EXHIBIT 10.1

 

CHANGE OF CONTROL AGREEMENT

 

Parties:

 

Ciprico Inc.

 

(“Company”)

 

 

17400 Medina Road

 

 

 

 

Plymouth, MN 55447

 

 

 

 

 

 

 

 

 

Donald L. McDonell

 

(“Employee”)

 

 

 

 

 

Effective Date:

 

April 24, 2006

 

 

 

RECITALS:

 

1.                                       Employee is employed by Company in
various capacities, has extensive knowledge and expertise relating to Company’s
business.

 

2.                                       The parties recognize that a “Change of
Control” may materially change or diminish Employee’s responsibilities and
substantially frustrate Employee’s commitment to the Company.

 

3.                                       The parties further recognize that it
is in the best interests of the Company and its stockholders to provide certain
benefits payable upon a “Change of Control Termination” to encourage Employee to
continue in his position in the event of a Change of Control, although no such
Change of Control is now contemplated or foreseen.

 

4.                                       The parties further desire to provide
for certain benefits payable upon certain involuntary terminations of Employee’s
employment.

 

AGREEMENTS:

 

In consideration of the mutual covenants set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.                                       Term of Agreement.  The term of this
Agreement shall commence on the Effective Date and shall continue in effect
until termination of Employee’s employment which does not constitute a Change of
Control Termination; provided, however, that if a Change of Control of the
Company shall occur during the term of this Agreement, this Agreement shall
instead continue in effect for a period of twelve (12) months following the date
of such Change of Control.  Any rights and obligations accruing before the
termination or expiration of this Agreement shall survive to the extent
necessary to enforce such rights and obligations.

 

2.                                       “Change of Control.”  For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

 

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(a)                                  A merger or consolidation to which the
Company is a party if the individuals and entities who were shareholders of the
Company immediately prior to the effective date of such merger or consolidation
have, immediately following the effective date of such merger or consolidation,
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of less than fifty percent (50%) of the total combined voting power of
all classes of securities issued by the surviving corporation for the election
of directors of the surviving corporation;

 

(b)                                 The acquisition of direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of securities of the Company by any person or entity or by a group of
associated persons or entities acting in concert in one or a series of
transactions, which causes the aggregate beneficial ownership of such person,
entity or group to equal or exceed twenty percent (20%) or more of the total
combined voting power of all classes of the Company’s then issued and
outstanding securities;

 

(c)                                  The sale of substantially all of the assets
of the Company to any person or entity that is not a wholly-owned subsidiary of
the Company;

 

(d)                                 The approval by the stockholders of the
Company of any plan or proposal for the liquidation of the Company;

 

(e)                                  A change in the composition of the Board of
the Company at any time during any consecutive twenty-four (24) month period
such that the “Continuity Directors” no longer constitute at least a seventy
percent (70%) majority of the Board.  For purposes of this event, “Continuity
Directors” means those members of the Board who were directors at the beginning
of such consecutive twenty-four (24) month period or were elected by, or on the
nomination or recommendation of, at least a two thirds (2/3) majority of the
then-existing Board of Directors; or

 

(f)                                    The execution by the Company of a letter
of intent, an agreement in principle or a definitive agreement relating to an
event described in Section 2(a), 2(b), 2(c), 2(d) or 2(e) that ultimately
results in such a Change of Control, or a tender or exchange offer or proxy
contest is commenced that ultimately results in an event described in
Section 2(b) or 2(e).

 

3.                                       Termination.  For purposes of this
Agreement, “Change of Control Termination” shall mean any of the following
events occurring within twelve (12) months after a change of control occurring
during the term of this Agreement.

