTROL AND TERMINATION.
(a) If (x) a Change in Control of the Company shall have occurred before the
expiration of the term of this Agreement, and (y) the Employee's employment
by the Company is terminated (whether by the Employee or the Company or
automatically as provided in Section 3) after the occurrence of that Change
in Control of the Company, the Employee shall be entitled to the following
benefits:
(i) If the Employee's employment by the Company is terminated
(x) by the Company as a result of the occurrence of an Event of
Termination for Cause, or (y) by the Employee before the occurrence of
an Event of Termination for Good Reason, then the Company shall pay to
the Employee the Base Salary accrued through the Termination Date but
not previously paid to the Employee, and the Employee shall be entitled
to any other amounts or benefits provided under any plan, policy,
practice, program, contract or arrangement of or with the Company,
including, but not limited to, the Basic Benefit Plans and the Other
Benefit Plans, which shall be governed by the terms thereof (except as
explicitly modified by this Agreement).
(ii) If the Employee's employment by the Company is
automatically terminated as a result of the Employee's death, the
Employee's Disability or the Employee's Retirement, then (x) the
Company shall pay to the Employee the Base Salary accrued through the
date of the occurrence of that event but not previously paid to the
Employee, and (y) the Employee shall be entitled to any other amounts
or benefits provided under any plan, policy, practice, program,
contract or arrangement of or with the Company, including, but not
limited to, the Basic Benefit
Plans and the Other Benefit Plans, which shall be governed by the terms
thereof (except as explicitly modified by this Agreement).
(iii) If the Employee's employment by the Company is
terminated (x) by the Company otherwise than as a result of the
occurrence of an Event of Termination for Cause, or (y) by the Employee
after the occurrence of an Event of Termination for Good Reason, then
the Employee shall be entitled to the following:
(1) the Company shall pay to the Employee the Base
Salary and compensation for earned but unused vacation time
accrued through the Termination Date but not previously paid
to the Employee;
(2) the Company shall pay to the Employee an amount
equal to the product of (A) the highest aggregate annual
bonus, incentive or other payment of cash compensation in
addition to annual base salary pursuant to any bonus,
incentive, profit-sharing, performance, discretionary pay or
similar policy, plan, program or arrangement of the Company
("Incentive Pay") paid or payable to the Executive (including
any deferred portion thereof) for any fiscal year (or portion
thereof) of the Company ending after the Effective Date (the
"Highest Bonus"), and (B) a fraction, the numerator of which
is the number of days in the current fiscal year of the
Company through the Date of Termination and the denominator of
which is 365;
(3) the Company shall pay to the Employee, as a lump
sum, an amount (the "Severance Payment") equal to one and
one-half (1 1/2) times the sum of:
(A) the amount (including any deferred
portion thereof) of the Base Salary that would have
been paid to the Employee during the fiscal year of
the Company in which the Termination Date occurs
based on the assumption that the Employee's
employment by the Company had continued throughout
that fiscal year at the Base Salary at the highest
rate in effect at any time during the term of this
Agreement; plus
(B) the amount of the Highest Bonus;
(4) the Company (at its sole expense) shall take the
following actions:
(A) throughout the Relevant Period, the
Company shall maintain in effect, and not materially
reduce the benefits provided by, each of the Other
Benefit Plans in which the Employee was a participant
immediately before the Termination Date; and
(B) the Company shall arrange for the
Employee's uninterrupted participation throughout the
Relevant Period in each of such Other Benefit Plans,
PROVIDED that if the Employee's participation after the
Termination Date in any such Other Benefit Plan is not
permitted by the terms of that Other Benefit Plan, then
throughout the Relevant Period, the Company (at its sole
expense) shall provide the Employee with substantially the
same benefits that were provided to the Employee by that Other
Benefit Plan immediately before the Termination Date; and
(5) the Employee shall be entitled to any other
amounts or benefits provided under any plan, policy, practice,
program, contract or
arrangement of or with the Company, including, but not limited
to, the Basic Benefit Plans and the Other Benefit Plans, which
shall be governed by the terms thereof (except as explicitly
modified by this Agreement).
