Exhibit 10.33
CHANGE IN CONTROL
AGREEMENT
[Date]
Dear
:
You are presently the
of Vital Images, Inc., a Minnesota corporation (the
“Company”). The Company considers the
establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the
Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control may arise and
that such possibility and the uncertainty and questions which it
may raise among management may result in the departure or
distraction of management personnel to the detriment of the Company
and its shareholders.
Accordingly, the Board has
determined that appropriate steps should be taken to minimize the
risk that Company management will depart prior to a Change in
Control, thereby leaving the Company without adequate management
personnel during such a critical period, and that appropriate steps
also be taken to reinforce and encourage the continued attention
and dedication of members of the Company’s management to
their assigned duties without distraction in circumstances arising
from the possibility of a Change in Control. In particular,
the Board believes it important, should the Company or its
shareholders receive a proposal for transfer of control, that you
be able to continue your management responsibilities without being
influenced by the uncertainties of your own personal
situation.
The Board recognizes that
continuance of your position with the Company involves a
substantial commitment to the Company in terms of your personal
life and professional career and the possibility of foregoing
present and future career opportunities, for which the Company
receives substantial benefits. Therefore, to induce you to
remain in the employ of the Company, this Agreement, which has been
approved by the Board, sets forth the benefits which the Company
agrees will be provided to you in the event your employment with
the Company is terminated in connection with a Change in Control
under the circumstances described below.
The following terms will have the
meaning set forth below unless the context clearly requires
otherwise. Terms defined elsewhere in this Agreement will
have the same meaning throughout this Agreement.
ARTICLE I.
DEFINITIONS
1.
“ Affiliate ”
means (i) any corporation at least a majority of whose
outstanding securities ordinarily having the right to vote at
elections of directors is owned directly or indirectly by the
Company or (ii) any other form of business entity in which the
Company, by virtue of a direct or indirect ownership interest, has
the right to elect a majority of the members of such entity’s
governing body.
2.
“ Agreement ”
means this letter agreement as amended, extended or renewed from
time to time in accordance with its terms.
3.
“ Board ” means
the board of directors of the Company duly qualified and acting at
the time in question. On and after the date of a Change in
Control, any duty of the Board in connection with this Agreement is
nondelegable and any attempt by the Board to delegate any such duty
is ineffective.
4.
“ Cause ”
means:
a.
your gross misconduct;
b.
your willful and continued failure
to perform substantially your duties with the Company (other than
any such failure (1) resulting from your Disability or
incapacity due to bodily injury or physical or mental illness or
(2) relating to changes in your duties after a Change in
Control which constitute Good Reason) after a demand for
substantial performance is delivered to you by the chair of the
Board which specifically identifies the manner in which you have
not substantially performed your duties and provides for a
reasonable period of time within which you may take corrective
actions; or
c.
your conviction (including a plea of
nolo contendere) of willfully engaging in illegal conduct
constituting a felony or gross misdemeanor under federal or state
law which is materially and demonstrably injurious to the Company
or which impairs your ability to perform substantially your duties
for the Company.
An act or failure to act will be
considered “gross” or “willful” for this
purpose only if done, or omitted to be done, by you in bad faith
and without reasonable belief that it was in, or not opposed to,
the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly
adopted by the Company’s board of directors (or a committee
thereof) or based upon the advice of counsel for the Company will
be conclusively presumed to be done, or omitted to be done, by you
in good faith and in the best interests of the Company. It is
also expressly understood that your attention to matters not
directly related to the business of the Company will not provide a
basis for termination for Cause so long as the Board did not
expressly disapprove in writing of your engagement in such
activities either before or within a reasonable period of time
after the Board knew or could reasonably have known that you
engaged in those activities. Notwithstanding the foregoing,
you may not be terminated for Cause unless and until there has been
delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board you were guilty
of the conduct set forth above in clauses a., b. or c. of this
definition and specifying the particulars thereof in
detail.
5.
“ Change in Control
” means any of the following:
a.
the sale, lease, exchange or other
transfer, directly or indirectly, of all or substantially all of
the assets of the Company in one transaction or in a series of
related transactions, to any Person;
b.
except in the case of the
liquidation or dissolution of the Company in connection with the
bankruptcy or insolvency of the Company or similar arrangement for
the benefit of the Company’s creditors, the approval by the
shareholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company, as the case may
be;
c.
any Person is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of (1) 20 percent
or more, but not more than 50 percent, of the combined voting power
of the outstanding securities of the Company ordinarily having the
right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the
“continuing directors” or (2) more than 50 percent
of the combined voting power of the outstanding securities of the
Company ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuing
directors);
d.
a merger or consolidation to which
the Company is a party if the shareholders of the Company
immediately prior to the effective date of such merger or
consolidation have, solely on account of ownership of securities of
the Company at such time, “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act) immediately
following the effective date of such merger or consolidation of
securities of the surviving company representing (1) 50
percent or more, but not more than 80 percent, of the combined
voting power of the surviving corporation’s then outstanding
securities ordinarily having the right to vote at elections of
directors, unless such merger or consolidation has been approved in
advance by the continuing directors, or (2) less than 50
percent of the combined voting power of the surviving
corporation’s then outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any
approval by the continuing directors);
e.
the continuing directors cease for
any reason to constitute at least a majority of the Board;
or
f.
a change in control of a nature that
is determined by outside legal counsel to the Company, in a written
opinion specifically referencing this provision of the Agreement,
to be required to be reported (assuming such event has not been
“previously reported”) pursuant to section 13 or
15(d) of the Exchange Act, whether or not the Company is then
subject to such reporting requirement, as of the effective date of
such change in control.
