Exhibit 10.22
ADEZA BIOMEDICAL CORPORATION
AMENDED AND RESTATED
MANAGEMENT CONTINUITY AGREEMENT
     This Amended and Restated Management Continuity Agreement (the “Agreement”)
is dated as of January 12, 2007, by and between Durlin E. Hickok (“Employee”)
and Adeza Biomedical Corporation., a Delaware corporation (the “Company” or
“Adeza”). This Agreement amends sections 2(b)(i) – (iv) and section 5(a) of the
Management Continuity Agreement entered into by and between Employee and the
Company on October 21, 2004. This Agreement is intended to provide Employee with
certain benefits described herein upon the occurrence of specific events.
RECITALS
     A. It is expected that another company may from time to time consider the
possibility of acquiring the Company or that a change in control may otherwise
occur, with or without the approval of the Company’s Board of Directors. The
Board of Directors recognizes that such consideration can be a distraction to
Employee and can cause Employee to consider alternative employment
opportunities. The Board of Directors has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication and objectivity of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company.
     B. The Company’s Board of Directors believes it is in the best interests of
the Company and its stockholders to retain Employee and provide incentives to
Employee to continue in the service of the Company.
     C. The Board of Directors further believes that it is imperative to provide
Employee with certain benefits upon a Change of Control and, under certain
circumstances, upon termination of Employee’s employment, which benefits are
intended to provide Employee with financial security and provide sufficient
income and encouragement to Employee to remain with the Company, notwithstanding
the possibility of a Change of Control.
     D. To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by Employee, to agree to
the terms provided in this Agreement.
     Now therefore, in consideration of the mutual promises, covenants and
agreements contained herein, and in consideration of the continuing employment
of Employee by the Company, the parties hereto agree as follows:
     1. At-Will Employment. The Company and Employee acknowledge that Employee’s
employment is and shall continue to be at-will, as defined under applicable law,
and that Employee’s employment with the Company may be terminated by either
party at any time for any or no reason. If Employee’s employment terminates for
any reason, Employee shall not be entitled to any payments, benefits, award or
compensation other than as provided in this Agreement. The terms of this
Agreement shall terminate upon the earlier of (i) the date on which Employee
ceases to be employed as an executive corporate officer of the Company, other
than as a result of an involuntary termination by the Company without Cause (as
defined below) or Employee’s resignation for Good Reason (as defined below); or
(ii) the date that all obligations of the parties hereunder have been satisfied.
A termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement. The rights and duties created by this Section 1 may not be
modified in any way except by a written agreement executed by an officer of the
Company upon direction from the Board of Directors.
     2. Benefits Upon a Change of Control; Termination of Employment.
          (a) Treatment of Stock Options and Other Equity Awards Upon a Change
of Control. In the event of a Change of Control and regardless of whether
Employee’s employment with the Company is terminated in connection with the
Change in Control, the vesting of each stock option and other equity award to
purchase the Company’s

 

