EXHIBIT 10.4
E XECUTIVE T ERMINATION A GREEMENT BETWEEN M YKROLIS C ORPORATION
AND P ETER S. K IRLIN
117
EXECUTIVE TERMINATION
AGREEMENT
This Agreement
(“Agreement”) between MYKROLIS CORPORATION, a Delaware
corporation with offices at 129 Concord Road, Billerica,
Massachusetts 01821 (“Mykrolis” or the
“Company”) and Peter S. Kirlin (the
“Executive”) dated March 19, 2005.
RECITALS
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A.
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The Executive
is an officer and key member of Mykrolis’
management.
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B.
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Mykrolis
believes that it is in the best interests of the Company and of its
stockholders, to provide for the continuity of management in
general and the retention of Executive in particular, in the event
of a Change of Control of the Company.
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C.
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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 of Control of Mykrolis, but is intended to
encourage and reward Executive’s willingness to remain in his
position with the Company and Executive’s compliance with the
wishes of the Mykrolis Board of Directors whatever they may be in
the event that a Change of Control occurs.
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NOW THEREFORE
, in consideration of the foregoing
premises, of the mutual promises of the Parties made herein and of
other consideration, the receipt and adequacy of which is hereby
acknowledged, the Parties hereby agree as follows:
SECTION 1. DEFINITIONS
. The following terms
when used in this Agreement or any Exhibit hereto with initial
capital letters shall have the meanings assigned to them below.
Other terms defined elsewhere in this Agreement shall have the
respective meanings assigned to them at the location of their
definition.
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1.01.
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The term
“Change of Control” shall have the meaning set forth in
Exhibit A attached hereto.
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1.02.
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The term
“Impending Change of Control” refers to: (i) the
execution by the Company of a definitive agreement providing for a
transaction which, if consummated would constitute a Change of
Control; or (ii) the initiation of a third party tender
offer to acquire common stock of the Company, which acquisition, if
completed, would result in a Change of Control; or (iii)
such other event or events as the Mykrolis’ Board of
Directors expressly designates, by reference to this Agreement, as
constituting an Impending Change of Control.
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1.03.
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The term
“Period of Employment” shall mean the period which
begins upon the occurrence of an Impending Change of Control and
which concludes on the earlier of (i) the close of business on the
180 th day following the Change of Control
resulting from such Impending Change of Control; or (ii) the date
that the Mykrolis Board determines in good faith that a Change of
Control will not result from the Impending Change of
Control.
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118
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1.04.
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The term
“Involuntary Termination” shall mean the following
events occurring either during the Period of Employment or, if a
Period of Employment has occurred and concluded, within two years
following the Change of Control, if any, to which such Period of
Employment related:
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(a)
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Any discharge
of Executive by Mykrolis or by any corporation succeeding to the
business and assets of Mykrolis (a
“Successor”);
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(b)
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Any resignation
by Executive if such resignation shall have been requested by
Mykrolis or by a Successor;
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(c)
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Any resignation
by Executive if such resignation shall follow: (i) any
reduction in the annual base salary, incentive compensation
(whether under the Mykrolis Incentive Plan or any other incentive
program), perquisites, life, health accident, or disability
benefits or other fringe benefits, equity incentive programs and
the like in each case applicable to Executive as compared to those
in effect immediately prior to the beginning of the Period of
Employment, or (ii) any material adverse change in the
duties, status, responsibilities, scope, employment conditions or
authority associated with Executive’s employment by Mykrolis,
if the foregoing events shall not have been approved in advance by
Executive; or (iii) the failure by the Company to comply
with the provisions of Section 9.06(b) of this Agreement; or
(iv) the relocation of Executive’s principal place of
work to a location more than fifty (50) miles from its location
immediately prior to the beginning of the Period of Employment
without Executive’s prior written consent.,
provided , however , that: (X) changes in
fringe benefit programs and perquisites shall not be regarded as
reductions if Mykrolis’ Board of Directors determines in good
faith that benefits and perquisites of equivalent value are
substituted, and (Y) reductions in payout or other benefits in
incentive programs shall not be regarded as reductions if
Mykrolis’ Board of Directors determines in good faith that
the differences are attributable to changing base levels and
changing performance criteria and goals.
