EXHIBIT 10.1
AMENDED & RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”), amends and restates that
certain Amended and Restated Employment Agreement by and between
Thermo Fisher Scientific Inc. (formerly Thermo Electron
Corporation), a Delaware corporation (together with its successors
and assigns permitted under this Agreement, the
“Company”), and Marijn Dekkers (the
“Executive”), dated as of November 21, 2002,
including any amendments or restatements thereto (the “Prior
Agreement”). The effective date of this Amended and Restated
Employment Agreement is April 7, 2008 (the “Effective
Date”).
WITNESSETH
WHEREAS, the Company and the
Executive desire to amend and restate the Prior Agreement in
accordance with the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of
the promises and mutual covenants contained herein and for other
good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Executive (individually a
“Party” and together the “Parties”) agree
as follows:
1. Definitions .
(a)
“Accrued Obligations” shall have the meaning set forth
in Section 10(a)(i) of this Agreement.
(b)
“Affiliate” of a person or other entity shall mean a
person or other entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other
entity specified.
(c)
“Base Salary” shall mean the salary provided for in
Section 4 below or any increased salary granted to the
Executive pursuant to Section 4.
(d)
“Board” shall mean the Board of Directors of the
Company.
(e)
“Cause” shall mean:
(i) the
Executive commits a felony or any crime involving moral turpitude,
or any conduct by the Executive that would reasonably be expected
to result in a material injury to the Company if he were retained
in his position, in each case as determined by the Board;
(ii) in
carrying out his duties, the Executive intentionally engages in
conduct that constitutes gross neglect or gross misconduct or any
material violation of this Agreement or any material violation of
applicable Company rule or policy, the violation of which amounts
to gross neglect or gross misconduct, which, in each case that is
curable, is not cured by the Executive within 30 days
following written notice of such conduct from the Board; or
(iii)
the Executive’s willful failure to respond to reasonable
requests made by the full Board (or by a committee of the Board
that has been established by the full Board) in connection with
(1) a bona fide internal investigation relating to the Company
that has been approved by the full Board (or by a committee of the
Board that has been established by the full Board) or (2) a
bona fide investigation relating to the Company by a federal or
state regulatory or law enforcement authority, or the
Executive’s willful destruction of documents or other
materials known by Executive to be relevant to such investigation,
or the Executive’s willful destruction of documents or other
materials not in accordance with Company policies (including any
Company retention policy), or the Executive’s willful
inducement of others to fail to cooperate or to produce documents
or other materials, in each case which has continued for more than
30 days following written notice of such failure from the
Board. Any determination to terminate Executive’s employment
for Cause as provided above shall be made by the full Board
following any applicable cure period as provided above and
following an opportunity for Executive to be heard by the full
Board.
(f)
“Code” shall mean the Internal Revenue Code of 1986, as
amended.
(g)
“Disability” shall mean the Executive’s
inability, due to physical or mental incapacity, to substantially
perform his duties and responsibilities as provided in this
Agreement for 180 days (including weekends and holidays ) in
any 365-day period. The existence of any such physical or mental
incapacity shall be determined by a medical doctor selected by the
Company and the Executive. If the Parties cannot agree on a medical
doctor, each Party shall select a medical doctor and the two
doctors shall select a third who shall be the approved medical
doctor for this purpose.
(h)
“Effective Date” shall have the meaning set forth in
the preamble to this Agreement.
(i)
“Executive Retention Agreement” shall mean that certain
Executive Retention Agreement by and between the Executive and the
Company dated as of November 21, 2002.
(j)
“Exercise Period” shall mean the maximum period in
which stock options granted to the Executive are exercisable
pursuant to the applicable award agreement under which such stock
options were granted (i.e., the period ending on such stock
option’s stated expiration date).
(k)
“Good Reason” shall mean termination by the Executive
of his employment, after written notice to the Company within
30 days following the occurrence of any of the following
events without his consent:
(i) a
reduction in the Executive’s then current Base Salary or
Reference Bonus Amount opportunity;
(ii)
the removal by the Board of Executive from any position described
in Section 3 of this Agreement;
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(iii) a
material diminution in the Executive’s duties or
responsibilities, including the assumption by the Board (in its
entirety or by an member(s)) of any duty or responsibility that was
previously the duty or responsibility of the Executive or his
reports (other than bona fide temporary assumptions connected with
the departure of one or more of his reports, provided that the
Company in good faith is conducting a search for a
replacement);
(iv) a
change in the reporting structure so that (A) the Executive
reports to any single person, or so that the Executive reports to
any person(s) or entity other than the full Board, or (B) any
officer or other member of senior management of the Company
(including the Chief Operating Officer, Chief Financial Officer and
General Counsel) reports to any person or entity other than the
Executive (either directly or with the Executive’s consent to
another officer or member of senior management of the Company who
reports to the Executive);
(v) the
failure of the Company to obtain the assumption in writing of its
obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days
after a merger, consolidation, sale or similar transaction;
or
(vi) a
material breach of this Agreement by the Company.
