EXHIBIT 10.23
CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between CTI Molecular Imaging, Inc., a Delaware
corporation (the "Company"), and Xxxxxxxxx X. Xxxxxxxx ("Executive"), dated as
of the 9th day of December, 2003.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide Executive
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date during
the Change of Control Period (as defined in Section l(b)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by Executive 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 the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third anniversary of the date
hereof; provided, however, that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to Executive that the Change of Control Period shall not be so extended.
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2. Change of Control. For the purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any of the following events but
shall specifically exclude a public offering of the Company's common stock:
(a) individuals who, as of the date of this Agreement,
constitute the Board of Directors of the Company (the "Incumbent Directors")
cease for any reason to constitute at least a majority of such Board, provided
that any person becoming a director after the date of this Agreement and whose
election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors then on the Board shall be an Incumbent
Director; provided, however, that no individual initially elected or nominated
as a director of the Company as a result of an actual or threatened election
contest with respect to the election or removal of directors ("Election
Contest") or other actual or threatened solicitation of proxies or consents by
or on behalf of any "person" (such term for purposes of this definition being as
defined in Section 3(a)(9) of the Exchange Act and as used in Section 13(d)(3)
and 14(d)(2) of the Exchange Act) other than the Board ("Proxy Contest"),
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(b) any person is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of either
(A) 35% or more of the then-outstanding shares of common stock of the Company
("Company Common Stock") or (B) securities of the Company representing 35% or
more of the combined voting power of the Company's then outstanding securities
eligible to vote for the election of directors (the "Company Voting
Securities"); provided, however, that for purposes of this subsection (b), the
following acquisitions shall not constitute a Change of Control: (i) an
acquisition directly from the Company, (ii) an acquisition by the Company or a
Subsidiary of the Company, (iii) an acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary of the
Company, or (iv) an acquisition pursuant to a Non-Qualifying Transaction (as
defined in subsection (c) below); or
(c) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of corporate transaction
involving the Company or a Subsidiary (a "Reorganization"), or the sale or other
disposition of all or substantially all of the Company's assets (a "Sale") or
the acquisition of assets or stock of another corporation (an "Acquisition"),
unless immediately following such Reorganization, Sale or Acquisition: (A) all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale or
Acquisition beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such
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Reorganization, Sale or Acquisition (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets or stock either directly or through
one or more subsidiaries, the "Surviving Company") in substantially the same
proportions as their ownership, immediately prior to such Reorganization, Sale
or Acquisition, of the outstanding Company Common Stock and the outstanding
Company Voting Securities, as the case may be, and (B) no person (other than (i)
the Company or any Subsidiary of the Company, (ii) the Surviving Company or its
ultimate parent corporation, (iii) any employee benefit plan (or related trust)
sponsored or maintained by any of the foregoing, or (iv) any person acquiring
Company Common Stock or Company Voting Securities, as the case may be, directly
from the Company) is the beneficial owner, directly or indirectly, of 35% or
more of the total common stock or 35% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Surviving
Company, and (C) at least a majority of the members of the board of directors of
the Surviving Company were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such
Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition
which satisfies all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a "Non-Qualifying Transaction"); or
(d) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
3. Employment Period. The Company hereby agrees to continue
Executive in its employ, and Executive hereby agrees to remain in the employ of
the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second anniversary of
such date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) Executive's
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately preceding the
Effective Date, and (B) Executive's services shall be performed at the location
where Executive was employed immediately preceding the Effective Date or any
office or location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which Executive is entitled, Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to Executive hereunder, to use
Executive's reasonable best efforts to perform faithfully and
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efficiently such responsibilities. During the Employment Period it shall not be
a violation of this Agreement for Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed that to
the extent that any such activities have been conducted by Executive prior to
the Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period,
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to 12 times the highest monthly
base salary paid or payable, including any base salary which has been earned but
deferred, to Executive by the Company and its affiliated companies in respect of
the 12-month period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Annual Base Salary shall be reviewed
no more than 12 months after the last salary increase awarded to Executive prior
to the Effective Date and thereafter at least annually. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as used in this Agreement shall refer
to Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by, controlling or
under common control with the Company.
(ii) Incentive, Bonus, Savings and Retirement Plans.
During the Employment Period, Executive shall be entitled to participate in all
incentive, bonus, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for
Executive under such plans, practices, policies and programs as in effect at any
time during the 120-day period immediately preceding the Effective Date or if
more favorable to Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
(iii) Welfare Benefit Plans. During the Employment
Period, Executive and/or Executive's eligible dependents, as the case may be,
shall be eligible for
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participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.
(iv) Expenses. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(v) Fringe Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
(vi) Vacation. During the Employment Period,
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall
terminate automatically upon Executive's death during the Employment Period. If
the Company determines in good faith that the Disability of Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to Executive written notice in accordance with
Section 13(b) of this Agreement of its intention to terminate Executive's
employment. In such event, Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by Executive
(the "Disability Effective Date"), provided that, within the 30 days after such
receipt, Executive shall not have returned to full-time performance of
Executive's duties.
