FORM OF SEVERANCE AGREEMENT
EXHIBIT 10.1
FORM OF
SEVERANCE AGREEMENT
THIS
AGREEMENT, dated ___________ is made by and between
AngioDynamics, Inc., a Delaware corporation (the "Company"), and _____________
(the "Executive").
WHEREAS,
the Company considers it essential to the best interests of its shareholders to
xxxxxx the continued employment of key management personnel;
and
WHEREAS,
the Board recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control exists and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its shareholders; and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as
follows:
1. Defined
Terms. The definitions of
capitalized terms used in this Agreement are provided in the last Section
hereof.
2. Term of
Agreement. The Term of this
Agreement shall commence on the date hereof and shall continue in effect through
December 31, 2009; provided, however, that effective January 1, 2010 and each
January 1 thereafter, the Term that is then in effect shall automatically be
extended for one additional year unless the Company has given notice before the
January 1 in question that the Term that is in effect at the time such notice is
given will not be extended; and further provided, however, that if a Change in
Control occurs during the Term, the Term shall expire no earlier than twelve
(12) calendar months after the calendar month in which such Change in Control
occurs. Notwithstanding the foregoing, this Agreement shall terminate if the
Executive ceases to be an employee of the Company and its subsidiaries for any
reason prior to a Change in Control.
However,
anything in this Agreement (including the preceding sentence) to the contrary
notwithstanding, if a Change in Control occurs and if, within three months prior
to the date on which such Change in Control occurs, the Executive's employment
with the Company is terminated by the Company without Cause or an event occurs
that would, if it took place after the Change in Control, constitute Good Reason
for termination of employment by the Executive, and if it is reasonably
demonstrated by the Executive that such termination of employment by the
Company or event constituting Good Reason for termination of employment by the
Executive (a) was undertaken at the request of a third party who has taken steps
reasonably calculated to effect the Change in Control, or (b) otherwise arose in
connection with or in anticipation of the Change in Control, then
for
purposes of this Agreement such
termination of employment by the Company without Cause or event constituting
Good Reason shall be deemed to occur during the 12 month period following the
Change in Control and, if the Executive terminates his employment for such Good
Reason before the Change in Control, such termination of employment by the
Executive shall likewise be deemed to occur during the 12 month period following
the Change in Control.
3. Company's
Covenants Summarized. In
order to induce the Executive to remain in the employ of the Company and in
consideration of the Executive's covenants set forth in Section 4 hereof, the
Company agrees, under the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 2, Section 6.3, Section 9.1 or
Section 14.2 hereof, no amounts shall be payable under this Agreement unless the
Executive's employment with the Company terminates following a Change in Control
and during the Term. This Agreement shall not be construed as creating an
express or implied contract of employment enforceable against the Company nor,
except as provided in Section 4 below, enforceable against the Executive, and,
except as otherwise agreed in writing between the Executive and the Company, the
Executive shall not have any right to be retained in the employ of the
Company.
4. The
Executive's Covenants. The
Executive agrees to remain in the employ of the Company, subject to the terms
and conditions of this Agreement, if a Potential Change in Control occurs during
the Term and the Executive is then in the employ of the Company, until the
earliest of (a) the date which is six (6) months from the date of such Potential
Change in Control, (b) the date of a Change in Control, (c) the date of
termination by the Executive of the Executive's employment for Good Reason or by
reason of death, Disability or Retirement, or (d) the termination by the Company
of the Executive's employment for any reason; provided that Executive’s
agreement to remain in the employ of the Company shall be subject to the
condition that no adverse change occurs after the Potential Change in Control in
his title, duties, responsibilities, authority, reporting relationships,
compensation, benefits or indemnification rights.
5. Certain
Compensation Other Than Severance Payments.
5.1 If
the Executive's employment shall be terminated for any reason following a Change
in Control and during the Term, the Company shall pay the Executive his full
salary through the date of termination at the rate in effect immediately prior
to the date of termination or, if higher, the rate in effect immediately prior
to the first occurrence of an event or circumstance constituting Good Reason,
together with all compensation and benefits payable to the Executive through the
date of termination under the terms of the Company's compensation and benefit
plans, programs and arrangements as in effect immediately prior to the date of
termination or, if more favorable to the Executive, as in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason.
