Document:

exv10w40

 

EXHIBIT 10.40

Amended
and Restated Change of Control Retention and Severance Agreement

     This Amended and Restated Change of Control Retention and Severance Agreement (the “Agreement”) is
made and entered into as of February 1, 2008, by and between Cepheid and Peter Dailey (the
“Executive”) and amends and restates in its entirety any Change of Control Retention and Severance
Agreement by and between Cepheid and Executive existing prior to the date hereof. Capitalized
terms used in this Agreement shall have the meanings set forth in Section 3 below.

1. Purpose. The purpose of this Agreement is to encourage Executive to remain in the
employ of the Company and to continue to devote Executive’s full attention to the success of the
Company in the event of a Change of Control, as such term is defined in Section 3 of this
Agreement.

2. Termination Upon Change of Control. In the event of Executive’s Termination Upon Change
of Control, Executive shall receive the following payments and benefits:

     2.1 Accrued Salary and Vacation, and Benefits. Executive shall receive all salary and
accrued vacation (less applicable withholding) earned through Executive’s termination date, and the
benefits, if any, under Company benefit plans to which Executive may be entitled pursuant to the
terms of such plans.

     2.2 Stock Award Acceleration. Provided that Executive complies with Section 5 below,
all outstanding stock options granted and restricted stock issued by the Company to Executive prior
to the Change of Control shall become fully vested and exercisable immediately prior to the
effective date of the Termination Upon Change of Control.

     2.3 Cash Severance Payment. Provided that Executive complies with Section 5 below,
Executive shall receive a lump sum cash payment in an amount equal to fifteen (15) months of
Executive’s effective base salary (less applicable withholding), paid within ten (10) business days
of the effective date of the Termination Upon Change of Control.

3. Definitions. Capitalized terms used in this Agreement shall have the meanings set forth
in this Section 3.

     3.1 “Cause” means Executive’s (a) failure to perform any reasonable and lawful duty of
Executive’s position or failure to follow the lawful written directions of the Chief Executive
Officer; (b) commission of an act that constitutes misconduct and is injurious to the Company or
any subsidiary; (c) conviction of, or pleading “guilty” or “no contest” to, a felony under the laws
of the United States or any state thereof; (d) committing an act of fraud against, or the
misappropriation of property belonging to, the Company or any subsidiary; (e) commission of an act
of dishonesty in connection with Executive’s responsibilities as an employee and affecting the
business or affairs of the Company; (f) breach of any confidentiality, proprietary information or
other agreement between Executive and the Company or any subsidiary; or (g) failure or refusal to
carry out the reasonable directives of the Company.

     3.2 “Change of Control” means (a) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a
trustee or other fiduciary holding securities of the Company under an employee benefit plan of the
Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the
outstanding shares of common stock of the Company or (B) the combined voting power of the Company’s
then outstanding securities; (b) the Company is party to a merger or consolidation which results in
the voting securities of the Company outstanding immediately prior thereto failing to continue to
represent (either by remaining outstanding or by being converted into voting securities of the
surviving or another entity) at least fifty (50%) percent of the combined voting power of the
voting securities of the Company or such surviving or other entity outstanding immediately after
such merger or consolidation; (c) the sale or disposition of all or substantially all of the Company’s
assets (or consummation of any transaction having similar effect); or (d) the dissolution or
liquidation of the Company.

     3.3 “Company” means Cepheid and any successor or assign to substantially all the
business and/or assets of Cepheid.

[Signature Page to Amended and Restated Change of Control Retention and Severance Agreement]

 

 

     3.4 “Diminution of Responsibilities” means the occurrence of any of the following
conditions, without Executive’s consent: (a) a significant diminution in the nature or scope of
Executive’s authority, title, function or duties from Executive’s authority, title, function or
duties in effect immediately preceding any Change of Control; (b) a ten percent (10%) reduction in
Executive’s base salary or a twenty-five percent (25%) reduction in Executive’s target bonus
opportunity, if any, in effect immediately preceding any Change of Control (in either case, unless
such reduction is part of a Company officer-wide program to reduce expenses); (c) the Company’s
requiring Executive to be based at any office or location more than 50 miles from the office where
Executive was employed immediately preceding the Change of Control; (d) any material breach of the
terms of this Agreement by the Company; or (e) failure of any successor or assignee to the Company
to assume this Agreement.