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Common Stock granted to Employee over the course of his employment with the
Company and held by Employee on the effective date of a Change of Control shall
accelerate such that 50% of the aggregate number of unvested option shares and
other equity awards shall become immediately vested immediately prior to the
effective date of the Change of Control, with the vesting acceleration applied
with respect to each outstanding option or equity award in the order in which
the award was granted. Each such option and equity award shall be exercisable in
accordance with the provisions of the agreement and plan pursuant to which such
option or award was granted.
          (b) Termination Following a Change of Control. In the event that
Employee’s employment is terminated as a result of an involuntary termination
other than for Cause or if Employee resigns for Good Reason at any time within
12 months following the effective date of a Change of Control, then Employee
will be entitled to receive severance benefits as follows: (i) severance
payments during the period from the date of Employee’s termination until the
date 18 months after the effective date of the termination (the “Severance
Period”) equal to the base salary which Employee was receiving immediately prior
to the Change of Control, which payments shall be paid during the Severance
Period in accordance with the Company’s standard payroll practices, (ii) a lump
sum payment as soon as practicable after the date of termination of employment
equal to 150% of the bonus payment made to Employee for the Company’s fiscal
year prior to the Company’s fiscal year in which the termination occurs, (iii) a
lump sum payment as soon as practicable after the date of termination of
employment equal to a pro-rata portion of the bonus payment made to Employee for
the Company’s fiscal year prior to the Company’s fiscal year in which the
termination occurs based on the number of completed months of Employee’s
employment during such fiscal year; (iv) continuation of the health insurance
benefits provided to Employee immediately prior to the Change of Control at
Company expense pursuant to the terms of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) or other applicable law through
the earlier of the end of the Severance Period or the date upon which Employee
is no longer eligible for such COBRA or other benefits under applicable law; and
(v) each stock option and equity award to purchase the Company’s Common Stock
granted to Employee over the course of his employment with the Company and held
by Employee on the date of termination of employment shall become immediately
vested on such date as to that number of shares that would have vested in
accordance with the terms of such option or equity award as of the date
12 months after the date of termination of employment (assuming that Employee
had remained an employee of the Company for 12 months after the date of
termination of employment). Each such option and equity award shall be
exercisable in accordance with the provisions of the agreement and plan pursuant
to which such option or award was granted, provided however that the vested
shares underlying an equity award granted on or after July 23, 2004, shall
remain exercisable for a period of eighteen (18) months following Employee’s
termination date (but not later than the expiration date of the award as set
forth in the applicable award agreement). In addition, Employee will receive
payment(s) for all salary, bonuses and unpaid vacation accrued as of the date of
Employee’s termination of employment.
          (c) Termination Not Following a Change of Control. In the event that
Employee’s employment is terminated as a result of an involuntary termination
other than for Cause or if Employee resigns for Good Reason at any time prior to
or more than 12 months following the effective date of a Change of Control, then
Employee will be entitled to receive severance benefits as follows:
(i) severance payments during the period from the date of Employee’s termination
until the date 6 months after the effective date of the termination (the
“Benefit Period”) equal to the base salary which Employee was receiving
immediately prior to the Change of Control, which payments shall be paid during
the Benefit Period in accordance with the Company’s standard payroll practices,
(ii) a lump sum payment as soon as practicable after the date of termination of
employment equal to 25% of the bonus paid to Employee for the Company’s fiscal
year prior to the Company’s fiscal year in which the termination occurs, and
(iii) continuation of the health insurance benefits provided to Employee
immediately prior to the Change of Control at Company expense pursuant to COBRA
or other applicable law through the earlier of the end of the Benefit Period or
the date upon which Employee is no longer eligible for such COBRA or other
benefits under applicable law. In addition, Employee will receive payment(s) for
all salary, bonuses and unpaid vacation accrued as of the date of Employee’s
termination of employment.
          (d) Termination for Cause. If Employee’s employment is terminated for
Cause at any time, then Employee shall not be entitled to receive payment of any
severance benefits. Employee will receive payment(s) for all salary, bonuses and
unpaid vacation accrued as of the date of Employee’s termination of employment
and Employee’s benefits will be continued under the Company’s then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of termination and in accordance with applicable law.
          (e) Voluntary Resignation other than for Good Reason. If Employee
voluntarily resigns from the Company for any reason other than Good Reason, then
Employee shall not be entitled to receive payment of any severance benefits.
Employee will receive payment(s) for all salary, bonuses and unpaid vacation
accrued as of the date of Employee’s

 