5.2 Subject
to Section 6.1 hereof, if the Executive's employment shall be terminated for any
reason following a Change in Control and during the Term, the Company shall pay
to the Executive the Executive's normal post-termination compensation and
benefits as such payments become due. Any such
post-termination
compensation and benefits shall be
determined under, and paid in accordance with, the Company's retirement,
insurance and other compensation and benefit plans, programs and arrangements as
in effect immediately prior to the date of termination or, if more favorable to
the Executive, as in effect immediately prior to the occurrence of the first
event or circumstance constituting Good Reason.
6. Severance
Payments; Excise Tax.
6.1 Subject
to Section 6.2 and Section 6.3 hereof, if the Executive's employment is
terminated following a Change in Control and during the Term either by the
Company or by the Executive, other than (a) by the Company for Cause, (b) by
reason of death or Disability, or (c) by the Executive without Good
Reason, (any such employment termination being hereafter sometimes referred to
as a "Compensable
Termination"), then the
Company shall pay the Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments"), in addition to
any payments and benefits to which the Executive is entitled under Sections 5
and 6.3 hereof. Notwithstanding the foregoing, the Executive shall not be
eligible to receive any payment or benefit provided for in this Section 6.1
unless the Executive shall have executed a release substantially in the form of
Exhibit A hereto effective as of the date of the Compensable Termination or a
date subsequent thereto and shall not have revoked said release. The
Severance Payments are in lieu of any severance benefits that would otherwise be
payable or provided pursuant to any severance plan or practice of the
Company.
(i) The
Company shall pay the Executive, at the time provided in Section 6.2 below, his
annual bonus for the fiscal year of the Company preceding the fiscal year of the
Company in which the Compensable Termination occurs, if unpaid at the time of
the Compensable Termination, the amount of such bonus to be determined by the
Compensation Committee of the Board on a basis no less favorable to the
Executive than its bonus determinations with respect to the Executive prior to
the Change in Control, unless the Committee made no bonus determinations with
respect to the Executive before the Change in Control, in which case on a basis
no less favorable to the Executive than its bonus determinations with respect to
other executives of comparable rank before the Change in
Control.
(ii) The
Company shall pay the Executive, at the time provided in Section 6.2 below, a
prorated annual bonus for the fiscal year of the Company in which the
Compensable Termination occurs, such prorated bonus to be determined by
multiplying the “Applicable Average Bonus” as defined below in this subsection
(ii) by a fraction the numerator of which shall be the number of days elapsed in
such fiscal year through (and including) the date on which the Compensable
Termination occurs and the denominator of which shall be the number
365. For purposes of this Agreement, the “Applicable
Average Bonus” means the
higher of (A) the average of all annual bonuses (including any deferred bonuses)
awarded to the Executive during the 36 months immediately preceding the
Compensable Termination or, if the Executive was employed by the Company for
less than 36 months before the Compensable Termination, during the period of his
employment by
the Company prior to the Compensable
Termination (annualizing any bonus awarded for less than a full year of
employment), or (B) the average of all annual bonuses (including any deferred
bonuses) awarded to the Executive during the three fiscal years of the Company
that precede the fiscal year in which the Compensable Termination occurs or
during the portion of such three fiscal years in which he was employed by the
Company (annualizing any bonus awarded for less than a full year of employment),
or (C) the average of all annual bonuses (including any deferred bonuses)
awarded to the Executive during the 36 months preceding the date on which the
Change in Control occurred or during the portion of such 36 month period in
which he was employed by the Company (annualizing any bonus awarded for less
than a full year of employment).
(iii) The
Company shall pay the Executive, at the time provided in Section 6.2 below, a
lump sum cash payment equal to two (2) times the Executive's annual base salary
at the rate in effect immediately prior to the Compensable Termination or, if
higher, in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason (“Base
Salary”).
(iv) The
Company will pay the Executive for all earned but unused vacation leave at the
time of the Compensable Termination.
(v) At
the time provided in Section 6.2 below, the Company shall, in accordance with
the Company’s automobile policy for officers as in effect on the date of this
Agreement (the “Auto
Policy”), (A) transfer
title to the Executive's Company-provided automobile to the Executive at the
Company’s expense, or (B) if the Company leases rather than owns such
automobile, purchase such automobile and transfer title to such automobile to
the Executive at the Company's expense, or (C) if the Executive is receiving a
car allowance in lieu of being provided with a Company-owned or Company-leased
automobile, pay the Executive the book value of the automobile for which the
allowance is paid, up to the amount provided in the Auto
Policy.
