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Exhibit
10.1
CHANGE IN CONTROL
AGREEMENT
This Change in Control
Agreement (“Agreement”) is being entered into on the
last date listed on the signature page hereof by and between
(“Vice President”) and Unigene Laboratories, Inc.
(“Company”). As used herein, “Parties”
refers to Vice President and Company.
WHEREAS, Vice President
serves the Company in a position of substantial authority and
responsibility;
WHEREAS, Company and Vice
President wish to establish certain protections for Vice President
in the event of the termination of Vice President’s
employment with Company for specified reasons following a Change in
Control;
NOW, THEREFORE, in
consideration of the mutual promises and undertakings contained
herein, and intending to be legally bound hereby, the Parties agree
as follows:
Section 1. Severance
Benefits
(a) Severance Payment
. If (1) Vice President is not hired by Surviving Company
following a Change in Control other than for Cause or
(2) within twelve (12) months following a Change in
Control, Vice President’s employment with Surviving Company
is terminated (i) by Surviving Company other than for Cause or
(ii) by Vice President for Good Reason, Vice President will be
entitled to, in addition to all compensation and benefits accrued
but unpaid up to the date of termination, severance pay in a gross
amount equal to twelve (12) months of Vice President’s
annualized base salary as of the date of Vice President’s
termination, except that in the event that Vice President
terminates his employment with Surviving Company due to a material
diminution by Surviving Company in Vice President’s base
salary without Vice President’s consent, the severance pay
will be calculated based on Vice President’s base salary
immediately preceding the diminution giving rise to Vice
President’s resignation (“Severance Payment”).
Company will pay Vice President the Severance Payment unless
Surviving Company assumes Company’s obligations under this
Agreement, in which case Company shall not be liable for the
Severance Payment. This Severance Payment will be paid in the form
of base salary continuation, commencing with the first regular pay
cycle following Vice President’s termination and otherwise in
accordance with Company’s or Surviving Company’s, as
applicable, regular payroll cycle as may be amended from time to
time. As a condition of receiving the Severance Payment, to which
Vice President would not otherwise be entitled, Vice President must
sign (and not revoke pursuant to any applicable revocation period),
in a form satisfactory to Company or Surviving Company, as
applicable, a general release of all claims against Company,
Surviving Company, and related entities or persons.
(b) Certain
Adjustments . The severance benefits to be provided to the Vice
President hereunder and all other payments or benefits which are
“parachute payments” (as defined in
Section 280G(b)(2)(A) of the Code) payable to the Vice
President under other arrangements or agreements (the “Total
Payments”) shall be adjusted as set forth in this
Section 1(b). If the Total Payments as a result of any Change
in Control would (in the aggregate) result
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in an amount not being deductible under
Code Section 280G or an excise tax under Section 4999,
the Total Payments shall be reduced to the extent necessary so that
the deductibility of the full amount of such reduced Total Payments
is not limited by Code Section 280G or such Total Payment is
not subject to an excise tax under Section 4999. The Company
or Surviving Company, as applicable, shall make all determinations
required to be made under this Section 1(b) in good faith and
shall, upon Vice President’s request, provide supporting
calculations to Vice President.
(c) Delay in Payment;
Section 409A . Notwithstanding any provision hereof to the
contrary, if upon termination, a Vice President is a
“specified employee” (within the meaning attributed
thereto by Section 409A of the Code and the regulations
thereunder) of Company or Surviving Company, and if the payments
would be subject to excise tax under Code Section 409A because
such payments are made within the 6-month period commencing upon
the Vice President’s effective date of termination, then such
payments shall be delayed for 6 months following such
termination.
(d) No Duplication of
Benefits . In the event of the termination of Vice
President’s employment under the circumstances described in
this Section 1 of this Agreement, the only obligations of
Company or Surviving Company, as applicable, are provided in this
Section 1 and Vice President acknowledges and agrees that Vice
President shall not be entitled to any other severance payments
upon such termination.
Section 2.
