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Amended And Restated Change In Control Severance Agreement

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Exhibit 10.7

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE AGREEMENT THIS AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT (" Agreement" ) is made and entered into this 24th day of July 2006 by and between Embrex, Inc. (" Company" ), a North Carolina corporation, and Don T. Seaquist (" Employee" ).

WHEREAS, the Board of Directors (" Board" ) of the Company considers the maintenance of a vital management group to be essential in protecting and enhancing the best interests of the Company and its shareholders; WHEREAS, the Board recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat of or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation;

WHEREAS, the Board has determined that it is in the best interest of the Company and its shareholders to ensure the Employee' s continued dedication and efforts on behalf of the Company; WHEREAS, in order to induce the Employee to remain in the employ of the Company, particularly in the event of a threat of or the occurrence of a Change in Control and to dispel any concerns that the Employee may have about taking an active part in the defense against an inappropriate attempt to bring about a Change in Control of the Company, the Company desires to enter into this Agreement with the Employee and to provide the Employee with certain payments and benefits in the event that his service with the Company is severed as a result of, or in connection with, a Change in Control;

WHEREAS, the Company and the Employee previously entered into a Change in Control Severance Agreement (the " Prior Agreement" ). This Amended and Restated Change in Control Severance Agreement is an amendment and restatement of the Prior Agreement; and

WHEREAS, the Effective Date of this Agreement is January 1, 2005.

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the legal sufficiency and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment . Employee acknowledges that he is employed with the Company pursuant to an Employment Agreement dated September 9, 1996 and hereby agrees that to the extent any provision of this Agreement should be contrary to any provision of the Employment Agreement, the terms of this Agreement shall control.

2. Definitions . For purposes of this Agreement, the following terms have the meanings indicated:

(A) " Acquiring Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates (as such term is hereinafter defined) and Associates (as such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of thirty-five percent (35%) or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan or employee stock plan of the Company or of any Subsidiary of the Company, (iv) any dividend reinvestment plan of the Company, or (v) any Person or entity organized, appointed, or established by the Company for or pursuant to the terms of such employee benefit, employee stock or dividend reinvestment plans. Notwithstanding the foregoing, no Person shall become an " Acquiring Person" as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to thirty-five percent (35%) or more of the Common Stock of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of thirty-five percents


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(35%) or more of the Common Stock of the Company, then outstanding by reason of such an acquisition and shall, after such acquisition, become the Beneficial Owner of any additional shares of Common Stock, then such Person shall be deemed to be an " Acquiring Person." In addition, notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an " Acquiring Person," as defined pursuant to the foregoing provisions of this Paragraph (A), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such Person would no longer be an " Acquiring Person" as defined pursuant to the foregoing provisions of this Paragraph (A), then such Person shall not be deemed to be an " Acquiring Person" for any purposes of this Agreement.

(B) " Affiliate" and " Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the " Exchange Act" ).

(C) A Person shall be deemed the " Beneficial Owner" of and shall be deemed to " beneficially own ," any securities:

(i) which such Person or any of such Person' s Affiliates or Associates, directly or indirectly, has the right or obligation to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided , however, that a Person shall not be deemed the " Beneficial Owner" of, or to " beneficially own," (a) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person' s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (b) at any time prior to the occurrence of a Triggering Event, securities issuable upon exercise of the Rights (" Triggering Event" and " Rights"


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shall have the respective meanings ascribed to such terms as set forth in the Rights Agreement between Embrex, Inc. and Branch Banking & Trust Company as Rights Agent, dated as of March 21, 1996 and as in effect on the date hereof (" Rights Agreement" )), or (c) from and after the occurrence of a Triggering Event, securities issuable upon exercise of Rights which were acquired by such Person or any of such Person' s Affiliates or Associates prior to the Distribution Date (as defined in the Rights Agreement) or pursuant to Section 3(a) or Section 22 of the Rights Agreement (the " Original Rights" ) or pursuant to Section 11(i) of the Rights Agreement in connection with an adjustment made with respect to any Original Rights;

(ii) which such Person or any of such Person' s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has " beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act and any successor provision thereof), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided , however, that a Person shall not be deemed the " Beneficial Owner" of, or to " beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (a) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (b) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of


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such Person' s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), but excluding customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities until the expiration of forty days after the date of such acquisition, for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the provision to subparagraph (ii) of this Paragraph (C)) or disposing of any voting securities of the Company.

(D) " Code" shall mean the Internal Revenue Code of 1986, as amended.

(E) " Continuing Director" shall mean (i) any member of the Board of Directors of the Company, while such Person is a member of the Board of Directors, who is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and was a member of the Board of Directors prior to the date of this Agreement, or (ii) any Person who subsequently becomes a member of the Board of Directors, while such Person is a member of the Board of Directors, who is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, if such Person' s nomination for election or election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.

(F) " Key Employee" shall mean an employee who, on an Identification Date, is:

(i) An officer of the Company having annual compensation greater than the compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more than fifty officers of the Company shall be determined to be Key Employees as of any Identification Date; or

(ii) A five percent owner of the Company; or


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(iii) A one percent owner of the Company having annual compensation from the Company of more than $150,000.

If a Participant is identified as a Key Employee on an Identification Date, then such Participant shall be considered a Key Employee for purposes of this Agreement during the period beginning on the first April 1 following the Identification Date and ending on the next March 31.

(G) " Identification Date" shall mean each December 31.

(H) " Person" shall mean any individual, firm, corporation, partnership, limited liability company or other entity.

(I) " Separation from Service" or " Separates from Service" or " Separated from Service" shall mean termination of the Employee' s employment as a common-law employee of the Company. A Separation from Service will not be deemed to have occurred if the Employee continues to provide services to the Company in a capacity other than as an employee and if the Employee is providing services at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment with the Company (or if employed by the Company less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period); provided, however, that a Separation from Service will be deemed to have occurred if the Employee' s service with the Company is reduced to an annual rate that is less than twenty percent (20%) of the services rendered, on average, during the immediately preceding three full calendar years of employment with the Company (or if employed by the Company less than three years, such lesser period) or the annual remuneration for such services is less than twenty percent (20%) of the annual remuneration earned during the three full calendar years of employment with the Company (or if less, such lesser period).

(J) " Subsidiary" shall mean, with reference to any other Person, any corporation or other entity of which securities or other ownership interests having or
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