Document:

Ex-10.3

 

Exhibit 10.3

TriPath Imaging, Inc.

780 Plantation Drive

Burlington, NC 27215

June 26, 2006

[Name of Executive Officer]

[Address]

[City, State Zip Code]

Dear [________]:

     In recognition of the fact that your contributions to the past and future growth and success
of TriPath Imaging, Inc. (the “Company”), a Delaware corporation, and its affiliates have been and
are expected to be substantial, we want to assure the Company of your continued services for the
benefit of the Company, particularly in the face of a change-in-control of the Company.

     This letter agreement (this “Agreement”) therefore sets forth those benefits which the Company
will provide to you and your obligations to the Company in the event your employment within the
Company is terminated in connection with a “Change in Control” (as defined in Section 2(i)) of the
Company under the circumstances described below.

	1.	 	TERM.

     This agreement shall expire on August 3, 2008; provided, however, that if a
Change in Control should occur while you are still an employee of the Company, then this Agreement
shall continue in effect from the date of such Change in Control for so long as you remain an
employee of the Company, but in no event for more than twenty-four (24) months following such
Change in Control (such 24-month period hereinafter called the “Change of Control Period”);
provided, further, if your employment is terminated by the Company without Cause
(defined below) prior to a Change in Control, this Agreement shall expire 180 days after the date
that your employment is terminated. In addition, this Agreement may be terminated by the Company
at any time prior to a Change of Control upon one year’s written notice to you. The termination or
expiration of the term of this Agreement shall not adversely affect your rights under this
Agreement that have accrued prior to any such termination or expiration, except to the extent
provided for in Section 7.

	2.	 	CHANGE IN CONTROL.

     (i) For purposes of this Agreement, a “Change in Control” means the consummation and closing
of an event or occurrence set forth in either or both of clauses (a) and (b) below (including the
consummation and closing of an event or occurrence that constitutes a Change in Control under one
clause but is specifically exempted from the other clause):

 

 

[Name of Executive Officer]

[Date]

Page 2

          (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (B) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this paragraph (a), the following
acquisitions shall not constitute a Change in Control: (I) any acquisition directly from the
Company (excluding an acquisition pursuant to the exercise, conversion of exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting securities of the
Company, unless the Person exercising, converting or exchanging such security acquired such
security directly from the Company or an underwriter or agent of the Company), (II) any acquisition
by the Company, (III) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (IV) any acquisition by
any corporation pursuant to a transaction which complies with subclause (A) of clause (b) of this
Section 2(i); or

          (b) the consummation of a merger, consolidation, reorganization, recapitalization or statutory
share exchange involving the Company or a sale, lease, exchange or other disposition of all or
substantially all of the assets of the Company (a “Business Combination”), unless, immediately
following such Business Combination, (A) all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting
power of the then outstanding securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such transaction owns the Company
or substantially all of the Company’s assets either directly or through one or more subsidiaries)
(such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Stock and Outstanding Company Voting Securities,
respectively.

	3.	 	TERMINATION FOLLOWING CHANGE IN CONTROL.

     If a Change in Control shall have occurred while you are still an employee of the Company, or
after events and within the time period as stated in Section 3(vi), you shall be entitled to the
payments and benefits provided in Section 4 hereof upon the subsequent termination of your
employment within twenty-four (24) months of such Change in Control, by you or by the Company
unless such termination is (a) by the Company for “Cause” (as defined below), or (b) by you other
than for “Good Reason” (as defined below), in any of which events you shall not be entitled to
receive benefits under this Agreement.

     (i) “Disability”. If, as a result of your incapacity due to physical or mental
illness, you shall have been deemed “disabled” by (A) the institution appointed by the Company to

-2-

 

[Name of Executive Officer]

[Date]

Page 3

administer the Company’s long-term disability plan (or successor plan) for your benefit or,
(B) in the absence of such an institution or in the event that you are not covered by a long-term
disability plan of the Company, the Company acting in good faith.

     (ii) “Cause”. For the purpose of this Agreement, the Company shall have “Cause” to
terminate your employment upon:

          (a) The willful and continued failure by you substantially to perform your duties with the
Company (other than any such failure resulting from your incapacity due to physical or mental
illness or any failure resulting from your terminating your employment with the Company for “Good
Reason” (as defined below));

          (b) Willful gross misconduct or dishonesty, including fraud or embezzlement related to the
performance of your duties with the Company or that which would be reasonably likely to cause, as
determined in good faith by the Board of Directors of the Company: (A) a material adverse affect on
the business or reputation of the Company, or (B) expose the Company to a material risk of civil or
criminal legal damages, liabilities or penalties; or

          (c) Conviction (or a plea of guilty or no contest) of a felony or a crime involving moral
turpitude.

