Exhibit 10.11
VIASYS HEALTHCARE INC.
CHANGE IN CONTROL
EXECUTIVE RETENTION AGREEMENT
THIS
AGREEMENT by and between VIASYS Healthcare Inc., a Delaware corporation (the “Company”),
and Xxxxxx X. Xxxxxx (the “Executive”) made and entered into as of September 26,
2005 (the “Effective Date”).
WHEREAS,
the Company recognizes that the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
that it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders; and
WHEREAS,
the Company has determined that appropriate steps should be taken to reinforce
and encourage the continued employment and dedication of the Company’s Vice
President and Corporate Treasurer, without distraction from the possibility of
a change in control of the Company and related events and circumstances; and
WHEREAS,
this Agreement will replace and supersede all prior severance agreements
between the Executive and the Company or its subsidiaries.
NOW,
THEREFORE, as an inducement for and in consideration of the Executive’s
remaining in its employ, the Company agrees that the Executive shall receive
the severance benefits set forth in this Agreement in the event the Executive’s
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).
1. KEY
DEFINITIONS.
As used herein, the
following terms shall have the following respective meanings:
1.1 “CHANGE IN CONTROL” means an event or
occurrence set forth in any one or more of subsections (a) through (d) below
(including an event or occurrence that constitutes a Change in Control under
one of such subsections but is specifically exempted from another such
subsection):
(a) the acquisition by an individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) forty percent (40%) or more of either (i)
the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”), or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for
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purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control:
(i) any acquisition by the Company, or
(ii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company;
(b) the Continuing Directors (as defined
below) do not constitute a majority of the Board (or, if applicable, the Board
of Directors of a successor corporation to the Company), where the term “Continuing
Director” means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents,
by or on behalf of a person other than the Board;
(c) the consummation of a merger,
consolidation, reorganization, recapitalization or statutory share exchange
involving the Company or a sale or other disposition of all or substantially
all of the assets of the Company in one or a series of transactions (a “Business
Combination”), unless, immediately following such Business Combination, each of
the following two conditions is satisfied: (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors, respectively, of the resulting or
acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or
through one or more subsidiaries); or
(d) approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company.
1.2 “CHANGE IN CONTROL DATE” means the
date on which a Change in Control occurs.
1.3 “CAUSE” means (i) repeated failure to
comply with reasonable directives of relevant senior officers, (ii) commission
of a felony that is materially detrimental to the Company or its successor
organization, or (iii) continued gross neglect
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of the Executive’s
duties with the Company or its successor organization (other than as a result
of physical or mental incapacity or illness).
2. LENGTH
OF AGREEMENT. This Agreement, and all
rights and obligations of the parties hereunder, shall take effect upon the
Effective Date and shall expire upon the first to occur of (a) the date that is
twelve (12) months after the Change in Control Date, if the Executive is still
employed by the Company or its successor organization as of such later date, or
(b) the fulfillment by the Company or its successor organization of all of its
obligations under Section 4 if the Executive’s employment is terminated by the
Company or its successor organization without Cause within twelve (12) months
following the Change in Control Date.
3. NOT
AN EMPLOYMENT CONTRACT. The Executive acknowledges that this Agreement does not
constitute a contract of employment or impose on the Company or its successor
organization any obligation to retain the Executive as an employee, and that
this Agreement does not prevent the Executive from terminating employment at
any time.
4. BENEFITS TO EXECUTIVE.
4.1 SEVERANCE. If the Executive’s employment is terminated
by the Company or its successor organization without Cause upon or within
twelve (12) months following a Change in Control of the Company, the Company or
its successor organization shall pay to the Executive in a lump sum within
sixty (60) days after the date of termination an amount equal to twelve (12)
months of base pay. Base pay shall mean
the Executive’s rate of wages or salary on the date of termination, excluding
all extra pay such as incentive bonuses, car allowances or other
allowances. Severance benefits shall not
be considered compensation or continuing employment for purposes of determining
benefits that are provided under any plans maintained by the Company or its
successor organization, including, without limitation, the Company’s or its
successor organization’s retirement plan(s) and equity compensation plan(s).