6.2 All
payments to be made pursuant to subsection (i), (ii), (iii), and (v) of
Section 6.1 above shall be made within thirty (30) calendar days
after the date on which a Separation from Service occurs coincident with or
following, or within 30 days before, the date on which the Compensable
Termination occurs (the “ Separation
from Service Date ”) unless
on the Separation from Service Date the Executive is a Specified
Employee, in which case such payments shall be made six months and one day after
the Separation from Service Date (or, if earlier, the date of the Executive’s
death). For purposes of the preceding sentence, a Specified Employee
means a “specified employee” who is subject to the special rule set
forth in subsection (a)(2)(B)(i) of section 409A of the Code and the regulations
thereunder (including, without limitation, Proposed Treasury Regulation section
1.409A-1(i)) with respect to such payments.
6.3 (A) Notwithstanding
any provision of this Agreement to the contrary, in the event that any payment
or benefit received or to be received by the Executive in connection with a
Change in Control or the termination of the Executive's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments but excluding any
payment to be made pursuant to this subsection 6.3(A), being hereinafter called
"Total
Payments") would be subject
(in whole or part) to the Excise Tax, then the cash Severance Payments shall
first be reduced, and the other payments and benefits hereunder shall thereafter
be reduced, to the extent necessary so that no portion of the Total Payments
will be subject to the Excise Tax, but only if (i) is greater than or equal to
(ii), where (i) equals the reduced amount of such Total Payments minus the
aggregate amount of federal, state and local income taxes on such reduced Total
Payments and (ii) equals the unreduced amount of such Total Payments minus the
sum of (a) the aggregate amount of federal, state and local income taxes on such
Total Payments and (b) the amount of Excise Tax to which the Executive would be
subject in respect of such unreduced Total Payments; provided, however, that the
Executive may elect to have the other payments and benefits hereunder reduced
(or eliminated) prior to any reduction of the cash Severance Payments. However,
if the Executive would realize at least $50,000 more after taxes from the Total
Payments if the Company were to “gross up” the Excise Tax on the Total Payments
rather than apply the preceding sentence, then the preceding sentence shall be
disregarded and the Company shall instead pay the Executive an amount of money
that would be sufficient to pay the Excise Tax on the Total Payments. Whether
the Executive would realize at least $50,000 more after taxes if he were grossed
up, and the amount of the gross up to be paid, shall be determined by assuming
(whether or not such is in fact the case) that the Executive is subject to
federal income taxation at the highest marginal rate of federal income tax and
to state and local income taxation at the highest marginal rates of state and
local income taxes in the state and locality of the Executive’s residence on the
date on which the Change in Control occurs or at the time provided in Section
6.2 above (whichever is the date as of which the determination in question is
made in accordance with the next sentence of this paragraph); provided that in
no event shall the Executive’s marginal tax rate including the Excise Tax be
assumed to exceed seventy percent (70%) for purposes of calculating
the amount of gross up to be paid. The amount of money payable to the
Executive pursuant to the two preceding sentences, if any, shall be determined
as of the date on which a Change in Control occurs and shall be paid within ten
(10) calendar days after the date on which occurs “a change in the
ownership or effective control of the corporation, or in the ownership of a
substantial portion of the assets of the corporation” within the meaning of
section 409A(a)(2)(A)(v) of the Code (whether occurring at the same time as or
after the date on which a Change in Control occurs); and if a Compensable
Termination occurs after the date on which a Change in Control occurs, the
amount of money payable to the Executive pursuant to the two preceding
sentences, if any, shall be re-determined as of the date of the Compensable
Termination and any balance due the Executive shall be paid at the time provided
in Section 6.2 above.
(B) For
purposes of determining whether and the extent to which the Total Payments will
be subject to the Excise Tax, (i) no portion of the Total Payments the receipt
or enjoyment of which the Executive shall have waived at such time and in such
manner as not to constitute a "payment" within the meaning of section 280G(b) of
the Code shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of the accounting
firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of section 280G(b)(2) of the Code (including,
without limitation, by reason of section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payments shall be taken
into account which, in the opinion of the Auditor, constitutes reasonable
compensation for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such
reasonable compensation, and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of sections 280G(d)(3) and (4)
of the Code. In the event that the Auditor is serving as accountant or auditor
for the individual, entity or group effecting the “change in ownership or
effective control” or “change in the ownership of a substantial portion of the
assets” (within the meaning of Code section 280G(b)(2)(A)) that gives rise to
the Excise Tax, or in the event that the Auditor for any reason is unable or
unwilling to make the determinations required hereunder, the Executive shall
designate another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Auditor hereunder). All fees and expenses of the Auditor
shall be borne solely by the Company.
