Exhibit 10.5
EXECUTIVE TERMINATION AGREEMENT,
dated as of { Date } (the “Effective Date”),
between MILLIPORE CORPORATION, a Massachusetts corporation with
offices at 290 Concord Road, Billerica, Massachusetts 01821 (the
“Company”), and { Name } (the
“Executive”).
WHEREAS the Executive is an officer
and key member of the Company’s management;
WHEREAS the Company believes that it
is in its best interests, as well as those of its stockholders, to
assure the continuity of management in general and the Executive in
particular, for a fixed period of time in the event of an actual or
threatened change of control of the Company and whether or not such
change of control is determined by the Board of Directors of the
Company (the “Board”) to be in the best interest of its
stockholders; and
WHEREAS this Agreement is not
intended to alter materially the compensation, benefits or terms of
employment that the Executive could reasonably expect in the
absence of a change in control of the Company, but is intended to
encourage and reward the Executive’s compliance with the
wishes of the Board whatever they may be in the event that a change
of control occurs or is threatened.
NOW, THEREFORE, in consideration of
the mutual agreements, provisions and covenants contained herein,
and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
Term of this Agreement;
Defined Terms.
SECTION 1.01. The term of this
Agreement (such term as it may be extended is herein referred to as
the “Term”) shall be for a period commencing on the
date first written above and ending on { Date }, provided
that the Term may be extended by action of the Committee effective
as of each { Date } beginning in { Date } as part of
its annual compensation review so that the then remaining Term is
three years. Notwithstanding any such notice, the Term shall not
expire before the second anniversary of a Change of Control that
occurs prior to expiration of the Term. Definitions of capitalized
terms used in this Agreement are provided in Exhibit A to this
Agreement.
ARTICLE II
The Company’s Covenants
Summarized
SECTION 2.01. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive’s covenants set forth in
Article III, the Company agrees, under the conditions described
herein, to provide the Executive with the payments and benefits
described in this Agreement in the event the Executive’s
employment with the Company is terminated
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following a Change of Control. No amount or
benefit shall be payable under this Agreement unless there shall
have been (or, under the terms hereof, there shall be deemed to
have been) a termination of the Executive’s employment with
the Company following a Change of Control.
ARTICLE III
The Executive’s
Employment Obligations
SECTION 3.01. If an Impending Change
of Control should occur while the Executive is employed by the
Company, the Executive agrees to remain in the employ of the
Company for at least the Period of Employment in the position and
with the duties and responsibilities in effect immediately prior to
the Impending Change of Control, with such changes therein as may
from time to time be made by the Board and upon the other terms and
conditions hereinafter stated, provided that the foregoing shall
not prevent the Executive from terminating the Executive’s
employment for Good Reason.
SECTION 3.02. The Executive agrees
that during the Period of Employment and prior to any Change of
Control, subject to the Executive’s fiduciary duties to the
Company and its stockholders, the Executive will exercise the
Executive’s best efforts to bring about whatever result the
Board determines to be in the best interests of the Company and its
stockholders relative to any Impending Change of Control, (i.e., to
help resist any such Change of Control if the Board determines that
to be in the best interests of the Company and its stockholders,
and to bring about such Change of Control if the Board determines
that to be the preferable alternative). The Executive agrees to use
the Executive’s best efforts at and after the occurrence of a
Change of Control to effect an orderly and beneficial transfer of
control to the party or parties comprising the new control
group.
SECTION 3.03. Nothing in this
Agreement shall be deemed to prevent the Executive from remaining
in the employ of the Company or any successor beyond the Period of
Employment either on the terms and conditions set forth herein or
on others that may be mutually agreed upon.
ARTICLE IV
Compensation Other Than
Severance Payments
SECTION 4.01. Following a Change of
Control, during any period that the Executive fails to perform the
Executive’s full-time duties with the Company as a result of
Disability, the Executive shall be compensated as provided pursuant
to the terms of the Company’s short- and long-term disability
plans as in effect as of immediately prior to a Change of Control
or, if more favorable, as of any time thereafter, together with all
other compensation and benefits payable to the Executive pursuant
to the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such
period.
SECTION 4.02. If the
Executive’s employment shall be terminated for any reason
following a Change of Control, the Company shall pay the
Executive’s full salary to the Executive through the Date of
Termination at the rate in effect at the time the Notice
of
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Termination is given, together with all other
compensation and benefits payable to the Executive through the Date
of Termination (including, without limitation, all incentive
compensation amounts owed the Executive for a completed calendar
year to the extent not yet then paid but excluding any annual bonus
for the year in which the Date of Termination occurs unless
specifically provided for in Section 5.03 of this Agreement)
under the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such
period.
