Exhibit 10.15
GENRAD, INC.
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT is entered into between GenRad, Inc. (the
"Company") and Xxxxxx X. Xxxxxxx ("Executive") effective as of the 15th day of
February 2001.
Executive is a key executive of the Company and a vital part of its
management. In consideration of Executive's continued employment with the
Company, the parties agree as follows:
1. TERM; WINDOW PERIOD. The term during which this Agreement (the
"Agreement") will be in effect (the "Term") will begin on the date of this
Agreement (the "Effective Date") and, except as provided below, will terminate
on the date which is one year from the date the Company advises Executive in
writing that the Company is terminating this Agreement. If a Change of Control
(as defined in Exhibit A) occurs during the Term, the Agreement will remain in
effect until all obligations hereunder have been discharged. The period starting
on the date of such a Change of Control and ending on the third anniversary of
the Change of Control will be a "Window Period" during which special provisions
of this Agreement will apply.
2. POSITIONS AND DUTIES. Subject to the provisions of the Agreement:
2.1 Executive is currently employed or to be employed by the
Company as it's Vice-President, Process Solutions, with responsibilities
consistent with this position. The Company may hereafter reassign Executive to a
different position, with responsibilities consistent with such new position,
provided that such different position shall not entail responsibilities
materially less than those of Executive's current position.
2.2 Executive will devote his entire business time and
attention and his best efforts to the duties and services of his positions.
However, Executive may serve on boards of directors of other businesses and
attend to personal investments and community and charitable service, provided
that such activities are not competitive with the business of the Company and do
not interfere with the performance of Executive's duties to the Company.
3. COMPENSATION AND BENEFITS. During his employment by the Company, the
Company will provide compensation and benefits to Executive as follows:
3.1 BASE SALARY. "Base Salary" means the remuneration
regularly paid to Executive for services rendered in connection with the
Executive's employment with the Company. Executive's Base Salary as of the
Effective Date will be $230,022.00 per year, payable in accordance with the
applicable payroll practices of the Company.
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The Company will review Executive's Base Salary annually, and Executive will
receive such adjustment in base salary, if any, for each succeeding year as the
Board of Directors of the Company (the "Board") determines in its sole
discretion. Executive's Base Salary will not be decreased during any Window
Period, and will not be decreased other than during a Window Period except as
part of a general reduction in which the base salaries of all corporate officers
of the Company have been decreased.
3.2 PERFORMANCE BONUS. Executive will be eligible for an
annual performance bonus, which (except as provided below) shall be determined
by the Board in its sole discretion. Executive's bonus for any year ending
during a Window Period will not be less than 100 percent of his bonus for the
completed year immediately preceding the Change of Control.
3.3 OTHER BENEFITS. Executive will be entitled to participate
in all plans, policies and arrangements (or in any successor or supplemental
plans, policies or arrangements) generally made available to officers of the
Company. Such benefits shall not be reduced during the Window Period, provided,
however, that any changes in the terms of such benefit programs generally
applicable to other program participants shall be applicable to Executive.
Notwithstanding the foregoing, Executive shall not be entitled to participate in
any severance or comparable plan, policy or arrangement maintained by the
Company and generally available to its other employees other than that set forth
in this Agreement.
4. SEVERANCE BENEFITS.
4.1 SEVERANCE BENEFITS DURING WINDOW PERIOD. If the Company
terminates Executive's employment without Cause (as defined below) during a
Window Period, or if Executive terminates his employment with the Company for
Good Reason (as defined below) during a Window Period, and subject to Sections
4.3 and 5 below, the Company will provide severance benefits to Executive as
follows (all payments and other benefits provided under this Section 4.1 being
called collectively the "Severance Benefits"):
(a) Within 10 days following the Effective Date of
the Release and Waiver described in Section 4.3, the Company
will pay to Executive a lump-sum cash amount equal to two
hundred percent (200%) of the sum of (A) Executive's annual
Base Salary in effect immediately prior to the termination
(or, if his Base Salary has been reduced within 60 days of the
termination or at any time after the Change of Control, his
Base Salary in effect prior to the reduction), plus (B) the
amount of the bonus earned by Executive for the fiscal year
completed immediately prior to the termination.
