ex104.htm


    Exhibit
      10.4

     

    CHANGE
      OF CONTROL SEVERANCE
      AGREEMENT

    


    THIS
      CHANGE OF CONTROL SEVERANCE
      AGREEMENT (this “Agreement”), dated as of December 21, 2005, is made and entered
      by and between Sologic, Inc., a Delaware corporation (the "Company"), and Carl
      L. Smith III (the “Executive").

    WITNESSETH:

    


    WHEREAS,
      the Executive is a key employee
      of the Company or one or more of It's Subsidiaries (as defined below) and has
      made and is expected to continue to Make major contributions to the short-and
      long-term profitability, growth and Financial strength of the
      Company;

    


    WHEREAS,
      the Company recognizes that, as
      is the case for most Companies, the possibility of a Change in Control (as
      defined below) exists and That such possibility, and the uncertainty it may
      create among management, may Result in the distraction or departure of
      management personnel, to the detriment of the Company and its
      stockholders;

    


    WHEREAS,
      the Company desires to assure
      itself of both present and future Continuity of management and desires to
      establish certain minimum severance benefits for certain of its senior
      executives, including the Executive, applicable in the event of a Change in
      Control; and

    


    WHEREAS,
      the Company wishes to ensure
      that its senior executives are not unduly distracted by the circumstances
      attendant to the possibility of a Change in Control and to encourage the
      continued attention and dedication of such executives, including the Executive,
      to their assigned duties with the Company; and

    


    WHEREAS,
      the Company desires to provide
      additional inducement for the Executive to continue to remain in the employ
      of the
      Company.

    


    NOW,
      THERFORE, the Company and the
      Executive agree as follows:

    


    1.
      Certain Defined Terms. In addition to
      terms defined elsewhere herein, the following terms have the following meanings
      when used in this Agreement with initial capital letters:

    


    (a)
      "Base Pay" means the annual base
      salary rate as in effect from time to time.

    


    (b)
      "Board” means the Board of Directors
      of the Company.

    


    (c)
“Cause"
      means that, prior to any
      termination pursuant to Section 3(b), the Executive shall
      have

    


    (i)  been
      convicted of a
      criminal Violation involving, in
      each fraud, embezzlement or theft in
      connection with his duties or in the course of his employment with the Company
      or any Subsidiary;

    


    (ii)
      committed intentional wrongful
      damage to of Company or any
Subsidiary;
      or

    


    (iii)
      committed intentional wrongful
      disclosure of secret processes or confidential information of the Company or
      any
      Subsidiary and any such act shall have been demonstrably and materially harmful
      to the Company. For purposes of this Agreement, no act or failure to act
on
      the part of the Executive shall be
      deemed "intentional” if
      it was due primarily to an error in
      judgment or negligence, but shall be deemed "intentional" only if done or
      omitted to be done by the Executive not in good faith and without reasonable
      belief that the Executive’s action or omission was in the best interest of the
      Company. Notwithstanding the foregoing, the Executive shall not be deemed to
      have been terminated for “Cause" hereunder unless and until there shall have
      been delivered to the Executive a copy of a resolution duly adopted by the
      affirmative vote of not less than three quarters of the Board then in office
      at
      a meeting of the Board called and held for such purpose, after reasonable notice
      to the Executive and an opportunity for the Executive, together with the
      Executive's counsel (if the Executive chooses to have counsel present at such
      meeting), to be heard before the Board, finding that, in the good faith opinion
      of the Board, the Executive had committed an act constituting "Cause" as herein
      defined and specifying the particulars thereof in detail. Nothing herein will
      limit the right of the Executive or his beneficiaries to contest the validity
      or
      propriety of any such determination. 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)
      "Change in Control" means the
      occurrence during the Term of any of the following events:

    


    (i)
      the acquisition by any individual,
      entity or group (within the meaning of Section 13(d) (3) or 14(d) (2) of the
      Exchange Act) (a "Person”) of beneficial ownership (within the meaning of Rule
      13d-3 promulgated under the Exchange Act) of or more of the combined voting
      power of the then-outstanding Voting Stock of the Company; provided, however,
      that:

    


