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EXHIBIT 10.89
COLLAGEN CORPORATION
FORM OF OFFICER MANAGEMENT CONTINUITY AGREEMENT
This Management Continuity Agreement (the "Agreement") is dated as of
February 7, 1997 by and between [Insert Name of Officer] ("Employee") and
Collagen Corporation, a Delaware corporation (the "Company" or "Collagen").
RECITALS
A. It is expected that another company may from time to time consider
the possibility of acquiring the Company or that a change in control may
otherwise occur, with or without the approval of the Company's Board of
Directors. The Board of Directors recognizes that such consideration can be a
distraction to Employee and can cause Employee to consider alternative
employment opportunities. The Board of Directors 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 and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Company's Board of Directors believes it is in the best
interests of the Company and its stockholders to retain Employee and provide
incentives to Employee to continue in the service of the Company.
C. The Board of Directors further believes that it is imperative to
provide Employee with certain benefits upon a Change of Control and, under
certain circumstances, upon termination of Employee's employment in connection
with a Change of Control, which benefits are intended to provide Employee with
financial security and provide sufficient income and encouragement to Employee
to remain with the Company, notwithstanding the possibility of a Change of
Control.
D. To accomplish the foregoing objectives, the Board of Directors
has directed the Company, upon execution of this Agreement by Employee, to agree
to the terms provided in this Agreement.
Now therefore, in consideration of the mutual promises, covenants and
agreements contained herein, and in consideration of the continuing employment
of Employee by the Company, the parties hereto agree as follows:
1. AT-WILL EMPLOYMENT. The Company and Employee acknowledge that
Employee's employment is and shall continue to be at-will, as defined under
applicable law, and that Employee's employment with the Company may be
terminated by either party at any time for any or no reason. If Employee's
employment terminates for any reason, Employee shall not be entitled to any
payments, benefits, damages, award or compensation other than as provided in
this Agreement, or as may otherwise be available in accordance with the terms of
the Company's
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established employee plans and written policies at the time of
termination. The terms of this Agreement shall terminate upon the earlier of (i)
the date on which Employee ceases to be employed as an executive corporate
officer of the Company, other than as a result of an involuntary termination by
the Company without cause (ii) the date that all obligations of the parties
hereunder have been satisfied, or (iii) two (2) years after a Change of Control.
A termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement. The rights and duties created by this Section 1 may not be
modified in any way except by a written agreement executed by an officer of the
Company upon direction from the Board of Directors.
2. BENEFITS UPON A CHANGE OF CONTROL; TERMINATION OF EMPLOYMENT.
(a) TREATMENT OF STOCK OPTIONS UPON A CHANGE OF CONTROL. In
the event of a Change of Control and regardless of whether Employee's employment
with the Company is terminated in connection with the Change in Control and
unless otherwise limited by the provisions of Section 5, each stock option to
purchase the Company's Common Stock granted to Employee over the course of his
or her employment with the Company and held by Employee on the effective date of
a Change of Control shall become immediately vested on such date as to that
number of shares that would have vested in accordance with the terms of such
option (assuming that Employee had remained in Continuous Status as an Employee,
as defined in the relevant plan and option agreement, for 24 months after the
date of termination of employment) as of the date 24 months after the effective
date of the Change of Control and each such option shall be exercisable in
accordance with the provisions of the option agreement and plan pursuant to
which such option was granted.
