CHANGE IN CONTROL SEVERANCE
BENEFIT PLAN
Amended and Restated
August 6, 2008
The Dionex
Corporation Change in Control Severance Benefit Plan (the
“Plan”) was established effective as of October 5,
2001 and is hereby amended and restated effective as of
August 6, 2008. The purpose of the Plan is to provide for the
payment of severance benefits to certain eligible employees of
Dionex Corporation (the “Company”) whose employment
with the Company is terminated following a Change in Control. This
Plan shall supersede any severance benefit plan, policy or practice
previously maintained by the Company. This Plan document also is
the Summary Plan Description for the Plan.
For purposes of
the Plan, the following terms are defined as follows:
(a) “Base Salary” means the Eligible
Employee’s annual base salary as in effect during the last
regularly scheduled payroll period immediately preceding the Change
in Control or as increased thereafter.
(b) “Board” means the Board of Directors of
the Company.
(c) “Change in Control” is defined as one
or more of the following events:
(i) there is consummated a sale or other disposition of all
or substantially all of the assets of the Company (other than a
sale to an entity where at least fifty percent (50%) of the
combined voting power of the voting securities of such entity are
owned by the stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to
such sale);
(ii) any person, entity or group (other than the Company, a
subsidiary or affiliate of the Company, or a Company employee
benefit plan, including any trustee of such plan acting as trustee)
becomes the beneficial owner, directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding
securities other than by virtue of a merger, consolidation or
similar transaction;
(iii) there is consummated a merger, consolidation or
similar transaction involving (directly or indirectly) the Company
and, immediately after the consummation of such transaction, the
stockholders immediately prior to the consummation of such
transaction do not own, directly or indirectly, outstanding voting
securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such
transaction or more than fifty percent (50%) of the combined
outstanding voting power of the parent of the surviving entity in
such transaction; or
(iv) there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such transaction, the
stockholders immediately prior to the consummation of such
transaction do not own, directly or indirectly, outstanding voting
securities representing at least seventy percent (70%) of the
combined outstanding voting power of the surviving entity in such
transaction or at least seventy percent (70%) of the combined
outstanding voting power of the parent of the surviving entity in
such transaction, and the
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chief executive
officer of the Company is not the chief executive officer of the
surviving entity immediately after such transaction.
(d) “Code” means the Internal Revenue Code
of 1986, as amended, and the regulations and other applicable
guidance promulgated thereunder.
(e) “Company” means Dionex Corporation or,
following a Change in Control, the surviving entity resulting from
such transaction.
(f) “Constructive Termination” means a
voluntary termination of employment by an Eligible Employee after
one of the following is undertaken without the Eligible
Employee’s express written consent:
(i) the assignment to the Eligible Employee of duties or
responsibilities that results in a material diminution in the
Eligible Employee’s authority, duties or responsibilities as
in effect immediately prior to the Change in Control; provided,
however , that a change in the Eligible Employee’s title
or reporting relationships by itself shall not provide the basis
for a Constructive Termination;
(ii) a greater than ten percent (10%) reduction in the
Eligible Employee’s base salary, as in effect immediately
prior to the Change in Control (or as increased
thereafter);
(iii) a change in the Eligible Employee’s business
location of more than 35 miles from the business location
immediately prior to the Change in Control; or
(iv) a material breach by the Company of any provisions of
the Plan or any enforceable written agreement between the Company
and the Eligible Employee; or the failure of the Company to arrange
for the assumption of this Plan by its successor or
assign.
In order to
constitute a Constructive Termination, (i) the Eligible
Employee must provide written notice to the Company of the
occurrence of one or more of the foregoing events within thirty
(30) days following the initial occurrence of the event, and
(ii) the Company shall not be required to provide any
severance benefits under the Plan if it is able to remedy such
event(s) within a period of thirty (30) days following such
notice.
(g) “Continuation Period” means the period
for which an Eligible Employee is entitled to receive the benefits
described in Section 4(c). The Continuation Period is twelve
(12) months.
(h) “Covered Termination” means an
Involuntary Termination Without Cause or a Constructive
Termination, either of which occurs within thirteen
(13) months following the effective date of a Change in
Control.
(i) “Eligible Employee” means an executive
employee of the Company who has been designated by the Board as an
eligible employee, has not entered into an individual severance
benefit or change in control agreement with the Company, and whose
employment with the Company terminates due to a Covered
Termination.
(j) “Involuntary Termination Without Cause”
means an involuntary termination of employment by the Company other
than for one of the following reasons:
(i) a refusal or failure to follow the lawful and reasonable
directions of the Board of Directors or individual to whom the
Eligible Employee reports, which refusal or failure is not
cured
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within
30 days following delivery of written notice of such conduct
to the Eligible Employee;
(ii) a material failure by the Eligible Employee to perform
his or her duties in a manner reasonably satisfactory to the Board
of Directors that is not cured within 30 days following
delivery of written notice of such failure to the Eligible
Employee; or
(iii) a conviction of a felony involving moral turpitude
that is likely to inflict or has inflicted material injury on the
business of the Company.