 

(a)                                  The termination of Employee’s employment by
the Company for any reason except Good Cause.  For purposes of this Agreement,
“Good Cause” shall include, but not be limited to, the following:

 

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(i)                                     Employee’s conviction of or plea of
guilty or nolo contendere to a felony resulting from conduct occurring on or
after the date of the Change of Control;

 

(ii)                                  Employee’s willful and repeated failure to
fulfill his employment duties with the Company; provided, however, that for
purposes of this clause (ii), an act or failure to act by Employee shall not be
“willful” unless it is done, or omitted to be done, in bad faith and without any
reasonable belief that Employee’s action or omission was in the best interests
of the Company;

 

(iii)                               Employee’s incurable breach of any material
element of any proprietary or confidential information agreement with the
Company;

 

(iv)                              Employee’s conduct that is materially
detrimental to Company’s business reputation or goodwill;

 

(v)                                 Any dishonesty in dealing between Employee
and Company or between Employee and Company’s vendors, advisors, other
employees, or customers;

 

(vi)                              Employee’s active use of alcohol or controlled
substances in a manner which impairs Employee’s ability to perform his duties;

 

(vii)                           Employee’s violation of any material portion of
this Agreement;

 

(viii)                        Employee’s failure to substantially perform his
material duties, which failure is not cured within thirty (30) days after
Employee’s receipt of written notice from Company specifying the
non-performance.

 

In no event shall Employee’s death or disability (as defined below) constitute
Good Cause.  “Disability” shall mean Employee’s failure or inability, for
reasons of health, to perform Employee’s usual and customary duties on behalf of
the Company in the usual and customary manner for a total of more than 90
consecutive business days (excluding Saturdays, Sundays and days during which
the Company is closed due to a recognized holiday).

 

(b)                                 The termination of employment with the
Company by Employee for Good Reason.  Such termination shall be accomplished by,
and effective upon, Employee giving written notice to the Company of his
decision to terminate.  “Good Reason” shall mean a good faith determination by
Employee, in Employee’s sole and absolute judgment that any one or more of the
following events has occurred on or after the date of the Change of Control
without the Employee’s express written consent:

 

(i)                                     A change in Employee’s reporting
responsibilities, titles or offices as in effect immediately prior to the date
of the Change of Control, or any removal of Employee from or any failure to
re-elect Employee to any of such

 

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positions, which has the effect of diminishing Employee’s responsibility or
authority;

 

(ii)                                  A reduction in Employee’s base salary in
effect immediately prior to the date of the Change of Control;

 

(iii)                               Requiring Employee to move to or work from a
location that is outside of a fifty (50) mile radius of Employee’s job location
on the date of the Change of Control;

 

(iv)                              Without the adoption of a replacement plan,
program or arrangement that provides benefits to Employee that are equal to or
greater than those benefits that are discontinued or adversely affected:

 

(A)                              The Company’s failure to continue in effect,
within its maximum stated term, any pension, bonus, incentive, stock ownership,
stock purchase, stock option, life insurance, health, accident, disability, or
any other employee compensation or benefit plan, program or arrangement, in
which Employee is participating immediately prior to the date of the Change of
Control; or

 

(B)                                The Company taking any action that would
adversely affect Employee’s participation or materially reduce Employee’s
benefits under any of such plans, programs or arrangements; or

 

(v)                                 Any material breach by the Company of this
Agreement so long as Employee has given the Company thirty (30) days notice of
such breach, and the Company has not cured the breach during that thirty (30)
day period.

 

Termination for “Good Reason” shall not include Employee’s death or a
termination of employment by Employee for any reason other than the events
specified in clauses (1) through (5) above.

 

4.                                       Compensation and Benefits.  Subject to
the limitations contained in Section 5 below, upon a Change of Control
Termination, Employee shall be entitled to the following compensation and
benefits:

 

(a)                                  The Company shall pay to Employee:

 

(i)                                     Within five (5) days of the Change of
Control Termination, all salary and other compensation earned by Employee
through the date of the Change of Control Termination at the rate in effect
immediately prior to such Change of Control Termination;

 

(ii)                                  Within fifteen (15) days of the Change of
Control Termination, all other amounts to which Employee may be entitled to
receive under any

 

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compensation plan maintained by the Company, subject to any distribution
requirements contained in such compensation plans; and

 

(iii)                               A severance benefit in a single lump sum
payment, an aggregate amount equal to one hundred percent (100%) of Employee’s
then current annual base salary.

