CHANGE OF CONTROL AGREEMENTChange of Control Agreement |
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Exhibit 10.2
CHANGE OF CONTROL AGREEMENT
This
CHANGE OF CONTROL AGREEMENT (this “Agreement”) is
made and entered into as of January 1, 2008, by and between IR
BioSciences Holdings, Inc., a Delaware corporation (the
“Company”) and John Fermanis (the
“Executive”).
RECITALS
WHEREAS,
Executive is the Chief Financial Officer of the
Company;
WHEREAS,
Board recognizes the possibility of a future Change of Control
(as hereinafter defined), which may alter the nature and
structure of Company, and recognizes that the uncertainty
regarding the consequences of such an event adversely affects
Company’s ability to retain Executive;
WHEREAS,
in order to induce Executive to retain employment with the
Company, the Board and Company desire to provide benefits to
Executive in the event Executive’s employment is
terminated under certain circumstances involving a Change of
Control, and the Executive desires to be so induced;
and
WHEREAS,
Company and Executive desire to set forth in writing the terms
and conditions of their agreement with respect to
Company’s provision of benefits to Executive in the
event Executive’s employment is terminated under certain
circumstances involving a Change of Control.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and
obligations herein contained, it is mutually agreed between
the parties hereto as follows:
1.
Term . This Agreement shall commence on the
Execution Date of this Agreement and shall continue until the
earlier of the following: (a) prior to a Change of
Control Date, the date of termination of Executive’s
employment with Company; or (b) subsequent to a Change of Control
Date the earlier of (x) the date of termination of
Executive’s employment with the Company absent Involuntary
Termination or (y) the one-year anniversary of a Change of Control
Date.
2.
At-Will Status . Notwithstanding any provision of
this Agreement, Executive is employed at-will , so that Executive,
on the one hand, or Company, on the other hand, may
terminate Executive’s employment at any time, with or without
notice, for any or no reason.
3.
Definitions . As used in this Agreement, the
following terms shall have the meanings set forth
herein:
“Affiliate”
means any entity that is part of a controlled group of
corporations or is under common control with Company, as
applicable, within the meaning of Sections 1563(a), 404(b) or
414(c) of the Code.
“Board”
means the Board of Directors of Company.
“Cause”
shall mean (i) a material act of dishonesty in connection with
the Executive’s responsibilities as an Executive of
Company; (ii) the Executive’s conviction of, or plea of
nolo
contendere to, a felony or a crime involving moral
turpitude, (iii) the Executive’s gross misconduct which
has a material adverse effect on the Company, or (iv) the
Executive’s consistent and willful failure to perform
his or her employment duties where such failure is not cured
within thirty (30) days after written notice to Executive by
Company.
“Change
of Control” shall mean a Company Change in
Control.
“Change
of Control Date” means the date on which a Change of
Control occurs. If any such change in control
occurs on account of a series of transactions, the
“Change of Control Date” is the date of the last
of such transactions.
“Code”
means the Internal Revenue Code of 1986, and any amendments
thereto.
“Company
Acquiring Person” means that a Person, considered alone
or as part of a “group” within the meaning of
Section 13(d)(3) of the Exchange Act, as amended, other than
an Initial Member or any Affiliate, is or becomes directly or
indirectly the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of securities representing more than
fifty percent (50%) of the Company’s then outstanding
securities entitled to vote generally in the election of the
Board.
