Document:

EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made effective as of the 17th day of September, 2012 (the “Effective Date or Commencement Date”), by and between Andrew Grethlein (“Executive”) and Geron Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for Executive’s services; and

 

WHEREAS, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

 

ARTICLE I
 DEFINITIONS

 

For purposes of the Agreement, the following terms are defined as follows:

 

1.1                               “Board” means the Board of Directors of the Company.

 

1.2                               “Cause” means any of the following:

 

(a)         any willful act or omission by Executive constituting dishonesty, fraud or other malfeasance against the Company;

 

(b)         Executive’s conviction of a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business;

 

(c)          Executive’s debarment by the U.S. Food and Drug Administration from working in or providing services to any pharmaceutical or biotechnology company under the Generic Drug Enforcement Act of 1992, or other ineligibility under any law or regulation to perform Executive’s duties to the Company; or

 

(d)         Executive’s breach of any of the material policies of the Company.

 

1.3                               “Change in Control” shall have the meaning set forth in the Plan.

 

1.4                               “Code” means the Internal Revenue Code of 1986, as amended.

 

1.5                               “Company” means Geron Corporation or its successors in interest.

 

1.6                               “Comparable Employment” means employment on terms which provide (a) the same or greater rate of base pay or salary as in effect immediately prior to Executive’s termination, (b) the same, equivalent or higher job title and level of responsibility as Executive

 

 

had prior to Executive’s termination, (c) equivalent or higher bonus opportunity as the bonus opportunity for the year preceding the year in which the termination occurs, and d) a principal work location that is both (i) no more than forty-five (45) miles from Executive’s principal work location immediately prior to Executive’s termination and (ii) no more than thirty (30) miles farther from Executive’s principal weekday residence than was Executive’s principal work location immediately prior to the termination.

 

1.7                               “Covered Termination” means an Involuntary Termination Without Cause that occurs at any time, provided that such termination constitutes a “separation from service” within the meaning of Section 409A of the Code and the regulations promulgated thereunder, including Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”).

 

1.8                               “Involuntary Termination Without Cause” means Executive’s dismissal or discharge other than (i) for Cause, or (ii) after an involuntary or voluntary filing of a petition under chapter 7 or 11 of 11 USC Section 101 et. seq., an assignment for the benefit of creditors, a liquidation of the company’s assets in formal proceeding or otherwise or any other event of insolvency by the Company, in any case, without an offer of Comparable Employment by the Company or a successor, acquirer, or affiliate of the Company. For purposes of this Agreement, the termination of Executive’s employment due to Executive’s death or disability will not constitute a termination for Cause.

 

1.9                               “Plan” means the Company’s 2011 Equity Incentive Award Plan, as amended.

 

ARTICLE II
 EMPLOYMENT BY THE COMPANY

 

2.1                               Position and Duties.  Subject to the terms set forth herein, the Company agrees to continue to employ Executive in the position of Executive Vice President, Technical Operations, such employment to commence on the Commencement Date.  During the Executive’s employment, Executive will report to the Chief Executive Officer. Executive shall serve in an employee capacity and shall perform such duties as are assigned to Executive by the Chief Executive Officer and, except as otherwise instructed by the Chief Executive Officer, such other duties as are customarily associated with the position of Executive Vice President, Technical Operations. During Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention (except for vacation periods as set forth herein and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies or as otherwise set forth in this Agreement) to the business of the Company.

 

2.2                               Employment at Will.  Both the Company and Executive acknowledge and agree that Executive’s employment with the Company is “at-will” and not for any specified period of time, and may be terminated at any time by Executive or the Company, with or without Cause, and with or without prior notice; provided, however, that if Executive’s employment with the Company is terminated under circumstances that constitute a Covered Termination, Executive will be eligible to receive certain severance payments and benefits as set forth in Article IV below.

 

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2.3                               Employment Policies.  The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including but not limited to those policies relating to protection of confidential information and assignment of inventions.  In the event of a conflict between the terms of this Agreement and the Company’s general employment policies or practices, this Agreement shall control.

 

ARTICLE III
 COMPENSATION

 

3.1                               Base Salary.  Executive shall receive for services to be rendered hereunder an annual base salary of $355,000 payable on the regular payroll dates of the Company, subject to increase in the sole discretion of the Board (the “Base Salary”).

