BIOSPECIFICS TECHNOLOGIES CORP. Change of Control Agreement
Exhibit
10.2
This
Change of Control Agreement, effective as of June 18, 2007 is entered into
by
and between BioSpecifics Technologies Corp., a Delaware corporation (the
“Company”), with its principal offices located at 00 Xxxxxx
Xxxxxx, Xxxxxxxx, XX 00000, and Xxxxxx X. Xxxxxx (the
“Employee”).
The
Employee is employed by the Company and the Company and the Employee desire
to
arrange for certain provisions applicable in the event of termination of
the
Employee’s employment in the circumstances provided herein. The Employee is a
skilled and dedicated employee who has important talents which benefit the
Company. The Company believes that its best interests will be served if the
Employee is encouraged to remain with the Company. The Company has determined
that the Employee’s ability to perform the Employee’s responsibilities and
utilize the Employee’s talents for the benefit of the Company, and the Company’s
ability to retain the Employee as an employee, will be significantly enhanced
if
the Employee is provided with fair and reasonable protection from the risks
of a
change in ownership or control of Company. Accordingly, the Company and the
Employee agree as follows:
1.
Change of Control Payments; Benefits.
1.1
Termination Events Resulting in Change of Control
Payments.
(a)
Following a “Change of Control” (as hereinafter defined) of the Company, in the
event of the termination of the Employee’s employment by the Company, or its
successor, without cause, at any time after such Change of Control, then
the
Company shall make Change of Control payments to the Employee in the amount
set
forth in, and payable in accordance with, Section 1.2 (a).
(b)
In the event of the termination of the Employee’s employment by the
Employee for “Good Reason” (as defined below) at any time after a “Change of
Control” (as defined below), then the Company shall make Change of Control
payments to the Employee in the amount set forth in, and payable in accordance
with, Section 1.2 (a).
(i)
For purposes of this Agreement, a “Change of Control”
shall mean the occurrence of any one of the following:
A.
the acquisition by any “person” (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934), other than the Company or
its
affiliates, from any party of an amount of the capital stock of the Company,
so
that such person holds or controls 40% or more of the Company’s capital stock;
or
B.
a merger or similar combination between the Company and another entity
after which 40% or more of the voting stock of the surviving corporation
is held
by persons other than the Company or its affiliates; or
C.
a merger or similar combination (other than with the Company) in which the
Company is not the surviving corporation; or
D.
an acquisition, merger or similar combination or a divestiture of a
substantial portion of the Company’s business after which the Employee’s role is
not substantially the same as such role prior to the transaction;
E.
the sale of all or substantially all of the Company’s assets or business;
or
(ii)
For purposes of this Agreement, “Good Reason” shall mean
the following involuntary circumstances:
A.
assignment to the Employee of any duties inconsistent in any material respect
with the Employee’s position (including titles and reporting requirements),
authority, duties or responsibilities as contemplated by the job description
of
the Employee’s position, or any other action by the Company or its successor,
which results in a diminution in such position, authority, duties or
responsibilities, other than an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after
receipt of written notice thereof given by the Employee;
B.
a reduction in the Employee’s annual base salary (or an adverse change in the
form or timing of the payment thereof), other than an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of written notice thereof given by the Employee;
or the elimination of or reduction of any benefit under any bonus, incentive
or
other employee benefit plan in effect on the day immediately preceding the
Change in Control, without an economically equivalent replacement, if Employee
was a participant or member of such plan on the day immediately preceding
the
Change in Control;
C.
the Company’s or its successor’s requiring the Employee (i) to be based at any
office or location more than 25 miles away from the office or location where
Employee was performing services immediately prior to the Change in Control,
or
(ii) to relocate his or her personal residence, or (iii) the Company’s requiring
the Employee to travel on Company business to a substantially greater extent
than required immediately prior to the Change in Control.
For
purposes of this Section 1.1 (b)(ii), any good faith determination of “Good
Reason” made by the Employee shall be conclusive.
(c)
No Change of Control payments shall be payable in the event that the
Employee’s employment is terminated (i) by the Employee, except in accordance
with Section 1.1(b) above, or (ii) by the Company in the event of (x) the
Employee’s breach of any material duty or obligation to the Company, or (y)
intentional or grossly negligent conduct that is materially injurious to
the
Company (as reasonably determined by the Company’s Board of Directors), or (z)
the willful failure of the Employee to follow the reasonable directions of
the
Company’s Employee officers or Board of Directors.
(d)
Anything in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Employee’s employment is terminated prior to the date
on which the Change of Control occurs, and if it is reasonably demonstrated
by
the Employee that such termination of employment (i) was at the request of
a
third party who has taken steps reasonably calculated to effect a Change
of
Control or (ii) otherwise arose in connection with or anticipation of a Change
of Control, then for all purposes of this Agreement change of Control payments
shall be payable.
1.2
Amount and Payment of Change of Control
Payments.
(a)
The aggregate Change of Control payment referred to in Sections 1.1(a) and
1.1(b) above shall be equal to one-twelfth (1/12th) of the
Employee’s
annual base salary at the time of such termination
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multiplied
by twelve (12) months, to be payable in one lump sum not later than thirty
(30)
days after date of termination of the Employee’s employment by the Company (the
“Termination Date”).
(b)
The Employee shall not be required to mitigate the amount of any payment
provided for in this Section 1.2 by seeking other employment or otherwise.
