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EXHIBIT 10.2
Change In Control Agreement
THIS AGREEMENT between UroCor, Inc., a Delaware corporation (the
"Company"), and _______________________________________ (the "Employee") is
effective as of this ____ day of ______, ____ (the "Effective Date"). Certain
capitalized terms used herein are defined in Section 21.
WITNESSETH:
WHEREAS, the Company considers it to be in the best interests of its
stockholders to encourage the continued employment of certain key employees of
the Company notwithstanding the possibility, threat or occurrence of a Change in
Control of the Company; and
WHEREAS, the Employee is a key employee of the Company; and
WHEREAS, the Company believes that the possibility of the occurrence of
a Change in Control of the Company may result in the termination by the Employee
of the Employee's employment by the Company or in the distraction of the
Employee from the performance of his duties to the Company, in either case to
the detriment of the Company and its stockholders; and
WHEREAS, the Company recognizes that the Employee could suffer adverse
financial and professional consequences if a Change in Control of the Company
were to occur; and
WHEREAS, the Company wishes to enter into this Agreement to protect the
Employee if a Change in Control of the Company occurs, thereby encouraging the
Employee to remain in the employ of the Company and not to be distracted from
the performance of his duties to the Company by the possibility of a Change in
Control of the Company;
NOW, THEREFORE, the parties agree as follows:
Section 1. Other Employment Arrangements.
(a) This Agreement does not affect the Employee's existing or future
employment arrangements with the Company unless a Change in Control of the
Company shall have occurred before the expiration of the term of this Agreement.
The Employee's employment with the Company shall continue to be governed by the
Employee's existing or future employment agreements with the Company, if any,
or, in the absence of any employment agreement, shall continue to be at the will
of the Board of Directors or, if the Employee is not an officer of the Company
at the time of the termination of the Employee's employment with the Company,
the will of the Chief Executive Officer of the Company, except that if (i) a
Change in Control of the Company shall have occurred before the expiration of
the term of this Agreement and (ii) the Employee's employment with the Company
is terminated (whether by the Employee or the Company or automatically as
provided in Section 3) after the occurrence of that Change in Control of the
Company, then the Employee shall be entitled to receive certain benefits as
provided in this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, if following the commencement of any discussions with any person that
ultimately results in a Change in Control of the Company, (i) the Employee's
employment with the Company is terminated, (ii) the Employee is removed from any
material duties or position with the Company, (iii) the Employee's Base Salary
is reduced or (iv) the Employee's annual bonus is reduced to an amount less than
the Benchmark Bonus, then for all purposes of this Agreement, such Change in
Control of the Company shall be deemed to have occurred on the date immediately
prior to the date of such termination, removal or reduction.
(c) Nothing in this Agreement shall prevent or limit the Employee's
continuing or future participation in any plan, program, policy or practice of
or provided by the Company or any of its Affiliates and for which the Employee
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Employee may have under any contract or agreement with the Company or any of
its Affiliates. Amounts which are vested benefits or which the Employee is
otherwise entitled to receive under any plan, program, policy or practice of or
provided by, or any contract or agreement with, the Company or any of its
Affiliates at or subsequent to the date of termination of the Employee's
employment with the Company shall be payable or otherwise provided in accordance
with such plan, program, policy or practice or contract or agreement except as
explicitly modified by this Agreement.
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Section 2. Change in Control of the Company. A "Change in Control of
the Company" shall have occurred if, after the Effective Date:
(i) a report on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) shall be filed with the Commission
pursuant to the Exchange Act and that report discloses that any person
(within the meaning of Section 13(d) or Section 14(d)(2) of the
Exchange Act), other than the Company (or one of its subsidiaries) or
any employee benefit plan sponsored by the Company (or one of its
subsidiaries), is the beneficial owner (as that term is defined in Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of 20 percent or more of the
outstanding Voting Stock;
(ii) any person (within the meaning of Section 13(d) or
Section 14(d)(2) of the Exchange Act), other than the Company (or one
of its subsidiaries) or any employee benefit plan sponsored by the
Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any Voting
Stock (or any securities convertible into Voting Stock) and,
immediately after consummation of that purchase, that person is the
beneficial owner (as that term is defined in Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act),
directly or indirectly, of 20 percent or more of the outstanding Voting
Stock (such person's beneficial ownership to be determined, in the case
of rights to acquire Voting Stock, pursuant to paragraph (d) of Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act);
(iii) the consummation of:
(x) a merger, stock exchange, consolidation
or reorganization of the Company with or into any other
person if as a result of such merger, stock exchange,
consolidation or reorganization, 50 percent or less of
the combined voting power of the then-outstanding
securities of such other person immediately after such
merger, stock exchange, consolidation or reorganization
are held in the aggregate by the holders of Voting Stock
immediately prior to such merger, consolidation or
reorganization;
(y) any sale, lease, exchange or other
transfer of all or substantially all the assets of the
Company and its consolidated subsidiaries to any other
person if as a result of such sale, lease, exchange or
other transfer, 50 percent or less of the combined
voting power of the then-outstanding securities of such
other person immediately after such sale, lease,
exchange or other transfer are held in the aggregate by
the holders of Voting Stock immediately prior to such
sale, lease, exchange or other transfer; or
(z) a transaction immediately after the
consummation of which any person (within the meaning of
Section 13(d) or Section 14(d)(2) of the Exchange Act)
would be the beneficial owner (as that term is defined
in Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act), directly or
indirectly, of more than 50 percent of the outstanding
Voting Stock;
(iv) the stockholders of the Company approve the dissolution
of the Company; or
(v) during any period of 12 consecutive months, the
individuals who at the beginning of that period constituted the Board
of Directors shall cease to constitute a majority of the Board of
Directors, unless the election, or the nomination for election by the
Company's stockholders, of each director of the Company first elected
during such period was approved by a vote of at least a two-thirds of
the directors of the Company then still in office who were directors of
the Company at the beginning of any such period.