SECTION 4.03. If the
Executive’s employment shall be terminated for any reason
following a Change of Control, the Company shall pay the Executive,
subject to Section 5.01, such normal post-termination
compensation and benefits as may be provided by the Company’s
retirement, insurance and other compensation or benefit plans,
programs and arrangements, as in effect as of immediately prior to
a Change of Control or, if more favorable, as of any time
thereafter.
ARTICLE V
Severance
Payments
SECTION 5.01. In lieu of any other
severance compensation or benefits to which the Executive may
otherwise be entitled under any plan, program, policy or
arrangement of the Company, the Severance Agreement or any other
agreement between the Executive and the Company (which compensation
and benefits the Executive hereby expressly waives to the extent
the Executive receives the compensation and benefits provided for
hereunder), the Company shall pay the Executive, in addition to the
payments and benefits described in Article IV, the payments
described in this Article V (the “Severance Payments”)
upon the termination of the Executive’s employment within two
years following a Change of Control, unless such termination is
(a) by the Company for Cause or due to the Executive’s
Disability, (b) by reason of the Executive’s death, or
(c) by the Executive without Good Reason. The
Executive’s employment shall be deemed to have been
terminated following a Change of Control by the Company without
Cause or by the Executive with Good Reason if (i) the
Executive is requested by the Company to terminate the
Executive’s employment after a Change of Control,
(ii) the Executive’s employment is terminated prior to a
Change of Control without Cause at the direction of a person or
entity who has entered into an agreement with the Company the
consummation of which will constitute a Change of Control or
(iii) if the Executive terminates the Executive’s
employment prior to a Change of Control with Good Reason
(determined by treating an Impending Change of Control as a Change
of Control in applying the definition of Good Reason) if the
circumstance or event which constitutes Good Reason occurs at the
direction of such person or entity. Any termination of
Executive’s employment in respect of which the Executive is
entitled to Severance Payments is referred to as a
“Qualifying Termination”.
SECTION 5.02. In the event of a
Qualifying Termination, the Company shall provide the Executive
with a lump sum severance payment in an amount equal to two times
the sum of (a) the Executive’s then current base salary
(without regard to any reduction that gave rise to Good Reason)
plus (b) the greater of (i) the average bonus earned by
the Executive in respect of the three most recently completed
calendar years prior to the Qualifying Termination and
(ii) the Executive’s target annual bonus (without regard
to any reduction that gave rise to Good Reason) for the year in
which the Qualifying Termination occurs six months and a day after
a Qualifying Termination.
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SECTION 5.03. In the event of a
Qualifying Termination, the Company shall pay the Executive a lump
sum cash amount equal to the Executive’s target annual bonus
(without regard to any reduction that gave rise to Good Reason) for
the year in which the Qualifying Termination occurs, multiplied by
a fraction, the numerator of which is the number of days elapsed in
such year through the date of termination, and the denominator of
which is 365, payable six months and a day following the Qualifying
Termination.
SECTION 5.04. In the event of a
Qualifying Termination, the Executive and the Executive’s
family shall receive continued provision of the Company’s
standard group employee insurance coverages (e.g. health, dental,
disability, and life), as elected by the Executive and as in effect
as of immediately prior to a Change of Control or, if more
favorable, as of any time thereafter, for a period (the
“Company-Paid Coverage Period”) that commences upon the
Qualifying Termination and ends upon the earlier of (i) the
expiration of two years thereafter, or (ii) the date that the
Executive becomes covered under another employer’s group
health, dental, disability or life insurance plans that provide the
Executive with benefits not less favorable than those being
provided to the Executive and the Executive’s family members
as of immediately prior to a Change of Control or, if more
favorable, as of any time thereafter; provided ,
however , that if the continuation of any or all of such
insurance coverages are not permitted under the terms of the
Company’s group insurance plans, the Company shall arrange
for the provision of substantially equivalent insurance coverages
to be provided under alternative plans or arrangements that provide
such coverages on substantially the same terms and at a cost to the
Executive that is not greater than that incurred by the Executive
(determined on an after-tax basis) immediately prior to a Change of
Control or, if more favorable, at any time thereafter.
