FORM OF SEVERANCE AGREEMENT
EXHIBIT
10.1
FORM
OF SEVERANCE AGREEMENT
THIS
AGREEMENT, dated ___________ is made by and between
AngioDynamics,
Inc., a Delaware corporation (the "Company"), and _____________ (the
"Executive").
WHEREAS,
the Company considers it essential to the best interests of its shareholders
to
xxxxxx the continued employment of key management personnel; and
WHEREAS,
the Board recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control exists and that such possibility, and
the
uncertainty and questions which it may raise among management, may result in
the
departure or distraction of management personnel to the detriment of the Company
and its shareholders; and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce
and
encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
the
possibility of a Change in Control;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1. Defined
Terms. The definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.
2. Term
of Agreement. The Term of this Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2008; provided, however,
that
effective January 1, 2009 and each January 1 thereafter, the Term that is then
in effect shall automatically be extended for one additional year unless the
Company has given notice before the January 1 in question that the Term that
is
in effect at the time such notice is given will not be extended; and further
provided, however, that if a Change in Control occurs during the Term, the
Term
shall expire no earlier than twelve (12) calendar months after the calendar
month in which such Change in Control occurs. Notwithstanding the foregoing,
this Agreement shall terminate if the Executive ceases to be an employee of
the
Company and its subsidiaries for any reason prior to a Change in Control. However,
anything in this
Agreement (including the preceding sentence) to the contrary notwithstanding,
if
a Change in Control occurs and if, within three months prior to the date on
which such Change in Control occurs, the Executive's employment with the Company
is terminated by the Company without Cause or an event occurs that would, if
it
took place after the Change in Control, constitute Good Reason for termination
of employment by the Executive, and if it is reasonably demonstrated by the
Executive that
such
termination of employment by the Company or event constituting Good Reason
for
termination of employment by the Executive (a) was undertaken at the request
of
a third party who has taken steps reasonably calculated to effect the Change
in
Control, or (b) otherwise arose in connection with or in anticipation of the
Change in Control, then for purposes of this Agreement such termination of
employment by the Company without Cause or event constituting Good Reason shall
be deemed to occur during the 12 month period following the Change in Control
and, if the Executive terminates his employment for such Good Reason before
the
Change in Control, such termination of employment by the Executive shall
likewise be deemed to occur during the 12 month period following the Change
in
Control.
3. Company's
Covenants Summarized. In order to induce the Executive
to remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments
and
the
other payments and benefits described herein. Except as provided in Section
2,
Section 6.3, Section 9.1 or Section 14.2 hereof, no amounts shall be payable
under this Agreement unless the Executive's employment with the Company
terminates following a Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied contract of employment
enforceable against the Company nor, except as provided in Section 4 below,
enforceable against the Executive, and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not have any right
to
be retained in the employ of the Company.
4. The
Executive's Covenants. The Executive agrees to remain in the employ of the
Company, subject to the terms and conditions of this Agreement, if a Potential
Change in Control occurs during the Term and the Executive is then in the employ
of the Company, until the earliest of (a) the date which is six (6) months
from
the date of such Potential Change in Control, (b) the date of a Change in
Control, (c) the date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death, Disability or Retirement,
or
(d) the termination by the Company of the Executive's employment for any reason;
provided that Executive’s agreement to remain in the employ of the Company shall
be subject to the condition that no adverse change occurs after the Potential
Change in Control in his title, duties, responsibilities, authority, reporting
relationships, compensation, benefits or indemnification rights.
5. Certain
Compensation Other Than Severance Payments.
5.1 If
the Executive's employment shall be terminated for any reason following a Change
in Control and during the Term, the Company shall pay the Executive his full
salary through the date of termination at the rate in effect immediately prior
to the date of termination or, if higher, the rate in effect immediately prior
to the first occurrence of an event or circumstance constituting Good Reason,
together with all compensation and benefits payable to the Executive through
the
date of termination under the terms of the Company's compensation and benefit
plans, programs and arrangements as in effect immediately prior to the date
of
termination or, if more favorable to the Executive, as in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason.
