Exhibit 10.10
CARDIODYNAMICS INTERNATIONAL
CORPORATION
AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT
THIS AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT (this “Agreement”) is effective as of
this
day of
, 2008 by and between
(“Executive”) and CARDIODYNAMICS INTERNATIONAL
CORPORATION, a California corporation (the
“Company”).
Executive and the Company desire to
make certain amendments to Executive’s Change of Control
Agreement first executed in 2006 (the “Prior
Agreement”) to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and to
make certain other revisions to the Prior Agreement. Therefore, the
parties agree that this Agreement will supersede, amend and restate
the Prior Agreement in all respects.
RECITALS
The Board of Directors of the
Company believes it is in the best interests of the Company to
provide Executive with compensation arrangements and equity
benefits upon a Change of Control (as hereinafter defined) that are
intended to provide Executive with enhanced financial security, are
competitive with those of other companies, and provide sufficient
incentive to Executive to remain at the Company as an employee
through and after a Change of Control.
In consideration of the mutual
promises and covenants herein contained, and in consideration of
the continuing employment of Executive by the Company, the adequacy
and sufficiency of which are hereby acknowledged, the parties agree
as follows:
AGREEMENT
1. Definition of Terms . The
following terms referred to in this Agreement shall have the
following meanings:
(a) “Base Compensation”
means, as at any time the same is to be determined, the greater of
(i) the annual base salary the Company pays Executive for his
or her services immediately prior to the termination of
Executive’s employment or (ii) the annual base salary
the Company pays Executive for his or her services immediately
prior to a Change of Control which occurs within twelve
(12) months prior to the termination of Executive’s
employment.
(b) “Cause” means
(i) gross negligence or willful misconduct in the performance
of Executive’s duties to the Company, including
Executive’s refusal to comply in any material respect with
the legal directives of the Board of Directors, or any member of
the Company’s management, if any, that is higher in rank than
Executive after Executive has been notified in writing;
(ii) material and willful violation of any federal or state
law by Executive that has resulted or is likely to result in
material damage to the Company; (iii) commission of any act of
fraud by Executive with respect to the Company; or
(iv) Executive’s conviction of a felony or a crime
causing material harm to the standing and reputation of the
Company.
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(c) “Change of Control”
means the occurrence of any of the following, whether they occur in
a single transaction or series of related transactions:
(i) any person, or more than one
person acting as a group, acquires ownership of the stock of the
Company that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the
Company;
(ii) consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar corporate transaction involving the Company (each a
“Business Combination”), in each case, unless,
following such Business Combination, all or substantially all of
the individuals and entities who were beneficial owners,
respectively, of the voting securities of the Company immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of the then
outstanding shares of the common stock and the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting
from such Business Combination (including, 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);
(iii) any person, or more than one
person acting as a group, acquires all or substantially all of the
assets of the Company; or
(iv) the incumbent members of the
Board of Directors as of the date of this Agreement cease for any
reason to constitute at least a majority of the Board, unless the
nomination or election of new directors is approved by a majority
of the incumbent directors.
(d) an “Involuntary
Termination” shall be deemed to occur if Executive resigns
from the company due to:
(i) without Executive’s
express written consent, a material reduction of Executive’s
authority, duties or responsibilities relative to
Executive’s, authority, duties, or responsibilities in effect
immediately prior to such reduction;
(ii) without Executive’s
express written consent, a material reduction by the Company of
Executive’s Base Compensation as in effect immediately prior
to such reduction;
(iii) without Executive’s
express written consent, the relocation of Executive’s
principal place of employment to a facility or a location more than
fifty (50) miles from his or her current location;
(iv) any purported termination of
Executive by the Company which is not effected for Cause or by
reason of death or disability; or
(v) the failure of the Company to
obtain the assumption of this Agreement by any successors
contemplated in Section 9 below;
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provided that Executive complies
with the provisions of Section 8(b)(ii).
