AMENDMENT NO. 1 TO EXECUTIVE SEVERANCE AGREEMENT
EXHIBIT 10.7
AMENDMENT NO. 1 TO
EXECUTIVE SEVERANCE AGREEMENT
EXECUTIVE SEVERANCE AGREEMENT
This AMENDMENT NO. 1 (the “Amendment”) to the Executive Severance Agreement dated November 19,
2003 (the “Agreement’) by and between THERMO ELECTRON CORPORATION, a Delaware corporation (the
“Company”), and Xxxx X. Xxxxxx (the “Executive”) is made this 9th day of November, 2006 by and
between the Company and the Executive. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, the Company and the Executive have entered into the Agreement for the purpose of
describing the severance benefits that the Executive would receive in the event that Executive’s
employment with the Company is terminated under certain circumstances;
WHEREAS, on November 9, 2006, the Company completed a merger with Xxxxxx Scientific
International Inc. (the “Merger”), pursuant to which, among other things, the Company changed its
name to Thermo Xxxxxx Scientific Inc.;
WHEREAS, in connection with the Merger, the Company is making grants of options and restricted
shares to its executives and as a condition of such grants, the Company is requiring that the
executives sign a noncompetition agreement; and
WHEREAS, the Company and the Executive have agreed to amend the Agreement in connection with
Executive’s execution of the noncompetition agreement between the Company and the Executive of even
date herewith;
NOW, THEREFORE, in consideration for the mutual promises contained herein, the parties hereby
agree as follows.
1. Amendments to Agreement.
(a) All references to “Thermo Electron Corporation” in the Agreement are hereby amended to
read “Thermo Xxxxxx Scientific Inc.”
(b) Section 1 of the Agreement is hereby amended to add a new sub-section 1.4 to be and read
as follows:
“1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of
any of the events or circumstances set forth in clauses (a) through (f) below. Notwithstanding the
occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute
Good Reason if, prior to the effective date of termination (which shall be not less than 15 days
following delivery of written notice of termination by Executive to the Company), such event or
circumstance has been fully corrected and the Executive has been reasonably compensated for any
losses or damages resulting therefrom.
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(a) the assignment to the Executive of duties inconsistent in any material respect with the
Executive’s position (including status, offices, titles and reporting requirements), authority or
responsibilities in effect as of the date of this Agreement or a material diminution in such
position, authority or responsibilities;
(b) a reduction in the Executive’s annual base salary as in effect on the date of
this Agreement or as the same was or may be increased hereafter from time to time;
(c) the failure by the Company to (i) continue in effect any material compensation or benefit
plan or program, including without limitation any life insurance, medical, health and accident or
disability plan and any vacation program or policy, in which the Executive participates or which is
applicable to the Executive (a “Benefit Plan”), unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan or program, (ii)
continue the Executive’s participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable than the basis previously existing (iii) award cash bonuses to
the Executive in amounts and in a manner substantially consistent with past practice in light of
the Company’s financial performance and Executive’s performance or (iv) continue to provide any
material fringe benefit previously enjoyed by Executive;
(d) a change by the Company in the location at which the Executive performs the Executive’s
principal duties for the Company to a new location that is both (i) outside a radius of 50 miles
from the Executive’s principal residence and (ii) more than 30 miles from the location at which the
Executive performed the Executive’s principal duties for the Company immediately prior to the date
of this Agreement; or a requirement by the Company that the Executive travel on Company business to
a substantially greater extent than required immediately prior to the date of this Agreement;
(e) the failure of the Company to obtain the agreement from any successor to the Company to
assume and agree to perform this Agreement, as required by Section 6.1; and
(f) any failure of the Company to pay or provide to the Executive any portion of the
Executive’s compensation or benefits due under any Benefit Plan within seven days of the date such
compensation or benefits are due (provided, however, that in the case of benefits, the Company
shall have a period of 30 days after receipt of notice from Executive to cure any default), or any
material breach by the Company of this Agreement or any employment agreement with the Executive.
The Executive’s right to terminate the Executive’s employment for Good Reason shall not be
affected by the Executive’s incapacity due to physical or mental illness.”