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termination of employment and Employee’s benefits will be continued under the
terms of the Company’s then existing benefit plans and policies in accordance
with such plans and policies in effect on the date of termination and in
accordance with applicable law.
     3. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
          (a) Change of Control. “Change of Control” shall mean the occurrence
of any of the following events:
               (i) Ownership. Any “Person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or
becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company’s then outstanding voting
securities without the approval of the Board;
               (ii) Merger/Sale of Assets. A merger or consolidation of the
Company whether or not approved by the Board, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets; or
               (iii) Change in Board Composition. A change in the composition of
the Board, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either
(A) are directors of the Company as of August 1, 2004 or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but an Incumbent Director shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company).
          (b) Cause. “Cause” for termination of Employee’s employment will exist
if Employee is terminated by the Company, for any of the following reasons, as
determined in good faith by the Company: (i) Employee’s gross negligence or
willful failure substantially to perform his duties and responsibilities to the
Company or deliberate violation of a Company policy; (ii) Employee’s commission
of any act of fraud, embezzlement, dishonesty or any other willful misconduct
that has caused or is reasonably expected to result in material injury to the
Company; (iii) unauthorized use or disclosure by Employee of any proprietary
information or trade secrets of the Company or any other party to whom the
Employee owes an obligation of nondisclosure as a result of his relationship
with the Company; or (iv) Employee’s willful breach of any of his obligations
under any written agreement or covenant with the Company.
          (c) Good Reason. “Good Reason” for Employee’s resignation of his
employment will exist if Employee tenders his resignation to the Company with
30 days prior written notice to the Company within 120 days of the occurrence of
any of the following events: (i) a material reduction in the Employee’s job
responsibilities, as of immediately prior to the Change of Control for purposes
of Section 2(b) above and as of immediately prior to the termination date for
purposes of Section 2(c) above; (ii) relocation by the Company of the Employee’s
work site which has the effect of increasing Employee’s then-current commute by
more than 50 miles; (iii) any reduction in Employee’s then-current base salary
and/or target bonus (other than in connection with a general decrease in the
base salaries and target bonus for all other executives of the Company); (iv) a
material reduction in Employee’s benefits (other than a general decrease in the
benefit programs offered to all other executives of the Company); or (v) the
Company’s failure to obtain agreement from any acquiror or successor to assume
the Company’s obligations under this Agreement.
     4. Parachute Payments. In the event that the severance and other benefits
provided for in this Agreement to Employee (the “Benefit”), determined without
regard to any additional payment required under this section 4, would
(i) constitute “parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), and (ii) be subject to
the excise tax imposed by Section 4999 of the Code or any interest or penalties
payable with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then Employee shall be entitled to receive from the Company an additional
payment (the

 

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“Gross-Up Payment”) in an amount sufficient to reimburse Employee for both
(A) such Excise Tax, and (B) the income, excise, employment and any other taxes
imposed on the Gross Up Payment provided under this Section 4. The accounting
firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the Change of Control shall perform the foregoing
calculations. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and to Employee within fifteen (15) calendar days after the date on which
Employee’s right to the Benefit is triggered (if requested at that time by the
Company or by Employee) or such other time as requested by the Company or by
Employee. If the accounting firm determines that no Excise Tax is payable with
respect to the Benefit, it shall furnish the Company and Employee with an
opinion reasonably acceptable to Employee that no Excise Tax will be imposed
with respect to such Benefit. Any good faith determinations of the accounting
firm made hereunder shall be final, binding and conclusive upon the Company and
Employee.
          5. Limitations and Conditions on Benefits
     (a) Income and Employment Taxes. Employees agrees that he shall be
responsible for any applicable taxes of any nature (including any penalties or
interest that may apply to such taxes) that the Company reasonably determines
apply to any payment made hereunder, that his receipt of any benefit hereunder
is conditioned on his satisfaction of any applicable withholding or similar
obligations that apply to such benefit, and that any cash payment owed hereunder
will be reduced to satisfy any such withholding or similar obligations that may
apply. Notwithstanding any provision of this Agreement to the contrary, if, at
the time of Employee’s termination of employment, he is a “specified employee”
as defined in Code Section 409A, and one or more of the payments or benefits
received or to be received by Employee pursuant to this Agreement would
constitute deferred compensation subject to Code Section 409A, no such payment
or benefit will be provided under the Agreement until the earliest of (A) the
date which is six (6) months after Employee’s “separation from service” for any
reason, other than death or “disability” (as such terms are used in
Section 409A(a)(2) of the Code), (B) the date of Employee’s death or
“disability” (as such term is used in Section 409A(a)(2)(C) of the Code), or
(C) the effective date of a “change in the ownership or effective control” or a
“change in ownership of a substantial portion of the assets” of the Company (as
such terms are used in Section 409A(a)(2)(A)(v) of the Code). The provisions of
this Section 5(a) shall only apply to the extent required to avoid Employee’s
incurrence of any penalty tax or interest under Code Section 409A or any
regulations or Treasury guidance promulgated thereunder. In addition, if any
provision of the Agreement would cause Employee to incur any penalty tax or
interest under Code Section 409A or any regulations or Treasury guidance
promulgated thereunder, the Company may reform such provision to maintain to the
maximum extent practicable in accordance with the original intent of the
applicable provision without violating the provisions of Code Section 409A,
including without limitation to limit payment or distribution of any amount of
benefit hereunder in connection with a change of control to a transaction
meeting the definitions referred to in clause (C) above, or in connection with a
disability as referred to in (B) above.
     (b) Release Prior to Receipt of Benefits. Prior to the receipt of any
benefits under this Agreement, Employee shall execute a release of claims
agreement (the “Release”) in the form provided by the Company. Such Release
shall specifically relate to all of Employee’s rights and claims in existence at
the time of such execution and shall confirm Employee’s obligations under the
Company’s standard form of proprietary information agreement.
     6. Conflicts. Employee represents that his performance of all the terms of
this Agreement will not breach any other agreement to which Employee is a party.
Employee has not, and will not during the term of this Agreement, enter into any
oral or written agreement in conflict with any of the provisions of this
Agreement. Employee further represents that he is entering into or has entered
into an employment relationship with the Company of his own free will and that
he has not been solicited as an employee in any way by the Company.
     7. Successors. Any successor to the Company (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company’s business and/or assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of Employee’s rights hereunder
and thereunder shall inure to the benefit of, and be enforceable by, Employee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