(C) At the time
that payments are made under this Agreement, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from the
Auditor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement). If the Executive objects to
the Company's calculations, the Company shall pay to the Executive such portion
of the Severance Payments (up to 100% thereof) and such amount of money referred
to in subsection (A) of this Section 6.3 as the Executive reasonably determines
(based on the written opinion of competent tax counsel, a copy of which opinion
shall be provided to the Company) is necessary to result in the proper
application of subsection (A) of this Section 6.3.
7. Payments
During Dispute. Any
payments to which the Executive may be entitled under this Agreement, including,
without limitation, under sections 5 and 6 hereof, shall be made forthwith on
the applicable date(s) for payment specified in this Agreement. If
for any reason the amount of any payment due to the Executive cannot be finally
determined on that date, such amount shall be estimated on a good faith basis by
the Company and the estimated amount
shall be paid no later than 10 days after such date. As soon as
practicable thereafter, the final determination of the amount due shall be made
and any adjustment requiring a payment to or from the Executive shall be made as
promptly as
practicable.
8. No
Mitigation. The Company
agrees that, if the Executive's employment with the Company terminates during
the Term, the Executive is not required to seek other employment or to attempt
in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 6 hereof or any other provision of this Agreement. Further,
the amount of any payment or benefit provided for in this Agreement shall not be
reduced (a) by any compensation earned by the Executive as the result of
employment by another employer, (b) by retirement benefits, (c) by offset
against any amount claimed to be owed by the Executive to the Company, or (d)
otherwise.
9. Successors;
Binding Agreement.
9.1 In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform the Company’s
obligations under this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession during the Term shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control and during the Term, except that, for purposes
of implementing the foregoing, the date on which the Executive’s employment
terminates (for any reason other than Cause) within 30 days before, or at any
time during the Term and on or after, the date on which any such succession
becomes effective during the Term shall be deemed the date of the Compensable
Termination.
9.2 This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than amounts which, by
their terms, terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
10. Notices. For the purpose of this Agreement,
notices and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed, if to the Executive, to his most recent
address shown on the books and records
of the Company at the time notice is given and, if to the Company, to the
address set forth below, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To
the Company:
AngioDynamics,
Inc.
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
11. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of any lack of compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement constitutes the
entire agreement of the parties concerning the specific subject matter addressed
by this Agreement and supersedes all prior agreements addressing the terms and
conditions contained herein. Nothing in this Agreement is intended to
amend or otherwise alter the change in control provisions or any other
provisions of any (a) stock option or other compensation or incentive award that
may heretofore have been or may hereafter be granted to the Executive, or (b)
employee benefit or fringe benefit plan in which the Executive may heretofore
have been or may hereafter be a participant. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York. All references to sections of the Code or the Exchange
Act shall be deemed also to refer to any successor provisions to such sections
and to IRS or SEC regulations and official guidance published thereunder. Any
payments provided for hereunder shall be subject to any applicable withholding
required under federal, state or local law and any additional withholding to
which the Executive has agreed. The obligations of the Company and the Executive
under this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
14. Settlement
of Disputes; Arbitration.
14.1 All
claims by the Executive for benefits under this Agreement shall be directed to
and determined by the Board and shall be in writing. Any denial by the Board of
a claim for benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the Board
within sixty (60) days after notification by the Board that the
Executive's claim has been denied.
14.2 Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in the Albany, New York
metropolitan area in accordance with the employment dispute resolution rules of
the American Arbitration Association then in effect. The arbitrator shall have
the authority to require that the Company reimburse the Executive for the
payment of all or any portion of the legal fees and expenses incurred by the
Executive in connection with such dispute or controversy. Judgment may be
entered on the arbitrator's award in any court having
jurisdiction.
