Exhibit 10.45
AGREEMENT REGARDING
TERMINATION BENEFITS
This “Agreement Regarding Termination
Benefits” (“Agreement”) is entered into as of
September 3, 2004 (the “Effective Date”) between
Teradyne, Inc., a Massachusetts Corporation with a principal office
at 321 Harrison Avenue, Boston, Mass. 02118 (the
“Company”) and Michael A. Bradley with a residential
address of 8 Barnstable Road, West Newton, Mass. 02465
(“Executive”).
WHEREAS, Executive was recently elected by the
Company’s Board of Directors as its Chief Executive Officer
and is now employed by the Company as its President and Chief
Executive Officer; and
WHEREAS, the Company and Executive have now
agreed on certain Termination Benefits in the event the
Executive’s employment with the Company terminates under the
conditions described herein.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, the Company and the Executive agree as
follows:
1. Effective Date and Term: This
Agreement shall become effective as of the date set forth in the
opening paragraph. Subject to the provisions of Sections 4 and 9
below and unless earlier terminated as permitted herein, this
Agreement shall continue in effect for a period of three (3) years
from the Effective Date (“Term”) and thereafter, the
Term shall automatically be extended for additional one year
periods unless, not later than sixty (60) days prior to the end of
the then current Term, the Company shall have given notice to the
Executive not to extend the then current Term.
2. Definitions: For purposes of this
Agreement, capitalized terms shall be defined as
follows:
“ Model
Compensation” shall mean the Executive’s annual
“model compensation” as determined by the
Company’s Compensation Committee or Board of Directors, which
consists of (a) a fixed monthly salary and (b) an annual variable
amount based upon overall corporate and group
performance.
“ Cause” shall
mean conduct involving one or more of the following: (i) the
substantial and continuing failure of the Executive, after notice
thereof, to render services to Company in accordance with the terms
or requirements of his employment, as established by the Company
Board of Directors from time to time and communicated to the
Executive; (ii) the Executive’s disloyalty, gross negligence,
willful misconduct, dishonesty, fraud or breach of fiduciary duty
to the Company; (iii) the Executive’s deliberate disregard of
the rules or policies of, or breach of an agreement with, Company
which results in direct or indirect material loss, damage or injury
to the Company; (iv) the intentional, unauthorized disclosure by
the Executive of any trade secret or confidential
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information of the Company; (v) the commission
by the Executive of an act which constitutes unfair competition
with the Company or (vi) the conviction of, or the entry of a plea
of guilty or nolo contendere by the Executive, to any crime
involving moral turpitude or any felony.
“Change in
Control” shall be
deemed to have occurred upon the occurrence of any of the following
events: (i) any consolidation, cash tender offer, reorganization,
re-capitalization, merger or plan of share exchange following which
the shareholders of the Company immediately prior to such
transaction own less than a majority of the combined voting power
of the then-outstanding securities of the combined corporation or
person immediately after such transaction; (ii) any sale, lease,
exchange or other transfer of all or substantially all of the
Company’s assets; (iii) the adoption by the Board of
Directors of Company of any plan or proposal for the liquidation or
dissolution of the Company; (iv) a change in the majority of the
Board of Directors of the Company through one or more contested
elections; or ( v) any person (as that term is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act of 1934,
as amended) becomes beneficial owner of 30% or more of the combined
voting power of the Company’s outstanding voting
securities.
“ Company” shall
mean “Teradyne, Inc. and shall include its successors and
assigns, and any corporation or other entity which is the surviving
or continuing entity following a merger, consolidation, or sale of
all or substantially all of the Company’s assets or
stock.
“ Competitor”
includes, but is not limited to, any business or enterprise that
develops, designs, produces, markets, sells, or renders any product
or service developed, produced, marketed, sold or rendered by the
Company, including actual or demonstrably anticipated research or
development.
“ Date of
Termination” shall mean the last day of Executive’s
employment with the Company.
“ Disability”
shall mean an illness, injury or other incapacitating condition as
a result of which the Executive is absent from full time
performance of his duties with the Company or is unable to perform
his duties and responsibilities for a period of sixty (60)
consecutive days during the Term or a period or periods aggregating
to more than ninety (90) days in any consecutive six (6) month
period but shall not include death.
“ Restricted
Activities” shall include the following:
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a)
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Recruiting,
soliciting, hiring or engaging, as an employee or independent
contractor, any employees or former employees (excluding any former
employee whose employment with the Companyor its subsidiaries has
been terminated for a period of six months or longer) of the
Company or its subsidiaries;
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b)
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Soliciting,
enticing, or encouraging employees of the Company or its
subsidiaries to leave employment with the Company or its
subsidiaries;
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c)
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Soliciting (for
the purpose of providing a product or service that is competitive
with the Company) any customer or prospective customer of the
Company or its subsidiaries;
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d)
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Soliciting,
enticing, advising, encouraging, or inducing (i) customers of the
Company or its subsidiaries to discontinue or alter their business
relationship or (ii) customers or prospective customers to refrain
from entering into a business relationship with the Company or its
subsidiaries;
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e)
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Entering the
employment, rendering any professional services or taking a
position as an officer, director, partner, owner, consultant,
independent contractor, advisory board or committee member,
principal, agent, employee or 10% or more shareholder with or to
any individual, partnership, association or corporation which is a
Competitor of the Company or its subsidiaries; but this clause (e)
shall not preclude the Executive from rendering services to an
entity that competes with an entity that has acquired Teradyne,
Inc. (an “Acquiror”) so long as (i) the
Executive’s services do not involve products or services that
are competitive to those that were produced, marketed, sold or
rendered by Teradyne, Inc. or any of its subsidiaries (including
actual or demonstratively anticipated research or development)
before the acquisition (“Teradyne Product/Services”)
and (ii) the Executive is not retained as an Officer of the
Acquiror following the consummation of the acquisition to render
services involving the Acquiror’s products and services which
are not Teradyne Products/Services.
