Addendum to Employment Agreement between Medizone International and Stephanie L. Sorensen dated as of November 1, 2017

 

 

THIS CHANGE OF CONTROL ADDENDUM TO THE EMPLOYMENT AGREEMENT (the “Addendum”) is made and entered into as of the 1st day of November, 2017, by and between Medizone International, Inc., a Nevada corporation (the “Company”), and Stephanie L. Sorensen (“Executive” or “you”).

The Company and Executive entered into that certain Employment Agreement effective as of October 1, 2016, pursuant to which the Company has employed Executive as Chief Financial Officer of the Company (the “Agreement”). Except as otherwise provided in this Addendum, all capitalized terms used but not defined in this Addendum shall have the meanings given to them in the Agreement.

The Company and Executive (as evidenced by their execution hereof) desire to amend and supplement the Agreement as provided herein.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

In addition to the Severance Pay, the Company shall provide group medical continuation coverage under the Company’s group medical plan for the Executive, her spouse and her eligible dependents for 18 months following the date of her termination of employment following the Change of Control; provided that you are eligible for COBRA and have elected continuation coverage under the applicable rules. However, the Company’s COBRA obligations shall immediately cease to the extent you become eligible for substantially equivalent health insurance coverage from a subsequent employer.  In lieu of providing such coverage, the Company may pay to the Executive an amount equal to the cost of such group medical continuation coverage, which amount shall be calculated using the applicable COBRA premium rates in effect for the month in which the termination of employment following a Change of Control occurs.  Subject to the terms of the following paragraph, the Severance Pay and the cost of group medical continuation coverage (if the Company elects to pay the cost of such coverage to the Executive) will be paid to the Executive in a lump sum within 90 days after you return the executed release agreement.  The vesting and exercisability of each option and any other equity award granted to the Executive by the Company (or of any property received by the Executive in exchange for such options in a Change of Control) shall be automatically accelerated in full upon the termination of her employment following a Change of Control.

If the Company determines that you are a “specified employee” under Section 409A(a)(2)(B)(i) of Internal Revenue Code of 1986, as amended (the “Code”) at the time of your Separation From Service (as defined in Section 409A of the Code), then (i) the Severance Payments under the preceding paragraph, to the extent that they are subject to Section 409A of the Code, will be paid in a lump sum during the seventh month after your Separation From Service.

For purposes of this Addendum, “Change of Control” shall mean the occurrence of any of the following:

For purposes of this Addendum, “Good Reason” shall mean any of the following events if effected by the Company without your consent within 12 months of the Change of Control:

“Change in Ownership or Control” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code.

“Contingent Compensation Payments” shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a

“disqualified individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G (b) (2) (A) (i) of the Code) on a Change in Ownership or Control of the Company.

“Excess Parachute Payments” shall mean “excess parachute payments” as defined in Section 280G(b)(1) of the Code before taking into account the Eliminated Amount, if otherwise applicable.

“Threshold Amount” shall mean $25,000.

“Income Tax Payable on the Eliminated Amount” shall mean the Eliminated Amount (determined without regard to whether any Contingent Compensation Payments are actually eliminated) multiplied by the highest combined marginal federal, state and local income tax rate in effect for the taxable year, taking into account the phase-out of itemized deductions and the federal Medicare tax.

“Excise Tax Payable on Excess Parachute Payments” shall mean the tax imposed by Section 4999(a) of the Code on Excess Parachute Payments.

3. Incorporation.  The terms of the Agreement (as modified hereby) are hereby incorporated herein by this reference. Agreement Affirmed.  As modified hereby, the Agreement is hereby affirmed and deemed to continue in full force and effect. Counterparts.  This Addendum may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which, when taken together, constitute one and the same document. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. This Addendum may be executed and delivered by facsimile, or by email in portable document format (.pdf) and delivery of the executed signature page by such method will be deemed to have the same effect as if the original signature had been delivered to other the party.

IN WITNESS WHEREOF, the parties have executed this Change of Control Addendum to the Employment Agreement as of the date above written.

“COMPANY”

Medizone International, Inc.

By: /s/ David A. Dodd                                          

Title: David A. Dodd, Chief Executive Officer

“EXECUTIVE”

Stephanie L. Sorensen