EMPLOYMENT AGREEMENT
AGREEMENT by and between Packard BioScience Company (f/k/a Canberra
Industries, Inc.), a Delaware corporation with its principal office and place of
business in Meriden, Connecticut (the "Company"), and Xxxxx X. Xxxxxx (the
"Executive"), dated as of the 4th day of March, 1997.
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 employ the Executive as Chairman of the Board of Directors, President and
Chief Executive Officer of the Company, and the Executive desires to serve in
those capacities;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and
the Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, for the period commencing on the date hereof and ending on the
third anniversary of the date hereof (the "Employment Period"); provided,
however, that commencing on the date two years after the date hereof (the
"Initial Renewal Date"), and on the first day of each calendar month following
the calendar month in which falls the Initial Renewal Date (each such date and
the Initial Renewal Date shall be hereinafter referred to as
the "Renewal Date"), unless previously terminated, the Employment Period shall
be automatically extended so as to terminate thirteen calendar months from such
Renewal Date, unless at least 60 days prior to the Renewal Date, the Company
shall give notice to the Executive that the Employment Period shall not be so
extended.
2. Position and Duties. (a) During the Employment Period, the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned as of the date hereof. During the Employment Period, the
Executive will serve as a director of the Company.
(b) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
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 under this Agreement, use the
Executive's reasonable best efforts to carry out such responsibilities
faithfully and efficiently. It shall not be considered a violation of the
foregoing for the Executive to (A) serve on corporate, civic
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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 Agreement.
(c) The Executive's services shall be performed primarily at
the Company's headquarters in Meriden, Connecticut.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") at least
equal to twelve times the monthly base salary paid or payable to the Executive
immediately prior to the date hereof. During the Employment Period, the Annual
Base Salary shall be reviewed for increase at least annually and shall be
increased pursuant to each such review by a percentage no less than the
percentage increase in the United States Consumer Price Index -- All Urban
Consumers, as published by the Bureau of Labor Statistics of the U.S. Department
of Labor, for the calendar year immediately preceding such review. Any increase
in the Annual Base Salary shall not limit or reduce any other obligation of the
Company under this Agreement. The Annual Base Salary shall not be reduced after
any such increase, and the term
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"Annual Base Salary" shall thereafter refer to the Annual Base Salary as so
increased.
(b) Annual Bonus. In addition to the Annual Base Salary, the
Executive shall be eligible to be awarded, for each fiscal year or portion of a
fiscal year ending during the Employment Period, an annual bonus (the "Annual
Bonus"), in accordance with the Company's annual incentive plans then in effect.
Each Annual Bonus shall be paid in a single cash lump sum no later than 90 days
after the end of the fiscal year or portion thereof for which the Annual Bonus
is awarded, unless the Executive elects in writing, before the beginning of the
fiscal year for which the Annual Bonus is to be awarded, to defer receipt of the
Annual Bonus.
(c) Other Benefits. During the Employment Period: (i) the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs of the Company and its
affiliated companies in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in effect for
the Executive as of the date hereof or, if more favorable to the Executive, to
the same extent as peer executives; and (ii) the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in,
and shall receive all benefits under, all
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welfare benefit plans, practices, policies and programs provided by the Company
and its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life insurance,
group life insurance, accidental death and travel accident insurance plans and
programs, and key employee insurance) in accordance with the most favorable
plans, practices, programs and policies of the Company and its affiliated
companies in effect for the Executive as of the date hereof or, if more
favorable to the Executive, to the same extent as peer executives. For purposes
of this Agreement, the term "affiliated companies" means all companies
controlled by, controlling or under common control with the Company.
(d) Retirement. Executive's Retirement age, for purposes of
the definition of "Retirement" contained in the Stockholders' Agreement, dated
as of March 4, 1997 (the "Stockholders Agreement"), by and among the Company,
certain management investors, certain other stockholders, Xxxxxxx Xxxxx KECALP
L.P. 1994, KECALP Inc. and Stonington Capital Appreciation 1994 Fund, L.P., a
Delaware limited partnership, shall be 64, provided that Executive's Retirement
age shall be 62 if and only if the Board determines, in its good faith judgment,
that (i) the Executive has provided for "successful succession planning" for the
senior management of the Company or (ii) bona fide personal hardship
circumstances exist.
