Exhibit 10.1
BIO-IMAGING TECHNOLOGIES,
INC.
Executive Retention
Agreement
THIS EXECUTIVE RETENTION AGREEMENT
by and between Bio-Imaging Technologies, Inc., a Delaware
corporation (the “Company”), and
(the “Executive”) is made as of March 1, 2006, to
be effective upon the earlier of (i) the termination of the
prior Executive Retention Agreement with the Executive or
(ii) March 1, 2006 (the “Effective
Date”).
WHEREAS, the Company recognizes
that, as is the case with many publicly-held corporations, the
possibility of a change in control of the Company exists and that
such possibility, and the uncertainty and questions which it may
raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and
its stockholders, and
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that
appropriate steps should be taken to reinforce and encourage the
continued employment and dedication of the Company’s key
personnel without distraction from the possibility of a change in
control of the Company and related events and
circumstances.
NOW, THEREFORE, as an inducement for
and in consideration of the Executive remaining in its employ, the
Company agrees that the Executive shall receive the severance
benefits set forth in this Agreement in the event the
Executive’s employment with the Company is terminated under
the circumstances described below in connection with a Change in
Control (as defined in Section 1.1).
1. Key Definitions
.
As used herein, the following terms
shall have the following respective meanings:
1.1 “ Change in Control
” means an event or occurrence set forth in any one or more
of subsections (a) through (d) below (including an event
or occurrence that constitutes a Change in Control under one of
such subsections but is specifically exempted from another such
subsection):
(a) the acquisition by an
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership of any capital stock
of the Company if, after such acquisition, such Person beneficially
owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) more than 50% of either (x) the total fair
market value of the then-outstanding shares of the Company’s
stock (the “Outstanding Company Stock”) or (y) the
combined voting power of the then-outstanding securities of the
Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”);
provided , however, that for purposes of this subsection
(a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition of
securities directly from the Company (excluding an acquisition
pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock
or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security
directly from the Company or an underwriter or agent of the
Company), (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i) and (ii) of subsection (c) of this
Section 1.1; or
(b) a change in the composition of
the Board over a period of twelve (12) months or less such
that the Continuing Directors (as defined below) fail to constitute
a majority of the Board (or, if applicable, the Board of Directors
of a successor corporation to the Company), where the term
“Continuing Director” means at any date a member of the
Board (i) who was a member of the Board on the date of the
execution of this Agreement or (ii) who was nominated or
elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such
nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who
were Continuing Directors at the time of such nomination or
election; provided , however , that there shall be
excluded from this clause (ii) any individual whose initial
assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents, by or on behalf of a person other than the Board;
or
(c) the consummation of a merger,
consolidation, reorganization, recapitalization or statutory share
exchange involving the Company or a sale or other disposition of
all or substantially all of the assets of the Company in one or a
series of related transactions over a 12-month period (a
“Business Combination”), unless, immediately following
such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Company’s
outstanding common stock (the “Company Outstanding Common
Stock”) and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company
or substantially all of the Company’s assets either directly
or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no Person (excluding any
employee benefit plan (or related trust) maintained or sponsored by
the Company or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 50% or more of the then outstanding shares
of common stock of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to
the extent that such ownership existed prior to the Business
Combination); or
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(d) approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
1.2 “ Change in Control
Date ” means the first date during the Term (as defined
in Section 2) on which a Change in Control occurs. Anything in
this Agreement to the contrary notwithstanding, if (a) a
Change in Control occurs, (b) the Executive’s employment
with the Company is terminated more than 6 0 days prior to
the date on which the Change in Control occurs, and (c) it is
reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or in anticipation of
a Change in Control, then for all purposes of this Agreement the
“Change in Control Date” shall mean the date
immediately prior to the date of such termination of
employment.
