EMPLOYMENT AGREEMENT
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AGREEMENT, dated this 1st day of August, 1997, by and
between INTERNATIONAL MUREX TECHNOLOGIES CORPORATION,
incorporated under the laws of the Province of British Columbia
(the "Company"), and C. XXXXXX XXXXXX ("Executive").
WHEREAS, the Company and Executive previously entered into
an Employment Agreement dated January 1, 1995; and
WHEREAS, the term of the employment relationship created by
such Employment Agreement has not expired; and
WHEREAS, the Company and Executive desire to amend and
restate the terms and conditions of their employment relationship
as it relates to the period subsequent to 1 August, 1997.
NOW THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the Company and Executive
agree as follows:
1. Employment. The Company hereby employs Executive, and
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Executive accepts such employment and agrees to perform services
for the Company, for the period and upon the other terms and
conditions set forth in this Agreement.
2. Term. The initial term of Executive's employment
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hereunder shall be for a period of three (3) years, commencing as
of 1 August 1997 (the "Commencement Date"), subject to earlier
termination as hereinafter specified in Section 8. At each
anniversary date of the Commencement Date (each a "Renewal
Date"), the then remaining term of this Agreement shall be
extended for an additional one-year period unless either party
hereto shall have provided written notice to the other party of
such non-renewal of this Agreement on or within three (3) months
before such Renewal Date. In the event that either party shall
provide the other party with written notice of non-renewal of
this Agreement, this Agreement shall not be extended as of any
subsequent Renewal Date but shall remain effective in accordance
with its terms (subject to termination in accordance with Section
8 hereof) until the end of the then current term of this
Agreement. A non-renewal of this Agreement in accordance with
this Section 2 shall not constitute a termination of this
Agreement for the purpose of Sections 5 or 8 hereof.
3. Position and Duties.
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3.01. Service with the Company. During the Term of
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this Agreement, Executive shall serve as, and his title shall be,
Vice Chairman of the Company or such other position as Executive
and the Board of Directors shall from time to time agree. In
such position, Executive agrees to perform such executive
employment duties consistent with such position as the Board of
Directors of the Company shall assign to him from time to time.
Executive also agrees to serve, during the Term hereof, as
requested by the Board, and without any additional compensation,
as a Director of the Company and as an executive officer and/or
director of any corporations affiliated with the Company. The
compensation payable to Executive herein shall be paid by the
Company or by a subsidiary of the Company as designated by
Executive.
3.02. Performance of Duties. Executive agrees to
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serve the Company faithfully and to the best of his ability and
to devote the time, attention and efforts necessary to advance
the business and affairs of the Company during the Term of this
Agreement. It is understood and agreed that Executive may pursue
personal investments requiring time commitments that do not
conflict with his obligations to the Company, including those in
the preceding sentence. Executive hereby confirms that he is
under no contractual commitments inconsistent with his
obligations set forth in this Agreement, and that during the Term
of this Agreement, he shall not render or perform services, or
enter into any contract to do so, for any other corporation,
firm, entity or person which are inconsistent with the provisions
of this Agreement.
4. Compensation.
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4.01. Base Salary. As compensation for all services
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to be rendered by Executive under this Agreement, the Company
shall pay to Executive an initial base annual salary (the "Base
Salary") of U.S. $265,000, which salary shall be paid in
semi-monthly installments in accordance with the Company's normal
payroll procedures and policies. The base salary shall be
increased on January 1, 1998 and on each January 1 thereafter by
the percentage equal to the percentage increase in the Consumer
Price Index maintained by the United States Bureau of Labor
Statistics for the Atlanta, Georgia metropolitan area or an
equivalent index (the "Index") as of January 1 of such year over
the Index for the immediately preceding January 1. Should the
Index be modified or discontinued, appropriate adjustment shall
be made to reflect such modification or to refer to a similar
index. Additionally, Executive's Base Salary shall be reviewed
annually and may be increased by an amount to be determined by
the Compensation/Option Committee (the "Committee") on the basis
of Executive's performance.
4.02. Incentive Compensation. In addition to the Base
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Salary described in Section 4.01, Executive shall be eligible to
receive incentive compensation pursuant to the Senior Management
Incentive Plan as approved by the Committee or such other plans
as may from time to time be available.
4.03. Deferral of Compensation. Executive shall be
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entitled to elect to defer the receipt of up to seventy five
percent (75%) of his Base Salary and Incentive Compensation for
each calendar year during which this Agreement is in effect.
Executive shall make the election to defer his compensation for a
calendar year by giving written notice to the Company of his
desire to do so in writing no later than December 31 of the
immediately preceding calendar year. In the event that Executive
elects to defer the payment of any compensation due hereunder in
the manner contemplated by this Section 4.03, the terms and
conditions set forth in Exhibit A hereto with respect to the
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circumstances under which Executive shall be entitled to the
payment of the deferred compensation as well as the interest
earned thereon and the timing and method of those payments shall
be applicable. Also, in such event, each of the periodic
payments of Executive's Base Salary for any year in which
Executive has elected to defer receipt of a portion of his Base
Salary shall be reduced by the percentage amount of his total
Base Salary which he has elected to defer.
