EXHIBIT 10(b)
AGREEMENT
AGREEMENT by and between ABIOMED, INC., a Delaware corporation (the
"Company"), and _ (the "Executive"), dated as of the _day of _, 1999.
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 continued dedication of the Executive,
notwithstanding the possibility, threat, or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS. (a) The "Effective Date" shall be the first date during
the "Change of Control Period" (as defined in Section 1(b)) on which a Change of
Control occurs. Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Company is terminated or the Executive
ceases to be an officer of the Company prior to the date on which a Change of
Control occurs, and it is reasonably demonstrated that such termination of
employment (1) was at the request of a third party who has taken steps
reasonably calculated to effect the Change of Control or (2) otherwise arose in
connection with or anticipation of the
Change of Control, then for all purposes of this Agreement the "Effective Date"
shall mean the date immediately prior to the date of such termination of
employment.
(b) The "Change of Control Period" is the period commencing on the date
hereof and ending on the second anniversary of such date; provided, however that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended without any further action by the Company or the
Executive so as to terminate two years from such Renewal Date; provided,
however, that if the Company shall give notice in writing to the Executive, at
least sixty days prior to the Renewal Date, stating that the Change of Control
Period shall not be extended, then the Change of Control Period shall expire two
years from the last effective Renewal Date.
2. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of Control"
shall mean:
(a) The acquisition by any 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")), other than Xxxxx X.
Xxxxxxxx or any of his affiliates (as defined in the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of thirty percent or more of the then
outstanding shares of stock of the Company entitled to vote in the
election of directors (the "Outstanding Company Common Stock"), whether
in one transaction or in multiple transactions which in the aggregate
equal or exceed thirty percent of the Outstanding Company Common Stock;
provided, however, that (i) any acquisition by the Company or its
subsidiaries, or any
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employee benefit plan (or related trust) of the Company or its
subsidiaries of thirty percent or more of Outstanding Company Common
Stock shall not constitute a Change of Control; (ii) any acquisition by
any individual, entity or group of beneficial ownership of thirty
percent or more but less than forty percent of the Outstanding Company
Common Stock may be deemed by the Board of Directors of the Company as
it is constituted as of the date of this Agreement (the "Incumbent
Board"), excluding any members of the Incumbent Board affiliated with
the acquiror, to not constitute a Change of Control, in the Incumbent
Board's sole and absolute discretion; and (iii) any acquisition by a
corporation with respect to which, following such acquisition, more
than fifty percent of the then outstanding shares of common stock of
such corporation, is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock
immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition,
of the Outstanding Company Common Stock, shall not constitute a Change
of Control; or
(b) Individuals who, as of the date of this Agreement,
constitute the Board of Directors (the "Board") of the Company (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date of this Agreement 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 comprising the Incumbent
Board shall be considered as though such individual were a member of
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the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with
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 by or on
behalf of a person other than the Board; or
c) Approval by the stockholders of the Company of (i) a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock
immediately prior to such reorganization, merger or consolidation will
not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of the then
outstanding shares of common stock of the corporation resulting from
such a reorganization, merger or consolidation, other than a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) acquires 30% or more of
Outstanding Company Common Stock; or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, excluding a
sale or other disposition of assets to a subsidiary of the Company and
excluding a sale or license of a portion of the business of the Company
which is deemed by the Incumbent Board, acting in its sole and absolute
discretion, to not constitute a Change of Control.
Anything in this Agreement to the contrary notwithstanding, if an event
that would, but for this paragraph, constitute a Change of Control results from
or arises out of a purchase or
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other acquisition of the Company, directly or indirectly, by a corporation or
other entity in which the Executive has a greater than ten percent direct or
indirect equity interest, such event shall not constitute a Change of Control.
3. EMPLOYMENT PERIOD. Subject to the terms and conditions hereof, the Company
hereby agrees to continue the Executive in its employ for the period commencing
on the Effective Date and ending on the last day of the twenty-fourth month
following the month in which the Effective Date occurs (the "Employment
Period"). The Executive hereby agrees to remain in the employ of the Company for
the period commencing on the Effective Date and ending on the last day of the
sixth month following the month in which the Effective Date occurs (the "Six
Month Period").
4. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i) Except as provided in
Section 4(c) below, during the Employment Period, (A) 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 at any
time during the one hundred eighty-day period immediately preceding the
Effective Date and (B) the Executive's services shall be performed at the
location where the Executive was employed immediately preceding the Effective
Date or any office or location less than thirty-five miles from such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote his full business time 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
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it shall not be a violation of this Agreement 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 Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities to the
Company.