Notwithstanding anything to the
contrary, any action or event taken by the Board in good faith
after receiving advice of counsel to comply with any applicable
law, regulation, rule, order or other legal requirement, shall not
constitute Good Reason. Following written notice from the
Executive, as described above, the Company shall have 30 days
in which to cure. If the Company fails to cure, the
Executive’s termination shall become effective on the 31st
day following the written notice.
(l)
“Pro-Rata Bonus” shall mean a pro-rata annual cash
incentive award for the year in which the Termination Date occurs
(for the period through the Termination Date), based on the amount
of the annual cash incentive award that would otherwise have been
paid to the Executive based on his Reference Bonus Amount under the
Company’s annual cash incentive award plan for such year,
after giving effect to any determination (including so-called
“negative discretion”) by the Board or the Compensation
Committee of the Board under such annual cash incentive award plan
(such determinations in a manner consistent with how such
determinations are applied with respect to the other named
executive officers of the Company for such year), payable when
annual cash incentive awards are normally paid to other
executives.
(m)
“Severance Bonus” shall have the meaning set forth in
Section 10(a)(i) of this Agreement.
(n)
“Stock” shall mean the common stock of the
Company.
(o)
“Termination Date” shall mean in the case of either a
voluntary or involuntary termination, the last day upon which
Executive works. In the event of the Executive’s death, the
Termination Date is the date of death. In the case of a Disability,
the Termination Date is the date upon which the Executive receives
written notice from the Board
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that it
has deemed him to have a Disability, but in no event before the
Executive is determined to have a Disability (as the term is
defined in Section 1(h)).
2. Term of Employment,
Effect on Prior Agreements .
(a) The
Term of Employment (“Term” or “Term of
Employment”) under this Agreement shall extend until
December 31, 2017. Notwithstanding the foregoing, the
“Term of Employment” hereunder may be earlier
terminated by either Party in accordance with the provisions of
Section 10.
(b)
Effect on Prior Agreements, Equity Awards . It is
specifically acknowledged, understood and agreed by the Parties
that this Agreement amends and restates the Prior Agreement, as of
the Effective Date; provided, however, that nothing contained
herein shall amend or restate the terms of any restricted stock or
stock option granted to the Executive prior to March 1, 2008
in a manner that would be adverse to the Executive, including any
provision herein relating to vesting or term of exercise.
3. Position, Duties and
Responsibilities .
(a) During
the Term of Employment, the Executive shall be employed as the
President and Chief Executive Officer of the Company. Executive
shall devote his full working time and efforts to the business and
affairs of the Company.
(b) The
Executive shall be responsible for such duties and responsibilities
that are assigned to him from time to time by the full Board.
(c) The
Executive, in carrying out his duties under this Agreement, shall
report directly to the full Board, and each officer or other member
of senior management of the Company (including the Chief Operating
Officer, Chief Financial Officer and General Counsel) shall report
to the Executive (either directly or with the Executive’s
consent to another officer or member of senior management of the
Company who reports to the Executive);.
(d) In
the event of a termination of employment of the Executive for any
reason, the Executive shall immediately resign as a member of the
Board of the Company and each of its Affiliates, unless requested
by the Board to remain in any such position.
(e) Nothing
herein shall preclude the Executive from (i) serving on the
boards of directors of a reasonable number of other corporations
subject to the approval of the Board in each case, (ii) serving on
the boards of a reasonable number of trade associations and/or
charitable organizations, (iii) engaging in charitable
activities and community affairs, and (iv) managing his
personal investments and affairs, provided that such activities set
forth in this Section 3(e) do not materially interfere with the
proper performance of his duties and responsibilities
hereunder.
4. Base Salary . The
Executive shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, of
$1,165,000 (effective as of April 1, 2008), which amount shall be
subject to review annually and may be increased (but not decreased)
in the discretion of the Board.