     (iii) “Good Reason”. You may terminate your employment for Good Reason. For purposes
of this Agreement, “Good Reason” shall mean without your express written consent:

          (a) The material diminution of your duties with the Company from those in effect immediately
prior to the Change in Control;

          (b) A continuing requirement that you perform duties that are materially inconsistent with and
which would have a material adverse impact on your title, position, authority, duties or
responsibilities in effect immediately prior to the Change in Control;

          (c) A reduction by the Company in your base salary as in effect immediately prior to the
Change in Control;

          (d) A reduction in the level of your bonus opportunities or the degree of probability of your
attainment of such opportunities as in effect immediately prior to the Change in Control, unless
there is a corresponding increase in your base salary or your equity compensation opportunities;
provided, however, that this clause shall not prohibit the Board or the Company’s
Compensation Committee from changing the general business criteria or specific performance goals
used to establish or determine bonus opportunities in a manner consistent with this clause;

          (e) A material reduction in your health, disability, life insurance, or retirement benefits as
in effect immediately prior to the Change in Control determined in the aggregate; provided,
however, that any changes in insurance companies, co-payments, deductibles,

-3-

 

[Name of Executive Officer]

[Date]

Page 4

premiums, or coverages shall not constitute a material reduction if such changes are generally
applicable to all full-time employees of the Company.

          (f) Any requirement by the Company that the location at which you perform your principal
duties for the Company be changed to a new location that is more than 100 miles from the location
at which you perform your principal duties for the Company immediately prior to the Change in
Control; or

          (g) Any failure by the Company to comply with and satisfy Section 14(i) of this Agreement.

     (iv) Notice of Termination. Any termination by the Company pursuant to subparagraphs
(i) or (ii) above or by you pursuant to subparagraph (iii) above shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis of your termination under the provision so indicated. If you are terminating
your employment pursuant to subparagraph (iii) above, the Notice of Termination shall be delivered
to the Company within thirty (30) days following the date on which the facts and circumstances
existed that gave rise to your right to terminate your employment for Good Reason and at least ten
(10) business days prior to your proposed Date of Termination. Such notice shall indicate the
specific provision or provisions in this Agreement upon which you have relied to make such
determination and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such determination. If the facts and circumstances that give rise to your
right to terminate for Good Reason present a curable condition, the Company shall have ten (10)
business days after receipt of the Notice of Termination to cure such condition.

     (v) Date of Termination. “Date of Termination” shall mean:

          (a) If this Agreement is terminated for Disability, thirty days after Notice of Termination is
given (provided that you shall not have returned to the performance of your duties on a full-time
basis during such thirty-day period),

          (b) If your employment is terminated pursuant to subparagraph (iii) above, the date specified
in the Notice of Termination, which shall be no less than ten (10) business days after the date on
which the Notice of Termination is delivered; and

          (c) If your employment is terminated for any other reason, the date on which a Notice of
Termination is given (or, if a Notice of Termination is not given, the date of such termination).

     (vi) Termination in Anticipation of a Change in Control. If your employment is
terminated by the Company without Cause within 180 days prior to a Change of Control and such
termination (i) was at the request of a third party who had indicated an intention or had taken
steps reasonably calculated to effect a Change of Control and who subsequently effectuates

-4-

 

[Name of Executive Officer]

[Date]

Page 5

a Change of Control or (ii) otherwise occurred as a condition to, or in anticipation of, a
Change of Control which actually occurs, then for all purposes of this Agreement, the date of a
Change of Control for purposes of this Agreement shall mean the date immediately prior to the date
of such termination of your employment and shall entitle you to the benefits provided under Section
4 of this Agreement as though it were a termination without Cause after a Change in Control.

	4.	 	COMPENSATION UPON DEATH, DURING DISABILITY OR UPON TERMINATION IN CONNECTION WITH A CHANGE
IN CONTROL.

     (i) If, after a Change in Control, your employment is terminated by reason of your death, your
legal representatives shall receive an amount equal to the payments described in Section 4(iv)(a)
below. Additionally, your eligible dependents may elect to continue their health care benefits
under COBRA, as described in and in accordance with Section (4)(iv)(b) below. Notwithstanding
anything herein to the contrary, all payments made pursuant to Section 4(iv)(a) and any cash
payments made pursuant to Section 4(iv)(b), if any, shall be paid in accordance with the Company’s
regular payroll practices applicable to you for a period of twelve (12) months following your
death, with the remaining balance paid in a lump sum at the end of the twelfth month following your
death, less applicable tax withholding, beginning with the next regular pay date applicable to you
following your death.

