Document:

EXHIBIT
10.1

 

 

CHANGE OF CONTROL AGREEMENT

 

	
  Parties:

  	
   

  	
  Ciprico Inc.

  	
   

  	
  (“Company”)

  
	
   

  	
   

  	
  17400 Medina Road

  	
   

  	
   

  
	
   

  	
   

  	
  Plymouth, MN 55447

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mark Gilmore

  	
   

  	
  (“Employee”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  April 15, 2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

RECITALS:

 

                                1.                               Employee has
been employed by Company since May 2005 in various capacities, has extensive
knowledge and expertise relating to Company’s business and has contributed to
Company’s success.

 

                                2.                               The parties
recognize that a “Change of Control” may materially change or diminish
Employee’s responsibilities and substantially frustrate Employee’s commitment
to the Company.

 

                                3.                               The parties
further recognize that it is in the best interests of the Company and its
stockholders to provide certain benefits payable upon a “Change of Control
Termination” to encourage Employee to continue in his position in the event of
a Change of Control, although no such Change of Control is now contemplated or
foreseen.

 

                                4.                               The parties
further desire to provide for certain benefits payable upon certain involuntary
terminations of Employee’s employment.

 

AGREEMENTS:

 

                In
consideration of the mutual covenants set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

                1.             Term
of Agreement.  The term of
this Agreement shall commence on the Effective Date and shall continue in
effect until termination of Employee’s employment which does not constitute a
Change of Control Termination; provided, however, that if a Change of Control
of the Company shall occur during the term of this Agreement, this Agreement
shall instead continue in effect for a period of twelve (12) months following
the date of such Change of Control.  Any
rights and obligations accruing before the termination or expiration of this
Agreement shall survive to the extent necessary to enforce such rights and
obligations.

 

 

1

 

 

                2.             “Change
of Control.”  For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

 

(a)           A merger or consolidation to which the Company is a party
if the individuals and entities who were shareholders of the Company
immediately prior to the effective date of such merger or consolidation have,
immediately following the effective date of such merger or consolidation,
beneficial ownership (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of less than fifty percent (50%) of the total combined
voting power of all classes of securities issued by the surviving corporation
for the election of directors of the surviving corporation;

 

(b)           The acquisition of direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of securities of the Company by any person or entity or by a group
of associated persons or entities acting in concert in one or a series of
transactions, which causes the aggregate beneficial ownership of such person,
entity or group to equal or exceed twenty percent (20%) or more of the total
combined voting power of all classes of the Company’s then issued and
outstanding securities;

 

(c)           The sale of substantially all of the
assets of the Company to any person or entity that is not a wholly-owned subsidiary
of the Company;

 

(d)           The approval by the
stockholders of the Company of any plan or proposal for the liquidation of the
Company;

 

(e)           A change in the composition of the Board of the Company at
any time during any consecutive twenty-four (24) month period such that the
“Continuity Directors” no longer constitute at least a seventy percent (70%)
majority of the Board.  For purposes of
this event, “Continuity Directors” means those members of the Board who were
directors at the beginning of such consecutive twenty-four (24) month period or
were elected by, or on the nomination or recommendation of, at least a two
thirds (2/3) majority of the then-existing Board of Directors; or

 

(f)            The execution by the Company of a letter of intent, an
agreement in principle or a definitive agreement relating to an event described
in Section 2(a), 2(b), 2(c), 2(d) or 2(e) that ultimately results in such a
Change of Control, or a tender or exchange offer or proxy contest is commenced
that ultimately results in an event described in Section 2(b) or 2(e).

 

                3.             Termination.  For purposes of this Agreement, “Change of
Control Termination” shall mean any of the following events occurring within
twelve (12) months after a change of control occurring during the term of this
Agreement.