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5. Annual Cash Incentive
Award . During the Term of Employment, the Executive shall
participate in the annual cash incentive award program of the
Company. Under such program, the Executive shall have a reference
bonus each calendar year equal to 125% of the Executive’s
then current Base Salary (the “Reference Bonus
Amount”), prorated for partial years. The actual bonus paid
will be a multiple of the Reference Bonus Amount (from zero
(0) to two (2) times the Reference Bonus Amount). The
actual multiple will reflect a variety of subjective and objective
factors, as determined by the Board. The Executive shall be paid
his annual cash incentive award at the same time that other senior
executives are paid their annual cash incentive awards.
6. Equity Incentive
Awards . During the Term, the Executive shall be eligible to
receive equity incentive awards, including options to purchase
shares of Stock, as determined by the Compensation Committee of the
Board. Any such equity incentive awards shall be granted in
accordance with the terms and conditions of the applicable equity
incentive plan then in effect. Each grant will be evidenced by an
award agreement issued under the plan, which shall be executed by
the Executive and the Company and the terms of which shall be
consistent with the terms of this Agreement. Notwithstanding
anything to the contrary, the second sentence of Section 10.7
of the Company’s 2001 Equity Incentive Plan shall not apply
to any equity incentive awards previously or hereafter granted to
the Executive. Further notwithstanding anything to the contrary,
any termination of the Executive’s employment that is not a
termination by the Company for Cause under this Agreement, shall
under no circumstance be treated as a termination for
“cause” under any equity incentive awards previously or
hereafter granted to the Executive.
7. Employee Benefit
Programs . During the Term, the Executive shall be entitled to
participate in all employee pension and welfare benefit plans and
programs made available to the Company’s senior level
executives or to its employees generally, as such plans or programs
may be in effect from time to time, including, without limitation,
pension, profit sharing, savings and other retirement plans or
programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, travel accident insurance, and any other
pension or retirement plans or programs and any other employee
welfare benefit plans or programs that may be sponsored by the
Company from time to time, including any plans that supplement the
above-listed types of plans or programs, whether funded or
unfunded. In no way limiting the foregoing, during the Term the
Company will maintain, at its cost, term life insurance on the life
of the Executive for the benefit of his beneficiaries with a face
amount equal to at least $3,000,000. The Executive shall be
entitled to four weeks paid vacation per year of employment.
8. Perquisites . During
the Term, the Executive shall be entitled to participate in all of
the Company’s executive perquisites in accordance with the
terms and conditions of such arrangements as are in effect from
time to time for the Company’s senior-level executives,
including without limitation, the Company’s automobile
reimbursement arrangement.
9. Reimbursement of Business
and Other Expenses . The Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities
under this Agreement including, without limitation, reasonable
legal fees incurred in the negotiation and preparation of
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this
Agreement, and the Company shall promptly reimburse him for such
expenses, subject to documentation in accordance with the
Company’s policy.
10. Termination of
Employment During the Term .
(a)
Termination Due to Death . In the event that the
Executive’s employment is terminated due to his death, his
estate or his beneficiaries, as the case may be, shall be entitled
to the following benefits:
(i) the
sum of (1) the Executive’s Base Salary through the end
of the month during which the Termination Date occurs (to the
extent not previously paid) (2) a pro-rata annual cash
incentive award for the year in which the Termination Date occurs,
based on the Reference Bonus Amount for such year, payable when
annual cash incentive awards are normally paid to other executives
(to the extent not previously paid) (the “Severance
Bonus”), (3) any earned but unpaid annual cash incentive
award for the year prior to the year in which the Termination Date
occurs, payable when annual cash incentive awards are normally paid
to other executives (the sum of the amounts described in clauses
(1), (2) and (3), together with expense reimbursements or
other amounts payable to the Executive under any benefit plan or
policy of the Company or otherwise, shall be hereinafter referred
to as the “Accrued Obligations”);
(ii)
all outstanding stock options shall become fully vested and all
stock options granted prior to November 21, 2002 shall remain
exercisable until two (2) years from the Termination Date (but
in no event beyond the end of each such stock option’s
Exercise Period) and all stock options granted on or after
November 21, 2002 shall remain exercisable until three
(3) years from the Termination Date (but in no event beyond
the end of each such stock option’s Exercise Period);
and
(iii)
the transfer restrictions on all outstanding restricted stock,
restricted stock units and other equity awards granted to the
Executive that are subject to time-based vesting at the time of
termination shall lapse.
All payments owing to the
Executive’s estate or beneficiaries, as the case may be,
shall be made in a lump sum payment within 30 days of the date
of Executive’s death.