     (ii) If, after a Change in Control, you shall fail to perform your duties hereunder as a
result of incapacity due to Disability, you shall (I) continue to receive your full base salary at
the rate then in effect until your Date of Termination (and, if the Company maintains a long-term
disability plan, you shall be eligible for coverage thereunder in accordance with the terms thereof
and subject to the satisfaction of all applicable conditions, including without limitation the
timely filing of a notice of claim) and (II) continue to be eligible to receive the health care
benefits under COBRA and other insurance benefits, as described in and in accordance with Section
4(iv)(b) below.

     (iii) If, after a Change in Control, your employment shall be terminated for Cause, the
Company shall pay you for your full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given and the Company shall have no further obligations
to you under this Agreement.

     (iv) If, after a Change in Control, the Company shall terminate your employment, other than
pursuant to Section 3(iii) hereof, or you shall terminate your employment for Good Reason, then,
subject to Section 7:

          (a) The Company shall pay you: (I) eighteen (18) months (the “Severance Period”) of salary
continuation at your base rate in effect at the time of your termination in accordance with the
Company’s regular payroll practices plus (II) an amount equal to 1.5 times the bonus (if any) you
received for the last fiscal year prior to your Date of Termination plus (III) an amount equal to
100% of your target bonus for the fiscal year in which the Date of Termination occurs, pro rated
for the number of days worked by you during such fiscal year, including the Date of Termination
(the “Severance Payments”). All payments described in this subparagraph (a) shall be paid in cash
by the Company to you in accordance with the Company’s

-5-

 

[Name of Executive Officer]

[Date]

Page 6

regular payroll practices , less applicable tax withholding, beginning with the first regular
pay date after the date that is six months after your Date of Termination. The first payment shall
be equal to the total amount that you would have received during the first six months after your
Date of Termination if payments had been made during the six-month period after your Date of
Termination assuming payments would have been pro-rata over eighteen (18) months. Thereafter,
payments shall be made pro-rata over the remaining twelve-month Severance Period.;

          (b) You shall have the opportunity to continue your group health care benefits, and those of
your eligible dependents, in accordance with COBRA. During the eighteen (18) calendar months
following the month in which you terminate employment with the Company, the Company shall make any
necessary payments or adjustments such that you shall have the opportunity to continue these group
health care benefits at the applicable employee premium rate in effect at the time of your
termination of employment. In the event that the Company’s insurance company is unable or
unwilling to provide the group health care benefits, or if you become entitled to Severance
Payments as a result of a termination in anticipation of a Change in Control as described in
Section 3(vi) hereof and you do not elect COBRA coverage at the time of your termination, then the
Company shall provide you with monthly cash payments equal to the cost of providing such coverage
to its employees generally. In addition, for the eighteen (18) calendar months following the month
in which you terminate employment (except if such termination is as a result of your death), the
Company shall provide you with group term life insurance and accidental death and dismemberment
coverage substantially similar to the coverage in effect immediately prior to your termination of
employment; provided, however, if the Company’s insurance company is unable or
unwilling to provide the coverage, or if you become entitled to Severance Payments as a result of a
termination in anticipation of a Change in Control as described in Section 3(vi) hereof, then the
Company shall provide you with monthly cash payments equal to the cost of providing such coverage
to its employees generally. You shall be responsible for such co-payments and other deductions and
premiums to the same extent that you were responsible prior to your termination of employment.
Notwithstanding the foregoing, (I) the group health care benefits, including the Company’s subsidy,
may be terminated sooner to the extent permitted by COBRA if you or your dependents obtain other
group health plan coverage, and (II) the Company shall not provide any such life insurance or
accidental death and dismemberment insurance benefits to you to the extent that an equivalent
benefit is received by you from another employer during such period, and you shall report any such
benefit actually received by you to the Company; and

          (c) the exercisability of all outstanding stock options, restricted stock, stock appreciation
rights and other equity awards then held by you shall accelerate in full; and

          (d) subject to Internal Revenue Code section 409A, the time period for exercising any
non-qualified stock options and stock appreciation rights following a termination of your
employment without Cause, as set forth in the applicable award agreement, shall be extended from
three (3) months to the shorter of (I) the later of (a) the 15th day of the third month
following the date at which or (b) December 31 of the calendar year in which, the award would
otherwise have expired if the award had not been extended, based on the terms of the

-6-

 

[Name of Executive Officer]

[Date]

Page 7

award at the original grant date or (II) the remaining balance of the term of such award,
provided however, that this Section 4(iv)(d) shall not apply to any non-qualified stock options and
stock appreciation rights where the applicable award agreement already provides that such awards
may be exercised for twelve months following a termination of your employment without Cause; and

     (v) You shall not be required to mitigate the amount of any payment provided for in this
Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided
for in this Section 4 be reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise, except to the extent provided in
Section 4(iv)(b).