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(e) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in carrying out the Executive's duties under this
Agreement, provided that the Executive complies with the policies, practices and
procedures of the Company for submission of expense reports, receipts, or
similar documentation of such expenses.
(f) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive as of the date hereof or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
(g) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other
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assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its affiliated companies as of the date hereof
or, if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(h) Vacation. During the Employment Period, the Executive
shall be entitled to six weeks of paid vacation annually in accordance with the
most favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive as of the date hereof or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
(i) Put Rights. Notwithstanding anything to the contrary
contained in the Stockholders Agreement, if, during the Employment Period, the
Company terminates the Executive's employment other than for Cause or the
Executive terminates employment for Good Reason, the Executive shall be entitled
to exercise his Put Right (as defined in the Stockholders Agreement) on the
terms and conditions set forth in the Stockholders Agreement.
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4. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. The Company shall be entitled to terminate the
Executive's employment because of the Executive's Disability during the
Employment Period. "Disability" means that the Executive has been unable, for a
period of 180 consecutive business days, to perform the Executive's duties under
this Agreement, as a result of physical or mental illness or injury. A
termination of the Executive's employment by the Company for Disability shall be
communicated to the Executive by written notice, and shall be effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(b) By the Company. (i) The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. "Cause"
means:
A. the Executive's willful and material breach of any of
his obligations under this Agreement that causes material loss or
detriment to the Company, if the Executive shall not have made a
good faith effort to cure the acts or behavior constituting any such
breach within thirty (30) days after receipt from the Company of
written notice (signed by at least a majority of the Directors) of
the alleged breach specifying in detail (i) the acts or behavior
alleged to constitute the breach and (ii) the proposed cure
therefor; or
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B. the commission by the Executive of a felony or the
perpetration by the Executive of a common law fraud upon the
Company.
(c) Good Reason. (i) The Executive may terminate employment for Good
Reason or without Good Reason. "Good Reason" means:
A. the assignment to the Executive of duties significantly
inconsistent with paragraph (a) of Section 2 of this Agreement, or
any other action by the Company that results in a significant
diminution in the Executive's position, authority, duties or
responsibilities, other than an isolated and inadvertent action that
is not taken in bad faith and is remedied by the Company promptly
after receipt of written notice thereof from the Executive;
B. any material failure by the Company to comply with any
provision of Section 3 of this Agreement, other than an isolated and
inadvertent failure that is not taken in bad faith and is remedied
by the Company promptly after receipt of written notice thereof from
the Executive;
C. any requirement by the Company that the Executive's
services be rendered primarily at a location or locations at a
distance of more than 50 miles from the location provided for in
paragraph (c) of Section 2 of this Agreement without the
Executive's consent;
D. any purported termination of the Executive's employment by
the Company for a reason or in a manner not permitted by this
Agreement;
E. any failure by the Company to comply with paragraph (c) of
Section 11 of this Agreement; or
F. the giving of notice by the Company to the Executive
pursuant to Section 1 of this Agreement that the Employment Period
shall not be automatically extended as described in Section 1.
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(ii) A termination of employment by the Executive for Good Reason
shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective on
the fifth business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given). In the event
of a termination of employment by the Executive for Good Reason pursuant to
clause (F) of Section 4(c)(i) of this Agreement, the Notice of Termination for
Good Reason must be given within 90 days of the event constituting Good Reason.
(iii) A termination of the Executive's employment by the Executive
without Good Reason shall be effected by giving the Company written notice of
the termination. If such a notice is given at any time on or after the date that
is 60 days prior to the third anniversary of the date hereof, then the
Noncompetition Period (as defined in Section 8(c) below) shall be deemed to be
the period beginning on the Date of Termination and ending on the first
anniversary thereof, notwithstanding the definition set forth in Section 8(c).
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(d) No Waiver. The failure to set forth any fact or circumstance in
a Notice of Termination for Cause or a Notice of Termination for Good Reason
shall not constitute a waiver of the right to assert, and shall not preclude the
party giving notice from asserting, such fact or circumstance in an attempt to
enforce any right under or provision of this Agreement.