(b) INVOLUNTARY TERMINATION FOLLOWING A CHANGE OF CONTROL. In
the event that Employee's employment is terminated as a result of an Involuntary
Termination other than for Cause at any time within 24 months following the
effective date of a Change of Control, then Employee will be entitled to receive
severance benefits as follows: (A) a lump sum payment within five days after the
date of termination of employment equal to 12 months of Employee's then current
base salary, (B) a lump sum payment as soon as practicable after the date of
termination of employment equal to Employee's scheduled bonus for the Company's
fiscal year in which the termination occurs or, if no such bonus has been
scheduled, equal to the bonus paid to Employee for the Company's fiscal year
prior to the Company's fiscal year in which the termination occurs and (C) in
the event that the acceleration of vesting provided for in Section 2(a) did not
occur due to the provisions of Section 5 on the effective date of the Change of
Control, then, except to the extent that the provisions of Section 5 would not
permit acceleration of vesting pursuant to this Section 2(b), each stock option
to purchase the Company's Common Stock granted to Employee over the course of
his or her employment with the Company and held by Employee on the date of
termination of employment shall become immediately vested on such date as to
that number of shares that would have vested in accordance with the terms of
such option (assuming that Employee had remained in Continuous Status as an
Employee, as defined in the relevant plan and option agreement, for 24 months
after the date of termination of
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employment) as of the date 24 months after the date of termination of employment
and each such option shall be exercisable in accordance with the provisions of
the option agreement and plan pursuant to which such option was granted. In
addition, Employee will receive payment(s) for all salary, bonuses and unpaid
vacation accrued as of the date of Employee's termination of employment and
Employee's benefits will be continued under the Company's then existing benefit
plans and policies in accordance with such plans and policies in effect on the
date of termination and in accordance with applicable law.
(c) TERMINATION FOR CAUSE. If Employee's employment is
terminated for Cause at any time, then Employee shall not be entitled to receive
payment of any severance benefits. Employee will receive payment(s) for all
salary, bonuses and unpaid vacation accrued as of the date of Employee's
termination of employment and Employee's benefits will be continued under the
Company's then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of termination and in accordance with
applicable law.
(d) VOLUNTARY RESIGNATION. If Employee voluntarily resigns
from the Company, then Employee shall not be entitled to receive payment of any
severance benefits. Employee will receive payment(s) for all salary, bonuses and
unpaid vacation accrued as of the date of Employee's termination of employment
and Employee's benefits will be continued under the Company's then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of termination and in accordance with applicable law.
3. DEFINITION OF TERMS. The following terms referred to in this
Agreement shall have the following meanings:
(a) CHANGE OF CONTROL. "Change of Control" shall mean
the occurrence of any of the following events:
(i) OWNERSHIP. Any "Person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing 50%
or more of the total voting power represented by the Company's then outstanding
voting securities without the approval of the Board;
(ii) MERGER/SALE OF ASSETS. A merger or
consolidation of the Company whether or not approved by the Board, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets; or
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(iii) CHANGE IN BOARD COMPOSITION. A change in
the composition of the Board, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean directors
who either (A) are directors of the Company as of February 7, 1997 or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but an Incumbent Director shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company).
(b) CAUSE. "Cause" shall mean (i) gross negligence or willful
misconduct in the performance of Employee's duties to the Company where such
gross negligence or willful misconduct has resulted or is likely to result in
substantial and material damage to the Company or its subsidiaries (ii) repeated
unexplained or unjustified absence from the Company, (iii) a material and
willful violation of any federal or state law; (iv) commission of any act of
fraud with respect to the Company or (v) conviction of a felony or a crime
involving moral turpitude causing material harm to the standing and reputation
of the Company, in each case as determined in good faith by the Board.
(c) INVOLUNTARY TERMINATION. "Involuntary Termination" shall
include any termination by the Company other than for Cause and Employee's
voluntary termination, upon 30 days prior written notice to the Company,
following (i) a material reduction or change in job duties, responsibilities and
requirements inconsistent with the Employee's position with the Company and the
Employee's prior duties, responsibilities and requirements or a change in
Employee's reporting relationship such that Employee is no longer reporting to
the Board; (ii) any reduction of Employee's base compensation (other than in
connection with a general decrease in base salaries for most officers of the
successor corporation); or (iii) Employee's refusal to relocate to a facility or
location more than 30 miles from the Company's current location.
4. LIMITATION ON PAYMENTS. In the event that the severance and other
benefits provided for in this Agreement to the Employee (i) constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") and (ii) but for this Section, would be
subject to the excise tax imposed by Section 4999 of the Code, then the
Employee's severance benefits under Sections 2(a) and 2(b) shall be payable
either:
(a) in full, or
(b) as to such lesser amount which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Employee on an after-tax basis, of the greatest amount of
severance benefits under Section 2(a) and 2(b), notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the
Code. Unless the Company and the Employee otherwise agree in writing,
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any determination required under this Section 4 shall be made in writing by
independent public accountants agreed to by the Company and the Employee (the
"Accountants"), whose determination shall be conclusive and binding upon the
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section 4, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Section
280G and 4999 of the Code. The Company and the Employee shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4.
