CHANGE IN CONTROL AGREEMENT
January ,1998
Dear :
-----------------
You are presently the Vice President of _____________ of Bio-Vascular, Inc., a
Minnesota corporation (the "Company"). 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. In this
connection, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control may arise and that such
possibility and the uncertainty and questions which it may raise among
management may result in the departure or distraction of management personnel to
the detriment of the Company and its shareholders.
Accordingly, the Board has determined that appropriate steps should be taken to
minimize the risk that Company management will depart prior to a Change in
Control, thereby leaving the Company without adequate management personnel
during such a critical period, and that appropriate steps also be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management to their assigned duties without distraction in
circumstances arising from the possibility of a Change in Control. In
particular, the Board believes it important, should the Company or its
shareholders receive a proposal for transfer of control, that you be able to
continue your management responsibilities without being influenced by the
uncertainties of your own personal situation.
The Board recognizes that continuance of your position with the Company involves
a substantial commitment to the Company in terms of your personal life and
professional career and the possibility of foregoing present and future career
opportunities, for which the Company receives substantial benefits. Therefore,
to induce you to remain in the employ of the Company, this Agreement, which has
been approved by the Board, sets forth the benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated in connection with a Change in Control under the circumstances
described below.
The following terms will have the meaning set forth below unless the context
clearly requires otherwise. Terms defined elsewhere in this Agreement will have
the same meaning throughout this Agreement.
ARTICLE I.
DEFINITIONS
1. "AFFILIATE" means (i) any corporation at least a majority of whose
outstanding securities ordinarily having the right to vote at elections of
directors is owned directly or indirectly by the Company or (ii) any other
form of business entity in which the Company, by virtue of a direct or
indirect ownership interest, has the right to elect a majority of the
members of such entity's governing body.
2. "AGREEMENT" means this letter agreement as amended, extended or renewed
from time to time in accordance with its terms.
3. "BOARD" means the board of directors of the Company duly qualified and
acting at the time in question. On and after the date of a Change in
Control, any duty of the Board in connection with
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this Agreement is nondelegable and any attempt by the Board to delegate any
such duty is ineffective.
4. "CAUSE" means:
a. your gross misconduct;
b. your willful and continued failure to perform substantially your
duties with the Company (other than any such failure (1) resulting
from your Disability or incapacity due to bodily injury or physical or
mental illness or (2) relating to changes in your duties after a
Change in Control which constitute Good Reason) after a demand for
substantial performance is delivered to you by the chair of the Board
which specifically identifies the manner in which you have not
substantially performed your duties and provides for a reasonable
period of time within which you may take corrective actions; or
c. your conviction (including a plea of nolo contendere) of willfully
engaging in illegal conduct constituting a felony or gross misdemeanor
under federal or state law which is materially and demonstrably
injurious to the Company or which impairs your ability to perform
substantially your duties for the Company.
An act or failure to act will be considered "gross" or "willful" for this
purpose only if done, or omitted to be done, by you in bad faith and
without reasonable belief that it was in, or not opposed to, the best
interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Company's board of
directors (or a committee thereof) or based upon the advice of counsel for
the Company will be conclusively presumed to be done, or omitted to be
done, by you in good faith and in the best interests of the Company. It is
also expressly understood that your attention to matters not directly
related to the business of the Company will not provide a basis for
termination for Cause so long as the Board did not expressly disapprove in
writing of your engagement in such activities either before or within a
reasonable period of time after the Board knew or could reasonably have
known that you engaged in those activities. Notwithstanding the foregoing,
you may not be terminated for Cause unless and until there has been
delivered to you a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board called and held for the purpose (after reasonable
notice to you and an opportunity for you, together with your counsel, to be
heard before the Board), finding that in the good faith opinion of the
Board you were guilty of the conduct set forth above in clauses a., b. or
c. of this definition and specifying the particulars thereof in detail.