4.04. Participation in Benefit Plans. Executive shall
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also be entitled, to the extent that his position, title, tenure,
salary, age, health and other qualifications make him eligible,
to participate in all employee benefit plans or programs
(including medical/dental and life insurance, retirement pension,
stock option incentives, vacation time, sick leave and holidays)
of the Company currently in existence on the date hereof or as
may hereafter be instituted from time to time. Executive's
participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.
4.05. Expenses. In accordance with the Company's
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policies established from time to time, the Company shall pay or
reimburse Executive for all reasonable and necessary
out-of-pocket expenses incurred by him in the performance of his
duties under this Agreement, subject to the timely presentment of
appropriate vouchers and receipts.
4.06. Car Allowance. The Company shall provide
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Executive with a car or pay a car allowance in amount recommended
by the Executive Committee and approved by the Committee.
4.07. Vacation. Executive will be also be entitled to
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the highest number of vacation days with full pay during each
twelve months in which this Agreement is in effect as are
available to any other key employees of the Company or its
subsidiaries, without any reduction based upon length of service
to the Company.
4.08. Club and Professional Dues. During the term of
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this Agreement, Executive will be entitled to the
club/professional society membership dues and monthly charges and
an annual physical examination by the physician of Executive's
choice. Amounts paid for club/professional society membership
dues and monthly charges shall not exceed US $5,000 annually. In
the event that Executive is required to pay any tax on such
reimbursement, the amount to be reimbursed to Executive shall be
grossed up by such amount as shall ensure that Executive receives
the same amount as he would have received had not such tax been
payable.
4.09. Double Tax Liability. In the event that in any
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year during the term of this Agreement Executive is required to
pay income taxes on any portion of his income for that year both
to the United States and to the United Kingdom, the Company shall
pay to Executive the amount which, after taking into account the
taxes required to be paid by Executive as a result of Executive's
receipt of such payment from the Company, shall cause Executive's
after-tax return on his income to equal the amount which would
have been available to Executive had no United Kingdom taxes been
due with respect to such income. The amounts due from the
Company pursuant to the immediately preceding sentence shall be
determined by Executive's tax return preparer, shall take into
account any foreign tax credits or other credits and deductions
allowed against his United States tax liability, and shall be
paid to Executive no later than fifteen (15) days following the
date on which Executive files the first tax return in which the
income subject to taxation in both the United States and the
United Kingdom is reported in any year, or within fifteen days
following the date on which the relevant taxing authority
determines that Executive's income is subject to taxation both in
the United States and in the United Kingdom, as the case may be.
4.10. Tax and Estate Planning. The Company agrees to
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reimburse Executive for the cost of financial, tax and estate
planning for each 365-day period in which this Agreement is in
effect in amount not to exceed US $3,000 for each 365-day period.
In the event that Executive is required to pay any tax on such
reimbursement, the amount to be reimbursed to Executive shall be
grossed up by such amount as shall ensure that Executive receives
the same amount as he would have received had not such tax been
payable.
4.11. Additional Benefits. During the term of this
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Agreement, Executive shall be entitled to participate in all
present and future employee benefit plans and all other
compensation and benefit plans, programs and structures as may
from time to time be made available by the Company to all other
key corporate executives of the Company, and on terms and
conditions no less favorable than those generally available to
other such employees. In the event that the Company elects to
obtain key man life insurance insuring Executive, Executive shall
make himself available for the necessary physical examinations
and shall cooperate in all other respects with the Company's
efforts to obtain such insurance.
5. Compensation upon Termination.
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(a) In the event this Agreement is terminated pursuant
to Subsection 8.01(a) hereof, in addition to any benefits to
which Executive may then or following the termination of his
employment be entitled under any other applicable policy or plan
of the Company then in effect (including basic life insurance
which coverage equals two times annual salary, and survivor
benefits which provide Accidental Death & Dismemberment for each
employee at two times the annual salary), the Company shall pay
to Executive's estate his Base Salary, incentive compensation and
benefits due through the effective date of termination. In the
event that such termination occurs on any date other than the
last day of the fiscal year, the incentive compensation shall be
based upon the performance goals achieved at the end of the
fiscal year, but shall be prorated based upon the number of days
which have elapsed in the fiscal year through the date of
termination. Payment of this incentive compensation, or the
release of any stock representing incentive compensation, due
under this Section 5(a) shall be made no later than 120 days
following the end of the fiscal year with respect to which it is
being paid. Payment of all other amounts under this Section 5(a)
shall be made not later than the 30th day following the effective
date of termination. Executive's estate shall be entitled to
receive an amount equal to twenty-four (24) times his then
current monthly Base Salary.
(b) In the event this Agreement is terminated pursuant
to Subsection 8.01(b)(i) hereof, Executive or his representative
shall be entitled to receive an amount equal to twenty-four (24)
times his then current monthly Base Salary, less any disability
insurance benefits payable to Executive during such twenty-four
month period from disability policies provided by the Company.
(c) In the event this Agreement is terminated pursuant
to Subsection 8.01(b)(ii) or (iii) hereof, Executive shall not be
entitled to any compensation other than his then current Base
Salary which has accrued through his date of termination, subject
to the Company's right of offset based upon acts of Executive
which gave rise to the termination.
(d) In the event that Executive is terminated pursuant
to Subsection 8.01(c) hereof, Executive shall be entitled to a
severance allowance equal to the greater of (i) his Base Salary
for all months remaining in his then current term, or (ii) his
then current monthly Base Salary for twenty-four (24) months.