5.2 Subject
to Section 6.1 hereof, if the Executive's employment shall be terminated for
any
reason following a Change in Control and during the Term, the Company shall
pay
to the Executive the Executive's normal post-termination compensation and
benefits as such payments become due. Any such post-termination compensation
and
benefits shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation and benefit plans, programs and
arrangements as in effect immediately prior to the date of termination or,
if
more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
6. Severance
Payments; Excise Tax.
6.1 Subject
to Section 6.2 and Section 6.3 hereof, if the Executive's employment is
terminated following a Change in Control and during the Term either by the
Company or by the Executive, other than (a) by the Company for Cause, (b) by
reason of death or Disability, or (c) by the Executive without Good
Reason, (any such employment termination being hereafter sometimes referred
to
as a "Compensable Termination"), then the Company shall pay the Executive
the amounts, and provide the Executive the benefits, described in this Section
6.1 ("Severance Payments"), in addition to any payments and benefits to
which the Executive is entitled under Sections 5 and 6.3 hereof. Notwithstanding
the foregoing, the Executive shall not be eligible to receive any payment or
benefit provided for in this Section 6.1 unless the Executive shall have
executed a release substantially in the form of Exhibit A hereto effective
as of
the date of the Compensable Termination or a date subsequent thereto and shall
not have revoked said release. The Severance Payments are in lieu of
any severance benefits that would otherwise be payable or provided pursuant
to
any severance plan or practice of the Company.
(i) The
Company shall pay the Executive, at the time provided in Section 6.2 below,
his
annual bonus for the fiscal year of the Company preceding the fiscal year of
the
Company in which the Compensable Termination occurs, if unpaid at the time
of
the Compensable Termination, the amount of such bonus to be determined by the
Compensation Committee of the Board on a basis no less favorable to the
Executive than its bonus determinations with respect to the Executive prior
to
the Change in Control, unless the Committee made no bonus determinations with
respect to the Executive before the Change in Control, in which case on a basis
no less favorable to the Executive than its bonus determinations with respect
to
other executives of comparable rank before the Change in Control.
(ii) The
Company shall pay the Executive, at the time provided in Section 6.2 below,
a
prorated annual bonus for the fiscal year of the Company in which the
Compensable Termination occurs, such prorated bonus to be determined by
multiplying the “Applicable Average Bonus” as defined below in this subsection
(ii) by a fraction the numerator of which shall be the number of days
elapsed in such fiscal year through (and including) the date on which the
Compensable Termination occurs and the denominator of which shall be the number
365. For purposes of this Agreement, the “Applicable Average
Bonus” means the higher of (A) the average of all annual bonuses (including
any deferred bonuses) awarded to the Executive during the 36 months immediately
preceding the Compensable Termination or, if the Executive was employed by
the
Company for less than 36 months before the Compensable Termination, during
the
period of his employment by the Company prior to the Compensable Termination
(annualizing any bonus awarded for less than a full year of employment), or
(B)
the average of all annual bonuses (including any deferred bonuses) awarded
to
the Executive during the three fiscal years of the Company that precede the
fiscal year in which the Compensable Termination occurs or during the portion
of
such three fiscal years in which he was employed by the Company (annualizing
any
bonus awarded for less than a full year of employment), or (C) the average
of
all annual bonuses (including any deferred bonuses) awarded to the Executive
during the 36 months preceding the date on which the Change in Control occurred
or during the portion of such 36 month period in which he was employed by the
Company (annualizing any bonus awarded for less than a full year of
employment).
(iii) The
Company shall pay the Executive, at the time provided in Section 6.2 below,
a
lump sum cash payment equal to ____ (_) times the Executive's annual base salary
at the rate in effect immediately prior to the Compensable Termination or,
if
higher, in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason (“Base Salary”).