5. "CHANGE IN CONTROL" means any of the following:
a. the sale, lease, exchange or other transfer, directly or indirectly,
of all or substantially all of the assets of the Company in one
transaction or in a series of related transactions, to any Person;
b. the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, as the
case may be;
c. any Person is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of (1) 20
percent or more, but not more than 50
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percent, of the combined voting power of the outstanding securities of
the Company ordinarily having the right to vote at elections of
directors, unless the transaction resulting in such ownership has been
approved in advance by the "continuity directors" or (2) more than 50
percent of the combined voting power of the outstanding securities of
the Company ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity directors);
d. a merger or consolidation to which the Company is a party if the
shareholders of the Company immediately prior to the effective date of
such merger or consolidation have, solely on account of ownership of
securities of the Company at such time, "beneficial ownership" (as
defined in Rule 13d-3 under the Exchange Act) immediately following
the effective date of such merger or consolidation of securities of
the surviving company representing (1) 50 percent or more, but not
more than 80 percent, of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right
to vote at elections of directors, unless such merger or consolidation
has been approved in advance by the continuity directors, or (2) less
than 50 percent of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right
to vote at elections of directors (regardless of any approval by the
continuity directors);
e. the continuity directors cease for any reason to constitute at least a
majority the Board; or
f. a change in control of a nature that is determined by outside legal
counsel to the Company, in a written opinion specifically referencing
this provision of the Agreement, to be required to be reported
(assuming such event has not been "previously reported") pursuant to
section 13 or 15(d) of the Exchange Act, whether or not the Company is
then subject to such reporting requirement, as of the effective date
of such change in control.
For purposes of this Section 1(e), a "continuity director" means any
individual who is a member of the Board on _____________, while he or she
is a member of the Board, and any individual who subsequently becomes a
member of the Board whose election or nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
directors who are continuity directors (either by a specific vote or by
approval of the proxy statement of the Company in which such individual is
named as a nominee for director without objection to such nomination).
6. "CODE" means the Internal Revenue Code of 1986, as amended. Any reference
to a specific provision of the Code includes a reference to such provision
as it may be amended from time to time and to any successor provision.
7. "COMPANY" means Bio-Vascular, Inc. and/or any Affiliate.
8. "CONFIDENTIAL INFORMATION" means information which is proprietary to the
Company or proprietary to others and entrusted to the Company, whether or
not trade secrets. It includes information relating to business plans and
to business as conducted or anticipated to be conducted, and to past or
current or anticipated products or services. It also includes, without
limitation, information concerning research, development, purchasing,
accounting, marketing and selling. All information which you have a
reasonable basis to consider confidential is Confidential Information,
whether or not originated by you and without regard to the manner in which
you obtain access to that and any other proprietary information.
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9. "DATE OF TERMINATION" following a Change in Control (or prior to a Change
in Control if your termination was either a condition of the Change in
Control or was at the request or insistence of any Person related to the
Change in Control) means:
a. if your employment is to be terminated for Disability, 30 days after
Notice of Termination is given (provided that you have not returned to
the performance of your duties on a full-time basis during such 30-day
period);
b. if your employment is to be terminated by the Company for Cause or by
you for Good Reason, the date specified in the Notice of Termination,
which date may not be less than 30 days or more than 60 days after the
date on which the Notice of Termination is given unless you and the
Company otherwise expressly agree;
c. if your employment is to be terminated by the Company for any reason
other than Cause, Disability, death or Retirement, the date specified
in the Notice of Termination, which in no event may be a date earlier
than 90 days after the date on which a Notice of Termination is given,
unless an earlier date has been expressly agreed to by you in writing
either in advance of, or after; receiving such Notice of Termination;
or
d. if your employment is terminated by reason of death or Retirement, the
date of death or Retirement, respectively.
In the case of termination by the Company of your employment for Cause, if
you have not previously expressly agreed in writing to the termination,
then within 30 days after receipt by you of the Notice of Termination with
respect thereto, you may notify the Company that a dispute exists
concerning the termination, in which event the Date of Termination will be
the date set either by mutual written agreement of the parties or by the
judge or arbitrators in a proceeding as provided in Section 13 of this
Agreement. During the pendency of any such dispute, you will continue to
make yourself available to provide services to the Company and the Company
will continue to pay you your full compensation and benefits in effect
immediately prior to the date on which the Notice of Termination is given
(without regard to any changes to such compensation or benefits which
constitute Good Reason) and until the dispute is resolved in accordance
with Section 13 of this Agreement. You will be entitled to retain the full
amount of any such compensation and benefits without regard to the
resolution of the dispute unless the judge or arbitrators decide(s) that
your claim of a dispute was frivolous or advanced by you in bad faith.