    (1)
for
      purposes of this Section
1(d)
      (i), the following acquisitions
      shall not constitute a Change in Control: (A) any acquisition of Voting Stock
      of
      the Company directly from the Company that is approved by a majority
of the Incumbent
      Directors, (B) any acquisition
      of Voting Stock of the Company by the Company or any Subsidiary; (C) any
      acquisition of Voting Stock of the Company by any employee benefit plan (or
      related trust) sponsored or maintained by the Company or any Subsidiary, (D)
      any
      acquisition of Voting Stock of the
      Company by any Person pursuant to a
      Business Combination that complies with clauses (A), (8) and (C) of Section
      1(d)
      (iii) below; 

    


    (2)
if
      any Person acquires beneficial
      ownership of 20% or more of combined voting power of the then-outstanding Voting
      Stock of the Company as a result of a transaction described in clause
(1) (A)
      of Section 1(d)
      (i) and such Person thereafter
      becomes the beneficial owner of any additional shares of Voting Stock of the
      Company representing 1% or more of the then-outstanding Voting Stock of the
      Company, other than in an acquisition directly from the Company that is approved
      by a majority of
      the Incumbent Directors or other than
      as a result of a stock dividend, stock split or similar transaction effected
      by
      the Company in which all holders of Voting Stock are treated equally, such
      subsequent acquisition shall be treated as a Change in Control;


    


    (3)
      a Change in Control will not be
      deemed to have occurred if a Person acquires beneficial ownership of 20% or
      more
      of the Voting Stock of the Company as a result of a reduction in the number
      of
      shares of Voting Stock of the Company outstanding unless and until such Person
      thereafter becomes the beneficial owner of any additional shares of Voting
      Stock
      of the Company representing 1% or
      more of the then-outstanding Voting
      Stock of the Company, other than as a result of a stock dividend, stock split
      or
      similar transaction effected by the Company in which all holders of Voting
      Stock
      are treated equally; and 

    


    (4)
      at least a majority of the Incumbent
      Directors determine in good faith that a Person has acquired beneficial
      ownership of 20 % or more of the Voting Stock of the Company inadvertently,
      and
      such Person divests as promptly as practicable a sufficient number of shares
      so
      that such Person beneficially owns less than 20% of the Voting Stock of the
      Company then no Change in Control shall have occurred as a result of such
      Person's acquisition; or

    


    (ii)
      a majority of the Directors are not
      Incumbent Directors; or

    


    (iii)
      the consummation of a
      reorganization, merger or consolidation, or sale or other disposition of all
      or
      substantially all of the assets of the Company or the acquisition of assets
      of
      another corporation, or other transaction (each, a “Business
      Combination"), unless, in each
      case, immediately following such Business Combination (A) all or substantially
      all of the individuals entities who were the beneficial owners of Voting Stock
      of the Company immediately prior to such Business Combination beneficially
      own,
      directly or indirectly, more than 60% of the combined voting power of the then
      outstanding shares of Voting Stock of the entity resulting from such Business
      Combination (including, without limitation, an entity which as a result of
      such
      transaction owns the Company or all or substantially all of the Company's assets
      either directly or through one or more subsidiaries), (B) no Person (other
      than
      the Company, such entity resulting from such Business Combination, or any
      employee benefit plan (or related trust) sponsored or maintained by the Company,
      any Subsidiary or such entity
      resulting from such Business Combination) beneficially owns, directly or
      indirectly, 20% or more of the combined voting power of the then outstanding
      shares of Voting Stock of the entity resulting from such Business Combination,
      and (C) at least a majority of the members of the Board of Directors of the
      entity resulting from such Business Combination were Incumbent Directors at
      the
      time of the execution of the initial agreement or of the action of the Board
      providing for such Business Combination; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)
approval
      by the shareholders of the
      Company of a complete liquidation or dissolution of the Company, except pursuant
      to a Business Combination that complies with clauses (A), (B) and (C) of Section
      1(d) (iii).

    


    (e)
      "Employee Benefits" means the
      perquisites, benefits and service credit for benefits as provided under any
      and
      all employee retirement income and Welfare Benefit policies, plans, programs
      or
      arrangements in which Executive is entitled to participate, including without
      limitation any stock option,
      performance share, performance unit, stock purchase, stock appreciation,
      savings, pension, supplemental executive retirement, or other retirement income
      or Welfare deferred compensation, incentive compensation, group or life; health,
      medical/hospital or other insurance (whether funded by actual insurance or
      self-insured by the Company or a Subsidiary),
      disability, salary
      continuation, expense reimbursement and other employee benefit policies. plans,
      programs or arrangements that may now exist or any equivalent successor
      policies, plans, programs or arrangements that may be adopted hereafter by
      the
      Company or a Subsidiary, providing perquisites, benefits and service credit
      for
      benefits at least great in the aggregate as are payable hereunder immediately
      prior to a Change in Control.