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f)
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Establishing,
funding, purchasing or managing a business which is competitive
with the business of the Company or its subsidiaries.
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3. Employment & Agreement
Consideration: In consideration of (a) the Executive’s
“at-will” employment with the Company following the
Executive’s recent election to the position of Chief
Executive Officer of the Company and the compensation payments made
to the Executive as a consequence thereof and (b) the
Company’s willingness to enter into an agreement regarding
termination benefits, specifically this Agreement, the Executive
covenants and agrees that during the Term of this Agreement and for
two (2) years after the Executive’s Date of Termination
resulting from the Executive’s Resignation, Retirement or a
termination by the Company for Cause, the Executive will not
directly or indirectly engage in any of the Restricted
Activities.
4. Termination Benefits and
Covenants:
4.1 For the Executive: In
consideration of, and as condition to, the Executive providing to
the Company the covenants and agreements set forth in
Section
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4.3 below, the Company shall provide the
following Termination Benefits to the Executive if his employment
with the Company is terminated by the Company for any reason other
than for Death, Disability, or Cause, regardless of whether prior
to, following or relating to a Change of Control.
(a) Continued Payments: The
Company shall pay the Executive a monthly amount equal to
1/12 th of his current annual Model
Compensation as of the Date of Termination for a period of
twenty-four (24) months from the Date of Termination (the
“Severance Period”). Except as otherwise expressly
provided herein, under no circumstances shall the Executive receive
more than a total of twenty-four (24) months of payments under this
Agreement. All such continued payments shall be in accord with the
Company’s usual model compensation pay practices.
(b) Benefits: During the
Severance Period, the Company shall arrange for continued health,
dental and vision insurance plan coverage for the Executive at the
same levels of coverage in existence prior to the Date of
Termination subject to the Company and Executive each contributing
to the applicable insurance premium payments on the same basis and
in the same proportions as in existence at the Date of Termination.
If the Executive is not eligible for continued health, dental and
vision insurance plan coverage for any portion of the Severance
Period, the Company shall provide or reimburse the Executive for
comparable individual insurance and, if such provision or
reimbursement constitutes taxable income to the Executive, such
additional amount as is necessary to place the Executive in
substantially the same after tax position as he was while an
employee of the Company with respect to such insurance plan
coverages. All other benefits, including but not limited to
flex/vacation time accrual, short and long term disability
insurance, and life insurance, contributions (including company
matches) into savings plan and savings plan plus, profit sharing
payments and participation in the Executive stock purchase plan
shall cease as of the Date of Termination.
(c) Stock Options: All stock
options held by the Executive shall be governed exclusively by the
terms of the applicable Stock Option Plan(s) and Stock Option
Agreements (including any successor plans and agreements) under
which the stock options were granted to the Executive and the
Executive Officer Change in Control Agreement between the Executive
and the Company dated October 19, 2001. Except as otherwise
expressly stated herein, this Agreement shall not modify or alter
any of the terms applicable to the Executive’s stock options,
including but not limited to the vesting schedule.
(d) Taxes and Withholdings:
All payments made by the Company to the Executive under this
Agreement shall be net of any applicable taxes (whether local,
state, federal, provincial or otherwise) or other required or
voluntary withholdings or deductions.
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(e) Notwithstanding anything to the
contrary herein, in the event the Executive dies after (i) his
employment with the Company has been terminated for any reason
other than Death, Disability and Cause and (ii) his right to the
Termination Benefits stated in Section 4.1 has attached, the
Company agrees that the Executive’s estate, conservator or
designated beneficiary(ies), as the case may be, shall be entitled
to the remainder of the Executive’s Termination Benefits
described in Section 4.1.
4.2 Notwithstanding the preceding
Section 4.1 and in consideration of, and as condition to, the
Executive providing to the Company the covenants and agreements set
forth in Section 4.3 below, the Company agrees that if the
Executive’s employment with the Company is terminated by the
Company for Disability, the Company shall:
(a) provide the monthly payments
described in Section 4.1(a) above, as reduced pursuant to 4.2(b)
below, to the Executive for each month during the two (2) year
period following his termination during which the Executive does
not receive or is no longer eligible to receive any Company
Disability insurance benefits under the applicable insurance policy
or program(s), other than as a result of Executive’s
intentional malfeasance or death; and
(b) under this Section 4.2, reduce
each monthly payment described in Section 4.1(a) above to the
Executive by any compensation received by the Executive from other
employment, consulting or the rendition of services outside the
Restricted Activities.
The Executive agrees to use his best efforts to
obtain and maintain any benefits from any disability policy or
program under which he is an insured party or
participant.
4.3 Executive’s
Covenants: In consideration of, and as a condition to, the
Company providing to the Executive the Termination Benefits set
forth in Sect