Section 3. Term of this Agreement. The term of this Agreement shall
begin on the Effective Date and shall expire on the first to occur of:
(i) the Employee's death, the Employee's Disability or the
Employee's Retirement, which events shall also be deemed automatically
to terminate the Employee's employment by the Company; or
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(ii) the termination by the Employee or the Company of the
Employee's employment by the Company.
The expiration of the term of this Agreement shall not terminate this Agreement
itself or affect the right of the Employee or the Employee's legal
representatives to enforce the payment of any amount or other benefit to which
the Employee was entitled before the expiration of the term of this Agreement or
to which the Employee became entitled as a result of the event (including the
termination, whether by the Employee or the Company or automatically as provided
in this Section 3, of the Employee's employment by the Company) that caused the
term of this Agreement to expire.
Section 4. Event of Termination for Cause. An "Event of Termination for
Cause" shall have occurred if, after a Change in Control of the Company, the
Employee shall have committed:
(i) gross negligence or willful misconduct in connection with
his duties or in the course of his employment with the Company;
(ii) an act of fraud, embezzlement or theft in connection with
his duties or in the course of his employment with the Company;
(iii) intentional wrongful damage to property of the Company;
(iv) intentional wrongful disclosure of secret processes or
confidential information of the Company; or
(v) an act leading to a conviction of a felony or a
misdemeanor involving moral turpitude.
For purposes of this Agreement, no act, or failure to act, on the part of the
Employee shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done, or
omitted to be done, by the Employee not in good faith and without reasonable
belief that his action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated as a result of an "Event of Termination for Cause" hereunder unless
and until there shall have been delivered to the Employee a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
Board of Directors then in office at a meeting of the Board of Directors called
and held for such purpose (after reasonable notice to the Employee and an
opportunity for the Employee, together with his counsel, to be heard before the
Board of Directors), finding that, in the good faith opinion of the Board of
Directors, the Employee had committed an act set forth above in this Section 4
and specifying the particulars thereof in detail. Nothing herein shall limit the
right of the Employee or his legal representatives to contest the validity or
propriety of any such determination.
Section 5. An Event of Termination for Good Reason. An "Event of
Termination for Good Reason" shall have occurred if, after a Change in Control
of the Company, the Company shall:
(i) assign to the Employee any duties inconsistent with the
Employee's position (including offices, titles and reporting
requirements), authority, duties or responsibilities with the Company
in effect immediately before the occurrence of the first Change in
Control of the Company or otherwise make any change in any such
position, authority, duties or responsibilities;
(ii) remove the Employee from, or fail to re-elect or appoint
the Employee to, any duties or position with the Company or any of its
Affiliates that were assigned or held by the Employee immediately
before the occurrence of the first Change in Control of the Company,
except that a nominal change in the Employee's title that is merely
descriptive and does not affect rank or status shall not constitute
such an event;
(iii) take any other action that results in a material
diminution in such position, authority, duties or responsibilities or
otherwise take any action that materially interferes therewith;
(iv) reduce the Employee's annual base salary as in effect
immediately before the occurrence of the first Change in Control of the
Company or as the Employee's annual base salary may be increased from
time to time after that occurrence (the "Base Salary");
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(v) reduce the Employee's annual bonus to an amount less than
___% of the Employee's Base Salary (the "Benchmark Bonus");
(vi) relocate the Employee's principal office outside of the
metropolitan area of Oklahoma City, Oklahoma;
(vii) fail to (x) continue in effect any bonus, incentive,
profit sharing, performance, savings, retirement or pension policy,
plan, program or arrangement (such policies, plans, programs and
arrangements collectively being referred to herein as "Basic Benefit
Plans"), including, but not limited to, any deferred compensation,
supplemental executive retirement or other retirement income, stock
option, stock purchase, stock appreciation, or similar policy, plan,
program or arrangement of the Company, in which the Employee was a
participant immediately before the occurrence of the first Change in
Control of the Company, or any substitute plan adopted by the Board of
Directors and in which the Employee was a participant immediately
before the occurrence of the last Change in Control of the Company,
unless an equitable and reasonably comparable arrangement (embodied in
a substitute or alternative benefit or plan) shall have been made with
respect to such Basic Benefit Plan promptly following the occurrence of
the last Change in Control of the Company, or (y) continue the
Employee's participation in any Basic Benefit Plan (or any substitute
or alternative plan) on substantially the same basis, both in terms of
the amount of benefits provided to the Employee (which are in any event
always subject to the terms of any applicable Basic Benefit Plan) and
the level of the Employee's participation relative to other
participants, as existed immediately before the occurrence of the first
Change in Control of the Company;
(viii) fail to continue to provide the Employee with benefits
substantially similar to those enjoyed by the Employee under any of the
Company's other employee benefit plans, policies, programs and
