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Exhibit 10.12
FORM OF
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS
CHANGE OF CONTROL SEVERANCE AGREEMENT ("Agreement") is made and
entered into as of the ____ day of ___, 2006, by and between
Suntron
Corporation, a Delaware corporation (the "Company"), and ________
(the
"Executive").
RECITALS:
The
Board of Directors of the Company (the "Board"), has determined
that it
is in the best interests of the Company and its stockholders to
assure that the
Company will have the continued dedication of the Executive,
notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of
the Company.
The
Board believes it is imperative to diminish the inevitable
distraction
of the Executive by virtue of the personal uncertainties and risks
created by a
pending or threatened Change of Control, to encourage the
Executive's full
attention and dedication to the Company currently and in the event
of any
threatened or pending Change of Control, and to provide the
Executive with
compensation arrangements upon a Change of Control which provide
the Executive
with individual financial security and which are competitive with
those of other
corporations and, in order to accomplish these objectives, the
Board has caused
the Company to enter into this Agreement.
Agreement
NOW,
THEREFORE, in consideration of the premises and mutual covenants
set
forth herein, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall be the first date during the "Change
of
Control Period" (as defined in Section 1(b)) on which a Change of
Control
occurs. Anything in this Agreement to the contrary notwithstanding,
if the
Executive's employment with the Company is terminated prior to the
date on which
a Change of Control occurs, and it is reasonably demonstrated that
such
termination (i) was at the request of a third party who has taken
steps
reasonably calculated to effect a Change of Control, or (ii)
otherwise arose in
connection with or anticipation of a Change of Control, then for
all purposes of
this Agreement the "Effective Date" shall mean the date immediately
prior to the
date of such termination.
(b) The "Change of Control Period" is the period commencing on
the
date hereof and ending on the first anniversary of such date.
2. Change of Control. For the purpose of this Agreement, a "Change
of
Control" shall mean the occurrence of any of the following events:
(i) a
reorganization, merger or consolidation with respect to which
persons who were
the stockholders of the Company immediately prior to such
reorganization, merger
or consolidation do not, immediately thereafter, own more than 50%
of the
combined voting power entitled to vote generally in the election of
directors of
the reorganized, merged or consolidated company's (or entity's)
then outstanding
voting securities in substantially the same proportions as their
ownership
immediately prior to such reorganization, merger, or consolidation,
(ii) a
liquidation or dissolution of the Company, or (iii) the sale of all
or
substantially all of the assets of the Company, unless the
approved
reorganization, merger, consolidation, liquidation, dissolution or
sale is
subsequently abandoned.
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3. Employment Period.
The
Company hereby agrees to continue the Executive in its employ, and
the
Executive hereby agrees to remain in the employ of the Company, for
the period
commencing on the Effective Date and ending on the first
anniversary of such
date (the "Employment Period").
4. Terms of Employment.
(a) Position and
Responsibilities.
(i) During the Employment Period, (1) the Executive's position
and responsibilities shall be at least commensurate in all material
respects
with the most significant of those held, exercised and assigned at
any time
during the 180-day period immediately preceding the Effective Date,
and (2) the
Executive's services shall be performed at the location where the
Executive was
employed immediately preceding the Effective Date or any office or
location less
than fifty (50) miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees
to devote reasonable attention and time during normal business
hours to the
business and affairs of the Company and, to the extent necessary to
discharge
the responsibilities assigned to the Executive hereunder, to use
the Executive's
reasonable best efforts to perform faithfully and efficiently
such
responsibilities. During the Employment Period it shall not be a
violation of
this Agreement for the Executive to (1) serve on corporate, civic
or charitable
boards or committees, (2) deliver lectures, fulfill speaking
engagements or
teach at educational institutions, and (3) manage personal
investments, so long
as such activities listed in clauses (1) - (3) do not significantly
interfere
with the performance of the Executive's responsibilities as an
employee of the
Company in accordance with this Agreement. It is expressly
understood and agreed
that to the extent that the Board was aware of any such activities
conducted by
the Executive prior to the Effective Date, the continued conduct of
such
activities (or the conduct of activities similar in nature and
scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to
interfere
with the performance of the Executive's responsibilities to the
Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive a base salary ("Base Salary") at a monthly rate at
least equal to
the highest monthly base salary paid or payable to the Executive by
the Company
during the twelve-month period immediately preceding the month in
which the
Effective Date occurs. During the Employment Period, the Base
Salary shall be
reviewed at least annually and shall be increased at any time and
from time to
time as shall be substantially consistent with increases in base
salary awarded
in the ordinary course of business to other key executives of the
Company. Any
increase in Base Salary shall not serve to limit or reduce any
other obligation
to the Executive under this Agreement. Base Salary shall not be
reduced after
any such increase.
