Document:

Form of Letter Agreement among Johnson & Johnson

 Exhibit 10.4 
  
 March 3,
2005                                        

  
 [Name of Executive Officer] 
 c/o Closure Medical Corporation 
 5250 Greens Dairy Road 
 Raleigh, NC 27616 
  
 Re: Change in Control Agreement 
  
 Dear [Name of Executive Officer]: 
  
 As you may know, Johnson & Johnson, a New Jersey corporation (“Parent”), Holden Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent (“Sub”), and Closure Medical Corporation, a Delaware corporation (the “Company”), propose to enter into a merger agreement (the “Merger Agreement”) that will result in the Company (or the surviving
corporation in the merger pursuant to the Merger Agreement (the “Merger”)) becoming wholly-owned by Parent. As a condition to the willingness of Parent and Sub to enter into the Merger Agreement, Parent has requested that you enter into
this letter agreement setting forth certain modifications to your rights and obligations under the employment agreement dated as of [date of employment agreement] between you and the Company (the “Employment Agreement”). Capitalized terms
used but not defined herein have the meanings given such terms under the Employment Agreement. 
  
 Parent, the Company and you each agree as follows: 
  
 1. Clarification of “Good Reason”. For the avoidance of doubt, Parent agrees to cause the Surviving Corporation (as defined in the
Merger Agreement) to assume and perform the obligations of the Company pursuant to the Employment Agreement after giving effect to this letter agreement, and you agree that such assumption and performance are satisfactory to you for purposes of
clause (vii) of the definition of “Good Reason” as set forth in Section 7.5.2 of the Employment Agreement. 
  
 2. Modification of Benefits Continuation. You agree that the first sentence of clause (c) of Section 7.5.3 of the Employment Agreement shall be
modified to read as follows: 
  
 “The Company shall
continue to provide, for [time period of continuation], all group healthcare (including dental and vision) and group life insurance benefits (and any other group welfare benefits that pursuant to their terms Parent would be able to continue or in
respect of which there is an ability to convert to an individual benefit or policy following termination of employment) in which Executive was entitled to participate immediately prior to the date of termination.” 
  
 3. Retention Bonus. Subject to the consummation of the Merger, and
notwithstanding anything to the contrary in the Employment Agreement, if you remain in continuous 

 
employment with the Company from the consummation of the Merger through the expiration of the three-month period following the consummation of the Merger,
you will receive the cash payment that you would have otherwise received pursuant to Section 7.5.3(b) of the Employment Agreement (assuming for such purpose that your employment with the Company had been involuntarily terminated by the Company
(other than for Cause, Disability or death) or you had resigned from the Company for Good Reason immediately following the consummation of the Merger) (the “Retention Bonus”). In the event you become entitled to payment of the Retention
Bonus, you shall no longer be eligible to receive any severance or termination payments under the Employment Agreement (other than pursuant to Sections 7.5.3(a), (c) and (e) of the Employment Agreement (after giving effect to the modifications as
set forth above in Paragraph 2 of this letter agreement) and 7.6 of the Employment Agreement) in respect of any subsequent termination of your employment. For the avoidance of doubt, in the event the Company terminates your employment without Cause
following the consummation of the Merger but prior to your becoming entitled to payment of the Retention Bonus, you shall be entitled to receive payments and benefits under Section 7.5.3 of the Employment Agreement (but, except for Section 7.6, not
under any other provision of Section 7 of the Employment Agreement). 
  
 4. General Waiver and Release. You agree that the Retention Bonus to which you may become entitled hereunder shall become payable to you only if you execute prior to the payment of such amount, a general waiver and release of all
claims, including those under the Employment Agreement, in favor of Parent, the Company and their respective subsidiaries and affiliates, and others related to such entities (including but not limited to their respective directors, officers and
employees), in a form which is a customary waiver and release of Parent, and such waiver and release becomes effective. 
  
 5. Full Force and Effect. For the avoidance of doubt, all other employment terms under the Employment Agreement which have not been modified by
this letter agreement, including without limitation Sections 2, 3, 4 and 5 thereof, shall remain in full force and effect following the consummation of the Merger, and Parent agrees to cause the Surviving Corporation (as defined in the Merger
Agreement) to keep the Employment Agreement in full force and effect through, at least the three-month period following the consummation of the Merger without regard to any earlier date on which it may be scheduled to expire. 
  