(b)
Termination Due to Disability . In the event that the
Executive’s employment is terminated by either party due to
his Disability, he shall be entitled to the following
benefits:
(i)
disability benefits in accordance with the long-term disability
(“LTD”) program then in effect for senior executives of
the Company;
(ii)
Base Salary through the end of the LTD elimination period;
(iii)
the Accrued Obligations;
(iv)
all outstanding stock options shall become fully vested and all
stock options granted prior to November 21, 2002 shall remain
exercisable until two (2)
6
years from the
Termination Date (but in no event beyond the end of each such stock
option’s Exercise Period ) and all stock options granted on
or after November 21, 2002 shall remain exercisable until
three (3) years from the Termination Date (but in no event
beyond the end of each such stock option’s Exercise
Period);
(v) the
transfer restrictions on all outstanding restricted stock,
restricted stock units and other equity awards granted to the
Executive that are subject to time-based vesting at the time of
termination shall lapse; and
(vi)
the Executive shall be entitled to continued participation at
Company expense in all medical and dental insurance coverage in
which he was participating on the Termination Date until the longer
of (x) the remaining Term of the Agreement following the
Termination Date, (y) 24 months following the Termination
Date and (z) the date, or dates, he receives equivalent
coverage and benefits under the plans and programs of a subsequent
employer.
In no event shall a termination of
Executive’s employment for Disability occur until the Party
terminating his employment gives written notice to the other Party
in accordance with Section 24 below, and until Executive is
determined to have a Disability as such term is defined in Section
1(g). All payments owing to the Executive under this subsection
shall be made to the Executive in a lump sum payment within
30 days of the Termination Date; provided, however, that if
the Executive is a “specified employee” within the
meaning of Section 409A of the Code and the guidance issued
thereunder on the Termination Date, then such payments shall be
delayed until the date that is six months and one day following the
Termination Date, if and to the extent required to comply with
Section 409A of the Code.
(c)
Termination by the Company for Cause . In the event the
Company terminates the Executive’s employment for Cause, he
shall be entitled to the following benefits:
(i) the
Accrued Obligations, excluding the Severance Bonus and excluding
Base Salary between the Termination Date and the end of the month
during which the Termination Date occurs;
(ii) no
further vesting of stock options shall occur and all vested options
shall remain exercisable until the expiration of the “Limited
Term.” For purposes hereof, the Limited Term shall be,
(1) in the case of options granted after 2004, 10 days
following the Termination Date, and (2) in the case of options
granted before 2005, 90 days following the Termination Date,
but not in either case beyond the end of each such stock
option’s Exercise Period. Notwithstanding the foregoing, if
at any time during the Limited Term the Executive is prohibited
from exercising options or selling shares of Company stock by
reason of (A) a Company policy, including the Company’s
insider trading policy, or (B) any legal or regulatory
restriction or limitation (in each case, a “Period of
Restriction”), then the Limited Term shall end on the later
of the date described in the preceding sentence or the date which
is 10 days following the end of the Period of Restriction, but
not in either case beyond the end of each such stock option’s
Exercise Period; and
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(iii)
all restricted stock, restricted stock units and other equity
awards granted to the Executive, under this Agreement or any other
agreement, as to which transfer restrictions have not lapsed shall
be forfeited.
All payments owing to the Executive
under this subsection shall be made to the Executive in a lump sum
payment within 30 days of the Termination Date; provided,
however, that if the Executive is a “specified
employee” within the meaning of Section 409A of the Code
and the guidance issued thereunder on the Termination Date, then
such payments shall be delayed until the date that is six months
and one day following the Termination Date, if and to the extent
required to comply with Section 409A of the Code.
