Amended and Restated Change of Control Agreement dated October 5, 2007
EXHIBIT
10.1
Amended
and Restated Change of Control Agreement dated October 5,
2007
Matritech,
Inc. (the “Company”) and Xxxxxxx X. Xxxxx (“Executive”) hereby enter into
this Amended and Restated Change of Control Agreement (“Agreement”), effective
on the date of closing of a transaction whereby the Company sells substantially
all its assets to a subsidiary of Inverness Medical Innovations, Inc. (the
“Effective Date”). This Agreement replaces and supersedes, effective
as of the Effective Date, the original Change of Control Agreement between
the
parties dated March 16, 2006.
Whereas,
the Company has entered into an agreement for the sale of substantially all
of
its assets to a subsidiary of Inverness Medical Innovations, Inc.;
and
Whereas,
it is in the best interests of the Company’s stockholders that assets be
preserved for distribution to them; and
Whereas,
both parties are amenable to changing the terms of the original change of
control agreement in accordance with the provisions hereof.
Now,
Therefore, in consideration of the premises and for good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Purpose. The
Company considers it essential to the best interests of its stockholders to
xxxxxx the continuous and dedicated employment of its executive officers and
other key management personnel. The Compensation Committee of Board
of Directors of the Company recognizes, however, that competition for key
management personnel is keen and that, as a small publicly held corporation,
the
Company may face special challenges in ensuring the continued commitment of
its
management. To assist in ensuring that executive officers and other
key management personnel do not become distracted or consider leaving the employ
of the Company due to concerns about their employment security in the event
of a
possible Change in Control (as defined in Section 2 hereof), the Committee
has
determined that appropriate steps should be taken to reinforce and encourage
the
continued attention and dedication of selected members of the Company’s
management, including the Executive. Nothing in this Agreement shall
be construed as creating an express or implied contract of employment 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.
2. Definitions.
“Change
of Control Transaction” shall mean any transaction involving the occurrence of
(x) a change in the ownership of the Company (as
1
defined
in section 1.409A-3(i)(5)(v) of the final regulations under Internal Revenue
Code section 409A or any similar provisions of any successor regulations),
or
(y) a change in effective control of the Company (as defined in section
1.409A-3(i)(5)(vi) of the final regulations under Internal Revenue Code section
409A or any similar provisions of any successor regulations) or (z) a change
in
the ownership of a substantial portion of the assets of the Company (as defined
in section 1.409A-3(i)(5)(vii) of the final regulations under Internal Revenue
Code section 409A or any similar provisions of any successor
regulations).
3. Change
of Control Payments. In the event of a Change of Control
Transaction, the Executive shall receive, in a lump sum payment paid within
thirty (30) days of the Change of Control Transaction, (i) a pro-rated incentive
bonus based on the portion of the then current fiscal year completed at the
time
of the Change of Control Transaction compared to the Executive’s target annual
bonus for such year and (ii) all deferred compensation, if any, then maintained
in the Executive’s account, including without limitation all restricted stock
issued pursuant to the Amended and Restated Management Bonus Plan, whether
or
not otherwise vested, and all other restricted stock which by the terms of
the
individual restricted stock award agreement is to be vested upon an Acquisition
(as defined in such individual agreements). All payments to be made
by the Company under this Section 3 shall be net of any tax or other amounts
required to be withheld by the Company under applicable law.