The
amount of any payment or benefit provided for in this Section 1.2 shall not
be
reduced as the result of employment by the Employee with another employer
after
the Termination Date, or otherwise.
(c)
Until the anniversary of the Termination Date, the Employee shall be entitled
to
participate in the Company’s medical, dental, and life insurance plans, at the
highest level provided to the Employee during the period beginning immediately
prior to the Change in Control and ending on the Termination Date, and at
no
greater cost than the cost the Employee was paying immediately prior to Change
in Control; provided, however, that if the Employee becomes
employed by a new employer, the Employee’s coverage under the applicable Company
plans shall continue, but the Employee’s coverage thereunder shall be secondary
to (i.e., reduced by) any benefits provided under like plans of such new
employer.
(d)
Payment of Accrued But Unpaid Amounts. Within ten
(10) business days after the Termination Date, the Company shall pay Employee
earned but unpaid compensation, including, without limitation, any unpaid
portion of the Employee’s vacation pay accrued with respect to the full calendar
year ended prior to the Termination Date
1.3
Option Vesting. If the Employee’s employment with
the Company is terminated pursuant to Sections 1.1(a) or 1.1(b), 100% of
any
options to purchase shares of Common Stock of the Company then held by the
Employee, which options are then subject to vesting, shall, notwithstanding
any
contrary provision in the option agreement or stock option plan pursuant
to
which such options had been granted, be accelerated and become fully vested
and
exercisable on the date immediately preceding the effective Termination Date.
All other terms of the Employee’s options shall remain in full force and
effect.
1.4
Restricted Stock. If the Employee’s employment with the
Company is terminated pursuant to Sections 1.1(a) or 1.1(b) and, on the date
immediately preceding the Date of Termination, the Employee then holds shares
of
Common Stock of the Company that are subject to restrictions on transfer
(“Restricted Stock”), which shares were issued to the Employee
in a transaction other than pursuant to the exercise of a stock option, then,
notwithstanding any contrary provision in the relevant stock purchase agreement
or other instrument pursuant to which the Employee acquired such shares of
Restricted Stock, such restrictions shall expire in their entirety on the
date
immediately preceding the Termination Date and all of such shares of Common
Stock shall become transferable free of restriction, subject to the applicable
provisions of federal and state securities laws. All other terms of any existing
stock purchase or similar document shall remain in full force and
effect.
2.
Confidentiality Agreement. The Employee confirms that as
of the date hereof he or she has executed, or agrees that he or she will
execute, the Company’s standard Confidentiality Agreement pursuant to which the
Employee has agreed to refrain from disclosing the Company’s confidential
information as set forth in such Confidentiality Agreement.
3.
Miscellaneous.
3.1
Assignment. This Agreement may not be assigned, in
whole or in part, by either party without the prior written consent of the
other
party, except that the Company shall assign its rights and
3
obligations
under this Agreement to any corporation, firm or other business entity with
or
into which the Company may merge or consolidate, or to which the Company
may
sell or transfer all or substantially all of its assets, or of which 50%
or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company. In the event
of
any such assignment by the Company.
3.2
Notices. All notices, requests, demands and other
communications to be given pursuant to this Agreement shall be in writing
and
shall be deemed to have been duly given if delivered by hand or mailed by
registered or certified mail, return receipt requested, postage prepaid,
to the
addresses set forth at the beginning of this Agreement or such other address
as
a party shall have designated by notice in writing to the other party, provided
that notice of any change in address must actually have been received to
be
effective hereunder.
3.3
Integration. This Agreement is the entire agreement of
the parties with respect to the subject matter hereof and supersedes any
prior
agreement or understanding relating to the subject matter hereof. This Agreement
may not be superseded, amended, supplemented or otherwise modified except
by a
writing signed by the Employee and the Company.
3.4
Binding Effect. Subject to Section 3.1, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their successors, assigns, heirs and personal representatives.
3.5
Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed an original and shall together
constitute one and the same instrument.
3.6
Severability. If any provision hereof shall, for
any reason, be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof,
and
this Agreement shall be construed as if such invalid or unenforceable provision
had not been included herein. If any provision hereof shall for any reason
be
held by a court to be excessively broad as to duration, geographical scope,
activity or subject matter, it shall be construed by limiting and reducing
it to
make it enforceable to the extent compatible with applicable law as then
in
effect.
3.7
Governing Law. This Agreement shall be governed by
the laws of the State of New York, without regard to its conflict-of-law
provisions.
3.8
Termination. Nothing in this Agreement is intended
to or shall modify the at-will nature of the Employee’s employment relationship
with the Company. The Employee may terminate his or her employment at any
time
with or without notice and with or without cause and the Company may do
likewise, subject only to the express provisions of this Agreement.
3.9
Survival of Obligations; Enforcement. The
Employee’s duties hereunder shall survive termination of the Employee’s
employment by the Company. The Employee acknowledges that a remedy at law
for
any breach or threatened breach by the Employee of the provisions of this
Agreement may be inadequate and the Employee therefore agrees that the Company
shall be entitled to injunctive relief in case of any such breach or threatened
breach.
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IN
WITNESS WHEREOF, the undersigned
have duly executed and delivered this Agreement under seal as of the date
first
written above.
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EMPLOYEE
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/s/
Xxxxxx X. Xxxxxx
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Name:
Xxxxxx X.
Xxxxxx
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By:
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/s/
Xxxx Xxxxxx
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Name: Xxxx
Xxxxxx
Title:
Director
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