10. "DISABILITY" means a disability as defined in the Company's long-term
disability plan as in effect immediately prior to the Change in Control or;
in the absence of such a plan, means permanent and total disability as
defined in section 22(e)(3) of the Code.
11. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act or to any rule or
regulation thereunder includes a reference to such provision as it may be
amended from time to time and to any successor provision.
12. "GOOD REASON" means:
a. change in your status, position(s), duties or responsibilities as an
executive of the Company as in effect immediately prior to the Change
in Control which, in your reasonable judgment, is an adverse change
(other than, if applicable, any such change directly
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attributable to the fact that the Company is no longer publicly owned)
except in connection with the termination of your employment for
Cause, Disability or Retirement or as a result of your death or by you
other than for Good Reason;
b. a reduction by the Company in your base salary (or an adverse change
in the form or timing of the payment thereof) as in effect immediately
prior to the Change in Control or as thereafter increased;
c. the failure by the Company to continue in effect any Plan in which you
(and/or your family) are eligible to participate at any time during
the 90-day period immediately preceding the Change in Control (or
Plans providing you (and/or your family) with at least substantially
similar benefits) other than as a result of the normal expiration of
any such Plan in accordance with its terms as in effect immediately
prior to the 90-day period immediately preceding the time of the
Change in Control, or the taking of any action, or the failure to act,
by the Company which would adversely affect your (and/or your
family's) continued eligibility to participate in any of such Plans on
at least as favorable a basis to you (and/or your family) as is the
case on the date of the Change in Control or which would materially
reduce your (and/or your family's) benefits in the future under any of
such Plans or deprive you (and/or your family) of any material benefit
enjoyed by you (and/or your family) at the time of the Change in
Control;
d. the Company's requiring you to be based more than 30 miles from where
your office is located immediately prior to the Change in Control,
except for required travel on the Company's business, and then only to
the extent substantially consistent with the business travel
obligations which you undertook on behalf of the Company during the
90-day period immediately preceding the Change in Control (without
regard to travel related to or in anticipation of the Change in
Control);
e. the failure by the Company to obtain from any Successor the assent to
this Agreement contemplated by Section 6 of this Agreement;
f. any purported termination by the Company of your employment which is
not properly effected pursuant to a Notice of Termination and pursuant
to any other requirements of this Agreement, and for purposes of this
Agreement, no such purported termination will be effective;
g. any refusal by the Company to continue to allow you to attend to
matters or engage in activities not directly related to the business
of the Company which, at any time prior to the Change in Control, you
were not expressly prohibited in writing by the Board from attending
to or engaging in; or
h. your termination of your employment with the Company for any reason
other than death, Disability or Retirement during the twelfth (12th)
month following the month in which a Change in Control occurs.
13. "HIGHEST MONTHLY COMPENSATION" means one-twelfth of the highest amount of
your compensation for any 12 consecutive calendar-month period during the
36 consecutive calendar-month period prior to the month that includes the
Date of Termination. For purposes of this definition, "compensation" means
the amount reportable by the Company, for federal income tax purposes, as
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wages paid to you by the Company, increased by the amount of contributions
made by the Company with respect to you under any qualified cash or
deferred arrangement or cafeteria plan that is not then includable in your
income by reason of the operation of section 402(a)(8) or section 125 of
the Code, and increased further by any other compensation deferred for any
reason.
14. "NOTICE OF TERMINATION" means a written notice given on or after the date
of a Change in Control (unless your termination before the date of the
Change in Control was either a condition of the Change in Control or was at
the request or insistence of any Person related to the Change in Control)
which indicates the specific termination provision in this Agreement
pursuant to which the notice is given. Any purported termination by the
Company or by you for Good Reason on or after the date of a Change in
Control (or before the date of a Change in Control if your termination was
either a condition of the Change in Control or was at the request or
insistence of any Person related to the Change in Control) must be
communicated by written Notice of Termination to be effective; provided,
that your failure to provide Notice of Termination will not limit any of
your rights under this Agreement except to the extent the Company
demonstrates that it suffered material actual damages by reason of such
failure.