(b) COMPENSATION. (i) BASE SALARY. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable to the Executive by the Company in respect
of the twelve-month period immediately preceding the month in which the
Effective Date occurs. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(ii) ANNUAL BONUS. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year during the Employment Period,
an annual bonus (the "Annual Bonus") in cash at least equal to the average
annualized (for any fiscal year consisting of less than twelve full months or
with respect to which the Executive has been employed by the Company for less
than twelve full months) bonus (the "Average Annual Bonus") paid or payable to
the Executive by the Company in respect of the lesser of the three fiscal years
immediately
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preceding the fiscal year in which the Effective Date occurs or the
number of full fiscal years for which the Executive has been employed by the
Company immediately preceding the fiscal year in which the Effective Date
occurs. Each such Annual Bonus shall be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the receipt of such
Annual Bonus pursuant to deferral plans of the Company.
(iii) At the end of the Six Month Period, if Executive remains
employed by the Company, all unvested stock options or stock appreciation rights
which Executive then holds to acquire securities from the Company shall be
immediately and automatically exercisable as of such date.
(iv) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to
Annual Base Salary and Annual Bonus payable as herein above provided, the
Executive shall be entitled to participate during the Employment Period in all
incentive, savings and retirement plans, practices, policies and programs
applicable to other peer executives of the Company, but in no event shall such
plans practices, policies and programs provide the Executive with incentive,
savings and retirement benefits opportunities, in each case, less favorable, in
the aggregate, than the most favorable of those provided by the Company for the
Executive under such plans, practices, policies and programs as in effect at any
time during the one-year immediately preceding the Effective Date.
(v) WELFARE BENEFIT PLANS. During the Employment Period, 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 welfare benefit plans,
practices, policies and programs provided by the Company (including, without
limitation, medical, prescription, dental, disability, salary
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continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) and applicable to other peer executives of the
Company, but in no event shall such plans, practices, policies and programs
provide benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect at any time
during the one-year period immediately preceding the Effective Date.
(vi) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in the conduct of the Company's business upon
submission of appropriate accountings in accordance with the most favorable
policies, practices and procedures of the Company in effect at any time during
the one-year period immediately preceding the Effective Date.
(vii) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company in effect at
any time during the one-year period immediately preceding the Effective Date. If
at the end of the Employment Period, the Company elects not to continue to
employ Executive for reasons other than for Cause, death or Disability, or if
the Executive shall terminate employment hereunder for Good Reason, the Company
will provide to Executive up to $5,000 in fees paid for out-placement
assistance.
(viii) 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 assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company at any time during the one-year period
immediately preceding the Effective Date.
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(ix) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company as in effect at any time during
the one-year period immediately preceding the Effective Date.
(c) SIX MONTH PERIOD. Notwithstanding anything to the contrary in this
Section 4, during the Six Month Period, the Company's obligations under this
Agreement are limited to employing the Executive in any capacity reasonably
assigned to Executive by the Company to assist in the transition caused by the
Change of Control at the location where the Executive was employed immediately
preceding the Effective Date or at any office or location less than thirty-five
miles from such location and providing to the Executive compensation and
benefits, as set forth in Section 4(b) hereof in accordance with the most
favorable plans, practices, policies and programs provided by the Company for
the Executive as in effect at any time during the one year period immediately
preceding the Effective Date.
5. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of "Disability" set forth below), it may give to the Executive
written notice in accordance with Section 11(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
thirtieth day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" means the absence of the
Executive from the
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Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) CAUSE. The Company may terminate the Executive's employment during
the Employment Period for "Cause". For purposes of this Agreement, "Cause" means
(i) an act or acts of personal dishonesty taken by the Executive and intended to
result in substantial personal enrichment of the Executive at the expense of the
Company, (ii) repeated violations by the Executive of the Executive's
obligations under Section 4(a) of this Agreement (other than as a result of
incapacity due to physical or mental illness) which are demonstrably willful and
deliberate on the Executive's part, which are committed in bad faith or without
reasonable belief that such violations are in the best interests of the Company
and which are not remedied in a reasonable period of time after receipt of
written notice from the Company or (iii) the conviction of the Executive of a
felony involving moral turpitude.