(iv) The
Company will pay the Executive for all earned but unused vacation leave at
the
time of the Compensable Termination.
(v) At
the time provided in Section 6.2 below, the Company shall, in accordance with
the Company’s automobile policy for officers as in effect on the date of this
Agreement (the “Auto Policy”), (A) transfer title to the Executive's
Company-provided automobile to the Executive at the Company’s expense, or (B) if
the Company leases rather than owns such automobile, purchase such automobile
and transfer title to such automobile to the Executive at the Company's expense,
or (C) if the Executive is receiving a car allowance in lieu of being provided
with a Company-owned or Company-leased automobile, pay the Executive the book
value of the automobile for which the allowance is paid, up to the amount
provided in the Auto Policy.
6.2 All
payments to be made pursuant to subsection (i), (ii), (iii), and (v) of
Section 6.1 above shall be made within thirty (30) calendar days
after the date on which a Separation from Service occurs coincident with or
following, or within 30 days before, the date on which the Compensable
Termination occurs (the “Separation from Service Date”) unless
on the Separation from Service Date the Executive is a Specified
Employee, in which case such payments shall be made six months and one day
after
the Separation from Service Date (or, if earlier, the date of the Executive’s
death). For purposes of the preceding sentence, a Specified Employee
means a “specified employee” who is subject to the special rule set
forth in subsection (a)(2)(B)(i) of section 409A of the Code and the regulations
thereunder (including, without limitation, Proposed Treasury Regulation section
1.409A-1(i)) with respect to such payments.
6.3 (A) Notwithstanding
any provision of this Agreement to the contrary, in the event that any payment
or benefit received or to be received by the Executive in connection with a
Change in Control or the termination of the Executive's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments but excluding any
payment to be made pursuant to this subsection 6.3(A), being hereinafter called
"Total Payments") would be subject (in whole or part) to the Excise Tax,
then the cash Severance Payments shall first be reduced, and the other payments
and benefits hereunder shall thereafter be reduced, to the extent necessary
so
that no portion of the Total Payments will be subject to the Excise Tax, but
only if (i) is greater than or equal to (ii), where (i) equals the reduced
amount of such Total Payments minus the aggregate amount of federal, state
and
local income taxes on such reduced Total Payments and (ii) equals the unreduced
amount of such Total Payments minus the sum of (a) the aggregate amount of
federal, state and local income taxes on such Total Payments and (b) the amount
of Excise Tax to which the Executive would be subject in respect of such
unreduced Total Payments; provided, however, that the Executive may elect to
have the other payments and benefits hereunder reduced (or eliminated) prior
to
any reduction of the cash Severance Payments. However, if the Executive would
realize at least $50,000 more after taxes from the Total Payments if the Company
were to “gross up” the Excise Tax on the Total Payments rather than apply the
preceding sentence, then the preceding sentence shall be disregarded and the
Company shall instead pay the Executive an amount of money that would be
sufficient to pay the Excise Tax on the Total Payments. Whether the Executive
would realize at least $50,000 more after taxes if he were grossed up, and
the
amount of the gross up to be paid, shall be determined by assuming (whether
or
not such is in fact the case) that the Executive is subject to federal income
taxation at the highest marginal rate of federal income tax and to state and
local income taxation at the highest marginal rates of state and local income
taxes in the state and locality of the Executive’s residence on the date on
which the Change in Control occurs or at the time provided in Section 6.2 above
(whichever is the date as of which the determination in question is made in
accordance with the next sentence of this paragraph); provided that in no event
shall the Executive’s marginal tax rate including the Excise Tax be assumed to
exceed seventy percent (70%) for purposes of calculating the amount of
gross up to be paid. The amount of money payable to the Executive pursuant
to
the two preceding sentences, if any, shall be determined as of the date on
which
a Change in Control occurs and shall be paid within ten (10) calendar days
after the date on which occurs “a change in the ownership or effective control
of the corporation, or in the ownership of a substantial portion of the assets
of the corporation” within the meaning of section 409A(a)(2)(A)(v) of the Code
(whether occurring at the same time as or after the date on which a Change
in
Control occurs); and if a Compensable Termination occurs after the date on
which
a Change in Control occurs, the amount of money payable to the Executive
pursuant to the two preceding sentences, if any, shall be re-determined as
of
the date of the Compensable Termination and any balance due the Executive shall
be paid at the time provided in Section 6.2 above.