15. "PERSON" means any individual, corporation, partnership, group, association
or other "person," as such term is used in section 14(d) of the Exchange
Act, other than the Company, any Affiliate or any employee benefit plan(s)
sponsored by the Company or an Affiliate.
16. "PLAN" means any compensation plan, program, policy or agreement (such as a
stock option, restricted stock plan or other equity-based plan), any bonus
or incentive compensation plan, program, policy or agreement, any employee
benefit plan, program, policy or agreement (such as a thrift, pension,
profit sharing, medical, dental, disability, accident, life insurance,
relocation, salary continuation, expense reimbursements, vacation, fringe
benefits, office and support staff plan or policy) or any other plan,
program, policy or agreement of the Company intended to benefit employees
(and/or their families) generally, management employees (and/or their
families) as a group or you (and/or your family) in particular.
17. "RETIREMENT" means termination of employment on or after the day on which
you attain the age of 65.
18. "SUCCESSOR" means any Person that succeeds to, or has the practical ability
to control (either immediately or solely with the passage of time), the
Company's business directly, by merger, consolidation or other form of
business combination, or indirectly, by purchase of the Company's
outstanding securities ordinarily having the right to vote at the election
of directors or, all or substantially all of its assets or otherwise.
Page 7
ARTICLE II.
TERM OF AGREEMENT
This Agreement is effective immediately and will continue in effect until
________________; provided, however; that commencing on ____________ and each
_____________ thereafter, the term of this Agreement will automatically be
extended for 12 additional months beyond the expiration date otherwise then in
effect, unless at least 90 calendar days prior to any such _______________, the
Company or you has given notice that this Agreement will not be extended; and,
provided, further; that if a Change in Control has occurred during the term of
this Agreement, this Agreement will continue in effect beyond the termination
date then in effect for a period of 12 months following the month during which
the Change in Control occurs or, if later, until the date on which the Company's
obligations to you arising under or in connection with this Agreement have been
satisfied in full.
ARTICLE III.
CHANGE IN CONTROL BENEFITS
1. BENEFITS UPON A CHANGE IN CONTROL TERMINATION. You will become entitled to
the payments and benefits described in clauses (a) and (b) of this Article
III., subject to the limitations described in clause (c) of this Article
III., and to the benefit of the provisions described in clause (d), if and
only if (i) your employment with the Company is terminated for any reason
other than death, Cause, Disability or Retirement, or if you terminate your
employment with the Company for Good Reason; and (ii) the termination
occurs either within the period beginning on the date of a Change in
Control and ending on the last day of the twelfth month that begins after
the month during which the Change in Control occurs or prior to a Change in
Control if your termination was either a condition of the Change in Control
or was at the request or insistence of a Person related to the Change in
Control.
a. CASH PAYMENT. Within five business days following the Date of
Termination or, if later, within five business days following the date
of the Change in Control, the Company will make a lump-sum cash
payment to you in an amount equal to the product of (i) your Highest
Monthly Compensation multiplied by (ii) 36.
b. WELFARE PLANS. The Company will maintain in full force and effect, for
the continued benefit of you and your dependents for a period
terminating 36 months after the Date of Termination, all insured and
self-insured employee welfare benefit Plans (including, without
limitation, medical, life, dental, vision and disability plans) in
which you were eligible to participate at any time during the 90-day
period immediately preceding the Change in Control, provided that your
continued participation is possible under the general terms and
provisions of such Plans and any applicable funding media and without
regard to any discretionary amendments to such Plans by the Company
following the Change in Control (or prior to the Change in Control if
amended as a condition or at the request or insistence of a Person
(other than the Company) related to the Change in Control) and
provided that you continue to pay an amount equal to your regular
contribution under such Plans for such participation (based upon your
level of benefits and employment status most favorable to you at any
time during the 90-day period immediately preceding the Change in
Control). The continuation period under federal and state continuation
laws, to the extent applicable, will begin to run from the date on
which coverage pursuant to this clause (b) ends. If, at the end of the
36-month period, you have not previously received or are not
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then receiving equivalent benefits from a new employer (including
coverage for any pre-existing conditions), the Company will arrange,
at its sole cost and expense, to enable you to convert your and your
dependents' coverage under such Plans to individual policies or
programs upon the same terms as executives of the Company may apply
for such conversions. In the event that your or your dependents'
participation in any such Plan is barred, the Company, at its sole
cost and expense, will arrange to have issued for the benefit of you
and your dependents individual policies of insurance providing
benefits substantially similar (on a federal, state and local income
and employment after-tax basis) to those which you otherwise would
have been entitled to receive under such Plans pursuant to this clause
(b) or; if such insurance is not available at a reasonable cost to the
Company, the Company will otherwise provide you and your dependents
equivalent benefits (on a federal, state and local income and
employment after-tax basis). You will not be required to pay any
premiums or other charges in an amount greater than that which you
would have paid in order to participate in such Plans.
