Exhibit 10.6
OFFICER SEVERANCE 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; and
WHEREAS the Company believes that it
is appropriate to provide its management in general and the
Executive in particular with certain specified severance
compensation and benefits in the event of termination of employment
under certain circumstances as set forth in more detail
below.
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. “Annual
Salary” means [the Executive’s current base salary
determined immediately prior to the Qualifying Termination and
without regard to any reduction to salary giving rise to the
Qualifying Termination] OR [the sum of (a) the
Executive’s current base salary and (b) the
Executive’s annual target bonus for the year in which the
Qualifying Termination occurs (in each case determined immediately
prior to the Qualifying Termination and without regard to any
reduction in such salary or target bonus giving rise to the
Qualifying Termination).]
SECTION 1.02. “Board”
means the Board of Directors of the Company.
SECTION 1.03. “Cause”
means any of the following:
(a) repeated and documented failure
or refusal, without proper legal cause, to perform the duties and
responsibilities of the Executive’s position;
(b) the Executive’s
conviction, indictment or entering into a guilty plea or a plea of
no contest (or their procedural equivalent) for any felony or other
crime with respect to which imprisonment is reasonably
likely;
(c) the Executive’s
misappropriation or embezzlement of funds or property belonging to
the Company;
(d) the appropriation (or attempted
appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the
Company;
(e) the Executive’s engaging
in activities that constitute a material breach or violation of any
of the terms of this Agreement or the Employee Code of Conduct
(including its Rules of Conduct) dated October 26, 2006, and
as may be amended from time to time;
(f) chronic absenteeism not caused
by Disability;
(g) engaging in sexual harassment in
violation of applicable federal, state or local laws or the
Company’s employment policies; or
(h) controlled substance abuse,
alcoholism or drug addiction that interferes with or affects the
Executive’s responsibilities to the Company or that reflects
negatively upon the Company’s integrity or
reputation.
The Executive shall have a
reasonable period of time (but in no event less than 15 days) to
cure any material breach described in paragraph (e) above;
provided, however, that the Board shall not be required to provide
the Executive an opportunity to cure a material breach under
paragraph (e) above if it reasonably determines that such
breach is not capable of being cured. Cause does not include any
act or omission of which any member of the Board who is not a party
to such act or omission has had actual knowledge for at least six
(6) months. Any notice to terminate the Executive’s
employment for Cause must state that the Board finds in good faith
that (1) the Executive is guilty of conduct constituting
Cause, specifying the details of such conduct and (2) solely
with respect to a material breach under paragraph (e), that either
(x) the Executive failed to timely cure such breach to the
Board’s reasonable satisfaction, or (y) such breach was
not capable of being cured.
SECTION 1.04. “Code”
means the Internal Revenue Code of 1986, as amended.
SECTION 1.05.
“Committee” means the Management Development and
Compensation Committee of the Board.
SECTION 1.06. “Company”
means Millipore Corporation and, for purposes of Section 1.03
and Article V, shall include its subsidiaries and
affiliates.
SECTION 1.07. “Company-Paid
Coverage Period” has the meaning given such term in
Section 2.01(b).
SECTION 1.08.
“Disability” means if, for physical or mental reasons,
the Executive is unable to perform the Executive’s duties
under this Agreement for 120 consecutive days, or 180 days during
any twelve-month period, as reasonably determined by the
Board.
SECTION 1.09. “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
SECTION 1.10. “Executive
Termination Agreement” means that certain Executive
Termination Agreement, dated as of the date hereof, between the
Executive and the Company.
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SECTION 1.11. “Non-Compete
Term” has the meaning given such term in
Section 5.01.
SECTION 1.12. “Other Severance
Benefits” has the meaning given such term in
Section 12.09.
SECTION 1.13. “Post-2006
Equity Awards” means stock options, stock appreciation
rights, restricted stock, and restricted stock units that are not
Pre-2007 Equity Awards.
SECTION 1.14. “Pre-2007 Equity
Awards” means the Executive’s stock option awards,
restricted stock and restricted stock units listed on Exhibit A to
this Agreement that are unvested at the time of the
Executive’s Qualifying Termination.
SECTION 1.15. “Qualifying
Termination” means any termination of the Executive’s
employment by the Company other than for Cause and other than due
to the Executive’s death or Disability. For avoidance of
doubt, a suspension of the Executive’s title and authority
while on a paid administrative leave not exceeding 60 days due to a
reasonable belief that the Executive has engaged in misconduct,
whether or not the suspected misconduct constitutes Cause for
employment termination, shall not be considered a constructive
termination of employment.
SECTION 1.16. “Severance
Amount” has the meaning given such term in
Section 3.01(a).
