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Exhibit
10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT,
dated as of January 25, 2007, is between WYETH, a Delaware
corporation (the “ Company ”), and Robert Essner
(the “ Executive ”).
W I
T N E S
S E T H
:
WHEREAS, the Company desires
to secure the continued services of the Executive as Chairman of
its Board of Directors and Chief Executive Officer and the
Executive desires to serve the Company in such capacities and, in
connection therewith, the Company and the Executive desire to enter
into this agreement (the “ Agreement ”) to,
among other things, set forth the terms of such continued
employment;
WHEREAS, the Company further
desires to secure the Executive’s assistance following the
Executive’s termination of employment with litigation or
regulatory matters; and
WHEREAS the Company also
further desires to secure an agreement from the Executive to
refrain from competing with the Company following his termination
of employment.
NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein
and for other good and valuable consideration, the Company and the
Executive hereby agree as follows:
1. Agreement to Employ;
Employment Period . Upon the terms and subject to the
conditions of this Agreement, the Company hereby agrees to continue
to employ the Executive, and the Executive hereby accepts such
employment, for the period commencing the date hereof (the “
Commencement Date ”) until such employment terminates
in accordance with Section 5. The period during which the
Executive is employed pursuant to this Agreement shall be referred
to as the “ Employment Period .”
2. Position and
Responsibilities . During the Employment Period, the Executive
will serve as Chairman of the Board of Directors and Chief
Executive Officer of the Company, with such duties and
responsibilities as are customarily assigned to individuals serving
in such position and such other duties and responsibilities
consistent therewith as may be specified by the Board of Directors
of the Company (the “ Board ”) from time to
time. During the Employment Period, the Executive will devote all
of his skill, knowledge and working time to the performance of his
duties and responsibilities hereunder, except for ( i
) reasonable vacation time and absence for sickness or similar
disability and ( ii ) to the extent that
it does not interfere with the
performance of the Executive’s duties hereunder, ( A
) such reasonable time as may be devoted to service on boards
of directors and the fulfillment of civic responsibilities and (
B ) such reasonable time as may be necessary from time
to time for personal financial matters.
3. Compensation and
Incentives .
(a) Base Salary . As
compensation for the services performed by the Executive hereunder,
during the Employment Period the Executive will be paid an annual
base salary of $1,662,000. The Board or an authorized committee
thereof will review the Executive’s base salary at the same
time it reviews the base salary of the Company’s other senior
executives and, in the discretion of the Board or such authorized
committee, may increase (but not decrease) such base salary from
time to time (as in effect from time to time, the “ Base
Salary ”). Payment of the Base Salary payable under this
Section 3(a) shall be deferred to the extent that the
Executive so elects and as permitted under the terms of any
deferred compensation or savings plan that may be maintained or
established by the Company.
(b) Annual Incentive
Bonus . During the Employment Period, the Executive will
participate in the Company’s annual bonus plan as in effect
from time to time for the Company’s senior executives (the
“ Executive Incentive Plan ”), on a basis
consistent with his position within the Company.
(c) Long-Term
Incentives . During the Employment Period, the Executive will
participate in all stock-based or other long-term incentive plans
or programs as in effect from time to time for the Company’s
senior executives (the “ Equity Plans ”), on a
basis consistent with his position within the Company.
4. Benefits; Perquisites,
Etc.
(a) Benefits . During
the Employment Period, the Executive will be provided all employee
and senior executive benefits (other than severance benefits),
including life, medical, dental and disability insurance, in
accordance with the programs of the Company then generally
available to its senior executives, as the same may be amended and
in effect from time to time. During the Employment Period, subject
to generally applicable eligibility requirements, the Executive
will also be entitled to participate in all of the Company’s
tax-qualified and non-qualified profit sharing, pension,
retirement, supplemental retirement (e.g., SERP, excess and
restoration plans), deferred compensation and savings plans and
vacation policies then generally available to its senior
executives, as the same may be amended and in effect from time to
time, on a basis consistent with the Executive’s then current
period of service, compensation and position.
(b) Perquisites .
During the Employment Period, the Executive will be entitled to
participate in all perquisite programs generally available from
time to time to senior executives of the Company on the terms and
conditions then prevailing under such programs.
(c) Business Expenses
. The Company will reimburse the Executive for reasonable travel,
lodging and meal expenses incurred by him in connection with his
performance of services hereunder upon submission of information
required to be submitted under the Company’s policy for
reimbursement of such business expenses.