(d)
Termination without Cause or for Good Reason . In the event
the Executive’s employment is terminated by the Company
without Cause or by the Executive with Good Reason (but not in any
event as a result of Disability, death, or as the result of a
termination with Cause or without Good Reason), the Company shall
pay to the Executive the Pro-Rata Bonus and the Accrued
Obligations, excluding the Severance Bonus. In addition, the
Executive shall be entitled to the following:
(i) the
Company shall pay to the Executive the aggregate of following
amounts in a lump sum payment within 30 days of the
Termination Date; provided, however, that if the Executive is a
“specified employee” within the meaning of
Section 409A of the Code and the guidance issued thereunder on
the Termination Date, then such payments shall be delayed until the
date that is six months and one day following the Termination Date,
if and to the extent required to comply with Section 409A of
the Code:
(A) the
sum of the Base Salary for the 36-month period following the
Termination Date; and
(B)
three (3) times the Reference Bonus Amount;
(ii)
for two (2) years after the Termination Date, the Company
shall continue to provide medical and dental benefits to the
Executive and the Executive’s family at least equal to those
which would have been provided to them if the Executive’s
employment had not been terminated, in accordance with the
applicable medical and dental benefit plans in effect on the
Termination Date and in which Executive participated as of such
date or, if more favorable to the Executive and his family, in
effect generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies; provided,
however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical and dental benefits
from such employer on terms at least as favorable to the Executive
and his family as those being provided by the Company, then the
Company shall no longer be required to provide those particular
benefits to the Executive and his family. In addition, in the event
the Executive receives such benefits pursuant to the preceding
sentence for the entire two-year period and as of the end of such
two-year period the Executive is not eligible to receive medical
and dental benefits from a subsequent employer, then at the end of
such two-year period the Company shall make a lump sum payment to
the Executive in an amount equal to the Company’s cost of
providing such medical and dental benefits pursuant to the
preceding
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sentence for a
one-year period, with such amount based on the relevant rates in
effect as of the last day of such two-year period;
(iii)
all outstanding stock options shall become fully vested and all
stock options granted prior to November 21, 2002 shall remain
exercisable until two (2) years from the Termination Date (but
in no event beyond the end of each such stock option’s
Exercise Period ) and all stock options granted on or after
November 21, 2002 shall remain exercisable until three
(3) years from the Termination Date (but in no event beyond
the end of each such stock option’s Exercise Period);
(iv)
the transfer restrictions on all outstanding restricted stock,
restricted stock units and other equity awards granted to the
Executive that are subject to time-based vesting at the time of
termination shall lapse; and
(v)
notwithstanding anything to the contrary in this Agreement or in
the Executive Retention Agreement, if the Executive’s
employment with the Company is terminated under circumstances which
entitle the Executive to receive benefits under the terms of the
Executive Retention Agreement and this Agreement, the Executive
shall be entitled to benefits equal to the greater of (1) the
benefits due and payable to him under Section 4 of the
Executive Retention Agreement as a result of such termination or
(2) the benefits due and payable to him under this
Section 10 as a result of such termination, but not both. In
furtherance thereof, it is the Parties’ understanding that in
the event of a termination under such circumstances, the Executive
shall be entitled to receive benefits payable under Section 10
of this Agreement or Section 4 of the Executive Retention
Agreement (but not both) determined on a benefit by benefit basis
by the Executive and that the term “Other Benefits” as
defined in the Executive Retention Agreement shall not include
benefits payable under this Agreement.
(e)
Voluntary Termination . A termination of employment by the
Executive on his own initiative, other than a termination due to
death or Disability or Good Reason, shall have the same
consequences as provided in Section 10(c) for a termination for
Cause. A voluntary termination under this Section 10(e) shall be
effective upon 30 days prior written notice to the
Company.
All payments owing to the Executive
under this subsection shall be made to the Executive in a lump sum
payment within 30 days of the Termination Date; provided,
however, that if the Executive is a “specified
employee” within the meaning of Section 409A of the Code
and the guidance issued thereunder on the Termination Date, then
such payments shall be delayed until the date that is six months
and one day following the Termination Date, if and to the extent
required to comply with Section 409A of the Code.
(f)
Taxes .
(i) In
the event that the Company undergoes a “Change in Ownership
or Control” (as defined below), including any Change in
Ownership or Control prior to the Effective Date, and thereafter
the Executive becomes eligible to receive “Contingent
Compensation Payments” (as defined below) the Company shall,
as soon as
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administratively feasible after the Executive becomes so eligible
determine and notify the Executive (with reasonable detail
regarding the basis for its determinations) (A) which of the
payments or benefits due to the Executive following such Change in
Ownership or Control constitute Contingent Compensation Payments,
(B) the amount, if any, of the excise tax (the “Excise
Tax”) payable pursuant to Section 4999 of the Code, by
the Executive with respect to such Contingent Compensation Payment
and (C) the amount of the “Gross-Up Payment” (as
defined below) due to the Executive with respect to such Contingent
Compensation Payment. Within 30 days after delivery of such
notice to the Executive, the Executive shall deliver a response to
the Company (the “Executive Response”) stating either
(1) that he agrees with the Company’s determination
pursuant to the preceding sentence or (2) that he disagrees
with such determination, in which case he shall indicate which
payment and/or benefits should be characterized as a Contingent
Compensation Payment, the amount of the Excise Tax with respect to
such Contingent Compensation Payment and the amount of the Gross-Up
Payment due to the Executive with respect to such Contingent
Compensation Payment. If the Executive states in the Executive
Response that he agrees with the Company’s determination, the
Company shall make the Gross-Up Payment to the Executive within
three (3) business days following delivery to the Company of the
Executive Response. If the Executive states in the Executive
Response that he disagrees with the Company’s determination,
then, for a period of 15 days following delivery of the
Executive Response, the Executive and the Company shall use good
faith efforts to resolve such dispute. If such dispute is not
resolved within such 15-day period, such dispute shall be settled
by arbitration in accordance with Section 14 below. The
Company shall, within three (3) business days following
delivery to the Company of the Executive Response, make to the
Executive those Gross-Up Payments as to which there is no dispute
between the Company and the Executive regarding whether they should
be made. The balance of the Gross-Up Payments shall be made within
three (3) business days following the resolution of such
dispute. The amount of any payments to be made to the Executive
following the resolution of such dispute shall be increased by the
amount of the accrued interest thereon computed at the prime rate
announced from time to time by The Wall Street Journal compounded
monthly from the date that such payments originally were due. In
the event that the Executive fails to deliver an Executive Response
on or before the required date, the Company’s initial
determination shall be final.
