Document:

Exhibit 10.3

 

THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR SUCH REGISTRATION UNDER THE SECURITIES
ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

 

 

Corgenix Medical Corporation

 

WARRANT TO PURCHASE COMMON STOCK

October 1, 2010

 

	
  Number
  of Shares: 833,333

  	
   

  	
  Warrant
  Holder: Wescor, Inc.

  
	
  Original
  Issue Date: October 1, 2010

  	
   

  	
  Address:

  

  Attention: Michael Saunders

  370 West 1700 South

  Logan, Utah 84321

  Email: m.saunders@elitechgroup.com

  
	
  Expiration
  Date: September 30, 2015

  	
   

  	
  Telephone:
  (435 752-6011)

  Facsimile: (425) 752-4127

  
	
  Exercise
  Price per Share: $0.15

  	
   

  	
   

  

 

Corgenix
Medical Corporation, a company organized and existing under the laws of the
State of Nevada (the “Company”),
hereby certifies that, for value received, Wescor, Inc., or its registered
assigns (the “Warrant Holder” or “Warrant Holders”), is entitled,
subject to the terms set forth below, to purchase from the Company up to eight
hundred thirty three thousand three hundred thirty three (833,333) shares (as
adjusted from time to time as provided in Section 6, collectively, the “Warrant Shares” and individually,
the “Warrant Share”) of common stock,
$.001 par value, of the Company (the “Common Stock”)
at a price of fifteen cents ($0.15) per Warrant Share (as adjusted from time to
time as provided in Section 6, the “Exercise Price”),
at any time and from time to time from and after the date hereof and through
and including 5:00 p.m. Mountain Time on September 30, 2015 (the “Expiration Date”):

 

1

 

1.             Registration
of Warrant.  The Company shall register this Warrant to
Purchase Common Stock (“Warrant”)
upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of
the record Warrant Holder from time to time.

 

2.             Investment
Representation.  The Warrant Holder by accepting this Warrant
represents that the Warrant Holder is acquiring this Warrant for its own
account or the account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder will not sell
or otherwise dispose of this Warrant or the underlying Warrant Shares in
violation of applicable securities laws. 
The Warrant Holder acknowledges that the certificates representing any
Warrant Shares will bear a legend indicating that they have not been registered
under the Securities Act and may not be sold by the Warrant Holder except
pursuant to an effective registration statement or pursuant to an exemption
from registration requirements of the Securities Act and in accordance with
United States federal and state securities laws.

 

3.             Validity of
Warrant and Issue of Shares.  The Company represents and warrants that this
Warrant has been duly authorized and validly issued.

 

4.             Registration
of Transfers and Exchange of Warrants.

 

(a)           Subject
to compliance with the legend set forth on the face of this Warrant, the
Warrant Holder may transfer all or part of this Warrant at any time to any
other transferee acceptable to the Company, in the Company’s sole
discretion.  Upon approval of such
transfer, the Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant with the
Company’s form of assignment duly completed and signed, to the Company at the
office specified in or pursuant to Section 10.  Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Warrant
Holder.  The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of the Warrant Holder.

 

(b)           This
Warrant is exchangeable, upon the surrender hereof by the Warrant Holder to the
office of the Company specified in or pursuant to Section 10 for one or
more New Warrants, evidencing in the aggregate the right to purchase the number
of Warrant Shares which may then be purchased hereunder.  Any such New Warrant will be dated the date
of such exchange.

 

5.             Exercise of
Warrants.

 

(a)           Upon
surrender of this Warrant with the Form of Election to Exercise attached hereto
duly completed and signed to the Company, at its address set forth in Section
10, and upon payment and delivery of the Exercise Price per Warrant Share
multiplied by the number of Warrant Shares that the Warrant Holder intends to
purchase hereunder, in lawful money of the United States of America, by
tendering cash, wire transferring or delivering a certified check or bank
cashier’s check, payable to the order of the Company, all as specified by the
Warrant Holder in the Form of Election to Exercise, the Company shall promptly
issue or

 

2

 

cause to be issued and cause to be delivered to or upon
the written order of the Warrant Holder and in such name or names as the
Warrant Holder may designate (subject to the restrictions on transfer described
in the legend set forth on the face of this Warrant), a certificate for the
Warrant Shares issuable upon such exercise, with such restrictive legend as
required by the Securities Act.  Any
person so designated by the Warrant Holder to receive Warrant Shares shall be
deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant, irrespective of the date of delivery of the
certificate evidencing such shares, except that, if the date of such receipt is
a date on which the stock transfer books of the Company are closed, such person
will be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are
open.

