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Exhibit 10.3
SENORX, INC.
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (the "Agreement") is made and
entered into by and between Kevin Cousins ("Executive") and SenoRx,
Inc. (the "Company"), effective as of August 26, 2008 (the
"Effective Date").
RECITALS
1. It is expected that the Company from time to time will
consider the possibility of an acquisition by another company or
other change in control. The Board of Directors of the Company (the
"Board") recognizes that such consideration can be a distraction to
Executive and can cause Executive to consider alternative
employment opportunities. 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 and objectivity
of Executive, notwithstanding the possibility, threat or occurrence
of a Change in Control (as defined herein) of the Company.
2. The Board believes that it is in the best interests of the
Company and its stockholders to provide Executive with an incentive
to continue his or her employment and to motivate Executive to
maximize the value of the Company upon a Change in Control for the
benefit of its stockholders.
3. The Board believes that it is imperative to provide Executive
with certain severance benefits upon Executive’s termination
of employment following a Change in Control. These benefits will
provide Executive with enhanced financial security and incentive
and encouragement to remain with the Company notwithstanding the
possibility of a Change in Control.
4. Certain capitalized terms used in the Agreement are defined
in Section 7 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Term of Agreement . This Agreement will terminate upon
the date that all of the obligations of the parties hereto with
respect to this Agreement have been satisfied.
2. At-Will Employment . The Company and Executive
acknowledge that Executive’s employment is and will continue
to be at-will, as defined under applicable law. If
Executive’s employment terminates for any reason, including
(without limitation) any termination prior to a Change in Control,
Executive will not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this
Agreement.
3. Acceleration of Vesting of Equity Awards
Upon a Change in Control . Upon a Change in Control, fifty
percent (50%) of Executive’s then outstanding and
unvested awards relating to the Company’s common stock
(whether stock options, stock appreciation rights, shares of
restricted stock, restricted stock units, or otherwise
(collectively, the "Equity Awards")) as of the date of the Change
in Control will become vested and will otherwise remain subject to
the terms and conditions of the applicable Equity Award
agreement.
4. Severance Benefits .
(a) Involuntary Termination Following a Change in Control
. If within twelve (12) months following a Change in Control
(i) Executive terminates his or her employment with the
Company (or any parent, subsidiary or successor of the Company) for
Good Reason (as defined herein) or (ii) the Company (or any
parent, subsidiary or successor of the Company) terminates
Executive’s employment without Cause (as defined herein), and
Executive signs and does not revoke the release of claims required
by Section 5, Executive will receive the following severance
benefits from the Company:
(i) Severance Payment . Executive will receive continuing
payments of severance pay (less applicable withholding taxes) for a
period of twelve (12) months from the date of such termination
(the "Severance Period") at a rate equal to Executive’s base
salary rate (as in effect immediately prior to (A) the Change
in Control, or (B) Executive’s termination, whichever is
greater).
(ii) Bonus Payment . Executive will receive a lump sum
cash payment (less applicable withholding taxes) in an amount equal
to the current year’s target annual incentive pro-rated to
the date of termination, with such pro-rated amount to be
calculated by multiplying the current year’s target incentive
level by a fraction with a numerator equal to the number of days
between the start of the current fiscal year and the date of
termination and a denominator equal to 365.
(iii) Equity Awards . One hundred percent (100%) of
Executive’s then outstanding and unvested Equity Awards as of
the date of Executive’s termination of employment will become
vested and will otherwise remain subject to the terms and
conditions of the applicable Equity Award agreement.
(iv) Benefits . The Company agrees to reimburse Executive
for the same level of health coverage and benefits as in effect for
Executive on the day immediately preceding the date of termination;
provided, however, that (1) Executive constitutes a qualified
beneficiary, as defined in Section 4980(B)(g)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
(2) Executive elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"), within the time period prescribed pursuant to COBRA. The
Company will continue to reimburse Executive for continuation
coverage through the Severance Period. Executive will thereafter be
responsible for the payment of COBRA premiums (including, without
limitation, all administrative expenses) for the remaining COBRA
period. Such reimbursements shall be made within thirty
(30) days of the premium payment.
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(b) Timing of Severance Payments . Unless
otherwise required pursuant to Section 11 of this Agreement,
the Company will pay the severance payments to which Executive is
entitled as salary continuation pursuant to Section 4(a)(i) on
the same basis and timing as in effect for other payroll payments
immediately prior to the Change in Control. The Company will pay
the severance payments to which Executive is entitled as bonus
payments pursuant to Section 4(a)(ii) in a lump sum as soon as
practicable following the date of termination. If Executive should
die before all of the salary continuation severance amounts have
been paid, such unpaid amounts will be paid in a lump-sum payment
(less any withholding taxes) to Executive’s designated
beneficiary, if living, or otherwise to the personal representative
of Executive’s estate.