 

3.2                               Bonus.  Executive shall be eligible to earn, for each fiscal year of the Company ending during Executive’s employment with the Company, an annual discretionary cash bonus (an “Annual Bonus”) targeted at forty-five percent (45%) of Executive’s Base Salary.

 

3.3                               Stock Option.  In accordance with the Company’s stock option granting practices, on the third Wednesday in the month of the Commencement Date (the “Grant Date”), the Compensation Committee of the Board shall grant Executive an option to purchase six hundred thousand (600,000) shares of Company common stock (the “Option”) having an exercise price equal to the closing trading price of a share of Company common stock on the Grant Date.  The Option shall vest with respect to  1/8th of the shares initially subject thereto on the six-month anniversary of the Commencement Date and with respect to 1/48th of the shares initially subject thereto on each monthly anniversary of the Commencement Date thereafter, subject to Executive’s continued service to the Company through the applicable vesting date, provided, that upon occurrence of a Change of Control, subject to Executive’s continued service to the Company through the date of such Change of Control, the Option shall vest and become exercisable with respect to one hundred percent (100%) of the unvested shares subject thereto.  The Option shall be exercisable in full on the Grant Date, subject to Executive entering into a restricted stock purchase agreement with respect to any unvested shares.  Executive shall be permitted to exercise any or all of the Option, whether or not vested, subject to the Company’s right of repurchase.  The Option otherwise shall be subject to and governed in all respects by the terms of the Plan and the option agreement to be entered into between the Company and Executive.

 

3.4                               Standard Company Benefits; Vacation.  Executive shall be entitled to all rights and benefits for which Executive is eligible under the terms and conditions of the Company’s benefit and compensation plans, practices, policies and programs, as in effect from time to time, that are provided by the Company to its senior executives generally.  Executive will be eligible for four weeks of vacation per year.

 

ARTICLE IV
 SEVERANCE BENEFITS AND RELEASE

 

4.1                               Severance Benefits.  If Executive’s employment terminates due to a Covered Termination after the date of execution of this Agreement, Executive shall receive:

 

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(i)                                    Payment of Accrued Obligations Upon Termination of Employment.  Upon a termination of Executive’s employment for any reason at any time following the Commencement Date, the Company shall pay to Executive in a single lump-sum cash payment as soon as administratively practicable following the date of termination, the aggregate amount of Executive’s (A) earned but unpaid Base Salary, and (B) accrued but unpaid vacation pay.  In addition, Executive shall be promptly paid for incurred but unreimbursed business expenses upon his submission of such expenses in accordance with the Company’s expense reimbursement policies.  The amounts set forth in this Section 4.1(i) are collectively referred to as the “Accrued Obligations”.

 

(ii)                                Severance Upon a Covered Termination.  If Executive’s employment terminates due to a Covered Termination at any time after the Commencement Date, then, in addition to the Accrued Obligations:

 

(a)                                 Executive shall be paid target Annual Bonus for the fiscal year in which the termination occurs, prorated for the length of service provided during the calendar year through the termination date,  payable in a single lump-sum payment within thirty (30) days following the date of termination;

 

(b)                                 Executive shall be paid an aggregate amount equal to twelve (12) months of Executive’s Base Salary in effect on the date of termination, payable to Executive in a single lump-sum amount on the sixtieth (60th) day following the date of termination;

 

(c)                                  Executive and Executive’s covered dependents will be eligible to continue their health care benefit coverage as permitted by COBRA (Internal Revenue Code Section 4980B) at the Company’s expense for the lesser of (i) twelve (12) months following the Covered Termination, or (ii) until the Executive and/or Executive’s covered dependents are no longer eligible for COBRA (for clarification and as an example, in the event Executive is covered by another health plan, etc.).  Thereafter, Executive and Executive’s covered dependents shall be entitled to maintain coverage for Executive and Executive’s eligible dependents at Executive’s own expense for the balance of the period that Executive is entitled to coverage under COBRA; and

 

(d)                                 the Option, along with any subsequent options or other exercisable equity interest in the Company held by Executive shall remain outstanding and exercisable through the earlier of (i) the second (2nd) anniversary of the date of termination or (ii) the original expiration date of the option or other equity interest.