arrangements (the "Other Benefit Plans"), including, but not limited
to, life insurance, medical, dental, health, hospital, accident or
disability plans, in which the Employee was a participant immediately
before the occurrence of the first Change in Control of the Company;
(ix) take any action that would directly or indirectly
materially reduce any other non-contractual benefits that were provided
to the Employee by the Company immediately before the occurrence of the
first Change in Control of the Company or deprive the Employee of any
material fringe benefit enjoyed by the Employee immediately before the
occurrence of the first Change in Control of the Company;
(x) fail to provide the Employee with the number of paid
vacation days to which the Employee was entitled in accordance with the
Company's vacation policy in effect immediately before the occurrence
of the first Change in Control of the Company;
(xi) fail to continue to provide Employee with office space,
related facilities and support personnel (including, but not limited
to, administrative and secretarial assistance) (y) that are both
commensurate with Employee's responsibilities to and position with the
Company immediately before the occurrence of the first Change in
Control of the Company and not materially dissimilar to the office
space, related facilities and support personnel provided to other
employees of the Company having comparable responsibility to the
Employee, or (z) that are physically located at the Company's principal
executive offices;
(xii) require the Employee to perform a majority of his duties
outside the Company's principal executive offices for a period of more
than 21 consecutive days or for more than 90 days in any calendar year;
(xiii) fail to honor any provision of any employment agreement
Employee has or may in the future have with the Company or fail to
honor any provision of this Agreement;
(xiv) give effective notice of an election to terminate at the
end of the term or extended the term of any employment agreement
Employee has or may in the future have with the Company in accordance
with the terms of any such agreement; or
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(xv) purport to terminate the Employee's employment by the
Company unless notice of that termination shall have been given to the
Employee pursuant to, and that notice shall meet the requirements of,
Section 6.
Section 6. Notice of Termination. If a Change in Control of the Company
shall have occurred before the expiration of the term of this Agreement, any
subsequent termination by the Employee or the Company of the Employee's
employment by the Company, or any determination of the Employee's Disability,
shall be communicated by notice to the other party that shall indicate the
specific paragraph of Section 7 pursuant to which the Employee is to receive
benefits as a result of the termination. If the notice states that the
Employee's employment by the Company has been automatically terminated as a
result of the Employee's Disability, the notice shall (i) specifically describe
the basis for the determination of the Employee's Disability, and (ii) state the
date of the determination of the Employee's Disability, which date shall be not
more than ten (10) days before the date such notice is given. If the notice is
from the Company and states that the Employee's employment by the Company is
terminated by the Company as a result of the occurrence of an Event of
Termination for Cause, the notice shall specifically describe the action or
inaction of the Employee that the Company believes constitutes an Event of
Termination for Cause and shall be accompanied by a copy of the resolution
satisfying Section 4. If the notice is from the Employee and states that the
Employee's employment by the Company is terminated by the Employee as a result
of the occurrence of an Event of Termination for Good Reason, the notice shall
specifically describe the action or inaction of the Company that the Employee
believes constitutes an Event of Termination for Good Reason. Each notice given
pursuant to this Section 6 (other than a notice stating that the Employee's
employment by the Company has been automatically terminated as a result of the
Employee's Disability) shall state a date, which shall be not fewer than thirty
(30) days nor more than sixty (60) days after the date such notice is given, on
which the termination of the Employee's employment by the Company is effective.
The date so stated in accordance with this Section 6 shall be the "Termination
Date". If a Change in Control of the Company shall have occurred before the
expiration of the term of this Agreement, any subsequent purported termination
by the Company of the Employee's employment by the Company, or any subsequent
purported determination by the Company of the Employee's Disability, shall be
ineffective unless that termination or determination shall have been
communicated by the Company to the Employee by notice that meets the
requirements of the foregoing provisions of this Section 6 and the provisions of
Section 9.
Section 7. Benefits Payable on Change in Control and Termination.
(a) If (x) a Change in Control of the Company shall have occurred
before the expiration of the term of this Agreement, and (y) the Employee's
employment by the Company is terminated (whether by the Employee or the Company
or automatically as provided in Section 3) after the occurrence of that Change
in Control of the Company, the Employee shall be entitled to the following
benefits:
(i) If the Employee's employment by the Company is terminated
(x) by the Company as a result of the occurrence of an Event of
Termination for Cause, or (y) by the Employee before the occurrence of
an Event of Termination for Good Reason, then the Company shall pay to
the Employee the Base Salary accrued through the Termination Date but
not previously paid to the Employee, and the Employee shall be entitled
to any other amounts or benefits provided under any plan, policy,
practice, program, contract or arrangement of or with the Company,
including, but not limited to, the Basic Benefit Plans and the Other
Benefit Plans, which shall be governed by the terms thereof (except as
explicitly modified by this Agreement).