4.2 OTHER BENEFITS. To the extent not previously paid or
provided, the Executive or the Executive’s estate or beneficiaries, as the case
may be, shall also be entitled to the balance of any base pay or incentive
awards due the Executive but not yet paid (including, without limitation,
awards due for performance periods that have been completed, but have not yet
been paid), any vacation pay accrued but not yet paid, any expense
reimbursements due the Executive, and other benefits, if any, in accordance
with applicable plans or programs of or contracts or agreements of the
Executive with the Company. In addition,
unless indicated otherwise in this Agreement, the treatment of any options
granted to the Executive shall be governed by the terms of the VIASYS Equity
Incentive Plan or other relevant equity compensation plan or any associated
stock option agreement.
4.3 MITIGATION. The Executive shall not
be required to mitigate the amount of any payment provided in this Section 4 by
seeking other employment or otherwise. Further, the amount of any payment
provided in this Section 4 shall not be reduced by any compensation earned by
the Executive as a result of employment by
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another employer,
by retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Company or its successor organization, or otherwise.
5. TERMINATION
AGREEMENT AND RELEASE. The payment to
the Executive under Section 4 shall be conditioned upon the Executive’s
execution of an agreement not to disparage the Company or its successor
organization, or otherwise take any action that could reasonably be expected to
adversely affect the reputation of the Company or its successor organization,
and generally to release and waive claims against the Company or its successor
organization, such agreement to be in a form satisfactory to the Company or its
successor organization in its sole discretion, within ten (10) business days of
the Executive’s date of termination, or within such longer period required by
law for enforceability of the agreement and release. The payment under Section 4 of this Agreement
shall not become due until such time as the Executive has executed the
agreement and release referred to in the previous sentence. In addition, the Executive’s right to payment
under this Agreement shall cease upon the Executive’s rescission or material
breach of the agreement.
6. DISPUTES.
Any disputes arising under or in connection with this Agreement shall be
resolved by binding arbitration, to be held in Philadelphia, Pennsylvania, in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
7. SUCCESSORS.
7.1 SUCCESSOR TO COMPANY. The Company
shall 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 expressly to assume and agree to perform this Agreement.
7.2 SUCCESSOR TO EXECUTIVE. 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 should die while
any amount would still be payable to the Executive or the Executive’s family
hereunder 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.
8. NOTICE.
All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail, return
receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide
overnight courier service, in each case addressed to the Company or its
successor organization, at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, XX
00000 and to the Executive at the Executive’s principal residence as currently
reflected on the Company’s or its successor organization’s records (or to such
other address as either the Company or its successor organization, or the
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Executive may have furnished to the other in writing
in accordance herewith). Any such
notice, instruction or communication shall be deemed to have been delivered
five business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, or one business day after it is sent via a
reputable nationwide overnight courier service. Either party may give any
notice, instruction or other communication hereunder using any other means, but
no such notice, instruction or other communication shall be deemed to have been
duly delivered unless and until it actually is received by the party for whom
it is intended.
9. MISCELLANEOUS.
9.1 SEVERABILITY. 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.
9.2 GOVERNING LAW. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the internal laws of the Commonwealth of Pennsylvania, without
regard to conflicts of law principles.
9.3 WAIVERS. No waiver by the Executive
at any time of any breach of, or compliance with, any provision of this
Agreement to be performed by the Company or its successor organization shall be
deemed a waiver of that or any other provision at any subsequent time.
9.4 COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original but
both of which together shall constitute one and the same instrument.
9.5 TAX WITHHOLDING. Any payments
provided for hereunder shall be paid net of any applicable tax withholding
required under federal, state or local law.
9.6 ENTIRE AGREEMENT. This Agreement sets
forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto
in respect of the subject matter contained herein; and any prior agreement of
the parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
9.7 AMENDMENTS. This Agreement may be
amended or modified only by a written instrument executed by both the Company
and the Executive.
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