ASSIGNMENT AND AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT
10.1
ASSIGNMENT
AND AMENDMENT TO EMPLOYMENT AGREEMENT
This
Assignment and Amendment (this “Amendment”)
dated
as of May 21, 2008 of the Employment Agreement dated as of [DATE OF EMPLOYMENT
AGREEMENT] (the “Employment
Agreement”)
entered into between Specialized Health Products, Inc., a Utah corporation
(the
“Company”),
and
[NAME OF EMPLOYEE] (the “Employee”)
is
entered into among the Employee, the Company and Specialized Health Products
International, Inc., a Delaware corporation (“SHPI”).
Capitalized terms not defined herein shall have the meaning set forth in the
Employment Agreement.
RECITALS
WHEREAS,
the Company and the Employee entered into the Employment Agreement;
WHEREAS,
each of the Company and the Employee deems it in their best interest to amend
the Employment Agreement; and
WHEREAS,
the Company desires to assign its rights under the Employment Agreement to
SHPI,
and SHPI desires to accept such assignment and assume all obligations of the
Company under the Employment Agreement in accordance with its terms and the
Employee desires to consent to such assignment and assumption.
WHEREAS,
the Company and the Employee desire to amend the Employment Agreement in
accordance with Section 409A of the Internal Revenue Code of 1986, as amended,
and the regulations and guidance thereunder, to include compliant payment dates
for nonqualified deferred compensation
AGREEMENT
NOW,
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the Company, SHPI and the Employee agrees as
follows:
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1.
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The
Company hereby transfers, assigns and conveys to SHPI its entire
right,
title and interest in, to and under the Employment
Agreement.
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2.
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SHPI
hereby accepts the assignment of the Company’s interest in the Employment
Agreement, assumes all of the obligations of the Company under the
Employment Agreement and agrees to be bound by and to perform, observe,
keep and comply with all of the terms and provisions contained in
the
Employment Agreement on the part of the Company to be performed,
observed,
kept and complied with from and after the date hereof, and to pay
all sums
due under the Employment Agreement.
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1
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3.
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The
Employee hereby consents to and approves the assignment by the Company,
and the assumption by SHPI, of the Employment Agreement as set forth
herein.
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4.
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Section
2.1.2 of the Employment Agreement is hereby amended and restated
to read
in its entirety as follows:
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“2.1.2
“Termination Other Than For Cause” shall mean involuntary separation of Employee
from service by Corporation within the meaning of Treasury Regulation §
1.409A-1(n)(1) and Employee’s voluntary separation from service within the
meaning of Treasury Regulation § 1.409A-1(n)(2)(ii) satisfying the following
conditions:
(A)
The
separation from service must occur within two (2) years following the initial
existence of one or more of the following conditions arising without Employee’s
consent:(1) a material diminution in Employee’s Base Salary; (2) a material
diminution in Employee’s authority, duties, or responsibilities; (3) a material
diminution in the authority, duties, or responsibilities of the supervisor
to
whom Employee is required to report; (4) a material diminution in the budget
over which Employee retains authority; (5) a material change in the geographic
location at which Employee must perform the services; and (6) any other action
or inaction that constitutes a material breach by Corporation of the Employment
Agreement.
(B)
Employee must provide notice to Corporation of the existence of the condition
described in paragraph (A) above within 90 days of the initial existence of
the
condition, upon the notice of which Corporation shall have a period of at least
30 days during which it may remedy the condition and not be required to pay
the
amount.”
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5.
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Section
2.4 of the Employment Agreement is hereby amended and restated to
read in
its entirety as follows:
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“2.4 Termination
Other Than For Cause.
Notwithstanding anything else in this Agreement, Corporation may effect a
Termination Other Than For Cause at any time upon giving written notice to
Employee of such termination and Employee may effect a Termination Other Than
For Cause by giving notice to Company in accordance with Section 2.1.2(B).
