Exhibit 10.12
March ___, 2006
CHANGE OF CONTROL AGREEMENT
Dear ___:
     The Board of Directors believes that it is in the best interests of Matrixx
Initiatives, Inc. (“Matrixx”), and its shareholders to take appropriate steps to
allay any concerns you may have about your future employment opportunities with
Matrixx and its subsidiaries (Matrixx and its subsidiaries are collectively
referred to as the “Company”). As a result, the Board has decided to offer to
you the benefits described below.
     Please bear in mind that these benefits are being offered only to a few,
selected employees and we ask you to refrain from discussing this program with
others. Also, please note that the benefits described below will only be
effective if you sign the extra copy of this Change of Control Agreement (the
“Agreement”) and return it to me on or before ___, 2006.
     1. TERM OF AGREEMENT.
     This Agreement is effective immediately and will continue in effect as long
as you are actively employed by Matrixx, unless you and Matrixx agree in writing
to its termination.
     2. SEVERANCE PAYMENT.
     If your employment with the Company is terminated without “Cause” (as
defined in Section 6) at any time within one (1) year following a “Change of
Control” (as defined in Section 4), you will receive the “Severance Payment”
described below. You will also receive the Severance Payment if you terminate
your employment for “Good Reason” (as defined in Section 5) at any time within
one (1) year following a Change of Control.
     The Severance Payment equals one times the sum of (a) your Base Salary in
effect for the fiscal year immediately prior to the fiscal year in which
termination of employment occurs, plus (b) the average of the annual incentive
bonuses paid to you for the two fiscal years immediately preceding the fiscal
year in which the Change of Control occurs (or, if less than two, the amount of
your single annual incentive bonus, if any).
     The Severance Payment will be paid to you in one lump sum on the first day
of the seventh month following your termination of employment; provided that if
you die before you receive the above payment, the Company will distribute the
benefits to your beneficiary as soon as administratively feasible following the
date of your death.
     You are not entitled to receive the Severance Payment if your employment is
terminated for Cause, if you terminate your employment without Good Reason, or
if your employment is terminated by reason of your “Disability” (as defined in
Section 7) or your death. In addition, you are not entitled to receive the
Severance Payment if your employment is terminated by you or the Company for any
or no reason before a Change of Control occurs or more than one (1) year after a
Change of Control has occurred.

 

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     You will receive the Severance Payment only if you execute a release
agreement reasonably requested by the Company.
     The Severance Payment will be paid to you without regard to whether you
look for or obtain alternative employment following your termination of
employment with the Company.
     3. BENEFITS CONTINUATION.
     If you timely elect to receive (and you are otherwise eligible to receive)
continuation of the Company’s group health plan coverage under the COBRA, the
Company will pay the portion of the employer’s share of the cost of your premium
for 18 months of the COBRA coverage period (in accordance with any premium
cost-sharing arrangement in effect as of the date of termination).
     The benefits you are entitled to receive under this Section 3 will be
reduced or eliminated if, and to the extent that, you receive comparable
benefits from any other source (for example, another employer); provided,
however, you have no obligation to seek, solicit, or accept employment from
another employer to receive these benefits.
     4. CHANGE OF CONTROL DEFINED .
     For purposes of this Agreement, the term Change of Control means and will
be deemed to have occurred if:
          (a) any “person” (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any
successor provision thereto) becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act or any successor provision thereto) directly
or indirectly of securities of the Company representing 15% or more of the
combined voting power of the Company’s then outstanding securities ordinarily
having the right to vote at an election of directors; provided, however, that,
for this purpose, “person” excludes the Company, any person acquiring such
securities directly from the Company, any employee benefit plan sponsored by the
Company or from you or any stockholder beneficially owning more than 15% or more
of the combined voting power of the Company’s outstanding securities as of the
date of this Agreement; or
          (b) any stockholder of the Company beneficially owning 15% or more of
the combined voting power of the Company’s outstanding securities as of the date
of this Agreement shall becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the
Company (other than through the acquisition of securities directly from the
Company or from you) representing 20% or more of the combined voting power of
the Company’s then outstanding securities ordinarily having the right to vote at
an election of directors; or