(b) Each payment required to be made to the Employee pursuant to the
foregoing provisions of this Section 7(a) above (i) shall be made by check
drawn on an account of the Company at a bank located in the United States of
America, and (ii) shall be paid (x) if the Employee's employment by the
Company was terminated as a result of the Employee's death, the Employee's
Disability or the Employee's Retirement, not more than thirty (30) days
immediately following the date of the occurrence of that event, and (y) if
the Employee's employment by the Company was terminated for any other reason,
not more than ten (10) days immediately following the Termination Date.
SECTION 8. SUCCESSORS. If a Change in Control of the Company
shall have occurred before the expiration of the term of this Agreement,
(i) the Company shall not, directly or indirectly, consolidate
with, merge into or sell or otherwise transfer its assets as an
entirety or substantially as an entirety to, any person, or permit any
person to consolidate with or merge into the Company, unless
immediately after such consolidation, merger, sale or transfer, the
Successor shall have assumed in writing the Company's obligations under
this Agreement; and
(ii) not fewer than ten (10) days before the consummation of
any consolidation of the Company with, merger by the Company into, or
sale or other transfer by the Company of its assets as an entirety or
substantially as an entirety to, any person, the Company shall give the
Employee notice of that proposed transaction.
SECTION 9. NOTICE. Notices required or permitted to be given
by either party pursuant to this Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the other party or
when deposited with the United States Postal Service as certified or
registered mail with postage prepaid and addressed:
(i) if to the Employee, at the Employee's address
last shown on the Company's records, and
(ii) if to the Company, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxx 00000, directed to the attention of the Company's
President.
or, in either case, to such other address as the party to whom or which such
notice is to be given shall have specified by notice given to the other party.
SECTION 10. WITHHOLDING TAXES. The Company may withhold from
all payments to be paid to the Employee pursuant to this Agreement all taxes
that, by applicable federal or state law, the Company is required to so
withhold.
SECTION 11. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by, or
benefit from, the Company or any of its Affiliates to or for the benefit of
the Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (any such payments,
distributions or benefits being individually referred to herein as a
"Payment," and any two or more of such payments, distributions or benefits
being referred to herein as "Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then the Employee shall be entitled to receive an
additional payment or payments (individually referred to herein as a
"Gross-Up Payment" and any two or more of such additional payments being
referred to herein as "Gross-Up Payments") in an amount such that after
payment by the Employee of all taxes (as defined in Section 11(k)) imposed
upon the Gross-Up Payment, the Employee retains an amount of such Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 11(c) through (i), any
determination (individually, a "Determination") required to be made under
this Section 11(b), including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall initially be made, at the Company's
expense, by nationally recognized tax counsel mutually acceptable to the
Company and the Employee ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and the Employee within 15 business days of the termination of the
Employee's employment, if applicable, or such other time or times as is
reasonably requested by the Company or the Employee. If Tax Counsel makes the
initial Determination that no Excise Tax is payable by the Employee with
respect to a Payment or Payments, it shall furnish the Employee with an
opinion reasonably acceptable to the Employee that no Excise Tax will be
imposed with respect to any such Payment or Payments. The Employee shall have
the right to dispute any Determination (a "Dispute") within 15 business days
after delivery of Tax Counsel's opinion with respect to such Determination.
The Gross-Up Payment, if any, as determined pursuant to such Determination
shall, at the Company's expense, be paid by the Company to the Employee
within five business days of the Employee's receipt of such Determination.
