Exhibit
10.3
EXECUTIVE TERMINATION AGREEMENT,
dated as of January 1, 2005, between MILLIPORE CORPORATION, a
Massachusetts corporation with offices at 290 Concord Road,
Billerica, Massachusetts 01821 (the “Company”), and
Martin D. Madaus (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 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;
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 his compliance with the wishes of the Board
whatever they may be in the event that a change of control occurs
or is threatened; and
WHEREAS this Agreement supersedes
and replaces the previous the Executive Termination Agreement
between the Executive and the Company.
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
Definitions
SECTION 1.01. “Accounting
Firm” shall have the meaning given such term in Section
8.02.
SECTION 1.02. “Cause”
shall mean (i) the willful and continued failure by the Executive
to substantially perform the Executive’s duties with the
Company (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness or
any such actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive) for a
period of at least 30 consecutive days after a written demand for
substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive’s duties, or (ii) the Executive is convicted of, or
has entered a plea of nolo contendere to, a felony.
For purposes of this definition, no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive’s act, or
failure to act, was in the best interest of the Company.
SECTION 1.03. “Change of
Control” shall mean the occurrence of any one of the
following events:
(a) any “person” (as
such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities eligible to vote
for the election of the Board (the “Company Voting
Securities”); provided , however , that the
event described in this paragraph (a) shall not be deemed to be a
Change of Control if such event results from any of the following:
(i) the acquisition of Company Voting Securities by the Company or
any of its subsidiaries, (ii) the acquisition of Company Voting
Securities by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its subsidiaries,
(iii) the acquisition of Company Voting Securities by any
underwriter temporarily holding securities pursuant to an offering
of such securities, or (iv) the acquisition of Company Voting
Securities pursuant to a Non-Qualifying Transaction (as defined in
paragraph (c) below);
(b) individuals who, as of the date
hereof, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a
majority of the Board; provided , however , that any
individual becoming a director subsequent to the date hereof, whose
election or nomination for election was approved (either by a
specific vote or by approval of the proxy statement of the Company
in which such individual is named as a nominee for director,
without written objection to such nomination) by a vote of at least
two-thirds of the directors who were, as of the date of such
approval, Incumbent Directors, shall be an Incumbent Director;
provided , however , that no individual initially
appointed, elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to
the election or removal of directors or as a result of any other
actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be an Incumbent
Director;
(c) the consummation of a merger,
consolidation, statutory share exchange or similar form of
corporate transaction involving (i) the Company or (ii) any of its
wholly owned subsidiaries pursuant to which, in the case of this
clause (ii), Company Voting Securities are issued or issuable (any
event described in the immediately preceding clause (i) or (ii), a
“Reorganization”) or (iii) the sale or other
disposition of all or substantially all of the assets of the
Company to an entity that is not an affiliate of the Company (a
“Sale”), unless immediately following such
Reorganization or Sale: (A) more than 50% of the total voting power
(in respect of the election of directors, or similar officials in
the case of an entity other than a corporation) of (x) the entity
resulting from such Reorganization, or the entity which has
acquired all or substantially all of the assets of the Company (in
either case, the “Surviving Entity”), or (y) if
applicable, the ultimate parent entity that directly or indirectly
has beneficial ownership of more than 50% of the total voting power
(in respect of the election of directors, or
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similar officials in the case of an
entity other than a corporation) of the Surviving Entity (the
“Parent Entity”), is represented by Company Voting
Securities that were outstanding immediately prior to such
Reorganization or Sale (or, if applicable, is represented by shares
into which such Company Voting Securities were converted pursuant
to such Reorganization or Sale), (B) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by
the Surviving Entity or the Parent Entity) is or becomes the
beneficial owner, directly or indirectly, of 30% or more of the
total voting power (in respect of the election of directors, or
similar officials in the case of an entity other than a
corporation) of the outstanding voting securities of the Parent
Entity (or, if there is no Parent Entity, the Surviving Entity) and
(C) at least a majority of the members of the board of directors
(or similar officials in the case of an entity other than a
corporation) of the Parent Entity (or, if there is no Parent
Entity, the Surviving Entity) following the consummation of the
Reorganization or Sale were, at the time of the approval by the
Board of the execution of the initial agreement providing for such
Reorganization or Sale, Incumbent Directors (any Reorganization or
Sale which satisfies all of the criteria specified in (A), (B) and
(C) above shall be deemed to be a “Non-Qualifying
Transaction”); or
(d) the stockholders of the Company
approve a plan of complete liquidation or dissolution of the
Company.
Notwithstanding the foregoing, if
any person becomes the beneficial owner of 30% or more of the
combined voting power of Company Voting Securities solely as a
result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities
outstanding, such increased amount shall be deemed not to result in
a Change of Control; provided , however , that if
such person subsequently becomes the beneficial owner of additional
Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such
person, a Change of Control shall then be deemed to
occur.
