EXHIBIT 10.29
CALIPER LIFE SCIENCES,
INC.
KEY EMPLOYEE CHANGE OF
CONTROL
AND SEVERANCE BENEFIT
PLAN
Amended and Restated as of
November 4, 2008
This Key Employee Change of Control
and Severance Benefit Plan (the “ Plan
”), previously adopted by the Board of Directors of Caliper
Life Sciences, Inc. (the “ Company
”), is hereby amended and restated effective November 4,
2008 to comply with Section 409A of the Internal Revenue
Code. This Plan supersedes and replaces the Plan amended and
restated as of February 16, 2005, which in turn amended and
superseded the Company’s Change of Control Sr. Mgmt
Severance/Equity Acceleration Plan (the “Prior COC
Plan”). However, except as provided herein, this Plan
does not supersede any written agreement between the Company and
any employee.
BACKGROUND OF THE PLAN
A.
The Company draws upon the
knowledge, experience and objective advice of its executives and
other key employees to manage its business for the benefit of the
Company’s stockholders.
B.
Due to the widespread awareness of
the possibility of mergers, acquisitions and other strategic
alliances, change of control is an issue in competitive recruitment
and retention efforts.
C.
The Company recognizes that if there
occurred a change of control or other event that could
substantially change the nature and structure of the Company, the
resulting uncertainty regarding the consequences of such an event
could adversely affect the Company’s ability to attract,
retain and motivate its executives and other key
employees.
D.
In order to enhance the ability of
the Company to retain its executives and other key employees, the
Company has previously provided certain severance benefits to
certain of its executives and other key employees, in the event of
termination following a change of control of the Company, pursuant
to the Prior COC Plan. The Company replaced the benefits
provided under the Prior COC Plan with the benefits set forth in
this Plan, and extended the benefits set forth in this Plan to
certain of its executives and other key employees, subject to the
terms and conditions set forth herein.
E.
On February 14, 2005, the
Compensation Committee of the Company’s Board of Directors
reviewed, approved and adopted the terms of this Plan, and adopted
a resolution recommending that the Company’s Board of
Directors approve and ratify this Plan.
F.
On February 16, 2005, this Plan
was approved and ratified by the Company’s Board of
Directors.
G.
The Company now wishes to amend and
restate the Plan to comply with Section 409A of the Internal
Revenue Code. Unless otherwise specifically provided herein,
the Section 409A of the Code changes are effective
January 1, 2008.
1.
GENERAL
1.1
Defined Terms
. Capitalized terms used in
this Plan shall have the meanings set forth in Section 4
below, unless the context clearly requires a different
meaning.
1.2
Purpose . The purpose of this Plan is to aid the
Company in attracting, retaining and motivating its Eligible
Participants by providing specified compensation and other benefits
to such Eligible Participants in the event of a Covered
Termination.
1.3
No Employment
Agreement . This
Plan does not obligate the Company to continue to employ an
Eligible Participant for any specific period of time, or in any
specific role or geographic location. Subject to the terms of
any applicable written employment agreement between Company and an
Eligible Participant, the Company may assign an Eligible
Participant to other duties, and either the Company or an Eligible
Participant may terminate such Eligible Participant’s
employment by the Company at any time for any reason.
1.4
Condition for Receipt of
Benefits .
Notwithstanding anything in this Plan to the contrary, the receipt
by any Eligible Participant of any of the benefits provided by this
Plan shall be conditioned on such Eligible Participant executing
and delivering to the Company an effective waiver and release of
all claims such Eligible Participant may have against the
Company.
2.
TERMINATION UPON CHANGE OF
CONTROL
2.1
Cash Severance Benefit
. In the event of a Change of
Control and an Eligible Participant’s Covered Termination,
the Eligible Participant shall be entitled to the basic cash
severance benefit described below.