(ii)
For purposes of this Section 10(f), the following terms shall
have the following respective meanings:
(A)
“Change in Ownership or Control” shall mean a change in
the ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company
determined in accordance with Section 280G(b)(2) of the
Code.
(B)
“Contingent Compensation Payment” shall mean any
payment (or benefit) in the nature of compensation that is made or
supplied to a “disqualified individual” (as defined in
Section 280G(c) of the Code) and that is contingent (within
the meaning of Section 280G(b)(2)(A)(i) of the Code) on a
Change in Ownership or Control of the Company.
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(C)
“Gross-Up Payment” shall mean an amount equal to the
sum of (i) the amount of the Excise Tax payable with respect
to a Contingent Compensation Payment and (ii) the amount necessary
to pay all additional taxes imposed on (or economically borne by)
the Executive (including the Excise Taxes, state and federal income
taxes and all applicable withholding taxes) attributable to the
receipt of such Gross-Up Payment. For purposes of the preceding
sentence, all taxes attributable to the receipt of the Gross-Up
Payment shall be computed assuming the application of the maximum
tax rates provided by law.
(g)
Outplacement Services . In the event the Executive’s
employment terminates in accordance with Section 10(d), the
Company shall provide outplacement services, including, but not
limited to the services of one or more executive search firms, a
personal assistant and such other services that the Executive
believes will assist him in his job search, and pay reasonable
out-of-pocket expenses, each subject to the Executive’s
presentation of appropriate vouchers, invoices or receipts in
accordance with such policies and procedures as the Company from
time to time may establish, up to an aggregate of $50,000, with
such services and expense reimbursement to extend until the earlier
of (i) 12 months following the termination of the
Executive’s employment or (ii) the date the Executive
secures full time employment.
(h)
Other Benefits . To the extent not previously paid or
provided, the Company shall timely pay or provide to the Executive
any other amounts or benefits, including, but not limited to any
deferred compensation amounts, required to be paid or provided or
which the Executive is eligible to receive following the
Executive’s termination of employment for any reason, under
any plan, program, policy, practice, contract or agreement of the
Company and its Affiliates and in accordance with such plan,
program, policy, practice, contract or agreement, except that the
Executive waives any rights to severance pay thereunder.
(i)
Nature of Payments . Any amounts due under this
Section 10 are in the nature of severance payments considered
to be reasonable by the Company and are not in the nature of a
penalty.
(j)
No Mitigation; No Offset . The Executive shall not be
required to mitigate the amount of any payment or benefit provided
in this Section 10 or Section 11 by seeking other
employment or otherwise. Further, except as provided in
Sections 10(b)(vi), 10(d)(ii) and Section 11(a), the amount of
any payment or benefits provided for in this Section 10 or
Section 11 shall not be reduced by any compensation earned by
the Executive as a result of employment by another employer or be
offset by any amount claimed to be owed by the Executive to the
Company.