 

(b)           A “Date of Exercise” means the date on
which the Company shall have received (i) this Warrant (or any New Warrant, as
applicable), with the Form of Election to Exercise attached hereto (or attached
to such New Warrant) appropriately completed and duly signed, and (ii) payment
of the Exercise Price for the number of Warrant Shares so indicated by the
Warrant Holder to be purchased.

 

(c)           This
Warrant shall be exercisable at any time and from time to time for such number
of Warrant Shares as is indicated in the attached Form of Election To
Exercise.  If less than all of the Warrant
Shares which may be purchased under this Warrant are exercised at any time, the
Company shall issue or cause to be issued, at its expense, a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares for
which no exercise has been evidenced.

 

6.             Adjustment
of Exercise Price and Number of Shares.  The number of the shares of Common Stock or
other securities at the time issuable upon exercise of this Warrant, and the
Exercise Price therefore, are subject to adjustment upon the occurrence of the
following events; provided, however that the Exercise Price per share will not
be less than the par value per share of the Common Stock.  For the purpose of this Section 6,
Common Stock includes shares now or hereafter authorized of any class of common
stock of the Company and any other stock of the Company, however designated,
that has the right to participate in any distribution of the assets or earnings
of the Company without limit as to per share amount (excluding, and subject to
any senior rights of, any class or series of preferred stock).

 

(a)           Adjustment
for Stock Splits, Stock Dividends, Recapitalizations, Etc.  The Exercise Price of this
Warrant and the number of shares of Common Stock or other securities at the
time issuable upon exercise of this Warrant shall be appropriately adjusted to
reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of stock or securities.

 

(b)           Capital
Reorganization or Reclassification.  If the Common Stock issuable upon the
exercise of this Warrant shall be changed into the same or different number of
shares of any class or classes of Common Stock, whether by capital
reorganization, reclassification or otherwise (other than a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Warrant)
then, in and as a condition to the effectiveness of each such event, the
Warrant Holder shall have the right thereafter to exercise this Warrant for the
kind and amount of Common Stock and other securities and property receivable
upon such 

 

3

 

reorganization, reclassification or other change by the
holder of the number of shares of Common Stock for which such Warrant might
have been exercised immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.

 

(c)           Merger.  In case of a dividend or
distribution paid pursuant to a plan of consolidation or merger of the Company
with another Person (as defined below) (other than a merger or consolidation in
which the Company is the continuing Person and the Common Stock is not
exchanged for securities, property or assets issued, delivered or paid by
another Person), or in case of any lease, sale or conveyance to another Person
(other than to a wholly owned domestic subsidiary of the Company so long as
such subsidiary continues to be wholly owned) of all or substantially all of
the property or assets of the Company, this Warrant shall thereafter (until the
Expiration Date) evidence the right to receive, upon its exercise, in lieu of
Common Stock deliverable upon such exercise, immediately prior to such
consolidation, merger, lease, sale or conveyance the kind and amount of shares
and/or other securities and/or property and assets and/or cash that the Warrant
Holder would have been entitled to receive upon such consolidation, merger,
lease, sale or conveyance had the Warrant Holder exercised this Warrant
immediately prior to such consolidation, merger, lease, sale or conveyance; provided, however, to the extent a stockholder would have
had an opportunity to elect the form of consideration in such a transaction,
the Warrant Holder electing to not exercise its warrants shall be entitled to
the same consideration that a holder of such Common Stock failing to make any
such election would have been entitled to receive upon such transaction.  The Company shall not consummate any
transaction that effects or permits any such event or occurrence unless each
Person whose shares of stock, securities or assets will be issued, delivered or
paid to the holders of the Common Stock (including the Company with respect to
clause (ii) below), prior to or simultaneously with the consummation of the
transaction, (i) is a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and (ii)
expressly assumes, or in the case of the Company, acknowledges, by a Warrant
supplement or other document in a form substantially similar hereto, executed
and delivered to the Warrant Holder thereof, the obligation to deliver to such
Warrant Holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions of this Section 6(c), such Warrant Holder
is entitled to purchase, and all other obligations and liabilities under this
Warrant, including the obligations and liabilities in respect of subsequent
adjustments that are required under this Warrant.  For purposes of this Section 6(c), “Person” shall mean an individual,
limited or general partnership, corporation, association, company, joint-stock
company, business trust, joint venture, trust or unincorporated organization,
or any other entity, including a government or agency or political subdivision
thereof.