2.1.1
Salary Continuation
. Subject to the terms of this
Section 2.1, such Eligible Participant shall receive payments
equal to his or her base pay at the time of such Eligible
Participant’s Covered Termination for (x) in the case of
each Eligible Participant other than the President or Chief
Executive Officer of the Company, twelve (12) months and
(y) in the case of the President or Chief Executive Officer of
the Company, twenty-four (24) months, or in each case until such
Eligible Participant is employed by another company, whichever
occurs earlier.
2.1.2
Prorated Bonus Payment
. Subject to the terms of this
Section 2.1, such Eligible Participant shall receive his or
her target bonus or incentive payment for the year in which
termination occurs, prorated through the date of
termination.
All cash severance payments made
under this Section 2.1 shall be reduced by applicable federal
and state withholding taxes. If there is a Change of Control,
(i) any cash payments pursuant to Section 2.1.1 shall be
made on the Company’s regular payroll dates commencing upon
the later of (x) the date of the Change of Control or
(y) thirty (30) days following such Eligible
Participant’s Covered Termination and (ii) any cash
payments pursuant to Section 2.1.2 shall be paid in a lump sum
upon the later of (x) the date of the Change of Control or
(y) thirty (30) days following such Eligible
Participant’s Covered Termination. An Eligible
Participant shall not be entitled to contribute any funds paid to
such Eligible Participant pursuant to this Plan to any deferred
compensation plan maintained by the Company and, with the exception
of continuation healthcare coverage mandated by the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”) or similar state law, shall cease to
be eligible to actively participate in any other benefit plan
maintained by the Company. Other than the vesting
acceleration provided for in Section 2.2.1, there shall not be
any continuing vesting of any outstanding equity award granted to
the Eligible Participant by the Company during the period of time
in which such Eligible Participant receives salary continuation
payments pursuant to this Section 2.1, except as may otherwise
be provided in a written agreement between the Company and such
Eligible Participant.
If any of the benefits set forth in
this Section 2.1 are deferred compensation under
Section 409A of the Internal Revenue Code and the
rules and regulations thereunder (“
Section 409A ”), any Covered Termination
triggering payment of such benefits must constitute a
“separation from service” under Section 409A
before, subject to Section 2.1.3 below, distribution of
such benefits can commence. For purposes of clarification,
this paragraph shall not cause any forfeiture of benefits on the
part of the
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Participant, but shall only act as a
delay until such time as a “separation from service”
occurs.
2.1.3
Specified Employee
Delay . Notwithstanding
the foregoing, if any amount to be paid to an Eligible Participant
pursuant to this Plan as a result of such Eligible
Participant’s termination of employment is “deferred
compensation” subject to Section 409A, and if the
Eligible Participant is a “Specified Employee” (as
defined under Section 409A) as of the date of such Eligible
Participant’s termination of employment hereunder, then, to
the extent necessary to avoid the imposition of excise taxes or
other penalties under Section 409A, the payment of benefits,
if any, scheduled to be paid by the Company to such Eligible
Participant hereunder during the first six (6) month period
following the date of a termination of employment shall not be paid
until the date which is the first business day after six
(6) months have elapsed since the Eligible Participant’s
termination of employment for any reason other than death. To
the extent the amounts to be paid to an Eligible Participant
satisfy the separation pay plan exception from deferred
compensation described in Treas. Reg. §1.409-1(b)(9)(iii), the
amounts will not be treated as deferred compensation subject to
this six (6) month delay. Any deferred compensation
payments delayed in accordance with the terms of this
Section 2.1.3 shall be paid in a lump sum when paid and any
remaining payments thereafter shall continue in accordance with the
normal schedule set forth in this Plan.
2.2
Acceleration of Vesting of Equity
Awards .