     (vi) The Severance Payments and other benefits described in this Section 4 shall be the only
severance payments you are to receive in the event of a termination of your employment following a
Change of Control and you agree you shall not be entitled to any additional payments or benefits
not otherwise described in this Agreement. You hereby acknowledge and agree that you are not
eligible to be a “Participant” in the TriPath Imaging, Inc. Employee Retention Plan. Any payments
or benefits received under this Agreement shall not be taken into account for purposes of
determining benefits under any other employee benefit plan of the Company or any affiliate, except
to the extent required by law, or as otherwise expressly provided by the terms of such other plan.

	5.	 	LIMIT ON PARACHUTE PAYMENTS.

     In the event that any payment or benefit received or to be received by you in connection with
a Change in Control or the termination of your employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any person whose actions
result in a Change in Control or any person affiliated with the Company or such person)
(collectively “Parachute Payments”) would not be deductible (in whole or part) as a result of
section 280G of the Internal Revenue Code of 1986, as amended by the Company, an affiliate or other
person making such payment or providing such benefit, the Parachute Payments shall be reduced until
no portion of the Parachute Payments is not deductible.

	6.	 	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

     You, by your execution hereof, (i) hereby irrevocably submit to the exclusive jurisdiction of
the state courts of the State of North Carolina (or any other state in which the Company or any
successor maintains its headquarters) for the purpose of any claim or action arising out of or
based upon this Agreement or relating to the subject matter hereof, (ii) hereby waive, to the
extent not prohibited by applicable law, and agree not to assert by way of motion, as a defense or
otherwise, in any such claim or action, any claim that you are not subject personally to the
jurisdiction of the above-named courts, that your property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is improper, or that this
Agreement or the subject matter hereof may not be enforced in or by such courts, and (iii) hereby
agree not to commence any claim or action arising out of or based upon this Agreement or relating
to the subject matter hereof other than before the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of any such

-7-

 

[Name of Executive Officer]

[Date]

Page 8

claim or action to any court other than the above-named courts whether on the grounds of
inconvenient forum or otherwise. You hereby consent to service of process in any such proceeding
in any manner permitted by North Carolina law (or the law of such other state in which the Company
or any successor maintains its headquarters), and agree that service of process by registered or
certified mail, return receipt requested, at your address specified on the first page hereof is
reasonably calculated to give actual notice. You hereby irrevocably waive any right to a trial by
jury in any action, suit, or other proceeding arising under or relating to any provisions of this
Agreement.

	7.	 	OBLIGATIONS DURING THE CHANGE OF CONTROL PERIOD AND FOLLOWING TERMINATION.

     You and the Company
have previously entered into a Non-Competition Agreement dated [____________]
(the “Non-Competition Agreement”) and an Employee Non-Disclosure and Inventions Agreement dated
[____________] (the “NDA”; the Non-Competition Agreement and the NDA collectively referred to as the
“Prior Agreements”) both attached hereto on Schedule A, which impose upon you certain
obligations including, but not limited to, non-competition with the Company, non-solicitation of
employees and customers and confidentiality of Company information. Such Prior Agreements shall
remain in full force and effect upon the execution of this Agreement except that they shall be
superceded by this Agreement during the Change of Control Period. If the Change of Control Period
expires and you remain employed by the Company thereafter, this Agreement shall have terminated and
the Prior Agreements and their terms shall continue to govern your obligations during and following
termination of your employment. Notwithstanding anything herein to the contrary, your right to
receive any payments or benefits under this Agreement shall be conditioned upon and subject to your
compliance with your obligations as described in this Section 7, which obligations shall survive
the termination or expiration of this Agreement according to their respective terms. You hereby
agree that any breach of the provisions of this Section 7 by you will entitle the Company to
terminate this Agreement and to cease all payments and benefits hereunder. Any payments you may
receive pursuant to the Prior Agreements shall offset on a dollar-for-dollar basis any obligations
of the Company or any affiliate to make payments to you under this Agreement.

     (i) Confidentiality.