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2. Employment; Period of
Employment
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2.01.
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If an Impending
Change of Control should occur while Executive is employed by
Mykrolis, Executive agrees to remain in the employ of Mykrolis
until the earlier of: (i) the expiration of the Period of
Employment or (ii) the Involuntary Termination of the Executive, in
the position and with the duties and responsibilities he then
currently carries, with such changes therein as may from time to
time be made by the Mykrolis Board of Directors, and upon the other
terms and conditions hereinafter stated.
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2.02.
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Executive
agrees that during the Period of Employment, and prior to any
Change of Control, he will discharge his duties to the best of his
ability and in furtherance of the interests of the Company and its
stockholders as such interests are determined by the Mykrolis board
of Directors., The Executive further 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 party or parties
comprising the new control group.
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119
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2.03 .
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Nothing in this
Agreement shall be deemed to prevent the Executive from remaining
in the employ of Mykrolis 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.
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3 . Compensation and Benefit
Plans
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3.01.
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For all
services rendered by the Executive to the Company in any capacity
during the Period of Employment and any subsequent period of
employment prior to the Involuntary Termination of Executive,
including, without limitation, services as an executive officer,
director or member of any committee of Mykrolis or of any
subsidiary, division or affiliate thereof, the Executive shall be
paid:
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(a)
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base
compensation equal to the salary he is receiving immediately prior
to the beginning of the Period of Employment, payable not less
often than monthly.
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(b)
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the executive
shall continue to be a participant in the Mykrolis Incentive Plan,
and its 2001 Equity Incentive Plan as in effect immediately prior
to the beginning of the Period of Employment, and any and all other
incentive plans in which key employees of the Company participate
that are in effect.
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(c)
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the Executive,
his dependents and beneficiaries shall be entitled to all payments
and benefits and service credit for benefits during the Period of
Employment to which officers of Mykrolis, their dependents and
beneficiaries are entitled immediately prior to the beginning of
the Period of Employment under the terms of the then effective
employee plans and practices of Mykrolis.
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3.02.
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For the two
year period commencing immediately after the Period of Employment,
the Executive and his family shall be entitled to and receive all
medical, dental and life insurance benefits to which they had been
entitled immediately prior to the beginning of the Period of
Employment. Notwithstanding the foregoing, to the extent the
relevant Company plans or policies preclude the provision of the
benefits outlined above to Executive following his/her termination
from the Company, the Company shall, at its option, separately
provide Executive with substantially equivalent benefits at the
Company’s expense or provide Executive with a lump sum cash
payment approximating, in the good faith judgment of the Board, the
value of such benefits.
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3.03.
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In
consideration of the benefits provided under this Agreement,
Executive expressly waives the application to Executive of the
provisions of Section 7(a) of the 2001 Equity Incentive Plan and of
Subsection 7.7.3 of the 2003 Employment Inducement and Acquisition
Stock Option Plan relating to the acceleration of stock option and
restricted stock awards and agrees that the provisions of Section
4.03 of this Agreement shall supersede such provisions
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120
4. Involuntary Termination
Payment
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4.01.
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In the event of
Involuntary Termination of Executive’s employment, Mykrolis
shall provide the Executive with a lump sum severance payment (the
“Termination Payment”) in an amount equal to two times
the annualized rate of compensation to the Executive, including
base salary plus variable compensation as in effect immediately
prior to any Impending Change of Control.
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4.02.
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In the event of
a Change of Control opposed by the Mykrolis Board of Directors, in
order to assure Executive’s receipt of the Termination
Payment as against a possibly hostile successor control group,
Mykrolis shall, just prior to a Change in Control, deposit an
amount equal to the Termination Payment wi
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