5. CERTAIN BUSINESS COMBINATIONS. In the event it is determined by the
Board, upon consultation with the Company management and the Company's
independent auditors, that the enforcement of any agreement between Employee and
the Company, including the provisions of Section 2(a) and 2(b) of this
Agreement, which allows for the acceleration of vesting of stock options granted
for the Company's Common Stock upon the effective date of a Change of Control or
thereafter, would preclude accounting for any proposed business combination of
the Company involving a Change of Control as a pooling of interests, and the
Board otherwise desires to approve such a proposed business transaction which
requires as a condition to the closing of such transaction that it be accounted
for as a pooling of interests, then any such provision of this Agreement shall
be null and void. For purposes of this Section 5, the Board's determination
shall require the unanimous approval of the non-employee Board members.
6. AESTHETIC TECHNOLOGIES CORPORATION. The Company has recently
announced its intention to formally separate its Aesthetic Technologies Group
and form a new corporation, Aesthetic Technologies Corporation ("AT"). The Board
and management of the Company will continue to evaluate strategies for Aesthetic
Technologies Corporation, which may include a public offering, a "spin-off" or a
"split-off", among other alternatives. If Employee becomes an employee of AT, AT
will assume all of the Company's obligations under this Agreement. The
distribution of assets of the Company to AT, an initial public offering of AT
Common Stock, a distribution of shares of AT Common Stock to the stockholder of
the Company or the termination of Employee's employment with the Company in
connection with commencement of his or her employment by AT will not by itself
or together result in any obligation of the Company to make any payments to
Employee pursuant to Section 2 of this Agreement.
7. CONFLICTS. Employee represents that his or her performance of all
the terms of this Agreement will not breach any other agreement to which
Employee is a party. Employee has not, and will not during the term of this
Agreement, enter into any oral or written agreement in conflict with any of the
provisions of this Agreement. Employee further represents that he or she is
entering into or has entered into an employment relationship with the Company of
his or her own free will and that he or she has not been solicited as an
employee in any way by the Company.
8. SUCCESSORS. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially
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all of the Company's business and/or assets shall assume the obligations under
this Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as the Company would be
required to perform such obligations in the absence of a succession. The terms
of this Agreement and all of Employee's rights hereunder and thereunder shall
inure to the benefit of, and be enforceable by, Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
9. NOTICE. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to Employee shall be
addressed to Employee at the home address which Employee most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
10. MISCELLANEOUS PROVISIONS.
(a) NO DUTY TO MITIGATE. Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor shall any such payment be
reduced by any earnings that Employee may receive from any other source.
(b) WAIVER. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Employee and by an authorized officer of the Company
(other than Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) WHOLE AGREEMENT. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
supersedes any agreement of the same title and concerning similar subject matter
dated prior to the date of this Agreement, and by execution of this Agreement
both parties agree that any such predecessor agreement shall be deemed null and
void.
(d) CHOICE OF LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.
(e) SEVERABILITY. If any term or provision of this Agreement
or the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to
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circumstances other than those as to which it is held invalid or unenforceable,
and a suitable and equitable term or provision shall be substituted therefor to
carry out, insofar as may be valid and enforceable, the intent and purpose of
the invalid or unenforceable term or provision.
(f) ARBITRATION. Any dispute or controversy arising under or
in connection with this Agreement may be settled at the option of either party
by binding arbitration in the County of Santa Clara, California, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
Punitive damages shall not be awarded.
(g) LEGAL FEES AND EXPENSES. The parties shall each bear
their own expenses, legal fees and other fees incurred in connection with this
Agreement.
(h) NO ASSIGNMENT OF BENEFITS. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this Section 11(h) shall be
void.
(i) EMPLOYMENT TAXES. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
(j) ASSIGNMENT BY COMPANY. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company. In
the case of any such assignment, the term "Company" when used in a section of
this Agreement shall mean the corporation that actually employs the Employee.
(k) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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The parties have executed this
Agreement the date first written above.
COLLAGEN CORPORATION
By: /s/ Collagen Corporation
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Title:
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Address: 0000 Xxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
[NAME OF OFFICER]
Signature:
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Address:
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