14.3 The
Company agrees to amend this Agreement on or before December 31, 2007 (or such
later date, if any, to which the December 31, 2005 date referred to in
Q&A-19 of IRS Notice 2005-1 is further extended) in the respects that the
Company reasonably determines to be necessary or advisable to enable the
Executive to receive all amounts and benefits payable under this Agreement at
the times herein provided (or as close thereto as is practicable and
permissible) without inclusion of any amounts in the Executive’s income pursuant
to Section 409A(a)(1)(A) of the Code. Any such amendments shall be
subject to the written consent of the Executive. The Company also
agrees to use commercially reasonable efforts to administer this Agreement, and
operate any deferred compensation plans in which the Executive participates from
time to time that are aggregated with this Agreement or with any payment or
benefit provided by this Agreement for purposes of Section 409A of the Code
(e.g., account balance plans, nonaccount balance plans, separation pay plans,
and plans that are neither account balance nor nonaccount balance plans), in
good faith compliance with Code Section 409A to the extent necessary to avoid
inclusion of any amounts or benefits payable hereunder in the Executive’s income
pursuant to Section 409A(a)(1)(A) of the Code.
15. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
the Exchange Act.
(B) "Aplicable Average Bonus"shall have
the meaning set forth in subsection (ii) of Section 6.1.
(C) "Auditor"
shall have the meaning set forth in Section 6.3(B)
hereof.
(D) "Base
Amount" shall have the meaning set forth in section 280G(b)(3) of the
Code.
(E) "Base Salary" shall have the
meaning set forth in subsection (iii) of Section 6.1.
(F) "Beneficial
Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
(G) "Board"
shall mean the Board of Directors of the Company.
(H) "Cause"
for termination by the Company of the Executive's employment shall mean (i) the
willful and continued failure by the Executive to substantially perform the
Executive's duties with the Company as such duties were in effect prior to any
change therein constituting Good Reason (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness or any such
failure after the occurrence of an event constituting Good Reason for
resignation by the Executive) after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive's duties, provided that such failure will constitute
Cause only if it remains uncured for more than thirty (30) days following
receipt by the Executive of such written demand from the Board; (ii) the
engaging by the Executive in willful conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise, provided that such conduct will constitute Cause only if it remains
uncured for more than thirty (30) days following receipt by the Executive of a
written demand from the Board to cease such conduct; (iii) the Executive’s
insubordination, as defined from time to time by the Board, provided that
insubordination will constitute Cause only if it remains uncured for more than
thirty (30) days following receipt by the Executive of a written demand from the
Board to cease such insubordination; or (iv) the Executive's conviction of (a) a
felony or (b) a crime involving fraud, dishonesty or moral turpitude. For
purposes of clauses (i) and (ii) of this definition, no act, or failure to act,
on the Executive's part shall be deemed "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Company. The Company shall notify the Executive in writing of any
employment termination purporting to be for Cause on or before the date of such
termination, which writing shall describe with specificity the conduct alleged
to constitute Cause for such termination. Any purported termination
of employment by the Company for Cause which does not satisfy the applicable
requirements of this Section 15(H) shall be conclusively deemed to be a
termination of employment by the Company without Cause for purposes of this
Agreement.
(I) A
"Change in Control" shall mean that any of the following events has
occurred:
(i) any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company or
its Affiliates) representing more than 40% of the combined voting power of the
Company's then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clause (A) of
paragraph (iii) below; or
(ii) the
following individuals cease for any reason to constitute a majority
of the number of directors serving on the Board: individuals who, at the
beginning of any period of two consecutive years or less (not including any
period prior to the date of this Agreement), constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election
by the Company's shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of such period or whose appointment, election or nomination for
election was previously so approved or recommended; or
(iii) there
is consummated a merger or consolidation of the Company or any Subsidiary with
any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company or any Subsidiary, at least 60% of the combined voting power of
the securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates) representing more than 40% of the
combined voting power of the Company's then outstanding securities;
or
(iv) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of all or substantially
all of the Company's assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by shareholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.
(J) "Code"
shall mean the Internal Revenue Code of 1986, as amended from time to
time.
(K) "Company"
shall mean AngioDynamics, Inc. and, except in determining under Section 15(I)
hereof whether or not any Change in Control of the Company has occurred, shall
include any successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(L) "Compensable Termination" shall
have the meaning set forth in Section 6.1.
(M)
"Disability" shall be deemed the reason for the termination by the Company of
the Executive's employment, if, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from the
full-time performance of the Executive's duties with the Company for a period of
six consecutive months or for six non-consecutive months within any period of 12
consecutive months.
