EXHIBIT 10(fff)
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT, dated as of _________ is made and entered into between
Computerized Thermal Imaging, Inc. (the "Company") and _________ (the
"Executive") and is made in light of the following circumstances:
(A) The Company recognizes the valuable services that the Executive has rendered
and desires to be assured that the Executive will continue his or her active
participation on the management and business of the Company; and
(B) The Company considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of the
Company and its shareholders, and the Company recognizes the existence and
continued likely existence of possible change in control of the Company, as
defined below, causing uncertainty among management and resulting in the
possible departure or distraction of members of management to the detriment of
the Company and its shareholders; and
(C) The Executive is willing to continue to serve the Company, but desires
assurance that in the event of any such change in control of the Company, he
will be protected against the financial impact of an unexpected termination.
(D) NOW, THEREFORE, the Company agrees that the severance benefits described
below will be provided, subject to the terms and conditions set forth below, to
the Executive in the event the employment of the Executive with the Company or
its subsidiaries is terminated subsequent to a change in control of the Company,
as defined below, under the circumstances described below:
1. COMPANY'S RIGHT TO TERMINATE. During the Term of Agreement, as defined below,
the Executive agrees, so long as he continues to be employed as an officer of
the Company or any of its subsidiaries, to continue to perform his regular
duties as such officer of the Company or such other officer position to which
the Executive may be assigned. Not withstanding the foregoing, the Company may
terminate the employment of the Executive at any time, subject to providing the
benefits hereinafter specified in accordance with the terms hereto and subject
to all terms and conditions of any other written agreement with the Company.
2. EFFECTIVE DATE. The "Effective Date" shall be the date of this Agreement as
above set forth.
3. TERM OF AGREEMENT. This Agreement shall have a termination of December 31,
2000 and shall continue from year to year thereafter until terminated at the end
of any year by written notice from the Company to you, unless a change in
control of the Company, as defined below, shall have occurred prior to that
date, in which event it shall continue in effect during the two (2) year period
immediately following such change in control as provided herein.
4. CHANGE IN CONTROL. No benefits shall be payable hereunder unless there shall
have occurred a change in control of the Company, as defined below, and the
employment of the Executive by the Company shall have been thereafter terminated
in the manner described in section 5 thereof. For purpose of this Agreement, a
change in control of the Company ("Change in Control") shall
mean and be determined to have occurred if (a) any organization, group or person
("Person") (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) (the "Exchange Act") is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more of the
combined voting power of the then outstanding securities of the Company; or (b)
during any two-year period, a majority of the members of the Board serving at
the Effective Date of this Agreement is replaced by directors who are not
nominated and approved by the Board; or (c) a majority of the members of the
Board is represented by, appointed by or affiliated with any Person Whom the
Board has determined is seeking to effect a Change in Control of the Company, or
(d) the company shall be combined with or acquired by another company and the
Board shall have determined, either before such event or thereafter, by
resolution, that a Change in Control will or has occurred.
5. TERMINATION FOLLOWING CHANGE IN CONTROL. If a Change in Control shall have
occurred, the Executive shall be entitled to the benefits provided in Section 6
hereof upon the subsequent involuntary termination, whether actual or
constructive, as defined below, of the employment of the Executive within the
two (2) year period immediately following such Change in Control, for any reason
other than termination for cause, disability, death, normal retirement or early
retirement. For the purposes of this section:
(a) "Constructive Involuntary Termination" shall mean voluntary
termination of employment by Executive as a result of a significant
change in the duties, responsibilities, reporting relationship, job
description, compensation, perquisites, office or location of
employment of Executive without the Written consent of the Executive.
(b) "Cause" shall mean termination of employment on account of (i)
fraud, misrepresentation, theft or embezzlement, which is materially
injurious to the company, or (ii) willful and continued failure by the
Executive substantially to perform his or her duties with the Company
or its subsidiaries (other than failure resulting from the Executive's
incapacity due to physical or mental illness), after a demand for
substantial performance is delivered to the Executive by the President
or Chairman of the Board of the Company, which demand specifically
identifies the manner in which the Executive has not substantially
performed his or her duties.
(c) "Disability" shall mean inability or incapacity, due to physical or
mental illness, of the Executive to perform his or her duties with the
company for a period of three continuous months.
(d) Any termination of the employment of the Executive by the Company
shall be communicated by a written notice of termination addressed to
the Executive and any termination of the employment of the Executive by
the Executive, except by death, shall be communicated by a written
notice of termination addressed to the President or Chairman of the
Board of the Company. The notice of termination shall specify the date
of termination ("Date of Termination") and the characterization of the
termination.
6. BENEFITS UPON TERMINATION. If the Executive's employment by the Company shall
be terminated as provided in Section 5 hereof, other than for
cause, disability or death, the Executive shall be entitled to the benefits
provided below:
(a) BASE SALARY AND BONUSES. The Company shall continue to compensate
the Executive at his or her full annual base salary at the rate in
effect immediately prior to the termination of the employment of the
Executive, and to pay short-term and long-term bonuses at the target
levels pursuant to the Company's Annual Incentive Plan for the period
of two (2) years following actual involuntary termination or
Constructive Involuntary Termination, if such termination occurs during
the period in which this Agreement is in effect (the "Salary
Continuance Period"). Benefits paid in accordance with this Subsection
6(a) shall not be reduced in the event the Executive is employed
elsewhere during this time period, or by reason of death or disability.