(ii) If the Employee's employment by the Company is
automatically terminated as a result of the Employee's death, the
Employee's Disability or the Employee's Retirement, then (x) the
Company shall pay to the Employee the Base Salary accrued through the
date of the occurrence of that event but not previously paid to the
Employee, and (y) the Employee shall be entitled to any other amounts
or benefits provided under any plan, policy, practice, program,
contract or arrangement of or with the Company, including, but not
limited to, the Basic Benefit Plans and the Other Benefit Plans, which
shall be governed by the terms thereof (except as explicitly modified
by this Agreement).
(iii) If the Employee's employment by the Company is
terminated (x) by the Company otherwise than as a result of the
occurrence of an Event of Termination for Cause, or (y) by the Employee
after the occurrence of an Event of Termination for Good Reason, then
the Employee shall be entitled to the following:
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(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
____________________ (___) times the sum of:
(A) the amount (including any deferred
portion thereof) of the Base Salary that would have
been paid to the Employee during the fiscal year of
the Company in which the Termination Date occurs
based on the assumption that the Employee's
employment by the Company had continued throughout
that fiscal year at the Base Salary at the highest
rate in effect at any time during the term of this
Agreement; plus
(B) the amount of the Highest Bonus;
(4) the Company (at its sole expense) shall take the
following actions:
(A) throughout the Relevant Period, the
Company shall maintain in effect, and not materially
reduce the benefits provided by, each of the Other
Benefit Plans in which the Employee was a participant
immediately before the Termination Date; and
(B) the Company shall arrange for the
Employee's uninterrupted participation throughout the
Relevant Period in each of such Other Benefit Plans,
provided that if the Employee's participation after
the Termination Date in any such Other Benefit Plan
is not permitted by the terms of that Other Benefit
Plan, then throughout the Relevant Period, the
Company (at its sole expense) shall provide the
Employee with substantially the same benefits that
were provided to the Employee by that Other Benefit
Plan immediately before the Termination Date; and
(5) the Employee shall be entitled to any other
amounts or benefits provided under any plan, policy, practice,
program, contract or arrangement of or with the Company,
including, but not limited to, the Basic Benefit Plans and the
Other Benefit Plans, which shall be governed by the terms
thereof (except as explicitly modified by this Agreement).
(b) Each payment required to be made to the Employee pursuant to the
foregoing provisions of this Section 7(a) above (i) shall be made by check drawn
on an account of the Company at a bank located in the United States of America,
and (ii) shall be paid (x) if the Employee's employment by the Company was
terminated as a result of the Employee's death, the Employee's Disability or the
Employee's Retirement, not more than thirty (30) days immediately following the
date of the occurrence of that event, and (y) if the Employee's employment by
the Company was terminated for any other reason, not more than ten (10) days
immediately following the Termination Date.
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Section 8. Successors. If a Change in Control of the Company shall have
occurred before the expiration of the term of this Agreement,
(i) the Company shall not, directly or indirectly, consolidate
with, merge into or sell or otherwise transfer its assets as an
entirety or substantially as an entirety to, any person, or permit any
person to consolidate with or merge into the Company, unless
immediately after such consolidation, merger, sale or transfer, the
Successor shall have assumed in writing the Company's obligations under
this Agreement; and
(ii) not fewer than ten (10) days before the consummation of
any consolidation of the Company with, merger by the Company into, or
sale or other transfer by the Company of its assets as an entirety or
substantially as an entirety to, any person, the Company shall give the
Employee notice of that proposed transaction.
Section 9. Notice. Notices required or permitted to be given by either
party pursuant to this Agreement shall be in writing and shall be deemed to have
been given when delivered personally to the other party or when deposited with
the United States Postal Service as certified or registered mail with postage
prepaid and addressed:
(i) if to the Employee, at the Employee's address last shown
on the Company's records, and
(ii) if to the Company, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxx 00000, directed to the attention of the Company's
President.
or, in either case, to such other address as the party to whom or which such
notice is to be given shall have specified by notice given to the other party.
Section 10. Withholding Taxes. The Company may withhold from all
payments to be paid to the Employee pursuant to this Agreement all taxes that,
by applicable federal or state law, the Company is required to so withhold.