(e) Subject to Section 5(a), payments or the release
of stock representing incentive compensation to Executive
pursuant to this Section 5 shall be made in either a lump-sum
payment or, at the sole discretion of the Company, in four (4)
equal payments within six (6) months of termination of the
Agreement.
(f) In the event that Executive is terminated pursuant
to Subsections 8.01(a), 8.01(b)(i) or 8.01(c) hereof, the
expiration dates of Executive's options currently outstanding
pursuant to any of the Company's stock option plans will extended
twenty-four (24) months from the date of such termination.
6. Confidential Information. Except as permitted or
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directed by the Company's Board of Directors, Executive shall not
during the Term of this Agreement or at any time thereafter
divulge, furnish or make accessible to anyone for use in any way
(other than in the ordinary course of the business of the
Company) any confidential or secret knowledge or information of
the Company (for the purposes of Sections 6 through 8 hereof, the
term "Company" shall be deemed to include any subsidiary or
affiliate of the Company) which Executive has acquired or become
acquainted with or will acquire or become acquainted with prior
to the termination of the period of his employment by the
Company, whether developed by himself or by others, concerning
any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the
business of the Company, and confidential customer or supplier
lists of the Company, any confidential or secret development or
research work of the Company, or any other confidential or secret
aspects of the business of the Company. Executive acknowledges
that the above-described knowledge or information constitutes a
unique and valuable asset of the Company acquired at great time
and expense by the Company and its predecessors, and that any
disclosure or other use of such knowledge or information other
than for the sole benefit of the Company would be wrongful and
would cause irreparable harm to the Company. Both during and
after the Term of this Agreement, Executive shall refrain from
any acts or omissions that would reduce the value of the use of
such knowledge or information to the Company. The foregoing
obligations of confidentiality, however, shall not apply to any
knowledge or information which is now published or which
subsequently becomes generally publicly known, other than as a
direct or indirect result of the breach of this Agreement by
Executive.
7. Non-Competition, Solicitation of Customers,
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Solicitation of Employees.
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7.01. Non-Competition.
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(a) Executive agrees that, during the period of his
employment hereunder and for a period of one (1) year following
the termination of such employment, he shall not directly engage
in competition with the Company within the "Territory" (as
hereinafter defined) in any management capacity in any phase of
the Company's business of developing, manufacturing,
distributing, marketing, leasing or selling any of the products
which the Company is in the business of developing,
manufacturing, distributing, marketing, leasing to others or
selling (the "Competitive Areas") during the Term of this
Agreement or which the Company has definitive plans to develop,
manufacture or market.
(b) The "Territory" shall be that area throughout the
world in which the Company presently markets its products. This
Agreement shall be deemed automatically amended without the need
of further action by any party to add to any new countries or
parts thereof where after the date hereof and prior to the
termination of Executive's employment the Company begins to
market its products and to delete any countries after no Company
products have been sold there for a period of six months.
(c) The restrictions in this Section 7 shall not apply
with respect to (i) a passive investment by Executive of less
than 5% of the outstanding shares of capital stock of any
corporation, or (ii) employment by Executive with an entity in a
management capacity in an area of business which is not, directly
or indirectly, a Competitive Area.
7.02. Agreement Not to Solicit Customers. Executive
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agrees that during his employment by the Company hereunder and
for the two (2) year period following the termination of such
employment, he shall not, without the prior written consent of
the Company, within the Territory, either directly or indirectly,
on his own behalf or in the service or on behalf of others,
solicit, divert or appropriate, or attempt to solicit, divert or
appropriate, to any competing business any person or entity whose
account with the Company was sold or serviced by or under the
supervision of Executive during the year preceding the
termination of such employment.
7.03. Agreement Not to Solicit Employees. Executive
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agrees that during his employment by the Company hereunder and
for the two (2) year period following the termination of such
employment, he shall not, either directly or indirectly, on his
own behalf or in the service or on behalf of others, solicit,
divert, or attempt to solicit or divert any person then employed
by the Company.
8. Termination.
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8.01. Grounds for Termination. This Agreement shall
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terminate prior to the expiration of the initial Term set forth
in Section 2 or any extension thereof in the event that at any
time during such initial Term or any extension thereof:
(a) Executive shall die; or
(b) The Board of Directors of the Company shall
determine that:
(i) Executive has become disabled; or
(ii) Executive has breached this Agreement in any
material respect, which breach is not cured by
Executive or is not capable of being cured (as
determined in the sole discretion of the Company's
Board of Directors) by Executive within thirty (30)
days after written notice of such breach is delivered
to Executive; or
(iii) In its sole discretion, Cause exists. "Cause"
means (A) conduct amounting to fraud, embezzlement or
misappropriation as against the Company, (B) the
willful and knowing material breach of any fiduciary
duty owed to the Company as an officer of the Company
other than done at the direction of the Board of
Directors, (C) having been convicted of a criminal
offense which may have a material adverse effect on the
Company or the ability of Executive to carry out his
duties of employment, or (D) the knowing failure of
Executive to follow specific directives of the Board of
Directors of the Company consistent with his duties.
If the Board of Directors terminates this Agreement
pursuant to this Section 8.01(b)(iii), Executive will
be provided ninety (90) days written notice.