(c) Voluntary Resignation; Termination For Cause . If
Executive’s employment with the Company terminates
(i) voluntarily by Executive (other than for Good Reason) or
(ii) for Cause by the Company, then Executive will not be
entitled to receive severance or other benefits except for those
(if any) as may then be established under the Company’s then
existing severance and benefits plans and practices or pursuant to
other written agreements with the Company, including, without
limitation, any Equity Award agreement.
(d) Disability; Death . If the Company terminates
Executive’s employment as a result of Executive’s
Disability, or Executive’s employment terminates due to his
or her death, then Executive will not be entitled to receive
severance or other benefits except for those (if any) as may then
be established under the Company’s then existing written
severance and benefits plans and practices or pursuant to other
written agreements with the Company, including, without limitation,
any Equity Award agreement.
(e) Termination Apart from Change in Control . In the
event Executive’s employment is terminated for any reason,
either prior to the occurrence of a Change in Control or after the
twelve (12) month period following a Change in Control, then
Executive will be entitled to receive severance and any other
benefits only as may then be established under the Company’s
existing written severance and benefits plans and practices or
pursuant to other written agreements with the Company, including,
without limitation, any Equity Award agreement.
(f) Exclusive Remedy . In the event of a termination of
Executive’s employment within twelve (12) months
following a Change in Control, the provisions of this
Section 4 are intended to be and are exclusive and in lieu of
any other rights or remedies to which Executive or the Company may
otherwise be entitled, whether at law, tort or contract, in equity,
or under this Agreement. Executive will be entitled to no benefits,
compensation or other payments or rights upon termination of
employment following a Change in Control other than those benefits
expressly set forth in this Section 4, except as may be
provided in any Equity Award agreement.
5. Conditions to Receipt of Severance .
(a) Release of Claims Agreement . The receipt of any
severance or other benefits pursuant to Section 4 will be
subject to Executive signing and not revoking a release of claims
agreement in a form reasonably acceptable to the Company, and such
release becoming effective within forty-five (45) days of
Executive’s termination. No severance or other benefits will
be paid or provided until the release of claims agreement becomes
effective, and any severance amounts or benefits otherwise payable
between the date of Executive’s termination and the date such
release becomes effective shall be paid on the effective date of
such release.
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(b) Non-solicitation . The receipt of any
severance or other benefits pursuant to Section 4 will be
subject to Executive agreeing that during the Severance Period,
Executive will not solicit any employee of the Company for
employment other than at the Company.
(c) Non-disparagement . The receipt of any severance of
other benefits pursuant to Section 4 will be subject to
Executive agreeing that during the Severance Period, Executive will
not knowingly and materially disparage, criticize, or otherwise
make any derogatory statements regarding the Company. During the
Severance Period, the Company will not knowingly and materially
disparage, criticize, or otherwise make any derogatory statements
regarding Executive. Notwithstanding the foregoing, nothing
contained in this Agreement will be deemed to restrict Executive,
the Company or any of the Company’s current or former
officers and/or directors from (1) providing information to
any governmental or regulatory agency (or in any way limit the
content of any such information) to the extent they are requested
or required to provide such information pursuant to applicable law
or regulation or (2) enforcing his or its rights pursuant to
this Agreement.
(d) Other Requirements . Executive’s receipt of any
payments or benefits under Section 4 will be subject to
Executive continuing to comply with the terms of any form of
confidential information agreement and the provisions of this
Section 5.
(e) No Duty to Mitigate . Executive will not be required
to mitigate the amount of any payment contemplated by this
Agreement, nor will any earnings that Executive may receive from
any other source reduce any such payment.
6. Limitation on Payments . In the event that the
severance and other benefits provided for in this Agreement or
otherwise payable to Executive (i) constitute "parachute
payments" within the meaning of Section 280G of the Code and
(ii) but for this Section 6, would be subject to the
excise tax imposed by Section 4999 of the Code, then
Executive’s severance benefits under Section 4 will be
either:
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(a)
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delivered in full, or
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(b)
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delivered as to such lesser extent
which would result in no portion of such severance benefits being
subject to excise tax under Section 4999 of the
Code,
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whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and
the excise tax imposed by Section 4999, results in the receipt
by Executive on an after-tax basis, of the greatest amount of
severance benefits, notwithstanding that all or some portion of
such severance benefits may be taxable under Section 4999 of
the Code. Unless the Company and Executive otherwise agree in
writing, any determination required under this Section 6 will
be made in writing by the Company’s independent public
accountants immediately prior to a Change in Control (the
"Accountants"), whose determination will be conclusive and binding
upon Executive and the Company for all purposes. For purposes of
making the calculations required by this Section 6, the
Accountants may make reasonable assumptions and approximations
concerning
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applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G
and 4999 of the Code. The Company and Executive will furnish to the
Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this
Section. The Company will bear all costs the Accountants may
reasonably incur in connection
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