EXHIBIT 10.13

 

AMENDED AND RESTATED

EXECUTIVE SEVERANCE AGREEMENT

 

Reference is hereby made to that certain Executive Severance Agreement (the
“Agreement”) dated January 26, 2000, by and between ZOLL Medical Corporation, a
Massachusetts corporation with its principal place of business in Burlington,
Massachusetts (the “Company”) and A. Ernest Whiton of Middleton, Massachusetts
(the “Executive”), which Agreement the Company and Executive now hereby desire
to amend and restate in its entirety as of this 1st day of April, 2002 (the
“Amended and Restated Agreement”). Following the execution of this Amended and
Restated Agreement, such original Agreement shall be of no further force or
effect.

 

1. Purpose. The Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel.
The Board of Directors of the Company (the “Board”) recognizes, however, that,
as is the case with many publicly held corporations, the uncertainty and
questions which may arise among management in connection with a Change in
Control (as defined in Section 2 hereof) may result in the departure or
distraction of management personnel to the detriment of the Company and its
stockholders. Therefore, the Board has determined that appropriate steps should
be taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control. Nothing in this Amended and
Restated Agreement shall be construed as creating an express or implied contract
of employment and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be retained in the
employ of the Company.

 

2. Change in Control. A “Change in Control” shall be deemed to have occurred in
any one of the following events:

 

(a) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan or trust of the Company or any of its
subsidiaries), together with all “affiliates” and “associates” (as such terms
are defined in Rule 12b-2 under the Act) of such person, shall become the
“beneficial owner” (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 25% or more of
either (A) the combined voting power of the Company’s then outstanding
securities having the right to vote in an election of the Company’s Board of
Directors (“Voting Securities”) or (B) the then outstanding shares of stock of
the Company (in either such case other than as a result of an acquisition of
securities directly from the Company); or

 

(b) persons who, as of the date hereof, constitute the Company’s Board of
Directors (the “Incumbent Directors”) cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that any
person becoming a director of the Company subsequent to the date hereof whose
election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors shall, for purposes of this Amended and
Restated Agreement, be considered as Incumbent Director, provided, however, that
there shall be excluded for consideration as Incumbent Director any individual
whose initial assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents, by or on
behalf of a person other than the Board of Directors; or

 

(c) the consummation of a transaction by the Company involving (A) any
consolidation or merger of the Company or any subsidiary where the shareholders
of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate more than 50% of the voting shares of the
corporation issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (B) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company.

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Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred for purposes of the foregoing clause (a) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of stock or other Voting Securities outstanding, increases (x) the proportionate
number of shares of stock beneficially owned by any person to 25% or more of the
shares of stock then outstanding or (y) the proportionate voting power
represented by the Voting Securities beneficially owned by any person to 25% or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any additional shares
of stock or other Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction), then a “Change in Control” shall be deemed to
have occurred for purposes of the foregoing clause (a).

 

3. Terminating Event. A “Terminating Event” shall mean any of the events
provided in this Section 3 occurring subsequent to a Change in Control as
defined in Section 2:

 

(a) termination by the Company of the employment of the Executive with the
Company for any reason other than (A) a willful act of dishonesty by the
Executive with respect to any material matter involving the Company or any
subsidiary or affiliate, or (B) conviction of the Executive of a crime involving
moral turpitude, or (C) the gross or willful failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any
such failure after Executive gives notice of termination), which failure is not
cured within 30 days after a written demand for substantial performance is
received by the Executive from the Board of Directors of the Company which
specifically identifies the manner in which the Board of Directors believes the
Executive has not substantially performed the Executive’s duties; or (D) the
failure by the Executive to perform his full-time duties with the Company by
reason of his death, disability or retirement; provided, however, that a
Terminating Event shall not be deemed to have occurred pursuant to this Section
3(a) solely as a result of the Executive being an employee of any direct or
indirect successor to the business or assets of the Company, rather than
continuing as an employee of the Company following a Change in Control. For
purposes of clauses (A) and (C) of this Section 3(a), no act, or failure to act,
on the Executive’s part shall be deemed “willful” unless done, or omitted to be
done, by the Executive without reasonable belief that the Executive’s act, or
failure to act, was in the best interest of the Company and its subsidiaries and
affiliates. For purposes of clause (D) of this Section 3(a), Section 6 and
Section 8(b) hereof, “disability” shall mean the Executive’s incapacity due to
physical or mental illness which has caused the Executive to be absent from the
full-time performance of his duties with the Company for a period of six (6)
consecutive months if the Company shall have given the Executive a Notice of
Termination and, within thirty (30) days after such Notice of Termination is
given, the Executive shall not have returned to the full-time performance of his
duties. For purposes of clause (D) of this Section 3(a) and Section 6,
“retirement” shall mean termination of the Executive’s employment in accordance
with the Company’s normal retirement policy, not including early retirement,
generally applicable to its salaried employees, as in effect immediately prior
to the Change in Control, or in accordance with any retirement arrangement
established with respect to the Executive with the Executive’s express written
consent or

 

(b) termination by the Executive of the Executive’s employment with the Company
for any reason.

