AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AMENDED
AND RESTATED CHANGE OF CONTROL SEVERANCE AGREEMENT , dated as
of
(the “ Agreement ”), is between NATIONAL DENTEX
CORPORATION, a Massachusetts corporation (the “
Company ”), and
(the “ Employee ”).
Whereas ,
the Employee is a key executive of the Company and an integral part
of its management.
Whereas ,
the Company recognizes that the possibility of a change of control
of the Company may result in the departure or distraction of
management to the detriment of the Company and its
shareholders.
Whereas ,
the Company wishes to assure the Employee of fair severance should
his employment terminate in specified circumstances following a
change of control, and to assure the Executive of certain other
benefits upon a change of control.
Whereas,
the Company and Employee are party to a certain Change of Control
Severance Agreement dated [ ] (the “
Original Agreement ”) and the parties desire to amend
and restate in its entirety the Original Agreement to amend, among
other provisions, certain definitions and payment
provisions.
Now
Therefore , in consideration of the Executive’s continued
employment with the Company and other good and valuable
consideration, the parties agree as follows:
1. Definitions.
The following terms as used in this Agreement shall have the
following meanings:
“Base
Salary” shall mean the Employee’s annual base salary,
exclusive of any bonus or other benefits he may receive.
“Bonus”
shall mean the aggregate amounts payable to the Employee pursuant
to one or more of the Company’s incentive compensation plans
as in effect prior to the occurrence of a Standstill
Period.
“Cause”
shall have the meaning set forth in Section 2.03.
“Change of
Control” shall mean the occurrence of any one of the
following events:
(a) Change in
Ownership. A change in ownership occurs if a person, or multiple
persons acting as a group, acquires more than 50% of the capital
stock of the Company, measured by voting power or value.
(b) Change in
Effective Control. A change in effective control occurs if
either:
(i) A Person (or
group of persons) acquires 30% of the capital stock of the Company
measured by voting power over a 12-month period; or
(ii) A majority of
the Board of Directors of the Company is replaced by directors not
endorsed by the prior members of the Board of Directors.
(c) Change in a
Substantial Portion of the Company’s Assets. A Change of
Control based on the sale of assets occurs if a Person (or group of
Persons) acquires 40% or more of the gross fair market value of the
assets of the Company over a 12-month period.
“Code”
shall mean the Internal Revenue Code of 1986, as
amended.
“Common
Stock” shall mean the then outstanding Common Stock of the
Company plus, for purposes of determining the stock ownership of
any Person, the number of unissued shares of Common Stock which
such Person has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) upon the
exercise of conversion rights, exchange rights, warrants or options
or otherwise.
“Current
Title” shall mean the Employee’s title on the date one
hundred eighty (180) days prior to the commencement of a Stand
Still Period.
“Date of
Qualified Termination” shall mean the date on which the
Employee’s employment is terminated pursuant to
Section 2.01(a) of this Agreement.
“Employee
Related Party” shall mean any Affiliate or Associate of the
Employee other than the Company or a Subsidiary of the Company. The
terms “Affiliate” and “Associate” shall
have the meanings ascribed thereto in Rule 12b-2 under the
Exchange Act (the term “registrant” in the definition
of “Associate” meaning, in this case, the
Company).
“Good
Reason” shall have the meaning set forth in
Section 2.04.
A Person shall be
deemed to be the “owner” of any Common
Stock:
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(a)
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of
which such Person would be the “beneficial owner”, as
such term is defined in Rule 13d-3, as in effect on the date
hereof, promulgated by the Securities and Exchange Commission (the
“ Commission ”) under the Exchange Act;
or
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(b)
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of
which such Person would be the “beneficial owner”, as
such term is used in Section 16 of the Exchange Act and the
rules of the Commission promulgated thereunder, as in effect on the
date hereof; or
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(c)
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which such Person or any of its
Affiliates or Associates (as such terms are defined in
Rule 12b-2, as in effect on the date hereof, promulgated by
the Commission under the Exchange Act), has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange
rights, warrants or options or otherwise.
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“Person”
shall have the meaning used in Section 13(d) of the Exchange Act,
as in effect on the date hereof.
“Qualified
Termination” shall have the meaning set forth in
Section 2.01(a) of this Agreement.
“Specified
Employee” shall mean the Employee if the Company’s
stock is publicly traded on an established securities market and
the Employee:
(a) owns
more than 5 percent (5%) of the stock of the Company or any
member of its “controlled group” as that term is
defined under §1563 of the Code:
(b) owns
more than 1 percent (1%) of the stock of the Company and has
compensation from the Company in excess of $150,000 per year;
or
(c) is
an officer of the Company with compensation in excess of $145,000
per year.
“Standstill
Period” shall be the period commencing on the date of a
Change of Control and continuing until the close of business on the
last business day of the 24th calendar month following such Change
of Control.
2. Benefits
Upon Change of Control.
2.01 Benefits
Following Termination of Employment.
(a) Upon the
termination of the Employee’s employment by the Company
without Cause or by the Employee for Good Reason, during any
Standstill Period following a Change of Control (a “
Qualified Termination ”), the Company shall, within
thirty (30) days following the Date of Qualified Termination,
pay to the Employee in a lump sum an amount equal to (x)
times the Employee’s Base Salary in effect immediately prior
to the Date of Termination plus (y)
times the average amount of the Bonus payable to the Employee for
the
fiscal years ending on or immediately prior to the Date of
Termination.
(b) Until the
anniversary of the Date of Qualified Termination, the Company shall
maintain in full force and effect for the continued benefit of
Employee and his family all life insurance, medical insurance and
disability plans and programs in
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which Employee
was entitled to participate immediately prior to the Change of
Control, provided that Employee’s continued participation is
possible under the general terms and provisions of such plans and
programs or under other plans and programs providing substantially
comparable coverage and benefits. In the event that Employee is
ineligible to participate in such plans or programs, the Company
shall arrange upon c
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