(e) Date of Termination. The "Date of Termination" means the date
of the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or by the
Executive for Good Reason is effective, or the date that is 60 days after the
date on which the Executive gives the Company notice of a termination of
employment without Good Reason, as the case may be.
5. Obligations of the Company upon Termination. (a) Other Than for
Cause, Death or Disability; Good Reason. If, during the Employment Period, the
Company terminates the Executive's employment, other than for Cause, Death or
Disability, or the Executive terminates employment for Good Reason, the Company
shall pay the amounts described in subparagraph (i) below to the Executive in a
lump sum in cash within 30 days after the Date of Termination and shall continue
the benefits described in subparagraph (ii) below until at least the third
anniversary of the Date of
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Termination. The payments provided pursuant to this paragraph (a) of Section 5
are intended as liquidated damages for a termination of the Executive's
employment by the Company other than for Cause, Death or Disability or for the
actions of the Company leading to a termination of the Executive's employment by
the Executive for Good Reason, and shall be the sole and exclusive remedy
therefor, but shall in no way affect the Executive's rights under the agreements
set forth on Schedule A, attached hereto.
(i) The amounts to be paid in a lump sum as described above are:
A. The Executive's accrued but unpaid cash compensation (the
"Accrued Obligations"), which shall equal the sum of (1) any portion
of the Executive's Annual Base Salary through the Date of
Termination that has not yet been paid, (2) an amount (the "Accrued
Bonus Amount") equal to the product of (x) the target Annual Bonus
for the year of termination (the "Annual Bonus Amount") and (y) a
fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the
denominator of which is 365; (3) any compensation previously
deferred by the Executive (together with any accrued interest or
earnings thereon) that has not yet been paid; and (4) any accrued
but unpaid Annual Bonuses and vacation pay;
X. Xxxxxxxxx pay equal to the product of (x) the sum of (1)
the Annual Base Salary and (2) the Annual Bonus Amount and (y) a
fraction, the numerator of which is the number of days remaining
from the Date of Termination until the end of the Employment Period,
and the denominator of which is 365;
C. An amount equal to the aggregate amounts that Company would
have contributed on behalf of Executive under the Thrift Savings
Plan of Company,
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if said plan shall be in effect, for three years after the Date of
Termination (plus estimated earnings thereon) as if Executive
continued in the employ of Company for such period and made
contributions under said plan at a rate, as a percentage of salary,
equal to the average rate at which Executive had made contributions
to said plan in the three (3) fiscal years of Company preceding the
Date of Termination;
D. To the extent that any form of compensation previously
granted to Executive, such as, by way of example only, restricted
stock, stock options or performance share awards, shall not be
fully vested or shall require additional service as an employee at
the time of the termination of Executive's employment, Executive
shall be credited with additional service through the period ending
three years after the Date of Termination;
E. For three years after the Date of Termination (but not
beyond the time when Executive becomes eligible for comparable
insurance coverage offered on comparable terms by any subsequent
employer), Executive shall also continue to participate in all life,
health, disability and similar insurance plans and programs of
Company to the extent that such continued participation is possible
under the general terms and provisions of such plans and programs,
with Company and Executive paying the same portion of the cost of
each such plan or program as existed at the time of Executive's
termination. In the event that Executive's continued participation
in any group plans and programs is not permitted, then in lieu
thereof, Company shall acquire, with the same cost sharing,
individual insurance policies providing comparable coverage for
Executive; provided that Company shall not be obligated to pay for
any such individual coverage more than three (3) times Company's
cost of such group coverage; and provided further, if any such
individual coverage is unavailable, then Company shall pay to
Executive annually for three years following the Date of Termination
an amount equal to the sum of the average annual contributions,
payments, credits, or allocations made by Company for such insurance
on Executive's behalf over the three (3) fiscal years of Company
preceding the Date of Termination, which amount shall be pro rated
for any fraction of a year; and
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F. Executive shall continue to receive for three years
following the Date of Termination such perquisites as he was
receiving at the time of the termination of his employment.