 

Notwithstanding the foregoing, the amounts payable under this Article IV, other than the Annual Bonus and the extended exercisability set forth in Section 4.1(d),  shall be reduced by the amount of severance or other cash compensation, if any, payable under the Company’s Change of Control Severance Plan attached hereto as Exhibit C.  For the avoidance of doubt, all amounts payable under this Agreement shall be subject to applicable federal, state, local or foreign tax withholding requirements.

 

4.2                               Parachute Payments.  If any payment or benefit Executive would receive in connection with a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but

 

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for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless Executive elects in writing a different order for cancellation.

 

The Company for general audit purposes shall engage a nationally recognized public accounting firm (the”Accounting Firm”) to perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The Accounting Firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. If the Accounting Firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

4.3                               Release.  Notwithstanding the foregoing, Executive’s right to receive the amounts provided for in Sections 4.1(ii) and 4.2, and the Change of Control acceleration referenced in Section 3.3 above shall be subject to and conditioned upon Executive’s execution and non-revocation of a release of claims in substantially the form attached hereto as Exhibit A (the “Release”) (as such form may be modified to take into account changes in the law) within fifty (50) days following the termination date.  Such Release shall specifically relate to all of Executive’s rights and claims in existence at the time of such execution and shall confirm Executive’s obligations under the Proprietary Information Agreement (as defined below). It is understood that Executive has a certain period to consider whether to execute such Release, as set forth in the Release, and Executive may revoke such Release within seven (7) business days after execution. In the event Executive does not execute such Release within the applicable period, or if Executive revokes such Release within the subsequent seven (7) business day period, none of the aforesaid benefits set forth in Sections 4.1(ii), 4.2 and the Change of Control acceleration referenced in Section 3.3 shall be payable to Executive under this Agreement and this Agreement shall be null and void.

 

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4.4                               Section 409A.  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of the Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (b) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 4.4 shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due under the Agreement shall be paid as otherwise provided herein.  For purposes of Section 409A of the Code, Executive’s right to receive the payments of compensation pursuant to the Agreement shall be treated as a right to receive a series of separate payments and accordingly, each payment shall at all times be considered a separate and distinct payment.

 

4.5                               Mitigation.  Executive shall not be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer or by any retirement benefits received by Executive after the date of the Covered Termination, or otherwise.

 

ARTICLE V
 PROPRIETARY INFORMATION OBLIGATIONS

 

5.1                               Agreement.  Executive agrees to abide by the Proprietary Information and Inventions Agreement attached hereto as Exhibit B (the “Proprietary Information Agreement”).

 

5.2                               Remedies.  Executive’s duties under the Proprietary Information and Inventions Agreement shall survive termination of Executive’s employment with the Company and the termination of this Agreement. Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of the provisions of the Proprietary Information and Inventions Agreement would be inadequate, and Executive therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.

 

ARTICLE VI
 OUTSIDE ACTIVITIES

 

6.1                               No Other Employment.  Except with the prior written consent of the Board, Executive shall not during the term of Executive’s employment with the Company, undertake or engage in any other employment, occupation or business enterprise.  Notwithstanding the foregoing, during the term of Executive’s employment with the Company, Executive may (a) undertake or engage in any other employment, occupation or business enterprise in which Executive is a passive investor, and/or (b) engage in civic and not-for-profit activities, in each

 

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case, so long as such activities do not materially interfere with the performance of Executive’s duties hereunder.

 

6.2                               No Conflicting Business Interests.  During the term of Executive’s employment by the Company, except on behalf of the Company, Executive shall not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which were known by Executive to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive’s direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such corporation.

 

ARTICLE VII
 NONINTERFERENCE

 

While employed by the Company, and for one (1) year immediately following the date on which Executive terminates employment or otherwise ceases providing services to the Company, Executive agrees not to interfere with the business of the Company by soliciting or attempting to solicit any employee of the Company to terminate such employee’s employment in order to become an employee, consultant or independent contractor to or for any competitor of the Company. Executive’s duties under this Article VII shall survive termination of Executive’s employment with the Company and the termination of this Agreement.