    


    (f)
“Exchange
      Act" means the Securities
      Exchange Act of 1934, as amended.

    


    (g)
      "Good Reason" means the occurrence
      of one or more of the following events (regardless of whether any other reason,
      other than Cause, for such termination exists or has occurred, including without
      limitation other employment):

    


    (i)
      Failure to elect or reelect or
      otherwise to maintain the Executive in the office or the position, or
      substantially equivalent or better office or position, of or with the Company
      and/or a Subsidiary (or any successor thereto by operation of law of or
      otherwise), as the may be, which the Executive held immediately prior to Change
      in Control, or the removal of the Executive as a Director of the Company and/or
      a Subsidiary (or any successor thereto) if the Executive shall have been a
      Director of the Company and/or a Subsidiary immediately prior to the Change
      in
      Control;

    


    (ii)
      Failure of the Company to remedy
      any of the following within 10 calendar
      days after receipt by the
      Company of written notice thereof from the Executive: (A) A significant adverse
      change in the nature
or
      scope of the
      authorities, powers, functions, responsibilities or duties attached to the
      position with the Company and any Subsidiary which the Executive held
      immediately prior to the Change in Control, (B) a reduction in the Executive's
      Base Pay received from
      the Company or any Subsidiary, (C)
      a reduction in the Executive's Incentive Pay as compared with the Incentive
      Pay
      most recently paid prior to the Change in Control, or (D) the termination or
      denial of the Executive's rights to Employee Benefits or a reduction in
the scope
      or value
      thereof;   


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)
      The liquidation, dissolution,
      merger, consolidation or reorganization of the Company or the transfer of all
      or
      substantially all of its business and/or assets, unless the successor or
      successors (by liquidation, merger, consolidation reorganization, transfer
      or
      otherwise) to which all or substantially all of its business and/or assets
      have
      been transferred (by operation of law or otherwise) assumed all duties and
      obligations of the Company under this Agreement pursuant to Section
      11(a);

     

    (iv)
      The Company requires the Executive
      to have his principal location of work changed to any location that is in excess
      of 50 miles from the location thereof immediately prior to the Change in
      Control, or requires the Executive to travel away from his office in the course
      of discharging his responsibilities or duties hereunder at least
20%
more
      (in terms of aggregate days in any
      calendar year or in any calendar quarter when annualized for purposes of
      comparison to any prior year) than was required of Executive in any of the
      three
      full years immediately prior to Change in Control
      without in
      either case, his prior written
      consent; or

    


    (v)
      Without limiting the generality or
      effect of the foregoing, any material breach of this Agreement by the Company
      or
      any successor thereto which is not remedied by the Company within 10 calendar
      days after receipt by the Company of written notice from the Executive of such
      breach.

    


    (h)
      "Incentive Pay" means an annual
      bonus, incentive or other payment compensation, in addition to Base Pay, made
      or
      to be made in regard to services rendered in any year
      or other period pursuant to any
      bonus, incentive, profit-sharing, performance, discretionary pay or similar
      agreement, policy, plan, program or arrangement (whether or not funded) of
      the
      Company or a Subsidiary, or any successor thereto. "Incentive Pay" does not
      include any stock option, stock appreciation, stock purchase, restricted stock
      or similar plan, program, arrangement or
      grant, whether or not provided under
      an arrangement described in the preceding sentence"

    


    (I)
      Incumbent Directors" means
the individuals
      who, as of the date hereof,
      are Directors of the Company and any individual becoming a Director subsequent
      to the date hereof whose election, nomination for election by the Company's
      shareholders, or appointment, were approved by a vote of at least two-thirds
      of
      the then Incumbent Directors (either by a specific vote or by approval of the
      proxy statement of the Company in which such person is named as a nominee for
      director, without objection to such nomination); provided, however, that an
      individual shall not be an Incumbent Director if such individual's election
      or
      appointment to the Board occurs as a result of an actual or threatened election
      contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to
      the
      election or removal of Directors or other actual or threatened solicitation
      of
      proxies or consents by or on behalf of a Person other than the
      Board.