(c) Section 2 of the Agreement is hereby amended and restated in its entirety as follows:
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“2. Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of
(a) the expiration of the Term (as defined below) or (b) the fulfillment by the Company of all of
its obligations under Sections 4 and 6.2 if the Executive’s employment with the Company terminates
prior to the expiration of the Term. “Term” shall mean the period commencing as of the Effective
Date and continuing in effect through November 9, 2011; provided, however, that on
November 9, 2011 and each November 9 thereafter, the Term shall be automatically extended for one
additional year unless, not later than six months prior to the scheduled expiration of the Term
(including any extension) thereof, the Company shall have given the Executive written notice that
the Term will not be extended.”
(d) The initial clause of Section 4.1(a) of the Agreement is hereby amended and restated in
its entirety as follows:
“(a) Termination Without Cause or for Good Reason. If the Executive’s employment with
the Company is terminated by the Company (other than for Cause, Disability or death) or by the
Executive for Good Reason, then the Executive shall be entitled to the following benefits:”
(e) Section 4.1(a)(i) of the Agreement is hereby amended and restated in its entirety as
follows:
“(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the
date of termination the aggregate of the following amounts:
(1) the sum of (A) the Executive’s base salary through the date of termination, (B) the
product of (x) the annual bonus paid or payable (including any bonus or portion thereof which has
been earned but deferred) for the most recently completed fiscal year 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 and (C) the amount of any accrued vacation pay, to
the extent not previously paid (the sum of the amounts described in clauses (A), (B), and (C) shall
be hereinafter referred to as the “Accrued Obligations”); and
(2) the sum of (A) two (2) times the Executive’s annual base salary and target bonus as in
effect immediately prior to the date of termination, and (B) the amount of any accrued vacation
pay, to the extent not previously paid; and”
(f) The reference to “18 months” in Section 4.1(a)(ii) is hereby amended to read “24 months”.
(g) Section 4.1(b) of the Agreement is hereby amended and restated in its entirety as follows:
“(b) Termination for Cause, Disability or Death. If the Company terminates the
Executive’s employment with the Company for Cause, then the Company shall (i) pay the Executive in
a lump sum in cash within 30 days after the date of termination, the Executive’s
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base salary through the date of termination and (ii) timely pay or provide to the Executive
the Other Benefits. If the Company terminates the Executive’s employment with the Company because
of the Executive’s disability or the Executive’s death, then the Company shall (i) pay the
Executive or the Executive’s estate, in a lump sum in cash within 30 days after the date of
termination, the Accrued Obligations and (ii) timely pay or provide to the Executive the Other
Benefits.
(h) Section 4.4 of the Agreement is hereby amended and restated in its entirety as follows:
“4.4. Release of Claims by Executive. The Executive shall not be entitled to any
payments or other benefits hereunder unless the Executive executes and, if applicable, does not
revoke, a full and complete release of claims and a reasonable and customary separation agreement
that includes nondisparagement and cooperation provisions. The parties further agree that the
separation agreement shall not include any restrictive covenants that are in addition to those
already contained in the Noncompetition Agreement between the Company and Executive dated November
9, 2006.
2. Miscellaneous.
(a) No Other Amendments. Except as specifically provided in this Amendment, no other
amendments, revisions or changes are made to the Agreement. All other terms and conditions of the
Agreement remain in full force and effect and the Parties hereby ratify and confirm their rights
and obligations under the Agreement, as amended hereby.
(b) Counterparts. This Amendment may be executed in one or more counterparts, each of
which shall be considered an original instrument, but all of which shall be considered one and the
same agreement, and shall become binding when one or more counterparts have been signed by each of
the Parties and delivered to each of them.
(c) Governing Law. This amendment and the rights and obligations of the parties
hereunder shall be governed by and construed and interpreted in accordance with the internal laws
of the Commonwealth of Massachusetts.
(e) Effectiveness of Amendment. The amendments to the Agreement contemplated by this
Amendment shall become effective upon the execution of this Amendment by the Parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal as of the day
and year first set forth above.
| THERMO XXXXXX SCIENTIFIC INC. |
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| By: | /s/ Xxxxx Xxxxxxx | |||
| EXECUTIVE: |
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| /s/ Xxxx X. Xxxxxx | ||||
| Xxxx X. Xxxxxx | ||||
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