 

(a)           The termination of
Employee’s employment by the Company for any reason except Good Cause.  For purposes of this Agreement, “Good Cause”
shall include, but not be limited to, the following:

 

 

2

 

(i)            Employee’s
conviction of or plea of guilty or nolo
contendere to a felony resulting from conduct occurring on or after
the date of the Change of Control;

 

(ii)           Employee’s willful
and repeated failure to fulfill his employment duties with the Company; provided,
however, that for purposes of this clause (ii), an act or failure to act by
Employee shall not be “willful” unless it is done, or omitted to be done, in
bad faith and without any reasonable belief that Employee’s action or omission
was in the best interests of the Company;

 

(iii)          Employee’s
incurable breach of any material element of any proprietary or confidential
information agreement with the Company;

 

(iv)          Employee’s conduct
that is materially detrimental to Company’s business reputation or goodwill;

 

(v)           Any dishonesty in
dealing between Employee and Company or between Employee and Company’s vendors,
advisors, other employees, or customers;

 

(vi)          Employee’s active
use of alcohol or controlled substances in a manner which impairs Employee’s
ability to perform his duties;

 

(vii)         Employee’s violation
of any material portion of this Agreement;

 

(viii)        Employee’s failure
to substantially perform his material duties, which failure is not cured within
thirty (30) days after Employee’s receipt of written notice from Company
specifying the non-performance.

 

In no event shall Employee’s
death or disability (as defined below) constitute Good Cause.  “Disability” shall mean Employee’s failure or
inability, for reasons of health, to perform Employee’s usual and customary
duties on behalf of the Company in the usual and customary manner for a total
of more than 90 consecutive business days (excluding Saturdays, Sundays and
days during which the Company is closed due to a recognized holiday).

 

(b)           The termination of employment with the Company by Employee
for Good Reason.  Such termination shall
be accomplished by, and effective upon, Employee giving written notice to the
Company of his decision to terminate. 
“Good Reason” shall mean a good faith determination by Employee, in
Employee’s sole and absolute judgment that any one or more of the following
events has occurred on or after the date of the Change of Control without the
Employee’s express written consent:

 

(i)            A change in Employee’s reporting responsibilities, titles
or offices as in effect immediately prior to the date of the Change of Control,
or any 

 

 

3

 

removal
of Employee from or any failure to re-elect Employee to any of such positions,
which has the effect of diminishing Employee’s responsibility or authority;

 

(ii)           A reduction in Employee’s base salary
in effect immediately prior to the date of the Change of Control;

 

(iii)          Requiring Employee to move to or work from a location that
is outside of a fifty (50) mile radius of Employee’s job location on the date
of the Change of Control;

 

(iv)          Without the adoption of a replacement
plan, program or arrangement that provides benefits to Employee that are equal
to or greater than those benefits that are discontinued or adversely affected:

 

(A)          The Company’s failure to continue in
effect, within its maximum stated term, any pension, bonus, incentive, stock
ownership, stock purchase, stock option, life insurance, health, accident,
disability, or any other employee compensation or benefit plan, program or
arrangement, in which Employee is participating immediately prior to the date
of the Change of Control; or

 

(B)           The Company taking any action that
would adversely affect Employee’s participation or materially reduce Employee’s
benefits under any of such plans, programs or arrangements; or

 

(v)           Any material breach by the Company of
this Agreement so long as Employee has given the Company thirty (30) days
notice of such breach, and the Company has not cured the breach during that
thirty (30) day period.

 

Termination for “Good
Reason” shall not include Employee’s death or a termination of employment by
Employee for any reason other than the events specified in clauses (1) through
(5) above.

 

                4.             Compensation
and Benefits.  Subject to the
limitations contained in Section 5 below, upon a Change of Control Termination,
Employee shall be entitled to the following compensation and benefits:

 

(a)           The Company shall pay to Employee:

 

(i)            Within five (5)
days of the Change of Control Termination, all salary and other compensation
earned by Employee through the date of the Change of Control Termination at the
rate in effect immediately prior to such Change of Control Termination;

 

 

4

 

(ii)           Within fifteen (15) days of the Change of Control
Termination, all other amounts to which Employee may be entitled to receive
under any compensation plan maintained by the Company, subject to any
distribution requirements contained in such compensation plans; and

 

(iii)          A severance benefit in a single lump
sum payment, an aggregate amount equal to one hundred percent (100%) of
Employee’s then current annual base salary.