Section 11. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by, or benefit
from, the Company or any of its Affiliates to or for the benefit of the
Employee, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments, distributions or
benefits being individually referred to herein as a "Payment," and any two or
more of such payments, distributions or benefits being referred to herein as
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code (such excise tax, together with any interest thereon, any penalties,
additions to tax, or additional amounts with respect to such excise tax, and any
interest in respect of such penalties, additions to tax or additional amounts,
being collectively referred herein to as the "Excise Tax"), then the Employee
shall be entitled to receive an additional payment or payments (individually
referred to herein as a "Gross-Up Payment" and any two or more of such
additional payments being referred to herein as "Gross-Up Payments") in an
amount such that after payment by the Employee of all taxes (as defined in
Section 11(k)) imposed upon the Gross-Up Payment, the Employee retains an amount
of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 11(c) through (i), any
determination (individually, a "Determination") required to be made under this
Section 11(b), including whether a Gross-Up Payment is required and the amount
of such Gross-Up Payment, shall initially be made, at the Company's expense, by
nationally recognized tax counsel mutually acceptable to the Company and the
Employee ("Tax Counsel"). Tax Counsel shall provide detailed supporting legal
authorities, calculations, and documentation both to the Company and the
Employee within 15 business days of the termination of the Employee's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or the Employee. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by the Employee with respect to a
Payment or Payments, it shall furnish the Employee with an opinion reasonably
acceptable to the Employee that no Excise Tax will be imposed with respect to
any such Payment or Payments. The Employee shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at the Company's
expense, be paid by the Company to the Employee within five business days of the
Employee's receipt of such Determination. The existence of a Dispute shall not
in any way affect the Employee's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon the Company and the Employee,
subject in all respects, however, to the provisions of Section 11(c)
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through (i) below. As a result of the uncertainty in the application of Sections
4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions
thereof) which will not have been made by the Company should have been made
("Underpayment"), and if upon any reasonable written request from the Employee
or the Company to Tax Counsel, or upon Tax Counsel's own initiative, Tax
Counsel, at the Company's expense, thereafter determines that the Employee is
required to make a payment of any Excise Tax or any additional Excise Tax, as
the case may be, Tax Counsel shall, at the Company's expense, determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to the Employee.
(c) The Company shall defend, hold harmless, and indemnify the Employee
on a fully grossed-up after tax basis from and against any and all claims,
losses, liabilities, obligations, damages, impositions, assessments, demands,
judgements, settlements, costs and expenses (including reasonable attorneys',
accountants', and experts' fees and expenses) with respect to any tax liability
of the Employee resulting from any Final Determination (as defined in Section
11(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral communication with
respect to any question, adjustment, assessment or pending or threatened audit,
examination, investigation or administrative, court or other proceeding which,
if pursued successfully, could result in or give rise to a claim by the Employee
against the Company under this Section 11 ("Claim"), including, but not limited
to, a claim for indemnification of the Employee by the Company under Section
11(c), then such party shall promptly notify the other party hereto in writing
of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against the Employee ("Employee Claim"), the
Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as are
reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide that
the Company shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:
(i) within 30 calendar days after the Company receives or
delivers, as the case may be, the Tax Claim Notice relating to such
Employee Claim (or such earlier date that any payment of the taxes
claimed is due from the Employee, but in no event sooner than five
calendar days after the Company receives or delivers such Tax Claim
Notice), the Company shall have notified the Employee in writing
("Election Notice") that the Company does not dispute its obligations
(including, but not limited to, its indemnity obligations) under this
Agreement and that the Company elects to contest, and to control the
defense or prosecution of, such Employee Claim at the Company's sole
risk and sole cost and expense; and
(ii) the Company shall have advanced to the Employee on an
interest-free basis, the total amount of the tax claimed in order for
the Employee, at the Company's request, to pay or cause to be paid the
tax claimed, file a claim for refund of such tax and, subject to the
provisions of the last sentence of Section 11(g), xxx for a refund of
such tax if such claim for refund is disallowed by the appropriate
taxing authority (it being understood and agreed by the parties hereto
that the Company shall only be entitled to xxx for a refund and the
Company shall not be entitled to initiate any proceeding in, for
example, United States Tax Court) and shall indemnify and hold the
Employee harmless, on a fully grossed-up after tax basis, from any tax
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and
(iii) the Company shall reimburse the Employee for any and all
costs and expenses resulting from any such request by the Company and
shall indemnify and hold the Employee harmless, on fully grossed-up
after-tax basis, from any tax imposed as a result of such
reimbursement.
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(f) Subject to the provisions of Section 11(e) hereof, the Company
shall have the right to defend or prosecute, at the sole cost, expense and risk
of the Company, such Employee Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by the Company to a Final
Determination; provided, however, that (i) the Company shall not, without the
Employee's prior written consent, enter into any compromise or settlement of
such Employee Claim that would adversely affect the Employee, (ii) any request
from the Company to the Employee regarding any extension of the statute of
limitations relating to assessment, payment, or collection of taxes for the
taxable year of the Employee with respect to which the contested issues involved
in, and amount of, the Employee Claim relate is limited solely to such contested
issues and amount, and (iii) the Company's control of any contest or proceeding
shall be limited to issues with respect to the Employee Claim and the Employee
shall be entitled to settle or contest, in his sole and absolute discretion, any
other issue raised by the Internal Revenue Service or any other taxing
authority. So long as the Company is diligently defending or prosecuting such
Employee Claim, the Employee shall provide or cause to be provided to the
Company any information reasonably requested by the Company that relates to such
Employee Claim, and shall otherwise cooperate with the Company and its
representatives in good faith in order to contest effectively such Employee
Claim. The Company shall keep the Employee informed of all developments and
events relating to any such Employee Claim (including, without limitation,
providing to the Employee copies of all written materials pertaining to any such
Employee Claim), and the Employee or his authorized representatives shall be
entitled, at the Employee's expense, to participate in all conferences, meetings
and proceedings relating to any such Employee Claim.