 6. Withholding. The Company may withhold from any amounts payable
under this letter agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
  
 7. Not an Employment Agreement. The terms of this letter agreement neither bind you to continued employment with Parent, the Company or any of
their respective subsidiaries and affiliates nor confer any rights upon you with respect to the continuation of employment by Parent, the Company or any of their respective subsidiaries and affiliates. 
  
 8. Governing Law. This letter agreement will be governed by,
construed and interpreted in accordance with the laws of the State of New Jersey, without regard to its principles of conflicts of laws. 
  
 9. Entire Agreement. This letter agreement contains the entire agreement among you, Parent and the Company concerning the subject matter hereof
and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, among you, Parent and the Company with respect hereto. You acknowledge and agree that this letter agreement constitutes an
amendment to the Employment Agreement in respect of your participation and rights to any benefits thereunder. This letter agreement may not be modified or amended except by a writing signed by each of the parties hereto. 
  

 2 

 10. Successors and Assigns. This letter agreement shall be binding on (a) you and your estate and
legal representatives and (b) the Company, Parent, and their respective successors and assigns. The Company and Parent shall 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 or the Parent, as the case may be, expressly to assume and agree to perform this letter agreement in the same manner and to the same extent that the Company and Parent would have been required to
perform it if no such succession had taken place. 
  
 11.
Counterparts. This letter agreement may be executed in two or more counterparts (including via facsimile), each of which shall be deemed an original but all of which together shall be considered one and the same agreement. 
  

 3 

 You acknowledge that your agreement to the terms and conditions of this letter agreement is in
consideration of the benefits provided under Paragraph 3 of this letter agreement and is an inducement to and a condition of Parent’s and Sub’s willingness to enter into the Merger Agreement. This letter agreement will be void and of no
further force and effect if the Merger Agreement is terminated prior to the consummation of the Merger (it being understood that Parent shall have no liabilities or obligations hereunder unless and until the Merger is consummated). 
  

			
	Very truly yours,
	
	JOHNSON & JOHNSON
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

 4 

			
	CLOSURE MEDICAL CORPORATION
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

	
	Agreed and Accepted:
	
	
 [Name of Executive Officer]

  

 5 

 Schedule 10.4 
  

			
	 Name

	  	 Time Period of Continuation of Benefits

	 Daniel A. Pelak
	  	The COBRA health care continuation period under Section 4980 of the Code.
		
	 Benny Ward
	  	Two years after the date of termination.

  

 6Amendment to Rights Agreement

 Exhibit 10.5 
  
 AMENDMENT TO RIGHTS AGREEMENT 
  
 This Amendment to Rights Agreement dated as of March 3, 2005 (this “Amendment”), between Closure Medical Corporation, a Delaware
corporation (“Closure Medical”), and American Stock Transfer & Trust Company (the “Rights Agent”). 
  
 WITNESSETH: 
  
 WHEREAS, Closure Medical and the Rights Agent constitute all of the parties to that certain Rights Agreement, dated as of July 30, 2001 (the
“Rights Agreement”), and desire to amend the Rights Agreement as set forth herein. 
  
 NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, and intending to be legally bound hereby,
and pursuant to the Rights Agreement and in accordance with Section 26 thereof, the parties hereto do hereby agree as follows (capitalized terms used but not defined herein have the meanings ascribed to such terms in the Rights Agreement):

  
 1. Amendments to the Rights Agreement. The Rights Agreement shall be
amended as follows: 
  
 (a) Section 1(a) of the Rights Agreement
is hereby amended to add the following sentence at the end thereof: 
  
 “Notwithstanding the foregoing, Johnson & Johnson and its Affiliates and Associates shall not be or become an “Acquiring Person”, either individually or collectively, as the result of (i) the announcement of the Merger,
(ii) the execution of the Merger Agreement or (iii) the consummation of the transactions contemplated by the Agreement and Plan of Merger substantially in the form attached hereto as Exhibit D (the “Merger Agreement”).”

  
 (b) The following definitions shall be added to Section 1 of
the Rights Agreement and the remaining sections shall be renumbered accordingly: 
  
 “1(s) “Merger” shall have the meaning assigned to such term in the Merger Agreement.” 
  
