EXHIBIT 10.3
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "Agreement") is entered into this
5th day of April, 2004 (the "Effective Date") by and between Atrix Laboratories,
Inc., a Delaware corporation (the "Company") with its principal place of
business at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000, and Xxxxxxx X.
Xxxxx an individual residing at 00000 X. 000xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx
00000 ("Executive").
1. Definitions.
(a) "Affiliate" means any corporation, partnership, trust or
other entity of which the Company and/or any of its Affiliates directly
or indirectly owns a majority of the outstanding shares of any class of
equity security of such corporation, partnership, trust or other entity
and any corporation, partnership, trust or other entity which directly
or indirectly owns a majority of the outstanding shares of any class of
equity security of the Company or any of its Affiliates.
(b) "Cause" means:
(i) If Executive materially violates any term of his
employment or any Company policies and such violation is not
substantially remedied within 30 days of written notice from the
Company to Executive;
(ii) Willful misfeasance, gross negligence or nonfeasance of
duty by Executive that is reasonably likely to be detrimental or
damaging or that has the effect of injuring or damaging the
reputation, business or business relationships of the Company or
any of its subsidiaries or any of their respective officers,
directors or employees;
(iii) Any arrest, indictment (defined as any proceeding in
which "probable cause" is found), conviction (or the civil
equivalent) of Executive or a plea of guilty or nolo contendere
by Executive to a charge based on a federal or state felony or
serious criminal or civil offense (even if the crime is
classified under the applicable law as a "misdemeanor"),
including, but not limited to (1) crimes or civil offenses
involving theft, embezzlement, fraud, dishonesty or moral
turpitude; (2) crimes or civil offenses based on banking or
securities laws (including the Xxxxxxxx-Xxxxx Act of 2002); and
(3) civil enforcement actions brought by federal or state
regulatory agencies (including the Securities and Exchange
Commission).
(iv) Willful or prolonged and unapproved absence from work by
the Executive or failure, neglect or refusal by the Executive to
perform his duties and responsibilities as determined by the
board of directors of the Company (the "Board") in its sole
discretion.
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(c) "Change of Control" means the occurrence of one or more of
the following:
(i) Any person (as defined in Sections 3(a)(9) and 13(d)(3)
of the Securities Exchange Act of 1934, as amended) other than an
existing stockholder or an Affiliate that directly or indirectly
becomes the owner of 50% or more of the Voting Stock;
(ii) A complete liquidation or dissolution of the Company
other than a liquidation or dissolution occurring after any of
the following transactions: the merger or consolidation of the
Company with an Affiliate, the transfer of 50% or more of the
Voting Stock of the Company to an Affiliate or Affiliates or the
sale or other transfer of all or substantially all of the assets
of the Company to an Affiliate or Affiliates;
(iii) The sale of all or substantially all of the Company's
assets to a single purchaser or group of affiliated purchasers,
other than any Affiliate or Affiliates, in one or a series of
related transactions; or
(iv) The Company engages in a merger or consolidation with
another entity other than an Affiliate and immediately after that
merger or consolidation, the persons or entities that were
stockholders of the Company immediately prior to that merger or
consolidation hold, directly or indirectly, less than 50% of the
Voting Stock of the surviving entity.
(d) "Good Reason" means any action on the part of the Company not
consented to by Executive in writing (which action shall not have been
cured within 30 days following written notice from Executive to the
Board specifying that such action will give rise to a termination of
Executive's employment hereunder for Good Reason) having the following
effect or effects: (i) a material diminution of Executive's job duties,
responsibilities or requirements that is detrimentally inconsistent
with Executive's then current title and Executive's prior duties,
responsibilities or requirements; (ii) a reduction in Executive's
salary then in effect, other than a reduction comparable to reductions
generally applicable to similarly situated employees of the Company;
(iii) the permanent relocation of Executive to a facility or location
more than 50 miles from the Company's current location; or (iv) a
significant change in the reporting relationship or title from that
existing immediately prior to the Change of Control.