(g) If, after actual receipt by the Employee of an amount of a tax
claimed (pursuant to an Employee Claim) that has been advanced by the Company
pursuant to Section 11(e)(ii) hereof, the extent of the liability of the Company
hereunder with respect to such tax claimed has been established by a Final
Determination, the Employee shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, the Employee
with respect to such tax (together with any interest paid or credited thereon by
the taxing authority and any recovery of legal fees from such taxing authority
related thereto), except to the extent that any amounts are then due and payable
by the Company to the Employee, whether under the provisions of this Agreement
or otherwise. If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 11(e)(ii), a determination is made by the Internal
Revenue Service or other appropriate taxing authority that the Employee shall
not be entitled to any refund with respect to such tax claimed and the Company
does not notify the Employee in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of any Gross-Up
Payments and other payments required to be paid hereunder.
(h) With respect to any Employee Claim, if the Company fails to deliver
an Election Notice to the Employee within the period provided in Section
11(e)(i) hereof or, after delivery of such Election Notice, the Company fails to
comply with the provisions of Section 11(e)(ii) and (iii) and (f) hereof, then
the Employee shall at any time thereafter have the right (but not the
obligation), at his election and in his sole and absolute discretion, to defend
or prosecute, at the sole cost, expense and risk of the Company, such Employee
Claim. The Employee shall have full control of such defense or prosecution and
such proceedings, including any settlement or compromise thereof. If requested
by the Employee, the Company shall cooperate, and shall cause its Affiliates to
cooperate, in good faith with the Employee and his authorized representatives in
order to contest effectively such Employee Claim. The Company may attend, but
not participate in or control, any defense, prosecution, settlement or
compromise of any Employee Claim controlled by the Employee pursuant to this
Section 11(h) and shall bear its own costs and expenses with respect thereto. In
the case of any Employee Claim that is defended or prosecuted by the Employee,
the Employee shall, from time to time, be entitled to current payment, on a
fully grossed-up after tax basis, from the Company with respect to costs and
expenses incurred by the Employee in connection with such defense or
prosecution.
(i) In the case of any Employee Claim that is defended or prosecuted to
a Final Determination pursuant to the terms of this Section 11(i), the Company
shall pay, on a fully grossed-up after tax basis, to the Employee in immediately
available funds the full amount of any taxes arising or resulting from or
incurred in connection with such Employee Claim that have not theretofore been
paid by the Company to the Employee, together with the costs and expenses, on a
fully grossed-up after tax basis, incurred in connection therewith that have not
theretofore been paid by the Company to the Employee, within ten calendar days
after such Final Determination. In the case of any Employee Claim not covered by
the preceding sentence, the Company shall pay, on a fully grossed-up after tax
basis, to the Employee in immediately available funds the full amount of any
taxes arising or resulting from or incurred in connection with such Employee
Claim at least ten calendar days before the date payment of such taxes is due
from the Employee, except where payment of such taxes is sooner required under
the provisions of this Section 11(i), in which case payment of such taxes (and
payment, on a fully grossed-up after tax basis, of any costs and expenses
required to be paid under this Section 11(i) shall be made within the time and
in the manner otherwise provided in this Section 11(i).
10
(j) For purposes of this Agreement, the term "Final Determination"
shall mean (A) a decision, judgment, decree or other order by a court or other
tribunal with appropriate jurisdiction, which has become final and
non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and "taxes" mean
any and all taxes of any kind whatsoever (including, but not limited to, any and
all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties, additions
to tax, or additional amounts.
Section 12. Expenses of Enforcement. If a Change in Control of the
Company shall have occurred before the expiration of the term of this Agreement,
then, upon demand by the Employee made to the Company, the Company shall
reimburse the Employee for the reasonable expenses (including attorneys' fees
and expenses) incurred by the Employee in enforcing or seeking to enforce the
payment of any amount or other benefit to which the Employee shall have become
entitled pursuant to this Agreement, including those incurred in connection with
any arbitration initiated pursuant to Section 20. To the extent that any such
reimbursement would be subject to the Excise Tax, then the Employee shall be
entitled to receive Gross-Up Payments in an amount such that after payment by
the Employee of all taxes imposed on such Gross-Up Payments, the Employee
retains an amount equal to the Excise Tax imposed upon the reimbursement, and
the other provisions of Section 11 hereof shall also apply to such circumstance
unless the context thereof otherwise indicates.
Section 13. Employment by Wholly Owned Entities. If, at or after the
Effective Date, the Employee is or becomes an employee of one or more
corporations, partnerships, limited liability companies or other entities that
are, directly or indirectly, wholly owned by the Company ("Wholly Owned
Entities"), references in this Agreement to the Employee's employment by the
Company shall include the Employee's employment by any such Wholly Owned Entity.
Section 14. No Obligation to Mitigate; No Rights of Offset.
(a) The Employee shall not be required to mitigate the amount of any
payment or other benefit required to be paid to the Employee pursuant to this
Agreement, whether by seeking other employment or otherwise, nor shall the
amount of any such payment or other benefit be reduced on account of any
compensation earned by the Employee as a result of employment by another person.
(b) The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Employee or others.