(ii) The benefits to be continued as described above are benefits to
the Executive and/or the Executive's family at least as favorable as those that
would have been provided to them under clause (ii) of paragraph (c) of Section 3
of this Agreement if the Executive's employment had continued until the third
anniversary of the Date of Termination; provided, however, that during any
period when the Executive is eligible to receive such benefits under another
employer-provided plan, the benefits provided by the Company under this
subparagraph may be made secondary to those provided under such other plan. For
purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits under this subparagraph, the
Executive shall be deemed to have continued employment with the Company until
the third anniversary of the Date of Termination.
(b) Death or Disability. If the employment of Executive shall
terminate during the Employment Period by reason of the permanent disability or
death of Executive, all payments that would have been due to Executive under
this Agreement had he remained in the employ of Company until the end of the
Employment Period shall continue to be made to him
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(or his legal representative). If Executive shall die following a termination of
his employment other than pursuant to subsection (c), below, of this Section 5,
or following a termination during the Employment Period by reason of Disability,
all payments that otherwise would have been due to Executive under this
Agreement had he not so died shall be made instead to such beneficiary as
Executive shall have designated in writing. To the extent that neither Executive
nor his designee shall live until all such payments have been made, after the
death of the second of them to die, said payments shall be made to the estate of
such person. If Executive shall die without a beneficiary designation in effect,
said payments shall be made to Executive's estate.
(c) Cause; Other than for Good Reason. If the Executive's employment
is terminated by the Company for Cause during the Employment Period, the Company
shall pay the Executive the Annual Base Salary through the Date of Termination
and the amount of any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), in each case to the
extent not yet paid, and the Company shall have no further obligations under
this Agreement. If the Executive voluntarily terminates employment during the
Employment Period, other than for Good Reason, the Company shall pay the Accrued
Obligations other than the Accrued Bonus Amount to the Executive in a lump sum
in
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cash within 30 days of the Date of Termination, and the Company shall have no
further obligations under this Agreement.
6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies for which the Executive may qualify, nor, subject to paragraph (f) of
Section 12, shall anything in this Agreement limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or any of its affiliated companies. Vested benefits and other amounts
that the Executive is otherwise entitled to receive under any plan, policy,
practice or program of, or any contract or agreement with, the Company or any of
its affiliated companies on or after the Date of Termination shall be payable in
accordance with such plan, policy, practice, program, contract or agreement, as
the case may be, except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the
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Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, but if the
Executive secures other employment, any fringe benefits (such as medical
insurance) the Company is required to provide to the Executive following
termination of the Executive's employment shall be secondary to those provided
by another employer (if any).
8. Confidential Information; Noncompetition. (a) Executive
understands that in the course of his employment by Company, Executive will
receive confidential information concerning the business or purposes of Company,
and which Company desires to protect. Executive agrees that he will not at any
time during or after the Employment Period reveal to anyone outside Company or
use for his own benefit any such information that has been designated as
confidential by Company or reasonably should be understood by Executive to be
confidential without specific written authorization by Company. Executive
further agrees not to use any such confidential information or trade secrets in
competing with Company at any time during or after his employment by Company.
(b) The Executive agrees that the Executive will not, at any time
during the Noncompetition Period, without
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the prior written consent of the Company, directly or indirectly employ, or
solicit the employment of (whether as an employee, officer, director, agent,
consultant or independent contractor), any person who was or is at any time
during the previous twelve (12) months an employee, representative, officer or
director of the Company or any of its affiliated companies (except for such
employment by the Company or any of its affiliated companies.