(e) "Voting Stock" means, with respect to a corporation, the
capital stock of any class or classes of that corporation having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect directors of such corporation and, with respect
to any other entity, the securities of that entity having such general
voting power to elect the members of the managing body of that entity.
2. Term. This Agreement shall be for a term beginning on the
Effective Date and terminating on the date on which Executive's employment with
the Company terminates or is terminated.
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3. Termination after Change of Control. If the Company terminates
Executive's employment without Cause, or Executive terminates his employment for
Good Reason, in either case within six months after a Change of Control, then
(i) the Company shall pay to Executive in either a lump-sum or through salary
continuation, at the Company's sole discretion, the amount of Executive's then
current base salary for a period of 12 months, (ii) the Company and the Board
shall cause all of Executive's unvested stock options to immediately vest
effective as of the date Executive's employment terminates, and Executive shall
have four months to exercise the options vested under this Section 3, (iii) if
Executive elects continued coverage under the Company's health plan pursuant to
the Comprehensive Omnibus Budget Reconciliation Act of 1985, as amended, then
the Company shall continue to pay the Company's portion of the premium for
Executive's continued coverage under the Company's health plan until the first
to occur of (A) the date that is 12 months after the date of termination and (B)
the date upon which Executive is employed by a third party and is eligible for
coverage by such third party's health insurance plan and (iv) if Executive
elects continued coverage under the Company's life insurance plan, then the
Company shall continue to pay the Company's portion of the premium for
Executive's continued coverage under the Company's life insurance plan, or if
continued coverage under the Company's life insurance plan is not available
pursuant to the terms of such plan, then the Company shall pay to Executive the
amount of the premium that would otherwise be payable by the Company if
Executive's employment were not terminated until the date that is 12 months
after the date of termination. Thereafter, Executive shall not be entitled to
receive, and the Company shall have no obligation to provide Executive with any
additional salary, payments or benefits of any kind.
4. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final and exclusive expression of their agreement with respect
to the relationship between Executive and the Company and may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements. The parties further intend that this Agreement shall constitute the
complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal
proceeding involving this Agreement.
5. Amendments, Waivers. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by Executive and by a
duly authorized representative of the Company other than Executive. No failure
to exercise and no delay in exercising any right, remedy, or power under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power under this Agreement preclude any other
or further exercise thereof, or the exercise of any other right, remedy, or
power provided herein or by law or in equity.
6. Assignment; Successors and Assigns. Executive agrees that
Executive will not assign, sell, transfer, delegate or otherwise dispose of,
whether voluntarily or involuntarily, or by operation of law, any rights or
obligations under this Agreement, nor shall Executive's rights be subject to
encumbrance or the claims of creditors. Any purported assignment, transfer, or
delegation shall be null and void. Subject to the foregoing, this Agreement
shall be binding upon Executive and the Company and shall inure to the benefit
of the parties and their respective heirs, legal representatives, successors,
and permitted assigns, and shall not benefit any person or entity other than
those enumerated above.
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7. Severability; Enforcement. If any provision of this Agreement, or
the application thereof to any person, place, or circumstance, shall be held by
a court or arbitrator of competent jurisdiction to be invalid, unenforceable, or
void, the remainder of this Agreement and such provisions as applied to other
persons, places, and circumstances shall remain in full force and effect.
8. Governing Law. The validity, interpretation, enforceability, and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado, without regard to choice of law rules.
All disputes arising under this Agreement shall be submitted to and heard by a
state or federal court located in Denver, Colorado and each of the Company and
Executive hereby irrevocably consents to the exclusive jurisdiction and
exclusive venue of such courts.
9. Executive Acknowledgment. The parties acknowledge (a) that they
have consulted with or have had the opportunity to consult with independent
counsel of their own choice concerning this Agreement, and (b) that they have
read and understand the Agreement, are fully aware of its legal effect, and have
entered into it freely based on their own judgment and not on any
representations or promises other than those contained in this Agreement.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures to this
Agreement may be transmitted via facsimile and such signatures shall be deemed
to be originals.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
Company Executive
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
Chairman of the Board of Directors and Chief Financial Officer
Chief Executive Officer
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