5. Termination of
Employment .
(a) Termination as a
result of Death or Disability . The Executive’s
employment with the Company shall terminate upon his death and the
Company may terminate the Executive’s employment as a result
of the Executive’s Disability (as defined below). In the
event that the Executive’s employment terminates as a result
of the Executive’s death or Disability, the Executive shall
only be entitled to the payments and benefits provided for in
Section 5(f)(i) and Section 5(f)(ii). For purposes of
this Agreement, “ Disability ” shall mean
permanent and total disability as such term is defined under
Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the “ Code ”), without regard to
whether the Executive is subject to the Code. Any question as to
the existence of the Executive’s Disability upon which the
Executive and the Company cannot agree shall be determined by a
qualified independent physician selected by the Executive (or, if
the Executive is unable to make such selection, such selection
shall be made by any adult member of the Executive’s
immediate family or the Executive’s legal representative),
and approved by the Company, said approval not to be unreasonably
withheld. The determination of such physician shall be submitted in
writing to the Company and to the Executive and shall be final and
conclusive for all purposes of this Agreement.
(b) Termination by the
Company for Cause . The Company may terminate the
Executive’s employment for Cause. In the event of such a
termination of employment, the Executive shall only be entitled to
the payments and benefits provided for in Section 5(f)(i). For
purposes of this Agreement, “ Cause ” shall mean
( i ) the conviction of, or plea of guilty or nolo
contendere to, a felony or ( ii ) the willful engaging
by the Executive in gross misconduct that is materially and
demonstrably injurious to the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the members
of the Board (excluding Executive to the extent that Executive
serves on the Board) at a meeting of the Board called and held for
such purpose (after reasonable notice to Executive and an
opportunity for the Executive, together with the Executive’s
counsel, to be
heard before the Board), finding that,
in the good-faith opinion of the Board, the Executive was guilty of
conduct set forth above in this Section 5(b) and specifying
the particulars thereof in detail.
(c) Termination Without
Cause . The Company may terminate the Executive’s
employment hereunder Without Cause. In the event of such a
termination of employment, the Executive shall only be entitled to
the payments and benefits provided for in Section 5(f)(i),
5(f)(ii) and, subject to the terms and conditions set forth
therein, to the termination benefits described in
Section 5(f)(iii). A termination “ Without Cause
” means a termination of the Executive’s employment by
the Company other than as a result of death, Disability, Cause or
Retirement (as defined in Section 5(e)).
(d) Termination by the
Executive . The Executive may terminate his employment with or
without Good Reason (as defined below). In the event of a
termination by the Executive of his employment with Good Reason,
the Executive shall only be entitled to the payments and benefits
provided for in Section 5(f)(i) and 5(f)(ii) and, subject to
the terms and conditions set forth therein, to the termination
benefits described in Section 5(f)(iii). In the event of a
termination by the Executive of his employment without Good Reason,
the Executive shall only be entitled to the payments and benefits
provided for in Section 5(f)(i) and 5(f)(ii). For the purpose
of this Agreement, “ Good Reason ” shall mean
the occurrence, without Executive’s written consent, of any
of the following circumstances unless such circumstances are cured
prior to the date specified as the Date of Termination in the
Notice of Termination given in respect thereof:
(i) the assignment to the
Executive of any duties inconsistent with the Executive’s
status as Chief Executive Officer of the Company or its
subsidiaries, the Executive’s removal from his position as
Chief Executive Officer, or a substantial diminution in the nature
or status of the Executive’s responsibilities;
provided that, solely with respect to the events or
circumstances provided in this clause (i), the Executive must
provide the Notice of Termination not later than 180 days following
the date he had actual knowledge of the event constituting Good
Reason;
(ii) a reduction by the
Company in Executive’s Base Salary;
(iii) the relocation of the
Executive’s place of business to a location that increases
the Executive’s commute by more than 35 miles compared
to the Executive’s commute as in effect immediately prior to
the date of such relocation;
(iv) the failure by the
Company to pay to the Executive any portion of any installment of
deferred compensation under any deferred compensation program of
the Company in which the Executive participated within seven days
of the date such compensation is due;
(v) the failure of the
Company to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in
Section 11 hereof; or
(vi) any other material
breach of this Agreement by the Company.
(e) Retirement .