(B) For
purposes of determining whether and the extent to which the Total Payments
will
be subject to the Excise Tax, (i) no portion of the Total Payments the receipt
or enjoyment of which the Executive shall have waived at such time and in such
manner as not to constitute a "payment" within the meaning of section 280G(b)
of
the Code shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of the accounting
firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the Code
(including, without limitation, by reason of section 280G(b)(4)(A) of the Code)
and, in calculating the Excise Tax, no portion of such Total Payments shall
be
taken into account which, in the opinion of the Auditor, constitutes reasonable
compensation for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such
reasonable compensation, and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of sections 280G(d)(3) and
(4)
of the Code. In the event that the Auditor is serving as accountant or auditor
for the individual, entity or group effecting the “change in ownership or
effective control” or “change in the ownership of a substantial portion of the
assets” (within the meaning of Code section 280G(b)(2)(A)) that gives rise to
the Excise Tax, or in the event that the Auditor for any reason is unable or
unwilling to make the determinations required hereunder, the Executive shall
designate another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Auditor hereunder). All fees and expenses of the Auditor
shall be borne solely by the Company.
(C) At the time
that payments are made under this Agreement, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from the
Auditor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement). If the Executive objects
to
the Company's calculations, the Company shall pay to the Executive such portion
of the Severance Payments (up to 100% thereof) and such amount of money referred
to in subsection (A) of this Section 6.3 as the Executive reasonably determines
(based on the written opinion of competent tax counsel, a copy of which opinion
shall be provided to the Company) is necessary to result in the proper
application of subsection (A) of this Section 6.3.
7. Payments
During Dispute. Any payments to which the Executive may be entitled under
this Agreement, including, without limitation, under sections 5 and 6 hereof,
shall be made forthwith on the applicable date(s) for payment specified in
this
Agreement. If for any reason the amount of any payment due to the
Executive cannot be finally determined on that date, such amount shall be
estimated on a good faith basis by
the
Company and the estimated amount shall be paid no later than 10 days after
such
date. As soon as practicable thereafter, the final determination of
the amount due shall be made and any adjustment requiring a payment to or from
the Executive shall be made as promptly as
practicable.
8. No
Mitigation. The Company agrees that, if the Executive's employment with the
Company terminates during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 6 hereof or any other provision
of
this Agreement. Further, the amount of any payment or benefit provided for
in
this Agreement shall not be reduced (a) by any compensation earned by the
Executive as the result of employment by another employer, (b) by retirement
benefits, (c) by offset against any amount claimed to be owed by the Executive
to the Company, or (d) otherwise.
9. Successors;
Binding Agreement.
9.1 In
addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether
direct
or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform the Company’s obligations under this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. Failure of the Company to obtain
such assumption and agreement prior to the effectiveness of any such succession
during the Term shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were
to
terminate the Executive's employment for Good Reason after a Change in Control
and during the Term, except that, for purposes of implementing the foregoing,
the date on which the Executive’s employment terminates (for any reason other
than Cause) within 30 days before, or at any time during the Term and on or
after, the date on which any such succession becomes effective during the Term
shall be deemed the date of the Compensable Termination.
9.2 This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than amounts which,
by
their terms, terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall
be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
10. Notices.
For the purpose of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the Executive, to his most
recent
address
shown on the books and records of the Company at the time notice is given and,
if to the Company, to the address set forth below, or to such other address
as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon actual
receipt:
To
the Company:
AngioDynamics,
Inc.
