Exhibit 10.34
CHANGE OF CONTROL AGREEMENT
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AGREEMENT made as of this _____th day of October, 1998, between
Meridian Medical Technologies, Inc., a Delaware corporation (hereinafter
"Company"), and _______________(hereinafter "Executive").
WHEREAS, the Company wishes to assure the continued availability of the
Executive's services and to create an environment which will promote the
Executive's giving impartial and objective advice in circumstances resulting
from the possibility of a Change of Control (as herein defined) of the Company;
and
WHEREAS, the Company and the Executive wish to provide the Executive
with financial protection in the event significant changes in the Executive's
employment status occur following a Change of Control of the Company.
NOW, THEREFORE, the Company and the Executive, in consideration of the
terms and conditions set forth herein and other valuable consideration, receipt
and sufficiency of which are hereby acknowledged, mutually covenant and agree as
follows:
1. Term.
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The term of this Agreement shall commence on the date hereof and
terminate on October 1, 2001 unless the Executive's employment with the Company
or a subsidiary is sooner terminated prior to a Change of Control in which case
it will terminate upon the termination of the Executive's employment (the
"Term"), provided, however, if a Change of Control occurs prior to October 1,
2001, then this Agreement will terminate on the second anniversary of the Change
of Control.
2. Payments Upon Change of Control and Termination Event.
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The Company shall make payments to the Executive as provided for in
paragraph 4 hereof upon the occurrence of both a Change of Control of the
Company and a Termination Event, as such terms are defined in paragraph 3.
3. Definitions.
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(a) "Base Salary" shall mean an amount equal to the Executive's highest
annual base salary after the date hereof and preceding a Termination Event.
(b) "Cause" means (i) the Executive's failure or refusal to perform
satisfactorily any duties reasonably required of the Executive by the Company
(other than by reason of disability), after reasonable demand for substantial
performance is delivered by the Company specifically identifying the manner in
which the Company believes the Executive has not performed his duties; (ii) the
commission by the Executive of a felony or the perpetration by the Executive of
a dishonest act against or breach of fiduciary duty toward the Company or any of
its customers, employees, or vendors; or (iii) any willful act or omission by
the Executive which is injurious in any material respect to the financial
condition or business reputation of the Company. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his act or omission was in the best
interests of the Company.
(c) A "Change of Control" shall be deemed to have occurred if any of
the following have occurred prior to the expiration of the Term:
(i) any person or group of persons (as defined in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended ("1934 Act"))
together with its affiliates, excluding employee benefit plans of the Company,
is or becomes, directly or indirectly, the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the 0000 Xxx) of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(ii) as a result of a proxy contest, individuals who prior to
the conclusion thereof constituted the Board of Directors of the Company (the
"Board") (including for this purpose any new director whose election or
nomination for election by the Company's shareholders in connection with such
proxy contest was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);
(iii) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination for election by
the Company's shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied);
(iv) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or entity regardless of
which entity is the survivor, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least 60% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
(v) the stockholders of the Company approve a plan of complete
liquidation or winding-up of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or
(vi) any other event which the Board of Directors determines
should constitute a Change of Control.
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(d) A "Termination Event" shall be deemed to have occurred if, within
the twenty-four (24) month period following a Change of Control, (1) the
Executive's employment with Company is terminated by the Company without Cause,
other than by reason of death, disability or retirement; or (2) the Executive
voluntarily terminates his employment with the Company within 30 days after the
occurrence of any of the following events:
(i) the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities immediately prior to the Change of Control, or any other action
by the Company which results in a diminution in any material respect in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(ii) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof, as the same may be increased from time
to time;
(iii) the Company's requiring the Executive to be based at any
office or location that is more than fifty (50) miles from the Executive's
office or location immediately prior to the Change of Control;
(iv) the failure by the Company (i) to continue in effect any
bonus, stock option, or other cash or equity-based incentive plan in which the
Executive participates immediately prior to a Change in Control that is material
to the Executive's total compensation, unless an arrangement not materially less
favorable to the Executive (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or (ii) to continue the
Executive's participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change of Control; or
(v) the failure by the Company to continue to provide the
Executive with benefits that in the aggregate are not materially less favorable
to the Executive than those received by the Executive under the Company's
pension (including, but not limited to, tax-qualified plans), life insurance,
health, accident, disability or other welfare plans in which the Executive was
participating, at costs not materially greater than to those paid by the
Executive, immediately prior to the Change of Control.
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1. Cash Payments.
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In the event of a Termination Event, the Company agrees to continue to
pay to the Executive, the Executive's Base Salary for a period of twelve (12)
months.