     3.5 “Termination Upon Change of Control” means:

          (a) any involuntary termination of the employment of Executive by the Company without Cause
within twelve (12) months following a Change of Control; or

          (b) any resignation by Executive based on a Diminution of Responsibilities where (i) such
Diminution of Responsibilities occurs within twelve (12) months following the Change of Control,
and (ii) such resignation occurs within ninety (90) days following such Diminution of
Responsibilities.

4. Federal Excise Tax. If the payments and benefits provided for in this Agreement
constitute “parachute payments” within the meaning of the Internal Revenue Code of 1986, as amended
(the “Code”), but for this Section 4, would be subject to the excise tax imposed by Section 4999 of
the Code, then the payments and benefits under this Agreement will be payable, at Executive’s
election, either in full or in such lesser amount as would result, after taking into account the
applicable federal, state and local income taxes and excise tax imposed by Section 4999 of the
Code, in Executive’s receipt on an after-tax basis of the greatest amount of benefits.

5. Release of Claims. The Company may condition the payments and benefits set forth in
Sections 2.2 and 2.3 of this Agreement upon the delivery by Executive of a signed release of claims
in a form satisfactory to the Company.

6. Agreement Not to Solicit. If Company performs its obligations to deliver the severance
compensation set forth in Sections 2.2 and 2.3 of this Agreement, then for a period of one (1) year
after Executive’s termination of employment, Executive will not solicit any employee of the Company
to discontinue that person’s employment relationship with the Company.

7. Arbitration. Any claim, dispute or controversy arising out of this Agreement, the
interpretation, validity or enforceability of this Agreement or the alleged breach thereof shall be
submitted by the parties to binding arbitration by the American Arbitration Association. The site
of the arbitration proceeding shall be in Santa Clara County, California, or another location
mutually agreed to by the parties.

8. Conflict in Benefits; Effect of Agreement. This Agreement shall supersede all prior
arrangements, whether written or oral, and understandings regarding severance compensation
following a Change of Control and shall be the exclusive agreement for the determination of any
severance compensation due upon Executive’s termination of employment upon a Change of Control.

9. Miscellaneous.

     9.1 Successors of the Company. The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, expressly, absolutely and
unconditionally to assume 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 or assignment had
taken place.

     9.2 No Employment Agreement. This Agreement does not alter Executive’s at-will
employment status or obligate the Company to continue to employ Executive for any specific period
of time, or in any specific role or geographic location.

 

 

     9.3 Modification of Agreement. This Agreement may be modified, amended or superceded
only by a written agreement signed by Executive and the Chief Executive Officer.

     9.4 Governing Law. This Agreement shall be interpreted in accordance with and
governed by the laws of the State of California.

     9.5 Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter of this Agreement, and supersedes
all prior understandings and agreements, whether oral or written between or among the parties
hereto with respect to the specific subject matter hereof.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	CEPHEID	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ PETER DAILEY	 	 	 	By:	 	/s/ JOHN L. BISHOP	 	 
	 

	 	Name:
	 	Peter Dailey
	 	 	 	 	 	Name:
	 	John L. Bishop	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Chief Executive Officerexv10w1w3

 

AMENDMENT NO. 2

TO

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ASHFORD HOSPITALITY LIMITED PARTNERSHIP

January __, 2008

     This Amendment No. 2 to Third Amended and Restated Agreement of Limited Partnership of Ashford
Hospitality Limited Partnership (this “Amendment”) is made as of January ___, 2008 by Ashford OP
General Partner, LLC, a Delaware limited liability company, as general partner (the “General
Partner”) of Ashford Hospitality Limited Partnership, a Delaware limited partnership (the
"Partnership”), and Ashford OP Limited Partner, LLC, a Delaware limited liability company, as a
limited partner of the Partnership (the “Ashford Limited Partner”), pursuant to the authority
granted in the Third Amended and Restated Agreement of Limited Partnership of Ashford Hospitality
Limited Partnership, dated as of May 7, 2007, as amended by Amendment No. 1 to the Third Amended
and Restated Agreement of Limited Partnership of Ashford Hospitality Limited Partnership, dated as
of July 18, 2007 (as so amended, the “Partnership Agreement”), for the purpose of reducing the
Payout Period associated with the Limited Partners’ Redemption Rights. Capitalized terms used and
not defined herein shall have the meanings set forth in the Partnership Agreement.