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attention: Chief Executive Officer
11. Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Board.
No
waiver by either party hereto at any time of any breach by the other party
hereto of, or of any lack of compliance with, any condition or provision of
this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. This Agreement constitutes the entire agreement of the parties
concerning the specific subject matter addressed by this Agreement and
supersedes all prior agreements addressing the terms and conditions contained
herein. Nothing in this Agreement is intended to amend or otherwise
alter the change in control provisions or any other provisions of any (a) stock
option or other compensation or incentive award that may heretofore have been
or
may hereafter be granted to the Executive, or (b) employee benefit or fringe
benefit plan in which the Executive may heretofore have been or may hereafter
be
a participant. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New York. All
references to sections of the Code or the Exchange Act shall be deemed also
to
refer to any successor provisions to such sections and to IRS or SEC regulations
and official guidance published thereunder. Any payments provided for hereunder
shall be subject to any applicable withholding required under federal, state
or
local law and any additional withholding to which the Executive has agreed.
The
obligations of the Company and the Executive under this Agreement which by
their
nature may require either partial or total performance after the expiration
of
the Term (including, without limitation, those under Sections 6 and 7 hereof)
shall survive such expiration.
12. 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.
13. Counterparts.
This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement
of Disputes; Arbitration.
14.1 All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board and shall
be in writing. Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Executive in writing and shall set forth
the
specific reasons for the denial and the specific provisions of this Agreement
relied upon. The Board shall afford a reasonable opportunity to the Executive
for a review of the decision denying a claim and shall further allow the
Executive to appeal to the Board a decision of the Board within sixty (60)
days
after
notification
by the Board that the Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in the Albany, New York metropolitan area in accordance with
the
employment dispute resolution rules of the American Arbitration Association
then
in effect. The arbitrator shall have the authority to require that the Company
reimburse the Executive for the payment of all or any portion of the legal
fees
and expenses incurred by the Executive in connection with such dispute or
controversy. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
14.3 The Company agrees to amend this
Agreement on or before December 31, 2007 (or such later date, if any, to which
the December 31, 2005 date referred to in Q&A-19 of IRS Notice 2005-1 is
further extended) in the respects that the Company reasonably determines to
be
necessary or advisable to enable the Executive to receive all amounts and
benefits payable under this Agreement at the times herein provided (or as close
thereto as is practicable and permissible) without inclusion of any amounts
in
the Executive’s income pursuant to Section 409A(a)(1)(A) of the
Code. Any such amendments shall be subject to the written consent of
the Executive. The Company also agrees to use commercially reasonable
efforts to administer this Agreement, and operate any deferred compensation
plans in which the Executive participates from time to time that are aggregated
with this Agreement or with any payment or benefit provided by this Agreement
for purposes of Section 409A of the Code (e.g., account balance plans,
nonaccount balance plans, separation pay plans, and plans that are neither
account balance nor nonaccount balance plans), in good faith compliance with
Code Section 409A to the extent necessary to avoid inclusion of any amounts
or
benefits payable hereunder in the Executive’s income pursuant to Section
409A(a)(1)(A) of the Code.
15. Definitions.
For purposes of this Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12
of
the Exchange Act.
(B) "Aplicable Average
Bonus"shall have the meaning set forth in subsection (ii) of Section
6.1.
(C) "Auditor"
shall have the meaning set forth in Section 6.3(B) hereof.
(D) "Base
Amount" shall have the meaning set forth in section 280G(b)(3) of the
Code.
(E) "Base Salary"
shall have the meaning set forth in subsection (iii) of Section
6.1.
(F) "Beneficial
Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
(G) "Board"
shall mean the Board of Directors of the Company.