(b) MEDICAL AND DENTAL BENEFITS; LONG-TERM DISABILITY BENEFITS. The
Company shall maintain in full force and effect from the Date of
Termination through the end of the Salary Continuance Period, all
medical and dental benefits and all long term disability benefits in
which the Executive was entitled to participate immediately prior to
the Date of Termination, to the same extent as if the Executive had
continued to be an employee of the Company during the Salary
Continuance Period, provided that such continued participation is
feasible under the general terms and provisions of such plans and
programs. To the extent such continued participation is not feasible,
the Company shall arrange to provide the Executive with substantially
the same benefits as those to which he or she would have been entitled
to receive under such plans and programs. All such health plan
continuation coverage requirements as provided in Section 162(d) of the
Internal Revenue Code of 1986, as amended (The "Code"). All such
medical and dental benefits shall be discontinued upon employment by
the Executive with another company commencement of coverage of the
Executive pursuant to a long term disability plan of such new employer.
(c) STOCK OPTIONS. In the event of a Change in Control, all outstanding
stock options, stock appreciation rights, restricted stock, performance
plan awards and performance shares granted by the Company to the
Executive shall become immediately exercisable in full and otherwise
vest 100% in accordance with and subject to the provisions of
agreements under which such awards were granted.
(d) RETIREMENT BENEFITS.
(1) DEFINED CONTRIBUTION PLANS. The Company shall not use the
provisions of any defined contribution plan to deny a lump sum
option to the Executive unless this occurs under uniform
treatment applicable to all plan participants.
(2) BENEFIT PLAN. The Executive shall be entitled to continued
credit for years of service under the benefit plan of the
Company from the date of Termination through the Salary
Continuance Period, and any compensation paid to the Executive
pursuant to subsection 6(a) above shall be treated as salary
compensation for purposes of such plan. To the extent that
such augmentation of the benefit plan is not possible under
such plan, the Company shall pay the Executive an amount equal
to the present value of
such augmentation, or arrange to provide the Executive with
substantially the same benefit.
(e) CERTAIN EXECUTIVE REIMBURSEMENT. The Company shall pay the
Executive an amount necessary to reimburse the Executive for all legal
fees and expenses incurred by the Executive as a result of the Change
in Control of the company and such termination of employment, including
fees and expenses incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement; provided, however, that the Company shall
be obliged only to pay amounts necessary to reimburse the Executive for
legal fees and expenses incurred by the Executive with respect to any
claim or claims made by him as to which he shall substantially prevail
in litigation relating thereto against the Company.
The payment provided for in subsection 6(a) hereof shall be subject to
applicable payroll or other tax required to be withheld by the Company. Payments
to the Executive hereunder shall be considered severance pay in consideration of
past service and his or her continued service after the date of this Agreement.
The payment provided for in subsection 6(d) (1) hereof shall be made to the
Executive within five (5) business days after the date of Termination. The
Executive shall not be required to mitigate the amount of any payment provided
for in this section 6 by seeking other employment or otherwise, and expect as
provided in subsection 6(b) above, the amount of any payment provided for in
this Section 6 shall not be reduced by any compensation earned by the Executive
as a result of employment by another employer after the Date of Termination, or
otherwise.
7. LIMITATION ON PAYMENT. If the severance payments provided for under this
Agreement, either alone or together with other payments which the Executive
would have the right to receive from the Company, would constitute a "parachute
payment" as defined in Section 280G(a) of the Code as in effect at the time of
payment, such payment shall be reduced to the largest amount as will result in
no portion being subject to the excise tax imposed by Section 4999 of the Code
or the disallowance of a deduction by Company pursuant to Section 280G of the
Code. The determination of the amount of any reduction under this section, and
the plan and payment to which such reductions shall apply, shall be made in good
faith by the Executive and such determination shall be binding on the Company.
8. SUCCESSOR; BINDING AGREEMENT
(a) The Company will 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 by agreement
in form and substance satisfactory to the Executive, 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 it if no
such succession had taken place.
(b) This agreement shall inure to the benefit of and be enforceable by
the personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees or the
Executive. If the Executive should die while any amount would be
payable to the Executive hereunder if the Executive had continued to
live, al such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the devisee, legatee
or other designee or, if there be no such designee, to the estate of
the Executive.
9. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed:
If to the Company:
If to the Executive:
or to such other address as either party may have furnished to the other in
writing in accordance herewith except the notice of change of address shall be
effective only upon receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or
discharged unless such Waiver, modification or discharge is agreed to in writing
signed by the Executive and on behalf of the Company by the President, the
Chairman of the Board or such other officer as may be specifically designated by
the Board. No waiver by either party thereof, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the time or
at any prior to subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in the Agreement.
This Agreement shall not supersede or in any way limit the rights, duties or
obligations the Executive may have under any other written agreement with the
Company. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Utah.
11. SEVERABILITY. The invalidity or unenforceability of any provisions 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.
12. ARBITRATION. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Layton, Utah in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in court having
jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first-above written.
THE COMPANY
By:_____________________
Title:___________________
THE EXECUTIVE________________________
Title:_______________________