 

(b)           The Company shall provide, at no cost to Employee,
continued coverage under the Company’s group life, health or dental benefit
plans, if any, at a level comparable to the benefits which Employee was
receiving or entitled to receive immediately prior to the Change of Control
Termination or, if greater, at a level comparable to the benefits which
Employee was receiving immediately prior to the event which constituted Good
Reason.  Employee shall be entitled to
such continued coverage for a six month period following such Change of Control
Termination or, if earlier, until Employee is eligible to be covered for such
benefits through his employment with another employer.  The Company may, in its sole discretion,
provide such coverage through the purchase of individual insurance contracts
for Employee.

 

                5.             Payment
of Attorneys Fees and Other Costs. 
If, after a Change in Control of the Company, a good faith dispute
arises with respect to the enforcement of Employee’s rights under this
Agreement or if any legal or arbitration proceeding shall be brought in good
faith to enforce or interpret any provision contained herein or to recover
damages for breach hereof, Employee shall recover from the Company (a)
reasonable attorneys’ fees and necessary costs and disbursements incurred by
Employee as a result of such dispute or such legal or arbitration proceeding,
and (b) prejudgment interest on any money judgment or arbitration award
obtained by Employee calculated at the prime rate announced from time to time
by Wells Fargo Bank Minnesota, N. A., or the maximum rate permitted under
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended, or any
successor provision, whichever rate is lower, such prejudgment interest to be
paid from the date that payments to Employee should have been made under this
Agreement.

 

                6.             Withholding
Taxes. The Company shall be entitled to deduct from all payments or
benefits provided for under this Agreement any federal, state or local income
and employment related taxes required by law to be withheld with respect to
such payments or benefits.

 

                7.             Successors
and Assigns.  This Agreement
shall inure to the benefit of and shall be enforceable by Employee, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.  The Company will require the transferee of
any sale of all or substantially all of the business and assets of the Company
or the survivor of any merger, consolidation or other transaction expressly to
agree to honor this Agreement in the same manner and to the same extent that
the Company would be required to perform this Agreement if no such event had
taken place.  Failure of the Company to
obtain such agreement before the effective date of such event shall be a breach
of 

 

 

5

 

this Agreement and shall entitle Employee to
the benefits provided in Section 4 as if Employee had terminated employment for
Good Reason following a Change in Control.

 

                8.             Notices.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. 
All notices to the Company shall be directed to the attention of the
Board of Directors of the Company.

 

	
   

  	
  For Ciprico:

  	
   

  	
  17400 Medina Road

  
	
   

  	
   

  	
   

  	
  Plymouth, MN 55447

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  For Employee:

  	
   

  	
  14303 Peach Hill Road

  
	
   

  	
   

  	
   

  	
  Moore Park, CA 93021

  

 

                9.             Captions.  The headings or captions set forth in this
Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.

 

                10.           Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Minnesota.

 

                11.           Construction.  Wherever possible, each term and provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law.  If any term or
provision of this Agreement is invalid or unenforceable under applicable law,
(a) the remaining terms and provisions shall be unimpaired, and (b) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the unenforceable term or provision.

 

                12.           Amendment;
Waivers.  This Agreement may
not be modified, amended, waived or discharged in any manner except by an
instrument in writing signed by both parties hereto.  The waiver by either party of compliance with
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.

 

                13.           Entire
Agreement.  This Agreement
supersedes all prior or contemporaneous negotiations, commitments, agreements
(written or oral) and writings between the Company and Employee with respect to
the subject matter hereof and constitutes the entire agreement and understanding
between the parties hereto.  All such
other negotiations, commitments, agreements and writings will have no further
force or effect, and the parties to any such other negotiation, commitment,
agreement or writing will have no further rights or obligations thereunder.

 

6

 

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

 

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

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CIPRICO INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James W. Hansen

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  President / CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Mark Gilmore

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Mark Gilmore

  	
   

  	
   

  
										

 

 

7EXHIBIT 10.1

 

May
17, 2005

 

 

VIA HAND DELIVERY

 

Donald M. Muir

c/o 132 Fairgrounds Road
West Kingston, RI 02892

 

Dear Don:

 

This will confirm that you
have resigned your employment with American Power Conversion Corporation and
its subsidiaries (collectively “APC”) to pursue other interests, effective as
of May 17, 2005 (the “Resignation Date”). 
As of the Resignation Date, your salary will cease, and any entitlement
you have or might have under an APC-provided benefit plan, program or practice
will terminate, except as otherwise required by federal or state law.  This letter agreement (“Agreement”) spells
out the terms of your separation from employment with APC.