 

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     8. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to Employee shall be
addressed to Employee at the home address which Employee most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
     9. Miscellaneous Provisions.
          (a) No Duty to Mitigate. Employee shall not be required to mitigate
the amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that Employee may receive from any other source.
          (b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Employee and by an authorized officer of the Company
(other than Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
          (c) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. This Agreement supersedes any agreement
concerning similar subject matter dated prior to the date of this Agreement, and
by execution of this Agreement both parties agree that any such predecessor
agreement shall be deemed null and void.
          (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.
          (e) Severability. If any term or provision of this Agreement or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions of this Agreement or the application of such terms and provisions to
circumstances other than those as to which it is held invalid or unenforceable,
and a suitable and equitable term or provision shall be substituted therefor to
carry out, insofar as may be valid and enforceable, the intent and purpose of
the invalid or unenforceable term or provision.
          (f) Arbitration. Employee and the Company agree to attempt to settle
any disputes arising in connection with this Agreement through good faith
consultation. In the event that Employee and the Company are not able to resolve
any such disputes within fifteen (15) days after notification in writing to the
other, Employee and the Company agree that any dispute or claim arising out of
or in connection with this Agreement will be finally settled by binding
arbitration in Santa Clara County, California in accordance with the rules of
the American Arbitration Association by one arbitrator mutually agreed upon by
the parties. The arbitrator will apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. Except as set forth in Subparagraph (e) above, the arbitrator
shall not have authority to modify the terms of this Agreement. The Company
shall pay the costs of the arbitration proceeding. Each party shall, unless
otherwise determined by the arbitrator, bear its or his own attorneys’ fees and
expenses, provided however that if Employee prevails in an arbitration
proceeding, the Company shall reimburse Employee for his reasonable attorneys’
fees and costs. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the
Company and Employee may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance
with this paragraph, without breach of this arbitration provision.
          (g) Legal Fees and Expenses. The parties shall each bear their own
expenses, legal fees and other fees incurred in connection with the execution of
this Agreement.
          (h) No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation

 

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of law, including (without limitation) bankruptcy, garnishment, attachment or
other creditor’s process, and any action in violation of this Section 10(h)
shall be void.
          (i) Assignment by Company. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company. In the
case of any such assignment, the term “Company” when used in a section of this
Agreement shall mean the corporation that actually employs the Employee.
          (j) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
     The parties have executed this Agreement on the date first written above.

                  ADEZA BIOMEDICAL CORPORATION.    
 
           
 
  By:   /s/ Mark D. Fischer-Colbrie
 
   
 
           
 
  Title:   Chief Financial Officer    
 
                Address: 1240 Elko Drive    
 
      Sunnyvale, California 94089    
 
                DURLIN E. HICKOK    
 
           
 
  Signature:   /s/ Durlin E. Hickok
 
   
 
                Address: 1240 Elko Drive    
 
      Sunnyvale, California 94089