Exhibit 4
SEVERANCE COMPENSATION AGREEMENT
[TIER 4]
This Agreement ("Agreement") is dated as of_______________________
___, 1995, by and between Cordis Corporation, a Florida corporation having
offices at 00000 X.X. 00xx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx 00000 (the "Company"),
and__________________, whose residence address is ____________________________
__________(the "Executive").
WHEREAS, the Company's Board of Directors has authorized the
Company to enter into severance agreements with those executives of the
Company who are designated by the Compensation Committee of the Board of
Directors ("Committee"), such agreements to set forth the severance
compensation which the Company agrees under certain circumstances to pay
such executives; and
WHEREAS, the Executive is an executive of the Company and has
been designated by the Committee as an executive to be offered such a
severance compensation agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the Company and the Executive agree as follows:
1. Change in Control. No compensation or other benefit shall
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be payable under this Agreement unless and until (i) a Change in Control of
the Company (as hereinafter defined) shall have occurred while the
Executive is an employee of the Company and (ii) the Executive's employment
by the Company thereafter shall have terminated in accordance with Sections
2 and 3 hereof. For purposes of this Agreement, a "Change in Control"
shall be defined as:
(a) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then outstanding
securities (unless the event causing the 25% threshold to be crossed is an
acquisition of securities directly from the Company); or
(b) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale of more than 50% of the
Company's assets or combination of the foregoing transactions (the
"Transactions") other than a Transaction immediately following which the
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shareholders of the Company immediately prior to the Transaction and any
trustee or fiduciary of any Company employee benefit plan own, immediately
following the Transaction, at least 75% of the voting securities of the
surviving
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company (or its parent), in the event of a merger or other business
combination, or, in the event of a sale of assets, of the purchaser of such
assets; or
(c) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
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shall cease (for any reason other than death) to constitute at least a
majority of the Board or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has entered into an agreement to effect a Change
in Control).
2. Termination Following Change in Control.
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(a) If a Change in Control shall have occurred while the
Executive is an employee of the Company, the Executive shall be entitled to
the compensation provided for in Section 3 hereof upon the subsequent
termination of the Executive's employment with the Company within the
relevant periods herein provided, (i) by the Executive for Good Reason, as
hereinafter defined, or (ii) by the Company other than for Cause (as
hereinafter defined), or is as a result of (A) the Executive's Disability
(as hereinafter defined) or (B) the Executive's Retirement (as hereinafter
defined).
(b) Disability. For purposes of this Agreement, "Disability"
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shall mean the Executive's absence from the full-time performance of the
Executive's duties pursuant to a determination made in accordance with the
procedures established by the Company in connection with the Company's
disability benefits plan, which plan was in effect immediately prior to the
Change in Control, that the Executive is disabled as a result of incapacity
due to physical or mental illness.
(c) Retirement. For purposes of this Agreement, "Retirement"
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shall mean termination of the Executive's employment with the Company, on
or after the Executive's normal or early retirement date, under the
Company's retirement policy then generally applicable to its salaried
employees, or in accordance with any retirement plan or arrangement with
respect to the Executive in effect immediately prior to a Change in Control
or thereafter established by the Company with the Executive's consent.
(d) Cause. For purposes of this Agreement, "Cause" shall mean:
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(i) fraud, dishonesty or willful malfeasance by Executive in
connection with Executive's employment with the Company which results
in material harm to the Company;
(ii) Executive's continued failure to substantially perform the
duties and responsibilities of Executive's office after written notice
from the Company setting
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forth the particulars of such failure and a reasonable opportunity,
but not less than ten (10) business days, to cure;
(iii) Executive's willful and material breach of the provisions
of Section 10 or 11 of this Agreement; or
(iv) Executive's plea of guilty or nolo contendere to, or
nonappealable conviction of, a felony.
Termination of Executive for Cause shall be made by delivery to Executive
of written notice to the Executive setting specifying the basis for such
termination and the particulars thereof and determining that in the
reasonable judgment of the Company, the conduct or event set forth in any
of clauses (i) through (iv) above has occurred and that such occurrence
warrants Executive's termination.
(e) Good Reason. For purposes of this Agreement, "Good Reason"
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shall mean the occurrence, after a Change in Control, of any of the
following without the Executive's express written consent:
(i) Any material diminution in the Executive's position, duties
or responsibilities with the Company from those in effect immediately
prior to the Change in Control or which would constitute a material
adverse alteration in the Executive's duties, responsibilities or
other conditions of employment from those in effect immediately prior
to the Change in Control;
(ii) Any material adverse change in the Executive's compensation
structure in effect immediately prior to the Change in Control; and
(iii) Any relocation of the Executive's employment to a location
in excess of 50 miles from the location at which the Executive was
based immediately prior to the Change in Control;
(f) Dispute Resolution. Any disputes arising from the operation
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of this Agreement shall be resolved solely by arbitration in accordance
with the rules of the American Arbitration Association, such arbitration to
be held in the metropolitan area nearest to, and in the same country as,
Executive's place of residence. Executive and the Company agree to be fully
bound by the findings of such arbitration.
