CHANGE OF CONTROL AGREEMENT
Exhibit 10.2
This Change of Control Agreement, made as of May 12, 2009, is by and between Molecular Insight
Pharmaceuticals, Inc., a Massachusetts corporation (the “Company”), and Xxxxxx X. Xxxxxx
(the “Employee”). All references to the Company include all affiliated or subsidiary
entities including, without limitation, a Buyer in a Change of Control (each as defined below).
Whereas, the Company wants to provide to the Employee assurances of continued employment in
the event of a Change of Control (as defined below); and
Whereas, the Employee is a member of senior management of the Company.
Now, therefore, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which consideration are
hereby acknowledged, the parties agree as follows:
1. Severance Payments
(a) From and after the consummation of a Change of Control and subject to the other provisions
of this Section 1, the Company shall pay to the Employee an amount equal to the Employee’s
then-current base salary for a period of one year (the “Severance Payment”) if (x) the Employee is
employed by the Company immediately prior to the consummation of a Change of Control and (y) (i)
upon consummation of such Change of Control the Employee is not hired by the Buyer or retained by
the Company on substantially similar terms of employment as those enjoyed by the Employee
immediately prior to the consummation of such Change of Control, (ii) the Employee’s employment
with the Company or the Buyer, as applicable, is terminated without Cause (as defined below) at any
time prior to the first anniversary of the consummation of such Change of Control or (iii) the
Employee resigns with Good Reason (as defined below) from employment with the Company or the Buyer,
as applicable, at any time prior to the first anniversary of the consummation of such Change of
Control. The Severance Payment shall be made in one lump sum upon the effective date of the
termination of such Employee’s employment with the Company or the Buyer, as the case may be.
(b) Notwithstanding anything else to the contrary herein, if upon termination, the Employee is
a “specified employee” (within the meaning attributed thereto by Section 409A of the Code and the
regulations thereunder) of Company, and if the payments would be subject to excise tax under Code
Section 409A because such payments are made within the 6-month period commencing upon the
Employee’s effective date of termination, then such payments shall be delayed for 6 months
following such termination.
2. Non-Competition Agreement
(a) In consideration for entering into this Agreement and the promises set forth herein, the
Employee agrees that, for a period of one (1) year after the termination of employment, whether in
connection with a Change of Control or otherwise, the Employee will not, without the Company’s
prior written approval, directly or indirectly:
(i) solicit, divert or take away, or attempt to divert or to take away, the business or
patronage of any of the clients, customers or accounts, or prospective clients, customers or
accounts, of the Company. For purposes of this Agreement, a prospective client, customer or
account is any individual or entity whose business is solicited by the Company, proposed to be
solicited by the Company, or who approaches the Company, with respect to possibly becoming a
client, customer, or account during the Employee’s employment relationship; or
(ii) engage (whether for compensation or without compensation) as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, investor, lender, or in any
other capacity whatsoever (otherwise than as the holder of not more than 1% of the total
outstanding stock of a publicly-held company), in any business activity which competes with the
business of the Company, including, without limitation, the licensing, sale, distribution,
development or research of radiotherapeutics and molecular imaging pharmaceuticals related to
diagnostic imaging of the human cardio-vascular system or carcinogenic tumors; or
(iii) hire any employee or consultant of the Company or recruit, solicit or knowingly induce,
or attempt to induce, any employee or consultant of the Company to terminate his employment or
consulting relationship with, or otherwise cease his relationship with, the Company.
(b) If any restriction set forth in this Section 2 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted to extend only
over the maximum period of time, range of activities or geographic areas to which it may be
enforceable.
(c) The Employee acknowledges and agrees that the restrictions contained in this Section 2 are
reasonable in scope, duration and geographic area, are necessary for the protection of the business
and goodwill of the Company, and provide a substantial inducement to a Buyer in order to consummate
a Change of Control. The Employee agrees that any breach of this Section 2 will cause the Company
substantial and irrevocable damage and, therefore, in the event of any such breach, in addition to
such other remedies which may be available, the Company will have the right to seek specific
performance and injunctive relief.
3. Rights to Employment or as a Stockholder
Nothing contained herein shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Employee.
4. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by
certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
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If to the Company:
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000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 Attn: General Counsel |
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If to the Employee:
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To the address set forth below the signature of the Employee; |
or to such other address as is specified in a notice complying with this Section 4. Any such
notice is deemed given on the date delivered by hand or three days after the date of mailing.
5. Definitions
5.1 “Buyer” shall mean the Person or Persons acting as a group who has acquired ownership of
the stock or assets of the Company pursuant to a transaction described in clauses (i) or (ii) of a
Change of Control.
