Exhibit 10.28

 

MOORE MEDICAL CORP.

 

2003 – 2004 CHANGE OF CONTROL AND POSITION PAYMENT PLAN

 

1. Purpose

 

The plan is designed to offer an incentive to participants to continue in the
Company’s employ by providing for severance payments in the event of certain
terminations of employment following a Change of Control.

 

2. Eligibility

 

The participants under this plan are the key employees of the Company entitled
to participate pursuant to their employment agreements with the Company or
otherwise selected as participants by the Compensation Committee of the Board of
Directors or the Board of Directors of the Company.

 

3. Severance Payment Conditions

 

(a) Severance will be payable to a participant only if there is a “Change of
Control” on or before December 31, 2004, followed within twelve months by a
termination of the participant’s employment with the Company (i) by the Company
without Cause or (ii) by the participant due to the participant’s Change of
Position.

 

(b) A “Change of Control” is:

 

(i) any merger or consolidation of the Company into or with another corporation
(other than a subsidiary of the Company) or entity, whether the acquirer is
privately-held or publicly-traded, unless, immediately thereafter, the holders
of common stock of the Company immediately prior thereto hold more than 50% of
the voting capital stock of such other corporation or the voting equity
interests of such entity, or

 

(ii) the acquisition by another person or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934), whether the acquirer is
privately-held or publicly traded, of beneficial ownership (as defined in Rule
13d-3 under said Act) of 50% or more of the common stock of the Company, or

 

(iii) the sale by the Company of substantially all of its assets, whether the
acquirer is privately-held or publicly traded, unless, immediately after such
sale, the holders of common stock of the Company immediately prior thereto hold
more than 50% of the voting capital stock of the acquiring corporation or, if
the acquiring person or entity is not a corporation, more than 50% of the voting
equity interests of such acquiring person or entity; or

 

(iv) the election or removal of directors constituting a majority of the
directors of the Company

 

(x) as a result of a solicitation subject to Rule 14a-11 (or successor Rule)
under the Securities Exchange Act of 1934 relating to the election removal of
directors, or

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(y) other than a result of the action of directors a majority of whom consist of
Continuing Directors;

 

(z) for purposes hereof, a “Continuing Director” means a director

 

(i) for whose election the Company solicited proxies pursuant to a proxy
statement under Regulation 14A of said Act, or

 

(ii) who was elected by action of the directors a majority of whom were elected
as described in clause (i) hereof, or

 

(iii) who was elected by action of directors a majority of whom were elected as
described in clause (i) and/or clause (ii) hereof.

 

(c) A participant’s “Change of Position” is a substantial change in his or her
duties. A participant will be considered to have had a substantial change in his
or her duties only if:

 

(v) the duties of the participant are materially diminished; or

 

(w) the participant’s base salary or bonus opportunity is reduced; or

 

(x) the principal place of employment by the Company of the participant is
changed to a location more than 75 miles travel from his or her residence; or

 

(y) the Company breaches any material term of an employment agreement between
the Company and the participant, if any; and

 

(z) within 90 days after the occurrence of any of the events referred to in
clause (x) or (y) of Section 3(c) hereof, he or she terminates his or her
employment by the Company.

 

(d) “Cause” means (i) a participant’s conviction of either a felony or of any
crime in connection with his employment by the Company; (ii) the willful and
continued failure of a participant to perform substantially his or her duties to
the Company (other than any such failure resulting from incapacity due to
physical or mental illness) after a written demand for substantial performance
is delivered to the participant by the Company, which specifically identifies
the manner in which the Company believes that the participant has not
substantially performed his or her duties and the participant has not cured to
the reasonable satisfaction of the Company any such failure that is capable of
being cured in all material respects within ten (10) days of receiving such
written demand; or (iii) the willful engaging by the participant in gross
misconduct that is materially injurious to the Company

 

4. Severance Amount; Etc.

 

Each participant’s severance amount will be an amount equal to the percentage of
the sum of participant’s annualized W-2 gross salary plus pro rata bonus, but
not including Company-401(k) contribution, car allowance, or other Company
provided benefits. Said percentage will be in accordance with the participant’s
employment agreement with the Company or otherwise as determined by the
Executive or Compensation Committee when it designates an employee as a
participant. For purposes hereof, the term “pro rata bonus” means the amount of
any bonus that the participant would have been entitled to as of the end of the
year of his termination pursuant to Section 3(c) hereof, assuming annualization
of the Company’s operating performance (as reported its quarterly reports on
Form 10-Q

 

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filed with the Securities and Exchange Commission for the quarter end next
following the date of a participant’s termination of employment), multiplied by
a fraction the numerator of which is the number of calendar days elapsed during
the year of termination to the date of termination and the denominator of which
is 365. Payment of severance amounts will be made within 45 days after the
quarter-end during which the two conditions described in paragraph 3(a), above,
occur. In no event shall the amount payable under this paragraph exceed an
amount which would (when aggregated with any other amounts which would be
subject to the Section 280G or Section 162(m) provisions hereinafter referred
to) result in any part of a payment otherwise to be made under this paragraph
constituting a “parachute payment” under Section 280G of the Internal Revenue
Code of 1986, as amended, or a payment which, pursuant to Section 162(m) of said
Code, would not be deductible by the Company as compensation for federal income
tax purposes.

 

5. Administration; Determinations

 

The plan will be administered by the Board’s Compensation Committee. All
interpretations and implementations of the plan by the Committee not expressly
inconsistent with the plan will be final and binding on the Company and all
participants. Neither this plan nor any participant’s rights or Company
obligations thereunder can be changed orally.

 

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