2. Change of Control Severance
Benefits . If Executive’s employment with the Company
terminates at any time during the period commencing thirty
(30) days prior to the date of the announcement of a Change of
Control and ending twenty-four (24) months after a Change of
Control, then the following shall apply:
(a) Voluntary Resignation;
Termination For Cause . If Executive voluntarily resigns from
the Company or is terminated for Cause, Executive shall not be
entitled to receive severance or other benefits hereunder except
for those, if any, as may be available under the Company’s
severance and benefits plans and policies then existing at the time
of such termination.
(b) Involuntary Termination;
Termination Without Cause . Subject to the terms and conditions
hereof, if an Involuntary Termination occurs or Executive is
terminated without Cause, Executive shall be entitled to receive
for fifteen (15) months from the date of such termination, or
from the date of the Change of Control, if such termination
occurred no more than thirty (30) days before a Change of
Control:
(i) an amount equal to the sum of
Executive’s Base Compensation (as determined at the time of
such termination) payable over the course of such fifteen
(15) month period in regular payroll increments;
and
(ii) continuation of all health and
disability insurance benefits (including, if applicable, vision,
dental benefits) provided by the Company to Executive and his or
her family under the Company’s benefits plan immediately
prior the termination (with Executive to continue to pay any
portion of the premiums therefor paid by Executive prior to the
Change of Control during such period of continuation).
3. Option and Stock
Acceleration .
(a) Acceleration of Stock Options
or Other Equity Awards . Subject to the terms and conditions
hereof, if Executive’s employment with the Company is
terminated without Cause or as the result of an Involuntary
Termination within the twelve (12) month period following a
Change of Control, then (i) the remaining portion of
Executive’s unvested stock options or other equity awards
shall fully vest, such that all outstanding stock options and other
equity awards granted to Executive shall be vested one hundred
percent (100%); and (ii) to the extent that such options are
assumed by the acquiring or surviving entity as part of any
relevant Change of Control, and notwithstanding the terms of such
stock options with respect to his or her termination, Executive
shall be entitled to exercise any stock options held thereby for a
period from the date of his or her termination up to the date which
is the earlier to occur of: (A) the one year anniversary of
such termination, or (B) the original stated expiration date
of such options.
(b) Voluntary Resignation;
Termination for Cause . Executive shall not be entitled to
receive any accelerated vesting for any then unvested portion of
his or her stock options or other equity awards if Executive
voluntarily resigns from the Company or if Executive is terminated
for Cause prior to or following a Change of Control.
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4. Code Section 409A
Provisions . Notwithstanding any provision to the contrary in
this Agreement, the Company shall delay the commencement of
payments or benefits coverage to which Executive would otherwise
become entitled under the Agreement in connection with his or her
termination of employment until the earlier of (i) the
expiration of the six-month period measured from the date of the
Executive’s “separation from service” with the
Company (as such term is defined in Treasury Regulations issued
under Section 409A of the Code) or (ii) the date of the
Executive’s death, if and only if the Company in good faith
determines that the Executive is a “specified employee”
within the meaning of that term under Code Section 409A at the
time of such separation from service and that such delayed
commencement is otherwise required in order to avoid a prohibited
distribution under Section 409A(a)(2) of the Code. Upon the
expiration of the applicable Code Section 409A(a)(2) deferral
period, all payments and benefits deferred pursuant to this
Section 4 (whether they would have otherwise been payable in a
single sum or in installments in the absence of such deferral)
shall be paid or reimbursed to the Executive in a lump sum,
together with interest for the period of delay, compounded monthly,
equal to the prime or base lending rate as set forth in the Wall
Street Journal and in effect as of the date the payment would
otherwise have been provided, and any remaining payments and
benefits due under the Agreement shall be paid or provided in
accordance with the normal payment dates specified for them
herein.
In the event a benefit is to be
provided during the applicable Code Section 409A(a)(2)
deferral period and the provision of such benefit during that
period would violate Section 409A(a)(2) of the Code, then
continuation of such benefit during that period shall be
conditioned on payment by the Executive of the full premium or
other cost of coverage and upon the expiration of such deferral
period the Company shall reimburse the Exec