(N) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended from time to
time.
(O) "Excise
Tax" shall mean any excise tax imposed under section 4999 of the
Code.
(P)
"Executive" shall mean the individual named in the first paragraph of this
Agreement.
(Q) "Good
Reason" for termination by the Executive of the Executive's employment shall
mean the occurrence (without the Executive's express written consent) after any
Change in Control, of any one of the following acts by the Company, or failures
by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (iii), (iv) or (vii) below, such act or failure to
act is corrected within thirty (30) calendar days after the Company’s receipt of
written notice thereof given by the Executive within thirty (30) calendar days
of such act or failure to act:
(i) the
assignment to the Executive of any duties inconsistent with the Executive's
status or position in the Company immediately prior to the Change in Control, or
a substantial adverse alteration in the nature, status or scope of the
Executive's responsibilities or authority from his responsibilities or authority
immediately prior to the Change in Control, or a reduction in his
title;
(ii) a
reduction by the Company in the Executive's annual base salary as in effect on
the date of this Agreement or as the same may be increased from time to
time;
(iii)
a significant reduction in compensation, benefits or reimbursements
provided under any employment, compensation, employee benefit or reimbursement
plan or program in which the Executive is a participant which is not replaced
with substantially equivalent compensation, benefits or
reimbursements under another plan,
program or arrangement at substantially the same cost (if any) to the
Executive;
(iv) the
Company fails to pay or provide any amount or benefit that the Company is
obligated to pay or provide under this Agreement or any other employment,
compensation, benefit or reimbursement plan, agreement or arrangement of the
Company to which the Executive is a party or in which the Executive
participates;
(v) the
Company fails to pay the Executive a bonus, for each fiscal year of Employer
that terminates following a Change in Control and during the Term, at least
equal to 80% of the Applicable Average Bonus;
(vi) the
relocation of the Executive's principal place of employment to a location which
increases the Executive's one-way commuting distance by more than 40 miles, or
the Company's requiring the Executive to travel on business other than to an
extent substantially consistent with the Executive's business travel obligations
prior to the Change in Control;
(vii) a
significant adverse change occurs, whether of a quantitative or qualitative
nature, in the indemnification protection provided to the Executive for acts and
omissions arising out of his service on behalf of the Company or any other
entity at the request of the Company; or
(viii) The
Company fails to obtain the assumption of this Agreement pursuant to
Section 9.1.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason
hereunder.
(R)
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(S) "Potential
Change in Control" shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:
(i) the
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;
(ii) the
Company or any Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in
Control;
(iii) any
Person becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing 15% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company's then
outstanding securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its
Affiliates); or
(iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(T) "Retirement"
shall be deemed the reason for the termination by the Executive of the
Executive's employment if such employment is terminated in accordance with the
Company's retirement policy, including early retirement, generally applicable to
its salaried employees.
(U) "Separation from Service" means
termination of employment with the Company. However, the Executive shall not be
deemed to have a Separation from Service if he continues to provide services to
the Company in a capacity other than as an employee and if he is providing
services at an annual rate that is fifty percent or more of the services he
rendered, on average, during the immediately preceding three full calendar years
of employment with the Company (or if employed by the Company less than three
years, such lesser period) and the annual remuneration for his services is fifty
percent or more of the annual remuneration earned during the final three full
calendar years of employment (of if less, such lesser period); provided,
however, that a Separation from Service will be deemed to have occurred if his
service with the Company is reduced to an annual rate that is less than twenty
percent of the services he rendered, on average, during the immediately
preceding three full calendar years of employment with the Company (or if
employed by the Company less than three years, such lesser period) or the annual
remuneration for his services is less than twenty percent of the annual
remuneration earned during the three full calendar years of employment with the
Company (or if less, such lesser period).
(V) "Separation from Service Date"
shall have the meaning set forth in Section 6.2 hereof.
(W)
"Severance Payments" shall have the meaning set forth in Section 6.1
hereof.
(X) "Subsidiary" means a corporation or
other form of business association of which shares (or other ownership
interests) having more than 50% of the voting power are owned or controlled,
directly or indirectly, by the Company.
(Y) "Term"
shall mean the period of time described in Section 2 hereof (including any
extension or continuation described therein).
(Z) "Total
Payments" shall mean those payments so described in Section 6.3
hereof.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