(c) GOOD REASON. The Executive's employment may be terminated during
the Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "Good Reason" means:
(i) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not
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taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) any failure by the Company to fulfill its obligations to
the Executive during the Six Month Period, as set forth in Section 4(c) of this
Agreement, other than an isolated, insubstantial and inadertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iv) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B) hereof;
(v) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(vi) any failure by the Company to comply with and satisfy
Section 10(c) of this Agreement.
Notwithstanding the foregoing, during the Six Month Period, "Good
Reason" shall mean (iii), (iv), (v) or (vi) above only. For purposes of this
Section 5(c), any good faith determination of "Good Reason" after the Six Month
Period made by the Executive shall be conclusive.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause or
without Cause or by the Executive for Good Reason shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
11(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
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specific termination provision in this Agreement relied upon, if applicable,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than fifteen days
after the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company hereunder or preclude the Executive or the Company
from asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided however, that (i) if the Executive's employment is
terminated by the Company other than for Cause, death or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (ii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than payment of the sum of the following amounts: (i) the
Executive's Annual Base Salary through the Date of Termination to the extent not
theretofore paid, (ii) the product of (A) the greater of (x) the Annual Bonus
paid
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or payable (and annualized for any fiscal year consisting of less than twelve
full months or for which the Executive has been employed for less than twelve
full months) to the Executive for the Company's most recently completed fiscal
year, and (y) the Average Annual Bonus and (B) 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, and (iii) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued bonus amounts or vacation pay, in each case,
to the extent not yet paid by the Company (the amounts described in
subparagraphs (i), (ii), and (iii) are hereafter referred to as "Accrued
Obligations" and shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within sixty days of the Date of Termination.
Subject to the provisions of Section 9 hereof, but, otherwise, anything herein
to the contrary notwithstanding, the Executive's family shall be entitled to
receive benefits at least equal to the most favorable benefits provided by the
Company to surviving families of peer executives of the Company under such
plans, programs, practices and policies relating to family death benefits, if
any, as in effect with respect to other peer executives and their families at
any time during the one year period immediately preceding the Effective Date.
(b) DISABILITY. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations of the Company to the Executive, other
than for payment of the Accrued Obligations (which shall be paid in a lump sum
in cash within sixty days of the Date of Termination). Subject to the provisions
of Section 9 hereof, but, otherwise, anything herein to the contrary
notwithstanding, the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to the most
favorable of those provided by the
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Company to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect with respect to other peer executives and their families at any time
during the one year period immediately preceding the Effective Date.
(c) CAUSE, OTHER THAN FOR GOOD REASON. If the Executive's employment
shall be terminated by the Company for Cause or by the Executive other than for
Good Reason (and other than by reason of his death or disability) during the
Employment Period, this Agreement shall terminate without further obligations of
the Company to the Executive other than the obligation to pay to the Executive
Annual Base Salary through the Date of Termination, plus the amount of any
compensation previously deferred by the Executive and any accrued and awarded
bonus amounts or vacation pay, in each case, to the extent theretofore unpaid.
In such case, such amounts shall be paid to the Executive in a lump sum in cash
within thirty days of the Date of Termination, except that accrued and awarded
bonus amounts, if any, shall be paid as previously scheduled at the time of the
award. The Executive shall, in such event, also be entitled to any benefits
required by law that are not otherwise provided by this Agreement.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR DISABILITY. If, during the
Employment Period, the Company shall terminate the Executive's employment other
than for Cause, death or Disability, or if the Executive shall terminate
employment under this Agreement for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash within
sixty days after the Date of Termination the aggregate of the following amounts:
A. all Accrued Obligations; and
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B. the amount (such amount shall be hereinafter referred to as the
"Severance Amount") equal to the product of (I) two and ninety-nine
one-hundredths (2.99) and (II) the Executive's "base amount" as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code").
