EXHIBIT 10.18
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT between UroCor, Inc., a Delaware corporation (the
"Company"), and _______________________________________ (the "Employee") is
effective as of this 21st day of October, 1998 (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 2. 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
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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 3. 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
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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 4. 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 5. 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 6. 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
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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;
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(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 7. 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 8. 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
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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
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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 9. 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 10. 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 11. 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
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so withhold.
SECTION 12. 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.
(c) 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").
(d) 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
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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.
(e) 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.
(f) 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
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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.
(g) 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.
(h) 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).
(i) 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.
(j) 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 13. 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 14. EMPLOYMENT BY WHOLLY OWNED ENTITIES. If, at or after the
Effective Date, the Employee
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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 15. 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 16. 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 17. GOVERNING LAW. The validity, interpretation, construction and
enforceability of this Agreement shall be governed by the laws of the State of
Oklahoma.
SECTION 18. 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 19. 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 20. 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 21. 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,
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(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 22. 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:
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(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,
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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.
(c) 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: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
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"EMPLOYEE"
-------------------------------------------
Name:
-------------------------------------
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SCHEDULE 10.18
CHANGE IN CONTROL AGREEMENTS
NAME PERCENT
---- -------
Xxxxxxx X. Xxxxxxxx 40%
Xxxxxxx X. Xxxxxx 50%
Socrates H. Choumbakos 25%
Xxxxxxx X. XxXxxxxx 25%
Xxxx X. Xxxxxxxxx 30%
Xxxxxx X. Xxxxxx 30%
Xxx X. Xxxxxxxxxx 30%
Xxxx X. Xxxx 25%
Xxxxxx X. X'Xxxx 20%
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