(c) During the Noncompetition Period, the Executive shall not,
without the prior written consent of the Board, engage in or become associated
with a Competitive Activity. For purposes of this paragraph (c) of Section 8:
(i) the "Noncompetition Period" means (except as otherwise set forth in Section
4(c)(iii)) (A) the period during which the Executive is employed by the Company,
plus (B) if the Executive's employment is terminated other than by reason of
death or Disability, the period ending on the first anniversary of the later of
(x) the date that would have been the last day of the Employment Period if (I)
the Executive's employment had not been previously terminated and (II) the
Company had given notice to the Executive that the Employment Period would not
be extended at least 60 days prior to the last Renewal Date preceding the Date
of Termination and (y) the date on which the Executive's employment with the
Company and its affiliated companies terminates; (ii) a "Competitive
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Activity" means any competitor identified by the Company from time to time prior
to the termination of Executive's employment or any other person or entity that
manufactures or sells products that compete with products manufactured or sold
by the Company or any of its affiliates in such jurisdiction at any time or from
time to time during the Noncompetition Period; (iii) the Executive shall be
considered to have become "associated with a Competitive Activity" if the
Executive becomes directly or indirectly involved as an owner, principal,
employee, officer, director, independent contractor, representative,
stockholder, financial backer, agent, partner, advisor, lender, or in any other
individual or representative capacity with any individual, partnership,
corporation or other organization that is engaged in a Competitive Activity.
Notwithstanding the foregoing, the Executive may make and retain investments
during the Noncompetition Period in less than one percent of the equity of any
entity engaged in a Competitive Activity, if such equity is listed on a national
securities exchange or regularly traded in an over-the-counter market.
(d) In consideration for the Executive's agreement to be bound by
the noncompetition covenant of Section 8(c), the Company shall pay to the
Executive an aggregate amount equal to the sum of (1) the Annual Base Salary and
(2) the Annual Bonus Amount (the "Noncompetition Consideration") in
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cash, in equal monthly installments (the "Installments") during the portion of
the Noncompetition Period, if any, following the date on which the Executive's
employment with the Company and its affiliated companies terminates; provided,
that if the Executive breaches the noncompetition covenant of Section 8(c), then
the Company shall have no further obligation to pay any unpaid Installment, and
the Executive shall be required to return to the Company all Installments that
had previously been paid, together with interest thereon at the applicable
federal rate as defined in Section 1274(d) of the Internal Revenue Code of 1986,
as amended, from the date the Installment was paid to the Executive through the
date the Executive repays it to the Company. No Noncompetition Consideration
shall be payable to the Executive if the Executive's employment terminates by
reason of death or Disability. The Noncompetition Consideration shall be in
addition to, and not in lieu of, any amounts otherwise payable to Executive
under this Agreement.
(e) All plans, discoveries and improvements, whether patentable or
unpatentable, made or devised by the Executive, whether alone or jointly with
others, from the date of the Executive's initial employment by the Company and
continuing until the end of the Employment Period and any subsequent period when
the Executive is employed by the Company or its affiliated companies, relating
or pertaining in
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any way to the Executive's employment with or the business of the Company or any
of its affiliated companies, shall be promptly disclosed in writing to the Board
of Directors of the Company and are hereby transferred to and shall redound to
the benefit of the Company, and shall become and remain its sole and exclusive
property. The Executive agrees to execute any assignments to the Company or its
nominee, of the Executive's entire right, title and interest in and to any such
discoveries and improvements and to execute any other instruments and documents
requisite or desirable in applying for and obtaining patents or copyrights, at
the expense of the Company, with respect thereto in the United States and in all
foreign countries, that may be required by the Company. The Executive further
agrees, during and after the Employment Period, to cooperate to the extent and
in the manner required by the Company, in the prosecution or defense of any
patent or copyright claims or any litigation, or other proceeding involving any
trade secrets, processes, discoveries or improvements covered by this Agreement,
but all necessary expenses thereof shall be paid by the Company.
(f) The Executive acknowledges and agrees that: (i) the purpose of
the foregoing covenants, including without limitation the noncompetition
covenant of Section 8(c), is to protect the goodwill, trade secrets and other
Confidential Information of the Company; (ii) because of the nature of the
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business in which Company and its affiliated companies are engaged and because
of the nature of the confidential information to which the Executive has access,
it would be impractical and excessively difficult to determine the actual
damages of Company and its affiliates in the event the Executive breached any of
the covenants of this Section 8; and (iii) remedies at law (such as monetary
damages) for any breach of the Executive's obligations under this Section 8
would be inadequate. The Executive therefore agrees and consents that if the
Executive commits any breach of a covenant under this Section 8 or threatens to
commit any such breach, the Company shall have the right (in addition to, and
not in lieu of, any other right or remedy that may be available to it) to
temporary and permanent injunctive relief from a court of competent
jurisdiction, without posting any bond or other security and without the
necessity of proof of actual damage. With respect to any provision of this
Agreement finally determined by a court of competent jurisdiction to be
unenforceable, the Executive and the Company hereby agree that such court shall
have jurisdiction to reform this Agreement or any provision hereof so that it is
enforceable to the maximum extent permitted by law, and the parties agree to
abide by such court's determination. If any of the covenants of this Agreement
are determined to be wholly or partially unenforceable in any jurisdiction, such
determination shall
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not be a bar to or in any way diminish the Company's right to enforce any such
covenant in any other jurisdiction.