(c) The Board of Directors of the Company shall
determine, in its sole discretion, that the termination of
this Agreement is in the best interest of the Company, and
in which event Executive shall have no duty to mitigate his
damages. If the Board of Directors terminates this
Agreement pursuant to this Section 8.01(c), Executive will
be provided ninety (90) days written notice.
Notwithstanding any termination of this Agreement, Executive, in
consideration of his employment hereunder to the date of such
termination, shall remain bound by the provisions of this
Agreement which specifically relate to periods, activities or
obligations upon or subsequent to the termination of Executive's
employment.
8.02. "Disability" Defined. The Board of Directors
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may determine that Executive has become disabled, for the purpose
of this Agreement, in the event that Executive shall fail,
because of illness or other physical or mental incapacity, to
render services of the character contemplated by this Agreement
for an aggregate of more than twelve (12) weeks during any twelve
(12) month period.
8.03. Surrender of Records and Property. Upon
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termination of his employment with the Company, Executive shall
deliver promptly to the Company all records, manuals, books,
blank forms, documents, letters, memoranda, notes, notebooks,
reports, data, tables, calculations or copies thereof, which are
the property of the Company and which relate in any way to the
business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of
the Company, including, but not limited to, all documents which
in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in
his possession or under this control.
9. Assignment and Inurement. This Agreement shall enure
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to the benefit of and be binding upon the parties hereto and
their respective heirs, successors, administrators, successors
and permitted assigns. The Company may, without the consent of
Executive, assign its rights and obligations under this Agreement
to any corporation, firm or other business entity with or into
which the Company may merge or consolidate, or to which the
Company may sell or transfer all or substantially all of its
assets or of which 50% or more of the equity investment and of
the voting control is owned, directly or indirectly, by, or is
under common ownership with, the Company; provided, however, that
if the assignee was not previously part of a consolidated group
with the Company, Executive will receive payments and benefits as
outlined in Exhibit B, attached hereto and incorporated herein.
10. Injunctive Relief. Executive agrees that it would be
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difficult to compensate the Company fully for damages for any
violation of the provisions of this Agreement, including without
limitation the provisions of Sections 6, 7 and 8.03.
Accordingly, Executive specifically agrees that the Company shall
be entitled to temporary and permanent injunctive relief to
enforce the provisions of this Agreement. This provision with
respect to injunctive relief shall not, however, diminish the
right of the Company to claim and recover damages in addition to
injunctive relief.
11. Miscellaneous.
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11.01. Governing Law. This Agreement is made under
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and shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania, United States, subject
to any principles of conflict of laws.
11.02. Prior Agreements. This Agreement contains the
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entire agreement of the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings
with respect to such subject matter, and the parties hereto have
made no agreements, representations or warranties relating to the
subject matter of this Agreement which are not set forth herein.
11.03. Withholding Taxes. The Company may withhold
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from any benefits payable under this Agreement all federal,
state, city and other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
11.04. Amendments. No amendment or modification of
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this Agreement shall be deemed effective unless made in writing
signed by the party against whom enforcement of the waiver or
estoppel is sought. Any written waiver shall not be deemed a
continuing waiver unless specifically stated, shall operate only
as to the specific term or condition for the future or as to any
act other than that specifically waived.
11.05. Notices. Any notice, request, demand or other
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document to be given hereunder shall be in writing, and shall be
delivered personally or sent by registered, certified or express
mail or facsimile followed by mail as follows:
If to the Company:
Board of Directors
000 Xxxxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxx
X0X 0X0
XXXXXX
If to Executive:
C. Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
or to such other address as either party hereto may hereinafter
duly give to the other.
11.06. Severability. To the extent any provision of
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this Agreement shall be invalid or unenforceable, it shall be
considered deleted herefrom and the remainder of such provision
and of this Agreement shall be unaffected and shall continue in
full force and effect. In furtherance and not in limitation of
the foregoing, should the duration or geographical extent of, or
business activities covered by any provision of this Agreement be
in excess of that which is valid or enforceable under applicable
law, then such provision shall be construed to cover only that
duration, extent or activities which may validly and enforceably
be covered. Executive acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement be
given the construction which renders its provisions valid and
enforceable to the maximum extent (not exceeding its express
terms) possible under applicable law.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year set forth above.