Section 3. ELIGIBILITY FOR
BENEFITS.
(a) General Rules. Subject to the requirement set forth
in this Section, the Company will provide the severance benefits
described in Section 4 of the Plan to Eligible Employees. In
order to be eligible to receive benefits under the Plan, an
Eligible Employee must execute a general waiver and release in
substantially the form attached hereto as Exhibit A,
Exhibit B or Exhibit C, as appropriate, and such release
must become effective in accordance with its terms. The Company, in
its sole discretion, may modify the form of the required release to
comply with applicable state law. Subject to the foregoing, the
Company, in its sole discretion, shall determine the form of the
required release.
(b) Exceptions to Benefit Entitlement. An employee who
otherwise is an Eligible Employee will not receive benefits under
the Plan in any of the following circumstances, as determined by
the Company in its sole discretion:
(i) The employee has executed an individually negotiated
employment contract or agreement with the Company relating to
severance benefits or change in control benefits that is in effect
on his or her termination date.
(ii) The employee’s employment with the Company is
involuntarily terminated by the Company other than in an
Involuntary Termination without Cause.
(iii) The employee voluntarily terminates employment with
the Company and such termination does not constitute a Constructive
Termination. Voluntary terminations include, but are not limited
to, resignation, retirement or failure to return from a leave of
absence on the scheduled date.
(iv) The employee voluntarily terminates employment with the
Company in order to accept employment with another entity that is
wholly or partly owned (directly or indirectly) by the Company or
an affiliate of the Company.
(v) The employee is offered immediate reemployment by a
successor to the Company or by a purchaser of its assets, as the
case may be, following a change in ownership of the Company or a
sale of all or substantially all the assets of a division or
business unit of the Company. For purposes of the foregoing,
“immediate reemployment” means that the
employee’s employment with the successor to the Company or
the purchaser of its assets, as the case may be, results in
uninterrupted employment such that the employee does not suffer a
lapse in pay as a result of the change in ownership of the Company
or the sale of its assets.
Section 4. AMOUNT AND PAYMENT OF
BENEFIT.
(a) Base
Salary. Each Eligible Employee shall receive twelve
(12) months of Base Salary. Subject to Section 4(f), such
amount shall be paid in substantially equal installments commencing
upon the Eligible Employee’s termination of employment
pursuant to the Company’s regularly scheduled
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payroll periods
and shall be subject to all required tax withholding.
(b) Bonus
Payment. Each Eligible Employee shall receive a bonus payment
equal to the average of the Eligible Employee’s annual
bonuses paid by the Company with respect to the last three (3)
complete fiscal years of the Company for which the Eligible
Employee was eligible to receive a bonus (or such fewer fiscal
years of the Company for which such Eligible Employee was eligible
to receive an annual bonus); provided, however, that if an Eligible
Employee’s Covered Termination occurs during the first fiscal
year for which he or she was eligible to receive an annual bonus,
such Eligible Employee shall receive a bonus payment based on the
Eligible Employee’s performance through the Covered
Termination. Subject to Section 4(f), such amount shall be
paid in a lump sum upon the Eligible Employee’s termination
of employment and shall be subject to all required tax
withholding.
(c) Continued Insurance Benefits . Provided that the
Eligible Employee elects continued coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
the Company shall pay the portion of premiums of each Eligible
Employee’s group medical, dental and vision coverage,
including coverage for the Eligible Employee’s eligible
dependents, that the Company paid prior to the Covered Termination,
for the Continuation Period; provided, however, that no such
premium payments shall be made following the effective date of the
Eligible Employee’s coverage by a medical, dental or vision
insurance plan of a subsequent employer. Each Eligible Employee
shall be required to notify the Company immediately if the Eligible
Employee becomes covered by a medical, dental or vision insurance
plan of a subsequent employer. No provision of this Plan will
affect the continuation coverage rules under COBRA, except that the
Company’s payment of any applicable insurance premiums during
the Continuation Period will be credited as payment by the Eligible
Employee for purposes of the Eligible Employee’s payment
required under COBRA. Therefore, the period during which an
Eligible Employee may elect whether or not to continue the
Company’s group medical, dental or vision coverage under
COBRA, the length of time during which COBRA continuation coverage
will be made available to the Eligible Employee, and all other
rights and obligations of the Eligible Employee under COBRA will be
applied in the same manner that such rules would apply in the
absence of this Plan. At the conclusion of the Continuation Period,
the Eligible Employee will be responsible for the entire payment of
premiums required under COBRA for the duration of the COBRA
continuation period. For purposes of this Section 4(c),
applicable premiums that will be paid by the Company during the
Continuation Period shall not include any amounts payable by the
Eligible Employee under a Section 125 health care
reimbursement plan, which amounts, if any, are the sole
responsibility of the Eligible Employee.