(b) Within 10 days following the Effective Date of
the Release and Waiver described in Section 4.3, the Company
will also pay to
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Executive a pro-rata portion of his target bonus (provided
for in Section 3.2 above) for the year of termination.
(c) The Company will continue for a period of three
years from the date of employment termination to provide
Executive with the same or substantially similar insurance
benefits and other health and welfare benefits referenced in
Section 3.3 above (subject to any contribution to premiums
required of plan participants generally) other than
participation in the Company's 401k plan and any Company
sponsored stock purchase plan. To the extent the Company is
unable to provide such benefits to Executive under its
existing plans and arrangements, it will either arrange to
provide Executive with substantially similar benefits upon
comparable terms or pay Executive cash amounts equal to
Executive's cost of obtaining such benefits. The Company's
obligation to provide each such benefit shall terminate
immediately upon Executive's becoming eligible (either as a
participant or a dependent) to participate in a plan providing
comparable benefits sponsored by another employer, except that
the Company shall pay any increase in the contribution to
premiums required of Executive (or the plan participant of
whom Executive is a dependent, if applicable) in order to
participate in such other employer's plan.
(d) Notwithstanding any contrary provisions of the
plans or arrangements under which they are granted, all
options to purchase Company stock held by Executive will
become exercisable immediately upon the Effective Date of the
Release and Waiver described in Section 4.3.
4.2 SEVERANCE BENEFITS OTHER THAN DURING WINDOW PERIOD. If the
Company terminates Executive's employment without Cause other than during a
Window Period, or if Executive terminates his employment with the Company for
Good Reason other than during a Window Period, and subject to Sections 4.3 and 5
below, the Company will provide severance benefits to Executive as follows (all
payments and other benefits provided under this Section 4.2 also being called
collectively "Severance Benefits"):
(a) Within 10 days following the Effective Date of
the Release and Waiver described in Section 4.3, the Company
will pay to Executive a lump-sum cash amount equal to one
hundred percent (100%) of Executive's annual Base Salary in
effect immediately prior to the termination (or, if his Base
Salary has been reduced within 60 days of the termination, his
Base Salary in effect prior to the reduction).
(b) Subject to the last sentence of this subsection
(b), the Company will continue for a period of one year from
the date of employment termination to provide Executive with
the same or substantially similar insurance benefits and other
health and welfare
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benefits referenced in Section 3.3 above (subject to any
contribution to premiums required of plan participants
generally) other than participation in the Company's 401k plan
and any Company sponsored stock purchase plan. To the extent
the Company is unable to provide such benefits to Executive
under its existing plans and arrangements, it will either
arrange to provide Executive with substantially similar
benefits upon comparable terms or pay Executive cash amounts
equal to the cost the Company would have incurred to provide
such benefits. The Company's obligation to provide each such
benefit shall terminate immediately upon Executive's becoming
eligible (either as a participant or a dependent) to
participate in a plan providing comparable benefits sponsored
by another employer, except that the Company shall pay any
increase in the contribution to premiums required of Executive
(or the plan participant of whom Executive is a dependent, if
applicable) in order to participate in such other employer's
plan.
4.3 GENERAL RELEASE AND CONFIDENTIALITY AGREEMENT. The
Company's obligation to pay and provide the Severance Benefits is conditioned on
Executive's prior execution and delivery (without subsequent revocation, to the
extent permitted therein) of a General Release, Waiver and Confidentiality
Agreement in the form attached as Exhibit B hereto (a "Release and Waiver"). The
Company shall deliver a form of Release and Waiver to Executive, for his or her
execution, within 10 days following a termination of Executive's employment that
entitles him or her to Severance Benefits under Section 4.1 or 4.2. In the event
Executive fails to execute and deliver a Release and Waiver to the Company
within 60 days following the delivery of the same to him or her, Executive will
be deemed to have waived his or her rights to Severance Benefits under Section
4.1 or 4.2.