Unless otherwise agreed to by the Executive and the Company, any
termination of the Executive’s employment by the Company or
by the Executive after the Executive’s 65 th
birthday
shall be deemed a retirement hereunder (“ Retirement
”). In the event of such termination of employment, the
Executive shall only be entitled to the payments and benefits
provided for in Section 5(f)(i) and
Section 5(f)(ii).
(f) Payments Upon
Terminations .
(i) All Terminations .
Following any termination of the Executive’s employment
hereunder (by the Executive or by the Company), the Company will
pay the Executive his full Base Salary through the Date of
Termination and accrued but unpaid annual vacation (except that in
the case of a termination for Cause, the Company shall only pay for
accrued vacation time to the extent required by law). The Executive
shall also retain all of his rights to benefits provided for under
the terms of the employee and executive benefit plans of the
Company in which the Executive is a participant in accordance with
and subject to the terms of such plans as in effect from time to
time.
(ii) All Terminations
Other Than For Cause . In the case of any termination of
employment other than a termination for Cause, the Executive shall
be entitled to ( A ) payment of any earned but unpaid
annual bonus for the year preceding the year in which termination
occurs, ( B ) payment of a pro-rated annual bonus for
the calendar year that includes the Date of Termination, in an
amount determined by the Compensation and Benefits Committee of the
Board of Directors to represent the annual bonus the Executive
would have received under the Executive Incentive Plan for such
year had he remained employed through the date such bonus would
have been paid, multiplied by a fraction, the numerator of which is
the number corresponding to the month in which the Date of
Termination occurs and the denominator of which is 12, payable when
such bonuses are otherwise paid to the Company’s senior-most
executives, ( C ) vesting of all outstanding time-based
equity awards and, in the case of performance-based equity awards,
vesting or payment, as the case may be if, to the extent and
when
applicable performance
targets are met, ( D ) retiree benefits payable in
accordance with Company policy as in effect from time to time,
including, without limitation, retiree medical coverage and life
insurance benefits, and ( E ) until the earlier to
occur of (x) the Executive’s death and (y) the end
of the Restriction Period (as defined in Section 6 and subject
to the Executive’s compliance with the terms of Sections 6, 7
and 8) and as consideration therefor, the Company shall provide the
Executive the following: ( 1 ) reasonable home and
personal security; ( 2 ) an office commensurate with
his status as former Chairman and Chief Executive Officer and
continued secretarial support; ( 3 ) continued use of
Company owned or leased aircraft, such usage not to interfere with
the Company’s business need for such aircraft and not to
exceed 75 hours in any year (such hour usage to be determined
regardless of the number of passengers in the aircraft during such
usage); and ( 4 ) access to a Company-provided car and
driver for personal use on an occasional basis. If, as of the Date
of Termination, the Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(1) of the Code and
the regulations thereunder, and the provision of any of the
foregoing benefits prior to the six month anniversary of the Date
of Termination could result in adverse tax consequences to the
Executive under Section 409A, the parties shall cooperate to
restructure such benefits so that they are provided in a manner
that complies with Section 409A and that preserves to the
maximum extent possible the intended economic benefit.
(iii) Without Cause/For
Good Reason . In the event of a termination of the
Executive’s employment by the Company Without Cause or a
termination by the Executive of his employment with Good Reason,
subject to entering into a release of claims in the form attached
as Exhibit A, (A) the Company will pay to the Executive in a
single lump sum an amount equal to two times the sum of
(1) the Executive’s then-current Base Salary and
(2) the average of the highest three annual bonuses earned by
the Executive under the Executive Incentive Plan in respect of each
of the five (5) prior bonus years (exclusive of any special or
prorated bonuses) immediately before the year of such termination
and (B) the Company shall for purposes of the Wyeth
Supplemental Executive Retirement Plan and the Wyeth Executive
Retirement Plan credit the Executive with two years’
additional service and age, such that under the terms of each such
plan, the Executive shall be treated as having continued in the
employ of the Company through the second anniversary of his
termination of employment by the Company Without Cause or a
termination by the Executive of his employment with Good Reason.
Accordingly, the assumptions to be used in calculating
Executive’s benefit under such plans are: (x) the
Executive has continued in the employ of the Company for an
additional two years after the Date of Termination, and
(y) the Executive has earned annually from the Date
of
Termination to the date of
Executive’s assumed continued employment pursuant to
clause
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