 

ARTICLE VIII
 GENERAL PROVISIONS

 

8.1                               Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by telex) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll.

 

8.2                               Section 409A.  To the extend applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulations or other such guidance that may be issued after the Commencement Date (“Section 409A”).  Notwithstanding any provision of this Agreement to the contrary, in the event that following the Commencement Date, the Company determines in good faith that any compensation or benefits payable under this Agreement may not be either exempt from or compliant with Section 409A, the Company may adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to preserve the intended tax treatment of the compensation and benefits payable hereunder, including without limitation actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A, provided, that this

 

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Section 8.2 does not, and shall not be construed so as to, create any obligation on the part of the Company to adopt any such amendments, policies or procedures or to take any other such actions or to create any liability on the part of the Company for any failure to do so.

 

8.3                               Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

 

8.4                               Waiver.  If either party should waive any breach of any provisions of this Agreement, they shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

8.5                               Complete Agreement.  This Agreement and its Exhibit A and Exhibit B constitute the entire agreement between Executive and the Company and are the complete, final, and exclusive embodiment of their agreement with regard to this subject matter (except for the Plan, any successor thereto or the Company’s Change of Control Severance Plan). This Agreement supersedes any prior agreement between Executive and the Company or any predecessor employer in its entirety.  Executive and the Company acknowledge and agree that this Agreement is entered into without reliance on any promise or representation other than those expressly contained herein or therein and cannot be modified or amended except in a writing signed by a duly-authorized officer of the Company.

 

8.6                               Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

 

8.7                               Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

 

8.8                               Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder, without the written consent of the Company, which shall not be withheld unreasonably.

 

8.9                               Arbitration.  In the event of any contractual, statutory or tort dispute or claim relating to or arising out of Executive’s employment relationship with the Company (including but not limited to any claims of wrongful termination or age, sex, race, or other discrimination, but not including workers’ compensation claims), Executive and the Company agree that all such disputes will be finally resolved by binding arbitration conducted by a single neutral arbitrator associated with the American Arbitration Association in Menlo Park, California. Executive and the Company hereby waive their respective rights to have any such disputes or claims tried to a judge or jury. However, the Company agrees that this arbitration provision will not apply to any

 

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claim, by either Executive or the Company, for injunctive relief. The administrative costs of any arbitration proceeding between Executive and the Company and the fees and costs of the arbitrator shall be borne by the Company.

 

8.10                        Attorneys’ Fees.  If either party hereto brings any action to enforce rights hereunder, each party in any such action shall be responsible for its own attorneys’ fees and costs incurred in connection with such action.

 

8.11                        Acknowledgement.  Executive acknowledges that Executive (a) has had the opportunity to discuss this matter with and obtain advice from independent counsel of Executive’s own choice and has been advised to do so by the Company, (b) has carefully read and fully understands all the provisions of this Agreement, and (c) is knowingly and voluntarily entering into this Agreement.  Executive represents that Executive (i) is familiar with the restrictive covenants set forth in the Proprietary Information Agreement and (ii) is fully aware of his/her obligations thereunder.

 

8.12                        Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth below:

 

	
 
    	
GERON   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   John A. Scarlett
    
	
 
    	
 
    	
John   A. Scarlett, MD
    
	
 
    	
 
    	
President &   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
August 20,   2012
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   and agreed this 23rd day of August, 2012,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Andrew Grethlein
    	
 
    	
 
    	
 
    
	
Andrew   Grethlein
    	
 
    	
 
    
				

 

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EXHIBIT A

 

GENERAL RELEASE

 

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EXHIBIT B

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

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EXHIBIT C

 

AMENDED AND RESTATED SEVERANCE PLAN

 

12Exhibit 10.1

 

AMENDED AND RESTATED
 EXECUTIVE SEVERANCE AGREEMENT

 

This Amended and Restated Executive Severance Agreement (“Agreement”) is entered into, effective as of October 31, 2012, by and between Andrew A. Krakauer (“Executive”) and Cantel Medical Corp. (“Company”).

 

Background

 

A.            The Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders.  The Company believes that, to attract and retain experienced and valuable key executive employees, it is important and prudent to provide such executives with fair compensation should their employment be terminated under certain circumstances, including but not limited to change in control situations.

