Exhibit 10.1


 


CHANGE IN CONTROL
AGREEMENT


 


THIS
CHANGE IN CONTROL AGREEMENT (the “Agreement”) is made and entered into
on the date hereinafter set forth by and between CREATIVE
COMPUTER APPLICATIONS, INC. (the “Company”) and                                     (the
“Employee”).


 


WHEREAS:


 


The Employee is an employee of the Company and is employed in the
capacity of VP, Operations; and


 


The Company wishes to incentivize the Employee in the
event of a Change in Control opportunity, as hereinafter defined, and to
encourage the Employee to participate in any Change in Control opportunity.


 


NOW,
THEREFORE, in consideration of the premises and promises, warranties and
representations herein contained, it is agreed as follows:


 


Change in Control.  As used
herein, a “Change in Control” shall mean any of the following
transactions or a series of related such transactions:


 


(a)                                  Merger or Consolidation. 
A merger or consolidation of the Company with any other entity, other
than (i) 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), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person or
entity acquires more than fifty percent (50%) of the combined voting power of
the Company’s then outstanding securities.


 


(b)                                 Sale of Assets. 
The sale or disposition by the Company of more than one-third (1/3rd) of
all of the Company’s assets other than to an affiliate or subsidiary;


 


(c)                                  Acquisition of 50% of Outstanding
Securities.  In any twelve (12) month period, if any
person or entity (other than a person or entity or its affiliates who
beneficially own any voting securities of the Company as of the date of this
Agreement) becoming the “beneficial owner” (as defined in Rule 13d-3 under the
Security Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Company representing Fifty Percent (50%) or more of the
combined voting power of the Company’s then outstanding securities; or


 


(d)                                 Change in Board of Directors. 
In any twelve (12) month period, if there is a change in the majority of
the Board of Directors of the Company (the “Board”) without the consent
of the pre-existing directors.


 


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The foregoing notwithstanding, a “Change in Control”
shall not include any transaction or series of related transactions (i) that
the Board determines are primarily for the purpose of providing financing for
the Company or (ii) immediately following which, in the judgment of the Board,
the holders (or their affiliates) of the Company’s capital stock immediately
prior to such transaction or series of transactions continue to have control in
any entity which owns all or substantially all of the assets of the Company.


 


Salary Continuation.  In the event
of a Change in Control where the Employee is not offered full-time employment
in a similar capacity as that existing before the Change in Control, or if the
Employee is terminated without Cause, or in the event the Employee resigns for
Good Reason, within one (1) year of the occurrence of a Change in Control, then
the Employee shall be entitled to a cash lump sum payment equal to twenty-four
(24) months of salary, at the then current rate of salary of the Employee, plus
bonus incentives existing as of the Change in Control event for the year of
termination.  In addition, the Employee
will be entitled to all accrued unpaid salary, vacation pay and expense
reimbursements, plus a pro rata share of any accrued incentive bonus based upon
actual performance for the year of termination up to the date of separation
from employment.  In addition, for a
period of twenty-four (24) months, the Employee may continue to participate in
any health and welfare benefit plans as allowed by law, with the Company
continuing to pay its share of the premiums as existed as of the date of
separation from employment.  This will
supercede and replace any other severance pay set forth in any agreement
between the Employee and the Company or in any Company policy.


 


“Cause”
will mean engaging in conduct which is materially injurious to the Company or
any of its affiliates, or any of their respective customers or supplier
relationships, financially or otherwise, and any willful breach of duty by the
Employee in the course of the Employee’s employment, continued violation of
written Company employment policies after a prior written notice of such
violation, conviction of a felony or any crime involving fraud, theft,
embezzlement, dishonesty or moral turpitude, engaging in activities which
defame the Company, or in the case of the performance of the Employee’s duties,
gross negligence resulting in material harm to the Company, or of the Employee’s
duty or continued incapacity to perform said duties.


 


“Good
Reason” will mean the occurrence of material breach of this Agreement by
the Company, which breach is not cured within fifteen (15) calendar days after
written notice thereof is received by the Company or in the event of a Change
in Control, a reduction of total compensation, benefits and perquisites, relocation
greater than fifty (50) miles, or a material changes in position or duties.


 


Payment Cap. 
Notwithstanding anything in the Agreement to contrary, if all or any
portion of the payments or benefits to be provided under this Agreement either
alone, or together with other payments or benefits which Employee is entitled
to receive from the Company, would constitute a “parachute payment,” as defined
under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
and the present value of such payments and benefits (but for the application of
this Section) exceeds 2.99 times the Employee’s “base amount” (as defined in Section 280G
of the Code), then the Employee shall irrevocably elect, by written notice to
the Company before payment would otherwise be required, to relinquish or not to
exercise all or any portion of the payments available to him under this
Agreement or under any plan, contract or program, in order to eliminate
therefrom any “excess parachute payment” as such term is defined in the Code
and regulations promulgated thereunder. 
For the purposes of this section “parachute


 


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payments” and “excess parachute payments” shall not
include amounts that are relinquished pursuant to the preceding sentence or
identified in the written opinion of independent tax counsel to the Company as
not constituting such an excess parachute payment (in whole or in part).  The Company shall bear all fees and expenses
of obtaining the opinion of the independent tax counsel referred to in this
Section.