SECTION 1.17. “Severance
Multiple” shall mean [one] OR [the sum of (a) one
plus (b) the quotient (but not more than one) obtained by
dividing (i) the number of the Executive’s full years of
service as of the date of termination of employment, by
(ii) 12.]
SECTION 1.18. “Severance
Period” means [mean the one year period immediately following
a Qualified Termination] OR [one year plus one additional
month (but not more than 12) for each of the Executive’s full
years of service with the Company as of the date of termination of
employment, beginning on the Qualifying Termination.]
ARTICLE II
Term
SECTION 2.01. The Executive’s
term of employment under this Agreement (such term of employment,
as it may be extended or terminated, is herein referred to as the
“Term”) shall be for a term commencing on the Effective
Date and, unless terminated earlier as provided in Article IV
hereof, ending on { Date }, provided that the Term of this
Agreement 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.
ARTICLE III
Benefits
SECTION 3.01. Subject to
Section 3.02, in the event that the Executive’s
employment terminates as a result of a Qualifying Termination, then
the Executive shall be entitled to the following
benefits:
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(a) Cash Severance Payment .
The Executive shall be entitled to receive continued payments of
his base salary as in effect immediately prior to his termination
date in accordance with the regular payroll schedule for executive
officers of the Company until the earlier of (1) such date as
the sum of such payments equals the lesser of (I) or (II)
below, or (2) the date that is six months and a day after the
Qualifying Termination (the “Salary Continuation Severance
Payments”). The Executive shall also be entitled to receive a
lump sum cash severance payment equal to the difference between
(i) the product of the Executive’s Annual Salary
multiplied by the Executive’s Severance Multiple, and
(ii) the aggregate amount of Salary Continuation Severance
Payments (the “Lump Sum Severance Payment”). The Lump
Sum Severance Payment shall be paid to the Executive on a date that
is six months and a day after the Qualifying Termination. The sum
of the Salary Continuation Severance Payments and the Lump Sum
Severance Payment shall be referred to as the “Severance
Amount.” The Severance Amount shall not be taken into account
for purposes of determining the Executive’s rights under any
other employee benefit or compensation plans, agreements,
arrangements or policies established, maintained or contributed to
by the Company or its subsidiaries or affiliates. For purposes of
this Section 3.01(a), “(I)” shall mean the sum of
the Executive’s annualized compensation based upon his annual
rate of pay for services provided to the Company for the calendar
year preceding the Company’s taxable year in which the
Employee had a separation from service as that term is used by
Section 409A of the Code (“Separation from
Service”), and “(II)” shall mean the maximum
amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in
which the Executive has a Separation from Service.
(b) Continued Employee Welfare
Benefits . 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 made available generally to the Company’s active
employees for a period (the “Company-Paid Coverage
Period”) that commences upon the Qualifying Termination and
ends upon the earlier of (i) the expiration of the Severance
Period, 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 comparable
benefits; 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 such Qualifying Termination
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
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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 that 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.
(c) Accelerated Vesting of
Pre-2007 Equity Awards . In the event of a Qualifying
Termination:
(i) 50% of the Executive’s
then outstanding and unvested stock options that are Pre-2007
Equity Awards shall immediately vest and become exercisable as of
the date of Qualifying Termination and remain exercisable for a
period of six months thereafter, but in no event later than the
originally scheduled expiration date without regard to the
Qualifying Termination, and
(ii) 50% of the Executive’s
then outstanding and unvested shares of restricted stock and
restricted stock units that are Pre-2007 Equity Awards shall
immediately vest and any restrictions on any such shares or units
shall immediately lapse.
(d) Accelerated Vesting of
Post-2006 Equity Awards . In the event of a Qualifying
Termination:
(i) 50% of the Executive’s
then outstanding and unvested stock option awards that are
Post-2006 Equity Awards shall immediately vest and become
exercisable as of such date, and
(ii) 25% of the Executive’s
then outstanding and unvested shares of restricted stock or
restricted stock units that are Post-2006 Equity Awards granted
during the 12 month period ending on the Qualified Termination
shall immediately vest and any restrictions on such shares or units
shall immediately lapse, and
(iii) 50% of the Executive’s
then outstanding and unvested shares of restricted stock or
restricted stock units that are Post-2006 Equity Awards granted
more the one year but less than two years before the Qualified
Termination shall immediately vest and any restrictions on such
shares or units shall immediately lapse, and
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(iv) 75% of the Executive’s
then outstanding and unvested shares of restricted stock or
restricted stock units that are Post-2006 Equity Awards granted
more the two years but less than three years before the Qualified
Termination shall immediately vest and any restrictions on such
shares or units shall immediately lapse.