 

(d)           Certificate
as to Adjustments.  In case of any adjustment or readjustment in
the price or number of securities issuable on the exercise of this Warrant, the
Company will promptly give written notice thereof to the Warrant Holder in the
form of a certificate, certified and confirmed by the board of directors of the
Company (the “Board of Directors”), setting
forth such adjustment or readjustment and showing in reasonable detail the facts
upon which such adjustment or readjustment is based.  The Board of Directors will also issue to the
Warrant Holder a substitute Warrant reflecting the adjusted number of shares
and/or Exercise Price upon the surrender of this Warrant to the Company.

 

4

 

(e)           Minimum
Adjustment.  No adjustment of the Exercise Price shall be
required under this Section 6 if the amount of such adjustment is less
than one percent (1.0%) of the Exercise Price then in effect; provided, however, that any adjustments that by reason of
the foregoing are not required at the time to be made shall be carried forward
and taken into account and included in determining the amount of any subsequent
adjustment.  If the Company shall take a
record of holders of Common Stock for the purpose of entitling them to receive
any dividend or distribution and thereafter and before the distribution to
stockholders of any such dividend or distribution, legally abandons its plan to
pay or deliver such dividend or distribution, then no adjustment of the
Exercise Price shall be required by reason of the taking of such record.  All calculations under this Section 6
shall be made to the nearest cent.

 

(f)            Equitable
Adjustment.  In case any event shall occur as to which the
other provisions of this Section 6 are not strictly applicable but the
failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof, then, in each such case, the Company shall effect such
adjustment, on a basis consistent with the essential intent and principles
established in this Section 6, as may be necessary to preserve, without
dilution, the purchase rights represented by this Warrant.

 

7.             Reservation
of Shares.  The Company agrees at all times to reserve
and hold available out of its authorized but unissued shares of Common Stock
the number of shares of Common Stock issuable upon the full exercise of this
Warrant.  The Company further covenants
and agrees that all shares of Common Stock that may be delivered upon the
exercise of this Warrant or any New Warrant, as applicable, will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof under this Warrant or any such New
Warrant.

 

8.             Fractional
Shares. The Company shall not be
required to issue or cause to be issued fractional Warrant Shares on the
exercise of this Warrant.  The number of
full Warrant Shares that shall be issuable upon the exercise of this Warrant
shall be computed on the basis of the aggregate number of Warrants Shares
purchasable on exercise of this Warrant so presented.  If any fraction of a Warrant Share would,
except for the provisions of this Section 8, be issuable on the exercise
of this Warrant, the Company shall pay an amount in cash equal to the Exercise
Price multiplied by such fraction.