4.4 TERMINATION BY COMPANY FOR CAUSE, BY EXECUTIVE WITHOUT
GOOD REASON, OR ON ACCOUNT OF DEATH OR DISABILITY. Notwithstanding Section 4.1
or 4.2, as applicable, Executive shall not be entitled to any Severance Benefits
under such Section in the event that (a) the Company terminates Executive's
employment for Cause, (b) Executive terminates his or her employment with the
Company other than on account of Good Reason (including adherence to the
procedural requirements set forth in the definition of "Good Reason"), or (c)
Executive's employment is terminated on account of his or her death or
Disability.
4.5 EFFECT ON RIGHTS UNDER COBRA. For the purposes of Part 6
of Title I of the Employee Retirement Income Security Act of 1974 and Section
4980B of the Internal Revenue Code of 1986 (the "Code"), the qualifying event
applicable to the Executive (and his qualifying beneficiaries, if any) whose
employment terminates during the Term (other than for Cause) shall be the
effective date of such employment termination notwithstanding any continuation
of benefits pursuant to subsection 4.1(c) above.
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4.6 DEFINITIONS. As used herein, the following terms have the
following meanings:
(a) "Cause" means (a) willful malfeasance or gross
negligence in the performance by Executive of his or her
duties, (b) fraud or dishonesty by Executive with respect to
the Company, or (c) Executive's conviction of a felony, or of
a misdemeanor that the Company reasonably determines has had a
material adverse effect on the Company including through
publicity.
(b) "Disability" means Executive's inability for a
period of not less than 60 consecutive days, as a result of
physical or mental incapacity, to perform each of the material
duties of his or her position, if a qualified physician chosen
by the Company and reasonably approved by Executive (or his or
her conservator) has determined upon examination that it is
probable that such inability will continue for an additional
60 consecutive days. Executive agrees to submit to one or more
such examinations if reasonably requested by the Company.
(c) "Good Reason" means (i) failure by the Company to
maintain Executive in the position described in Section 2
(including any position to which Executive may be reassigned
as provided in Section 2), (ii) assignment to Executive of
duties materially inconsistent with his or her nominal
position, or the removal of the authority and responsibility
which is reasonably necessary for Executive to carry out his
or her duties in such position, (iii) relocation of
Executive's principal place of work to a location more than 50
miles from the previous location or (iv) failure by the
Company to provide Executive with the compensation and
benefits described in Section 3, in each case provided that
(x) within 60 days following the onset of such Good Reason
Executive gives written notice of his or her resignation
identifying the event or change constituting Good Reason and
(y) the Company does not alleviate the Good Reason so
identified within 10 days following its receipt of such notice
from Executive.
5. LIMITATIONS ON SEVERANCE BENEFITS.
5.1 Except as provided in Section 5.2 below, the payments and
benefits to which Executive would otherwise be entitled under Section 4 of this
Agreement will be reduced to the extent necessary to prevent Executive from
becoming liable for the excise tax levied on certain "excess parachute payments"
under section 4999 of the Code. If a reduction is made under this Section 5.1,
Executive will have the right to determine which payments and benefits will be
reduced.
5.2 The limitations of Section 5.1 will not apply if:
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(i) the present value, net of all federal, state
and other income and excise taxes, of all
payments and benefits to which Executive is
entitled hereunder without such limitations,
exceeds
(ii) the present value, net of all federal, state
and other income and excise taxes, of all
payments and benefits to which Executive
would be entitled hereunder if such
limitations applied.
5.3 Determinations under this Section 5 will be made by the
firm of certified public accountants then serving as the Company's auditor
unless Executive has reasonable objections to the use of that firm, in which
case the determinations will be made by a comparable firm chosen by Executive
after consultation with the Company. The determinations of such firm will be
binding upon the Company and Executive.
6. EMPLOYMENT "AT WILL". Neither this Agreement nor the Severance
Benefits to be provided to Executive hereunder shall be deemed to limit, replace
or otherwise affect the "at will" nature of Executive's employment with the
Company. Executive's employment with the Company continues to be for an
unspecified term and may be terminated at will at any time with or without cause
or notice by either the Company or Executive. This at-will relationship cannot
be changed absent an express intent as set forth in a separate and
individualized written employment contact signed by both Executive and the Chief
Executive Officer of the Company.