          (a) Proprietary Information. In the course of your service to the Company and its affiliates,
you will have access to confidential intellectual property, confidential specifications, know-how,
inventions, testing methods, strategic or technical data, marketing research data, product research
and development data, manufacturing techniques, financial performance, confidential customer lists,
costs, sources of supply and trade secrets, names and addresses of the people and organizations
with whom the Company and its affiliates have business relationships and such relationships, and
special needs of customers of the Company and its affiliates, as well as other confidential
business information, all of which are confidential and may be proprietary and are owned or used by
the Company or its affiliates. Such information shall hereinafter be called “Proprietary
Information” and shall include any and all items enumerated in the preceding sentence and coming
within the scope of the business of the Company or its affiliates as to which you may have access,
whether conceived or developed by

-8-

 

[Name of Executive Officer]

[Date]

Page 9

others or by you alone or with others during the period of your service to the Company or its
affiliates, whether or not conceived or developed during regular working hours. The term
“Proprietary Information” also shall be deemed to include comparable information that the Company
or any of its affiliates have received belonging to others or which was received by the Company or
any of its affiliates with any understanding that it would not be disclosed. Proprietary
Information may be contained in various media, including without limitation, patent applications,
computer programs in object and/or source code, flow charts and other program documentation,
manuals, plans drawings, designs, technical and scientific specifications, laboratory notebooks,
supplier and customer lists, internal financial and business data and other documents and records
of the Company and its affiliates. Proprietary Information shall not include any information which
(I) is in the public domain prior to the execution of the NDA and this Agreement, (II) entered the
public domain after the time of its disclosure under the NDA or this Agreement through means other
than an unauthorized disclosure resulting from an act or omission by you, (III) was independently
developed or discovered by you prior to the time of disclosure under the NDA, or (IV) is required
to be disclosed to comply with applicable laws or regulations, or with a court or administrative
order, provided that the Company is notified prior to such disclosure and has the opportunity to
take any actions it deems appropriate to obtain confidential treatment for such disclosure and, if
possible, to minimize the extent of such disclosure.

          (b) You shall not during the term of your employment with the Company or any time thereafter,
regardless of the reason for termination of your employment (a) disclose, directly or indirectly,
any Proprietary Information to any person other than the Company or authorized employees thereof at
the time of such disclosure, or such other persons to whom you have been specifically instructed to
make disclosure by management of the Company and in all such cases only to the extent required in
the course of your service to the Company or (b) use any Proprietary Information, directly or
indirectly, for your own benefit or for the benefit of any other person or entity.

          (c) All notes, letters, documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or its affiliates and
any copies, in whole or in part, thereof (collectively, the “Documents”), whether or not prepared
by you, shall be the sole and exclusive property of the Company. You shall safeguard all Documents
and shall surrender to the Company at the time your employment terminates, or at such earlier time
or times as management of the Company may specify, all Documents then in your possession or
control.

     (ii) Non-Competition; Non-Hire; Non-Solicitation.

          (a) During the Severance Period, you will not engage or participate in, directly or
indirectly, as principal, agent, employee, employer, consultant, investor or partner, or assist in
the management of, or own any stock or any other ownership interest in (excluding ownership of not
more than one (1%) percent of the voting stock of any publicly held corporation), any business
which is Competitive with the Company (as defined below).

-9-

 

[Name of Executive Officer]

[Date]

Page 10

               (1) A business shall be considered “Competitive with the Company” if it is engaged in any
business, venture or activity, or is developing any product, in the Restricted Area (as defined
below) which competes, plans to compete or upon commercialization, would compete, with any
business, product, venture or activity being developed, conducted or proposed to be conducted (as
evidenced by the Company’s internal written business plans or memoranda) by the Company, or any
group, division or affiliate of the Company, determined as of the date of the Change in Control.

               (2) The “Restricted Area” shall mean the United States of America, Canada, and any other
geographic area where the Company, or any group, division or affiliate of the Company, is
conducting, or has proposed to conduct (as evidenced by the Company’s internal written business
plans or memoranda), any business, venture or activity, determined as of the date of the Change in
Control.

          (b) During the term of your employment and during the Severance Period, you will not hire any
officer, director, consultant, executive or employee of the Company or any of its affiliates, nor
will you solicit or attempt to solicit any such person to leave his or her engagement with the
Company or such affiliate. During the term of your employment and during the Severance Period, you
will not call upon, solicit, divert or attempt to solicit or divert from the Company or any of its
affiliates any of their customers or suppliers or potential customers or suppliers of whose names
you were aware during your employment with the Company.

          (c) During the Severance Period you shall notify the Company of any change of address and of
any subsequent employment (stating the name and address of the employer and the nature of the
position) or any other business activity.