“Company
Change in Control” means (i) a Person is or becomes a
Company Acquiring Person; (ii) holders of the securities of
Company entitled to vote thereon approve any agreement with a
Person, (or, if such approval is not required by applicable
law and is not solicited by Company, the closing of such an
agreement) that involves the transfer of all or substantially
all of Company’s assets on a consolidated basis; (iii)
holders of the securities of Company entitled to vote thereon
approve a transaction (or, if such approval is not required by
applicable law and is not solicited by the Company, the
closing of such a transaction) pursuant to which Company will
undergo a merger, consolidation, statutory share exchange or
similar event with a Person, regardless of whether Company is
intended to be the surviving or resulting entity after the
merger, consolidation, statutory share exchange or similar
event, other than a transaction that results in the voting
securities of Company carrying the right to vote in elections
of persons to the Board outstanding immediately prior to the
closing of the transaction continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% (fifty
percent) of Company’s voting securities carrying the
right to vote in elections of persons to Company’s
Board, or voting securities of such surviving entity carrying
the right to vote in elections of persons to the Board of
Directors or similar authority of such surviving entity,
outstanding immediately after the closing of such transaction;
(iv) the Continuing Directors cease for any reason to
constitute at least half of the number of members of the
Board; (v) holders of the securities of Company entitled to
vote thereon approve a plan of complete liquidation of Company
or an agreement for the liquidation by the Company of all or
substantially all of Company’s assets (or, if such
approval is not required by applicable law and is not
solicited by Company, the commencement of actions constituting
such a plan or the closing of such an agreement); or (vi) the
Board adopts a resolution to the effect that, in its judgment,
as a consequence of any one or more transactions or events or
series of transactions or events, a change in control of
Company has effectively occurred. Notwithstanding
the foregoing, no event resulting from an initial public
offering of securities of Company shall constitute a Company
Change in Control. The Board shall be entitled to
exercise its discretion in exercising its judgment and in the
adoption of such resolution, whether or not any such
transaction(s) or event(s) might be deemed, individually or
collectively, to satisfy any of the criteria set forth in
subparagraphs (i) through (v) above.
“Continuing
Director” means any member of the Board (i) who was a
member of the Board on the date hereof, or (ii) whose
nomination for or election to the Board was recommended or
approved by a majority of the Continuing
Directors.
“Control”
(and “Controlling” and “Controlled”)
shall mean possession, directly or indirectly, of the power to
direct or cause the direction of management policies of such
Entity through the ownership of voting securities or by
contract.
“Constructive
Termination” means Executive’s
voluntary termination, upon thirty (30) days’ prior
written notice to the Company, following: (A)
Executive being designated to a divisional as opposed to
corporate role with the Company or Operating Company; (B) a
material reduction or change in job duties, responsibilities
and requirements, including, without limitation, any material
increase in travel responsibilities, inconsistent with
Executive’s position with Company and Executive’s
duties, responsibilities and requirements; (C) any reduction
of Executive’s base compensation or inactive pay
(bonus); or (D) Executive’s refusal to relocate to a
facility or location more than fifty (50) miles from
Company’s current headquarters.
“Entity”
means any corporation, firm, unincorporated organization,
association, partnership, limited partnership, limited
liability company, limited liability partnership, business
trust, joint stock company, joint venture organization, entity
or business.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Involuntary
Termination” shall mean, at any time within that period
which is one-year from the Change of Control Date (including
such date), the termination of the employment of Executive (i)
by Company without Cause or (ii) due to Constructive
Termination.
“Person”
means any human being, firm, corporation, partnership, or
other entity. “Person” also includes
any human being, firm, corporation, partnership, or other
entity as defined in sections 13(d)(3) and 14(d)(2) of the
Exchange Act. The term “Person” does
not include Company or any of its Affiliates, and the term
Person does not include any employee-benefit plan maintained
by the Company or any of its Affiliates, or any person or
entity organized, appointed, or established by the Company, or
any of its Affiliates for or pursuant to the terms of any such
employee-benefit plan, unless the Board determines that such
an employee-benefit plan or such person or entity is a
“Person”.
4.
Effect of Termination . If Executive’s
employment is terminated with Company at any time for any reason,
Executive shall be entitled to (i) reimbursement for final expenses
that Executive reasonably and necessarily incurred on behalf of the
Company prior to Executive’s termination of employment
(provided that Executive submits expense reports and supporting
documentation as required by Company practice or policy), (ii)
unpaid compensation and benefits and (iii) unused vacation, accrued
through the date of Executive’s termination of
employment.
5.
Effect of Involuntary Termination . Only in the
event of an Involuntary Termination, Executive shall be entitled to
the following, subject to Section 7
hereof:
a. continuation
of Executive’s base salary in effect on the date of
such Involuntary Termination for a period of eighteen (18)
months from the date of termination (the “Payment
Period”), payable in accordance with the Operating
Company’s prevailing compensation practice, as such
practice may be modified from time to time;
b. Notwithstanding
any provision of any annual or long-term incentive plan to
the contrary, the Company shall pay to the Executive a lump
sum amount, in cash, equal
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