SECTION 1.04. “Code”
shall mean the Internal Revenue Code of 1986, as
amended.
SECTION 1.05. “Date of
Termination”, with respect to any purported termination of
the Executive’s employment after a Change of Control, means
(a) if the Executive’s employment is terminated for
Disability, 30 days after Notice of Termination is given (provided
that the Executive has not returned to the performance of the
Executive’s duties on a full-time basis during such 30-day
period), (b) if the Executive’s employment is terminated by
the Company for any reason other than Disability or by the
Executive for any reason, the date specified in the Notice of
Termination (which, in the case of a termination by the Company
shall not be less than 30 days, and in the case of a termination by
the Executive shall not be more than 60 days, respectively, from
the date such Notice of Termination is given) or (c) if the
Executive dies, his date of death (without any requirement that a
Notice of Termination be provided), subject in each case to Section
11.02.
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SECTION 1.06.
“Disability” shall have the meaning given such term
under the Company’s short- and long-term disability plans as
in effect immediately prior to a Change of Control.
SECTION 1.07. “Excise
Tax” shall mean the excise tax imposed by Section 4999 of the
Code, together with any interest or penalties imposed with respect
to such excise tax.
SECTION 1.08. “Good
Reason” shall mean the occurrence (without the
Executive’s express written consent) of any one of the
following acts by the Company, or failures by the Company to act,
unless, in the case of any act or failure to act described in
paragraph (a), (e), (f) or (g) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(a) any diminution in the
Executive’s status, position, titles, reporting lines,
authority, duties or responsibilities from those in effect as of
immediately prior to a Change of Control or, if more favorable, as
of any time thereafter (it being understood that the assignment to
the Executive of any duties inconsistent with such status,
position, titles, reporting lines, authority, duties or
responsibilities, shall be treated as a diminution for purposes of
this paragraph (a));
(b) a reduction by the Company in
the Executive’s annual base salary and/or the level of the
Executive’s entitlement under the Company’s annual
bonus plan, in each case as in effect as of immediately prior to a
Change of Control or as the same may be increased from time to
time;
(c) the Company’s requiring
the Executive to be based anywhere other than the Company’s
offices at which the Executive is based as of immediately prior to
a Change of Control (or any subsequent location at which the
Executive has previously consented to be based) except for required
travel on the Company’s business to an extent substantially
consistent with the Executive’s business travel obligations
as of immediately prior to a Change of Control or, if more
favorable, as of any time thereafter, or, in the event the
Executive consents to any such relocation of his offices, the
failure by the Company to provide the Executive with all of the
benefits of the Company’s relocation policy as in effect as
of immediately prior to a Change of Control or, if more favorable,
as of any time thereafter;
(d) the failure by the Company to
pay to the Executive any portion of the Executive’s current
compensation (for purposes of this paragraph (d), “current
compensation” shall mean the Executive’s annual base
salary and the awards earned pursuant to the Company’s annual
bonus plan, in each case as in effect as of immediately prior to a
Change of Control or as the same may be increased from time to
time) or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program of
the Company as in effect as of immediately prior to a Change of
Control or, if more favorable, as of any time thereafter, within
seven days of the date such compensation is due;
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(e) the failure by the Company to
continue in effect any compensation (including without limitation
short-term and long-term cash compensation and stock-based
compensation) plan in which the Executive participates as of
immediately prior to a Change of Control or, if more favorable, as
of any time thereafter, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue the
Executive’s participation therein (or in such substitute or
alternative plan) on a basis not less favorable, both in terms of
the amount of benefits provided and the level of the
Executive’s participation relative to other participants as
existed as of immediately prior to a Change of Control or, if more
favorable, as of any time thereafter;
(f) (i) the failure by the Company
to continue to provide the Executive with benefits no less
favorable in the aggregate than those enjoyed by the Executive
under any of the Company’s pension, savings, life insurance,
medical, health and accident, or disability plans in which the
Executive was participating as of immediately prior to a Change of
Control or, if more favorable, as of any time thereafter, (ii) the
taking of any action by the Company which would directly or
indirectly reduce any of such benefits or deprive the Executive of
any fringe benefit enjoyed by the Executive as of immediately prior
to a Change of Control or, if more favorable, as of any time
thereafter, or (iii) the failure by the Company to provide the
Executive with the number of paid vacation days to which the
Executive is entitled on the basis of years of service with the
Company in accordance with the Company’s normal vacation
policy in effect as of immediately prior to a Change of Control or,
if more favorable, as of any time thereafter; or
(g) any purported termination of the
Executive’s employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 1.11
and 10.01, and, for purposes of this Agreement, no such purported
termination shall preclude the Executive from claiming Good Reason
hereunder.