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C. Xxxxxx Xxxxxx
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By:
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Xxxxxx X. Xxxx, on behalf of the Compensation
Committee and the Board of Directors
EXHIBIT "A"
DEFERRED COMPENSATION PLAN
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1. At the time the Executive elects to defer compensation
pursuant to Section 4.03 of the Employment Agreement, the
Executive shall also elect the percentage of such compensation to
be credited from the date of deferral to the date it is paid to
the Executive with either (a) simple interest at a rate per annum
equal to the average of the rates then being earned by the
Company on deposits with a term of ninety days or less, adjusted
on the first day of each calendar quarter or (b) the same rate of
return experienced by the common stock of the Company. The
portion of the compensation deferred by the Executive to which
the Executive elects to have the Company common stock rate of
return apply shall be hypothetically invested in shares of the
Company's common stock based on the closing price of the
Company's common stock on the Nasdaq National Market System, or
such other exchange that the Company's common stock may be listed
at the time, on the business day prior to the date on which the
compensation would otherwise be paid. The number of shares of
the Company's common stock in which the Executive has
hypothetically invested shall be adjusted to reflect stock
splits, stock dividends and other capital changes affecting the
outstanding common stock of the Company in the same manner as an
equivalent number of actual shares of the Company's common stock
are adjusted. In addition, all cash distributions and the fair
market value (as determined in good faith by the Company) of any
property distributions with respect to shares of common stock of
the Company shall be reinvested in the common stock of the
Company based on the closing price of the common stock as
reported on the Nasdaq National Market System, or such other
exchange that the Company's common stock may be listed at the
time, on the business day prior to the distribution. The portion
of the Executive's compensation deferred hereunder and credited
with simple interest, together with such simple interest, shall
be referred to herein as "Deferred Compensation". The portion of
Executive's compensation deferred hereunder and credited with the
rate of return of the common stock of the Company shall be
reflected in hypothetical shares of the Company's common stock
with each such share being referred to herein as a "Stock
Credit". On December 31st of each year during which any Deferred
Compensation or Stock Credits remain unpaid, the Company shall
provide the Executive with a statement setting forth the amount
of his unpaid Deferred Compensation and the number of outstanding
Stock Credits.
2. The Deferred Compensation shall be paid to Executive in
a lump sum following the termination of his employment with the
Company for any reason on the 30th day following the date of
termination. The number of Stock Credits credited to the
Executive shall be paid to the Executive on the 30th date
following the date of his termination, by the release of common
stock to the Executive."
3. Notwithstanding the foregoing, in the event of the
occurrence of an "unforeseeable emergency," as hereinafter
defined, Executive shall be entitled to a payment from the
Deferred Compensation (or release of common stock representing
Stock Credits) prior to the date set forth in paragraph 2 of this
Exhibit A of that amount reasonably required to satisfy the
emergency need. As used herein, "unforeseeable emergency" shall
be limited to (i) severe financial hardship to Executive
resulting from a sudden and unexpected illness or accident of
Executive or of a dependent of Executive, as dependent is defined
in Section 152 of the Internal Revenue Code or any successor
provision thereto, (ii) loss of Executive's property due to
casualty, or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
Executive. The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case,
but, in any case, a payment (or release) of all or any portion of
the Deferred Compensation in the event of an unforeseeable
emergency may not be made to the extent that such hardship is or
may be relieved;
(i) Through reimbursement or compensation by insurance
or otherwise,
(ii) By liquidation of Executive's assets, to the
extent the liquidation of such assets would not itself cause
severe financial hardship, or
(iii) By cessation of the deferral of the payment
of the Deferred Compensation pursuant to paragraph 2, above.
4. The Company's obligation to pay the Deferred
Compensation or release of common stock representing Stock
Credits constitutes a mere promise by the Company to make these
payments at the times specified herein. Accordingly, Executive
shall have the status of a general unsecured creditor with
respect to the Deferred Compensation. Executive's rights to the
payment of Deferred Compensation or the release of common stock
representing Stock Credits shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of Executive
or his estate or any beneficiary of either Executive or his
estate.
EXHIBIT "B"
CHANGE IN CONTROL PROVISIONS
This Exhibit "B" (the "Provisions") set forth the severance
benefits which the Company agrees will be provided Executive in
the event employment with the Company is terminated subsequent to
a Change in Control of the Company under the circumstances
described below. In order to secure the payment of all
obligations under these Provisions, the Company shall establish
an irrevocable grantor trust and make contributions thereto
sufficient to satisfy its obligations under these Provisions
immediately upon an event which constitutes a Change in Control
(as hereinafter defined).
1. Term of these Provisions. These Provisions shall
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commence on the date set forth in the Employment Agreement and
shall continue in effect as long as the Employment Agreement is
in effect, or until the Company or Executive shall have given
notice that these Provisions shall not be extended; and provided,
further, that, notwithstanding the delivery of any such notice,
these Provisions shall continue in effect for a period of twenty-
four (24) months after a Change in Control of the Company if such
Change in Control shall have occurred while these Provisions are
in effect. Notwithstanding anything in this Section 1 to the
contrary, these Provisions shall terminate if Executive or the
Company terminates Executive's employment in accordance with the
terms and conditions of the applicable Employment Agreement prior
to a Change in Control of the Company.
2. Change in Control. For purposes of these Provisions, a
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"Change in Control" means and shall be deemed to occur if any of
the following occurs:
(a) an acquisition, after September 1, 1995, by an
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the outstanding shares of common stock, no
par value, of the Company (the "Common Shares"), or (ii) the
combined voting power of the voting securities of the Company
entitled to vote generally in the election of directors (the
"Voting Securities"); or
(b) individuals who, as of September 1, 1995, constituted
the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the Board, provided, however,
that any individual becoming a director subsequent to September
1, 1995, whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then serving and comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act ) or other actual or
threatened solicitation of proxies or consents; or
(c) approval by the shareholders of the Company of (i) a
tender offer to acquire 20% or more of the Common Shares or
Voting Securities, (ii) a reorganization, (iii) a merger, or (iv)
a consolidation, other than a reorganization, merger or
consolidation with respect to which all or substantially all of
the individuals and entities who were the beneficial owners,
immediately prior to such reorganization, merger or
consolidation, of the Common Shares and Voting Securities
beneficially own, directly or indirectly, immediately after such
reorganization, merger or consolidation, more than 80% of the
then outstanding Common Shares and Voting Securities (entitled to
vote generally in the election of directors) of the corporation
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership,
immediately prior to such reorganization, merger or
consolidation, of the Common Shares or Voting Securities; or
(d) approval by the Company's shareholders of (i) a
complete or substantial liquidation or dissolution of the
Company; or (ii) the sale or other disposition of all or
substantially all of the assets of the Company.
