VIASYS HEALTHCARE INC. CHANGE IN CONTROL EXECUTIVE RETENTION AGREEMENT
Exhibit 10.9
CHANGE IN CONTROL EXECUTIVE RETENTION AGREEMENT
THIS AGREEMENT by and between VIASYS Healthcare Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxxx (the “Executive”) made and entered into as of May 26, 2006 (the “Restatement Effective Date”).
WHEREAS, the Company and the Executive previously entered into a Change in Control Executive Retention Agreement dated as of September 26, 2005 (the “Original Agreement”); and
WHEREAS, this Agreement will replace and supersede all prior severance agreements between the Executive and the Company or its subsidiaries, including, without limitation, the Original Agreement, the portion of the letter from the Company to the Executive, dated March 10, 2005, that relates to severance payments (the “Offer Letter Severance Commitment”) and any benefits payable to the Executive under the VIASYS Healthcare Inc. Change in Control Severance Plan (the “Change in Control Plan”).
As used herein, the following terms shall have the following respective meanings:
1.1 “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 of the Executive’s duties with the Company or its successor organization (other than as a result of physical or mental incapacity or illness).
1.2 “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 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.
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1.3 “CHANGE IN CONTROL DATE” means the date on which a Change in Control is consummated.
(a) an amount equal to the sum of (i) twelve (12) months of the Executive’s then current base pay and (ii) the Executive’s target bonus under the VIASYS Healthcare Inc. Management Incentive Plan for the year of termination, payable by the Company or its successor organization in a lump sum within sixty (60) days after the Executive’s date of termination, and
(b) continued participation, at the expense of the Company (or its successor organization), in all medical and dental insurance plans in which the Executive and the Executive’s family were participating on the Executive’s date of termination until the earlier of (A) twelve (12) months following the Executive’s date of termination or (B) the date on which the Executive receives substantially equivalent coverage and benefits under the plans of a subsequent employer.
Base pay shall mean the Executive’s rate of wages or salary on the date of termination of employment, 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).
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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.
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.
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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.
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.
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party hereto in respect of the subject matter contained herein, including, without limitation, the Original Agreement, the Offer Letter Severance Commitment and the Change in Control Plan; and any prior agreement of the parties hereto in respect of the subject matter contained herein, including, without limitation, the Original Agreement, the Offer Letter Severance Commitment and the Executive’s participation in the Change in Control Plan, is hereby terminated and cancelled.
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By: |
/s/ Xxxxx X. Xxxxxxx |
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Name: Xxxxx X. Xxxxxxx |
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Title: Chief Executive Officer |
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EXECUTIVE |
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/s/ Xxxxx X. Xxxxxx |
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Xxxxx Xxxxxx |
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