2.2.1
Acceleration at Covered
Termination . All
outstanding stock options granted and restricted stock units,
restricted stock, performance shares or other equity award issued
by the Company prior to the Change of Control to an Eligible
Participant who suffers a Covered Termination shall have their
vesting accelerated by an additional thirty (30) months on the date
of such Termination Upon Change of Control or Constructive
Termination Upon Change of Control. To the extent any stock
options granted and restricted stock units, restricted stock,
performance shares or other equity award are subject to
Section 409A, vesting will be accelerated only to the extent
the acceleration does not violate Section 409A or cause
additional taxes or penalties under Section 409A.
2.2.2
Acceleration Upon Non-Assumption
in a Change of Control . If there is a Change of Control
transaction in which outstanding stock options, restricted stock
units, restricted stock, performance shares or other equity awards
granted by the Company to an Eligible Participant prior to the
transaction are not replaced with a reasonably equivalent incentive
program of the Successor, then (i) all such options,
restricted stock units, restricted stock, performance shares or
other equity awards shall have their vesting fully accelerated so
as to be 100% vested and exercisable prior to the effective date of
the Change of Control, and (ii) the Company shall provide
reasonable prior written notice to the Eligible Participant of
(A) the date such unexercised options or other equity awards
will terminate, and (B) the period during which the Eligible
Participant may exercise the unexercised options or other equity
awards. For the purposes of the foregoing, an option or other
equity award shall be deemed to be replaced with a reasonably
equivalent incentive program of the Successor if the vesting under
the replacement program is not less favorable than the vesting
under the option or other equity award and the Board of the Company
otherwise determines that the replacement incentive program is
reasonably equivalent to the option or other equity award being
replaced. Such a replacement incentive program might include,
without limitation, (x) the Successor assuming the option (or
substituting a Successor option) whereby the option becomes an
option to acquire stock of the Successor in a manner qualifying
under Section 424(a) of the Internal Revenue Code of
1986, as amended (the “ Code ”),
(y) the option becomes an option to acquire the same
consideration per share of common stock subject to the option as
the stockholders of the Company receive for their common stock in
the Change of Control transaction (the “ Common Change
of Control Consideration ”), or (z) the
Successor establishes a cash incentive program whereby each option
is replaced with the opportunity to receive a cash payment equal to
the excess of (X) the value of the Common Change of Control
Consideration, over (Y) the aggregate exercise price of the
Eligible Participant’s unexercised options. As a
condition of such replacement incentive program, the Board
of
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the Company may require that such
replacement incentive program comply with Treas. Reg.
§1.409A-1(b)(5)(v)(D). If there is a Change of Control
transaction and any outstanding unvested restricted stock units,
restricted stock or other equity award granted by the Company to
any Eligible Participant that is subject to vesting or a repurchase
right in favor of the Company is not replaced with Common Change of
Control Consideration, the vesting of such stock shall accelerate
(and any repurchase rights shall lapse) so that such stock is
completely vested immediately prior to the Change of Control
transaction.
2.3
Extended Medical and Dental
Benefits .
2.3.1
Benefit Continuation
. Each U.S. Eligible
Participant, who continues to be employed by the Company or its
Successor or who makes a valid COBRA election, shall receive
continued provision of the Company’s standard employee
medical and dental benefit coverages at standard staff rates, as
elected by the Eligible Participant and in effect immediately prior
to the Change of Control, for so long as, but not to exceed twelve
(12) months following a Change of Control, the Eligible Participant
is not eligible to receive comparable health insurance coverage
from another employer. Continued health coverage for non-U.S.
Eligible Participants shall be negotiated in accordance with
applicable law and policy to provide similar coverage.
2.3.2
Continued Medical Coverage for
U.S. Residents . If
the Eligible Participant resides in the United States, such
Eligible Participant shall be entitled to continued medical and
dental insurance coverage in accordance with the applicable
provisions of U.S. federal law (Title X of the Consolidated Budget
Reconciliation Act of 1985 (“ COBRA
”). The date of the COBRA “qualifying
event” for the Eligible Participant and his or her dependents
shall be the date