The existence of a Dispute shall not in any way affect the Employee's right
to receive the Gross-Up Payment in accordance with such Determination. If
there is no Dispute, such Determination shall be binding, final and
conclusive upon the Company and the Employee, subject in all respects,
however, to the provisions of Section 11(c) through (i) below. As a result of
the uncertainty in the application of Sections 4999 and 280G of the Code, it
is possible that Gross-Up Payments (or portions thereof) which will not have
been made by the Company should have been made ("Underpayment"), and if upon
any reasonable written request from the Employee or the Company to Tax
Counsel, or upon Tax Counsel's own initiative, Tax Counsel, at the Company's
expense, thereafter determines that the Employee is required to make a
payment of any Excise Tax or any additional Excise Tax, as the case may be,
Tax Counsel shall, at the Company's expense, determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to the Employee.
(c) The Company shall defend, hold harmless, and indemnify the
Employee on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, impositions, assessments,
demands, judgements, settlements, costs and expenses (including reasonable
attorneys', accountants', and experts' fees and expenses) with respect to any
tax liability of the Employee resulting from any Final Determination (as
defined in Section 11(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral communication
with respect to any question, adjustment, assessment or pending or threatened
audit, examination, investigation or administrative, court or other
proceeding which, if pursued successfully, could result in or give rise to a
claim by the Employee against the Company under this Section 11 ("Claim"),
including, but not limited to, a claim for indemnification of the Employee by
the Company under Section 11(c), then such party shall promptly notify the
other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against the Employee ("Employee Claim"),
the Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by
the parties hereto that the terms of any such retention shall expressly
provide that the Company shall be solely responsible for the payment of any
and all fees and disbursements of such counsel and any experts) and the
execution of powers of attorney, PROVIDED that:
(i) within 30 calendar days after the Company receives or
delivers, as the case may be, the Tax Claim Notice relating to such
Employee Claim (or such earlier date that any payment of the taxes
claimed is due from the Employee, but in no event sooner than five
calendar days after the Company receives or delivers such Tax Claim
Notice), the Company shall have notified the Employee in writing
("Election Notice") that the Company does not dispute its obligations
(including, but not limited to, its indemnity obligations) under this
Agreement and that the Company elects to contest, and to control the
defense or prosecution of, such Employee Claim at the Company's sole
risk and sole cost and expense; and
(ii) the Company shall have advanced to the Employee on an
interest-free basis, the total amount of the tax claimed in order for
the Employee, at the Company's request, to pay or cause to be paid the
tax claimed, file a claim for refund of such tax and, subject to the
provisions of the last sentence of Section 11(g), xxx for a refund of
such tax if such claim for refund is disallowed by the appropriate
taxing authority (it being understood and agreed by the parties hereto
that the Company shall only be entitled to xxx for a refund and the
Company shall not be entitled to initiate any proceeding in, for
example, United States Tax Court) and shall indemnify
and hold the Employee harmless, on a fully grossed-up after tax basis,
from any tax imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and
(iii) the Company shall reimburse the Employee for any and all
costs and expenses resulting from any such request by the Company and
shall indemnify and hold the Employee harmless, on fully grossed-up
after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 11(e) hereof, the Company
shall have the right to defend or prosecute, at the sole cost, expense and
risk of the Company, such Employee Claim by all appropriate proceedings,
which proceedings shall be defended or prosecuted diligently by the Company
to a Final Determination; PROVIDED, HOWEVER, that (i) the Company shall not,
without the Employee's prior written consent, enter into any compromise or
settlement of such Employee Claim that would adversely affect the Employee,
(ii) any request from the Company to the Employee regarding any extension of
the statute of limitations relating to assessment, payment, or collection of
taxes for the taxable year of the Employee with respect to which the
contested issues involved in, and amount of, the Employee Claim relate is
limited solely to such contested issues and amount, and (iii) the Company's
control of any contest or proceeding shall be limited to issues with respect
to the Employee Claim and the Employee shall be entitled to settle or
contest, in his sole and absolute discretion, any other issue raised by the
Internal Revenue Service or any other taxing authority. So long as the
Company is diligently defending or prosecuting such Employee Claim, the
Employee shall provide or cause to be provided to the Company any information
reasonably requested by the Company that relates to such Employee Claim, and
shall otherwise cooperate with the Company and its representatives in good
faith in order to contest effectively such Employee Claim. The Company shall
keep the Employee informed of all developments and events relating to any
such Employee Claim (including, without limitation, providing to the Employee
copies of all written materials pertaining to any such Employee Claim), and
the Employee or his authorized representatives shall be entitled, at the
Employee's expense, to participate in all conferences, meetings and
proceedings relating to any such Employee Claim.
