Exhibit 10.1
CLOSURE MEDICAL CORPORATION
AMENDMENT TO EXECUTIVE AGREEMENTS
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THIS AGREEMENT (the "Agreement"), dated as of May 17, 2002 (the
"Amendment Date") is entered into by CLOSURE MEDICAL CORPORATION (the "Company")
and XXXXXX X. XXXX, an employee of the Company (the "Employee").
RECITALS
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A. The Company and the Employee are party to an employment agreement
dated May 31, 1996 (the "Employment Agreement") pursuant to which the Employee
has served as President and Chief Executive Officer of the Company. Pursuant to
an agreement dated March 27, 2002, the notification date under Section 1.1 of
the Employment Agreement that would have occurred on March 30, 2002 was extended
to April 30, 2002.
B. Option grants have been made to the Employee under the CLOSURE
Medical Corporation 1996 Equity Compensation Plan (the "Plan") and are
memorialized in a distinct option grant agreement with respect to each grant of
options made to the Employee (each, an "Option Agreement").
C. The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to modify the terms and
conditions of the Employment Agreement and to recognize the Employee's service
to the Company and anticipated ongoing assistance to the Company following the
Employee's separation from service of the Company, by amending each referenced
Option Agreement, on the terms and conditions set forth below.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Section 1.1 of the Employment Agreement is hereby amended to
read in its entirety as follows:
1.1 Employment Term. This Agreement shall continue in full
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force and effect until validly terminated by either party. The
employment term ("Employment Term") shall consist of the period ending
on the date as of which this Agreement is validly terminated. The
Company may terminate this Agreement without cause at any time pursuant
to Section 7.4 of this Agreement, provided that Employee receives at
least fifteen (15) days prior written notice.
2. Section 7 of the Employment Agreement is hereby amended to add
the following new Section 7.4 and all succeeding sections of Section 7 are
hereby renumbered accordingly:
7.4 NOT FOR CAUSE. The Company may terminate Employee's
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employment with the Company at any time provided that Employee receives
at least fifteen (15) days written notice of such termination. As of
such 15th day (the "Executive Termination Date"), Employee shall resign
all positions assigned to him pursuant to Section 1.2.1 of this
Agreement (or otherwise) and, if Employee serves as a member of the
Board, shall resign such position if so requested by the Board. In the
event that Employee's employment is terminated pursuant to this Section
7.4, Employee shall be entitled to the following payments and benefits
in lieu of any other payments or benefits under this Agreement: (a)
provided that Employee completes each component of the Transition
Services Requirement (as defined below) in full, Employee shall be
entitled to thirty-six monthly payments of $16,666.67 commencing with
the month in which the Final Termination Date (as defined below) falls,
provided that Employee does not materially breach any of his
obligations under this Agreement, the Employment Agreement, the
Non-Competition Agreement (as defined below) or as otherwise imposed,
in which case the Employee shall forfeit all right to receive any
further payments under this subsection (a); (b) Employee shall be
provided continued coverage under the Company's medical benefit plan(s)
until the later of (i) the Final Termination Date if the Employee does
not become entitled to the payments described in (a) above or (ii) the
last day of the month in which the last payment referred to in (a)
above is made, as such plan(s) may be amended from time to time, with
medical coverage at the same level in effect on the Executive
Termination Date, at no cost to Employee; (c) payment of his Base
Salary through the Final Termination Date and pro rata incentive
compensation under Section 1.6 determined on the basis of his actual
period of service during the relevant performance year, which period
shall be deemed to end on the Final Termination Date; and (d) to the
extent that the Company requests Employee to provide consulting or
other services after the Executive Termination Date, the Company shall
reimburse Employee's reasonable expenses incurred in connection with
such services. The "Transition Services Requirement" shall consist of
(w) consulting with the Board and a successor Chief Executive Officer,
(x) making appropriate introductions of such successor Chief Executive
Officer to clients and other interested parties as requested by the
Board, (y) entering into a non-competition agreement (the
"Non-Competition Agreement") pursuant to which Employee will agree not
to engage, for a period of three years, in any activities, directly or
indirectly, that compete in any way with the Company in any activities
that the Company has engaged in during the Employee's time with the
Company, and (z) performing such other transition services as the Board
or a successor Chief Executive Officer may reasonably request. The
Employee's performance of the Transition Services Requirement shall
commence on the Executive Termination Date and shall terminate on the
date on which Employee has performed each component of the Transition
Services Requirement in full (the "Fulfillment Date"). The "Final
Termination Date" shall mean the first to occur of (i) the Fulfillment
Date and (ii) the date on which the Employee informs the Company that
he will not be completing the Transition Services Requirement.
3. The Option Agreements between the Company and the Employee dated
January 1, 1999 (two agreements), September 11, 2000, January 2, 2002 (as
described in the Attachment to this Agreement) are hereby amended as follows.
Notwithstanding any contrary provision in the Plan or in the relevant Option
Agreement, as of the date hereof, (a) the term of the option subject to the
relevant Option Agreement (the "Affected Option") shall be the full ten years
originally provided in each such Option Agreement (calculated from each Option's
Date of Grant (as
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defined in the Option Agreement) and not from the Amendment Date); and (b) each
Affected Option shall become fully vested and exercisable.
4. All terms not defined in this Agreement shall have the meaning set
forth in the Employment Agreement, the Plan or the relevant Option Agreement.
Except to the extent set forth in this Agreement, the terms and conditions of
the Employment Agreement, the Plan and the relevant Option Agreement shall
continue in full force and effect.
5. This Agreement may be executed in counterpart and will be deemed
binding when both parties have so executed, and may be amended by a subsequent
written agreement of the parties.
IN WITNESS WHEREOF, the Company has caused its duly authorized officers
to execute and attest this instrument, and the Employee has placed his signature
hereon, effective as of the Amendment Date.
CLOSURE MEDICAL CORPORATION
Attest:
_______________________ By: /s/ Xxxxxx X. Xxxxxx
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Accepted: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
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ATTACHMENT
XXXXXX X. XXXX OPTION HOLDINGS
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SUBJECT TO THIS AGREEMENT
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Number Option Date Number of Options Granted Exercise Price
------ ----------- ------------------------- --------------
00000286 01/01/99 45,000 $29.81000
00000343 01/01/99 250,000 $29.81250
00000408 09/11/00 100,000 $19.87500
00000584 01/02/02 100,000 $23.49000
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