    


    (j)
"Retirement
      Plans" means the benefit
      plans of the Company
      that are intended to be
      qualified under Section 401
(a)
      of the Internal Revenue
      Code of 1986, as amended (the "Code") and any supplemental executive retirement
      benefit plan or any other plan that is a successor thereto if
      the Executive was a participant in
      such Retirement Plan on the date of the Change
      in Control.

    


    (k)
“Severance
      Period" means the period
      of time commencing on the date of the first occurrence of a Change in Control
      and continuing until the earlier of (i) the second anniversary of the occurrence
      of the Change in Control, or (ii) the Executive's death; provided, however,
      that
      commencing on each anniversary of the Change in Control, the Severance Period
      will automatically be extended for an additional year unless, not later than
      90
      calendar days prior to such
      anniversary date, either the
      Company or the Executive shall have given written notice to the other that
      the
      Severance Period is not to be so extended.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (I)
      "Subsidiary" means an entity in
      which the Company directly or indirectly beneficially owns 50% or more of the
      outstanding Voting Stock"

    


    (m)
      "Term" means the period commencing
      as of the date hereof and expiring on the close of business on December 31,
      2015, or the end of executive's employment with the Company in any capacity
      (including a seat on the board of directors or a consultancy arrangement);
      provided, however, that (i) commencing on January 1,2006 and each January 1
      thereafter, the term of this Agreement will automatically be extended for an
      additional year unless, not later than September 30 of the immediately preceding
      year, the Executive shall have given notice that he does not wish to
have the
      Term extended; (ii) if
      a Change in Control occurs during the
      Term, the Term shall expire and this Agreement will terminate on the last day
      of
      the Severance Period; and (iii) subject to Section 3(c), if, prior to a Change
      in Control, the Executive ceases for any reason to be
      an employee of the Company
      or any Subsidiary (including
      termination arising in
connection
      with the Company
      ceasing to beneficially own 50% or more of the Voting Stock of a Subsidiary),
      or
      ceases to be an employee at level previously designatect for the benefits set
      forth in Annex A hereto, thereupon without further action the Term shall
be deemed
      to have expired and this
      Agreement will immediately terminate and be of no further effect. For purposes
      of this Section 1(n), the Executive shall not be deemed to have ceased to be
      an
      employee of the Company and any Subsidiary by reason of the transfer of
      Executive's employment between the Company and any Subsidiary, or among any
      Subsidiaries.

    


    (n)
      "Termination Date” means
      the date on which the Executive's
      employment is terminated (the effective date
      of Which shall be the date of
      termination, or such other date that
      may be specified by the Executive if the termination is pursuant to Section
      3(b)). 

    


    (0)
      "Voting Stock" means securities
      entitled to vote generally in the election of directors.

    


    (p)
“Welfare
      Benefits" means Employee
      Benefits that are provided under any "welfare plan" (within the meaning of
      Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended)
      of the Company.

    


    (q)
      "Tax” means
      taxes that would be due on any
      unexercised stock options owned by executive. 

    


    2.
      Operation of Agreement. This
      Agreement will be effective and binding immediately upon its execution, but,
      anything in this Agreement to the contrary notwithstanding, except as provided
      in Section 3(c), this Agreement will not be operative unless and until a Change
      in Control occurs. Upon the occurrence of a Change in Control at any time during
      the Term, without further action, this Agreement become immediately
      operative.

    


    3.
      Termination Following a Change in
      Control. (a) In the event of the occurrence of a Change in Control, the
      Executive's employment may be terminated by the Company or a Subsidiary during
      the Severance Period and the Executive will be entitled to the benefits provided
      by Section 4 unless such termination is the result of the occurrence of one
      or
      more of the following events:

    


    (i)
      Executive's
      death;

    


    (ii)
      If the Executive becomes
      permanently disabled within the meaning of, and begins actually to receive
      disability benefits pursuant to, the long-term disability plan in effect for,
      or
      applicable to, Executive immediately prior to the Change in Control;
      or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)
      Cause. If during the Severance Period, the Executive's employment is terminated
      by the Company or any Subsidiary other than pursuant to Section 3(a) (i), 3(a)
      (ii) or 3(a) (iii), the Executive will be entitled to the benefits provided
      by
      Section 4.

    


    (b)
      In the event of the occurrence of a
      Change In Control, the Executive may terminate employment with the Company
      and
      any Subsidiary during the Severance Period for Good Reason with the right to
      severance compensation as provided in Section 4.