Notwithstanding the foregoing, in the event any such coverage is
unavailable or otherwise commercially impracticable, the Company
may (but is not required to) satisfy its obligation under this
Section 3.01(b) by paying to the Executive the cost of such
coverage if it were available, as determined in good faith by the
Company. For purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of the
“qualifying event” for the Executive and the
Executive’s family members shall be the date of the
Executive’s employment termination; provided, however, that
such date shall be the date on which the Executive loses coverage
if the applicable group health plan provides for such treatment. To
the extent any medical, dental, prescription drug, or other health
benefits (collectively, the “Medical Benefits”) that
may be required to be provided by the Company during the
Company-Paid Coverage Period that are provided under a so-called
“self-insured” benefit plan which is subject to
Section 105(h) of the Code shall be structured so that on or
about the first day of each month for which coverage is to be
provided the Company shall pay to the Executive an amount in cash
sufficient (taking into account applicable taxes) to cover the
applicable premium for the Medical Benefits coverage for that
month. The Executive’s premium payments to the Company for
Medical Benefits shall be due on the last day of the month to which
the coverage relates. The parties intend that the first 18 months
of Medical Benefits coverage shall be exempt from the application
of Section 409A, and that any remaining payments by the
Company for Medical Benefits shall be considered in compliance with
Section 409A.
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ARTICLE VI
Treatment of Stock Awards on
and after a Change of Control
SECTION 6.01. The vesting of the
Executive’s Stock Awards shall be accelerated solely by
reason of a Change of Control only if the surviving corporation or
acquiring corporation following a Change of Control refuses to
assume or continue the Executive’s Stock Awards or to
substitute similar Stock Awards for those outstanding immediately
prior to the Change of Control. If the Executive’s Stock
Awards are so continued, assumed or substituted and at any time
after the Change of Control the Executive’s employment is
terminated by the Company without Cause or the Executive for Good
Reason, then the vesting and exercisability of all unvested Stock
Awards held by the Executive shall be accelerated in full and any
reacquisition rights held by the Company with respect to a Stock
Award shall lapse in full, in each case, upon such termination. By
signing this Agreement, the Executive waives any greater rights to
accelerated vesting with respect to the Stock Awards that the
Executive may currently have under any plan, agreement, arrangement
or policy (written or unwritten) with the Company or any of its
subsidiaries or affiliates, and agrees to cooperate with the
Company in executing amendments or consents to further the intent
and purposes of this Section 6.01. Enforcement of the terms of
this Section 6.01 shall survive termination of this Executive
Termination Agreement.
ARTICLE VII
Conditions to Severance
Benefits and Accelerated Vesting of Stock Awards
SECTION 7.01. The Executive’s
entitlement to receive the Severance Payments and accelerated
vesting of Stock Awards under Section 6.01 due to a Qualifying
Termination shall be conditioned upon the Executive having complied
to the best of the Executive’s abilities with the commitments
contained in Sections 3.01 and 3.02 and the conditions set forth in
Section 7.02. In the event of a Qualifying Termination, the
Executive shall be deemed to have so complied if the Executive
shall have complied to the best of the Executive’s abilities
with the requirements of those Sections until the time of the
Executive’s discharge or resignation.
SECTION 7.02. Conditions .
Severance Payments and accelerated vesting of Stock Awards under
Section 6.01 are subject to the Executive’s:
(a) compliance with the provisions
of Article IX hereof and Article V of the Severance
Agreement;
(b) delivery to the Company of an
executed Agreement and General Release (the “General
Release”), which shall be executed substantially in the form
attached hereto as Exhibit B (with such changes therein or
additions thereto as needed under then applicable law to give
effect to its intent and purpose) within 21 days of presentation
thereof by the Company to the Executive; and
(c) delivery to the Company of a
resignation from all offices, directorships and fiduciary positions
with the Company, its affiliates and employee benefit
plans.
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SECTION 7.03. If the Executive fails
to materially comply with any obligation or covenant under
Section 5.02 of the Severance Agreement or is subsequently
determined to have terminated employment for Cause under
Section 11.02 below, the Company’s obligations to make
any additional payments or provide any additional benefits or other
rights or entitlements to Executive pursuant to any provision of
this Agreement shall immediately cease and Executive shall be
required to immediately repay to the Company all amounts
theretofore paid or otherwise provided to Executive pursuant to
Sections 5.02 and 5.03 of this Executive Termination Agreement. The
Company may recover amounts under this Section 7.03 by set-off
from any amounts otherwise due to Executive under any other plan,
program or arrangement if the Executive fails to make any required
repayment within 15 business days after written demand to the
Executive.