c. LIMITATION ON PAYMENTS AND BENEFITS. Notwithstanding anything in this
Agreement to the contrary, if any of the payments or benefits to be
made or provided in connection with this Agreement, together with any
other payments, benefits or awards which you have the right to receive
from the Company, or any corporation which is a member of an
"affiliated group" (as defined in section 1504(a) of the Code without
regard to section 1504(b) of the Code) of which the Company is a
member ("Affiliate"), constitute an "excess parachute payment" (as
defined in section 280G(b) of the Code), such payments, benefits or
awards to be made or provided in connection with this Agreement, or
any other agreement between you and the Company or its Affiliates, may
be reduced, eliminated, modified or waived to the extent necessary to
prevent all, or any portion, of such payments, benefits or awards from
becoming "excess parachute payments" and therefore subject to the
excise tax imposed under section 4999 of the Code. You will have the
sole right and discretion to determine whether the payments, benefits
or awards to be made or provided in connection with this Agreement, or
any other agreement between you and the Company, should be reduced,
whether or not such other agreement with the Company or an Affiliate
expressly addresses the potential application of Sections 280G or 4999
of the Code (including, without limitation, that "payments" under such
agreement be reduced). You will also have the right to designate the
particular payments, benefits or awards that are to be reduced,
eliminated, modified or waived; provided that no such adjustment will
be made if it results in additional expense to the Company in excess
of expenses the Company would have experienced if no adjustment had
been made. The determination as to whether any such decrease in the
payments or benefits is necessary must be made in good faith by legal
counsel or a certified public accountant selected by you and
reasonably acceptable to the Company, and such determination will be
conclusive and binding upon you and the Company. The Company will pay
or reimburse you on demand for the reasonable fees, costs and expenses
of the counsel or accountant selected to make the determinations under
this clause (c).
2. DISPOSITION. If, on or after the date of a Change in Control, an Affiliate
is sold, merged, transferred or in any other manner or for any other reason
ceases to be an Affiliate or all or any portion of the business or assets
of an Affiliate are sold, transferred or otherwise disposed of and the
acquiror is not the Company or an Affiliate (a "Disposition"), and you
remain or become employed by the acquiror or an affiliate of the acquiror
(as defined in this Agreement but substituting "acquiror" for
Page 9
"Company") in connection with the Disposition, you will be deemed to have
terminated employment on the effective date of the Disposition for purposes
of this section unless (a) the acquiror and its affiliates jointly and
severally expressly assume and agree, in a manner that is enforceable by
you, to perform the obligations of this Agreement to the same extent that
the Company would be required to perform if the Disposition had not
occurred and (b) the Successor guarantees, in a manner that is enforceable
by you, payment and performance by the acquiror.
ARTICLE IV.
INDEMNIFICATION
Following a Change in Control, the Company will indemnify and advance expenses
to you to the full extent permitted by law and the Company's articles of
incorporation and bylaws for damages, costs and expenses (including, without
limitation, judgments, fines, penalties, settlements and reasonable fees and
expenses of your counsel) incurred in connection with all matters, events and
transactions relating to your service to or status with the Company or any other
corporation, employee benefit plan or other entity with whom you served at the
request of the Company.
ARTICLE V.