(g) If, after actual receipt by the Employee of an amount of a tax
claimed (pursuant to an Employee Claim) that has been advanced by the Company
pursuant to Section 11(e)(ii) hereof, the extent of the liability of the
Company hereunder with respect to such tax claimed has been established by a
Final Determination, the Employee shall promptly pay or cause to be paid to
the Company any refund actually received by, or actually credited to, the
Employee with respect to such tax (together with any interest paid or
credited thereon by the taxing authority and any recovery of legal fees from
such taxing authority related thereto), except to the extent that any amounts
are then due and payable by the Company to the Employee, whether under the
provisions of this Agreement or otherwise. If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 11(e)(ii),
a determination is made by the Internal Revenue Service or other appropriate
taxing authority that the Employee shall not be entitled to any refund with
respect to such tax claimed and the Company does not notify the Employee in
writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of any Gross-Up
Payments and other payments required to be paid hereunder.
(h) With respect to any Employee Claim, if the Company fails to
deliver an Election Notice to the Employee within the period provided in
Section 11(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 11(e)(ii) and (iii)
and (f) hereof, then the Employee shall at any time thereafter have the right
(but not the obligation), at his election and in his sole and absolute
discretion, to defend or prosecute, at the sole cost, expense and risk of the
Company, such Employee Claim. The Employee shall have full control of such
defense or prosecution and such proceedings, including any settlement or
compromise thereof. If requested by the Employee, the Company shall
cooperate, and shall cause its Affiliates to cooperate, in good faith with
the Employee and his authorized representatives in order to contest
effectively such Employee Claim. The Company may attend, but not participate
in or control, any defense, prosecution, settlement or compromise of any
Employee Claim controlled by the Employee pursuant to this Section 11(h) and
shall bear its own costs and expenses with respect thereto. In the case of
any Employee Claim that is defended or prosecuted by the Employee, the
Employee shall, from time to time, be entitled to current payment, on a fully
grossed-up after tax basis, from the Company with respect to costs and
expenses incurred by the Employee in connection with such defense or
prosecution.
(i) In the case of any Employee Claim that is defended or prosecuted
to a Final Determination pursuant to the terms of this Section 11(i), the
Company shall pay, on a fully grossed-up after tax basis, to the Employee in
immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Employee Claim that have not
theretofore been paid by the Company to the Employee,
together with the costs and expenses, on a fully grossed-up after tax basis,
incurred in connection therewith that have not theretofore been paid by the
Company to the Employee, within ten calendar days after such Final
Determination. In the case of any Employee Claim not covered by the preceding
sentence, the Company shall pay, on a fully grossed-up after tax basis, to
the Employee in immediately available funds the full amount of any taxes
arising or resulting from or incurred in connection with such Employee Claim
at least ten calendar days before the date payment of such taxes is due from
the Employee, except where payment of such taxes is sooner required under the
provisions of this Section 11(i), in which case payment of such taxes (and
payment, on a fully grossed-up after tax basis, of any costs and expenses
required to be paid under this Section 11(i) shall be made within the time
and in the manner otherwise provided in this Section 11(i).
(j) For purposes of this Agreement, the term "Final Determination"
shall mean (A) a decision, judgment, decree or other order by a court or
other tribunal with appropriate jurisdiction, which has become final and
non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not
limited to, a closing agreement under Section 7121 of the Code; (C) any
disallowance of a claim for refund or credit in respect to an overpayment of
tax unless a suit is filed on a timely basis; or (D) any final disposition by
reason of the expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and "taxes" mean
any and all taxes of any kind whatsoever (including, but not limited to, any
and all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties,
additions to tax, or additional amounts.