 

9.             Prior
Notice as to Certain Events.  In case at any time:

 

(a)           the
Company shall fix a record date with respect to the holders of any class of
securities of the Company for the purpose of determining which of such holders
are entitled to dividends or other distributions, or any rights to subscribe
for, purchase or otherwise acquire any shares of capital stock of any class or
any other securities or property;

 

(b)           the
Company shall declare a dividend (or any other distribution) on the Common
Stock, including any extraordinary dividend;

 

5

 

(c)           the
Company shall authorize the granting to the holders of the Common Stock of pro
rata rights, options or warrants to subscribe for or purchase any shares of
capital stock of the Company;

 

(d)           there
occurs any capital reorganization of the Company, or reclassification of the
Common Stock of the Company (other than a merger which is effected solely to
change the jurisdiction of incorporation of the Company), or any consolidation
or merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or the sale or transfer of all or
substantially all of the assets of the Company (other than to a wholly owned
domestic subsidiary of the Company so long as such subsidiary continues to be
wholly owned); or

 

(e)           there
occurs any voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then
in each such event the Company shall cause to be mailed to the registered
Warrant Holder at its last address as shown in the Warrant Register, no later
than ten (10) business days prior to the earliest date specified therein, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options or warrants and stating the amount
and character of such dividend, distribution, or right, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding up (or
amendment thereto) is expected to become effective, and the date as of which it
is expected that holders of record of such class of Common Stock shall be
entitled to exchange their Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding up.

 

10.           Notice.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been given (i) on the
date they are delivered if delivered in person; (ii) on the date initially
received if delivered by facsimile transmission followed by registered or
certified mail confirmation; (iii) on the date delivered by an overnight
courier service; or (iv) on the third business day after it is mailed by
registered or certified mail, return receipt requested with postage and other
fees prepaid as follows:

 

If to the Company:

 

Corgenix Medical Corporation

11575 Main Street, Suite 400

Broomfield, Colorado 80020

Attention:  Chief Financial
Officer

Facsimile:  (303) 453-8898

 

If to the Warrant Holder:

 

Wescor, Inc.

Attention:  Michael Saunders

 

6

 

370 West 1700 South

Logan, Utah 84321

Facsimile:  (425) 752-4127

 

11.          Additional Covenants of the Company.

 

(a)           For so
long as the Common Stock is listed for trading on any regional or national
securities exchange, and for so long as and to the extent that such
requirements apply to the Company, the Company shall comply with the reporting
requirements of Sections 13 and 15(d) of the Securities Exchange Act of 1934,
as amended.

 

(b)           The
Company shall not, by amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant.  Without limiting the generality of the
foregoing, the Company (i) will at all times reserve and keep available,
solely for issuance and delivery upon exercise of this Warrant, shares of
Common Stock issuable from time to time upon exercise of this Warrant,
(ii) will not increase the par value of any shares of capital stock
receivable upon exercise of this Warrant above the amount payable therefor upon
such exercise, and (iii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable stock.

 

12.          Miscellaneous.

 

(a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.  This Warrant may be amended only by a writing
signed by the Company and the Warrant Holder.

 

(b)           Nothing
in this Warrant shall be construed to give to any Person other than the Company
and the Warrant Holder any legal or equitable right, remedy or cause of action
under this Warrant; this Warrant shall be for the sole and exclusive benefit of
the Company and the Warrant Holder.

 

(c)           This
Warrant shall be governed by, construed and enforced in accordance with the
internal laws of the State of Nevada, without regard to the principles of
conflicts of law thereof.

 

(d)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

 

(e)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

7

 

(f)            The
Warrant Holder shall not, by virtue hereof, be entitled to any voting or other
rights of a stockholder of the Company, either at law or equity, and the rights
of the Warrant Holder are limited to those expressed in this Warrant.

 

(g)           In any
action or proceeding brought to enforce any provision of this Warrant, the
prevailing party shall be entitled to recover reasonable attorneys’ fees in
addition to its costs and expenses and any other available remedy.

 

[Remainder of page intentionally left blank.  Signature page follows.]

 

8

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by the
authorized officer as of the date first above stated.