11. Retirement Upon
Expiration of the Term . In the event that the
Executive’s employment is terminated by the Company without
Cause or the Executive (with or without Good Reason) on or after
December 31, 2017, the Company shall pay to the Executive the
Pro-Rata Bonus and the Accrued Obligations, excluding the Severance
Bonus. In addition, the Executive shall be entitled to the
following:
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(a) for
the period beginning on the Termination Date and ending on the date
the Executive becomes eligible for Medicare, or such longer period
as may be provided by the term of the appropriate plan, program,
practice or policy, the Executive and the Executive’s family
shall be permitted to continue to participate, at Executive’s
expense based on the applicable COBRA premium rate, in the
Company’s medical and dental benefit plans in effect
generally with respect to other peer executives of the Company and
its affiliated companies; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive
medical and dental benefits from such employer on terms at least as
favorable to the Executive and his family as those being provided
by the Company, then the Company shall no longer be required to
provide those particular benefits to the Executive and his
family;
(b) except
as otherwise provided in an applicable stock option agreement, all
outstanding stock options shall become fully vested, and all
outstanding stock options shall remain exercisable until the end of
each such stock option’s Exercise Period; and
(c) except
as otherwise provided in an applicable award agreement, the
transfer restrictions on all outstanding restricted stock,
restricted stock units and other equity awards granted to the
Executive that are subject to time-based vesting at the time of
termination shall lapse.
12. Confidentiality &
Assignment of Inventions .
(a) The
Executive shall abide by his previously executed confidentiality
and assignment of inventions agreement, set forth in
Exhibit A, attached and incorporated herein.
(b) Upon
the termination of the Executive’s employment, the Executive
(or in the event of his death, the Executive’s personal
representative) shall promptly surrender to the Company the
original and all copies of any materials containing confidential
information of the Company which are then in the Executive’s
possession or control, provided, however, the Executive shall not
be required to surrender his rolodexes, personal diaries and other
items of a personal nature.
13. Noncompetition;
Nonsolicitation .
(a) The
Executive acknowledges (i) that in the course of his
employment with the Company he will become familiar with trade
secrets and customer lists of, and other confidential information
concerning, the Company and its Affiliates, customers, and clients
and (ii) that his services will be of special, unique and
extraordinary value to the Company.
(b) The
Executive agrees that during the Term of Employment and for a
period of two (2) years following his Termination Date (the
“Noncompetition Period”), he shall not in any manner,
directly or indirectly, through any person, firm, corporation or
enterprise, alone or as a member of a partnership or as an officer,
director, stockholder, investor or employee of or advisor or
consultant to any person, firm, corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm,
corporation or enterprise in engaging or being engaged
(collectively, (“Restricted Activity”)), in any
Competitive Activity.
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(c) In
the event the Executive’s employment is terminated pursuant
to Section 10(d) or Section 11, a Competitive Activity shall mean a
business that sells or offers for sale the product line or product
lines (i) of the Company or any Affiliate at the time in
question and (ii) that were being actively considered to be
included in the Company’s or any Affiliate’s product
line or product lines, prior to the Termination Date of the
Executive’s employment; provided that a Competitive Activity
shall not include a product line or product lines of the Company
contributing less than 20% of the Company’s revenues for the
year in question, and provided further that a product line or
product lines shall not be deemed to be a Competitive Activity if
the product line or product lines contribute less than 20% of the
revenues for the year in question of the business by which the
Executive is employed or with which he is otherwise associated, and
provided further that it is agreed and understood that the
prohibitions provided for in this Section 13(c) shall not restrict
Executive from engaging in Restricted Activity for any subsidiary,
division or affiliate or unit of a company (collectively a
“Related Entity”) if that Related Entity is not engaged
in Competitive Activity, irrespective of whether some other Related
Entity of that company engages in what would otherwise be
considered to be Competitive Activity (as long as Executive does
not engage in Restricted Activity for such other Related
Entity).
(d) In
the event the Executive is terminated pursuant to Sections 10(c) or
10(e), a Competitive Activity shall mean a business that sells or
offers for sale the product line or product lines (i) of the
Company or any Affiliate at the time in question and (ii) that
were being actively considered to be included in the
Company’s or any Affiliate’s product line or product
lines, prior to the Termination Date of the Executive’s
employment; provided that a Competitive Activity shall not include
a product line or product lines of the Company contributing less
than five percent (5%) of the Company’s revenues for the year
in question, and provided further that a product line or product
lines shall not be deemed to be a Competitive Activity if the
product line or product lines contribute less than five percent
(5%) of the revenues for the year in question of the business by
which the Executive is employed or with which he is otherwise
associated, and provided further that it is agreed and understood
that the prohibitions provided for in this Section 13(d) shall not
restrict Executive from engaging in Restricted Activity for any
Related Entity if that Related Entity is not engaged in Competitive
Activity, irrespective of whether some other Related Entity of that
company engages in what would otherwise be considered to be
Competitive Activity (as long as Executive does not engage in
Restricted Activity for such other Related Entity).