 (c) Section 1(c) of the Rights Agreement is hereby amended to add the following sentence at the end thereof: 
  
 “Notwithstanding the foregoing, Johnson & Johnson and its
Affiliates and Associates shall not be deemed either individually or collectively, the “Beneficial Owner” of, or be deemed to “beneficially own,” any securities of the Company as the result of the execution of, or the exercise of
any of their rights under, the Stockholder Agreement dated as of March 3, 2005 among Johnson 

 
& Johnson and the individuals and other parties listed on Schedule A attached hereto, substantially in the form attached hereto as Exhibit E.”

  
 (d) New Exhibits D and E are hereby added to the
Rights Agreement in the forms set forth as Exhibits A and B hereto, respectively. 
  
 (e) Section 3(a) of the Rights Agreement is amended to add the following sentence at the end thereof: 
  
 “Notwithstanding anything in this Rights Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred as the result of (i) the announcement of the Merger, (ii) the execution of the Merger Agreement or (iii) the consummation of the Merger or of the other transactions contemplated by the Merger
Agreement.” 
  
 (f) Section 7(a) of the Rights Agreement is
hereby amended and restated in its entirety to read as follows: 
  
 Subject to subsection (e), the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price (except as provided in Section 11(q) hereof) with respect to the total number of
Preferred Share Fractions (or Common Shares, other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable (except as provided in Section 11(q) hereof), at or prior to the earliest of (i) the
close of business on July 30, 2011 (the “Final Expiration Date”), (ii) the consummation of a transaction contemplated by Section 13(d) hereof, (iii) the time at which the Rights are redeemed or terminated as provided in Section 23
hereof, or (iv) immediately prior to the Effective Time (as defined in the Merger Agreement) (the earlier of (i), (ii), (iii) and (iv) being herein referred to as the “Expiration Date”). 
  
 (g) The following shall be added to Section 13(b) as a new clause (iii):

  
 (iii) “Notwithstanding the foregoing, Johnson &
Johnson and its Affiliates and Associates shall not be or become a “Principal 

 
Party,” either individually or collectively, as the result of (A) the announcement of the Merger, (B) the execution of the Merger Agreement or (C) the
consummation of the Merger or of the other transactions contemplated by the Merger Agreement.” 
  
 (h) Section 24(b) of the Rights Agreement is amended to add the following sentence at the end thereof: 
  
 “Notwithstanding anything in this Rights Agreement to the contrary, the
Company shall not be obligated to provide any notice pursuant to this Section 24(b) as a result of (i) the announcement of the Merger, (ii) the execution of the Merger Agreement or (iii) the consummation of the Merger or of the other transactions
contemplated by the Merger Agreement.” 
  
 2. Miscellaneous.

  
 (a) The laws of the State of Delaware shall govern the
validity, interpretation, construction, performance, and enforcement of this Agreement, excluding the choice of laws provisions of the State of Delaware. 
  
 (b) Except as modified herein, all other terms and provisions of the Rights Agreement (including the Exhibits thereto) are unchanged and remain in full
force and effect. 
  
 (c) This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Amendment shall become effective when each party to this Amendment shall have received a counterpart hereof
signed by the other party to this Amendment. 
  
 (d) This
Amendment shall be binding upon any permitted assignee, transferee, successor or assign to any of the parties hereto. 
  
 (e) If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment, and the Rights Agreement, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 
  
 (f) The officer of Closure Medical executing this Amendment on behalf of
Closure Medical hereby certifies on behalf of the company that this Amendment complies with Section 26 of the Rights Agreement. 
  
 (g) In all respects not inconsistent with the terms and provisions of this Amendment, the Rights Agreement is hereby ratified, adopted, approved and
confirmed. In executing and delivering this Amendment, the Rights Agent shall be entitled to all the privileges and immunities afforded to the Rights Agent under the terms and conditions of the Rights Agreement. 

 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed by their duly authorized
representatives as of the date first written above. 
  

			
	CLOSURE MEDICAL CORPORATION
		
	By:	 	 /s/ Daniel A. Pelak

	Name:	 	Daniel A. Pelak
	Title:	 	President & CEO
	
	AMERICAN STOCK TRANSFER & TRUST COMPANY
		
	By:	 	 /s/ Herbert J. Lemmer

	Name:	 	Herbert J. Lemmer
	Title:	 	Vice President

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