exv10w39



 



Exhibit 10.39



CHANGE OF CONTROL AGREEMENT


AGREEMENT made as of this 6th day of May, 2002, between Meridian Medical
Technologies, Inc., a Delaware corporation (hereinafter “the Company”), and
Carl J. Rebert (hereinafter “the Executive”).


     WHEREAS, the Company wishes to assure the continued availability of the
Executive’s services and to create an environment which will promote the
Executive’s giving impartial and objective advice in circumstances resulting
from the possibility of a Change of Control (as herein defined); and


     WHEREAS, the Company and the Executive wish to provide the Executive with
financial protection in the event significant changes in the Executive’s
employment status occur following a Change of Control.


     NOW, THEREFORE, the Company and the Executive, in consideration of the
terms and conditions set forth herein and other valuable consideration, receipt
and sufficiency of which are hereby acknowledged, mutually covenant and agree
as follows:


1.     Term.


     The term of this Agreement shall commence on the date hereof and terminate
on May 6, 2005 unless the Executive’s employment with the Company or a
subsidiary is sooner terminated prior to a Change of Control in which case it
will terminate upon the termination of the Executive’s employment (the “Term”),
provided, however, if a Change of Control occurs prior to May 6, 2005, then
this Agreement will terminate on the second anniversary of the Change of
Control.


2.     Payments Upon Change of Control and Termination Event.


     The Company (or after any assumption of the Company’s obligations
hereunder by a Successor Employer, the Successor Employer) shall make payments
to the Executive as provided for in paragraph 4 hereof upon the occurrence of
both a Change of Control and a Termination Event, as such terms are defined in
paragraph 3.


3.     Definitions.


     (a)  “Annual Bonus” shall mean the greater of (a) the annual bonus paid or
payable to the Executive by the Company or any Successor Employer for the
fiscal year immediately preceding the Termination Event and (b) the average of
the bonuses paid or payable to the Executive in the three (3) fiscal years
immediately preceding the fiscal year in which the Change of Control falls.


     (b)  “Base Salary” shall mean an amount equal to the Executive’s highest
annual base salary after the date hereof and preceding a Termination Event.


 






 


     (c)  “Cause” means (i) the Executive’s failure or refusal to perform
satisfactorily any duties reasonably required of the Executive by the Company
or any Successor Employer, as applicable (other than by reason of disability),
after reasonable demand for substantial performance is delivered by the Company
or Successor Employer specifically identifying the manner in which the Company
or Successor Employer believes the Executive has not performed his duties; (ii)
the commission by the Executive of a felony or the perpetration by the
Executive of a dishonest act against or breach of fiduciary duty toward the
Company or any Successor Employer, or any of their customers, employees, or
vendors; or (iii) any willful act or omission by the Executive which is
injurious in any material respect to the financial condition or business
reputation of the Company or any Successor Employer. For purposes of this
definition, no act, or failure to act, on the Executive’s part shall be
considered “willful” unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his act or omission was in the best
interests of the Company or any Successor Employer, as applicable.


     (d)  A “Change of Control” shall be deemed to have occurred if any of the
following have occurred prior to the expiration of the Term:


           (i) any person or group of persons (as defined in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (“1934 Act”)) together with
its affiliates, excluding employee benefit plans of the Company, is or becomes,
directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3
promulgated under the 1934 Act) of securities of the Company representing 30%
or more of the combined voting power of the Company’s then outstanding
securities;


           (ii) individuals who at the beginning of any two-year period during the
Term constitute the Board of Directors of the Company (the “Board”), plus new
Directors whose election or nomination for election by the Company’s
shareholders is approved by a vote of at least two-thirds (2/3) of the
Directors then still in office who were Directors at the beginning of such
two-year period (including for this purpose any new director whose election or
nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds (2/3) of the directors still in office who were directors
at the beginning of such period), cease for any reason during such two-year
period to constitute at least two-thirds (2/3) of the members of the Board;


           (iii) the consummation of a merger or consolidation of the Company with
any other corporation or entity regardless of which entity is the survivor,
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 being converted into voting
securities of the surviving entity) at least 60% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation;


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           (iv) the shareholders of the Company approve a plan of complete
liquidation or winding-up of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets;


           (v) the sale or other disposition by the Company of all or substantially
all of the assets of the Company’s Cardiopulmonary Systems Organization; or


           (vi) any other event which the Board determines should constitute a
Change of Control.


     (e)  A “Termination Event” shall be deemed to have occurred under
the circumstances described in paragraph 3(e)(i) and paragraph 3(e)(ii),
as applicable.