 

B.            The Company wishes to encourage the Executive to devote his full time and attention to the performance of his management responsibilities and to assist the Board and other management employees in evaluating business options and pursuing the best interests of the Company’s shareholders without being influenced by the uncertainty of his own employment situation.

 

C.            In furtherance of the foregoing, the Company and the Executive previously entered into an Amended and Restated Executive Severance Agreement which, among other things, sets forth the compensation and benefits arrangements payable in connection with a termination of employment of the Executive.   The Board has determined that it continues to be in the best interests of the Company and its stockholders that this Agreement and the Executive Severance Agreements of other executives of the Company be maintained in order to ensure that the Company will have the continued dedication of the executives throughout their tenure.   The Company and the Executive desire to amend and restate the Agreement as more fully set forth herein.

 

In consideration of the premises, the Executive’s employment by the Company on an at-will basis, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Company agree as follows:

 

Agreement

 

1.             Defined Terms.  Throughout this Agreement, when the first letter of a word (or the first letter of each word in a phrase) is capitalized, the word or phrase shall have the meaning specified in Appendix A (beginning on page 15).

 

2.             Term.  This initial Term of this Agreement commenced as of January 1, 2010, and shall continue through July 31, 2014; provided, however, that beginning on August 1, 2013, and on the first day of each following August, the Term of this Agreement shall automatically be extended by one year, unless either the Company or the Executive shall have provided notice to the other at least six (6) months before such date that the Term shall not be extended.  Notwithstanding the preceding provisions of this Section, (i) if a Change in Control occurs

 

 

during the Term of this Agreement, such Term (other than with respect to the provisions of Section 4) shall not end before the second anniversary of the Change in Control; provided, however, this sentence shall apply only to the first Change of Control while this Agreement is in effect; and (ii) termination of this Agreement shall not affect the obligations of the Company hereunder on account of the Executive’s Termination of Employment during the Term.

 

3.             Termination of Employment; Resignation of Officer and Director Positions.  The Executive is an at-will employee.  The Company may Terminate the Executive’s Employment at any time, for any reason whatsoever or for no reason, subject to its payment obligations under this Section and, if applicable, Section 4 or 5.  The Executive may voluntarily Terminate his Employment at any time by providing at least twenty (20) days’ prior notice to the Company.  Regardless of whether the Executive’s Termination of Employment is voluntary or involuntary, the Executive shall resign from any and all of his director positions and offices with the Company and each Related Employer, effective as of his Termination Date.  Upon Termination of Employment, the Executive shall be entitled to the following, in addition to any benefits payable under Section 4 or 5:

 

(a)           Any earned but unpaid base salary through his Termination Date, plus any accrued and unused paid time off (PTO) due to the Executive under the Company’s PTO program through his Termination Date, which amounts shall be paid to the Executive not later than the payment date for the payroll period next following his Termination Date.

 

(b)           Provided that the Executive applies for reimbursement in accordance with the Company’s established reimbursement procedures (within the period required by such procedures but under no circumstances later than ninety (90) days after his Termination Date), the Company shall pay the Executive any reimbursements to which he is entitled under such procedures not later than the payment date for the payroll period next following the date on which the Executive applies for reimbursement.

 

(c)           Any benefits (other than severance) payable to the Executive under any of the Company’s cash or equity incentive compensation plans, employee benefit plans or programs, the Company’s 2006 Equity Incentive Plan and any successor thereto (the “Equity Plan”) and the agreements issued thereunder (collectively, “Benefit Plans”), to the extent not provided for herein, shall be payable in accordance with the provisions of those plans or programs. This Agreement and all such Benefit Plans that cover the Executive shall be construed in a consistent manner.  In the event of conflict between the terms and conditions of this Agreement and any of the Benefit Plans as they relate to the Executive and any particular payment or award, the order of precedence shall be as follows: (i) this Agreement; (ii) any Benefit Plan that constitutes an employment agreement; (iii) any Benefit Plan that constitutes an annual or long term incentive plan; (iv) the Equity Plan; and (v) any agreement issued under the Equity Plan; provided, however, that no effect shall be given to any provision of this Agreement over any provision of the Equity Plan if and to the extent such provision could not have been approved by the Board as an amendment to the Equity Plan pursuant to Section 14(a) of the Company’s 2006 Equity Incentive Plan (or any corresponding provision of any successor Equity Plan) without stockholder approval or the consent of the Executive, unless and until such approval or consent has been obtained.