 

4. Severance Payment. In the event a Terminating Event occurs within eighteen
(18) months after a Change in Control,

 

(a) the Company shall pay to the Executive an amount equal to two (2) times the
sum of (i) the Executive’s base salary immediately prior to the Terminating
Event (or immediately prior to the Change in Control, if higher) and (ii) the
average of the bonuses paid to the Executive over the three most recent years
prior to the Change in Control, payable in one lump-sum payment on the Date of
Termination;

 

(b) the Company shall continue to provide health and dental insurance coverage
to the Executive, on the same terms and conditions as though the Executive had
remained an active employee, for eighteen (18) months after the Terminating
Event; and

 

(c) the Company shall pay to the Executive all reasonable legal and arbitration
fees and expenses incurred by the Executive in obtaining or enforcing any right
or benefit provided by this Amended and Restated Agreement, except in cases
involving frivolous or bad faith litigation.

 

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5. Additional Benefits.

 

(a) Anything in this Amended and Restated Agreement to the contrary
notwithstanding, in the event it shall be determined that any compensation,
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 Amended and Restated Agreement or otherwise, (the “Severance Payments”),
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the following provisions shall
apply:

 

(i) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes payable
by the Executive on the amount of the Severance Payments which are in excess of
the Threshold Amount, are greater than or equal to the Threshold Amount, the
Executive shall be entitled to the full benefits payable under this Amended and
Restated Agreement.

 

(ii) If the Threshold Amount is less than (x) the Severance Payments, but
greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax
and (2) the total of the Federal, state, and local income and employment taxes
on the amount of the Severance Payments which are in excess of the Threshold
Amount, then the benefits payable under this Amended and Restated Agreement
shall be reduced (but not below zero) to the extent necessary so that the
maximum Severance Payments shall not exceed the Threshold Amount. To the extent
that there is more than one method of reducing the payments to bring them within
the Threshold Amount, the Executive shall determine which method shall be
followed; provided that if the Executive fails to make such determination within
45 days after the Company has sent the Executive written notice of the need for
such reduction, the Company may determine the amount of such reduction in its
sole discretion.

 

For the purposes of this Section 5, “Threshold Amount” shall mean three times
the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the
Code and the regulations promulgated thereunder less one dollar ($1.00); and
“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, or
any interest or penalties incurred by the Executive with respect to such excise
tax.

 

(b) The determination as to which of the alternative provisions of Section 5(a)
shall apply to the Executive shall be made by Ernst & Young LLP or any other
nationally recognized accounting firm selected by the Company (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the Date of Termination, if
applicable, or at such earlier time as is reasonably requested by the Company or
the Executive. For purposes of determining which of the alternative provisions
of Section 5(a) shall apply, the Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of the Executive’s residence on the Date of
Termination, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.

 

6. Term. This Amended and Restated Agreement shall take effect on the date first
set forth above and shall terminate upon the earlier of (a) the termination by
the Company of the employment of the Executive because of (A) a willful act of
dishonesty by the Executive with respect to any material matter involving the
Company or any subsidiary or affiliate, or (B) conviction of the Executive of a
crime involving moral turpitude, or (C) the gross or willful failure by the
Executive to substantially perform the Executive’s duties with the Company, or
(D) the failure by the Executive to perform his full-time duties with the
Company by reason of his death, disability (as defined in Section 3(a)) or
retirement (as defined in Section 3(a)), (b) the resignation or termination of
the Executive for any reason prior to a Change in Control, or (c) the date which
is eighteen (18) months after a Change in Control if the Executive is still
employed by the Company.

 

7. Withholding. All payments made by the Company under this Amended and Restated
Agreement shall be net of any tax or other amounts required to be withheld by
the Company under applicable law.

 

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8. Notice and Date of Termination; Disputes; Etc.

 

(a) Notice of Termination. After a Change in Control and during the term of this
Amended and Restated Agreement, any purported termination of the Executive’s
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with this Section 8. For purposes of this Amended and Restated
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Amended and Restated Agreement relied
upon and the Date of Termination. Further, a Notice of Termination pursuant to
one or more of clauses (A) through (C) of Section 3(a) hereof is required to
include a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board at a meeting of the
Board (after reasonable notice to the Executive and an opportunity for the
Executive, accompanied by the Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the termination met the
criteria set forth in one or more of clauses (A) through (C) of Section 3(a)
hereof.