Section 15. Amendment and Waiver. No provision of this Agreement may be
amended or waived (whether by act or course of conduct or omission or otherwise)
unless that amendment or waiver is by written instrument signed by the parties
hereto. No waiver by either party of any breach of this Agreement shall be
deemed a waiver of any other or subsequent breach.
Section 16. Governing Law. The validity, interpretation, construction
and enforceability of this Agreement shall be governed by the laws of the State
of Oklahoma.
Section 17. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
Section 18. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together will constitute the same instrument.
Section 19. Assignment. This Agreement shall inure to the benefit of
and be enforceable by the Employee's legal representative. The Company may not
assign any of its obligations under this Agreement unless (i) such assignment is
to a Successor and (ii) the requirements of Section 8 are fulfilled.
11
Section 20. Arbitration. Except as otherwise explicitly provided in
Section 11, any dispute between the parties arising out of this Agreement,
whether as to this Agreement's construction, interpretation or enforceability or
as to any party's breach or alleged breach of any provision of this Agreement,
shall be submitted to arbitration in accordance with the following procedures:
(i) Either party may demand such arbitration by giving notice
of that demand to the other party. The notice shall state (x) the
matter in controversy, and (y) the name of the arbitrator selected by
the party giving the notice.
(ii) Not more than 15 days after such notice is given, the
other party shall give notice to the party who demanded arbitration of
the name of the arbitrator selected by the other party. If the other
party shall fail to timely give such notice, the arbitrator that the
other party was entitled to select shall be named by the Arbitration
Committee of the American Arbitration Association. Not more than 15
days after the second arbitrator is so named, the two arbitrators shall
select a third arbitrator. If the two arbitrators shall fail to timely
select a third arbitrator, the third arbitrator shall be named by the
Arbitration Committee of the American Arbitration Association.
(iii) The dispute shall be arbitrated at a hearing that shall
be concluded within ten days immediately following the date the dispute
is submitted to arbitration unless a majority of the arbitrators shall
elect to extend the period of arbitration. Any award made by a majority
of the arbitrators (x) shall be made within ten days following the
conclusion of the arbitration hearing, (y) shall be conclusive and
binding on the parties, and (z) may be made the subject of a judgment
of any court having jurisdiction.
(iv) All expenses of the arbitration shall be borne by the
Company.
The agreement of the parties contained in the foregoing provisions of this
Section 20 shall be a complete defense to any action, suit or other proceeding
instituted in any court or before any administrative tribunal with respect to
any dispute between the parties arising out of this Agreement.
Section 21. Interpretation.
(a) As used in this Agreement, the following terms and phrases have the
indicated meanings:
(i) "Affiliate" and "Affiliates" mean, when used with respect
to any entity, individual, or other person, any other entity,
individual, or other person which, directly or indirectly, through one
or more intermediaries controls, or is controlled by, or is under
common control with such entity, individual or person.
(ii) "Base Salary" has the meaning assigned to that term in
Section 5.
(iii) "Basic Benefit Plans" has the meaning assigned to that
term in Section 5.
(iv) "Benchmark Bonus" has the meaning assigned to that term
in Section 5.
(v) "Board of Directors" means the Board of Directors of the
Company.
(vi) "Change in Control of the Company" has the meaning
assigned to that phrase in Section 2.
(vii) "Claim" has the meaning assigned to such term in Section
11.
(viii) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(ix) "Commission" means the United States Securities and
Exchange Commission or any successor agency.
(x) "Company" has the meaning assigned to that term in the
preamble to this Agreement. The term "Company" shall also include any
Successor, whether the liability of such Successor under this Agreement
is established by contract or occurs by operation of law.
12
(xi) "Determination" has the meaning assigned to that term in
Section 11.
(xii) "Dispute" has the meaning assigned to that term in
Section 11.
(xiii) "Effective Date" has the meaning assigned to that term
in the preamble to this Agreement.
(xiv) "Election Notice" has the meaning assigned to such term
in Section 11.
(xv) "Employee" has the meaning assigned to such term in the
preamble to this Agreement.
(xvi) "Employee Claim" has the meaning assigned to such term
in Section 11.
(xvii) "Employee's Disability" means:
(A) if no Change in Control of the Company shall have
occurred before the date of determination, the physical or
mental disability of the Employee determined in accordance
with the disability policy of the Company at the time in
effect and generally applicable to its salaried employees; and
(B) if a Change in Control of the Company shall have
occurred at that date, the physical or mental disability of
the Employee determined in accordance with the disability
policy of the Company in effect immediately before the
occurrence of the first Change in Control of the Company and
generally applicable to its salaried employees.
The Employee's Disability, and the automatic termination of the
Employee's employment by the Company by reason of the Employee's
Disability, shall be deemed to have occurred on the date of
determination, provided that if (1) a Change in Control of the Company
shall have occurred before the expiration of the term of this
Agreement, (2) the Company shall have subsequently given notice
pursuant to Section 6 of the Company's determination of the Employee's
Disability, and (3) the Employee shall have given notice to the Company
that the Employee disagrees with that determination, then (A) whether
the Employee's Disability shall have occurred shall be submitted to
arbitration pursuant to Section 20, and (B) if a majority of the
arbitrators decide that the Employee's Disability had not occurred, at
the date of determination by the Company, then (I) the Employee's
Disability, and the automatic termination of the Employee's employment
by the Company by reason of the Employee's Disability, shall be deemed
not to have occurred, and (II) on demand by the Employee made to the
Company, the Company shall reimburse the Employee for the reasonable
expenses (including attorneys' fees and expenses) incurred by the
Employee in obtaining that decision.