    


    (c)
      Anything in this Agreement to the
      contrary notwithstanding, if a
      Change in Control occurs and not more
      than twelve months prior to the date on which the Change in Control occurs,
      the
      Executive’s employment with
      the Company ceases at the
      previously designated level or is terminated by the Company (or the Executive
      terminates his employment for Good Reason), such cessation or termination of
      employment will be deemed to a cessation or termination of employment after
      a
      Change in Control for purposes of this Agreement if the Executive has reasonably
      demonstrated that such cessation or termination of employment (i) was
      at the request of a third
      party who has taken steps
      reasonably calculated to effect a Change in Control,
      or (ii) otherwise arose in
      connection with or in anticipation of a Change in Control.

    


    (d)
      A termination by the Company
      pursuant to Section 3(a) or by the Executive pursuant to Section 3(b) will
      not
      affect any rights that the Executive may have pursuant to any agreement, policy,
      plan, program or arrangement of the Company or Subsidiary providing Employee
      Benefits, which rights shall be governed by the terms thereof except for any
      rights to severance
      compensation to which
      Executive may be entitled upon termination of employment under any severance
      or
      employment agreement between the Company and the Executive which rights, to
      the
extent not
      greater than those provided
by this
      Agreement, shall, during the
      Severance Period, be superseded by this Agreement

    


    4.
      Severance Compensation. (a) If,
      following the occurrence of a Change
      in Control, the Company or Subsidiary terminates the Executive's employment
      during the Severance Period other than pursuant to Section 3(a)(i) 3(a)(ii)
      or
      3(a)(iii) or if the Executive terminates his employment pursuant to Section
      3(b), provided that the Executive executes a release substantially in the form
      rendered by senior executives of the Company prior to the Change in Control.
      The Company will pay to the
      Executive the amounts described in Annex A within five business days after
      the
      Termination Date and will continue to provide to the Executive the benefits
      described on Annex A for the periods described therein.

    


    b)
      Without limiting the rights of the
      Executive at law or in equity, if the Company to make any payment or provide
      any
      benefit required to be made
or
      provided hereunder on a
      timely basis, the Company will pay interest on the amount or value thereof
      at an
      annualized rate of interest equal to the "prime rate” as
      set forth from time to time during
      the relevant period in The Wall Street Journal "Money Rates: column,
      plus 2%. Such interest will be
      payable as it accrues on demand. Any change
in
such
      prime rate will be
      effective on and as of the date of
      such change" 

    


    (c)
Unless
      otherwise expressly provided by
      applicable annual incentive compensation plan or program, after the occurrence
      of a Change in Control, the Company will pay in cash to the Executive a lump
      sum
      amount equal to the value of the Executive's annual bonus for the performance
      period that includes the date on which the Change in Control occurred,
      disregarding any applicable vesting requirements; provided that such amount
      will
      be equal to the product of the target award percentage under the applicable
      annual incentive plan or program in effect immediately prior to the Change
      in
      Control times Base Pay, but prorated to base payment only on the portion of
      the
      Executive's service that
had
      elapsed during the
      applicable performance period
      through the Change in Control. Such payment will be made within five business
      days after the Change in Control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)
      At
      the option of Executive, in the event of a Change in Control, Executive shall
      be
      granted voting rights on such number of common shares that would result in
      Executive having a voting majority of shares (including, if necessary, a number
      of shares that would result in a total voting shares that exceeds the number
      of
      authorized shares) needed for any shareholder meeting as governed by the
      Company's bylaws.

    


    5.
      No Limitation on Payments and
      Benefits., notwithstanding any provision of this Agreement to the contrary,
      if
      any amount or benefit to be paid or provided under this Agreement would be
      an
      "Excess Parachute Payment," within the meaning of Section 280G of the Code,
      but
      for the application of this sentence, then the payments and benefits to be
      paid
      or provided under this Agreement will not be reduced to the minimum extent
      necessary (but in no event to less than zero) so that a portion of any such
      payment or benefit constitute an Excess Parachute Payment and any tax triggered
      to the Executive will be covered by the Company.

    


    6.
      No Mitigation Obligation. The Company
hereby acknowledges
      that it will be difficult
      and may be impossible for the Executive to find reasonably comparable employment
      following the Termination Date. Accordingly, the payment of the severance
      compensation by the Company to the Executive in accordance with the terms
      of this Agreement is hereby
      acknowledged by the Company to be reasonable, and the Executive will not be
      required to mitigate the amount of any payment provided for in this Agreement
      by
      seeking other employment or otherwise, nor will any profits, income, earnings
      or other benefits
      from any source whatsoever
      create any mitigation. offset, reduction or any other obligation on the part
      of
      the Executive hereunder or otherwise, except as expressly provided in the last
      sentence of Paragraph 2 of Annex A.