(ii) Incentive, Savings and Retirement Plans. In addition to
Base
Salary and Annual Bonus payable as hereinabove provided, the
Executive shall be
entitled to participate during the Employment Period in all
incentive, savings
and retirement plans, practices, policies and programs applicable
to other key
executives of the Company (including its successors or assigns) and
its
affiliates, in each case comparable to those in effect on the
Effective Date or
as subsequently amended. Such plans, practices, policies and
programs, in the
aggregate, shall provide the Executive with compensation, benefits
and reward
opportunities at least as favorable as the most favorable of such
compensation,
benefits and reward opportunities provided by the Company for the
Executive
under such plans, practices, policies and programs as in effect at
any time
during the 180-day period immediately preceding
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the Effective Date or, if more favorable to the Executive, as
provided at any
time thereafter with respect to other key executives.
(iii) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall
be eligible
for participation in and shall receive all benefits under welfare
benefit plans,
practices, policies and programs provided by the Company
(including, without
limitation, medical, prescription, dental, disability, salary
continuance,
employee life, group life, accidental death and travel accident
insurance plans
and programs), at least as favorable as the most favorable of such
plans,
practices, policies and programs in effect at any time during the
180-day period
immediately preceding the Effective Date or, if more favorable to
the Executive
and/or the Executive's family, as in effect at any time thereafter
with respect
to other key executives.
(iv) Expenses. During the Employment Period, the Executive
shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred
by the Executive in connection with the business of the Company in
accordance
with the most favorable policies, practices and procedures of the
Company in
effect at any time during the 180-day period immediately preceding
the Effective
Date or, if more favorable to the Executive, as in effect at any
time thereafter
with respect to other key executives.
(v) Fringe Benefits. During the Employment Period, the
Executive
shall be entitled to fringe benefits in accordance with the most
favorable
plans, practices, programs and policies of the Company in effect at
any time
during the 180-day period immediately preceding the Effective Date
or, if more
favorable to the Executive, as in effect at any time thereafter
with respect to
other key executives.
(vi) Office and
Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and
with
furnishings and other appointments, and to secretarial and other
assistance, at
least equal to the most favorable of the foregoing provided to the
Executive by
the Company at any time during the 180-day period immediately
preceding the
Effective Date or, if more favorable to the Executive, as provided
at any time
thereafter with respect to other key executives of the Company.
(vii) Vacation. During the Employment Period, the Executive
shall
be entitled to paid vacation in accordance with the most favorable
plans,
policies, programs and practices provided to the Executive by the
Company as in
effect at any time during the 180-day period immediately preceding
the Effective
Date or, if more favorable to the Executive, as in effect at any
time thereafter
with respect to other key executives of the Company.
5. Termination
(a) Death or Disability. This Agreement shall terminate
automatically
upon the Executive's death. If the Company determines in good faith
that the
Disability of the Executive has occurred (pursuant to the
definition of
"Disability" set forth below), it may give to the Executive written
notice of
its intention to terminate the Executive's employment. In such
event, the
Executive's employment with the Company shall terminate effective
on the 30th
day after receipt of such notice by the Executive (the "Disability
Effective
Date"), provided that, within the 30 days after such receipt, the
Executive
shall not have returned to full-time performance of the Executive's
duties. For
purposes
