EXHIBIT 10.13
AMENDED & RESTATED EMPLOYMENT
AGREEMENT dated as of December 31, 2008 (the "Effective Date"), by
and between HENRY SCHEIN, INC., a Delaware corporation (the
"Company"), and STANLEY M. BERGMAN ("Bergman").
WHEREAS, Bergman is currently
Chairman of the Board of Directors and Chief Executive Officer of
the Company, and Bergman and the Company previously had entered
into an Employment Agreement dated as of January 1, 2003, as
subsequently amended from time to time (the "Prior
Agreement");
WHEREAS, the Company recognizes that
Bergman has made substantial contributions to the success of the
Company over a long period of time and desires to assure the
Company of Bergman's continued service and Bergman desires to
continue to perform services for the Company; and
WHEREAS, Bergman and the Company
wish to amend and restate the Prior Agreement, to extend the period
thereof, conform certain severance provisions so that the treatment
of Bergman is the same as that afforded to the Company’s
other senior executives, and comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"), to the extent any amounts or benefits payable hereunder
are subject to Section 409A of the Code.
In consideration of the agreements
herein after set forth, the Company and Bergman agree as
follows:
1.1 CAPACITY; DUTIES. The
Company hereby employs Bergman as the Company's Chairman of the
Board of Directors and Chief Executive Officer. Bergman shall have
general supervision over the business and affairs of the Company
and its subsidiaries, shall report and be responsible only to, and
subject to the supervision of, the Board of Directors of the
Company (the "Board of Directors"), and shall have powers and
authority superior to those of any other officer or employee of the
Company or any of its subsidiaries. The Board of Directors may with
Bergman's consent, which consent may be withheld in his reasonable
discretion, confer the title of President upon another person
without any diminution in the compensation or benefits payable to
Bergman hereunder. Subject to Section 6(b), Bergman may serve on
the board of directors of any other corporation, or may be involved
in civic or charitable activities and may manage his personal
investments, so long as such service does not interfere with his
duties to the Company or its subsidiaries and such other
corporation is not a supplier or customer of the Company and does
not engage in any business that is competitive with the business of
the Company. Bergman accepts the employment described herein and
agrees to devote his full business time and effort thereto, and to
perform those duties normally attributable to the positions for
which he is employed hereunder.
1.2 EMPLOYMENT PERIOD.
Bergman's employment shall be for the period (the "Employment
Period") commencing on the Effective Date, and ending on the
earlier of (i) December 31, 2011, as such date may be extended as
provided below, or (ii) the date on which Bergman's employment is
terminated earlier pursuant to Section 4. The Employment
Period
may be extended by the Company from
time to time for successive three-year periods by giving Bergman
notice (an "Extension Notice") at least six months but not more
than twelve months prior to the date that the then applicable
Employment Period is to expire. Notwithstanding the preceding
sentence, the Employment Period shall not be extended if Bergman,
within 90 days after any Extension Notice is given, advises the
Company that he chooses not to extend the Employment Period. The
date on which the Employment Period is scheduled to expire pursuant
to whichever shall be the later of the date set forth in clause (i)
above or the extended date as provided above is hereinafter
referred to as the "Employment Expiration Date."
2.1 BASE SALARY. During the
Employment Period, as compensation for Bergman's employment
hereunder, Bergman shall receive a base salary at the rate of
$1,150,000 per annum, payable in accordance with the Company's
normal payroll practices for its senior executive officers from
time to time in effect. The base salary may be increased by such
amounts and at such times as shall be determined by the Board of
Directors or the Compensation Committee of the Board of Directors
(the "Compensation Committee") from time to time, in its sole
discretion. (The base salary, as it may be increased from time to
time, is hereinafter referred to as the "Base Salary.")
2.2 INCENTIVE COMPENSATION.
During the Employment Period, Bergman shall be eligible to receive,
in addition to his Base Salary, incentive compensation ("Incentive
Compensation") as follows: with respect to each year during the
Employment Period, the Board of Directors or the Compensation
Committee shall, after consultation with Bergman, establish a
maximum annual Incentive Compensation opportunity for Bergman, to
be expressed as a percentage of the Base Salary for such year, and
performance criteria consistent with such performance-based
criteria as are applicable to other Company senior management. All
Incentive Compensation shall be paid as soon as practicable after
the amount of such compensation has been finally determined, and in
all events during the calendar year immediately following the
calendar year with respect to which the Incentive Compensation was
earned.