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing
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provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Executive, after taking into
account the Payments and the Gross-Up Payment, would not receive a net after-tax
benefit of at least $30,000 (taking into account both income taxes and any
Excise Tax) as compared to the net after-tax proceeds to the Executive resulting
from an elimination of the Gross-Up Payment and a reduction of the Payments, in
the aggregate, to an amount (the "Reduced Amount") such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall
be made to the Executive and the Payments, in the aggregate, shall be reduced to
the Reduced Amount.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Xxxxxx
Xxxxxxxx LLP or such other certified public accounting firm as may be designated
by the Executive (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. All fees and expenses of
the Accounting Firm shall
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be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive
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shall not pay such claim prior to the expiration of the 30-day period following
the date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a
-26-
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 9(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
xxx for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the
-27-
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
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10. Arbitration. (a) Claims Subject to Arbitration. Company and
Executive mutually consent to the resolution by arbitration in Hartford,
Connecticut of all claims or controversies ("Claims"), whether or not arising
out of Executive's employment (or its termination), that Company may have
against Executive or that Executive may have against the Company or against its
officers, directors, shareholders, employees or agents in their capacity as
such. Any such arbitration shall be conducted in accordance with the employment
dispute resolution rules and procedures of the American Arbitration Association.
The claims covered by this Agreement include, but are not limited to, claims for
wages or other compensation due; claims for breach of any contract or covenant
(express or implied); tort claims; claims for discrimination (including, but not
limited to, race, sex, religion, national origin, age, marital status, or
medical condition, handicap or disability); claims for benefits (except where an
employee benefit or pension plan specifies that its claims procedure shall
culminate in an arbitration procedure different from this one), and claims for
violation of any federal, state, or other governmental law, statute, regulation,
or ordinance, except claims excluded in the following Subparagraph.
(b) Claims Not Subject to Arbitration. Claims Executive may have for
workers' compensation or unemployment
-29-
compensation benefits are not covered under this Section 10. Also not covered
are claims by the Company for injunctive and/or other equitable relief for
breach of the Executive's covenant not to compete, for unfair competition or for
the use or unauthorized disclosure of trade secrets or confidential information,
as to which Executive understands and agrees that the Company may seek and
obtain relief from a court of competent jurisdiction, without any obligation on
the part of the Company to submit any related issue to arbitration before
seeking such relief.
11. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the
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same extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Connecticut, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
Subject to the provisions of Section 10 of this Agreement, the
courts of record of the State of Connecticut or the Courts of the United States
located in the State of Connecticut shall have exclusive jurisdiction over any
suit, action or other proceeding arising out of this Agreement and, in the event
that it is brought, any such suit, action or other proceeding arising out of
this Agreement shall be filed in the Hartford Superior Court of the State of
Connecticut or the United States District Court in Hartford, Connecticut.
-31-
The parties hereto hereby irrevocably consent to the jurisdiction of each such
court in any such suit, action or proceeding.
(b) All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxx X. Xxxxxx
0 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
If to the Company:
Packard BioScience Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision,
-32-
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 4 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof, including, without limitation, the Employment Agreement by and between
the Company and the Executive dated as of August 1, 1996, except that the
agreements set forth on Schedule A, attached hereto, shall not be superseded.
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(g) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
PACKARD BIOSCIENCE COMPANY
By: /s/ Xxxxxxx X. XxXxxxxx
------------------------------
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