 


No Obligation.  Nothing set
forth herein shall obligate the Company to consummate a transaction involving a
Change in Control.


 


Termination.  This
Agreement shall terminate and be of no further force or effect (except to the
extent that any obligation of the Company hereunder remains due and payable as
of such time) upon the first to occur of (a) termination of Employee’s
employment with the Company for any reason, whether voluntarily or involuntary,
prior to a Change in Control; (b) thirty-six (36) months from the date of a
Change in Control, or (c) December 31, 2006, whichever is earlier.


 


Effect on Employment Rights. 
This Agreement is not part of any employment agreement that the Company
and Employee may have entered into, and the terms of this Agreement supercede
and replace any severance pay or similar terms of any employment
agreement.  Nothing in this Agreement
shall confer upon Employee any right to continue in the employ of the Company,
alter or modify the “at will” nature of the Employee’s employment or interfere
with or restrict in any way the rights of the Company, which are hereby
expressly reserved, to terminate Employee’s employment at any time prior to or
following a Change in Control for any reason (except as provided in Sections
2, 3 and 4 above), with or without cause.  Upon termination of Employee’s employment
with the Company, for any reason, prior to the consummation of a Change in
Control, this Agreement shall terminate and Employee shall not be entitled to
any payment hereunder.


 


Tax Withholding.  The Company
shall be entitled to withhold, or require the withholding, from any payment
which it is required to make under this Agreement, any federal, state or local
taxes required by law to be withheld with respect to such payment or
forgiveness.


 


Arbitration.  Any dispute
arising out of or relating to this Agreement shall be finally settled by a
single arbitrator under the then existing Commercial Arbitration Rules of the
American Arbitration Association in arbitration proceedings conducted in Los
Angeles, California.  The arbitrator
shall have no power or authority in making his award to modify, enlarge or add
to the terms and provisions of this Agreement. Judgment upon the award of the
arbitrator shall be binding upon the parties and may be entered in any court
having jurisdiction.  Costs and attorneys’
fees shall be paid to the prevailing party as determined by the arbitrator.


 


Confidentiality.  Employee
agrees to keep the terms of this Agreement confidential.  If the Company, in its reasonable discretion,
determines that Employee failed to keep the terms of this Agreement
confidential, then the Company may terminate this Agreement without any having
any obligation owed or liability to Employee.


 


Notices.  All notices
and other communications provided for in this Agreement shall be given or made
by telecopy, certified or registered mail (return receipt requested), or
delivered personally or by a nationally recognized overnight courier service to
the address set forth below (or such


 


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other address as may be designated by a party to the
other party in writing).  All such
communications shall be deemed to have been duly given when transmitted by telecopier
(if a copy thereof is also mailed to the recipient, certified or registered
mail, postage prepaid), or personally delivered or delivered by or nationally
recognized overnight courier service, or five (5) days after mailing, postage
prepaid, to the address set forth below the applicable party’s signature on the
signature page of this Agreement.


 


Amendment; Waiver.  This
Agreement may not be amended or modified except in a writing signed by the
parties.  No waiver of any provisions of
this Agreement shall be deemed to, or shall, operate as a waiver of any other
provision, nor shall any waiver constitute a continuing waiver.  Except as expressly provided in this
Agreement, no waiver shall be binding unless executed in writing by the party
making the waiver.


 


Governing Law.  This
Agreement shall be governed and construed under the laws of the State of
California.


 


No Transfer by Employee.  Employee’s
rights and obligations under this Agreement shall not be transferable by
assignment or otherwise.  Nothing in this
Agreement shall prevent the consolidation of the Company with, or its merger
into, any other corporation, or the sale by the Company of all or substantially
all of its properties or assets.  This
Agreement shall inure to the benefit of, and be binding upon and be enforceable
by, any successor surviving or resulting corporation, or other entity to which
such assets shall be transferred.  This
Agreement shall not be terminated by the voluntary or involuntary dissolution
of the Company.


 


Entire Understanding.  This
Agreement embodies the entire understanding of the parties with respect to the
subject matter hereof, and there are no promises, terms, conditions, or
obligations, oral or written, express or implied, other than those contained
herein, with respect to such subject matter. 
Without limiting the generality of the foregoing, this Agreement
supercedes any other change in control or severance arrangements between the
Company and Employee.


 


Partial Invalidity.  If for any
reason any provision of this Agreement shall be determined to be inoperative or
invalid, the validity and effect of the other provisions hereof shall not be
affected thereby.


 


No Strict Construction.  The language
used in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against any person.


 


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


 


Effective Date.  This
Agreement shall be effective as of January 28, 2003, the date upon which
it was authorized by the Compensation Committee of the Company.


 


IN WITNESS WHEREOF,  the parties have executed this Agreement as
of the date first written above.


 


COMPANY:


 


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  CREATIVE COMPUTER APPLICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
  26115-A Mureau Road

  
	
   

  	
  Calabasas, CA 91302

  
	
   

  	
   

  
	
   

  	
  Telecopier: 818-880-4398

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name Typed or Printed

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  26115-A Mureau Road

  
	
   

  	
  Calabasas, CA 91302

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  
	
   

  	
  818-880-4398

  
							



 


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