EXHIBIT 10.1.2

CHANGE OF CONTROL AGREEMENT

Parties:

 

Ciprico Inc.

 

(“Company”)

 

 

17400 Medina Road

 

 

 

 

Plymouth, MN 55447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven Merrifield

 

 

(“Employee”)

 

 

 

 

 

 

 

 

 

 

Effective Date:

 

12/8/06

 

 

RECITALS:

1.             Employee has been employed by Company since 12/8/06 in various
capacities, has extensive knowledge and expertise relating to Company’s business
and has contributed to Company’s success.

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 intentional conduct that is materially detrimental to
Company’s business reputation or goodwill;

(v)           Any intentional 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 materially impairs Employee’s ability to perform his duties;

(vii)         Employee’s violation of any material portion of this Agreement;
which violation is not cured within thirty (30) days after Employee’s receipt of
written notice from Company specifying the violation.

(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:

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(i)            A material change in Employee’s reporting responsibilities,
titles or the like 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 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;

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(ii)           Within fifteen (15) days of the Change of Control Termination,
all other amounts to which Employee may be entitled to receive under any
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 total compensation (as
outlined in the offer letter to include base and bonus).

(iv)                                                                             
At the employees election all qualified and non-qualified options and restricted
stock may vest at the time of change in control.

(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 twelve 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

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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.

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, Suite 800

 

 

Plymouth, MN 55447

 

 

 

 

 

 

For Employee:

 

3325 Vintage Drive

 

 

Round Rock, TX 78664

 

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

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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.

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:

 

 

Its:

 

 

 

 

 

 

 

 

 

Employee

 

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