 

 

CORGENIX
MEDICAL CORPORATION, a Nevada corporation

 

 

	
  By:

  	
  /s/
  Douglass T. Simpson

  	
   

  
	
  Name:
  Douglass T. Simpson

  	
   

  
	
  Its:
  Chief Executive Officer

  	
   

  

 

9

 

FORM OF ELECTION TO EXERCISE

 

(To
be executed by the Warrant Holder to exercise its right to purchase shares of
Common Stock under the foregoing Warrant)

 

To:  Corgenix Medical
Corporation:

 

In
accordance with the Warrant enclosed with this Form of Election to Exercise,
the undersigned hereby irrevocably elects to purchase
                  
shares of common stock, $.001 par value, of Corgenix Medical Corporation (“Common Stock”) and encloses the
Warrant and
$                      
for each Warrant Share being purchased or an aggregate of
$                        
and hereby makes payment therefor by tendering cash, wire transferring or
delivering a certified check or bank cashier’s check, payable to the order of
the Company, which sum represents the aggregate Exercise Price (as defined in
the Warrant).

 

The
undersigned requests that certificates for the shares of Common Stock issuable
upon this exercise be issued in the name of:

 

	
   

  
	
   

  
	
   

  

(Please
print name and address)

 

	
   

  

(Please
insert Social Security or Tax Identification Number)

 

If
the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

(Please
print name and address)

 

	
  Dated:

  	
  Name
  of Warrant Holder:

  
	
   

  	
  (Print)

  	
   

  
	
   

  	
  (By:)

  	
   

  
	
   

  	
  (Name:)

  	
   

  
	
   

  	
  (Title:)

  	
   

  
	
   

  	
  Signature
  must conform in all respects to name of Warrant Holder as specified on the
  face of the WarrantExhibit 10.1

 

October 1, 2010

 

Mr. Frank
S. Sklarsky

 

 

 

Dear
Frank:

 

I
am pleased to offer you a position as Executive Vice President and Chief
Financial Officer, reporting
directly to me.  Your employment will
begin on a mutually agreeable start date. 
This position will be located in Princeton, New Jersey.  Your
compensation and benefits are described below.

 

Compensation

 

You will receive an annual salary of $700,000. 
Your salary will be paid monthly, in the month that it is earned. In addition to your base salary,
you will be eligible to participate in the Company’s short-term performance
bonus and long-term incentive programs.

 

Under the short-term performance bonus program, you
will have the opportunity to earn a target award of 100% of your salary and you
can earn a maximum bonus award of up to 200% of your base salary. Determination
of award levels will be based on the Company’s financial performance and your
individual contribution.  For purposes of fiscal year 2011, your bonus
will be determined as if you were employed by Tyco as of the start of the
fiscal year, which commenced on September 27, 2010, rather than your
actual start date.

 

You
are eligible to participate in the annual long-term incentive program that the
Company makes available to other executives in similar roles.  For fiscal year 2011, you will receive a
recommended grant value of $2,000,000 which will be split between stock options
(40%), performance share units (40%), and restricted stock units (20%). Stock
options and restricted stock units vest equally over a four year period on the
anniversary date of the grant. The number of performance units earned will be
determined at the end of three years and can range from 0% to 200% of the
target number of shares granted. The grant date of this award will be the day
of the next meeting of the Compensation and Human Resources Committee of the
Tyco Board of Directors following your start date at Tyco International.  You will receive more information about your
awards, detailing the terms and conditions, after they have been granted.

 

Sign-on
Compensation

 

Additionally, in consideration for your annual
incentive bonus forfeited at your previous employer, you will receive a cash
sign-on bonus of $500,000 to be paid as soon as administratively possible after
your employment start date.  Should you
voluntarily terminate 

 

 

your employment within one year of your start date,
you will be required to repay this one-time bonus in full.

 

You
will be eligible to receive a one-time sign-on restricted unit grant value of
$1,500,000, intended to replace the value of unvested restricted stock
forfeited at your previous employer. 
These restricted stock units vest equally over a three year period on
the anniversary date of the grant. You will also be eligible to receive a
one-time sign-on restricted unit grant value of $375,000, intended to replace
the forfeited value of your supplemental pension at your previous employer.
Restrictions on these units will lapse at the end of three years. The grant
date of these awards will be the day of the next meeting of the Compensation
and Human Resources Committee of the Tyco Board of Directors following your
start date at Tyco International.  You
will receive more information about your awards, detailing the terms and
conditions, after they have been granted.