    


    7.
      Legal Fees and Expenses. It is the
      intent of the Company that the Executive not be required to incur legal fees
      and
      the related expenses associated with the preparation, interpretation,
      enforcement or defense of Executive's rights under this or any other agreement
      with the Company for any reason, including litigation or otherwise because
      the
      cost and expense thereof would substantially detract from the benefits intended
      to be extended to the Executive hereunder. Accordingly, for any reason, or
      if it
      should appear to the Executive that the Company has failed to comply with any
      of
      its obligations under this Agreement or in the event that the Company or any
      other person takes or threatens to take any action to declare this Agreement
      void or unenforceable, or institutes any litigation or other action or
      proceeding designed to deny, or to recover from, the Executive the benefits
      provided or intended to be provided to the Executive hereunder, the Company
      irrevocably authorizes the Executive from time to time to retain counsel of
      Executive's choice, at the expense of the Company as hereafter provided, to
      advise and represent the Executive in connection with any such interpretation,
      enforcement or defense, including without limitation the initiation or defense
      of any litigation or other legal action in regard thereto, whether by or against
      the Company or any Director, officer, stockholder or other person affiliated
      with the Company, in any jurisdiction, Notwithstanding any existing or prior
      attorney-client relationship between the Company and such counsel, the Company
      irrevocably consents to the Executive's entering into an attorney-client
      relationship with such counsel, and in that connection the Company and the
      Executive agree that a confidential relationship will exist between the
      Executive and such counsel. Without respect to whether the Executive prevails,
      in whole or in part, in connection with any of the foregoing, the Company will
      pay and be solely financially responsible for any and all attorneys' and
related fees and
      expenses incurred by the Executive
      in connection with any of the foregoing: provided that, in regard to such
      matters, the Executive has not acted in bad faith or with no colorable claim
      of
      success.

    


    8.
      Confidentiality; No solicitation; No
      disparagement.

    


    (a)
      During the Term, the Company agrees
      that it disclose will to Executive its confidential or proprietary information
      (as defined in this Section 8(a)) to the extent necessary for Executive to
      carry
      out his obligations to the Company. The Executive hereby covenants and agrees
      that he will not, without the prior written consent of the Company, during
      the
      Term or thereafter disclose to any person not employed by the Company, or use
      in
      connection with engaging in competition with the Company, any confidential
      or proprietary
      information of the Company.
      For purposes of this Agreement, the term “confidential or proprietary
      information" will include all information of any nature and in any form that
      is
      owned by the Company and that is not publicly available (other than by Executive's
      breach of this Section 8(a))
      or generally known to persons engaged in businesses similar or related to
      those of the Company. Confidential
or proprietary
      information will include,
      without limitation, the Company's financial matters, customers, employees,
      industry contracts, strategic business plans, product development (or other
      proprietary product data), marketing plans, and all other secrets and all other
      information of a confidential or proprietary nature, For purposes of the
      preceding two sentences, the term
"Company"
will
      also include any Subsidiary
      (collectively, the "Restricted Group”). The foregoing obligations imposed by
      this Section 8(a) will not apply (i) during the Term, in the course of the
      business of and for the benefit of the Company, (ii) if such confidential or
      proprietary information has become, through no fault of the Executive generally
      known to the public or (iii) if the Executive is required by law to make
      disclosure (after giving
the
      Company notice and an
      opportunity to contest such requirement).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      The Executive hereby covenants and
      agrees that during the Term and for one year thereafter Executive will not,
      without the prior written consent of the Company, on behalf of Executive or on
      behalf of any person, firm or
      company, directly or indirectly, attempt to influence, persuade or induce,
      or
      assist any other person in so persuading or inducing, any employee of the
      Restricted Group to give up, or to not
      commence, employment or a business
      relationship with the Restricted Group.

    


    (c)
      The Executive hereby covenants and
      agrees that the Executive will not make Publish or cause to be made or published
      any public or private statement disparaging the Company or Its present or former
      officers, directors or employees.