(d) Acceleration of Vesting. Effective as of the date
of the Covered Termination, each Eligible Employee shall be
credited with full acceleration of vesting for all options
outstanding that the Eligible Employee holds on such date that have
not yet vested.
(e) Outplacement Services. On behalf of the Eligible
Employee, the Company shall pay for an executive assistance program
for a period not to exceed three (3) months and at a cost not
to exceed $7,500, provided that the Eligible Employee enrolls in
the program within six (6) months following the Covered
Termination.
(f) Payment of Benefits. If the Company determines that
any payments or benefits provided to an Eligible Employee pursuant
to Section 4 (any such payments or benefits, the “Plan
Payments”) constitute “deferred compensation”
under Section 409A of the Code (together, with any state law
of similar effect, “Section 409A”) and if the
Eligible Employee is a “specified employee” of the
Company, as such term is defined in Section 409A(a)(2)(B)(i)
(a “Specified Employee”), then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Plan
Payments will be delayed as follows: on the earliest to occur of
(1) the date that is six (6) months and one (1) day
after the date of the Eligible Employee’s termination of
employment, and (2)
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the date of the
Eligible Employee’s death (such earliest date, the
“Delayed Initial Payment Date”), the Company shall
(i) pay the Eligible Employee a lump sum amount equal to the
sum of the Plan Payments that the Eligible Employee would otherwise
have received through the Delayed Initial Payment Date if the
commencement of the payment of the Plan Payments had not been
delayed pursuant to this Section 4(f) and (ii) commence paying
the balance of the Plan Payments in accordance with the applicable
payment schedule set forth in Section 4. Prior to the
imposition of any delay on the Plan Payments as set forth above, it
is intended that (A) each installment of the Plan Payments be
regarded as a separate “payment” for purposes of
Treasury Regulations Section 1.409A-2(b)(2)(i), (B) all
Plan Payments satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A provided under
Treasury Regulations Sections 1.409A-1(b)(4) and
1.409A-1(b)(9)(iii), and (C) the Plan Payments consisting of
COBRA premiums also satisfy, to the greatest extent possible, the
exemption from the application of Section 409A provided under
Treasury Regulations Section 1.409A-1(b)(9)(v).
Section 5. LIMITATIONS ON
BENEFITS.
(a) Release. To receive benefits under this Plan, an
Eligible Employee must execute a release of claims in favor of the
Company, in the form attached to this Plan as Exhibit A,
Exhibit B or Exhibit C, as appropriate, and such release
must become effective in accordance with its terms.
(b) Certain Reductions and Offsets. Notwithstanding any
other provision of the Plan to the contrary, any benefits payable
to an Eligible Employee under this Plan shall be reduced by any
severance benefits payable by the Company to such individual under
any other policy, plan, program or arrangement, including, without
limitation, a contract between the Eligible Employee and any
entity, covering such individual. Furthermore, to the extent that
any federal, state or local laws, including, without limitation,
so-called “plant closing” laws or statutory severance
requirements, require the Company to give advance notice or make a
payment of any kind to an Eligible Employee because of that
Eligible Employee’s involuntary termination due to a layoff,
reduction in force, plant or facility closing, sale of business,
change of control, or any other similar event or reason, the
benefits payable under this Plan shall either be reduced or
eliminated. The benefits provided under this Plan are intended to
satisfy any and all statutory obligations that may arise out of an
Eligible Employee’s involuntary termination of employment for
the foregoing reasons, and the Plan Administrator shall so construe
and implement the terms of the Plan.
(c) Mitigation. Except as otherwise specifically
provided herein, an Eligible Employee shall not be required to
mitigate damages or the amount of any payment provided under this
Plan by seeking other employment or otherwise, nor shall the amount
of any payment provided for under this Plan be reduced by any
compensation earned by an Eligible Employee as a result of
employment by another employer or any retirement benefits received
by such Eligible Employee after the date of the Covered
Termination.
(d) Termination of Benefits. Benefits under this Plan
shall terminate immediately if the Eligible Employee, at any time,
violates any proprietary information or confidentiality obligation
to the Company.
(e) Non-Duplication of Benefits. No Eligible Employee
is eligible to receive benefits under this Plan more than one
time.
(f) Indebtedness of Eligible Employees. If a
terminating employee is indebted to the Company or an affiliate of
the Company at his or her termination date, the Company reserves
the right to offset any severance payments under the Plan by the
amount of such indebtedness.
(g) Parachute Payments. If any payment or benefit the
Eligible Employee would receive in
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connection with
a Change in Control from the Company or otherwise
(“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code,
and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payment shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of
the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever
amount, after taking into account all applicable federal, state and
local employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results in the
Eligible Employee’s receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some
portion of the Payment may be subject to the Excise Tax. If a
reduction in payments or benefits constituting “parachute
payments” is necessary so that the Payment equals the Reduced
Amount, reduction shall occur in the follow
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