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For purposes of this Agreement, "Disability" has the same meaning as provided in
the long-term disability plan or policy maintained by the Company or if
applicable, most recently maintained, by the Company or if applicable, an
affiliated company, for Executive, whether or not Executive actually receives
disability benefits under such plan or policy. If no long-term disability plan
or policy was ever maintained on behalf of Executive, "Disability" shall mean
the absence of Executive from Executive's duties with the Company on a full-time
basis for 180 consecutive business days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive or
Executive's legal representative.
(b) Cause. The Company may terminate Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to
perform substantially Executive's reasonably assigned duties with the Company or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness or from the assignment to Executive of duties that
would constitute Good Reason under Section 5(c)(i), and specifically excluding
any failure by Executive, after reasonable efforts, to meet performance
expectations), which failure continues for a period of at least 30 days after a
written demand for substantial performance, signed by a duly authorized officer
of the Company, has been delivered to Executive which specifically identifies
the manner in which Executive has failed to substantially performed his duties;
provided, however, that no failure to perform by Executive after a Notice of
Termination is given to the Company by Executive shall constitute Cause for
purposes of this Agreement, or
(ii) the willful engaging by Executive in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the Company.
For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of a superior officer of the Company or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by Executive in good faith and in the best
interests of the Company. The cessation of employment of Executive shall not be
deemed to be for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to Executive and Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the
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good faith opinion of the Board, Executive is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
(c) Good Reason. Executive's employment may be terminated
by Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to Executive of any duties
inconsistent in any respect with Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(iii) the Company's requiring Executive to be based
at any office or location other than as provided in Section 4(a)(i)(B) hereof or
the Company's requiring Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(iv) any purported termination by the Company of
Executive's employment otherwise than as expressly permitted by this Agreement;
(v) any failure by the Company to comply with and
satisfy Section 12(c) of this Agreement;
(vi) any other material breach by the Company of any
provision of this Agreement.
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder. For
purposes of this Section 5(c), any good faith determination of "Good Reason"
made by Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company
or Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 13(b) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable,
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sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated, and (iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date. If a dispute
exists concerning the provisions of this Agreement that apply to Executive's
termination of employment, the parties shall pursue the resolution of such
dispute with reasonable diligence. Within five (5) days of such a resolution,
any party owing any payments pursuant to the provisions of this Agreement shall
make all such payments together with interest accrued thereon at the rate
provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"). The failure by Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing Executive's
or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if Executive's employment is terminated other than by reason of death or
Disability, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, or (ii) if Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of Executive or the Disability Effective Date, as the case may
be.
6. Obligations of the Company upon Termination.
(a) Termination by Executive for Good Reason; Termination
by the Company Other Than for Cause or Disability. If, during the Employment
Period, the Company shall terminate Executive's employment other than for Cause
or Disability, or Executive shall terminate employment for Good Reason:
(i) the Company shall pay to Executive in a lump sum
in cash within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the sum of (1) Executive's Annual
Base Salary through the Date of Termination to the extent not theretofore paid,
(2) any accrued vacation pay to the extent not theretofore paid, and (3) unless
Executive has elected a different payout date in a prior deferral election, any
compensation previously deferred by Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2) and (3) shall be hereinafter referred to
as the "Accrued Obligations"); and
B. the amount equal to the product of
(1) two and (2) the sum of (x) Executive's Annual Base Salary and (y)
Executive's target annual bonus for the year in which the Date of Termination
occurs; and
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(ii) for two years after the Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to Executive
and/or Executive's eligible dependents at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iii) of this Agreement if Executive's
employment had not been terminated or, if more favorable to Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided, however,
that if Executive becomes re-employed with another employer and is eligible to
receive medical or other welfare benefits under another employer provided plan,
the Company's obligations under this Section 6(a)(ii) shall cease; and
(iii) as of the Date of Termination, all of
Executive's outstanding options to acquire common stock of the Company and other
compensatory awards from the Company in the nature of rights that may be
exercised shall become fully vested and exercisable, and all restrictions on
Executive's outstanding shares of restricted stock of the Company shall lapse;
and
(iv) to the extent not theretofore paid or provided,
the Company shall timely pay or provide to Executive any other amounts or
benefits required to be paid or provided or which Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and its affiliated companies (such other amounts and benefits shall
be hereinafter referred to as the "Other Benefits").
(b) Termination by Executive without Good Reason after
One Year. If Executive resigns without Good Reason after the first anniversary
of the Effective Date and before the expiration of the Employment Period:
(i) the Company shall pay to Executive in a lump sum
in cash within 30 days after the Date of Termination:
A. the Accrued Obligations; and
B. the amount equal to the product of
(1) a fraction, the numerator of which is the number of full months remaining in
the Employment Period from and after the Date of Termination and the denominator
of which is 24, and (2) the sum of Executive's Annual Base Salary and
Executive's target annual bonus for the year in which the Date of Termination
occurs; and
(ii) for the remaining term of the Employment Period,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to Executive
and/or Executive's eligible dependents at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iii) of this Agreement if Executive's
employment had not been terminated or, if more favorable to
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Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families,
provided, however, that if Executive becomes re-employed with another employer
and is eligible to receive medical or other welfare benefits under another
employer provided plan, the Company's obligations under this Section 6(b)(ii)
shall cease; and
(iii) to the extent not theretofore paid or provided,
the Company shall timely pay or provide to Executive any Other Benefits.
