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EXHIBIT 99.1
CHANGE IN CONTROL, INVENTION, CONFIDENTIALITY, NON-COMPETE AND
NON-
SOLICITATION AGREEMENT
This
Change in Control, Invention, Confidentiality, Non-Compete and
Non-Solicitation Agreement (the
"Agreement") is entered into as of June __, 2005
between Somanetics Corporation, a Michigan
corporation (the "Company"), and
[William M. Iacona] [Richard S. Scheuing]
[Mary Ann Victor] [Ronald A. Widman]
[Pamela A. Winters] ("Employee").
RECITALS
A.
Employee
is currently the Company's Vice President[, Finance,
Controller and Treasurer] [, Research and
Development] [, Communications and
Administration and Secretary] [, Medical
Affairs] [, Operations], and is a key
employee of the Company.
B.
The
Company and Employee desire to provide for severance payments
to
Employee upon specified terminations of
employment in connection with a change
in control and to protect the Company's
technology, proprietary information and
personnel.
Therefore,
the Company and Employee agree as follows:
1. Change in Control
Severance.
1.1.
Right to Receive
Benefits. Employee shall receive the severance
benefits
described in Section 1.2 if (1) a "Change in Control" (as
defined
in Section
1.3) occurs during the "Period" (as defined in Section 1.4),
and (2) at
any time during the period beginning 90 days before the Change
in Control
occurs and ending one year after the Change in Control occurs,
Employee
terminates Employee's employment with the "Entity" (as defined
in
Section
1.5) for "Good Reason" (as defined in Section 1.6) or the
Entity
terminates
Employee's employment without "Cause" (as defined in Section
1.9).
1.2.
Severance Benefits. If
Employee is entitled to the severance
benefits
under Section 1.1, the Company shall pay Employee an amount in
cash equal
to one times Employee's annualized base salary at the rate in
effect on
the date of this Agreement, or, if higher, Employee's base
salary in
effect immediately before the earlier of Employee's termination
of
employment or the date the Change in Control occurs. This
severance
benefit
shall be paid to Employee in one undiscounted lump sum within
10
business
days after the date all of the conditions to receiving the
severance
benefit, described in Section 1.1, are met. The Company may
withhold
from such payment all federal, state, city and other taxes to
the
extent
such taxes are required to be withheld by applicable law.
1.3.
"Change in Control".
For purposes of this Agreement, a "Change in
Control"
shall mean:
1.3.1. Acquisition of Shares. the acquisition by any
individual,
entity or group (a "Person"), including any "person" within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership within the meaning of Rule
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13d-3 promulgated under the Exchange Act,
of 40% or more of either (1) the then
outstanding Common Shares of the Company
(the "Outstanding Common Shares") or
(2) the combined voting power of the then
outstanding securities of the Company
entitled to vote generally in the election
of directors (the "Outstanding Voting
Securities"); excluding, however, the
following: (A) any acquisition directly
from the Company (excluding any acquisition
resulting from the exercise of an
exercise, conversion or exchange privilege
unless the security being so
exercised, converted or exchanged was
acquired directly from the Company), (B)
any acquisition by the Company, (C) any
acquisition by an employee benefit plan
(or related trust) sponsored or maintained
by the Company or any corporation
controlled by the Company, or (D) any
acquisition by any corporation pursuant to
a transaction which complies with clauses
(1), (2) and (3) of Section 1.3.3;
provided further, that for purposes of
clause (B), if any Person (other than the
Company or any employee benefit plan (or
related trust) sponsored or maintained
by the Company or any corporation
controlled by the Company) shall become the
beneficial owner of 40% or more of the
Outstanding Common Shares or 40% or more
of the Outstanding Voting Securities by
reason of an acquisition by the Company,
and such Person shall, after such
acquisition by the Company, become the
beneficial owner of any additional
Outstanding Common Shares or any additional
Outstanding Voting Securities and such
beneficial ownership is publicly
announced, such additional beneficial
ownership shall constitute a Change in
Control;
1.3.2. Change in Board Control. individuals
who, as of the date hereof,
constitute the Board (the "Incumbent
Board") cease for any reason to constitute
at least a majority of such Board; provided
that any individual who becomes a
director of the Company subsequent to the
date hereof whose election, or
nomination for election, by the Company's
shareholders was approved by the vote
of at least a majority of the directors
then comprising the Incumbent Board
shall be deemed a member of the Incumbent
Board;
1.3.3. Reorganization, Merger or Asset
Sale. the consummation of a
reorganization, merger or consolidation, or
sale or other disposition of all or
substantially all of the assets, of the
Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction
pursuant to which (1) all or
substantially all of the individuals or
entities who are the beneficial owners,
respectively, of the Outstanding Common
Shares and the Outstanding Voting
Securities immediately prior to such
Corporate Transaction will beneficially
own, directly or indirectly, more than 60%
of, respectively, the outstanding
Common Shares, and the combined voting
power of the outstanding securities
entitled to vote generally in the election
of directors, as the case may be, of
the corporation resulting from such
Corporate Transaction (including, without
limitation, a corporation which as a result
of such transaction owns the Company
or all or substantially all of the
Company's assets either directly or
indirectly) in substantially the same
proportions relative to each other as
their ownership, immediately prior to such
Corporate Transaction, of the
Outstanding Common Shares and the
Outstanding Voting Securities, as the case may
be, (2) no Person
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(other
than: the Company; any employee benefit plan (or related trust)
sponsored
or maintained by the Company or any corporation controlled by
the
Company; the corporation resulting from such Corporate
Transaction;
and any
Person which beneficially owned, immediately prior to such
Corporate
Transaction, directly or indirectly, 40% or more of the
Outstanding Common Shares or the Outstanding Voting Securities, as
the
case may
be) will beneficially own, directly or indirectly, 40% or more
of,
respectively, the outstanding Common Shares of the corporation
resulting from such
Corporate Transaction or the combined voting power of
the
outstanding securities of such corporation entitled to vote
generally
in the
election of directors and (3) individuals who were members of
the
Incumbent
Board will constitute at least a majority of the members of the
board of
directors of the corporation resulting from such Corporate
Transaction; or
1.3.4.
Dissolution or Liquidation. the consummation of a plan of
complete
liquidation or dissolution of the Company.
1.4. "Period". For purposes of this
Agreement, the "Period" will begin on the
date of this Agreement and end on the first
to occur of (1) Employee's death,
(2) Employee's "Disability" (as defined in
Section 1.6), (3) 90 days after the
termination of Employee's employment
(voluntarily or involuntarily and with or
without good reason or cause) if such
termination occurs before a Change in
Control, and (4) three years after the date
of this Agreement. Notwithstanding
the foregoing, (1) if Employee becomes
entitled to the severance benefit under
Section 1.1, the provisions of this Section
1 will continue until Employee is
paid the severance benefit pursuant to this
Section 1, and (2) the other
provisions of this Agreement are not
limited by the Period and will survive the
end of the Period.
1.5. "Entity". For purposes of this
Agreement, the "Entity" shall mean (1) in
connection with a Change in Control that
results in an entity other than the
Company being a successor to the Company's
business, such new entity (the
"Successor") beginning on the date of the
Change in Control, but the Successor
shall be the Entity only if the Successor
is either bound by the terms of this
Agreement as a successor to the Company or
offers to employ Employee beginning
on the date of the Change in Control on
such terms that would not constitute
"Good Reason" for termination of Employee's
employment if imposed by the
Company, and (2) in all other cases, the
Company. For purposes of this Section
1.5, Employee shall not be deemed to have
terminated Employee's employment with
the Entity for "Good Reason" and the
"Entity" shall not be deemed to have
terminated Employee's employment without
Cause if (1) a Successor who has
purchased all or substantially all of the
Company's assets has offered to employ
Employee on such terms that would not
constitute "Good Reason" for termination
of Employee's employment if imposed by the
Company, (2) Employee refuses such
employment, and (3) the Company terminates
Employee's employment for any reason
or for no reason.
1.6. "Good Reason". Termination of
Employee's employment for "Good Reason"
means Employee's termination of employment
with the Entity before or after a
Change in Control as a result of (1) any
decrease by the Entity (without
Employee's consent) in Employee's
compensation,
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incentives
and benefits from Employee's compensation, incentives and
benefits
immediately before such Change in Control; provided that
Employee's
bonus shall not be deemed to have decreased if Employee has a
substantially similar opportunity to earn a bonus as Employee did
in the
last full
fiscal year before the Change in Control, (2) a substantial
change by
the Entity (without Employee's consent) in Employee's duties or
responsibilities from Employees duties and responsibilities
immediately
before
such Change in Control, (3) any requirement by the Entity (to
which
Employee
does not consent) that Employee change Employee's primary place
of
business to be outside the metropolitan Detroit area,