2.3 ADDITIONAL COMPENSATION.
Nothing contained herein shall limit or otherwise restrict the
Board of Directors from granting to Bergman at any time and from
time to time such additional compensation as may be recommended
from time to time by the Compensation Committee.
2.4 EXPENSES. The Company shall
promptly reimburse Bergman for all expenses reasonably incurred by
him in the performance of his duties under this Agreement in
accordance with the Company's general policies and practices for
senior executive officers in effect from time to time; provided
that in no event shall any such reimbursement be made later than
the later of (i) the 15 th day of the third month
following the end of the calendar year in which the applicable
expense is incurred or (ii) the 15 th day of the third
month following the end of the fiscal year in which the applicable
expense is incurred.
3.1 BENEFITS. During the
Employment Period, Bergman shall be entitled to participate in all
benefit, welfare, perquisite, equity and other similar plans,
policies and programs, in accordance with the terms as are
generally provided from time to time by the Company for its senior
management employees and for which Bergman is eligible.
Unless
Bergman’s employment shall
have been terminated for Cause (in the manner and as defined in
Section 4.3), during the period commencing immediately after
Bergman’s termination of employment for any reason and
continuing (x) as to Bergman, for the life of Bergman, and (y) as
to Bergman's spouse, for the life of his spouse, the Company shall
continue the participation of Bergman and his spouse in all health
and medical benefit plans, policies and programs in effect from
time to time with respect to the senior executive officers of the
Company and their families generally (at the same levels and at the
same cost, if any, as provided to the senior executive officers of
the Company generally immediately prior to his date of
termination). Notwithstanding the foregoing, in the event the plan
under which Bergman and his spouse were receiving health benefits
immediately prior to Bergman's date of termination is not
fully-insured, then the Company shall either (A) provide health
coverage to Bergman and his spouse pursuant to a fully-insured
replacement policy or (B) in lieu of such health coverage pay
Bergman (or to his spouse, as applicable, in the event of his
death) annual cash payments equal to the cost to Bergman (and/or
his spouse) to obtain a replacement policy ( i.e. , the
premium costs), on a fully grossed-up basis, as determined on the
termination date (adjusted for increase in the cost-of-living
index, as defined in Treasury regulation § 1.401(a)(9)-6,
Q&A-14(b)(2)); in either case for the remaining lives of
Bergman and his spouse. In all cases, the annual cash payments
described above (if applicable), and any gross up required to be
provided under this Section 3.1, will be paid on each anniversary
of Bergman's date of termination, commencing with the one-year
anniversary of such date.
3.2 VACATION. During each
calendar year during the Employment Period, Bergman shall be
entitled to four (4) weeks of vacation and such other number of
personal days generally afforded to senior executive officers of
the Company.
3.3 AUTOMOBILE. During the
Employment Period, the Company shall provide Bergman with first
priority, non-exclusive use of a car and driver on the same basis
as immediately prior to the Effective Date. At Bergman's option,
the Company shall provide Bergman with the use of a new automobile
during the Employment Period, similarly equipped to that last
provided to him under the Prior Agreement, and shall pay the costs
of fuel, maintenance, repairs and insurance. If Bergman's
employment hereunder is terminated by the Company without Cause (as
defined in Section 4.3), by the Company choosing not to extend the
Employment Period, upon Bergman's Disability,or by Bergman pursuant
to Section 4.1(c)(i) or (ii), the Company shall continue the
arrangements in effect immediately prior to his termination of
employment until the second anniversary of Bergman's date of
termination. If Bergman's employment is terminated by the Company
without Cause, by the Company choosing not to extend the Employment
Period, or by Bergman for Good Reason pursuant to Section
4.1(c)(i), in any such case within two years after the date of a
Change in Control, the Company shall continue the transportation
arrangements in effect immediately prior to his termination of
employment until the last day of the second calendar year following
the calendar year in which Bergman's date of termination occurs,
and (ii) shall pay on the second anniversary of Bergman's date of
termination a lump sum in cash equal to the value of the applicable
benefits specified in the prior sentence for the period from the
last day of the second calendar year following the calendar year on
which the termination date occurs until the third anniversary of
his date of termination.