SECTION 12. EXPENSES OF ENFORCEMENT. If a Change in Control of
the Company shall have occurred before the expiration of the term of this
Agreement, then, upon demand by the Employee made to the Company, the Company
shall reimburse the Employee for the reasonable expenses (including
attorneys' fees and expenses) incurred by the Employee in enforcing or
seeking to enforce the payment of any amount or other benefit to which the
Employee shall have become entitled pursuant to this Agreement, including
those incurred in connection with any arbitration initiated pursuant to
Section 20. To the extent that any such reimbursement would be subject to the
Excise Tax, then the Employee shall be entitled to receive Gross-Up Payments
in an amount such that after payment by the Employee of all taxes imposed on
such Gross-Up Payments, the Employee retains an amount equal to the Excise
Tax imposed upon the reimbursement, and the other provisions of Section 11
hereof shall also apply to such circumstance unless the context thereof
otherwise indicates.
SECTION 13. EMPLOYMENT BY WHOLLY OWNED ENTITIES. If, at or
after the Effective Date, the Employee is or becomes an employee of one or
more corporations, partnerships, limited liability companies or other
entities that are, directly or indirectly, wholly owned by the Company
("Wholly Owned Entities"), references in this Agreement to the Employee's
employment by the Company shall include the Employee's employment by any such
Wholly Owned Entity.
SECTION 14. NO OBLIGATION TO MITIGATE; NO RIGHTS OF OFFSET.
(a) The Employee shall not be required to mitigate the amount of any
payment or other benefit required to be paid to the Employee pursuant to this
Agreement, whether by seeking other employment or otherwise, nor shall the
amount of any such payment or other benefit be reduced on account of any
compensation earned by the Employee as a result of employment by another
person.
(b) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Employee or others.
SECTION 15. AMENDMENT AND WAIVER. No provision of this
Agreement may be amended or waived (whether by act or course of conduct or
omission or otherwise) unless that amendment or waiver is by written
instrument signed by the parties hereto. No waiver by either party of any
breach of this Agreement shall be deemed a waiver of any other or subsequent
breach.
SECTION 16. GOVERNING LAW. The validity, interpretation,
construction and enforceability of this Agreement shall be governed by the
laws of the State of Oklahoma.
SECTION 17. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
SECTION 18. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together will constitute the same instrument.
SECTION 19. ASSIGNMENT. This Agreement shall inure to the
benefit of and be enforceable by the Employee's legal representative. The
Company may not assign any of its obligations under this Agreement unless (i)
such assignment is to a Successor and (ii) the requirements of Section 8 are
fulfilled.
SECTION 20. ARBITRATION. Except as otherwise explicitly
provided in Section 11, any dispute between the parties arising out of this
Agreement, whether as to this Agreement's construction, interpretation or
enforceability or as to any party's breach or alleged breach of any provision
of this Agreement, shall be submitted to arbitration in accordance with the
following procedures:
(i) Either party may demand such arbitration by giving notice
of that demand to the other party. The notice shall state (x) the
matter in controversy, and (y) the name of the arbitrator selected by
the party giving the notice.
(ii) Not more than 15 days after such notice is given, the
other party shall give notice to the party who demanded arbitration of
the name of the arbitrator selected by the other party. If the other
party shall fail to timely give such notice, the arbitrator that the
other party was entitled to select shall be named by the Arbitration
Committee of the American Arbitration Association. Not more than 15
days after the second arbitrator is so named, the two arbitrators shall
select a third arbitrator. If the two arbitrators shall fail to timely
select a third arbitrator, the third arbitrator shall be named by the
Arbitration Committee of the American Arbitration Association.