     (iii) Non-Disparagement. During the term of your employment and for five (5) years
thereafter, you shall not disparage, deprecate, or make any comments or take any other actions,
directly or indirectly, that could reflect adversely on the Company, its affiliates or its
officers, directors, employees or agents or adversely affect their business reputation or goodwill.

     (iv) Release and Waiver of Claims. Upon your termination following a Change in
Control, and in consideration of the benefits provided to you under the terms of this Agreement,
you hereby agree to execute the Release and Waiver of Claims attached hereto as Exhibit A.

	8.	 	CONFLICT AMONG AGREEMENTS OR BENEFIT PLANS.

     In the event of any conflict between the provisions of this Agreement and the terms of any
other agreement or any benefit plan under which you are entitled to receive payments or benefits,
or any agreement, instrument, other document or undertaking between you and the Company, unless
otherwise specifically provided herein, the provisions of this Agreement shall control.

-10-

 

[Name of Executive Officer]

[Date]

Page 11

	9.	 	DEDUCTION; WITHHOLDING; SET-OFF.

     Notwithstanding any other provision of this Agreement, any payments or benefits hereunder
shall be subject to the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company reasonably determines it should withhold pursuant to any applicable law
or regulation. The amounts due and payable under Section 4 shall at all times be subject to the
right of set-off of the Company for any amounts or debts incurred and owed by you to the Company
whether during your employment or after the Date of Termination.

	10.	 	LEGAL FEES.

     If any contest or dispute shall arise between you and the Company regarding or as a result of
any provision of this Agreement, the Company shall reimburse you for all reasonable attorney’s fees
and legal expenses incurred by you up to a maximum of $15,000.00 in connection with such contest or
dispute, but only if you are successful with respect to substantially all of your material claims
pursued or defended in connection with such contest or dispute. Such reimbursement shall be made
as soon as practicable following the final adjudication (not subject to further appeal) by a court
or arbitrator, or by settlement of the dispute to the extent that the Company receives reasonable
written evidence of such fees and expenses.

	11.	 	LITIGATION AND REGULATORY COOPERATION.

     You agree to cooperate fully with the Company or any related entity in the defense or
prosecution of any claims or actions now in existence or which may be brought in the future against
or on behalf of the Company or any related entity that relate to events or occurrences that
transpired during your employment with the Company. Your full cooperation in connection with such
claims or actions shall include, but not be limited to, being available to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of the Company at mutually
convenient times. In scheduling your time to prepare for discovery or trial, the Company shall
attempt to minimize interference with any other employment obligations that you may have. You also
shall cooperate with the Company in connection with any investigation or review of any foreign,
federal, state or local regulatory authority as any such investigation or review relates to events
or occurrences that transpired while you were employed by the Company. The Company shall reimburse
you for any reasonable out-of-pocket expenses incurred in connection with any litigation and
regulatory cooperation provided under this Section 11 after your Date of Termination. In the event
that you are named personally in any legal proceeding relating to your activities on behalf of the
Company, you will be eligible for indemnification to the extent permitted by the Company’s By-laws
and other governance documents, as well as the Company’s liability insurance policies, as in effect
at the time you make a claim for indemnification.

	12.	 	NOTICE.

     For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered to each party at each party’s respective
address set forth on the first page of this Agreement, and shall be deemed effectively given or
delivered: (i) upon personal delivery to the party to be notified, (ii) three (3) days after
having been sent by registered or certified mail, return receipt requested, postage prepaid, or
(iii) one (1)

-11-

 

[Name of Executive Officer]

[Date]

Page 12

business day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt; provided that all notices to the Company should be
directed to the attention of the Chairman of the Board of the Company, with a copy to the General
Counsel of TriPath Imaging, Inc.

	13.	 	ENTIRE AGREEMENT.

     Except for the Prior Agreements, this Agreement represents the entire agreement of the parties
with respect to the subject matter hereof and, except to the extent provided for herein, supersedes
any other agreement between the parties with respect to such subject matter.

	14.	 	SUCCESSORS; BINDING AGREEMENT.

     (i) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to compensation from the
Company or its successor in the same amount and on the same terms as he would be entitled to
hereunder if he terminates his employment for Good Reason following a Change in Control, except
that for purposes of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement, “Company” shall mean
the Company as hereinbefore defined and any successor to its business or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

     (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

	15.	 	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 in the same instrument.

	16.	 	MISCELLANEOUS.

     (i) Nothing contained in this Agreement, nor any action taken hereunder, shall be construed as
a contract of employment, or as giving you any right to be retained as an employee of the Company.
Your employment will remain at-will and your obligations under this Agreement shall not be affected
by any change in your position, title or function with, or compensation by the Company.