3. Compensation Upon Termination After a Change in Control.
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(a) If within one (1) year after a Change in Control, the
Executive's employment by the Company shall be terminated by the Company
for any reason other than (i) the Executive's Disability, (ii) the
Executive's Retirement, or (iii) for Cause, or if within one (1) year after
a Change in Control, the Executive terminates his employment for Good
Reason, the Company shall (subject only to any applicable payroll and other
taxes required to be withheld) pay or cause to be paid to the Executive, a
lump sum cash amount equal to one
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(1) times the sum of (i) Executive's base salary immediately prior to the
Change in Control and (ii) the highest bonus paid to the Executive under the
Company's executive incentive compensation plans during the three years
preceding the Change in Control. In addition, Executive shall be entitled
to (i) continued medical, dental and life insurance coverage for Executive
and executive's eligible dependents on the same basis as in effect prior to
Executive's termination of employment until the earlier of (A) twelve (12)
months after the Executive's termination or (B) the commencement of
comparable coverage with a subsequent employer; provided, however, that
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such continued coverage shall not count against any continued coverage
required by law and (ii) payment, in a cash lump sum, of all amounts
deferred by Executive under any non-qualified plan of deferred compensation
maintained by the Company (notwithstanding the payment provisions of any
such plans to the contrary) and any accrued but unused vacation time.
(b) Parachute Payment Limitation. If any payment or benefit to
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the Executive under this Agreement would be considered a "parachute
payment" within the meaning of Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code") and if, after reduction for any
applicable federal excise tax imposed by Code Section 4999 (the "Excise
Tax") and federal income tax imposed by the Code, the Executive's net
proceeds of the amounts payable and the benefits provided under this
Agreement would be less than the amount of the Executive's net proceeds
resulting from the payment of the Reduced Amount described below, after
reduction for federal income taxes, then the amount payable and the
benefits provided under this Agreement shall be limited to the Reduced
Amount. The "Reduced Amount" shall be the largest amount that could be
received by the Executive under this Agreement such that no amount paid to
the Executive under this Agreement and any other agreement, contract, or
understanding heretofore or hereafter entered into between the Executive
and the Company (the "Other Agreements") and any formal or informal plan or
other arrangement heretofore or hereafter adopted by the Company for the
direct or indirect provision of compensation to the Executive (including
groups or classes of participants or beneficiaries of which the Executive
is a member), whether or not such compensation is deferred, is in cash, or
is in the form if a benefit to or for the Executive (a "Benefit Plan")
would be subject to the Excise Tax. In the event that the amount payable
to the Executive shall be limited to the Reduced Amount, then the Executive
shall have the right, in the Executive's sole discretion, to designate
those payments or benefits under this Agreement, any Other Agreements,
and/or any Benefit Plans, that should be reduced or eliminated so as to
avoid having the payment to the Executive under this Agreement be subject
to the Excise Tax.
4. Obligations Absolute; No Effect On Other Rights.
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(a) The obligations of the Company to make the payment to the
Executive, and to make the arrangements, provided for herein shall be
absolute and unconditional and shall not be reduced by any circumstances,
including without limitation any setoff, counterclaim, recoupment, defense
or other right which the Company may have against the Executive or any
third party at any time.
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(b) The provision of this Agreement, and any payment provided
for herein, shall not supersede or in any way limit the rights, benefits,
duties or obligations which the Executive may now or in the future have
under any benefit, incentive or other plan or arrangement of the Company or
any other agreement with the Company.
5. Not an Employment Agreement. This Agreement is not, and
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nothing herein shall be deemed to create, a contract of employment between
the Executive and the Company. The Company may terminate the employment of
the Executive by the Company at any time, subject to the terms of any
employment agreement or arrangement between the Company and the Executive
that may then be in effect.
6. Term of Agreement. This Agreement shall commence on the
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date hereof and shall continue in effect until the expiration of the one-
year period following a Change in Control; provided, however, that this
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Agreement shall terminate, in all events, terminate no later than three
years after the date hereof. Any renewal of this Agreement shall be by
means of a new Agreement, in writing, executed with the same formality as
this Agreement and, on behalf of the Company, by an officer duly authorized
by the Board of Directors to so enter into such a renewal of the Agreement.