Upon
any Termination Other Than For Cause, (a) Employee shall promptly be paid all
accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension plan, profit sharing plan and stock option
plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Corporation in which Employee is a participant
to the full extent of Employee’s rights under such plans (other than pension
plan, profit
2
sharing
plan and stock option plan benefits which will be paid in accordance with the
applicable plan), accrued vacation pay and any appropriate business expenses
incurred by Employee in connection with his duties hereunder, all to the date
of
termination, (b) as long as Employee complies with the provisions of Sections
5
through 8 as severance compensation, two separate lump sum payments for which
the aggregate amount shall be equal to [SEVERANCE PERIOD] months (the
“Severance
Period”)
of
salary (the “Total
Severance Amount”)
which
shall be payable in the amounts and at the times set forth as follows: (x)
the
first lump sum payment shall equal a portion of the Total Severance Amount
calculated by multiplying the Total Severance Amount by a fraction, the
numerator of which is the number of days elapsed from the termination date
until
and including December 31 of the calendar year in which the Termination Other
Than For Cause occurs and the denominator of which is the number of days in
the
Severance Period and shall be paid on or within two business days of the date
of
termination and (y) the second lump sum payment shall equal the remaining
portion of the Total Severance Amount not paid in the first lump sum payment
and
shall be paid in the next following calendar year on or before January 5 of
such
calendar year, and (c) as long as Employee complies with the provisions of
Sections 5 through 8, medical benefits continuation for the Severance Period
under then current Corporation plans, provided that the medical benefits
provided to Employee during the Severance Period shall be on the same basis
as
those provided to then active employees of the Corporation, except that the
Employee will not be required to contribute any portion of the applicable
premium rate. [Employee acknowledges, understands and agrees that
notwithstanding the schedule of severance payments set forth in this Section
2.4, Employee shall be subject to the post-termination restrictive covenants
set
forth in Sections 5 and 9 of this Agreement during the Severance
Period.]*
Notwithstanding
the foregoing, if Employee breaches any provision of Sections 5 through 8,
then
(i) Employee shall promptly pay to the Corporation an amount equal to the Total
Severance Amount multiplied by a fraction, the numerator of which is the number
of days from the first breach of any such provision through the last day of
the
Severance Period and the denominator of which is the number of days in the
Severance Period and (ii) the Corporation shall immediately cease the
continuation of medical benefits provided under Section 2.4(c),
above.”
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6.
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Section
2.8 of the Employment Agreement which was added by amendment dated
as of
June 3, 2004 is hereby deleted in its entirety.**
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7.
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The
text “eighteen (18) months” set forth in each of Sections 5, 8 and 9 is
hereby amended and replaced with the text “twenty-four (24)
months.”**
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The
bracketed sentence only applies to ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
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This
provision only applies to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
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3
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8.
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The
effectiveness of the amendments set forth in Sections 4 and 5***
of
this Amendment is conditioned upon SHPI effecting a Termination Other
Than
For Cause immediately prior to the completion of a Change of Control
(as
defined below) on or before September 10, 2008. For purposes of this
Amendment, Change of Control means (i) a merger, consolidation or
reorganization of SHPI other than a merger, consolidation or
reorganization resulting in the voting securities of SHPI outstanding
immediately prior thereto continuing to represent at least 50% of
the
combined voting power of the securities of SHPI or the surviving
entity or
any parent thereof outstanding immediately thereafter, (ii) the
acquisition by a person or persons acting as a group of equity securities,
which together with equity securities already held by such person
or
persons, constitutes more than 50% of the total voting power of the
Company or (iii) any transfer or other disposition of all or substantially
all of SHPI’s assets.
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9.
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Except
as modified herein, all terms and conditions of the Employment Agreement
shall remain in full force and
effect.
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10.
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This
Amendment and the Employment Agreement contain the entire understanding
of
the parties with respect to the subject matter hereof and thereof,
and
supersede in all respects any and all prior or contemporaneous oral
or
written agreements or
understandings.
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[Signature
page follows]
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And
Sections 6 and 7 in the case of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
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4
IN
WITNESS WHEREOF,
the
parties hereto have executed this Amendment as of the date set forth in the
first paragraph.
SPECIALIZED
HEALTH PRODUCTS, INC.
By:
Name:
Title:
SPECIALIZED
HEALTH PRODUCTS INTERNATIONAL, INC.
By:
Name:
Title:
[NAME
OF
EMPLOYEE]
[Signature
page to Assignment and Amendment to Employment Agreement for [NAME OF
EMPLOYEE]]