CONFIDENTIALITY
You will not use, other than in connection with your employment with the
Company, or disclose any Confidential Information to any person not employed by
the Company or not authorized by the Company to receive such Confidential
Information, without the prior written consent of the Company; and you will use
reasonable and prudent care to safeguard and protect and prevent the
unauthorized disclosure of Confidential Information. Nothing in this Agreement
will prevent you from using, disclosing or authorizing the disclosure of any
Confidential Information: (a) which is or hereafter becomes part of the public
domain or otherwise becomes generally available to the public through no fault
of yours; (b) to the extent and upon the terms and conditions that the Company
may have previously made the Confidential Information available to certain
persons; or (c) to the extent that you are required to disclose such
Confidential Information by law or judicial or administrative process.
ARTICLE VI.
SUCCESSORS
The Company will seek to have any Successor, by agreement in form and substance
satisfactory to you, assent to the fulfillment by the Company of the Company's
obligations under this Agreement. Failure of the Company to obtain such assent
at least three business days prior to the time a Person becomes a Successor (or
where the Company does not have at least three business days' advance notice
that a Person may become a Successor, within one business day after having
notice that such Person may become or has become a Successor) will constitute
Good Reason for termination by you of your employment. The date on which any
such succession becomes effective will be deemed the Date of Termination and
Notice of Termination will be deemed to have been given on that date. A
Successor has no rights, authority or power with respect to this Agreement prior
to a Change in Control.
ARTICLE VII.
OTHER PROVISIONS
1. FEES AND EXPENSES. The Company, upon demand, will pay or reimburse you for
all reasonable legal fees, court costs, experts' fees and related costs and
expenses incurred by you in connection
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with any actual, threatened or contemplated litigation or legal,
administrative, arbitration or other proceeding relating to this Agreement
to which you are or reasonably expect to become a party, whether or not
initiated by you, including, without limitation: (a) all such fees and
expenses, if any, incurred in contesting or disputing any such termination;
or (b) your seeking to obtain or enforce any right or benefit provided by
this Agreement; provided, however; you will be required to repay (without
interest) any such amounts to the Company to the extent that a court issues
a final and non-appealable order setting forth the determination that the
position taken by you was frivolous or advanced by you in bad faith.
2. BINDING AGREEMENT. This Agreement inures to the benefit of, and is
enforceable by, you, your personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you die while any amount would still be payable to you under this Agreement
if you had continued to live, all such amounts, unless otherwise provided
in this Agreement, will be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or; if there be no
such designee, to your estate.
3. NO MITIGATION. You will not be required to mitigate the amount of any
payments or benefits the Company becomes obligated to make or provide to
you in connection with this Agreement by seeking other employment or
otherwise. The payments or benefits to be made or provided to you in
connection with this Agreement may not be reduced, offset or subject to
recovery by the Company by any payments or benefits you may receive from
other employment or otherwise.
4. NO SETOFF. The Company has no right to setoff payments or benefits owed to
you under this Agreement against amounts owed or claimed to be owed by you
to the Company under this Agreement or otherwise.
5. TAXES. All payments and benefits to be made or provided to you in
connection with this Agreement will be subject to required withholding of
federal, state and local income, excise and employment-related taxes.
6. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in, or required under, this Agreement must be
in writing and will be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail,
return receipt requested, postage prepaid and addressed to each party's
respective address set forth on the first page of this Agreement (provided
that all notices to the Company must be directed to the attention of the
chair of the Board), or to such other address as either party may have
furnished to the other in writing in accordance with these provisions,
except that notice of change of address will be effective only upon
receipt.
7. DISPUTES.If you so elect, any dispute, controversy or claim arising under
or in connection with this Agreement will be settled exclusively by binding
arbitration administered by the American Arbitration Association in
Minneapolis, Minnesota in accordance with the Commercial Arbitration Rules
of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction;
provided, that you may seek specific performance of your right to receive
payment or benefits until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement. The Company will be entitled to seek an injunction or
restraining order in a court of competent jurisdiction (within or without
the State of Minnesota) to enforce the provisions of Section 5 of this
Agreement.
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8. JURISDICTION. Except as specifically provided otherwise in this Agreement,
the parties agree that any action or proceeding arising under or in
connection with this Agreement must be brought in a court of competent
jurisdiction in the State of Minnesota, and hereby consent to the exclusive
jurisdiction of said courts for this purpose and agree not to assert that
such courts are an inconvenient forum.