7. WITHHOLDING. All payments required to be made by the Company to
Executive under this Agreement will be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as may be required
by law.
8. FEES AND EXPENSES. In the event of a termination of Executive's
employment during a Window Period, the Company will pay any and all fees and
expenses (including legal fees and other costs of arbitration or litigation)
that may be incurred by Executive in enforcing his or her rights under this
Agreement. Fees and expenses incurred by Executive in connection with his or her
execution of a Release and Waiver shall not be construed as having been incurred
in connection with the enforcement of his or her rights hereunder.
9. NO DUTY TO MITIGATE. Severance Benefits payable under this Agreement
as a result of termination of Executive's employment will be considered
severance pay in consideration of Executive's past service and his or her
continued service from the Effective Date, and Executive's entitlement thereto
will neither be governed by any duty to mitigate his or her damages by seeking
further employment nor offset by any compensation that he or she may receive
from other employment (except to the extent expressly provided in Section 4.2(b)
herein with respect to insurance benefits).
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10. CONFIDENTIALITY AND EXCLUSIVITY. Executive agrees to maintain the
confidentiality of the Company's (and its related entities' and projects')
books, records, financial information, technical information, business plans
and/or strategies, and other confidential and/or proprietary matters unless
required to make disclosure in the performance of his or her duties for the
Company or as a result of a legal proceeding or other legally mandated cause.
The parties recognize and agree that should the Company be required to pursue a
claim against Executive under this Section 10, the Company will likely be
required to seek injunctive relief as well as damages at law. Accordingly,
Section 11, Arbitration, will not apply to any action by the Company against
Executive for violation of this Section 10. Executive agrees for purposes of any
disputes arising under this Section 10 to submit to the exclusive jurisdiction
of the federal and state courts in the Commonwealth of Massachusetts.
11. ARBITRATION. Except as otherwise provided in Section 10, any
dispute or controversy between the parties involving the construction or
application of any terms, covenants or conditions of this Agreement, or any
claim arising out of or relating to this Agreement, that is not resolved within
20 days by the parties will be settled by arbitration in Boston, Massachusetts,
in accordance with the rules of the American Arbitration Association then in
effect, and judgment upon the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof and Executive hereby waives any right
to resolve such dispute or controversy by any other procedure, including,
without limitation, any administrative claims procedure set forth in a benefit
or similar plan, or by any other forum, including, without limitation, any other
judicial forum, the Department of Labor or the Internal Revenue Service. The
Company and Executive agree that the arbitrator(s) will have no authority to
award punitive or exemplary damages or so-called consequential or remote damages
such as damages for emotional distress. Any decision of the arbitrator(s) will
be final and binding upon the parties. Upon request, the arbitrator(s) shall
submit written findings of fact and conclusions of law. The parties agree that
the fees and costs incurred for the arbitration shall be assessed equally to
Executive and the Company and that each party shall bear its own attorneys' fees
and costs in connection with its own representation. The parties agree and
understand that they hereby waive their rights to a jury trial of any dispute or
controversy relating to the matters specified above in this Section 11.
12. RIGHTS OF SURVIVORS. If Executive dies after becoming entitled to
Severance Benefits under Section 4 following termination of employment but
before all such Severance Benefits have been provided, (a) all unpaid cash
amounts will be paid to the beneficiary that have been designated by Executive
in writing (the "beneficiary"), or if none, to Executive's estate, (b) all
applicable insurance coverage will be provided to Executive's family as though
Executive had continued to live, and (c) any stock options that become
exercisable under Section 4 will be exercisable by the beneficiary, or if none,
the estate.
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13. SUCCESSORS. This Agreement will inure to and be binding upon the
Company's successors and assigns and upon the Executive's heirs, executors,
legal administrators and guardians. This Agreement shall not be assignable by
Executive.
14. SUBSIDIARIES. For purposes of this Agreement, employment by a
corporation or other entity that is controlled directly or indirectly by the
Company will be deemed to be employment by the Company. Thus, references in the
Agreement to "Company" include such corporations or other entities where
appropriate in the context.