-12-

 

[Name of Executive Officer]

[Date]

Page 13

     (ii) No provision of this Agreement may be modified, waived, or discharged unless such waiver,
modification, or discharge is agreed to in writing signed by you and such officer as may be
specifically designated by the Board of Directors of the Company.

     (iii) No waiver by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any time prior to subsequent time.

     (iv) The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of North Carolina.

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

     (vi) Your rights to payments or benefits under this Agreement shall not be made subject to
option or assignment, either by voluntary or involuntary assignment or by operation of law,
including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and
any action in violation of this Section 16(vi) shall be void.

[The remainder of this page intentionally left blank.]

-13-

 

[Name of Executive Officer]

[Date]

Page 14

     If this Agreement correctly sets forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this Agreement which will then constitute our
agreement on this subject.

	 	 	 
	 

	 	Sincerely,
	 
	 	 
	 

	 	TRIPATH IMAGING, INC.
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Name: Paul R. Sohmer

Title: President, Chief Executive Officer and Chairman
	 
	 	 
	I acknowledge receipt and agree
with the foregoing terms and conditions.

	 
	 	 
	 
	 	 
	 
	Name: [____________]

-14-

 

Exhibit A

Release and Waiver of Claims

[To be inserted]

 

Schedule A

Prior Agreements

[To be inserted]<PAGE>

                                                                    EXHIBIT 10.2

                                (FOR ORGANIZERS)

                         MOUNTAIN VALLEY COMMUNITY BANK
                                WARRANT AGREEMENT

      THIS WARRANT AGREEMENT (the "Warrant Agreement") is made and entered into
effective as of the ____ day of __________, 2004 by and between MOUNTAIN VALLEY
COMMUNITY BANK (the "Bank") and ________________________, a resident of the
State of Georgia (the "Warrantholder").

      WHEREAS, the Warrantholder was named as an organizing director of the Bank
and has placed assets at risk to fund the organizational expenses in expectation
of being granted warrants to purchase the number of shares of the common stock
of the Bank equal to the number of shares subscribed by the Warrantholder; and

      WHEREAS, the Bank hereby grants the number of warrants to the
Warrantholder on the terms and conditions hereinafter stated as part of the
Warrantholder's investment in the Bank;

      NOW, THEREFORE, this Warrant Agreement is entered into by the Bank and the
Warrantholder with the following terms:

1.    WARRANT.

      The Bank hereby grants to the Warrantholder warrants (the "Warrants") to
purchase _____________________ (___________) shares (the "Shares") of the
common stock ($5.00 par value) (the "Common Stock") of the Bank in accordance
with the terms and subject to the restrictions hereinafter set forth.

2.    TERMINATION.

      The Warrants have been granted on the date of this Warrant Agreement and
shall terminate on ___________, _____, the date which is ten years from the date
of the Bank's incorporation, unless sooner terminated as follows. The Warrants
shall terminate on the date that is ninety days from the date on which the
Warrantholder ceases to be an active officer, employee or director of the Bank
other than by reason of his or her death or disability and six months after the
Warrantholder ceases being an active officer, employee or director of the
Company by reason of his or her death or disability.

<PAGE>

3.    EXERCISE OF WARRANTS.

      The Warrants must be exercised within ten (10) years from the date of the
Bank's incorporation, _____________, _____. If any Warrants are not exercised in
this ten (10)-year period, those Warrants shall be null and void.

      No fractional shares will be issued upon exercise of Warrants, but the
Bank will pay the cash value of any fractional shares otherwise issuable.

      The Warrants shall be exercised, in whole or in part, by written notice
directed to the Secretary of the Bank at the Bank's main office or at such other
address as the Bank shall have notified the Warrantholder in writing. Such
written notice shall be accompanied by payment in full in cash or by check or
shares of the Common Stock previously held by the Warrantholder of the Warrant
Price for the number of Shares specified in such written notice. In the event of
the Warrantholder's death or mental incapacity, the Warrants may be exercised by
the Warrantholder's personal representative.

4.    VESTING.

      The Warrants shall have the following vesting schedule:

<TABLE>
<CAPTION>
                                                          VESTING PERCENTAGE
                                                               OF TOTAL
DATE                                                      WARRANTS GRANTED
----                                                      ------------------
<S>                                                       <C>
First Anniversary of the Date Hereof                          33(1/3)%
Second Anniversary of the Date Hereof                         33(1/3)%
Third Anniversary of the Date Hereof                          33(1/3)%
</TABLE>

5.    WARRANT PRICE.

      The price per share at which Shares may be purchased pursuant to exercise
of the Warrants (the "Warrant Price") shall be $10.00(1) (which amount has been
determined by the Board to be the fair market value per share of the Common
Stock on the date that these Warrants are granted).