(e) The
Executive further agrees that during the Noncompetition Period he
shall not (i) in any manner, directly or indirectly, hire or
cause to be hired any employee of or advisor or consultant to the
Company or any of its Affiliates for any purpose or in any capacity
whatsoever, or (ii) in connection with any business to which
Section 13(b) applies, call on, service, solicit or otherwise do
business with any customer of the Company or any of its Affiliates;
provided, however, that the restriction contained in clause
(i) of this Section 13(e) shall not apply to, or interfere
with, the proper performance by the Executive of his duties and
responsibilities under Section 3 of this Agreement.
(f) Nothing
in this Section 13 shall prohibit the Executive from being a
passive owner of not more than one percent (1%) of the outstanding
common stock, capital stock and equity of any firm, corporation or
enterprise so long as the Executive has no active participation in
the management of business of such firm, corporation or
enterprise.
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(g) If
the restrictions stated herein are found by a court to be
unreasonable, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances
shall be substituted for the stated period, scope or area and that
the court shall revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law.
14. Resolution of
Disputes . Any disputes arising under or in connection with
this Agreement shall be resolved by binding arbitration, to be held
in Boston, Massachusetts, in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. Costs of the mediation, arbitration or
litigation including, without limitation, reasonable
attorneys’ fees of both parties, shall be borne by the
Company. Pending the resolution of the dispute, the Company shall
continue payment of all amounts due and provisions of all benefits
to which Executive is entitled, which amounts shall be subject to
repayment to the Company if the Company prevails.
15. Remedies . Each of
the parties to this Agreement shall be entitled to enforce its
rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney’s fees) caused by any
breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for
any breach of the provisions of this Agreement and that any party
may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this
Agreement. Nothing in this paragraph is intended to prevent the
parties from raising any and all defenses with respect to the
necessity for, and scope of, such injunctive or equitable
relief.
16. Indemnification
.
(a) The
Executive shall continue to be indemnified under the amended and
restated Indemnification Agreement, dated as of July 11, 2000,
a copy of which is attached hereto as Exhibit B, in accordance with
the terms of such agreement.
(b) The
Company agrees to continue and maintain a directors’ and
officers’ liability insurance policy covering the Executive
to the extent the Company provides such coverage for its other
senior executives.
17. Assignability; Binding
Nature . This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and assigns. Rights or obligations of
the Company under this Agreement may be assigned or transferred by
the Company pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation of
all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as
a matter of law. The Company further agrees that, in the event of a
sale of assets or liquidation as described in the preceding
sentence, it shall take whatever action it reasonably can in order
to cause such assignee
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or
transferee to expressly assume the liabilities, obligations and
duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by
the Executive other than his rights to compensation and benefits,
which may be transferred only by will or operation of law.
18. Representations
.
(a) The
Company represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of
its obligations under this Agreement will not violate any agreement
between it and any other person, firm or organization. The
Executive represents that he knows of no agreement between him and
any other person, firm or organization that would be violated by
the performance of his obligations under this Agreement.
(b) Executive
hereby represent and warrants that he is not bound by the terms of
any agreement with any previous employer or other party to refrain
from competing, directly or indirectly, with the business of such
previous employer or any other party. Executive further represents
and warrants that Executive’s performance of all the terms of
this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Executive in confidence
or in trust prior to Executive’s employment with the Company.
Executive will not disclose to the Company or induce the Company to
use any confidential or proprietary information or material
belonging to any previous employer or others. Executive will not
hereafter grant anyone any rights inconsistent with the terms of
this Agreement.
19. Entire Agreement .
This Agreement contains the entire understanding and agreement
between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the
Parties with respect thereto (including without limitation the
letter agreement dated February 11, 2004); provided, however,
that nothing contained herein shall modify or amend the terms of
any outstanding restricted stock or stock option granted to the
Executive in a manner adverse to the Executive. This is an
integrated document.
20. Amendment or Waiver
. No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and
an authorized officer of the Company. No waiver by either Party of
any breach by the other Party of any condition or provision
contained in this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time. Any waiver
must be in writing and signed by the Executive or an authorized
officer of the Company, as the case may be.
21. Severability . In
the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by law so as to achieve the purposes of
this Agreement.
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22. References . In the
event of the Executive’s death or a judicial determination of
his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
23. Governing
Law/Jurisdiction . This Agreement shall be governed in
accordance with the laws of Massachusetts without reference to
principles of conflict of laws.
24. Notices . All
notices and other communications required or permitted hereunder
shall be in writing and shall be deemed given when
(a) delivered personally, (b) sent by certified or
registered mail, postage prepaid, return receipt requested or
(c) delivered by overnight courier (provided that a written
acknowledgment of receipt is obtained by the overnight courier) to
the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice
of:
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