     WHEREAS, Section 11.1(e) of the Partnership Agreement permits the General Partner, with the
approval of the Limited Partners holding more than 50% of the Common Percentage Interests of the
Limited Partners, to amend the Partnership Agreement for any purpose not specifically addressed
otherwise in such Section 11.1(e);

     WHEREAS, the Ashford Limited Partner holds approximately 90% of the Common Percentage
Interests of the Limited Partners, and the General Partner and the Ashford Limited Partner desire
to amend the Partnership Agreement to reduce the Payout Period associated with the Limited
Partners’ Redemption Rights pursuant to Section 7.4 of the Partnership Agreement from one year to
60 days for all Limited Partners;

     WHEREAS, Ashford Hospitality Trust, Inc., a Maryland corporation, which is the sole member of
the General Partner and the Ashford Limited Partner, has directed the General Partner and the
Ashford Limited Partner to amend the Partnership Agreement as set forth in this Amendment;

     WHEREAS, the General Partner and the Ashford Limited Partner desire to so amend the
Partnership Agreement, effective as of the date hereof; and

     WHEREAS, the Payout Period with respect to a cash payment upon the exercise of the Redemption
Rights by a Limited Partner varies from 60 days to one year, to ensure uniform application of such
Redemption Rights to all Limited Partners, the Payout Period set forth in Section 7.4(a) of the
Partnership Agreement shall be reduced from one (1) year to sixty (60) days for all Limited
Partners.

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     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the General Partner
and the Ashford Limited Partner hereby adopt the following amendments to the Partnership Agreement
pursuant to the authority granted such parties under Section 11.1(e) of the Partnership Agreement:

     1. The second sentence of Section 7.4(a) is hereby amended and restated in its entirety as
follows:

“The Partnership shall have up to sixty (60) days (the “Payout Period”) following
exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is
exercising the redemption right (the “Redeeming Partner”).”

     2. The second sentence of the second paragraph of Section 7.4(b) is hereby amended and
restated in its entirety as follows:

“If such shareholder approval is not obtained, the Partnership shall pay to the
Redeeming Partner the Cash Amount no later than the earliest of (i) ten (10) days
after shareholders have voted against the issuance of the REIT Common Shares, or
(ii) one hundred and thirty (130) days after such Common Partnership Units are
presented for redemption, together with interest on such Cash Amount as specified in
Section 7.4(a) hereof.”

     3. Paragraph 2. of Exhibit D is hereby amended and restated in its entirety as follows:

“2. Amendment to Section 7.4(b). Section 7.4(b) is amended and by adding the
following provision to the end of Section 7.4(b):

     Notwithstanding anything in Section 7.4(a) or Section 7.4(b) to the contrary,
with respect to the exercise of a Redemption Right by Huron Jacksonville Limited
Partnership or any of the Sea Turtle Inn Limited Partners, in the event of an
election by the Company to satisfy such Redemption Right by payment of the Cash
Amount, then the Company may not, after making such election, pay any portion of
such Cash Amount with REIT Common Shares.”

     4. Except as modified herein, all terms and conditions of the Partnership Agreement shall
remain in full force and effect, which terms and conditions the General Partner hereby ratifies and
confirms.

     5. This Amendment shall be construed and enforced in accordance with and governed by the laws
of the State of Delaware, without regard to conflicts of law.

     6. If any provision of this Amendment is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.

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     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first set
forth above.

	 	 	 	 	 
	 	ASHFORD OP GENERAL PARTNER, LLC, a
 Delaware limited
liability company, as General Partner of Ashford
Hospitality Limited Partnership
 	 
	 
	 	 
	 	By:  	 	 
	 	 	Monty Bennett, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	ASHFORD OP LIMITED PARTNER, LLC, a Delaware limited
liability company, as a Limited Partner of Ashford
Hospitality Limited Partnership holding approximately
90% of the Common Percentage Interests of the Limited
Partners

 	 
	 	By:  	 	 
	 	 	David A. Brooks, Vice President 	 
	 	 	 	 
	 

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