 

1.               In consideration for your execution of this
Agreement, including specifically the release provisions in Section 3, APC
agrees to the following:

 

(a)          You will be paid an aggregate of $500,000 in
severance pay, minus any applicable federal, state and/or local taxes,
deductions and withholdings, and any other agreed-upon deductions, in
accordance with APC’s normal payroll practices, in eight (8) equal monthly
installments of $62,500, commencing in the pay period following APC’s receipt
of this Agreement signed by you.

 

(b)         You have the right under federal legislation,
commonly referred to as “COBRA”, to continue participation in APC’s group
health insurance plans (medical, dental) at your expense for a period of up to
18 months after termination of employment with APC, subject to limitations on
that right imposed by COBRA.  Although
not obligated to do so, APC will pay your health insurance premiums for the
twelve (12) months that follow the month in which the Resignation Date falls or
until you are eligible for other health insurance coverage by virtue of
becoming employed, whichever comes first. 
At the conclusion of the 12-month period, you will be permitted to
continue participation in the group health insurance plans by payment of the
entire appropriate monthly premium for the remainder of the 18-month COBRA
period (subject to the limitations on that right imposed by COBRA). You
understand that, in accordance with COBRA, APC’s obligations under this
paragraph may terminate in any event if you are not eligible or become covered
by another health insurance plan prior to the end of the 18-month period
following your termination of employment. 
Documents relating to your COBRA rights will be provided separately.

 

2.               You understand and agree that the payments
and benefits offered to you in Section 1 of this Agreement are in addition to
any payments or benefits to which you are otherwise entitled because of your
employment with the Company.

 

 

3.  (a)  In exchange for the amounts described in
Section 1 of this Agreement, and other good and valuable consideration, you
knowingly and voluntarily agree that you, your representatives, agents, estate,
heirs, successors and assigns absolutely and unconditionally release,
indemnify, hold harmless and forever discharge the Company and its parent,
subsidiaries, divisions, affiliates, successors and/or assigns and their
respective current and/or former officers, directors, shareholders, agents, and
employees, both individually and in their official capacities (collectively
referred to throughout this Agreement as the “Releasees”), of and from any and
all actions, causes of action, suits, claims, complaints, liabilities,
agreements, promises, contracts, torts, damages, controversies, judgments,
rights and demands, whether existing or contingent, known or unknown, which you
have or may have against the Releasees, including, but not limited to: (i) any
and all claims arising out of or in connection with your employment, change in
employment, resignation or termination; (ii) any and all claims based on any
federal, state or local law, constitution or regulation dealing with
employment, employment discrimination, retaliation and/or employment benefits
such as those laws or regulations concerning discrimination on the basis of
race, color, creed, religion, age, sex, sex harassment, sexual orientation,
marital status, national origin, ancestry, handicap or disability, family or
medical leave, veteran status or any military service or application for
military service; (iii) any and all claims based on any alleged public policy,
contract (whether oral or written, express or implied), tort, or any other
statutory or common law claim of any nature whatsoever; and/or (iv) any
allegation for costs, fees, or other expenses including attorneys’ fees
incurred in these matters.  This
provision is intended by you to be all-encompassing and to act as a full and
total release of any and all claims, whether specifically enumerated herein or
not, that you and your representatives, agents, estate, heirs, successors and
assigns have, may have or have had against the Releasees from the beginning of
the world to the date of this Agreement.

 

(b)          You not only release and discharge the Releasees from any and all
claims as stated above that you could make on your own behalf or on behalf of
others, but you also specifically waive any right to recover any award(s) as a
member of any class in a case in which any claim(s) against the Releasees are
made, including, without limitation, claims involving any matters arising out
of your employment with, change in employment status with, or
resignation/termination from employment with APC.

 

(c)          The amounts set forth above in Section 1 shall be complete and
unconditional payment, settlement, accord and/or satisfaction with respect to
all obligations and liabilities of Releasees to you, including, without
limitation, all claims for wages, salary, draws, incentive pay, bonuses, stock
and stock options, restricted stock or restricted stock units, commissions,
severance pay, any and all other forms of compensation or benefits, attorney’s
fees, or other costs or sums.