 

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4.             Non-Change of Control Severance and Other Benefits.

 

(a)           Subject to (i) the Executive’s timely filing of a duly executed Release in accordance with Section 19, (ii) such Release becoming effective and irrevocable in accordance with its terms not later than sixty (60) days after the Executive’s Termination of Employment (the last day of such 60-day period being referred to as the “Release Effectiveness Date”), (iii) the provisions of this Section 4, and (iv) the limitations provided in Section 10, the Company shall provide the Executive with the payments and benefits set forth in this Section, if at any time during the Term other than during a Change in Control Coverage Period either (i) the Company Terminates the Executive’s Employment (other than a termination for Cause, Unacceptable Performance, Disability, or death pursuant to Section 7), or (ii) the Executive voluntarily Terminates his Employment for Adequate Reason pursuant to Section 9.  Notwithstanding the preceding provisions of this Subsection, the Executive shall not be entitled to benefits pursuant to this Section 4, if he is entitled to benefits pursuant to Section 5.

 

(b)           As soon as administratively feasible (and not more than ten (10) days) after the Company’s receipt of the duly executed Release and the Release becoming effective and irrevocable, the Company shall pay to the Executive a single lump sum payment equal to the product of two (2) times the sum of (A) the Executive’s Annual Base Salary at the rate in effect as of the Termination Date plus (B) 85%(1) of the Executive’s Annual Base Salary at the rate in effect as of the Termination Date.  For purposes of determining the Executive’s Annual Base Salary Rate pursuant to the preceding sentence, any reduction to the Executive’s salary during the six-month period preceding his Termination of Employment (other than in connection with an “across-the-board” reduction in salary of all senior executives of the Company with the approval of the Company’s CEO) shall be disregarded.  Notwithstanding the foregoing, if the Release Effectiveness Date falls in the calendar year next succeeding the calendar year of the Termination Date, the lump sum payment will be made no earlier than the first business day of such next succeeding calendar year.

 

(c)           If the Termination Date of the Executive occurs subsequent to the last day of a Fiscal Year for which the Executive has not been paid his Bonus, then the Executive shall be entitled to his full Bonus for such Fiscal Year to the extent otherwise earned under the terms of the Bonus Plan for such Fiscal Year (as if the Executive’s employment had not been Terminated prior to the next Bonus payment date). Such amount shall be paid to the Executive not later than seventy five (75) days following the close of such Fiscal Year.  Amounts payable under this Subparagraph (c) will be deemed payments attributable to the Executive’s employment prior to or on the Termination Date and not as severance.

 

(d)           The Company shall pay to the Executive a pro-rated Bonus for the Fiscal Year in which the Termination Date occurs, determined by multiplying (i) the amount of the Executive’s full Bonus for such Fiscal Year that would have been earned under the terms of the

 

(1)  This percentage represents the Executive’s bonus percentage in effect as of the date of this Agreement.  Such percentage shall increase automatically at any time the Executive’s bonus percentage is increased by the Company’s Compensation Committee of the Board (or by the Board itself).  Such increase shall be to the new approved bonus percentage as documented in resolutions of the Compensation Committee set forth in a written consent or minutes of proceedings of the Committee (or Board).

 

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Bonus Plan for such Fiscal Year (as in effect immediately prior to the Termination Date) if the Executive’s employment had continued through the next Bonus payment date, by (ii) a fraction, (A) the numerator of which is the number of full or partial months since the end of the prior Fiscal Year in which the Executive was employed by the Company, and (B) the denominator of which is 12.  Such amount shall be paid to the Executive not later than seventy five (75) days following the close of such Fiscal Year.  To the extent that a Bonus is payable to the Executive under Subparagraph (c) or (d) of this Section 4 for any Fiscal Year, the Executive shall not also be entitled to any Bonus payment for such Fiscal Year under the terms of the applicable Bonus Plan.  Notwithstanding the foregoing, if no Bonus Plan has been finalized (i.e., approved by the Compensation Committee and disseminated to the Executive) for the Fiscal Year in which such Termination Date occurs either prior to the commencement of such Fiscal Year or within three months following the commencement of such Fiscal Year, then the Bonus for such Fiscal Year payable under this Subparagraph (d) will be determined in accordance with the first sentence of Section 5(b)(2) (as if the pro rata Bonus payment under that Section was required). Amounts payable under this Subparagraph (d) will be deemed payments attributable to the Executive’s employment prior to or on the Termination Date and not as severance.