1.3 “ Cause ”
means:
(a) the Executive’s willful
and continued failure to substantially perform his reasonable
assigned duties as an officer of the Company (other than any such
failure resulting from incapacity due to physical or mental illness
or any failure after the Executive gives notice of termination for
Good Reason), which failure is not cured within 30 days after a
written demand for substantial performance is received by the
Executive from the Board of Directors of the Company which
specifically identifies the manner in which the Board of Directors
believes the Executive has not substantially performed the
Executive’s duties; or
(b) the conviction of the Executive
of, or the entry of a pleading of guilty or nolo contendere by the
Executive to, any crime involving moral turpitude or any felony;
or
(c) the Executive’s commission
of dishonesty or gross negligence which is materially and
demonstrably injurious to the Company; or
(d) the Executive’s willful
engagement in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company; or
(e) any material breach by the
Executive of this Agreement or any employment agreement and related
agreements with the Company, including, but not limited to, any
non-competition or non-solicitation provision, which breach is not
cured within 30 days after a written notice of such breach is
received by the Executive from the Board of Directors of the
Company, which specifically identifies such breach.
For purposes of this
Section 1.3, no act or failure to act by the Executive shall
be considered “willful” unless it is done, or omitted
to be done, in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of
the Company.
Notwithstanding the foregoing, if
the Executive has an effective employment agreement with the
Company that contains a definition of “Cause” for
purposes of termination of the Executive’s employment with
the Company, the definition of “Cause” contained in
such effective employment agreement shall be used in this
Agreement.
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1.4 “ Good Reason
” means the occurrence, without the Executive’s written
consent, of any of the events or circumstances set forth in clauses
(a) through (g) below. Notwithstanding the occurrence of
any such event or circumstance, such occurrence shall not be deemed
to constitute Good Reason if, prior to the Date of Termination
specified in the Notice of Termination (each as defined in
Section 3.2(a)) given by the Executive in respect thereof,
such event or circumstance has been fully corrected and the
Executive has been reasonably compensated for any losses or damages
resulting therefrom (provided that such right of correction by the
Company shall only apply to the first Notice of Termination for
Good Reason given by the Executive):
(a) the assignment to the Executive
of duties materially inconsistent with the Executive’s
authority or responsibilities taken as a whole in effect
immediately prior to the earliest to occur of (i) the Change
in Control Date, (ii) the date of the execution by the Company
of the initial written agreement or instrument providing for the
Change in Control or (iii) the date of the adoption by the
Board of Directors of a resolution providing for the Change in
Control (with the earliest to occur of such dates referred to
herein as the “Measurement Date”), or any other action
or omission by the Company which results in a material diminution
in such position, authority or responsibilities; or
(b) a reduction in the
Executive’s annual base salary as in effect on the
Measurement Date; or
(c) the failure by the Company to
(i) continue in effect any material compensation or benefit
plan or program (including without limitation any life insurance,
medical, health and accident or disability plan and any vacation or
automobile program or policy) (a “Benefit Plan”) in
which the Executive participates or which is applicable to the
Executive immediately prior to the Measurement Date, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan, a lump sum payment or increase in compensation)
has been made with respect to such plan or program,
(ii) continue the Executive’s participation therein (or
in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided
and the level of the Executive’s participation relative to
other participants, than the basis existing immediately prior to
the Measurement Date or (iii) award cash bonuses to the
Executive in amounts and in a manner substantially consistent with
past practice in light of the Company’s financial
performance; or
(d) a change by the Company in the
location at which the Executive performs his principal duties for
the Company to a new location that is outside a radius of 50 miles
from the Executive’s principal residence and outside a
radius of 25 miles from the location at which the Executive
performed his principal duties for the Company immediately prior to
the Measurement Date; or
(e) the failure of the Company to
obtain the agreement from any successor to the Company to assume
and agree to perform this Agreement, as required by
Section 6.1; or
(f) a purported termination of the
Executive’s employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of
Section 3.2(a); or
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(g) any material breach by the
Company of this Agreement or any employment agreement with the
Executive, which breach is not cured within 30 days after a written
notice of such breach is received by the Company from the
Executive, which specifically identifies such breach.
The Executive’s right to
terminate his employment for Good Reason shall not be affected by
his incapacity due to physical or mental illness.
1.5 “ Disability
” means the Executive’s absence from the full-time
performance of the Executive’s duties with the Company for
180 consecutive calendar days as a result of incapacity due to
mental or physical illness which is determined to be total and
permanent by a physician selected by the Company or its insurers
and reasonably acceptable to the Executive or the Executive’s
legal representative, which consent shall not be unreasonably
withheld.