3. Termination Following a Change in Control. If any of
-----------------------------------------
the events described in Section 2 hereof constituting a Change in
Control of the Company shall have occurred, Executive shall be
entitled to the benefits provided in Section 4(c) hereof upon the
termination of employment with the Company after such Change in
Control, unless such termination is because of death, by the
Company for Cause or Disability (as each such term is defined in
the Employment Agreement), or by Executive other than for Good
Reason (as hereinafter defined).
(a) Good Reason. Termination by Executive of employment
-----------
for "Good Reason" for the purpose of these Provisions shall mean
termination based on:
(i) a determination by Executive, in his reasonable
judgment, that there has been a material adverse change in his
status or position(s) with the Company from those in effect
immediately prior to the Change in Control, including, without
limitation, a material adverse change in Executive's status or
position as a result of a diminution of his duties or
responsibilities (other than, if applicable, any such change
directly attributable to the fact that the Company is no longer
publicly owned) or the assignment to him of any duties or
responsibilities which are inconsistent with such status or
position(s), or any removal of Executive from, or any failure to
reappoint or reelect him to, such position(s) (except in
connection with the termination of employment for Cause or
Disability or as a result of death or by Executive other than for
Good Reason);
(ii) a reduction by the Company in base salary from
that in effect immediately prior to the Change in Control;
(iii) the failure by the Company to continue in
effect any Plan (as herein defined) in which Executive
participates in at the time of the Change in Control of the
Company (or plans providing him with substantially similar
benefits), or the taking of any action, or the failure to act, by
the Company which would adversely affect continued participation
in any of such Plans on at least as favorable a basis as is the
case on the date of the Change in Control or which would
materially reduce Executive's benefits in the future under any of
such plans or deprive him of any material benefit enjoyed at the
time of the Change in Control. For purposes of these Provisions,
"Plan" shall mean any compensation plan or any employee benefit
plan such as a thrift, pension, profit sharing, medical,
disability, accident, life insurance plan or a relocation plan or
policy or any other plan, program or policy of the Company
intended to benefit employees;
(iv) the failure by the Company to provide and credit
the number of paid vacation days to which Executive is then
entitled in accordance with the Company's normal vacation policy
in effect immediately prior to the Change in Control;
(v) the Company's requiring Executive to be based at
any office that is greater than fifty (50) miles from where his
office is located immediately prior to the Change in Control
except for required travel on the Company's business to an extent
substantially consistent with the business travel obligations
which he undertook on behalf of the Company prior to the Change
in Control;
(vi) the failure by the Company to obtain from any
Successor (as hereinafter defined) the assent to these Provisions
contemplated by Section 5(a) hereof;
(vii) any termination by the Company of Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph (c) below;
and for purposes of these Provisions, no such termination shall
be effective; or
(viii) any refusal by the Company to continue to
allow Executive to attend to matters or engage in activities not
directly related to the business of the Company which, prior to
the Change in Control, he was previously permitted to attend to
or engage in.
(b) Window Periods. Notwithstanding anything in these
--------------
Provisions to the contrary, any termination by Executive for any
reason during the thirty (30) day period immediately following a
Change in Control of the Company (the "First Window Period")
shall be deemed a termination for Good Reason for all purposes of
these Provisions. In addition, any termination by him for any
reason during the thirty (30) day period immediately following
the first anniversary date of a Change in Control of the Company
(the "Second Window Period") shall be deemed a termination for
Good Reason for all purposes of these Provisions, except all
benefits paid hereunder shall be reduced by twelve (12) months.
(c) Notice of Termination. Any termination by the Company
---------------------
or any termination by Executive following a Change in Control
shall be communicated by written notice to the other party hereto
which indicates the specific termination provision in these
Provisions relied upon (the "Notice of Termination").
(d) Date of Termination. "Date of Termination" following a
-------------------
Change in Control shall mean: (i) if employment is to be
terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that Executive shall not have
returned to the performance of his duties on a full-time basis
pursuant to a doctor's release during such thirty (30) day
period), (ii) if employment is to be terminated by the Company
for any reason other than death or Disability or by Executive
pursuant to Sections 3(a)(vi) or 5(a) hereof or for other Good
Reason, the date specified in the Notice of Termination, or (iii)
if employment is terminated on account of death, the day after
death. In the case of termination of employment by the Company
for Cause pursuant to Paragraph 8.01(b)(iii) of the Employment
Agreement, if Executive has not previously expressly agreed in
writing to the termination, then within ninety (90) days after
receipt by him of the Notice of Termination with respect thereto,
Executive may notify the Company that a dispute exists concerning
the Termination, in which even the Date of Termination shall be
the date set either by mutual written agreement of the parties or
by such court having the matter before it. During the pendency
of any such dispute, the Company will continue to pay Executive
his full compensation in effect just prior to the time the Notice
of Termination is given and until the dispute is resolved.