ARTICLE VIII
Section 4999 Excise
Tax
SECTION 8.01. If any payments,
rights or benefits (whether pursuant to the terms of this Executive
Termination Agreement or any other plan, arrangement or agreement
of Executive with the Company or with any person affiliated with
the Company and whether or not the Executive’s employment has
then terminated (the “Payments”)) received or to be
received by Executive will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed), then the Company shall
pay to Executive an amount in addition to the Payments (the
“Gross-Up Payment”) as calculated below. The Gross Up
Payment shall be in an amount such that, after deduction of any
Excise Tax on the Payments and any federal, state and local income
and employment tax and Excise Tax on the Gross Up Payment, but
before deduction for any federal, state or local income and
employment tax on the Payments, the net amount retained by the
Executive shall be equal to the Payments.
SECTION 8.02. The process for
calculating the Excise Tax, determining the amount of any Gross-Up
Payment and other procedures relating to this Article VIII are set
forth in Exhibit C attached hereto. For purposes of making the
determinations and calculations required herein, the Consultant may
rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code,
provided that the Consultant shall make such determinations
and calculations on the basis of “substantial
authority” (within the meaning of Section 6662 of the
Code) and shall provide opinions to that effect to both the Company
and Executive.
ARTICLE IX
Post-Employment
Obligations
SECTION 9.01. As an inducement to
the Company to provide the payments and benefits to the Executive
hereunder, the Executive acknowledges and agrees that in the event
that the Executive’s employment is terminated by reason of a
Qualifying Termination, the Executive shall be subject to the
provisions set forth in Article V of the Severance Agreement, in
the same manner as if his employment had terminated prior to a
Change of Control and Executive had received severance benefits
under such Severance Agreement. For avoidance of doubt, this
Article IX shall survive termination of this Executive Termination
Agreement.
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ARTICLE X
Successors; Binding
Agreement
SECTION 10.01. In addition to any
obligations imposed by law upon any successor to the Company, the
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Executive Termination
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be a breach of this Executive Termination Agreement and shall
entitle the Executive to compensation from the Company in the same
amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive’s
employment for Good Reason after a Change of Control, except that,
for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination.
SECTION 10.02. This Executive
Termination Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die
while any amount would still be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive’s
estate.
ARTICLE XI
Termination
Procedures
SECTION 11.01. Notice of
Termination. After a Change of Control, any purported
termination of the Executive’s employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Article XI hereof.
SECTION 11.02. Termination of
Employment for Cause . Any termination of employment for Cause
shall be made by written notice setting forth in detail all acts or
omissions upon which the Board is relying for such
termination.
SECTION 11.03. Dispute Concerning
Termination. If the party receiving the Notice of Termination
notifies the other party within thirty (30) days after the
date such Notice of Termination is given that a dispute exists
concerning the termination, the Date of Termination shall be the
date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided ,
however, that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute
with reasonable diligence. The Company shall continue to pay the
Executive the Executive’s full compensation in effect when
the notice
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giving rise to the dispute was given and
continue the Executive as a participant in all compensation,
benefit and insurance plans in which the Executive participated
when the Notice of Termination was given (without regard to any
reductions that gave rise to Good Reason) until the dispute is
finally resolved in accordance with this Section. Amounts paid
under this Section are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement. In addition, for purposes of
determining whether any Qualifying Termination has occurred, the
date a Notice of Termination is given pursuant to this Section
shall be deemed the date of the Executive’s Qualifying
Termination.
ARTICLE XII
Notices
SECTION 12.01. For the purpose of
this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have
been duly given (a) on the date of delivery if delivered by
hand, (b) on the date of transmission, if delivered by
confirmed facsimile, (c) on the first business day following
the date of deposit if delivered by guaranteed overnight delivery
service, or (d) on the fourth business day following the date
delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the address
(or to the facsimile number) shown on the records of the
Company.
To the Company:
Millipore Corporation
290 Concord Road
Billerica, MA 01821
Attention: Clerk
or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be
effective only upon receipt.
ARTICLE XIII
Legal Fees and
Expenses
SECTION 13.01. The Company also
shall pay to the Executive all legal fees and expenses incurred by
the Executive in good faith as a result of a termination of
employment which entitles the Executive to the Severance Payments
(including all such fees and expenses, if any, incurred in
disputing any such termination) or in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement
or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to
any payment or benefit provided hereunder. Such payments shall be
made within five business days after delivery of the
Executive’s written requests for payment accompanied with
such evidence of fees and expenses incurred as the Company
reasonably may require.