2. Death of Executive.
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If the Executive dies before receiving all payments payable to him
under paragraph 4 of this Agreement, the Company shall continue to make payments
pursuant to paragraph 4 hereof to the Executive's spouse, or if the Executive
leaves no spouse, to the estate of the Executive.
3. Health and Life Insurance Benefits.
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The Company agrees to maintain, for a period of twelve (12) months
following the date of the occurrence of a Termination Event, the Executive's
eligibility for and participation in any health and life insurance plans
("Insurance Benefits"), in which the Executive was eligible to participate prior
to the Termination Event and upon the same basis and cost as prior to the
Termination Event, provided however, that if, for any reason, the Company is
unable to continue the Executive's participation in any such plan, the Company
shall cause the Executive to be eligible to participate in a substantially
equivalent arrangement upon substantially the same basis and cost as prior to
the Termination Event. Notwithstanding any other provision of this Agreement to
the contrary, if in connection with the termination of the Executive's
employment for any reason the Company is obligated by law or by contract
(including any employment or severance agreement other than this Agreement) or
by Company plan or policy to provide the Executive with life or health insurance
after the Executive's termination (or a cash payment in lieu thereof), then any
Insurance Benefits hereunder shall be reduced by the amount of any payments and
similar benefits described above, as applicable.
4. No Duty to Seek Other Employment.
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Amounts payable to the Executive under this Agreement shall not be
reduced by the amount of any compensation received by the Executive from any
other employer or source, and the Executive shall not be under any obligation to
seek other employment or gainful pursuit as a result of this Agreement.
5. Reduction of Payments.
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Notwithstanding any other provision of this Agreement, in the event
that any payment or benefit received or to be received by the Executive in
connection with a Change of Control or the termination of the Executive's
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement (all such payments and benefits, including the payments
and benefits provided for hereunder, being hereinafter called "Total Payments")
would not be deductible (in whole or part), by the Company, an affiliate or
other person or entity making such payment or providing such benefit as a result
of section 280G of the Internal Revenue Code of 1986, as amended,
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then, to the extent necessary to make such portion of the Total Payments
deductible, (A) the cash payments provided for by paragraph 4 hereof shall first
be reduced (if necessary, to zero), and (B) the benefits provided for by
paragraph 7 hereof shall next be reduced. For purposes of this limitation, no
portion of the Total Payments the receipt or enjoyment of which the Executive
shall have waived by written notice to the Company prior to the date of payment
shall be taken into account. All determinations required to be made under the
provisions of this paragraph 8 hereof shall be made by tax counsel selected by
the Company's independent auditors and reasonably acceptable to the Executive.
6. Payment of Compensation to Termination Date.
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In addition to any other payments payable to the Executive hereunder,
the Company shall pay the Executive full compensation and all other amounts and
benefits to which the Executive is entitled through the termination of his
employment.
7. No Right to Continued Employment.
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This Agreement shall not confer upon the Executive any right with
respect to continuance of employment by the Company or any subsidiary, nor shall
it interfere in any way with the right of his employer to terminate his
employment at any time. No payments hereunder shall be required except upon the
occurrence of both a Change of Control of the Company and a Termination Event.
Thus, except as specifically provided herein, no payments hereunder shall be
made on account of termination of the Executive's employment (i) upon the
Executive's death, disability or retirement, (ii) by the Company with or without
cause or (iii) upon the Executive's voluntary termination.
8. Waiver of Breach.
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Waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed as a waiver by such party of any subsequent
breach hereof.
9. Invalidity.
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The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision, which
shall remain in full force and effect.
10. Entire Agreement; Written Modification; Termination.
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This Agreement contains the entire agreement between the parties
concerning the matters covered hereby. No modification, amendment or waiver of
any provision hereof shall be effective unless in writing specifically referring
hereto and signed by the party against whom such provision as modified or
amended or such waiver is sought to be enforced. This Agreement shall terminate
as of the time the Company makes the final payment which it may be obligated to
pay hereunder or provide the final benefit which it
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may be obligated to provide hereunder. This Agreement supersedes and replaces
any earlier agreement on the subject matter hereof.
11. Counterparts.
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This Agreement may be made and executed in counterparts, each of which
may be considered an original for all purposes.
12. Governing Law.
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This Agreement is governed by and is to be construed and enforced in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned parties have executed or caused to
be executed this Agreement as of the day and year first above written.
MERIDIAN MEDICAL TECHNOLOGIES, INC.
By:
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"EXECUTIVE"
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