           (i) Within the twenty-four (24) month period following a Change of
Control, other than a Change of Control described exclusively in
paragraph 3(d)(v), (A) the Executive’s employment with the Company is
terminated by the Company without Cause, other than by reason of death,
retirement on or after the Executive attains the age of sixty-five (65)
or disability that entitles the Executive to long-term disability
benefits under the Company’s long-term disability plan or policy, or (B)
the Executive voluntarily terminates his employment with the Company
within 30 days after the occurrence of any of the following events:


                 (A) the assignment to the Executive of any duties inconsistent in
any material respect with the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities immediately prior to the Change of Control, or any
other action by the Company which results in a diminution in any
material respect in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith that is remedied by the
Company promptly after receipt of notice thereof given by the Executive;


                 (B) a reduction by the Company in the Executive’s annual base
salary as in effect on the date hereof, as the same may be increased
from time to time;


                 (C) the Company’s requiring the Executive to be based at any
office or location that is more than fifty (50) miles from the
Executive’s office or location immediately prior to the Change of
Control;


                 (D) the failure by the Company (i) to continue in effect any
bonus, stock option, or other cash or equity-based incentive plan in
which the Executive participates immediately prior to a Change of
Control that is material to the Executive’s total compensation, unless
an arrangement not materially less


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 favorable to the Executive (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or (ii) to
continue the Executive’s participation in such plan (or in such
substitute or alternative plan) on a basis at least as favorable, both
in terms of the amount of benefits provided and the level of the
Executive’s participation relative to other participants, as existed
immediately prior to the Change of Control; or


                 (E) the failure by the Company to continue to provide the
Executive with benefits that in the aggregate are not materially less
favorable to the Executive than those received by the Executive under
the Company’s pension (including, but not limited to, tax-qualified
plans), life insurance, health, accident, disability or other welfare
plans in which the Executive was participating, at costs not materially
greater than to those paid by the Executive, immediately prior to the
Change of Control.


           (ii) Within the twenty-four (24) month period following a Change of
Control described exclusively in paragraph 3(d)(v), (A) the Executive’s
employment with the Successor Employer is terminated by the Successor
Employer without Cause, other than by reason of death, retirement on or
after the Executive attains the age of sixty-five (65) or disability
that entitles the Executive to long-term disability benefits under the
Successor Employer’s long-term disability plan or policy, or (B) the
Executive voluntarily terminates his employment with the Successor
Employer within 30 days after the occurrence of any of the following
events:


                 (A) a reduction by the Successor Employer in the Executive’s
annual base salary as in effect on the date hereof, as the same may be
increased from time to time;


                 (B) the failure by the Successor Employer to provide the Executive
with benefits that are comparable, on an overall basis, to those
provided (or made available) to the Executive under the Company’s
pension plan(s) (including, but not limited to, tax-qualified plans),
life insurance, health, accident, disability or other welfare plans in
which the Executive was participating, at costs not materially greater
than to those paid by the Executive, immediately prior to the Change of
Control; or


                 (C) the failure by the Successor Employer to provide the Executive
with incentive compensation opportunities that are at least comparable
on an overall basis to those made available to the Executive immediately
prior to the Change of Control.


     (f) “Successor Employer” shall mean any person or entity that
acquires from the Company all or substantially all of the assets of the
Company’s Cardiopulmonary Systems Organization.


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4.     Cash Payments.


     In the event of a Termination Event, the Company (or after any assumption
of the Company’s obligations hereunder by a Successor Employer, the Successor
Employer) shall pay to the Executive the following amounts:


     (a)  the Executive’s full base compensation as earned through the date of
the Termination Event at the rate in effect on the date the Termination Event
occurs;


     (b)  any bonus to which the Executive has become entitled but which has not
yet been paid to the Executive;


     (c)  a lump sum cash payment equal to the sum of: (i) the Executive’s
combined base compensation for the twelve-month period immediately preceding
the Notice of Termination, and (ii) the Executive’s Annual Bonus; and


     (d)  a lump sum cash payment equal to the product of:


           (i) the higher of (A) the target bonus to which the Executive would have
become entitled for the fiscal year in which the Termination Event falls,
assuming that all applicable performance goals for the year of termination
would have been satisfied, or (B) the Executive’s Annual Bonus; and


           (ii) a fraction, the numerator of which is the number of days in the
then-current fiscal year through the date of the Termination Event, and (B) the
denominator of which is 365.


5.     Death of Executive.


     If the Executive dies before receiving all payments payable to him under
paragraph 4 of this Agreement, the Company (or after any assumption of the
Company’s obligations hereunder by a Successor Employer, the Successor
Employer) shall continue to make payments pursuant to paragraph 4 hereof to the
Executive’s spouse, or if the Executive leaves no spouse, to the estate of the
Executive.


6.     Health and Life Insurance Benefits.


     The Company (or after any assumption of the Company’s obligations
hereunder by a Successor Employer, the Successor Employer) shall maintain, for
a period of twelve (12) months following the date of the occurrence of a
Termination Event, the Executive’s eligibility for and participation in any
health and life insurance plans in which the Executive was eligible to
participate prior to the Termination Event and upon the same basis and cost as
prior to the Termination Event, provided however, that if, for any reason, the
Company or Successor Employer, as applicable, is unable to continue the
Executive’s participation in any such plan, the Company or Successor Employer
shall cause the Executive to be eligible to participate in a substantially
equivalent arrangement upon substantially the same basis and cost (determined
on an after-tax basis) as prior to the Termination Event. Notwithstanding any
other provision of this Agreement to the


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 contrary, if in connection with the termination of the Executive’s
employment for any reason, the Company or Successor Employer, as applicable, is
obligated by law or by contract (including any employment or severance
agreement other than this Agreement) or by a Company or Successor Employer plan
or policy to provide the Executive with life or health insurance after the
Executive’s termination (or a cash payment in lieu thereof), then any health
and life insurance required to be provided under this paragraph shall be
reduced by the amount of any payments and similar benefits described above, as
applicable.