(ii) the Company shall timely pay and provide, for eighteen months from
the Date of Termination, medical benefits to the Executive and/or the
Executive's family at least equal to those which would have been provided in
accordance with the applicable plans (including the Company's 401(k), match and
profit-sharing plans), programs, practices and policies described in Section
4(b)(v) of this Agreement as if the Executive's employment had not been
terminated in accordance with the most favorable plans, practices, programs or
policies of the Company as in effect and applicable generally to other peer
executives and their families during the one year period immediately preceding
the Effective Date, provided, however, that if the Executive becomes re-employed
with another employer and is eligible to receive medical and dental benefits
under another employer provided plan, the medical and dental benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility and provided, further, that if any Company plan
would not allow Executive to participate, the Company shall provided to
Executive comparable tax-adjusted payments of an equivalent amount; and
(iii) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive and/or the Executive's family any other
amounts or benefits required to be paid or provided or which the Executive
and/or the Executive's family is eligible to receive pursuant to this Agreement
and under any plan, program, policy or practice or contract or agreement of the
Company as in effect and applicable generally to other peer executives of the
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Company and their families, including up to $5,000 in fees paid for
out-placement assistance (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and
(iv) all remaining unvested stock options or stock appreciation rights
which Executive then holds to acquire securities from the Company shall be
immediately and automatically exercisable as of the Date of Termination; and
(v) the Company shall pay the Executive in cash a lump sum equal to the
amounts accrued on behalf of the Executive, but not yet vested, under the
Company's profit-sharing plan.
7. NON-EXCLUSIVITY OF RIGHTS. Except as provided in Section 6, nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plans, programs,
policies or practices, provided by the Company and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any other agreements with the Company. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of the Company at or subsequent to
the Date of Termination shall be payable in accordance with such plan, policy,
practice or program except as explicitly modified by this Agreement.
8. FULL SETTLEMENT. (a) The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the 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 and, except as provided
in Section
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6(d)(ii), such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement, unless a court of competent
jurisdiction determines that the Executive made such effort in bad faith), plus
in each case interest at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
(b) If there shall be any dispute between the Company and the Executive
(i) in the event of any termination of the Executive's employment by the
Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
6(d) as though such termination were by the Company without Cause, or by the
Executive with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amount pursuant to this paragraph except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
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9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that 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 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"), the Company shall make an additional payment with respect to such
Excise Tax (a "Gross-Up Payment") to the Executive 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.
(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 its successor), unless such firm shall be the accounting firm
of the individual, entity or group effecting the Change of Control or any
affiliate of the Company at the Date of Termination, in which case such
determinations shall be made by an accounting firm of national standing agreed
to by the Company and the Executive, or, if the Company does not so agree within
10 days of the Date of Termination, such an accounting firm shall be selected by
the Executive, (the "Accounting Firm") which shall provide
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detailed supporting calculations both to the Company and the Executive within
fifteen business days of the date such firm is selected or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
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. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence, accuracy-related or similar penalty. Any such
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 that 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 it 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 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
-20-
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; 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
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.
-21-
10. 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 will 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 to assume expressly 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.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
In addition, the Executive shall be entitled, upon exercise of any outstanding
stock options or stock appreciation rights of the Company, to receive in lieu of
shares of the Company's stock, shares of such stock or other securities of such
successor as the holders of shares of the Company's stock received pursuant to
the terms of the merger, consolidation or sale.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts, 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.
-22-
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder 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:
[ ]
[ ]
[ ]
If to the Company:
ABIOMED, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: [ ]
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. 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.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision thereof.
-23-
(f) This Agreement and the employment agreement between the Company and
the Executive (the "Employment Agreement") contain the entire understanding of
the Company and the Executive with respect to the subject matter hereof and by
entering into this Agreement the Executive waives all rights he may have under
the Company's separation policy, provided that if the Company's separation
policy would provide greater benefits to the Executive than this Agreement, than
the Executive may elect to receive benefits under the Company's separation
policy in lieu of the benefits provided hereunder. In the event of any conflict
between a provision of the Employment Agreement and a provision of this
Agreement, the provision of this Agreement shall control. Without limiting the
generality of the foregoing, it is expressly acknowledged that the definition of
"Cause" in this Agreement shall be controlling in all respects with respect to
Executive's employment following the Effective Date.
(g) The Executive and the Company acknowledge that, except as may
otherwise be provided under the Employment Agreement, prior to the Effective
Date and following the end of the Employment Period, the employment of the
Executive by the Company is "at will" and may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date,
the Executive's employment with the Company terminates, then the Executive shall
have no further rights under this Agreement. Notwithstanding anything contained
herein, if, during the Employment Period, the Executive shall terminate
employment with the Company other than for Good Reason, the Executive shall have
no liability to the Company.
(h) As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law, or
otherwise.
-24-
IN WITNESS WHEREOF, the Executive has hereunto set his 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.
ABIOMED, INC.
By:
--------------------------------
Name:
Title:
EXECUTIVE
-----------------------------------