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          (c) individuals who, as of the date of this Agreement, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least 80% of
the Board, provided however, that any person becoming a member of the Board
subsequent to the date of this Agreement whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least 80%
of the members then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of
directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act or any successor provisions thereto) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board; or
          (d) approval by the stockholders of the Company and consummation of a
reorganization, merger, consolidation, or sale or other disposition of all or
substantially all of the assets of the Company, in each case, with or to a
corporation or other person or entity of which persons who were the stockholders
of the Company immediately prior to such transaction do not, immediately
thereafter, own more than 80% of the combined voting power of the outstanding
voting securities entitled to vote generally in the election of directors of the
reorganized, merged, consolidated or purchasing corporation (or in the case of a
non-corporate person or entity, functionally equivalent voting power) and 80% of
the members of the Board of which corporation (or functional equivalent in the
case of a non-corporate person or entity) were not members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger, consolidation or sale.
     5. GOOD REASON DEFINED.
     For purposes of this Agreement, the term “Good Reason” means the occurrence
of any of the following: (a) your compensation is reduced by the Company;
(b) your function, duties and/or responsibilities are significantly reduced so
as to cause your position with the Company to become of materially less dignity,
responsibility and/or importance than those associated with your functions,
duties and/or responsibilities immediately before the Change of Control; or
(c) if more than once during the term of this Agreement, you are required by the
Company permanently to relocate your residence or the Company’s principal
business office is relocated more than 60 miles away from its then current
location.
     6. CAUSE DEFINED.
     For purposes of this Agreement, the term “Cause” means the occurrence of
any of the following: (a) your gross and willful misconduct which results in
material injury to the Company; (b) your engaging in fraudulent conduct with
respect to the Company’s or any of its affiliates’ business or in conduct of a
criminal nature that may have an adverse impact on the Company’s or any of its
affiliates’ standing and reputation; (c) the material failure or refusal by you
to perform the duties required of you by the Board of Directors, which
inappropriate failure or refusal is not be cured within 30 days following
receipt by you of written notice from the Board specifying the factors or events
constituting such failure or refusal; (d) your use of drugs and/or alcohol in
violation of then current Company policies; or (e) the material breach of your
obligation to devote substantially all of your business time, attention, skill,
and efforts to the faithful performance of your duties, which is not be cured
within 30 days after written notice to you from the Board.

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     At the Board’s sole discretion, you may be placed on a paid or unpaid
administrative leave of absence for a reasonable period of time if it is
necessary to confirm that reasonable grounds exist for a termination for Cause,
for example, pending the outcome of any dispute resolution procedure or any
criminal charges. During this leave, the Board may bar your access to the
Company’s offices or facilities or may provide you with access subject to terms
and conditions as the Board chooses to impose. In any event, you or the Board
may utilize the dispute resolution procedures contained in Section 15 to
challenge or confirm, as the case may be, a termination for Cause.
     7. DISABILITY DEFINED.
     For purposes of this Agreement, your suffering from a “Disability” means
that you are physically or mentally incapacitated so as to render you incapable
of performing the essential functions of your position with the Company for a
period of more than ninety (90) consecutive days or one hundred twenty
(120) aggregate days in any twelve (12)-month period, with or without reasonable
accommodation by the Company. Your receipt of disability benefits under any
long-term disability plan of the Company or receipt of other long-term
disability benefits shall be deemed conclusive evidence of your having a
Disability for purposes of this Agreement; provided, however, that in the
absence of your receipt of any such long-term disability benefits, the Company
may, in its reasonable discretion (but based upon appropriate medical evidence),
determine that you have a Disability.
     8. TERMINATION NOTICE AND PROCEDURE.
     Any termination by the Company or you of your employment shall be
communicated by written Notice of Termination to you if such Notice of
Termination is delivered by the Company and to the Company if such Notice of
Termination is delivered by you, all in accordance with the following
procedures:
          (a) The Notice of Termination shall indicate the specific termination
provision of this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated; and
          (b) Any Notice of Termination by the Company shall be in writing
signed by an executive officer of Matrixx (or an executive officer of any parent
or successor company or successor to the business of Matrixx following a Change
of Control) specifying in detail the basis for such termination.
     9. SUCCESSORS.
     Matrixx will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Matrixx or any of its subsidiaries to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Matrixx or any subsidiary would be required to perform it if no such
succession had taken place.