(iii) The dispute shall be arbitrated at a hearing that shall
be concluded within ten days immediately following the date the dispute
is submitted to arbitration unless a majority of the arbitrators shall
elect to extend the period of arbitration. Any award made by a majority
of the arbitrators (x) shall be made within ten days following the
conclusion of the arbitration hearing, (y) shall be conclusive and
binding on the parties, and (z) may be made the subject of a judgment
of any court having jurisdiction.
(iv) All expenses of the arbitration shall be borne by the
Company.
The agreement of the parties contained in the foregoing provisions of this
Section 20 shall be a complete defense to any action, suit or other
proceeding instituted in any court or before any administrative tribunal with
respect to any dispute between the parties arising out of this Agreement.
SECTION 21. INTERPRETATION.
(a) As used in this Agreement, the following terms and phrases have the
indicated meanings:
(i) "Affiliate" and "Affiliates" mean, when used with respect
to any entity, individual, or other person, any other entity,
individual, or other person which, directly or indirectly, through one
or more intermediaries controls, or is controlled by, or is under
common control with such entity, individual or person.
(ii) "Base Salary" has the meaning assigned to that term in
Section 5.
(iii) "Basic Benefit Plans" has the meaning assigned to that
term in Section 5.
(iv) "Benchmark Bonus" has the meaning assigned to that term
in Section 5.
(v) "Board of Directors" means the Board of Directors of the
Company.
(vi) "Change in Control of the Company" has the meaning
assigned to that phrase in Section 2.
(vii) "Claim" has the meaning assigned to such term in Section
11.
(viii) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(ix) "Commission" means the United States Securities and
Exchange Commission or any successor agency.
(x) "Company" has the meaning assigned to that term in the
preamble to this Agreement. The term "Company" shall also include any
Successor, whether the liability of such Successor under this Agreement
is established by contract or occurs by operation of law.
(xi) "Determination" has the meaning assigned to that term in
Section 11.
(xii) "Dispute" has the meaning assigned to that term in
Section 11.
(xiii) "Effective Date" has the meaning assigned to that term
in the preamble to this Agreement.
(xiv) "Election Notice" has the meaning assigned to such term
in Section 11.
(xv) "Employee" has the meaning assigned to such term in the
preamble to this Agreement.
(xvi) "Employee Claim" has the meaning assigned to such term
in Section 11.
(xvii) "Employee's Disability" means:
(A) if no Change in Control of the Company shall have
occurred before the date of determination, the physical or
mental disability of the Employee determined in accordance
with the disability policy of the Company at the time in
effect and generally applicable to its salaried employees; and
(B) if a Change in Control of the Company shall have
occurred at that date, the physical or mental disability of
the Employee determined in accordance with the disability
policy of the Company in effect immediately before the
occurrence of the first Change in Control of the Company and
generally applicable to its salaried employees.
The Employee's Disability, and the automatic termination of the
Employee's employment by the Company by reason of the Employee's
Disability, shall be deemed to have occurred on the date of
determination, PROVIDED that if (1) a Change in Control of the Company
shall have occurred before the expiration of the term of this
Agreement, (2) the Company shall have subsequently given notice
pursuant to Section 6 of the Company's determination of the Employee's
Disability, and (3) the Employee shall have given notice to the Company
that the Employee disagrees with that determination, then (A) whether
the Employee's Disability shall have occurred shall be submitted to
arbitration pursuant to Section 20, and (B) if a majority of the
arbitrators decide that the Employee's Disability had not occurred, at
the date of determination by the Company, then (I) the Employee's
Disability, and the automatic termination of the Employee's employment
by the Company by reason of the Employee's Disability, shall be deemed
not to have occurred, and (II) on demand by the Employee made to the
Company, the Company shall reimburse the Employee for the reasonable
expenses (including attorneys' fees and expenses) incurred by the
Employee in obtaining that decision.