5.2 “Cause” shall mean a vote of the Board of Directors of the Company resolving that the
Employee should be dismissed as a result of (i) the commission of any act constituting financial
dishonesty against the Company (which act would be chargeable as a crime under applicable law);
(ii) engaging in any other act of dishonesty, fraud, intentional misrepresentation, moral
turpitude, illegality or harassment which, as determined in good faith by the Board, would
materially adversely affect the business or the reputation of the Company with its customers,
suppliers, lenders and/or other third parties with whom the Company does business; (iii) the
repeated failure to follow the written directives of the Board, which failure has not been
corrected within 30 days after written notice from the Board, or (iv) any material misconduct,
violation of the Company’s written policies, or willful and deliberate non-performance of duty in
connection with the business affairs of the Company, after written warning of such violation from
the Board.
5.3 “Change of Control” shall mean the occurrence of any one of the following events:
(i) the date on which (1) any one Person, or more than one Person acting as a group, other
than Excluded Persons, acquires (or has acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such Person or Persons) ownership of stock of the Company
possessing thirty-five percent (35%) or more of the total voting power of the stock of the Company;
provided, however, that if any one Person or more than one Person acting as a group is already
considered to own more than thirty-five percent (35%) of the total voting power of the stock of the
Company, the acquisition of additional voting stock by the same Person or Persons is not considered
to cause a Change of Control; or (2) a majority of the members of the Company’s Board of Directors
is replaced during any twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’s Board of Directors prior to the date of the
appointment or election.
(ii) the date on which any one Person, or more than one Person acting as a group, other than
Excluded Persons, acquires (or has acquired during the twelve (12) month period ending on the date
of the most recent acquisition by such person or persons) assets from
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the Company that have a total
Gross Fair Market Value equal to more than sixty percent (60%) of the total Gross Fair Market Value
of all the assets of the Company immediately prior to such acquisition or acquisitions, other than
an Excluded Transaction.
5.4 “Excluded Persons” shall mean (a) the Company or any of its affiliates, (b) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company or any of its
affiliates, (c) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (d) a corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock in the Company.
5.5 “Excluded Transaction” shall mean any transaction in which assets are transferred to: (a)
a shareholder of the Company (determined immediately before the asset transfer) in exchange for or
with respect to its stock; (b) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company (determined after the asset
transfer); (c) a Person, or more than one Person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding
stock of the Company (determined after the asset transfer); or (d) an entity at least fifty percent
(50%) of the total value or voting power of which is owned, directly or indirectly, by a Person
described in clause (c) (determined after the asset transfer).
5.6 “Good Reason” shall mean that the Employee has resigned within 30 days after the
occurrence of one or more of the following events: (i) a material diminution in the Employee’s
annual base salary other than reduction approved by the Employee, (ii) a material diminution of the
Employee’s job responsibilities when compared to the Employee’s responsibilities as of the date
hereof, or (ii) the relocation of the Employee’s principal office location to a facility or
location that is more than 50 miles away from the Employee’s principal office location as of the
consummation of the Change of Control, which relocation is not approved by the Employee.
5.7 “Gross Fair Market Value” shall mean the value of the assets of the Company, or the value
of the assets being disposed of, as applicable, determined without regard to any liabilities
associated with such assets.
5.8 “Person” has the meaning given in Section 3(a)(9) of the Exchange Act of 1934, as modified
and used in Sections 13(d) and 14(d) thereof.
6. Miscellaneous
6.1 Withholding. The Company may withhold from any distribution under this Agreement
all federal, state, city and other taxes as shall be legally required.
6.2 Modification. This Agreement constitutes the entire agreement between the parties
with regard to the subject matter hereof, superseding all prior understandings and agreements,
whether written or oral. This Agreement may not be amended or revised except by a writing signed
by the parties.
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6.3 Successors and Assigns. This Agreement is binding upon and inures to the benefit
of both parties and their respective successors and assigns, including any Buyer with which or into
which the Company may be merged or which may succeed to the Company’s assets or business, although
the obligations of the Employee are personal and may be performed only by him. Upon any assignment
by the Company of this Agreement, all references to Company herein shall be deemed to be references
to such assignee.
6.4 Captions. Captions have been inserted in this Agreement solely for convenience of
reference, and in no way define, limit or affect the scope or substance of any provision of this
Agreement.
6.5 Severability. The provisions of this Agreement are severable, and invalidity of
any provision does not affect the validity of any other provision. In the event that any court of
competent jurisdiction determines that any provision of this Agreement or the application thereof
is unenforceable because of its duration or scope, the parties agree that the court in making such
determination will have the power to reduce the duration and scope of such provision to the extent
necessary to make it enforceable, and that the Agreement in its reduced form is valid and
enforceable to the full extent permitted by law.
6.6 Governing Law. This Agreement is to be construed under and governed by the laws
of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties have executed this Change of Control Agreement as of the date
and year first above written.
| MOLECULAR INSIGHT PHARMACEUTICALS, INC.: |
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| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Chairman of the Board of Directors of Molecular Insight Pharmaceuticals, Inc., | |||
| EMPLOYEE: |
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| /s/ Xxxxxx X. Xxxxxx | ||||
| Address: 0 Xxxxxxxxx XX | ||||
| Xxxxxxx, XX 00000 | ||||
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