Accelerated vesting under this
Section 3.01(d) shall only apply to time-based Post-2006
Equity Awards (i.e., awards that vest based on periods of continued
employment). Accelerated vesting of performance-based Post-2006
Equity Awards (i.e., awards that vest upon attaining corporate,
business unit, individual or other performance objectives) shall
only accelerate upon a Qualifying Termination to the extent set
forth in the underlying award agreement or in an amendment to this
Agreement.
(e) Accrued Salary and
Vacation . The Executive shall be paid all salary and accrued
vacation pay earned through the date of the Qualifying Termination.
Such payment shall be made no later than 10 business days after the
Qualifying Termination.
(f) Pro-Rata Bonus. The
Executive shall become entitled to receive, in lieu of any payments
that the Executive may be entitled to receive under the
Company’s annual incentive plan for the year in which the
Qualifying Termination occurs, a lump-sum payment equal to the
Executive’s target annual bonus for the performance 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 the Qualifying Termination and the denominator
of which is 365. Such payment shall be made at the same time as the
Cash Severance Payment under Section 3.01(a) above.
(g) Outplacement Services.
The Executive shall be entitled to receive outplacement services
for a reimbursement period ending not later than the earlier of the
first anniversary of the Qualifying Termination or the date on
which the Executive commences other employment. The Company shall
select the outplacement services after consultation with the
Executive, it being understood that the cost of these services
shall in no event exceed the lesser of 10% of Annual Salary or
$50,000. The Company shall reimburse the Executive for the amount
of any such outplacement services upon the receipt of appropriate
documentation from the Executive. Any reimbursement under this
Section 3.01(g) will be made by the Company not later than the
90 day period following the expiration of the reimbursement
period.
SECTION 3.02. Any payments or
benefits made or provided pursuant to Section 3.01 (other than
accrued salary and vacation) are subject to the
Executive’s:
(a) compliance with the provisions
of Article V hereof;
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(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.
Notwithstanding the due date of any
post-employment payments, any amounts or benefits due following a
Qualifying Termination (other than accrued salary and vacation)
shall not be due until after the expiration of any revocation
period applicable to the General Release without the Executive
having revoked such General Release, and any such amounts shall be
paid to the Executive within ten (10) business days of the
expiration of such revocation period without the occurrence of a
revocation by the Executive (or such later date as may be required
under Section 409A of the Code).
SECTION 3.03. If the Executive fails
to materially comply with any obligation or covenant under
Section 5.02 of this Agreement or is subsequently determined
to have terminated employment for Cause under Section 4.02
below, the Company’s obligations to make any additional
payments or provide any additional benefits or other rights or
entitlements to the Executive pursuant to any provision of this
Agreement shall immediately cease and the Executive shall be
required to immediately repay to the Company all amounts
theretofore paid or otherwise provided to the Executive pursuant to
Sections 3.01(a), (c), (d), (f) and (g) of this
Agreement. The Company may recover amounts under this
Section 3.02 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 IV
Nonqualifying
Termination
SECTION 4.01. In the event the
Executive’s employment is terminated by reason of the
Executive’s voluntary resignation, death or Disability or by
the Company for Cause, then the Executive shall not be entitled to
receive severance or other benefits under this
Agreement.
SECTION 4.02. Any termination of
employment for Cause shall be made in writing to the Executive,
which notice shall set forth in detail all acts or omissions upon
which the Board is relying for such termination. If the
Executive’s employment is terminated by the Company without
Cause and the Board discovers in the following six (6) months
that the Executive’s employment could have been terminated
for Cause, the Board shall be entitled to retroactively treat
Executive’s employment to have been terminated for Cause for
all purposes.
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SECTION 4.03. If the
Executive’s employment is terminated for Cause, the
Executive’s employment and rights to compensation from the
Company shall terminate immediately upon receipt of written notice
except that the Company shall have the obligation to pay the
Executive such portion of base salary and vacation as may be
accrued but unpaid on the date the Executive’s employment is
terminated. For avoidance of doubt, the Executive shall have no
right to receive any bonus payments that have accrued and are
payable if Executive’s employment is terminated for
Cause.
ARTICLE V
Post Employment
Obligations
SECTION 5.01. 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
of the Executive’s termination of employment for any reason,
the Executive agrees to comply with the restrictions set forth in
Section 5.02 for a term equal to the Executive’s
Severance Period (the “Non-Compete Term”).
SECTION 5.02. The Executive
acknowledges and agrees that, so long as the Company complies with
its obligations to provide the payments required under
Section 3.01, the Executive shall not, directly or indirectly:
(a) engage in or have any interest in any sole proprietorship,
partnership, corporation or business or any other person or entity
(whet