7. Successors; Binding Agreement, Assignment.
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(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to
expressly, absolutely and unconditionally assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure
of the Company to obtain such agreement prior to the effectiveness of any
such succession shall be a material breach of this Agreement and shall
entitle the Executive to terminate the Executive's employment with the
Company or such successor for Good Reason immediately prior to or at any
time after such succession. As used in this Agreement, "Company shall mean
(i) the Company as hereinbefore defined, and (ii) any successor to all or
substantially all of the Company's business or assets which executes and
delivers an agreement provided for in this Section 7(a) or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law, including any parent or subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would be payable to
the Executive hereunder if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there be no such designee, to the Executive's estate.
Neither this Agreement nor any right arising hereunder may be assigned or
pledged by the Executive.
8. Notice. For purpose of this Agreement, notices and all
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other communications provided for in this Agreement shall be in writing and
shall be deemed to
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have been duly given when personally delivered or when mailed United States
certified or registered mail, return receipt requested, postage prepaid,
address to (i) the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to
the attention of the Committee with a copy directed to the Secretary of the
Company, or (ii) such other address for a party as such party may have
furnished to the other in writing in accordance with this Section 8, except
that notices of change of address shall be effective only upon receipt.
[9. Expenses. In addition to all other amounts payable to the
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Executive under this Agreement, the Company shall pay or reimburse the
Executive for all costs and expenses (including without limitation, any and
all court costs and attorneys' fees and expenses) incurred by the Executive
in connection with or as a result of any claim, action or proceeding
brought by the Company or the Executive with respect to or arising out of
this Agreement or any provision hereof; unless, in the case of an action
brought by the Executive, it is determined by an arbitrator or by a court
of competent jurisdiction that such action was frivolous and was not
brought in good faith.]
10. Confidentiality. The Executive shall retain in confidence
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any and all confidential information concerning the Company and its
respective business which is now known or hereafter becomes known to the
Executive, except information (i) ascertainable or obtained from public
information, (ii) received by the Executive at any time after the
Executive's employment by the Company shall have terminated, from a third
party not employed by or otherwise affiliated with the Company or (iii)
which is or becomes known to the public by any means other than a breach of
this Section 10. Upon termination of employment, the Executive will not
take or keep any proprietary information or documentation belonging to the
Company.
11. Non-Competition. The Executive covenants and agrees that,
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during the Executive's employment, the Executive will not directly or
indirectly own, operate, manage, consult with, control, participate in the
management or control of, be employed by, maintain or continue any interest
whatsoever in any enterprise that designs, manufactures, distributes,
markets or promotes medical devices or their components in competition with
the Company, in any technical area of expertise in which the Executive is
involved, without the written consent of an officer of the Company. The
Executive further agrees that after termination of employment, the Executive
will not, either directly or indirectly or in concert with others, seek to
influence any employee to leave the Company's employment. The Executive
further acknowledges that a lawsuit for damages for any of the provisions of
paragraph 11 of this Agreement will be inadequate and agrees that the
Company is entitled to injunctive relief in case of any such breach. If
any part of this Agreement is held to be invalid or unenforceable, such
holding will not affect any other part of the Agreement. If, moreover, any
part of this Agreement is for any reason held to be excessively broad as to
time, duration, geographical scope, activity or subject, it will be
construed by limiting or reducing it, so as to be enforceable to the extent
compatible with the applicable law as it then exists.
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12. Miscellaneous. No provision of this Agreement may be
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modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Executive and such officer
of the Company as shall be specifically designated by the Committee or by
the Board of Directors of the Company. No waiver by either party, at any
time, of any breach by the other party of, or of compliance by the other
party with, any condition or provision of this Agreement to be performed or
complied with by such other party shall be deemed a waiver of any similar
or dissimilar provision or condition of this Agreement or any other breach
of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Florida
without giving effect to its conflict of laws rules.
13. Severability. If any one or more of the provisions of this
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Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby. To the extent permitted by
applicable law, each party hereto waives any provision of law which renders
any provision of this Agreement invalid, illegal or unenforceable in any
respect.
14. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida.
15. Amendment/Waiver. This Agreement shall not be amended,
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altered, or modified except by an instrument in writing duly executed by
the parties hereto. Neither the waiver by either of the parties hereto of
a breach of or a default under any of the provisions of this Agreement, nor
the failure of either of the parties, on one or more occasions, to enforce
any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any
such provisions, rights or privileges hereunder.
16. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
17. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior oral or written agreements, commitments or
understanding with respect to the matters provided for herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORDIS CORPORATION
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Witnesses:
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Name:
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Title:
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Executive