(H) "Cause"
for termination by the Company of the Executive's employment shall mean (i)
the
willful and continued failure by the Executive to substantially perform the
Executive's duties with the Company as such duties were in effect prior to
any
change therein constituting Good Reason (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness or any such
failure after the occurrence of an event constituting Good Reason for
resignation by the Executive) after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive's duties, provided that such failure will constitute
Cause only if it remains uncured for more than thirty (30) days following
receipt by the Executive of such written demand from the Board; (ii) the
engaging by the Executive in willful conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise, provided that such conduct will constitute Cause only if it remains
uncured for more than thirty (30) days following receipt by the Executive of
a
written demand from the Board to cease such conduct; (iii) the Executive’s
insubordination, as defined from time to time by the Board, provided that
insubordination will constitute Cause only if it remains uncured for more than
thirty (30) days following receipt by the Executive of a written demand from
the
Board to cease such insubordination; or (iv) the Executive's conviction of
(a) a
felony or (b) a crime involving fraud, dishonesty or moral turpitude. For
purposes of clauses (i) and (ii) of this definition, no act, or failure to
act,
on the Executive's part shall be deemed "willful" unless done, or omitted to
be
done, by the Executive not in good faith and without reasonable belief that
the
Executive's act, or failure to act, was in the best interest of the
Company. The Company shall notify the Executive in writing of any
employment termination purporting to be for Cause on or before the date of
such
termination, which writing shall describe with specificity the conduct alleged
to constitute Cause for such termination. Any purported termination
of employment by the Company for Cause which does not satisfy the applicable
requirements of this Section 15(H) shall be conclusively deemed to be a
termination of employment by the Company without Cause for purposes of this
Agreement.
(I) A
"Change in Control" shall mean that any of the following events has
occurred:
(i) any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company or
its Affiliates) representing more than 40% of the combined voting power of
the
Company's then outstanding securities, excluding any Person who becomes such
a
Beneficial Owner in connection with a transaction described in clause (A) of
paragraph (iii) below; or
(ii) the
following individuals cease for any reason to constitute a majority
of the number of directors serving on the Board: individuals who, at the
beginning of any period of two consecutive years or less (not including any
period prior to the date of this Agreement), constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
the
Company) whose appointment or election by the Board or nomination for election
by the Company's shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of such period or whose appointment, election or nomination
for
election was previously so approved or recommended; or
(iii) there
is consummated a merger or consolidation of the Company or any Subsidiary with
any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership
of
any trustee or other fiduciary holding securities under an employee benefit
plan
of the Company or any Subsidiary, at least 60% of the combined voting power
of
the securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger
or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates) representing more than 40% of
the
combined voting power of the Company's then outstanding securities;
or
(iv) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of all or substantially
all of the Company's assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by shareholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.
(J) "Code"
shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(K) "Company"
shall mean AngioDynamics, Inc. and, except in determining under Section 15(I)
hereof whether or not any Change in Control of the Company has occurred, shall
include any successor to its business and/or assets which assumes and agrees
to
perform this Agreement by operation of law, or otherwise.
(L) “Compensable
Termination” shall have the meaning set forth in Section 6.1.
(M) "Disability"
shall be deemed the reason for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity due to physical or
mental illness, the Executive shall have been absent from the full-time
performance of the Executive's duties with the Company for a period of six
consecutive months or for six non-consecutive months within any period of 12
consecutive months.
(N) "Exchange
Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(O) "Excise
Tax" shall mean any excise tax imposed under section 4999 of the
Code.
(P) "Executive"
shall mean the individual named in the first paragraph of this
Agreement.