(c) Death or Disability. If Executive's employment is
terminated by reason of Executive's death or Disability during the Employment
Period, this Agreement shall terminate without further obligations to Executive
or Executive's estate, beneficiaries or legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to Executive
or Executive's estate, beneficiaries or legal representatives, as applicable, in
a lump sum in cash within 30 days of the Date of Termination. The term Other
Benefits as used in this Section 6(c) shall include without limitation, and
Executive or Executive's estate, beneficiaries and/or legal representatives
shall be entitled to receive, benefits under the plans, programs, practices and
policies of the Company or any affiliated company as in effect with respect to
Executive on the Date of Termination.
(d) Resignation without Good Reason within One Year;
Termination for Cause. If Executive resigns without Good Reason prior to the
first anniversary of the Effective Date, this Agreement shall terminate without
further obligations to Executive, other than for Accrued Obligations and the
timely payment or provision of Other Benefits. If Executive's employment is
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to Executive other than the obligation to
pay to Executive (x) his Annual Base Salary through the Date of Termination, (y)
the amount of any compensation previously deferred by Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. In either such case,
all Accrued Obligations shall be paid to Executive in a lump sum in cash within
30 days of the Date of Termination.
(e) Expiration of Employment Period. If Executive's
employment shall be terminated due to the normal expiration of the Employment
Period, this Agreement shall terminate without further obligations to Executive,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which Executive may qualify, nor, subject to Section 13(f),
shall anything herein limit or otherwise affect such rights as Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or
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which Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
8. Full Settlement; No Mitigation. 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 Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and, except
as provided in Section 6(a)(ii) and 6(b)(ii), such amounts shall not be reduced
whether or not Executive obtains other employment.
9. Costs of Enforcement. Each party hereto shall pay its own
legal fees and expenses incurred as a result of any contest (regardless of the
outcome thereof) by the Company, Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by
Executive about the amount of any payment pursuant to this Agreement).
10. Mandatory Reduction of Payments in Certain Events.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then, prior to the making of any
Payment to Executive, a calculation shall be made comparing (i) the net
after-tax benefit to Executive of the Payment after payment of the Excise Tax,
to (ii) the net after-tax benefit to Executive if the Payment had been limited
to the extent necessary to avoid being subject to the Excise Tax. If the amount
calculated under (i) above is less than the amount calculated under (ii) above,
then the Payment shall be limited to the extent necessary to avoid being subject
to the Excise Tax (the "Reduced Amount"). In that event, Executive shall direct
which Payments are to be modified or reduced.
(b) The determination of whether an Excise Tax would be
imposed, the amount of such Excise Tax, and the calculation of the amounts
referred to Section 10(a)(i) and (ii) above shall be made by the Company's
regular independent accounting firm at the expense of the Company or, at the
election and expense of Executive, another nationally recognized independent
accounting firm (the "Accounting Firm") which shall provide detailed supporting
calculations. Any determination by the Accounting Firm shall be binding upon the
Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
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determination by the Accounting Firm hereunder, it is possible that Payments
which Executive was entitled to, but did not receive pursuant to Section 10(a),
could have been made without the imposition of the Excise Tax ("Underpayment").
In such event, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of Executive.
(c) In the event that the provisions of Code Section 280G
and 4999 or any successor provisions are repealed without succession, this
Section 10 shall be of no further force or effect.
11. Confidential Information. Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by Executive
during Executive's employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this Agreement). After
termination of Executive's employment with the Company, Executive shall not,
without the prior written consent of the Company or as may otherwise be required
by law or legal process, communicate or divulge any such information, knowledge
or data to anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 11 constitute a
basis for deferring or withholding any amounts otherwise payable to Executive
under this Agreement.
12. Successors.
(a) This Agreement is personal to Executive and without
the prior written consent of the Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) 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 assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
13. Miscellaneous.
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(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than-by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Executive: Xxxxxxxxx Xxxxxxxx
__________________
__________________
If to the Company: CTI Molecular Imaging, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right Executive or the Company may have hereunder, including, without
limitation, the right of Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) Executive and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between Executive
and the Company, the employment of Executive by the Company is "at will" and,
subject to Section 1(a) hereof, Executive's employment and/or this Agreement may
be terminated by either Executive or the Company at any time prior to the
Effective Date, in which case Executive shall have no further rights under this
Agreement. From and after the
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Effective Date this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxxxx X. Xxxxxxxx
CTI MOLECULAR IMAGING, INC.
By: /s/ Xxxxxx Xxxx
-----------------
Xxxxxx Xxxx, Ph.D.
President and CEO
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