    


    (d)
      Executive and the Company agree that
      the covenants contained in this Section 8 is reasonable under the circumstances,
      and further agrees that if in the opinion of any court of competent jurisdiction
      any such covenant is not reasonable in any respect, such court will have the
      right, power and authority to excise or modify any provision or provisions
      of
      such covenants as to the court will appear not reasonable and to enforce the
      remainder of the covenants as so amended. Executive acknowledges and agrees
      that
      the remedy at law available to the Company for breach of any of his obligations
      under this Section 8 would be inadequate and that damages flowing from such
      a
      breach may not readily be susceptible to being measured in monetary terms.
      Accordingly, Executive acknowledges, consents and agrees
      that, in addition to any
other rights
      or remedies that the Company may
      have at law, in equity or under this Agreement, upon adequate proof of his
      violation of any such provision of this Agreement, the Company will be entitled
      to immediate injunctive relief and may obtain a temporary order restraining
      any
      threatened or further breach, without the necessity of proof of actual
      damage.

    


    9.
Employment
      Rights. Nothing expressed or
      implied in this Agreement will create any right or duty on part of the Company
      or the Executive to have Executive remain in the employment of the Company
      or
      any Subsidiary prior to or following any Change in Control.

    


    10.
      Withholding of Taxes. The Company
      may withhold from any amounts payable under this Agreement all federal, state,
      city or other taxes as the Company is required to withhold pursuant to any
      applicable law, regulation or ruling.

    


    11.
      Successors and Binding Agreement.
      (a) The Company will require any successor (whether direct or indirect, by
      purchase, merger, consolidation, reorganization or otherwise) to all or
      substantially all of the business or assets of the Company, by agreement in
      form
      and substance reasonably satisfactory to the Executive, expressly to assume
      and
      agree to perform this Agreement in the same manner and to the same extent the
      Company would be required to perform if no such succession had taken place.
      This
      Agreement will be binding upon and inure to the benefit of the Company and
      any
      successor to the Company, including without limitation any persons acquiring
      directly or indirectly all or substantially all of the business or assets of
      the
      Company whether by purchase, merger, consolidation, reorganization or otherwise
      (and such successor shall thereafter be deemed the "Company" for the purposes
      of
      this Agreement), but will not otherwise be assignable, transferable or delegable
      by the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      this Agreement will inure to the
      benefit of and be enforceable by the Executive’s personal or legal
      representatives, executors, administrators, successors, heirs, distributes
      and
      legatees.

    


    (c)
      This Agreement is personal in nature
      and neither of the parties hereto will, without the consent of the other,
      assign, and transfer or delegate this Agreement or any rights or obligations
      hereunder except expressly provided in Sections 11(a) and 11 (b). Without
      limiting the generality or
      effect of the foregoing, the Executive's right to receive payments hereunder
      will not be assignable, transferable or delegable, whether by pledge, creation
      of a security interest, or otherwise, other than by a transfer by Executive's
      will or by the laws of descent and distribution and, in the event of
      any attempted assignment or transfer
      contrary to this Section 11 (c), the
      Company will have no liability
      to pay any amount so
      attempted to be assigned, transferred
      or delegated.

    


    12.
      Notices. For all purposes of this
      Agreement, all communications, including without limitation notices, consents,
      requests or approvals, required or permitted to be given hereunder will be
      in
      writing and will be deemed
to
have
      been duly given when hand
      delivered or
      dispatched by electronic facsimile transmission (with receipt thereof orally
      confirmed), or five business days after having been mailed by United
      States registered or certified
      mail, return receipt requested. postage prepaid, or three business days after
      having been sent by a nationally recognized overnight courier service such
      as
      FedEx or UPS addressed
      to the Company (to the
      attention of the Secretary of the Company) at its principal executive office
      and
      to the Executive at his principal residence, or to
      such other address as any party may
      have furnished to
the
      other in writing and in
      accordance herewith, except that notices of changes of address shall be
      effective only upon receipt. 

    


    13.
      Governing Law. The validity,
      interpretation, construction and performance of this Agreement will be governed
      by and construed in accordance with the substantive laws of the State of
      Delaware, without giving effect to the principles of conflict of laws of such
      State.

    


    14.
      Validity. If any provision of this
      Agreement or the application of any provision hereof to any person or
      circumstance is held invalid, unenforceable or otherwise illegal, the remainder
      of this Agreement and the application of such provision to any other person
      or
      circumstance will not be affected, and the provision so held to be invalid,
      unenforceable or otherwise illegal will be reformed to the extent (and only
      to
      the extent) necessary to make it enforceable, valid or
      legal.