 

(b) Date of Termination. “Date of Termination”, with respect to any purported
termination of the Executive’s employment after a Change in Control and during
the term of this Amended and Restated Agreement, shall mean (i) if the
Executive’s employment is terminated for disability, 30 days after the Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive’s duties during such 30-day period) and
(ii) if the Executive’s employment is terminated for any other reason, the date
specified in the Notice of Termination. In the case of a termination by the
Company other than a termination pursuant to one or more of clauses (A) through
(C) of Section 3(a) (which may be effective immediately), the Date of
Termination shall be 30 days after the Notice of Termination is given. In the
case of a termination by the Executive, the Date of Termination shall not be
less than 15 days from the date such Notice of Termination is given; provided,
however that notwithstanding Section 3(a) of this Amended and Restated
Agreement, in the event that the Executive gives a Notice of Termination to the
Company, the Company may unilaterally accelerate the Date of Termination.

 

(c) No Mitigation. The Company agrees that, if the Executive’s employment by the
Company is terminated during the term of this Amended and Restated Agreement,
the Executive is not required to seek other employment or to attempt in any way
to reduce any amounts payable to the Executive by the Company pursuant to
Sections 4(a), (b) and (c) hereof. Further, the amount of any payment provided
for in this Amended and Restated Agreement shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company or otherwise.

 

(d) Settlement and Arbitration of Disputes. Any controversy or claim arising out
of or relating to this Amended and Restated Agreement or the breach thereof
shall be settled exclusively by arbitration in accordance with the laws of the
Commonwealth of Massachusetts by three arbitrators, one of whom shall be
appointed by the Company, one by the Executive and the third by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the American
Arbitration Association in the City of Boston. Such arbitration shall be
conducted in the City of Boston in accordance with the rules of the American
Arbitration Association for commercial arbitrations, except with respect to the
selection of arbitrators which shall be as provided in this Section 8(d).
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.

 

9. Successor to Executive. This Amended and Restated Agreement shall inure to
the benefit of and be enforceable by the Executive’s personal representatives,
executors, administrators, heirs, distributees, devisees and legatees. In the
event of the Executive’s death after a Terminating Event but prior to the
completion by the Company of all payments due him under Section 4(a), (b) and
(c) of this Amended and Restated Agreement, the Company shall continue such
payments to the Executive’s beneficiary designated in writing to the Company
prior to his death (or to his estate, if the Executive fails to make such
designation).

 

10. Enforceability. If any portion or provision of this Amended and Restated
Agreement shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Amended and Restated
Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this Amended and
Restated Agreement shall be valid and enforceable to the fullest extent
permitted by law.

 

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11. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Amended and Restated Agreement, or
the waiver by any party of any breach of this Amended and Restated Agreement,
shall not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach.

 

12. Notices. Any notices, requests, demands and other communications provided
for by this Amended and Restated Agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
the Executive at the last address the Executive has filed in writing with the
Company, or to the Company at its main office, attention of the Board of
Directors.

 

13. Effect on Other Plans. An election by the Executive to resign after a Change
in Control under the provisions of this Amended and Restated Agreement shall not
be deemed a voluntary termination of employment by the Executive for the purpose
of interpreting the provisions of any of the Company’s benefit plans, programs
or policies. Nothing in this Amended and Restated Agreement shall be construed
to limit the rights of the Executive under the Company’s benefit plans, programs
or policies except as otherwise provided in Section 5 hereof, and except that
the Executive shall have no rights to any severance benefits under any severance
pay plan.

 

14. Amendment. This Amended and Restated Agreement may be amended or modified
only by a written instrument signed by the Executive and by a duly authorized
representative of the Company.

 

15. Governing Law. This is a Massachusetts contract and shall be construed under
and be governed in all respects by the laws of the Commonwealth of Massachusetts
.

 

16. Obligations of Successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Amended and Restated Agreement in the same manner and
to the same extent that the Company would be required to perform if no such
succession had taken place.

 

17. Confidential Information. The Executive shall never use, publish or disclose
in a manner adverse to the Company’s interests, any proprietary or confidential
information relating to (a) the business, operations or properties of the
Company or any subsidiary or other affiliate of the Company, or (b) any
materials, processes, business practices, technology, know-how, research,
programs, customer lists, customer requirements or other information used in the
manufacture, sale or marketing of any of the respective products or services of
the Company or any subsidiary or other affiliate of the Company; provided,
however, that no breach or alleged breach of this Section 17 shall entitle the
Company to fail to comply fully and in a timely manner with any other provision
hereof. Nothing in this Amended and Restated Agreement shall preclude the
Company from seeking money damages, or equitable relief by injunction or
otherwise without the necessity of proving actual damage to the Company, for any
breach by the Executive hereunder.

 

IN WITNESS WHEREOF, this Amended and Restated Agreement has been executed as a
sealed instrument by the Company by its duly authorized officer, and by the
Executive, as of the date first above written.

 

ZOLL MEDICAL CORPORATION

By:

 

/s/ Richard A. Packer

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Name:

 

Richard A. Packer

Title:

 

Chief Executive Officer

   

/s/ A. Ernest Whiton

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A. Ernest Whiton

 

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