EXHIBIT 10.42
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIRD AMENDMENT to employment agreement by and between Advanced Technology
Laboratories, Inc., a Washington corporation (the "Company"), and Xxxxxx X. Fill
(the "Executive") effective as of the date of its approval by the Compensation
Committee of the Board of Directors of the Company.
WITNESSETH:
WHEREAS, the Executive has for the past ten years served the Company as its
Chairman of the Board and Chief Executive Officer; and
WHEREAS, the Executive has long intended that he would retire from these
positions at age sixty-five, the age he attained in July, 1994; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the benefit of the continued services of the
Executive through his retirement date so as to best enable the Company to
achieve its current business and financial objectives for the good of the
Company, its shareholders and employees;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Certain Definitions
a. A "Change of Control" shall mean a change of control of the Company as
defined in section 2 of the "EMPLOYMENT AGREEMENT" between the Company and the
Executive, dated November 2, 1990, as amended by the FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT, dated May 18, 1992 (together, the "Employment Agreement").
2. Employment Period
The Company hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the Company, in accordance
with the terms and provisions of this Third Amendment, for the period commencing
as of the effective date of this Third Amendment and ending on the date of
Executive's retirement (the "Employment Period") in the executive capacity of
Chairman of the Board (subject to election by the shareholders of the Company at
its annual general meetings) and Chief Executive
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Xxxxxx X. Fill Employment Agreement July, 1996
Officer of the Company, subject to the general supervision of the Board as
required by the Washington business corporation act. Removal of the Executive
from, or non-election of the Executive to the Board by the Company's
shareholders or the Board, as provided in the Company's by-laws and certificate
of incorporation, shall in no event be deemed a breach of this Third Amendment
by the Company, provided, however that if the Executive continues to be an
employee of the Company but ceases to be a member of the Board, the Company
shall thereafter invite the Executive to all meetings of the Board, provided the
Executive with written notice thereof as with each such meeting and provide the
Executive with access, upon request, to all information, records and documents
of the Company to which a director of the Company is legally entitled.
3. Terms of Employment
a. Position and Duties. During the Employment Period, the Executive's
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position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be in accordance with Section 2
above. During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Third Amendment for the Executive to (a) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (c) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Third Amendment. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the Executive
prior to the Employment Period, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) during the Employment
Period shall not thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
b. Compensation.
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(i) Base Salary. During the Employment Period, The Executive shall
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receive an annual base salary set by the Compensation Committee of the Board
(the "Compensation Committee") which, at the effective date of this Third
Amendment, is Five Hundred Seventy Five Thousand Dollars ($575,000) (the
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Xxxxxx X. Fill Employment Agreement July, 1996
"Base Salary") which shall be paid in equal installments in accordance with the
Company's regular payroll practices.
(ii) Bonuses. The Executive shall receive an annual bonus for each
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fiscal year during the Employment Period at the time bonuses to other officers
of the Company are paid or payable for such fiscal years as determined by the
Compensation Committee.
(iii) Employee Benefits. The Executive shall be entitled to
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participate in the incentive, savings, retirement, fringe benefit, vacation, and
welfare benefit plans of the Company, receive prompt reimbursement of expenses,
and an office and support staff, all as specified in Section 4(b)(iii) through
4(b)(viii) of the Employment Agreement which are incorporated herein as Section
3(b)(iii) of this Third Amendment.
In consideration of the continued provision of his services to the Company
during the Employment Period, the Executive shall also receive:
(iv) a grant of 50,000 shares of the Company's restricted common stock
which has previously been awarded with a grant date of July 4, 1994. This grant
will vest in its entirety on the earlier of (i) Executive's death, or (ii) the
day following Executive's retirement date, except that, if a Change of Control
shall occur during the term of this Third Amendment, then this grant will vest
on the date on which the Change of Control occurs; and
(v) a five year consulting agreement with the Company commencing on
the day following Executive's retirement date and at a rate of $375,000 per
annum, payable quarterly, and subject to maintenance by the Executive of his
availability to provide consulting services at reasonable times and places to
the Company and to his continued agreement not to compete with the Company by
serving an entity which is in the same business as the Company during such five
year period; and
(vi) during the term of this Third Amendment and for the remainder of
the Executive's life, life insurance coverage in the amount of $300,000, and
payable to a beneficiary or beneficiaries designated by the Executive or,
failing such designation, to the Executive's estate.
4. Termination of Employment
a. In the event of the death or disability of the Executive, this Third
Amendment shall terminate in accordance with the provisions of Section 5(a) of
the Employment Agreement, which is incorporated herein as Section 4a of this
Third Amendment. In addition thereto,
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Xxxxxx X. Fill Employment Agreement July, 1996
(i) if the termination is due to the Executive's death, the Executive
shall receive an immediate vesting as of the date of death of all of the Company
stock options and restricted stock previously awarded to Executive but unvested
as of such date.
(ii) If the termination is due to disability of the Executive, the
Executive shall receive:
(1) a vesting as of the Disability Effective Date of all of the
Company stock options and restricted stock previously awarded to Executive but
unvested as of such date; and
(2) the five year consulting agreement of Section 3(b)(v) shall
commence as of the Disability Effective Date and shall be subject to the ability
of the Executive to provide such consulting services; and
(3) the life insurance coverage of Section 3(b)(vi) shall be
provided by the Company.
b. The Company may terminate the Executive's employment during the
Employment Period only for Cause in accordance with the provisions of Section
5(b) of the Employment Agreement, which is incorporated herein as Section 4b of
this Third Amendment.
c. Section 5(d), Notice of Termination, and Section 5(e), Date of
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Termination, of the Employment Agreement are incorporated herein as Section 4c
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of this Third Amendment. Reference therein to Section 12(b) for the manner of
serving notice shall be taken to refer to Section 7 of this Third Amendment.
5. Successors
Section 11, Successors, of the Employment Agreement is incorporated herein
as Section 5 of this Third Amendment.
6. Miscellaneous
The following paragraphs of Section 12, Miscellaneous, of the Employment
agreement are incorporated herein as Section 6 of this Third Amendment: 12(a)
("choice of law"), 12(c) ("severability"), 12(d) ("tax withholding"), and 12(e)
("no waiver").
7. Notice
All notices and other communications permitted or required hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or
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Xxxxxx X. Fill Employment Agreement July, 1996
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx X. Fill
Xxxx 0X
0000 Xxxx Xxxxxxxxxx Xxxx. XX
Xxxxxxxx, XX 00000
If to the Company:
X. Xxxxxxx Yorks, Jr., Corporate Secretary
Advanced Technology Laboratories, Inc.
00000 Xxxxxxx Xxxxxxx Xxxxxxx XX
P.O. Box 3003
Bothell, WA 98041-3003
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
8. Exhibits
The Employment Agreement is attached hereto as an exhibit to this Third
Amendment.
9. Termination of Second Amendment
The Second Amendment to Employment Agreement between Executive and the
Company shall terminate upon the effectiveness of this Third Amendment to
Employment Agreement.
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Xxxxxx X. Fill Employment Agreement July, 1996
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxxx X. Fill
___________________________
Xxxxxx X. Fill
ADVANCED TECHNOLOGY
LABORATORIES, INC.
By: /s/ Xxxxx X. Xxxxxx
________________________
Xxxxx X. Xxxxxx
Chairman
Compensation Committee
Board of Directors of
Advanced Technology
Laboratories, Inc.
Dated: July 25, 1996
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