However if such court issues a final and non-appealable order
finding that the Company had Cause to terminate Executive then he
must return all compensation paid after the Date of Termination
specified in the Notice of Termination previously received.
4. Compensation Upon Termination or During Disability;
---------------------------------------------------
Other Agreements.
----------------
(a) During any period following a Change in Control of the
Company that Executive fails to perform his duties as a result of
incapacity due to physical or mental illness, he shall continue
to receive his Base Salary at the rate then in effect and any
benefits or awards under any Plan shall continue to accrue during
such period, to the extent not inconsistent with such Plans,
until and unless his employment is terminated pursuant to and in
accordance with paragraph 4(c) hereof. Thereafter, his benefits
shall be determined in accordance with the Plans then in effect.
(b) If employment is terminated for Cause following a
Change in Control of the Company, the Company shall pay to
Executive's Base Salary through the Date of Termination at the
rate in effect just prior to the time a Notice of Termination is
given, plus any benefits or awards (including both the cash and
stock components) which pursuant to the terms of any Plans have
been earned or become payable, but which have not yet been paid.
Thereupon the Company shall have no further obligations to
Executive under these Provisions.
(c) Subject to Section 8 hereof, if, within twenty-four
(24) months after a Change in Control of the Company has
occurred, Executive's employment by the Company is terminated
other than on account of death and is terminated by the Company
other than for Cause or Disability or by Executive for Good
Reason, including any termination by him during the First Window
Period or the Second Window Period (subject to reduction as set
forth in Section 3(b)), then the Company shall pay to Executive,
no later than the fifth (5th) day following the Date of
Termination, without regard to any contrary provisions of any
Plan, the following, which shall be inclusive and in place of any
other severance benefits to which he may previously have been
entitled under his employment agreement with the Company and
shall constitute all of the severance benefits to which he may be
entitled under all agreements with the Company:
(i) Executive's Base Salary through the Date of
Termination at the rate in effect just prior to the time a Notice
of Termination is given plus any benefits or awards (including
both the cash and stock components) which pursuant to the terms
of any Plans have been earned or become payable, but which have
not yet been paid (including amounts which previously had been
deferred at his request);
(ii) an amount in cash equal to 299% of Executive's
average annual taxable compensation over the base period (within
the meaning of Section 280G(d)(2) of the Internal Revenue Code of
1986, as amended (the "Code")) ending on the effective date of
the Change in Control; provided, however, that the maximum amount
which Executive may receive under this Section 4(c)(ii) shall
not exceed the lowest amount received by any other Company
employee whose employment agreement with the Company contains an
agreement substantially similar to these Provisions. For
purposes of this Section 4(c)(ii), the term "average annual
taxable compensation" shall mean Executive's base salary plus
bonuses, including any amounts deducted by the Company or
contributed by the Company with respect to Executive or for
Executive's account pursuant to Sections 125 and 401(k) of the
Code and excluding the value of any fringe benefits or executive
perquisites, and any gross-up payments thereon, which are
includeable by Executive as taxable compensation.
(d) If, within twenty-four (24) months after a Change in
Control of the Company has occurred, Executive's employment by
the Company is terminated (i) by the Company other than for Cause
or Disability, or (ii) by Executive for Good Reasons, then the
Company shall maintain in full force and effect, for the
continued benefit of Executive and his dependents for a period
terminating on the earliest of (i) two (2) years after the Date
of Termination, or (ii) the commencement date of equivalent
benefits from a new employer, all insured and self-insured
employee welfare benefit Plans in which he was entitled to
participate immediately prior to the Date of Termination,
provided that his continued participation is possible under the
general terms and provisions of such Plans (and any applicable
funding media) and he continues to pay an amount equal to regular
contributions under such Plans for such participation. If two
(2) years after the Date of Termination Executive has not
previously received, nor are then receiving, equivalent benefits
from a new employer, the Company shall offer him continuation of
coverage under COBRA as prescribed under Section 4980B of the
Code. At the expiration of such continuation coverage (or, if
COBRA continuation coverage is not applicable to the Plan, then
upon the expiration of the two (2) year period beginning on the
Termination Date), the Company shall arrange, at its sole cost
and expense, to enable him to convert he and his dependents'
coverage under such plans to individual policies and programs
upon the same terms as employees of the Company may apply for
such conversions. In the event that Executive's participation in
any such Plan is barred, the Company, at its sole cost and
expense, shall arrange to have issued for the benefit of
Executive and his dependents individual policies of insurance
providing benefits substantially similar (on an after-tax basis)
to those which he otherwise would have been entitled to receive
under such Plans pursuant to this paragraph 4(d) or, if such
insurance is not available at a reasonable cost to the Company,
the Company shall otherwise provide Executive and his dependents
with equivalent benefits (on an after-tax basis). Executive shall
not be required to pay any premiums or other charges in an amount
greater than that which he would have paid in order to
participate in such Plans.
(e) Until Executive obtains another full-time job, the
Company shall provide him with professional outplacement services
of his choosing and shall reimburse him for documented incidental
outplacement expenses directly related to his job search such as
resume mailing, interviewing trips, and clerical support, subject
to a maximum cost of $50,000 for such outplacement services and
incidental expenses; provided, however, that the Company shall
not provide him with any such outplacement services or reimburse
him for any such costs under this paragraph 4(e) if employment is
terminated by Executive during the Second Window Period.