(Q) "Good
Reason" for termination by the Executive of the Executive's employment shall
mean the occurrence (without the Executive's express written consent) after
any
Change in Control, of any one of the following acts by the Company, or failures
by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (iii), (iv) or (vii) below, such act or failure
to
act is corrected within thirty (30) calendar days after the Company’s receipt of
written notice thereof given by the Executive within thirty (30) calendar days
of such act or failure to act:
(i) the
assignment to the Executive of any duties inconsistent with the Executive's
status or position in the Company immediately prior to the Change in Control,
or
a substantial adverse alteration in the nature, status or scope of the
Executive's responsibilities or authority from his responsibilities or authority
immediately prior to the Change in Control, or a reduction in his
title;
(ii) a
reduction by the Company in the Executive's annual base salary as in effect
on
the date of this Agreement or as the same may be increased from time to
time;
(iii) a significant
reduction in compensation, benefits or reimbursements provided under any
employment, compensation, employee benefit or reimbursement plan or program
in
which the Executive is a participant which is not replaced with substantially
equivalent compensation, benefits or reimbursements under another plan, program
or arrangement at substantially the same cost (if any) to the
Executive;
(iv) the
Company fails to pay or provide any amount or benefit that the Company is
obligated to pay or provide under this Agreement or any other employment,
compensation, benefit or reimbursement plan, agreement or arrangement of the
Company to which the Executive is a party or in which the Executive
participates;
(v) the
Company fails to pay the Executive a bonus, for each fiscal year of Employer
that terminates following a Change in Control and during the Term, at least
equal to 80% of the Applicable Average Bonus;
(vi) the
relocation of the Executive's principal place of employment to a location which
increases the Executive's one-way commuting distance by more than 40 miles,
or
the Company's requiring the Executive to travel on business other than to an
extent substantially consistent with the Executive's business travel obligations
prior to the Change in Control;
(vii) a
significant adverse change occurs, whether of a quantitative or qualitative
nature, in the indemnification protection provided to the Executive for acts
and
omissions arising out of his service on behalf of the Company or any other
entity at the request of the Company; or
(viii) The
Company fails to obtain the assumption of this Agreement pursuant to
Section 9.1.
The
Executive's right to terminate the Executive's employment for Good Reason shall
not be affected by the Executive's incapacity due to physical or mental illness.
The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
(R) "Person"
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or
any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially
the
same proportions as their ownership of stock of the Company.
(S) "Potential
Change in Control" shall be deemed to have occurred if the event set forth
in
any one of the following paragraphs shall have occurred:
(i) the
Company enters into an agreement, the consummation of which would result in
the
occurrence of a Change in Control;
(ii) the
Company or any Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in
Control;
(iii) any
Person becomes the Beneficial Owner, directly or indirectly, of securities
of
the Company representing 15% or more of either the then outstanding shares
of
common stock of the Company or the combined voting power of the Company's then
outstanding securities (not including in the securities beneficially owned
by
such Person any securities acquired directly from the Company or its
Affiliates); or
(iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement,
a
Potential Change in Control has occurred.
(T) "Retirement"
shall be deemed the reason for the termination by the Executive of the
Executive's employment if such employment is terminated in accordance with
the
Company's retirement policy, including early retirement, generally applicable
to
its salaried employees.
(U) "Separation
from Service" means termination of employment with the Company. However, the
Executive shall not be deemed to have a Separation from Service if he continues
to provide services to the Company in a capacity other than as an employee
and
if he is providing services at an annual rate that is fifty percent or more
of
the services he rendered, on average, during the immediately preceding three
full calendar years of employment with the Company (or if employed by the
Company less than three years, such lesser period) and the annual remuneration
for his services is fifty percent or more of the annual remuneration earned
during the final three full calendar years of employment (of if less, such
lesser period); provided, however, that a Separation from Service will be deemed
to have occurred if his service with the Company is reduced to an annual rate
that is less than twenty percent of the services he rendered, on average, during
the immediately preceding three full calendar years of employment with the
Company (or if employed by the Company less than three years, such lesser
period) or the annual remuneration for his services is less than twenty percent
of the annual remuneration earned during the three full calendar years of
employment with the Company (or if less, such lesser period).
(V) "Separation
from Service Date" shall have the meaning set forth in Section 6.2
hereof.