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     10. BINDING AGREEMENT.
     This Agreement shall inure to the benefit of and be enforceable by you and
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you die while any amount is
payable to you hereunder had you continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or, if there is no such
designee, to your estate.
     11. NOTICE.
     For purposes of this Agreement, notices and all other communications
provided for in this 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, provided
that all notices to Matrixx shall be directed to the attention of the Chief
Executive Officer of Matrixx with a copy to the Secretary of Matrixx, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change in address shall be effective
only upon receipt.
     12. MISCELLANEOUS.
     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by you
and the Chief Executive Officer of Matrixx. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Arizona without regard
to its conflicts of law principles. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal, state or local
law. The obligations of Matrixx that arise prior to the expiration of this
Agreement shall survive the expiration of the term of this Agreement.
     13. VALIDITY.
     The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

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     14. COUNTERPARTS.
     This Agreement may be executed in several counterparts, each of which shall
he deemed to be an original but all of which together will constitute one and
the same instrument.
     15. ALTERNATIVE DISPUTE RESOLUTION.
     If there is a dispute between the Company and you concerning the terms of
this Agreement, the dispute will be resolved by binding arbitration in
accordance with the National Rules for the Resolution of Labor Disputes
(“Rules”) administered by the American Arbitration Association (“AAA”). This
arbitration will be held in the AAA office located nearest the Company’s
headquarters. The provisions of the Rules are incorporated as a part of this
Agreement; provided, however, that (i) the Company or you must initiate
arbitration within one year from the date any claim accrues; and (ii) either
party may seek injunctive relief in court to avoid irreparable injury during the
pendency or arbitration proceedings. IT IS EXPRESSELY UNDERSTOOD THAT BY SIGNING
THIS AGREEMENT, WHICH INCORPORATES BINDING ARBITRATION, THE COMPANY AND YOU
AGREE, EXCEPT AS OTHERWISE PROVIDED ABOVE, TO WAIVE COURT OR JURY TRIAL TO THE
FULLEST EXTENT PERMITTED BY LAW AND TO WAIVE PUNITIVE, STATUTORY, CONSEQUENTIAL,
AND ANY DAMAGES, OTHER THAN COMPENSATORY DAMAGES.
     16. ENTIRE AGREEMENT.
     This Agreement set forth the entire agreement between you and the Company
concerning the subject matter discussed in this Agreement and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations, or warranties, whether written or oral, by any officer,
employee or representative of the Company. Any prior agreements or
understandings with respect to the subject matter set forth in this Agreement
are hereby terminated and canceled.
     17. PARTIES.
     This Agreement is an agreement between you and Matrixx. In certain cases,
though, obligations imposed upon Matrixx may be satisfied by a subsidiary of
Matrixx. Any payment made or action taken by a subsidiary of Matrixx shall be
considered to be a payment made or action taken by Matrixx for purposes of
determining whether Matrixx has satisfied its obligations under this Agreement.
     18. SECTION 409A OF THE CODE.
     If any payments under this Agreement are subject to the provisions of
Section 409A of the Code, both you and the Company agree that this Agreement
will comply fully with and meet all the requirements of Section 409A of the
Code.

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     If you would like to participate in this special benefits program, please
sign and return the extra copy of this Agreement.

            Sincerely,

MATRIXX INITIATIVES, INC.
      By:         Name:         Its:        

Enclosure
ACCEPTANCE
     I hereby accept the offer to participate in this special benefits program
and I agree to be bound by all of the provisions noted above.

         
Dated:
         
 
       
 
  Signature    
 
       
 
       
 
  Name  

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