9. RELATED AGREEMENTS. To the extent that any provision of any other Plan or
agreement between the Company and you limits, qualifies or is inconsistent
with any provision of this Agreement, then for purposes of this Agreement,
while such other Plan or agreement remains in force, the provision of this
Agreement will control and such provision of such other Plan or agreement
will be deemed to have been superseded, and to be of no force or effect, as
if such other agreement had been formally amended to the extent necessary
to accomplish such purpose. Nothing in this Agreement prevents or limits
your continuing or future participation in any Plan provided by the Company
and for which you may qualify, and nothing in this Agreement limits or
otherwise affects the rights you may have under any Plans or other
agreements with the Company. Amounts which are vested benefits or which you
are otherwise entitled to receive under any Plan or other agreement with
the Company at or subsequent to the Date of Termination will be payable in
accordance with such Plan or other agreement.
10. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement is intended to
provide you with any right to continue in the employ of the Company for any
period of specific duration or interfere with or otherwise restrict in any
way your rights or the rights of the Company, which rights are hereby
expressly reserved by each, to terminate your employment at any time for
any reason or no reason whatsoever, with or without cause.
11. FUNDING AND PAYMENT. Benefits payable under this Agreement will be paid
only from the general assets of the Company. No person has any right to or
interest in any specific assets of the Company by reason of this Agreement.
To the extent benefits under this Agreement are not paid when due to any
individual, he or she is a general unsecured creditor of the Company with
respect to any amounts due. The Company with whom you were employed
immediately before your Date of Termination has primary responsibility for
benefits to which you or any other person are entitled pursuant to this
Agreement but to the extent such Company is unable or unwilling to provide
such benefits, the Company and each other Affiliate are jointly and
severally responsible therefor to the extent permitted by applicable law.
If you were simultaneously employed by more than one Company immediately
before your Date of Termination, each such Company has primary
responsibility for a portion of the benefits to which you or any other
person are entitled pursuant to this Agreement that bears the same ratio to
the total benefits to which you or such other person are entitled pursuant
to this Agreement as your base pay from the Company immediately before your
Date of Termination bears to your aggregate base pay from all such
Companies.
12. SURVIVAL.The respective obligations of, and benefits afforded to, the
Company and you which by their express terms or clear intent survive
termination of your employment with the Company or termination of this
Agreement, as the case may be, including without limitation the provisions
of Articles III, IV, V and VI and Sections 1, 4, 5, 6 and 7 of Article VII
of this Agreement, will survive termination of your employment with the
Company or termination of this Agreement, as the case may be, and will
remain in full force and effect according to their terms.
Page 12
ARTICLE VIII.
MISCELLANEOUS
1. MODIFICATION AND WAIVER. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is
agreed to in a writing signed by you and the chair of the Board. No waiver
by any party to this Agreement at any time of any breach by another party
to this Agreement of, or of compliance with, any condition or provision of
this Agreement to be performed by such party will be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.
2. ENTIRE AGREEMENT. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter to this Agreement
have been made by any party which are not expressly set forth in this
Agreement.
3. GOVERNING LAW. This Agreement and the legal relations among the parties as
to all matters, including, without limitation, matters of validity,
interpretation, construction, performance and remedies, will be governed by
and construed exclusively in accordance with the internal laws of the State
of Minnesota (without regard to the conflict of laws principles of any
jurisdiction).
4. HEADINGS. Headings are for purposes of convenience only and do not
constitute a part of this Agreement.
5. FURTHER ACTS. The parties to this Agreement agree to perform, or cause to
be performed, such further acts and deeds and to execute and deliver or
cause to be executed and delivered, such additional or supplemental
documents or instruments as may be reasonably required by the other party
to carry into effect the intent and purpose of this Agreement.
6. SEVERABILITY. The invalidity or unenforceability of all or any part of any
provision of this Agreement will not affect the validity or enforceability
of the remainder of such provision or of any other provision of this
Agreement, which will remain in full force and effect.
7. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which will be deemed to be an original, but all of which together will
constitute one and the same instrument.
Page 13
If this letter correctly sets forth our agreement on the subject matter
discussed above, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject.
Sincerely,
BIO-VASCULAR, INC.
By:
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Name:
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Title:
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Agreed to this day of JANUARY , 1998.
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