Lifeline Systems, Inc. Change of Control Agreement with Employee
This agreement between Lifeline Systems, Inc. and an employee provides that if the employee's job is terminated without cause, or if their job responsibilities, salary, or work location are significantly changed within twelve months after a change in control of the company, the employee will receive a severance payment equal to one year's base salary. The agreement defines what constitutes a change in control and clarifies that it is not an employment contract but a condition of ongoing employment.
Exhibit 10.26
(Date)
(Name)
(Address)
(Address)
Re: Change in Control Event
Dear (Name):
This will confirm, on behalf of the Board and the Company, that in the event that within twelve months following a Change in Control Event, as defined in Section 8 (c) (1) (b) of the Company’s 2000 Stock Incentive Plan, a copy of the definition being attached hereto, your employment is terminated without cause or you terminate your employment in the event your then responsibilities or conditions of employment, including base salary and principal location at which services are performed, are significantly changed, reduced or adversely affected, the Company will pay you, in full satisfaction of any and all claims which you may have against the Company, an amount equal to one year’s base annual salary then being paid to you. Termination of employment by the Company shall be deemed to be without cause unless the termination results from conduct involving moral turpitude or a willful failure to continue to perform your pre-Change in Control duties, subject to the direction of post-Change in Control management.
This undertaking should not be construed by you as an employment contract but does constitute one of the conditions of your ongoing employment relationship with the Company.
If the foregoing is satisfactory, please indicate your consent below.
Sincerely,
LIFELINE SYSTEMS, INC.
Ronald Feinstein
President/CEO
ACCEPTED BY:
| (Name) | Date |
Section 8(c) (1) (b) of the 2000 Stock Incentive Plan is as follows:
(b) A “Change in Control Event” shall mean:
(i) 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) 30% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common 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 (i), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition 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), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or
| (ii) | such time as the Continuing Directors (as defined below) do not 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 (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) 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 (y) 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 |
(iii) 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 (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company 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 of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 30% 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).