(W) "Severance
Payments" shall have the meaning set forth in Section
6.1 hereof.
(X) "Subsidiary"
means a corporation or other form of business association
of which shares (or other ownership interests) having more than 50% of the
voting power are owned or controlled, directly or indirectly, by the
Company.
(Y) "Term"
shall mean the period of time described in Section 2 hereof (including any
extension or continuation described therein).
(Z) "Total
Payments" shall mean those payments so described in Section
6.3 hereof.
IN
WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
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ANGIODYNAMICS,
INC.
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|
By:
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|
Name:
|
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|
Title:
|
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|
Executive
|
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EXHIBIT
A - COMPLETE AND PERMANENT RELEASE
TO: ________________
(the "Executive")
DATE: _________________
The
Executive is hereby offered severance payments and benefits in accordance with
and subject to the terms of the Severance Agreement between the Executive and
AngioDynamics, Inc. (the “Company”), dated _______________ (the “Agreement”) in
consideration of the Executive's execution and return of this Complete and
Permanent Release (the "Release").
The
Executive's severance payments and benefits pursuant to the Agreement will
commence at the time provided in the Agreement, provided that the Executive
has
not revoked this Release as hereinafter described. The Executive has seven
(7)
calendar days from the date that the Executive signs this Release to revoke
this
Release by giving written notice of the Executive's intent to do so to the
Company. This Release shall not become effective or enforceable until this
seven
(7) day period has expired. If the Executive revokes this Release, the Executive
will not receive the Severance Payments as defined in the
Agreement.
By
signing below, the Executive agrees that execution of this Release operates
to,
and hereby does, release the Company, its subsidiaries and affiliates, its
(and
its subsidiaries' and affiliates') present and former employees, officers,
directors, shareholders, representatives and agents, in their individual and
representative capacities (the "Released Parties"), to the fullest extent
permitted by law, from all claims or demands (the "Claims") the Executive has
had, presently has or may have, based on the Executive's employment with the
Company or the termination of that employment, including Claims the Executive
may have based on any facts or events arising on or before the date of this
Release, whether known or unknown by the Executive, including, without
limitation, a release of any Claims the Executive may have based on Title VII
of
the Civil Rights Act; the Age Discrimination in Employment Act; the Americans
with Disabilities Act; and the New York Executive Law, and any amendments
thereto; any and all laws of any state concerning wages, employment and
discharge; any state or local municipality fair employment statutes or laws;
or
any other law, rule, regulation or ordinance pertaining to employment, terms
and
conditions of employment, or termination of employment; provided, however,
that
execution of this Release shall not adversely affect (i) the Executive's rights
to receive benefits under the employee benefit plans and arrangements of the
Company, following termination of the Executive's employment; (ii) the
Executive's rights under the Agreement; or (iii) the Executive's rights to
indemnification under applicable law, the Certificate of Incorporation or
by-laws of the Company or any agreement between the Executive and the Company.
Further, nothing in this Release prevents the Executive from filing a charge
(including a challenge to the validity of this Release) with the Equal
Employment Opportunity Commission (the “EEOC”) or participating in any
investigation or proceeding conducted by the EEOC. However, the
Executive understands and agrees that he/she is waiving any right to recover
any
monetary relief or other personal relief as a result of any such EEOC
proceedings or any subsequent legal action.
The
Executive is advised to consult with an attorney before signing the
Release.
The
Executive acknowledges that he is receiving valuable consideration for executing
this Release to which he would not otherwise be entitled.
The
Executive has twenty-one (21) calendar days (forty-five (45) calendar days,
in
the case of a “termination program”) from the date of the Release, as set forth
above, in which to sign and return this Release to the Company.
For
the Company:
________________________
Signature
________________________
Name
________________________
Title
ACCEPTED
AND AGREED THIS ____ DAY OF ___________, 20___:
________________________
Executive