6.    EXERCISE OR FORFEITURE OF WARRANTS DUE TO CAPITAL BELOW MINIMUM
      REQUIREMENTS.

      If the Bank's capital falls below the minimum requirements, as determined
by the State of Georgia Department of Banking and Finance (the "Department") or
the Federal Deposit Insurance Corporation (the "FDIC"), and if directed by the
Department and/or the FDIC, the Bank can require the Warrantholder to exercise
or forfeit his or her Warrants.

-----------
(1)   Please note that since the dates of the original warrants the exercise
      price has been reduced to $8.00 per share by virtue of a stock split.
<PAGE>

7.    ADJUSTMENTS IN CERTAIN EVENTS.

      The Warrants granted hereunder shall be appropriately adjusted both as to
the number of shares subject to the Warrants and the Warrant Price for any
increase or decrease in the number of outstanding shares of Common Stock of the
Bank resulting from a stock split or payment of a stock dividend on the Common
Stock, a subdivision or combination of shares of the Common Stock, or a
reclassification of the Common Stock, and in the event of a merger or
consolidation in accordance with the following paragraph.

      After any merger, consolidation or reorganization of any form involving
the Bank as a party thereto involving any exchange, conversion, adjustment or
other modification of the outstanding shares of the Bank's Common Stock,
Warrantholder at the time of such reorganization shall, at no additional cost,
be entitled, upon any exercise of his or her Warrant, to receive, in lieu of the
number of shares as to which such Warrant shall then so be exercised, the number
and class of shares of stock or other securities or such other property to which
such Warrantholder would have been entitled pursuant to the terms of the
agreement of merger or consolidation, if at the time of such merger or
consolidation, such Warrantholder had been a holder of record of a number of
shares of the Common Stock of the Bank equal to the number of shares as to which
such Warrant shall then be so exercised. Comparable rights shall accrue to each
Warrantholder in the event of successive mergers or consolidations of the
character described above.

      The foregoing adjustments and the manner of their application will be in
the discretion of the Bank to determine.

8.    LIMITATION ON PERCENTAGE OF COMMON STOCK OWNED.

      Exercise of the Warrants shall not result in the Warrantholder (including
shares owned by the Warrantholder's spouse and minor children) owning more than
twenty percent (20%) of the outstanding Common Stock of the Bank, unless the
Department has approved the Warrantholder owning more than twenty percent (20%)
of the outstanding Common Stock of the Bank in the approval of the Bank's
charter application. Any attempt to exercise the Warrants which would result in
a violation of the above restriction shall be null and void to the extent of any
excess over the above limitation.

9.    LIMITATION OF RIGHTS.

      The Warrantholder or the personal representative of the Warrantholder is
not entitled, by virtue of being such a holder, to receive dividends or to
consent or to receive notice as a stockholder in respect to any meeting of
stockholders for the election of directors of the Bank or any other matters, or
to vote at any such meeting, or to any other rights whatsoever as a stockholder
of the Company. The Warrantholder or the personal representative of the
Warrantholder shall have no rights as a stockholder with respect to the Common
Stock covered by the Warrants until the Warrantholder or the personal
representative of the Warrantholder shall become the holder of record of such
Common Stock.

<PAGE>

10.   RESTRICTIONS ON TRANSFER AND PLEDGE.

      The Warrants and all rights and privileges granted hereunder shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of law or otherwise, and shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Warrants or any right or privilege granted hereunder,
or upon the levy or any attachment or similar process upon the rights and
privileges herein conferred, the Warrants and the rights and privileges
hereunder shall become immediately null and void.

11.   RESTRICTIONS ON ISSUANCE OF SHARES.

      If at any time the Board of Directors of the Bank shall determine, in its
discretion, that listing, registration or qualification of the Common Stock
covered by the Warrants upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition to the exercise of the Warrants, the
Warrants may not be exercised in whole or in part unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors.

      IN WITNESS WHEREOF, the Bank, acting by and through its duly authorized
officers, has caused this Warrant Agreement to be executed and the Warrantholder
has executed this Warrant Agreement, all as of the day and year first above
written.

                                                MOUNTAIN VALLEY COMMUNITY BANK

                  [SEAL]

Attest:                                         By: ____________________________
                                                        Marc J. Greene
By: __________________________                          President

                                                WARRANTHOLDER:

                                                ________________________________
                                                Print Name: ____________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]