4. Application
of Section 280G of the Internal Revenue Code. If the payments and
benefits provided for in this Agreement, together with any other payments or
benefits which the Executive has the right to receive from the Company (or
any
of its subsidiaries or affiliates), would constitute an “excess parachute
payment” (as defined in Section 280G of the Internal Revenue Code) or would
otherwise be non-deductible by the Company as a result of application of any
similar statutory or regulatory provision, the Executive shall receive either
(a) all compensation and benefits provided for him under this Agreement or
(b)
the maximum of compensation and benefits that will avoid an excess parachute
payment under Section 280G, whichever would provide the greater after-tax
benefit to the Executive. In the event that clause (b) of this
Section 4 provides the greater after-tax benefit, the Executive shall be
entitled to select the items to be abated, provided that if the Executive fails
to make such selection within forty-five (45) days after the Company has given
notice of the need for such abatement, the Company may determine the method
of
such abatement in its sole discretion. If the Executive is to receive
benefits under clause (b) of this Section 8 and through error or otherwise
the
Executive receives payments, together with other payments the Executive has
the
right to receive from the Company (or its affiliates or subsidiaries) in excess
of 2.99 time the Executive’s base amount, the Executive agrees to immediately
refund the overpayment to the Company, together with interest thereon at the
applicable Federal rate determined under Section 1274(d) of the Code, compounded
annually, or at such other rate as may be required in order that no such
payments shall be nondeductible to the Company by reason of the operation of
Section 280G or any similar statutory or regulatory provision.
5. Notices. Any
notice, request, demand, and other communication provided for or permitted
by
this Agreement shall be sufficient if in writing and delivered in person or
sent
by registered or certified mail, postage prepaid, or by overnight delivery
service,
2
to
the
Executive at the last address the Executive has filed in writing with the
Company, or to the Company at its main office, attention of the Board of
Directors.
6. Amendments. This
Agreement may be amended or modified only by a written instrument signed by
the
Executive and by a duly authorized representative of the Company.
7. Assignment;
Entire Agreement. Except for an assignment by the Company in
connection with a Change of Control Transaction in which the successor, if
other
than the Company, shall assume and agree to perform this Agreement in writing,
neither the Company nor the Executive may make any assignment of this Agreement
or any interest herein, by operation of law or otherwise, without the prior
written consent of the other party, and without such consent any attempted
transfer shall be null and void and of no effect. This Agreement
shall inure to the benefit of and be binding upon the Company and the Executive,
their respective successors, executors, administrators, heirs and permitted
assigns. In the event of the Executive’s death after he becomes
entitled to the Change of Control Payments but prior to the completion by the
Company of all payments due him under this Agreement, the Company shall continue
such payments to the Executive’s beneficiary designated in writing to the
Company prior to his death (or to his estate, if the Executive fails to make
such designation). This Agreement supersedes all prior Agreements,
whether written or oral with respect to the subject matter
hereof. Notwithstanding the foregoing, the Non-Disclosure and
Inventions Agreement executed by the Executive (or any substitute or successor
agreement of similar import which the Executive may hereafter enter into with
the Company) and individual restricted stock award agreements executed prior
to
or after this Agreement between the Executive and the Company shall remain
in
full force and effect in accordance with its terms.
8. Obligations
of Successors. In addition to any obligations imposed by law upon
any successor to the Company, the Company will use commercially reasonable
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company to expressly assume and agree to perform 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.
9. Dispute
Resolution. In the event of any dispute between the Company and
the Executive as to any claim arising out of or relating to this Agreement
or
the breach thereof, the parties shall endeavor in good faith to settle the
dispute through mediation using a professional mediator mutually selected by
them. If the dispute has not been resolved within 90 days, either
party shall be free to pursue legal remedies, at law or in equity.
10. Severability. If
any term or provision of this Agreement is declared by a court of competent
jurisdiction to be invalid or unenforceable for any reason, this Agreement
shall
remain in full force and effect, and either (a) the invalid or unenforceable
provision shall be modified to the minimum extent necessary to make it
3
valid
and
enforceable, or (b) if such a modification is not possible, this Agreement
shall
be interpreted as if such invalid or unenforceable provisions were not a part
hereof.
11. Governing
Law and Venue. This Agreement shall be construed and enforced in accordance
with the substantive law of the Commonwealth of Massachusetts, without giving
effect to its conflicts of law principles. The parties agree that any
litigation pertaining to this Agreement shall be maintained exclusively in
the
courts of general jurisdiction located in Massachusetts, and each party agrees
to submit to the jurisdiction and venue of any such court.
In
Witness Whereof, the parties have executed this Agreement effective on the
Effective Date.
Matritech,
Inc.
By: _________________________
Its
______________________
|
Xxxxxxx
X. Xxxxx
__________________________
|
4