For purposes of this
Section 1(e), a “continuing director” means any
individual who is a member of the Board on September 8, 2005,
while he or she is a member of the Board, and any individual who
subsequently becomes a member of the Board whose election or
nomination for election by the Company’s shareholders was
approved by a vote of at least a majority of the directors who are
continuing directors (either by a specific vote or by approval of
the proxy statement of the Company in which such individual is
named as a nominee for director without objection to such
nomination).
6.
“ Code ” means
the Internal Revenue Code of 1986, as amended. Any reference
to a specific provision of the Code includes a reference to such
provision as it may be amended from time to time and to any
successor provision.
7.
“ Company ” means
Vital Images, Inc. and/or any Affiliate.
8.
“ Confidential
Information ” means information which is proprietary to
the Company or proprietary to others and entrusted to the Company,
whether or not trade secrets. It includes information relating to
business plans and to business as conducted or anticipated to be
conducted, and to past or current or anticipated products or
services. It also includes, without limitation, information
concerning research, development, purchasing, accounting, marketing
and selling. All information which you have a reasonable
basis to consider confidential is Confidential Information, whether
or not originated by you and without regard to the manner in which
you obtain access to that and any other proprietary
information.
9.
“ Date of Termination
” following a Change in Control (or prior to a Change in
Control if your termination was either a condition of the Change in
Control or was at the request or insistence of any Person related
to the Change in Control) means:
a.
if your employment is to be
terminated for Disability, 30 days after Notice of Termination is
given (provided that you have not returned to the performance of
your duties on a full-time basis during such 30-day
period);
b.
if your employment is to be
terminated by the Company for Cause or by you for Good Reason, the
date specified in the Notice of Termination, which date may not be
less than 30 days or more than 60 days after the date on which the
Notice of Termination is given unless you and the Company otherwise
expressly agree;
c.
if your employment is to be
terminated by the Company for any reason other than Cause,
Disability, death or Retirement, the date specified in the Notice
of Termination, which in no event may be a date earlier than 90
days after the date on which a Notice of Termination is given,
unless an earlier date has been expressly agreed to by you in
writing either in advance of, or after; receiving such Notice of
Termination; or
d.
if your employment is terminated by
reason of death or Retirement, the date of death or Retirement,
respectively.
In the case of termination by the
Company of your employment for Cause, if you have not previously
expressly agreed in writing to the termination, then within 30 days
after receipt by you of the Notice of Termination with respect
thereto, you may notify the Company that a dispute exists
concerning the termination, in which event the Date of Termination
will be the date set either by mutual written agreement of the
parties or by the judge or arbitrators in a proceeding as provided
in Article VII Section 6 of this Agreement. During
the pendency of any such dispute, you will continue to make
yourself available to provide services to the Company and
the
Company will continue to pay you
your full compensation and benefits in effect immediately prior to
the date on which the Notice of Termination is given (without
regard to any changes to such compensation or benefits which
constitute Good Reason) and until the dispute is resolved in
accordance with Article VII Section 6 of this
Agreement. You will be entitled to retain the full amount of
any such compensation and benefits without regard to the resolution
of the dispute unless the judge or arbitrators decide(s) that your
claim of a dispute was frivolous or advanced by you in bad
faith.
10.
“ Disability ”
means a disability as defined in the Company’s long-term
disability plan as in effect immediately prior to the Change in
Control or; in the absence of such a plan, means permanent and
total disability as defined in section 22(e)(3) of the
Code.
11.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act or to any
rule or regulation thereunder includes a reference to such
provision as it may be amended from time to time and to any
successor provision.
12.
“ Good Reason ”
means:
a.
change in your status, position(s),
duties or responsibilities as an executive of the Company as in
effect immediately prior to the Change in Control which, in your
reasonable judgment, is an adverse change (other than, if
applicable, any such change directly attributable to the fact that
the Company is no longer publicly owned) except in connection with
the termination of your employment for Cause, Disability or
Retirement or as a result of your death or by you other than for
Good Reason;
b.
a reduction by the Company in your
base salary (or an adverse change in the form or timing of the
payment thereof) as in effect immediately prior to the Change in
Control or as thereafter increased;
c.
the failure by the Company to
continue in effect any Plan in which you (and/or your family) are
eligible to participate at any time during the 90-day period
immediately preceding the Change in Control (or Plans providing you
(and/or your family) with at least substantially similar benefits)
other than as a result of the normal expiration of any such Plan in
accordance with its terms as in effect immediately prior to the
90-day period immediately preceding the time of the Change in
Control, or the taking of any action, or the failure to act, by the
Company which would adversely affect your (and/or your
family’s) continued eligibility to participate in any of such
Plans on at least as favorable a basis to you (and/or your family)
as is the case on the date of the Change in Control or which would
materially reduce your (and/or your family’s) benefits in the
future under any of such Plans or deprive you (and/or your family)
of any material benefit enjoyed by you (and/or your family) at
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