 

Flexible Perquisite Program

 

You will also be eligible
to participate in the Flexible Perquisites Plan, which allows for an annual sum
paid in four installments that can be used at the discretion of the participant
to apply to various eligible expenses. 
Your eligibility will begin with the first full quarter after start
date.  Allowances are set at 10% of base
annual salary, capped at $70,000 annually, less applicable taxes.  Examples of eligible expenses covered under
this plan are car leases, car payments or auto insurance, financial and estate
planning, club memberships, executive physicals and income tax preparation.

 

Benefits

 

You will also be entitled
to all employee benefits that Tyco International customarily makes available to
employees in positions comparable to yours.  Specifically, you will be
eligible to participate in the following:

 

·                  Tyco
Retirement Savings and Investment Plan — This 401(k) plan
provides for retirement savings through employee contributions and a generous
five-to-one company matching contribution on the first one percent of eligible
compensation that you contribute.  Catch up contributions are also allowed
for participants who qualify, but are not matched by Tyco.  An enrollment
package will be mailed to you in the next few weeks.

·                  Tyco
Supplemental Savings and Retirement Plan — In addition to the 401(k) plan,
Tyco also offers you another opportunity to save money on a tax-deferred
basis.  Under this non-qualified program, you can defer up to 50% of your
base salary.  While you will not be eligible to enroll in this plan for
the remainder of 2010, you will be eligible to enroll for 2011.  You will
have until December 16, 2010 to enroll for 2011. A plan brochure will be
mailed to you in the next few weeks. If you participate in this plan, you will
receive company matching credits equal to the matching percentage rate you
would be eligible to receive under the 401(k).  If you choose not to
participate, you will still receive company credits to this plan on any
eligible compensation during the year that exceeds the IRS compensation limit
(expected to be $245,000 for 2011).  This plan also allows participants to
defer all or a portion of their performance based bonus, but only if 

 

2

 

the deferral election is
made prior to the start of the year in which the bonus is earned.  Since
your employment start date will be after the 2011 fiscal year has commenced,
you will not be eligible to defer your 2011 bonus.  You will be given an
opportunity to defer your 2012 bonus during next year’s enrollment period
(anticipated to be during September 2011).

·                  Tyco
Medical and/or Dental Plans — You will be eligible to
participate  on a contributory
basis 31 days after your employment start date.  You will be given
information about the enrollment process during your new hire
orientation.  Benefit programs are reviewed annually and changes in plan
design and/or employee contributions are the norm and communicated in advance
of any changes.  Please refer to the Tyco Benefits summary booklet called “For
Your Benefit”, found in the new hire kit under tab Your Health &
Welfare Benefits for detailed information on US benefits offerings.

·                  Tyco
International Change in Control Severance Plan for Certain U.S. Officers and
Executives (“CIC Plan”) — In the event of involuntary termination of
your employment or termination by you for Good Reason (as defined in the CIC
Plan) in connection with a Change in Control, you will be eligible for such
benefits as may be provided under the terms of the CIC Plan.

·                  Tyco
International Severance Plan for U.S. Officers and Executives (“Severance Plan”)
— In the event of a qualifying termination of your employment under
this plan, you will be eligible for such benefits as may be provided under the
terms of the Severance Plan.

·                  Vacation — You will be
eligible for four (4) weeks of vacation

 

Relocation

 

The Company will provide you
with a relocation package.  In addition
to the standard relocation plan, you will be eligible to receive up to an
additional 8 months of temporary living in the Princeton area, as well and
commuting expenses between Princeton and your home in New York. Commuting trips
eligible for reimbursement will be limited to 4 per month. Both the additional
temporary living and commuting expenses will be taxable income to you.

 

Conditions of Employment

 

Your employment will be
conditioned upon your execution of and ongoing compliance with the Company’s
Confidentiality and Development Agreement and the Guide to Ethical Conduct that
are enclosed; and any other applicable Company policies.  Please return one original signed copy of
this letter along with all necessary forms referenced in your Welcome Letter
to:  Sherry Smith, Recruiting
Coordinator, Tyco International, 9 Roszel Road, Princeton, NJ 08540, as soon as
possible.