3.4 CONVERSION OF BENEFITS.
During the Employment Period, Bergman shall be entitled to the same
conversion privileges (including but not limited to cash
conversions) with regard to the Company's benefit plans, policies
and programs in which Bergman is entitled to participate under
Section 3.1 as may be generally offered from time to time by the
Company to its senior executive officers; provided that in the
event of a cash conversion, the payment of such
cash conversion shall be made no
later than the later of (i) the 15 th day of the third
month following the end of the calendar year in which the benefit
is offered to senior executive officers or (ii) the 15
th day of the third month following the end of the
fiscal year in which the benefit is offered to senior executive
officers.
3.5 GROSS-UP. To the extent
that Bergman incurs any tax obligations as a result of the
provisions of Section 3.3 during any calendar year, the Company
shall pay to Bergman or the applicable taxing authority on
Bergman's behalf, with respect to each such year, in accordance
with its customary practice but in no event later than the 15
th day of the third month following the end of such
year, an amount equal to the sum of such taxes and all taxes
payable on account of payments made to or on behalf of Bergman
under this Section 3.5.
4.1 TERMINATION OF EMPLOYMENT.
Bergman's employment (and the Employment Period) shall terminate
prior to the Employment Expiration Date upon the occurrence of any
of the following events:
(a) upon Bergman's death or
Bergman's Disability (pursuant to Section 4.2); or
(b) (i) by action of the
Company for Cause; or (ii) by action of the Board of Directors
without Cause upon 90 days' prior written notice to Bergman;
or
(c) by Bergman (i) following
the occurrence of an event that constitutes Good Reason, as
hereinafter defined, or (ii) upon 180 days prior written notice to
the Company.
A “Change in Control”
shall be deemed to occur upon any of the following:
(A) acquisition of "beneficial
ownership" (within the meaning of Rule 13d-3 promulgated under the
Securities and Exchange Act of 1934, as amended (the "Act")) by any
one “person” (as such term is defined in Section
3(a)(9) of the Act) or by any two or more persons deemed to be one
"person" (as used in Section 13(d) or 14(d) of the Act)(each
referred to as a “Person”) excluding the Company, any
subsidiary of the Company and any employee benefit plan sponsored
or maintained by the Company or any subsidiary of the Company
(including any trustee of any such plan acting in his or its
capacity as trustee), of 33% or more of the combined total voting
power of the then-outstanding voting securities of the Company (the
“Outstanding Voting Securities”) without the prior
express approval of the Board of Directors;
(B) acquisition of "beneficial
ownership" by any Person excluding the Company, any subsidiary of
the Company and any employee benefit plan sponsored or maintained
by the Company or any subsidiary of the Company (including any
trustee of any such plan acting in his or its capacity as trustee),
of more than 50% of the combined total voting power of the then
Outstanding Voting Securities;
(C) directors elected to the Board
of Directors over any 24-month period (except in the case of a
Change in Control referred to in Section 5.4(c), a twelve-month
period) not nominated by the Company’s Nominating &
Corporate Governance Committee (or a committee of the Board of
Directors performing functions substantially similar to such
committee) represent 30% (except in the case of a Change in Control
referred to in Section 5.4(c), a majority) or more of
the total number of directors
constituting the Board of Directors at the beginning of the period,
(or such nomination results from an actual or threatened proxy
contest);
(D) any merger, consolidation or
other corporate combination of the Company (a "Transaction"), other
than (i) a Transaction involving only the Company and one or more
of its subsidiaries, or (ii) a Transaction immediately following
which the stockholders of the Company immediately prior to the
Transaction continue to be the beneficial owners of securities of
the resulting entity representing more than 50% of the voting power
in the resulting entity, in substantially the same proportions as
their ownership of Outstanding Voting Securities immediately prior
to the Transaction; and
(E) upon the sale of all or
substantially all of the consolidated assets of the Company, other
than (i) a distribution to stockholders, or (ii) a sale immediately
following which the stockholders of the Company immediately prior
to the sale are the beneficial owners of securities of the
purchasing entity representing more than 50% of the voting power in
the purchasing entity, in substantially the same proportions as
their ownership of Outstanding Voting Securities immediately prior
to the Transaction.
Solely for purposes of Section
5.4(c), no Change in Control shall be deemed to have occurred
unless the circumstances of such Change in Control would be treated
as having resulted in the occurrence of a “change in control
event” as such term is defined in Treasury Regulation Section
1.409A-3(i)(5)(i).