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ARTICLE XIV
No Mitigation and No
Offset
SECTION 14.01. The amounts payable
to the Executive hereunder shall be absolutely owing, and not
subject to reduction or mitigation as a result of employment by the
Executive elsewhere after the Executive’s employment with the
Company is terminated.
SECTION 14.02. There shall be no
right of set-off or counterclaim in respect of any claim, debt or
obligation against any payments to the Executive, the
Executive’s dependents, beneficiaries or estate, provided for
in this Agreement.
ARTICLE XV
Amendment or Modification;
Waiver
SECTION 15.01. No provision of this
Agreement may be amended, modified or waived unless such amendment,
modification or waiver shall be authorized by the Board or any
authorized committee of the Board and shall be agreed to in
writing, signed by the Executive and by an officer of the Company
thereunto duly authorized; provided , however , that
either the Board or the Committee may amend this Agreement at any
time as necessary to comply with applicable laws and regulations
without the Executive’s written consent prior to a Change of
Control; provided, further, however, that (1) the
Company’s unilateral power to amend this Agreement shall be
limited to technical, ministerial, and regulatory requirements
generally applicable to all public company officers, and
(2) no such amendment would constitute Good Reason as
presently defined by this Agreement. Except as otherwise
specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other party
shall be deemed a waiver of a subsequent breach of such condition
or provision or a waiver of a similar or dissimilar provision or
condition at the same time or at any prior or subsequent
time.
ARTICLE XVI
Governing Law; Submission to
Jurisdiction
SECTION 16.01. The validity,
interpretation, construction performance and enforcement of this
Agreement shall be governed by the laws of the Commonwealth of
Massachusetts without giving effect to the principles of conflict
of laws thereof.
SECTION 16.02. (a) Except as
otherwise specifically provided herein, the Executive and the
Company each hereby irrevocably submits to the exclusive
jurisdiction of federal and state courts in the Commonwealth of
Massachusetts with respect to any disputes or controversies arising
out of or relating to this Agreement. The parties undertake not to
commence any suit, action or proceeding arising out of or relating
to this Agreement in a forum other than a forum described in this
Section 16.02(a); provided , however , that
nothing herein shall preclude the Company from bringing any suit,
action or proceeding in any other court for the purposes of
enforcing any judgment obtained by the Company and, in such event,
the Executive hereby irrevocably submits to the jurisdiction of
such other court.
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(b) The agreement of the parties to
the forum described in Section 16.02(a) is independent of the
law that may be applied in any suit, action, or proceeding and the
parties agree to such forum even if such forum may under applicable
law choose to apply non-forum law. The parties hereby waive, to the
fullest extent permitted by applicable law, any objection which
they now or hereafter have to personal jurisdiction or to the
laying of venue of any such suit, action or proceeding brought in
an applicable court described in Section 16.02(a), and each
party agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any
such court. The parties agree that, to the fullest extent permitted
by applicable law, a final and non-appealable judgment in any suit,
action or proceeding brought in any applicable court described in
Section 16.02(a) shall be conclusive and binding upon the
parties and may be enforced in any other jurisdiction.
(c) Each party hereto irrevocably
consents to the service of any and all process in any suit, action
or proceeding arising out of or relating to this Agreement by the
mailing of copies of such process to such party at such
party’s address specified in Article XII.
ARTICLE XVII
General
Provisions
SECTION 17.01. The Company and the
Executive intend that the benefits and payments described in this
Agreement shall comply with, or be exempt from, the requirements of
Section 409A of the Code (“Section 409A”). The
Company shall in no event be obligated to indemnify the Executive
for any taxes or interest that may be assessed by the IRS pursuant
to Section 409A of the Code.
SECTION 17.02. This Executive
Termination Agreement shall not be construed as creating an express
or implied contract of employment and, except as otherwise agreed
in writing between the Executive and the Company, the Executive
shall not have any right to be retained in the employ of the
Company.
SECTION 17.03. No right or interest
to or in any payments shall be assignable by the Executive;
provided , however , that this provision shall not
preclude the Executive from designating one or more beneficiaries
to receive any amount that may be payable after the
Executive’s death and shall not preclude the legal
representative of the Executive’s estate from assigning any
right hereunder to the person or persons entitled thereto under the
Executive’s will or, in the case of intestacy, to the person
or persons entitled thereto under the laws of intestacy applicable
to the Executive’s estate.
SECTION 17.04. No right, benefit or
interest hereunder shall be subject to anticipation, alienation,
sale, assignment, encumbrance, charge, pledge, hypothecation, or
set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or s