Definitions
(a) “ Change in
Control ” means:
(i) any individual, entity or
group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) acquires beneficial
ownership (within the meaning of Rule l3d-3 promulgated under the
Exchange Act) of more than 50% of either (A) the then
outstanding shares of common stock or (B) the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
“Voting Securities”); provided, however, that any
acquisition by the Company, by any employee benefit plan (or
related trust) of the Company, or by any corporation with respect
to which, following such acquisition, more than 50%, respectively,
of the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
common stock and Voting Securities immediately prior to such
acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the common
stock and Voting Securities, as the case may be, shall not
constitute a Change of Control;
(ii) individuals who, as of
the effective date of this Agreement, constitute the Board of
Directors of Company (the “Incumbent Board”) cease for
any reason during any 12-month period to constitute at least a
majority of the Board of Directors, provided that any individual
becoming a director subsequent to the effective date of this
Agreement whose
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election was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board shall be deemed a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office is in settlement of an actual or threatened
election contest relating to the election of the directors of the
Company; or
(iii) the consummation
(following approval by the Company’s stockholders) of
(A) a reorganization, merger or consolidation, in each case,
with respect to which all or substantially all of the persons who
were the respective beneficial owners of the common stock and the
Voting Securities immediately prior to such reorganization, merger
or consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than
50%, respectively, of the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such
reorganization, merger or consolidation or (B) a complete
liquidation or dissolution of the Company or of the sale or other
disposition of all or substantially all of the assets of the
Company.
(b) “ Cause
” means the occurrence of any of the following events:
(i) Vice President’s failure to substantially perform
his employment duties (other than due to disability), provided that
such failure (if curable) is not cured within thirty (30) days
after delivery of notice to Vice President of such failure;
(ii) a material breach of this Agreement by Vice President,
including without limitation any breach of Section 3 of this
Agreement; (iii) Vice President’s dishonesty, which
includes without limitation any misuse or misappropriation of
Company’s or Surviving Company’s assets, or other gross
or willful misconduct, which includes without limitation any
conduct by Vice President intended to or likely to injure the
business of Company or Surviving Company; (iv) Vice
President’s conviction (including a plea of nolo contendere)
for any felony or gross misdemeanor under federal or state law; or
(v) Vice President’s insobriety or use of drugs, or
controlled substances either (a) in the course of performing
his duties and responsibilities or (b) otherwise affecting his
ability to perform the same. In addition to the foregoing, Vice
President’s death or disability (Vice President’s
inability to perform the essential functions of his position for a
period of six (6) months in the twelve (12) month period
following a Change in Control), shall constitute Cause. The
existence of any of the foregoing events or conditions is to be
determined by Company or Surviving Company, as applicable, in the
exercise of its reasonable judgment.
(c) “ Good
Reason ” means the occurrence of any of the following
events: (i) a material diminution by Surviving Company in Vice
President’s base salary without Vice President’s
consent; (ii) a material diminution by Surviving Company in
Vice President’s authority, duties or responsibilities
without Vice President’s consent; or (iii) a relocation,
without Vice President’s consent, by Surviving Company of
Vice President’s base site of employment to a location
greater than fifty (50) miles from Vice President’s base
site of employment immediately preceding such relocation, except
for travel reasonably required in the performance of Vice
President’s duties and responsibilities, or unless the new
base site of employment is located closer to Vice President’s
home. Notwithstanding the foregoing, none of the foregoing events
or conditions will constitute Good Reason if Vice President failed
to give Surviving Company (A) written notice stating Vice
President’s intention to claim Good Reason and the
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basis for that claim within ninety
(90) days of the occurrence of the event or circumstance
giving rise to the claim of Good Reason and (B) at least
thirty (30) days for Surviving Company to cure such event or
circumstance, if such event or circumstance is susceptible of
cure.
(d) “ Code
” means the Internal Revenue Code of 1986, as
amended.
(e) “ Surviving
Company ” means the entity surviving the Change in
Control of Company.
Section 3. Restrictive
Covenants
(a) Non-competition .
Vice President agrees that for so long as he is employed by Company
or Surviving Company, and for a period of one (1) year after
the termination or cessation of his employment with Company or
Surviving Company for any reason, Vice President will not directly
or indirectly:
(i) Within the United States
or elsewhere where C
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