A "Good Reason" event shall have
occurred upon the taking of any of the following actions, without
Bergman's written consent; provided that a Good Reason event shall
not be deemed to have occurred unless Bergman shall have given
written notice to the Company specifying the Good Reason event
within 90 days of the occurrence of such event:
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(a)
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a material reduction or material adverse change
in Bergman's responsibilities, duties, positions or authority, as
provided in the Agreement, including, the failure to appoint
Bergman to, or to continue Bergman in, any position to which he is
required to be appointed under this Agreement.
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(b)
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any failure by the Company to provide the
compensation, or any failure by the Company to provide the material
benefits, agreed to be provided under this Agreement;
provided , however, that any reduction in benefits generally
applicable to senior management employees shall not constitute Good
Reason;
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(c)
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any change in location of the Company's
principal executive offices outside of the New York metropolitan
area (which shall consist solely of New York City, Long Island and
any other location within 35 miles of the Company's current
principal executive offices);
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(d)
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any failure of the Company to obtain the express
assumption of this Agreement as provided in Section 9(a)or 9(b),
unless such assumption occurs by operation of law;
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provided , however , that (i) a "Good Reason" event will not
include acts which are cured by the Company within 30 days from
receipt by it of a written notice from Bergman identifying in
reasonable detail the act or acts constituting "Good Reason," and
(ii) if the Company has failed to cure as provided above, a "Good
Reason" event will not exist unless Bergman has thereafter given
notice of termination for Good Reason within 30 days after the
earlier of the expiration of
the 30-day cure period or the
Company's notice to Bergman that it will not cure such Good Reason
event.
4.2 DISABILITY. If, by reason
of physical or mental disability, Bergman (i) is unable to carry
out the material duties he has agreed to carry out under this
Agreement for more than 180 days in any twelve-month period or (ii)
is expected to be unable to carry out his duties for such period as
certified by a Licensed Physician ("Disability"), the Employment
Period shall terminate hereunder. A "Licensed Physician" shall be
any qualified physician licensed to practice medicine in the State
of New York as shall be mutually agreed by the Company and Bergman
(or his representatives), such approval not to be unreasonably
withheld or delayed. Bergman shall submit to an examination by a
physician for purposes of the preceding provisions upon the request
of the Board of Directors. During any period of Disability prior to
such termination, Bergman shall continue to receive all
compensation and other benefits provided herein as if he had not
been disabled at the time, in the amounts and in the manner
provided herein, provided that the Company shall be entitled to a
credit against such amounts with regard to the amount, if any, paid
to Bergman for such period under any disability plan of the
Company.
4.3 CAUSE. For purposes of this
Agreement, the term "Cause" shall be limited to (i) action or
omission by Bergman involving willful malfeasance or willful
misconduct having a material adverse effect on the Company (whether
economically or as to reputation), (ii) Bergman being convicted of,
or pleading NOLO CONTENDERE to, a felony (other than resulting from
a traffic violation or like event) or being convicted of any other
crime involving intentional dishonesty or fraud, (iii) any other
action by Bergman constituting a material breach of Section 6 of
this Agreement which is not cured within 30 days after notice from
the Company. In the case of (i) above, no act or omission by
Bergman shall be considered willful if it is done or omitted in
good faith and with a reasonable belief that it was in the best
interests of the Company. Termination by the Company for Cause
pursuant to (i) or (iii) above will not be effective unless the
Board of Directors has voted to terminate Bergman for Cause at a
meeting of the Board of Directors called for such purpose after
Bergman has been afforded at least three days notice of the meeting
and an opportunity to be heard at a meeting of the Board of
Directors; provided , however , that the Board of Directors may suspend
Bergman with pay and benefits pending such Board of Directors
meeting.
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5.
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CONSEQUENCES OF TERMINATION
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5.1 DEATH. If Bergman's
employment hereunder is terminated by reason of Bergman's death,
the Company shall have no further obligation to Bergman under this
Agreement except that Bergman's heirs or estate shall be paid those
obligations accrued hereunder to the date of his death, consisting
only of (a) Bergman's unpaid Base Salary to the extent unpaid
through the date of termination, (b) the annual Incentive
Compensation due to Bergman, if any, for the last full fiscal year
of the Company ending prior to the date of termination (if not
previously paid), (c) the product of (i) the annual Incentive
Compensation paid or payable to Bergman for the last full fiscal
year of the Company ending prior to the date of termination
multiplied by (ii) a fraction, the numerator of which is the number
of days in the current fiscal year during which Bergman was
employed by the Company, and the denomin