(xviii) "Employee's Retirement" means (x) if no Change in
Control of the Company shall have occurred before the date of the
Employee's proposed retirement, the retirement of the Employee in
accordance with the retirement policy of the Company at the time in
effect and generally applicable to its salaried employees, and (y) if a
Change in Control of the Company shall have occurred at that date, the
retirement of the Employee from the employ of the Company in accordance
with the retirement policy of the Company in effect immediately before
the occurrence of the first Change in Control of the Company and
generally applicable to its salaried employees.
(xix) "Event of Termination for Good Reason" has the meaning
assigned to that phrase in Section 5.
(xx) "Event of Termination for Cause" has the meaning assigned
to that phrase in Section 4.
(xxi) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(xxii) "Excise Tax" has the meaning assigned to that term in
Section 11.
(xxiii) "Expiration Date" has the meaning assigned to that
term in Section 3.
13
(xxiv) "Final Determination" has the meaning assigned to such
term in Section 11.
(xxv) "Gross-Up Payment" has the meaning assigned to that term
in Section 11.
(xxvi) "Other Benefit Plans" has the meaning assigned to that
term in Section 5.
(xxvii) "Payment" has the meaning assigned to that term in
Section 11.
(xxviii) "person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited
partnership, limited liability company, trust, unincorporated
organization, government, or agency or political subdivision of any
government.
(xxix) "Relevant Period" means a period beginning on the
Termination Date and ending on the first to occur of (x) the last day
of the __th calendar month immediately following the calendar month in
which the Termination Date occurs, (y) the date on which the Employee
becomes a full time employee of another person and (z) the Employee's
normal retirement date, determined in accordance with the retirement
policy of the Company in effect on the Termination Date.
(xxx) "Severance Payment" has the meaning assigned to that
term in Section 7.
(xxxi) "Successor" means a person with or into which the
Company shall have been merged or consolidated or to which the Company
shall have transferred its assets as an entirety or substantially as an
entirety.
(xxxii) "Tax" has the meaning assigned to that term in Section
11.
(xxxiii) "Tax Claim Notice" has the meaning assigned to that
term in Section 11.
(xxxiv) "Tax Counsel" has the meaning assigned to that term in
Section 11.
(xxxv) "Termination Date" has the meaning assigned to that
term in Section 6.
(xxxvi) "this Agreement" means this Change in Control
Agreement as it may be amended from time to time in accordance with
Section 15.
(xxxvii) "Underpayment" has the meaning assigned to that term
in Section 11.
(xxxviii) "Voting Stock" means shares of capital stock of the
Company the holders of which are entitled to vote for the election of
directors, but excluding shares entitled to so vote only upon the
occurrence of a contingency unless that contingency shall have
occurred.
(xxxix) "Wholly Owned Entities" has the meaning assigned to
that term in Section 13.
(b) In the event of the enactment of any successor provision to any
statute or rule cited in this Agreement, references in this Agreement to such
statute or rule shall be to such successor provision.
(c) The headings of Sections of this Agreement shall not control the
meaning or interpretation of this Agreement.
(d) References in this Agreement to any Section are to the
corresponding Section of this Agreement unless the context otherwise indicates.
14
IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as
of the Effective Date.
"Company"
UROCOR, INC.
By
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
"Employee"
-------------------------------------
Name:
--------------------------------
15
SCHEDULE 10.1
CHANGE IN CONTROL AGREEMENTS
SECTION 5 (v) SECTION 7 (a) (iii) SECTION 21 (a)
------------- -------------------- --------------
NAME PERCENTAGE 3 LUMP SUM (xxix) MONTH
---- ------------- ---------- ------------
Xxxxxxx X. Xxxxxx, Chief Executive 50% 1 1/2 18
Officer and President
Xxxxx X. Xxxxxx, Senior Vice 40% 1 1/2 18
President and Chief Financial
Officer
Xxxx X. Xxxx, Senior Vice President 40% 1 1/2 18
and General Manager, Sales,
Marketing and Operations
Xxxx X. Xxxxxxxxx, Xx., Vice 35% 1 1/2 18
President for Business Development
Xxxxxx X. Xxxxxx, Vice President and 30% 1 1/2 18
General Manager, UroSciences
Group
Xxxxxx X. Xxxxxx, Chief Information 30% 1 1/2 18
Officer
Xxxxxxx X. Xxxxxx, Vice President,
Chief Compliance Officer 0% 1 1/2 18
Xxxxxx X. XxXxxx, Director Human Resources 30% 1 12
Resources
Xxxxxxx X. Xxxxx, Ph.D., Vice 10% 1 1/2 18
President-Product Development
Xxxxxx X. X'Xxxx, Medical Director 20% 1 1/2 18