7.     No Duty to Seek Other Employment.


     Amounts payable to the Executive under this Agreement shall not be reduced
by the amount of any compensation received by the Executive from any other
employer or source, and the Executive shall not be under any obligation to seek
other employment or gainful pursuit as a result of this Agreement.


8.     Reduction of Payments.


     Notwithstanding any other provision of this Agreement, in the event that
any payment or benefit received or to be received by the Executive in
connection with a Change of Control or the termination of the Executive’s
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement (all such payments and benefits, including the
payments and benefits provided for hereunder, being hereinafter called “Total
Payments”) would not be deductible (in whole or part), by the Company, an
affiliate or other person or entity making such payment or providing such
benefit as a result of Section 280G of the Internal Revenue Code of 1986, as
amended, then, to the extent necessary to make such portion of the Total
Payments deductible, (A) the cash payments provided for by paragraph 4 hereof
shall first be reduced (if necessary, to zero), and (B) the benefits provided
for by paragraph 6 hereof shall next be reduced. For purposes of this
limitation, no portion of the Total Payments the receipt or enjoyment of which
the Executive shall have waived by written notice to the Company prior to the
date of payment shall be taken into account. All determinations required to be
made under the provisions of this paragraph 8 hereof shall be made by tax
counsel selected by the Company’s independent auditors and reasonably
acceptable to the Executive.


9.     Payment of Compensation to Termination Date.


     In addition to any other payments payable to the Executive hereunder, the
Company (or after any assumption of the Company’s obligations hereunder by a
Successor Employer, the Successor Employer) shall pay the Executive full
compensation and all other amounts and benefits to which the Executive is
entitled through the termination of his employment.


10.     No Right to Continued Employment.


     This Agreement shall not confer upon the Executive any right with respect
to continuance of employment by the Company, any Successor Employer, or their


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 subsidiaries, nor shall it interfere in any way with the right of his
employer to terminate his employment at any time. No payments hereunder shall
be required except upon the occurrence of both a Change of Control and a
Termination Event. Thus, except as specifically provided herein, no payments
hereunder shall be made on account of termination of the Executive’s employment
(i) upon the Executive’s death, disability or retirement, (ii) by the Company
or any Successor Employer with or without cause or (iii) upon the Executive’s
voluntary termination.


11.     Waiver of Breach.


     Waiver by any party of a breach of any provision of this Agreement shall
not operate as or be construed as a waiver by such party of any subsequent
breach hereof.


12.     Invalidity.


     The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision, which
shall remain in full force and effect.


13.     Legal Fees and Expenses.


     The Company (or after any assumption of the Company’s obligations
hereunder by a Successor Employer, the Successor Employer) shall pay to the
Executive all reasonable legal fees and expenses incurred by the Executive as a
result of a bona fide dispute regarding the application of any provision of
this Agreement. Such payments shall be made within five (5) business days
after delivery of the Executive’s respective written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company or
Successor Employer, as applicable, reasonably may require.


14.     Ratification of Previous Employment Agreement.


     The Executive ratifies and confirms the terms and obligations of the
agreement entered into between the Company and the Executive relating to, among
other things, non-competition with the Company.


15.     Entire Agreement; Written Modification; Termination.


     This Agreement contains the entire agreement between the parties
concerning the matters covered hereby. No modification, amendment or waiver of
any provision hereof shall be effective unless in writing specifically
referring hereto and signed by the party against whom such provision as
modified or amended or such waiver is sought to be enforced. This Agreement
shall terminate as of the time the Company or any Successor Employer, as
applicable, makes the final payment which it may be obligated to pay hereunder
or provides the final benefit which it may be obligated to provide hereunder.
This Agreement supersedes and replaces any earlier agreement on the subject
matter hereof.


16.     Counterparts.


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     This Agreement may be made and executed in counterparts, each of which may
be considered an original for all purposes.


17.     Successors.


     This agreement shall be binding upon the Company’s successors by reason of
merger, consolidation or otherwise. In addition, the Company shall require any
Successor Employer to expressly assume this Agreement and the Company’s
obligations hereunder, unless such Successor Employer becomes a Successor
Employer after a Termination Event has occurred with respect to the Executive.


18.     Governing Law.


     This Agreement is governed by and is to be construed and enforced in
accordance with the laws of the State of Delaware.


     IN WITNESS WHEREOF, the undersigned parties have executed or caused to be
executed this Agreement as of the day and year first above written.



	 	 	 
	 	 	
MERIDIAN MEDICAL TECHNOLOGIES, INC.
	 
	By:	 	
/s/ JAMES H. MILLER



James H. Miller

Chairman, President and Chief Executive Officer
	 
	 	 	
“EXECUTIVE”
	 
	 	 	
/s/ CARL J. REBERT



Carl J. Rebert




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