15. AMENDMENT OR MODIFICATION; WAIVER. Except as provided in clause (1)
of Exhibit A, this Agreement may not be amended unless agreed to in writing by
Executive and the Company. No waiver by either party of any breach of this
Agreement will be deemed a waiver of a subsequent breach.
16. SEVERABILITY. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, the remaining provisions shall remain
in full force and effect to the fullest extent permitted by law. In the event
that any provision is unenforceable on the basis that it is overbroad, in lieu
of deletion such provision shall be deemed limited to the extent necessary so as
to render it enforceable to the maximum extent permitted by law.
17. CONTROLLING LAW. This Agreement will be controlled and interpreted
pursuant to Massachusetts law without regard to the conflict of laws principles
thereof.
18. SUPERSEDED AGREEMENT. This Agreement supersedes any prior or
contemporaneous agreement or understanding, written or oral, between the parties
with respect to the subject matter hereof.
19. NOTICES. Any notices required or permitted to be sent under this
Agreement are to be delivered by hand or mailed by registered or certified mail,
return receipt requested, or by any recognized express courier service, and
addressed as follows:
20. IF TO THE COMPANY:
GenRad, Inc.
0 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attn: President
IF TO EXECUTIVE:
Xxxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxx, XX 00000
Either party may change its address for receiving notices by giving
notice to the other party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
"EXECUTIVE":
------------------------------
Xxxxxx X. Xxxxxxx
------------------------------
Date
GENRAD, INC.
By: _______________________________
Xxxxxx X. Xxxxxxxxx
Chairman of the Board, President & CEO
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EXHIBIT A
"Change of Control" means the occurrence of any of the following
events:
(1) any Person becomes the owner of 20% or more of the
Company's Common Stock; provided, however, that the Board of Directors
of the Company may unilaterally amend this clause (1) to increase the
20% threshold to any percentage up to, but not exceeding, 50%; or
(2) individuals who, as of the Effective Date, constitute the
Board of Directors of the Company (the "Continuing Directors") cease
for any reason to constitute at least a majority of such Board;
provided, however, that any individual becoming a director after the
Effective Date whose election or nomination for election by the
Company's shareholders was approved by a vote of at least a majority of
the Continuing Directors will be deemed to be a Continuing Director,
but excluding for this purpose any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities and Exchange Act of
1934 (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
(3) approval by the shareholders of the Company of a
reorganization, merger, consolidation or other transaction that will
result in the transfer of ownership of more than 50% of the Company's
Common Stock; or
(4) liquidation or dissolution of the Company or sale of
substantially all of the Company's assets.
In addition, for purposes of this definition the following terms have
the meanings set forth below:
"Common Stock" means the then outstanding Common Stock of the Company
plus, for purposes of determining the stock ownership of any Person, the number
of unissued shares of Common Stock which such Person has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) upon the exercise of conversion rights, exchange rights, warrants or
options or otherwise. Notwithstanding the foregoing, the term "Common Stock"
does not include shares of preferred stock or convertible debt or options or
warrants to acquire shares of Common Stock (including any shares of Common Stock
issued or issuable upon the conversion or exercise thereof) to the extent that
the Board expressly so determines in any future transaction or transactions.
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A Person will be deemed to be the "owner" of any Common Stock of which
such Person would be the "beneficial owner", as such term is defined in Rule
13d-3 promulgated by the Securities and Exchange Commission under the Exchange
Act.
"Person" has the meaning used in Section 13(d) of the Exchange Act,
except that "Person" does not include (i) the Executive, an Executive Related
Party, or any group of which the Executive or Executive Related Party is a
member, or (ii) the Company or a wholly-owned subsidiary of the Company or an
employee benefit plan (or related trust) of the Company or of a wholly-owned
subsidiary.
An "Executive Related Party" means any affiliate or associate of the
Executive other than the Company or a subsidiary of the Company. The terms
"affiliate" and "associate" have the meanings given in Rule 12b-2 under the
Exchange Act; the term "registrant" in the definition of "associate" means, in
this case, the Company.
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