 

4.               By signing this Agreement, you understand and
agree:  (a) that this Agreement sets
forth the entire agreement between you and APC and supersedes all other
agreements, representations, and or understandings, whether oral or written,
with respect to the subject matter herein; (b) that nothing in this Agreement
is intended to mean that APC has engaged in any wrongdoing or unlawful conduct;
(c) that you will not disclose the existence or the contents of this Agreement
to anyone but your attorney, advisor or spouse, provided that nothing in this
Agreement shall bar you from providing truthful testimony in any legal
proceeding or cooperating with any governmental agency, however, you understand
and agree that APC may publicly disclose your resignation and the existence of
this Agreement and/or its contents; (d) that you will continue to be bound by
your obligation under Employee Non-Disclosure and Development Agreement between
you and APC, which shall remain in full force and effect in

 

 

accordance with its terms;
(e) that this Agreement can be modified only in a written agreement signed by
you and APC; and (f) that this Agreement shall be interpreted pursuant to its
fair meaning and shall not be strictly construed for or against either party.

 

5.               In addition to the above, and in
consideration of the amounts described in Section 1 of this Agreement, by
signing this Agreement you agree (i) not to make disparaging, critical or
otherwise detrimental comments, in any form, forum or media, to any person or
entity concerning APC and its officers, directors, shareholders, trustees, or
employees, concerning the services or programs provided or to be provided by
APC, concerning the business affairs or the financial condition of APC, or
concerning the circumstances surrounding your employment with and/or separation
from APC; (ii) for a period of one (1) year from the Resignation Date, not to,
directly or indirectly, alone or as a consultant, partner, officer, director,
employee, joint venturer, lender or stockholder of any entity, recruit, solicit
for hire, hire or knowingly permit any company or business organization in
which you are employed or which is directly or indirectly controlled by you to
recruit, solicit for hire or hire any APC employee, agent, representative or consultant,
or any such person who has terminated his/her relationship with APC within six
months following the Resignation Date; and (iii) not at any time, whether
during or after the Resignation Date, use, permit to be used or reveal to any
person or entity any of the trade secrets or confidential information
concerning the organization, personnel, business, technology or finances of the
APC or any third party which APC is under an obligation to keep confidential
(including, but not limited to, trade secrets or confidential information
respecting products, designs, systems, processes, software programs, marketing
plans and/or strategies, sales plans and/or strategies, information regarding
APC’s employees, customer lists, customer profiles and any other information
collected by and/or created by APC regarding customers, and other projects,
plans and proposals).

 

6.               You understand that, whether or not you sign
this Agreement, you must immediately return to APC all property of APC in your
possession or control, including, but not limited to, company records, files,
laptop computers, cellular telephones, credit cards, keys and security badges.

 

7.               You confirm that no
charge, complaint or action filed by you or on your behalf against the
Releasees exists in any forum or form.

 

8                  In connection with
the resignation of your employment with APC, you confirm that such resignation
includes your resignation as Senior Vice President, Finance and Administration
and Chief Financial Officer of APC, as well as resignation as an officer and/or
director of any subsidiary or affiliate of APC.

 

9.               This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island, without
regard to its conflict of laws provision. 
Should any provision of the Agreement be declared unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable,
excluding the general release language contained in Section 3, such provision
shall immediately become null and void, leaving the remainder of this Agreement
in full force and effect.  This Agreement
cannot be assigned by you and shall inure to the benefit of APC’s successors
and assigns.

 

 

10.         If this Agreement correctly states the
understanding we have reached, please indicate your acceptance by
countersigning the enclosed copy and returning it to me on May 17, 2005.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Andrew Cole

  	
   

  
	
   

  	
  Andrew Cole,

  
	
   

  	
  Vice
  President—Organizational Development

  

 

 

I acknowledge that I have read
the foregoing Agreement, and that I carefully considered and fully understand
the terms and conditions of such Agreement. I acknowledge that I am signing
this Agreement knowingly and voluntarily. 
In entering into this Agreement, I do not rely on any representation,
promise or inducement made by APC, the Releasees or their attorneys, with the
exception of the consideration described in this document.

 

ACCEPTED:

 

	
  /s/ Donald M. Muir

  	
   

  	
  May 17, 2005

  	
   

  
	
  Signature

  	
  Date

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