 

(b)                                 The Company shall provide, at no cost to
Employee, continued coverage under the Company’s group life, health or dental
benefit plans, if any, at a level comparable to the benefits which Employee was
receiving or entitled to receive immediately prior to the Change of Control
Termination or, if greater, at a level comparable to the benefits which Employee
was receiving immediately prior to the event which constituted Good Reason. 
Employee shall be entitled to such continued coverage for a six month period
following such Change of Control Termination or, if earlier, until Employee is
eligible to be covered for such benefits through his employment with another
employer.  The Company may, in its sole discretion, provide such coverage
through the purchase of individual insurance contracts for Employee.

 

5.                                       Payment of Attorneys Fees and Other
Costs.  If, after a Change in Control of the Company, a good faith dispute
arises with respect to the enforcement of Employee’s rights under this Agreement
or if any legal or arbitration proceeding shall be brought in good faith to
enforce or interpret any provision contained herein or to recover damages for
breach hereof, Employee shall recover from the Company (a) reasonable attorneys’
fees and necessary costs and disbursements incurred by Employee as a result of
such dispute or such legal or arbitration proceeding, and (b) prejudgment
interest on any money judgment or arbitration award obtained by Employee
calculated at the prime rate announced from time to time by Wells Fargo Bank
Minnesota, N. A., or the maximum rate permitted under Section 280G(d)(4) of the
Internal Revenue Code of 1986, as amended, or any successor provision, whichever
rate is lower, such prejudgment interest to be paid from the date that payments
to Employee should have been made under this Agreement.

 

6.                                       Withholding Taxes. The Company shall be
entitled to deduct from all payments or benefits provided for under this
Agreement any federal, state or local income and employment related taxes
required by law to be withheld with respect to such payments or benefits.

 

7.                                       Successors and Assigns.  This Agreement
shall inure to the benefit of and shall be enforceable by Employee, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.  The Company
will require the transferee of any sale of all or substantially all of the
business and assets of the Company or the survivor of any merger, consolidation
or other transaction expressly to agree to honor this Agreement in the same
manner and to the same extent that the Company would be required to perform this
Agreement if no such event had taken place.  Failure of the Company to obtain
such agreement before the effective date of such event shall be a breach of this
Agreement and shall entitle Employee to the benefits provided in Section 4 as if
Employee had terminated employment for Good Reason following a Change in
Control.

 

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8.                                       Notices.  For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.  All notices
to the Company shall be directed to the attention of the Board of Directors of
the Company.

 

For Ciprico:

 

17400 Medina Road

 

 

Plymouth, MN 55447

 

 

 

For Employee:

 

3234 Wind River Circle

 

 

Westlake Village, CA 91362

 

9.                                       Captions.  The headings or captions set
forth in this Agreement are for convenience only and shall not affect the
meaning or interpretation of this Agreement.

 

10.                                 Governing Law.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Minnesota.

 

11.                                 Construction.  Wherever possible, each term
and provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law.  If any term or provision of this
Agreement is invalid or unenforceable under applicable law, (a) the remaining
terms and provisions shall be unimpaired, and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
unenforceable term or provision.

 

12.                                 Amendment; Waivers.  This Agreement may not
be modified, amended, waived or discharged in any manner except by an instrument
in writing signed by both parties hereto.  The waiver by either party of
compliance with any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any other provision of this Agreement, or
of any subsequent breach by such party of a provision of this Agreement.

 

13.                                 Entire Agreement.  This Agreement supersedes
all prior or contemporaneous negotiations, commitments, agreements (written or
oral) and writings between the Company and Employee with respect to the subject
matter hereof and constitutes the entire agreement and understanding between the
parties hereto.  All such other negotiations, commitments, agreements and
writings will have no further force or effect, and the parties to any such other
negotiation, commitment, agreement or writing will have no further rights or
obligations thereunder.

 

14.                                 Counterparts.  This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

 

CIPRICO INC.

 

 

 

 

 

By:

/s/ James W. Hansen

 

 

Its:

President / CEO

 

 

 

/s/ Donald L. McDonell

 

 

Donald L. McDonell

 

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