 

Confidentiality,
Non-Competition, Non-Solicitation

 

Because you will be performing services for the
Company of a unique and irreplaceable nature, your performance of services to a
competing business that could lead to disclosure of business 

 

3

 

confidential or propriety information as to which
you have had access would result in irreparable harm to the Company.  Accordingly, by accepting this employment
offer, you agree that during your employment and for the one year period
thereafter, you will not, directly or indirectly, own, manage, operate,
control, or provide services to or be employed by any person or entity engaged
in any business of the same type as any business in which the Company or any of
its subsidiaries or affiliates is engaged (or have proposed to be engaged) on
the date of termination if such disclosure could result.  It is understood, however, that ownership of
one percent of the total shares of all classes of stock outstanding of any
publicly held entity engaged in such business and rendering of services to
charitable organizations, as such term is define in Section 501(c) of
the Code, shall not be considered to violate this non-competition provision.

 

By your acceptance of this employment offer, you
also agree that during your employment with the Company and for the one year
period thereafter, you will not, directly or indirectly, on your own behalf or
on behalf of another, solicit, aid or induce any managerial level employee of
the Company or any of its subsidiaries or affiliates to leave such employment
in order to accept employment with or render services to another person or
entity or solicit, air or induce any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person or entity
(or assist or aid any other persons or entity in identifying or soliciting any
such customer).

 

The invalidity or unenforceability of any provision
indicated herein will not affect the validity or enforceability of the other
provisions, which will remain in full force and effect.  Moreover, if any provision is found to be
excessively broad in duration, scope or covered activity, the provision will be
construed so as to be enforceable to the maximum extent compatible with applicable
law. The validity, interpretation, construction and performance of these
provisions shall be governed by the laws of the state of New Jersey without
reference to principles of conflicts of laws that would direct the application
of the law of any other jurisdiction. The Company reserves all rights to seek
any and all remedies and damages permitted under law, including, but not
limited to, injunctive relief, equitable relief and compensatory damages.

 

Other Conditions of Employment

 

In addition, the conditions of this letter are
contingent upon the following, which will be sent under separate cover:

 

·             Successful completion of a drug test.  A Chain of Custody Form and instructions
to set up an appointment at a collection site are included in your new hire
package.  The Company shall maintain the
confidentiality of the results of the drug testing.

·             Completion of an acceptable background check.  Please complete and return the enclosed
employment application, written consent and disclosure form, and reference
forms so that we may conduct the background check expeditiously.

·             Documentation of your identity and unrestricted
legal authority to work in the United States. 
You will be required to complete the employee portion of the enclosed
I-9 documentation as well as other documents within 3 business days of your
hire date to satisfy those requirements. 
Please note that this is a legal requirement under federal immigration
laws.

 

4

 

Frank, I
am excited about the possibility of your joining the Tyco International
leadership team and I look forward to the opportunity to work with you.  Please sign below to signify your acceptance
of our offer of employment and its terms. 
Should you have any questions with regard to any of the items indicated
above, please call me.

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Ed Breen

  	
   

  
	
  Ed
  Breen

  	
   

  

 

 

	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Frank S. Sklarsky

  	
  10/8/10

  	
   

  
	
  Frank
  S. Sklarksy

  	
  Date

  	
   

  

 

 

cc:       Laurie Siegel

 

Employees have the right to terminate their employment at
any time with or without cause or notice, and the Company reserves for itself
an equal right.  We both agree that any
dispute arising with respect to your employment, the termination of that
employment, or a breach of any covenant of good faith and fair dealing related
to your employment, shall be settled exclusively through arbitration.  This document sets forth the entire agreement
with respect to your employment.  The
terms of this offer may only be changed by written agreement, although the
Company may from time to time, in its sole discretion, adjust the salaries and
benefits paid to you and its other employees.

 

5

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