Exhibit 10.43
EXECUTIVE SEVERANCE
AGREEMENT
AGREEMENT made as of
this 11 th day of November, 2008 by and
between ZOLL Medical Corporation, a Massachusetts corporation with
its principal place of business in Chelmsford, Massachusetts (the
“Company”), and Jonathan Rennert of Concord,
Massachusetts (the “Executive”).
1. Purpose . The Company
considers it essential to the best interests of its stockholders to
foster the continuous employment of key management personnel. The
Board of Directors of the Company (the “Board”)
recognizes, however, that, as is the case with many publicly held
corporations, the uncertainty and questions which may arise among
management in connection with a Change in Control (as defined in
Section 2 hereof) may result in the departure or distraction
of management personnel to the detriment of the Company and its
stockholders. Therefore, the Board has determined that appropriate
steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s
management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control.
Nothing in this Agreement shall 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.
2. Change in Control . A
“Change in Control” shall be deemed to have occurred in
any one of the following events:
(a) any “person,” as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Act”) (other than the
Company, any of its subsidiaries, or any trustee, fiduciary or
other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its subsidiaries),
together with all “affiliates” and
“associates” (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the “beneficial
owner” (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing
more than 50% of either (A) the combined voting power of the
Company’s then outstanding securities having the right to
vote in an election of the Company’s Board (“Voting
Securities”) or (B) the then outstanding shares of stock
of the Company (in either such case other than as a result of an
acquisition of securities directly from the Company); or
(b) the date a majority of members
of the Company’s Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a
majority of the members of the Company’s Board before the
date of the appointment or election; or
(c) the consummation of a
transaction by the Company involving: (A) any consolidation or
merger of the Company or any Subsidiary where the stockholders of
the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Act),
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directly or indirectly, shares representing in
the aggregate more than 50% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of
its ultimate parent corporation, if any) or (B) any sale,
lease, exchange or other transfer (in one transaction or a series
of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the
Company.
Notwithstanding the foregoing, a
“Change in Control” shall not be deemed to have
occurred for purposes of the foregoing clause (a) solely as
the result of an acquisition of securities by the Company which, by
reducing the number of shares of stock or other Voting Securities
outstanding, increases (x) the proportionate number of shares
of stock beneficially owned by any person to more than 50% of the
shares of stock then outstanding or (y) the proportionate
voting power represented by the Voting Securities beneficially
owned by any person to more than 50% of the combined voting power
of all then outstanding Voting Securities; provided ,
however , that if any person referred to in clause
(x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional shares of stock or other Voting
Securities (other than pursuant to a stock split, stock dividend,
or similar transaction), then a “Change in Control”
shall be deemed to have occurred for purposes of the foregoing
clause (a).
3. Terminating Event . A
“Terminating Event” shall mean the Executive’s
first “separation from service” (within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”)) that occurs in connection with or
subsequent to a Change in Control and that occurs in connection
with or subsequent to any of the events provided in this
Section 3:
(a) termination by the Company of
the Executive’s employment with the Company for any reason
other than (A) a willful act of dishonesty by the Executive
with respect to any material matter involving the Company or any
subsidiary or affiliate; or (B) conviction of the Executive of
a crime involving moral turpitude; or (C) the gross or willful
failure by the Executive to substantially perform the
Executive’s duties with the Company (other than such failure
after Executive gives notice of termination), which failure is not
cured within 30 days after a written demand for substantial
performance is received by the Executive from the Board of the
Company which specifically identifies the manner in which the Board
believes the Executive has not substantially performed the
Executive’s duties; or (D) the failure by the Executive
to perform his full-time duties with the Company by reason of his
death, disability or retirement; provided , however ,
that a Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the
Executive being an employee of any direct or indirect successor to
the business or assets of the Company, rather than continuing as an
employee of the Company following a Change in Control. For purposes
of clauses (A) and (C) of this Section 3(a), 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 without reasonable belief that the Executive’s act,
or failure to act, was in the best interest of the Company and its
subsidiaries and affiliates. For purposes of clause (D) of
this Section 3(a), Section 6 and Section 8(b)
hereof, “disability” shall mean the Executive’s
incapacity due to physical or mental illness which has caused the
Executive to be absent from the full-time performance of his duties
with the Company for a period of six (6) consecutive months if
the Company shall have given the Executive a Notice of Termination
(as hereinafter defined)and, within 30 days after such Notice
of
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Termination is given, the Executive shall not
have returned to the full-time performance of his duties. For
purposes of clause (D) of this Section 3(a) and
Section 6, “retirement” shall mean termination of
the Executive’s employment in accordance with the
Company’s normal retirement policy, not including early
retirement, generally applicable to its salaried employees, as in
effect immediately prior to the Change in Control, or in accordance
with any retirement arrangement established with respect to the
Executive with the Executive’s express written consent;
or
(b) termination by the Executive of
the Executive’s employment with the Company for any
reason.
4. Severance Payment . In the
event a Terminating Event occurs within eighteen (18) months
after a Change in Control,
(a) the Company shall pay to the
Executive an amount equal to two (2) times the sum of
(i) the Executive’s base salary immediately prior to the
Terminating Event (or immediately prior to the Change in Control,
if higher) and (ii) the average of the bonuses paid to the
Executive over the three most recent years prior to the Change in
Control, payable in one lump-sum payment on the Date of Termination
(as hereinafter defined);
(b) the Company shall continue to
provide health and dental insurance coverage to the Executive, on
the same terms and conditions as though the Executive had remained
an active employee, for eighteen (18) months after the
Terminating Event; and
(c) the Company shall pay to the
Executive all reasonable legal and arbitration fees and expenses
incurred by the Executive in obtaining or enforcing any right or
benefit provided by this Agreement, except in cases involving
frivolous or bad faith litigation.
5. Additional Benefits
.
(a) Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined
that any compensation, payment or distribution by the Company to or
for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise, (the “Severance Payments”),
would be subject to the excise tax imposed by Section 4999 of
the Code, the following provisions shall apply:
(A) If the Severance Payments,
reduced by the sum of (i) the Excise Tax (as hereinafter
defined) and (ii) the total of the Federal, state, and local
income and employment taxes payable by the Executive on the amount
of the Severance Payments which are in excess of the Threshold
Amount (as hereinafter defined), are greater than or equal to the
Threshold Amount, the Executive shall be entitled to the full
benefits payable under this Agreement.
(B) If the Threshold Amount is less
than (x) the Severance Payments, but greater than (y) the
Severance Payments reduced by the