(xviii) "Employee's Retirement" means (x) if no Change in
Control of the Company shall have occurred before the date of the
Employee's proposed retirement, the retirement of the Employee in
accordance with the retirement policy of the Company at the time in
effect and generally applicable to its salaried employees, and (y) if a
Change in Control of the Company shall have occurred at that date, the
retirement of the Employee from the employ of the Company in accordance
with the retirement policy of the Company in effect immediately before
the occurrence of the first Change in Control of the Company and
generally applicable to its salaried employees.
(xix) "Event of Termination for Good Reason" has the meaning
assigned to that phrase in Section 5.
(xx) "Event of Termination for Cause" has the meaning
assigned to that phrase in Section 4.
(xxi) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(xxii) "Excise Tax" has the meaning assigned to that term in
Section 11.
(xxiii) "Expiration Date" has the meaning assigned to that
term in Section 3.
(xxiv) "Final Determination" has the meaning assigned to such
term in Section 11.
(xxv) "Gross-Up Payment" has the meaning assigned to that term
in Section 11.
(xxvi) "Other Benefit Plans" has the meaning assigned to that
term in Section 5.
(xxvii) "Payment" has the meaning assigned to that term in
Section 11.
(xxviii) "person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited
partnership, limited liability company, trust, unincorporated
organization, government, or agency or political subdivision of any
government.
(xxix) "Relevant Period" means a period beginning on the
Termination Date and ending on the first to occur of (x) the last day
of the 18th calendar month immediately following the calendar month in
which the Termination Date occurs, (y) the date on which the Employee
becomes a full time employee of another person and (z) the Employee's
normal retirement date, determined in accordance with the retirement
policy of the Company in effect on the Termination Date.
(xxx) "Severance Payment" has the meaning assigned to that
term in Section 7.
(xxxi) "Successor" means a person with or into which the
Company shall have been merged or consolidated or to which the Company
shall have transferred its assets as an entirety or substantially as an
entirety.
(xxxii) "Tax" has the meaning assigned to that term in Section
11.
(xxxiii) "Tax Claim Notice" has the meaning assigned to that
term in Section 11.
(xxxiv) "Tax Counsel" has the meaning assigned to that term in
Section 11.
(xxxv) "Termination Date" has the meaning assigned to that
term in Section 6.
(xxxvi) "this Agreement" means this Change in Control
Agreement as it may be amended from time to time in accordance with
Section 15.
(xxxvii) "Underpayment" has the meaning assigned to that term
in Section 11.
(xxxviii) "Voting Stock" means shares of capital stock of the
Company the holders of which are entitled to vote for the election of
directors, but excluding shares entitled to so vote only upon the
occurrence of a contingency unless that contingency shall have
occurred.
(xxxix) "Wholly Owned Entities" has the meaning assigned to
that term in Section 13.
(b) In the event of the enactment of any successor provision to any
statute or rule cited in this Agreement, references in this Agreement to such
statute or rule shall be to such successor provision.
(c) The headings of Sections of this Agreement shall not control the
meaning or interpretation of this Agreement.
(d) References in this Agreement to any Section are to the
corresponding Section of this Agreement unless the context otherwise indicates.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the Effective Date.
"COMPANY"
UROCOR, INC.
By_____________________________________
Name:__________________________________
Title:_________________________________
"EMPLOYEE"
-------------------------------------
Name:________________________________
SCHEDULE 10.1
CHANGE IN CONTROL AGREEMENTS
NAME PERCENT
----- -------
Xxxxxxx X. Xxxxxx, Chief Executive Officer and President 50%
Xxxxx X. Xxxxxx, Senior Vice President and Chief Financial Officer 30%
Xxxx X. Xxxx, Senior Vice President and General Manager, Sales, Marketing and Operations 40%
Xxxx X. Xxxxxxxxx, Xx., Vice President for Business Development 35%
Xxxxxx X. Xxxxxx, Vice President and General Manager, UroSciences Group 30%
Xxx X. Xxxxxxxxxx, Vice President, Chief Compliance Officer 0%
Xxxxxx X. X'Xxxx, Medical Director 20%