2. Term of Agreement . This
Agreement, and all rights and obligations of the parties hereunder,
shall take effect upon the Effective Date and shall expire upon the
first to occur of (a) the termination of the Executive’s
employment with the Company more than 60 days prior to the Change
in Control Date, (b) the date 24 months after the Change in
Control Date, if the Executive is still employed by the Company as
of such later date, or (c) the fulfillment by the Company of
all of its obligations under Sections 4 and 5.2 and 5.3 if the
Executive’s employment with the Company terminates within the
period from 60 days prior to the Change in Control Date to 24
months following the Change in Control Date.
3. Employment Status; Termination
Following Change in Control .
3.1 Not an Employment
Contract . The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this
Agreement does not prevent the Executive from terminating
employment at any time.
3.2 Termination of Employment
.
(a) If the Change in Control Date
occurs during the Term, any termination of the Executive’s
employment by the Company or by the Executive within 24 months
following the Change in Control Date (other than due to the death
of the Executive) shall be communicated by a written notice to the
other party hereto (the “Notice of Termination”), given
in accordance with Section 7. Any Notice of Termination shall:
(i) indicate the specific termination provision (if any) of
this Agreement relied upon by the party giving such notice,
(ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated and (iii) specify the Date of Termination (as
defined below). The effective date of an employment termination
(the “Date of Termination”) shall be the close of
business on the date specified in the Notice of Termination (which
date may not be less than 15 days or more than 120 days after the
date of delivery of such Notice of Termination), in the case of a
termination other than one due to the Executive’s death, or
the date of the Executive’s death, as the case may be. In the
event the Company fails to satisfy the requirements of
Section 3.2(a) regarding a Notice of Termination, the
purported termination of the Executive’s employment pursuant
to such Notice of Termination shall not be effective for purposes
of this Agreement.
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(b) If a Change in Control Date
occurs during the 60 days after the termination of the
Executive’s employment by the Company, the Company shall give
the Executive notice of such Change in Control.
(c) The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting any such fact or circumstance in
enforcing the Executive’s or the Company’s rights
hereunder.
(d) Any Notice of Termination for
Cause given by the Company must be given within 90 days of the
discovery by the Board of the occurrence of the event(s) or
circumstance(s) that constitute(s) Cause. Prior to any Notice of
Termination for Cause being given (and prior to any termination for
Cause being effective), the Executive shall be entitled to a
hearing before the Board of Directors of the Company at which he
may, at his election, be represented by counsel and at which he
shall have a reasonable opportunity to be heard. Such hearing shall
be held on not less than 15 days prior written notice to the
Executive stating the Board of Directors’ intention to
terminate the Executive for Cause and stating in detail the
particular event(s) or circumstance(s) which the Board of Directors
believes constitutes Cause for termination.
(e) Any Notice of Termination for
Good Reason given by the Executive must be given within 90 days of
the discovery by the Executive of the occurrence of the event(s) or
circumstance(s) that constitute(s) Good Reason.
4. Benefits to Executive
.
4.1 Stock Acceleration . If
the Executive’s employment is terminated by the Company other
than for Cause, or the Executive terminates his employment for Good
Reason, during the Pre-Closing Period or at any time thereafter
during the remainder (if any) of the Term, then, effective upon
such termination of employment, (a) each outstanding option to
purchase shares of Common Stock of the Company held at that time by
the Executive shall become immediately exercisable in full and
shares of Common Stock of the Company received upon exercise of any
options will no longer be subject to a right of repurchase by the
Company, and (b) each outstanding restricted stock award shall
be deemed to be fully vested and will no longer be subject to a
right of repurchase by the Company. Each option shall remain so
exercisable until the expiration date of the option term or (if
earlier) the termination of that option in accordance with the
provisions of the applicable stock option agreement. For purposes
of this Section 4.1, the Pre-Closing Period means the period
commencing with the Company’s execution of the definitive
agreement for a Change in Control transaction and ending upon the
earlier of (i) the closing of the Change in Control
contemplated by such definitive agreement or (ii) the
termination of such definitive agreement without the consummation
of the contemplated Change in Control.
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4.2 Compensation . If the
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