    


    15.
      Miscellaneous. No provision of this
      Agreement may be modified, waived or discharged unless such waiver, modification
      or discharge is agreed to in writing Signed by the Executive and the Company.
      No
      waiver by either party hereto at any time of any breach by the other party
      heretoor compliance with
      any condition or provision of Agreement to be performed by such
other
      party will be deemed a waiver of
      Similar or dissimilar provisions or conditions at the same or at any prior
      or
      subsequent time. No agreements or representations, oral or otherwise, expressed
      or implied with respect to the subject matter hereof have been made by either
      party that are not set forth expressly in this Agreement. References to Sections
      are to Sections of this Agreement References to Paragraphs are to Paragraphs
      of
      an Annex to this Agreement. Any reference in this Agreement to
      a provision of a statute, rule or
      regulation will also include any successor provision thereto.


    


    16.
      Survival. Notwithstanding any
      provision of this Agreement to the contrary, the parties' respective rights
      and
      obligations under Sections 3(c), 4, 5, 7 and
8
will
      survive any termination
      or

    


    expiration
      of this Agreement or the
      termination of the Executive's employment following a Change in Control for
      any reason
      whatsoever.

    


    17.
      Counterparts. This Agreement may be
      executed in one or more counterparts, each of which shall be deemed to be an
      original but all of which together will constitute one and the same
      agreement.

    


    IN
      WITNESS the parties have caused this
      Agreement to be duly executed and delivered as of the date first above
      written.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    SOLOGIC
      INC.

    Annex
      A

    


    Severance
      Compensation

    


    (1)
      A lump sum payment in an amount
      equal to one times the sum of (A) Base Pay (at the highest rate in effect for
      any period within three years prior to the Termination Date). plus (B) Incentive
      Pay (in an amount equal to the product of the target award percentage under
      the
      applicable Incentive Pay plan or program in effect immediately prior to the
      Change in Control times Base Pay).

    


    (2)
      For a period of 12 months following
      the Termination Date (the ”Continuation Period”), the Company will arrange to
      provide the Executive with Welfare Benefits Substantially similar to those
      that
      the Executive was receiving or entitled to
      receive immediately prior to
      Termination Date (or, if greater, immediately prior to the reduction,
      termination, or denial described in Section 1(g)
      (ii))" If and to the extent that any
      benefit described in this Paragraph 2 is not or
      cannot be paid
      or provided under any policy, plan.
      program or arrangement of the Company or any Subsidiary, as the case may be
      then
      the Company will itself pay or provide for the payment to the Executive, his
      dependents and beneficiaries of such Employee Benefits along with, in the case
      of any benefit described in this Paragraph 2 which is subject to tax
      because it is not or cannot be paid
      or provided under any such policy, plan, program or arrangement of the Company
      or any Subsidiary, an additional amount such that after payment by the
      Executive, or his dependents or beneficiaries. as the case may be, of all taxes
      so imposed, the recipient retains an amount equal to such taxes. Notwithstanding
      the foregoing, or any other provision of the Agreement, for purposes of
      determining the period of continuation coverage to which the Executive or any
      of
      his dependents is entitled pursuant to Section 4980B of the Code under the
      Company's medical l dental and other group health plans, or successor plans,
      the
      Executive's “qualifying event" will be the termination of the Continuation
      Period and the Executive will be considered to have remained actively employed
      on a full-time basis through that date. Further, for purposes of the immediately
      preceding sentence and for any other purpose, including, without limitation,
      the
      calculation of service or age to determine the Executive's eligibility for
      benefits under any retiree
medical
      benefits or life
      insurance plan or policy, the Executive shall be considered to have remained actively
      employed on a full-time basis
      through the termination of the Continuation Period, Without otherwise limiting
      the purposes or
effect
      of Section 5
or this Paragraph
      2. Employee Benefits otherwise
      receivable by the Executive pursuant to this Paragraph 2 will be reduced to
      the
      extent comparable welfare
benefits
      are actually
      received by the Executive from another employer during the Continuation Period
      following the Executive's
      Termination Date, and any
      such benefits actually received by the Executive will be reported by Executive
      to the Company. 

    


    (3)
      Reimbursement for relocation
      expenses on a basis consistent with the Company's practices for senior
      executives, in amount up to
$50,000;
      provided such
      executive was relocated at the request of the Company (including but not limited
      to as a result of initial hire) within five years of his or Termination
      Date.