The Executive’s right to terminate the
Executive’s employment for Good Reason shall not be affected
by the Executive’s incapacity due to physical or mental
illness. The Executive will be deemed to have waived his rights
relating to circumstances constituting Good Reason if he has not
provided to the Company a written Notice of Termination within
ninety (90) days following his knowledge of circumstances
constituting Good Reason. Notwithstanding the foregoing, any
termination by the Executive of the Executive’s employment
for any reason or no reason following a Change of Control and
effective upon the expiration of the Period of Employment shall be
deemed a termination of employment for Good Reason.
SECTION 1.09. “Gross-Up
Payment” shall have the meaning given such term in Section
8.01.
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SECTION 1.10. “Impending
Change of Control” means the occurrence of any event or
circumstance which gives rise to a threat or a likelihood of Change
of Control, whether or not supported or approved by the
Company’s management or the Board, provided that an Impending
Change of Control shall be deemed to have occurred if:
(a) the Company enters into an
agreement, the consummation of which would result in the occurrence
of a Change of Control;
(b) the Company or any person (as
defined for purposes of Section 1.03(a)), publicly announces an
intention to take or to consider taking actions which, if
consummated, would constitute a Change of Control;
(c) any person (other than any
person described in Section 1.03(a)(i), (ii) or (iii)) (i) who is
the beneficial owner (as defined for purposes of Section 1.03(a)),
as of the date hereof, directly or indirectly, 15% or more of the
combined voting power of the Company Voting Securities, increases
such person’s beneficial ownership of Company Voting
Securities or (ii) who beneficially owns, as of the date hereof,
directly or indirectly, less than 15% of the combined voting power
of the Company Voting Securities, becomes the beneficial owner of
15% or more of the combined voting power of the Company Voting
Securities; or
(d) the Board adopts a resolution to
the effect that, for purposes of this Agreement, an Impending
Change of Control has occurred.
Notwithstanding the foregoing, if any person
becomes the beneficial owner of an additional amount of the
combined voting power of Company Voting Securities solely as a
result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities
outstanding, such increased amount shall be deemed not to result in
an Impending Change of Control; provided , however ,
that if such person subsequently becomes the beneficial owner of
additional Company Voting Securities that increases the percentage
of outstanding Company Voting Securities beneficially owned by such
person, an Impending Change of Control shall then be deemed to
occur.
Any determination made by the Board that an
event constituting an Impending Change of Control has occurred
shall be final and binding if such determination is made by the
Board in good faith.
SECTION 1.11. “Notice of
Termination” shall mean a notice which indicates the specific
termination provision in this Agreement relied upon and sets forth
in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive’s employment under
the provision so indicated. A Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board (excluding the Executive for such
purpose) at a meeting of the Board which was called and held for
the purpose of considering such termination (after reasonable
notice to the Executive and an opportunity for the Executive,
together with the Executive’s
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counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive was
guilty of conduct constituting Cause, and specifying the
particulars thereof in detail.
SECTION 1.12. “Payment”
shall mean, for purposes of Article VIII, any payment or
distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or
otherwise.
SECTION 1.13. “Pension and
Retirement Program” shall mean the Participation and the
Retirement Plan of the Company, its supplemental unfunded pension
plan, if any, and any other supplemental, early retirement and
similar plan or plans of the Company and its subsidiaries providing
for pension or retirement benefits that may be applicable to the
Executive as in effect as of immediately prior to a Change of
Control or, if more favorable, as of any time
thereafter.
SECTION 1.14. “Period of
Employment” shall mean the period beginning upon the
occurrence of an Impending Change of Control (or, if a Change of
Control occurs prior to any Impending Change of Control, upon a
Change of Control) and ending at the close of business on the
180 th day subsequent to any Change of
Control (or, if earlier, the date on which the Board determines
that there is no longer any threat or likelihood of a Change of
Control).
SECTION 1.15. “Qualifying
Termination” shall have the meaning given such term in
Section 5.01.
SECTION 1.16. “Severance
Agreement” shall mean that certain Officer Severance
Agreement, dated as of the date hereof, between the Executive and
the Company.
SECTION 1.17. “Severance
Payments” shall have the meaning given such term in Section
5.01.
SECTION 1.18.
“Underpayment” shall have the meaning given such term
in Section 8.02.
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 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.
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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 his or her employment
for Good Reason.
SECTION 3.02. The Executive agrees
that during the Period of Employment and prior to any Change of
Control he will exercise his 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 his best efforts at and after the
occurrence of a Change of Control to effect an orderly and
beneficial transfer of control to the
