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Exhibit
10.5
EXECUTIVE TERMINATION
AGREEMENT, dated as of September 10, 2007 (the
“Effective Date”), between MILLIPORE CORPORATION, a
Massachusetts corporation with offices at 290 Concord Road,
Billerica, Massachusetts 01821 (the “Company”), and
Charles F. Wagner, Jr. (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;
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; and
WHEREAS this Agreement
supersedes and replaces the previous the Executive Termination
Agreement between the Executive and the Company dated
November 18, 2003.
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 March 1, 2011,
provided that the Term may be extended by action of the Committee
effective as of each March 1st beginning in 2009 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
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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.
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
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Executive through the Date of
Termination at the rate in effect at the time the Notice of
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
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pay the Executive the Executive’s
full compensation in effect when the notice 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 un
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