Executive's choice of professional outplacement services shall be
subject to the Company's reasonable prior approval. If the
Company has not approved or disapproved of Executive's choice
within ten (10) business days of receiving notice of such choice,
the Company will be deemed to have given its approval. Any
disapproval issued by the Company pursuant to this Section shall
be in writing and state the basis for such disapproval. Executive
shall not be entitled to receive cash in lieu of the professional
outplacement services provided pursuant to this Section.
(f) Except as specifically provided in paragraph 4(d)
above, the amount of any payment provided for in this Section 4
shall not be reduced, offset or subject to recovery by the
Company by reason of any compensation earned as the result of
employment by another employer after the Date of Termination, or
otherwise.
(g) If, by reason of Section 280G of the Code, any payment
or benefit received or to be received in connection with a
Change in Control of the Company of the termination of
Executive's employment (whether payable pursuant to the terms of
these Provisions ("Contract Payments") or any other plan,
arrangement or agreement with the Company, its successors, any
person whose actions result in a Change in Control or any
corporation affiliated, or which, as a result of the completion
of the transactions causing a change in control will become
affiliated, with the Company within the meaning of Section 1504
of the Code ("Affiliate") (which payments collectively with the
Contract Payments are called the "Total Payments")) would not be
deductible, in whole or in part, by the Company an Affiliate or
other person making such payment or providing such benefit, the
Contract Payments shall be reduced until no portion of the Total
Payments is not deductible by reason of Section 280G of the Code.
For purposes of this limitation
(i) no portion of the Total Payments, the receipt or
enjoyment of which Executive shall have effectively waived in
writing prior to the date of payment of the Contract Payments,
shall be taken into account;
(ii) no portion of the Total Payments shall be taken
into account which, in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to Executive, does
not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code (without regard to subsection
(A)(ii) thereof);
(iii) the Contract Payments shall be reduced only
to the extent necessary so that the Total Payments, other than
those referred to in clauses (i) and (ii), in their entirety
constitute reasonable compensation for services actually rendered
with the meaning of Section 280G(b)(4) of the Code, in the
opinion of the tax counsel referred to in clause (ii); and
(iv) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments shall be
determined by the Company's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
5. Successors Binding Agreement.
----------------------------
(a) The Company will seek, by written request at least five
(5) business days prior to the time a natural person,
corporation, partnership or other business entity (a "Person")
becomes a Successor (as hereinafter defined), to have such
Person, by agreement in form and substance satisfactory to
Executive, assent to the fulfillment of the Company's obligations
under these Provisions. Failure of such Person to furnish such
assent by the later of (i) three (3) business days prior to the
time such Person becomes a successor or (ii) two (2) business
days after such Person receives a written request to so assent
shall constitute Good Reason for termination by Executive of his
employment if a Change in Control of the Company occurs or has
occurred. For purposes of these Provisions, "Successor" shall
mean any person that succeeds to, or has the practical ability to
control (either immediately or with the passage of time), the
Company's business directly, by merger or consolidation, or
indirectly, by purchase of the Company's Voting Securities or
otherwise.
(b) These Provisions shall inure to the benefit of and be
enforceable by Executive's personal legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amount
would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of these Provisions to
Executive's devisee, legatee or other designee or, if no such
designee exists, to his estate.
(c) For purposes of these Provisions, the "Company" shall
include any subsidiaries of the Company and any corporation or
other entity which is the surviving or continuing entity in
respect of any merger, consolidation or form of business
combination in which the Company ceases to exist; provided,
however, for purposes of determining whether a Change in Control
has occurred herein, the term "Company" shall refer to
International Murex Technologies Corporation or its successor(s).
6. Fees and Expenses: Mitigation.
-----------------------------
(a) The Company shall reimburse Executive, on a current
basis, for all reasonable legal fees and related expenses
incurred in connection with the Provisions of this Agreement
following a Change in Control of the Company, including without
limitation, (i) all such fees and expenses, if any, incurred in
contesting or disputing any termination of his employment or
incurred by him in seeking advice with respect to the matters set
forth in Section 7 hereof or (ii) his seeking to obtain or
enforce any right or benefit provided by these Provisions, in
each case, regardless of whether or not his claim is upheld by a
court of competent jurisdiction; provided, however, he shall be
required to repay any such amounts to the Company to the extent
that a court issues a final and non-appealable order setting
forth the determination that the position taken by him was
frivolous or advanced in bad faith.
(b) Executive shall not be required to mitigate the amount
of any payment the Company becomes obligated to make in
connection with these Provisions, by seeking other employment or
otherwise.
7. Taxes. All payments to be made to Executive under
-----
these Provisions will be subject to required withholding of
federal, state and local income and employment taxes.
8. Survival. The respective obligations of, and benefits
--------
afforded to, the Company and Executive as provided in Section 4,
5(b), 6 and 7 of these Provisions shall survive termination of
these Provisions.
9. Validity: Conflict with Employment Agreement. The
--------------------------------------------
invalidity or unenforceability of any provision of these
Provisions shall not affect the validity or enforceability of any
other provision of these Provisions, which shall remain in full
force and effect. In the event that any term or provision of
these Provisions shall conflict or be inconsistent with any term
or provision of the Employment Agreement by and between Executive
and the Company, the terms and conditions of these Provisions
shall govern.