 

(e)           If the Executive is eligible for and properly elects Continuation Coverage for himself and/or one or more qualified beneficiaries (as defined in ERISA Section 607(3)) under the Company’s medical plan, the Company shall pay the premiums for such coverage (or reimburse the Executive for such premiums) for the eighteen (18) month period following the Executive’s Termination of Employment (or such shorter period during which such person is eligible for Continuation Coverage).  Such payments or reimbursements shall constitute taxable income of the Executive to the extent required by law.

 

(f)            The Company shall pay the cost of outplacement services incurred by the Executive during the twelve (12) month period following his Termination of Employment and provided by a firm of the Executive’s choice, up to a total of Twenty Thousand Dollars ($20,000).  Payment for outplacement expenses shall be made by the Company promptly following the Company’s receipt of appropriate invoices documenting such expenses.

 

(g)           Notwithstanding the preceding provisions or any other provisions herein to the contrary, if the Executive’s Employment is Terminated during a Change in Control Coverage Period, either by the Executive for Good Reason or by the Company for any reason other than for Cause or death, then the Executive shall be entitled to the payments and benefits that would have been provided to him pursuant to Section 5 if the Company had Terminated his Employment without Cause during a Change in Control Coverage Period (reduced by any payments or benefits provided to him pursuant to this Section 4).  In such a case, the Executive shall not be required to execute an additional Release, and any Release requirement specified in Section 5 shall be deemed satisfied on the Change in Control Date.

 

(h)           Notwithstanding the preceding provisions of this Section, if the Executive is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), the Company shall promptly deliver written notice to the Executive advising him of the application of such Code Section. Solely to the extent necessary to avoid adverse personal tax consequences to the Executive under Code Section 409A, payments otherwise required to be made to the Executive

 

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pursuant to this Section 4 shall be delayed to the earlier of (i) six months and one day after the Executive’s Termination Date, or (ii) the Executive’s death.  For purposes of this Subparagraph, the Executive’s Date of Termination shall be interpreted in a manner that is consistent with the term “separation from service” as defined in Code Section 409A and the Treasury Regulations thereunder. Interest shall accrue on unpaid amounts delayed under this subparagraph at the prime rate from time to time in effect at JP Morgan Chase Bank or any successor bank commencing from the date that such amounts would otherwise have been due under the applicable provision.

 

5.             Change of Control Severance and Other Benefits.

 

(a)           Subject to (i) the Executive’s timely filing of a duly executed Release in accordance with Section 19, (ii) such Release becoming effective and irrevocable in accordance with its terms not later than the Release Effectiveness Date (i.e., the sixtieth day after the Executive’s Termination of Employment), (iii) the provisions of this Section 5, and (iv) the limitations provided in Section 10, the Company shall provide the Executive with the payments and benefits set forth in this Section, if during a Change in Control Coverage Period, (A) the Company Terminates the Executive’s Employment (other than a termination for Cause or death pursuant to Section 7), or (B) the Executive voluntarily Terminates his Employment for Good Reason pursuant to Section 9.  Amounts payable pursuant to this Section shall be subject to the limitations and reimbursement expressly provided in this Agreement.

 

(b)           As soon as administratively feasible (and not more than five (5) business days) after the Company’s receipt of the duly executed Release and the Release becoming effective and irrevocable in accordance with its terms, the Company shall pay to the Executive a single lump sum payment in an amount equal to the sum of the following:

 

(1)           the product of (i) two (2) times (ii) the sum of (A) the Executive’s Annual Base Salary, at the greater of the rate in effect on the Change in Control Date or the Termination Date (disregarding any reduction in the rate of the Executive’s salary during the six-month period immediately preceding his Termination of Employment), plus (B) the greater of (I) 85%(2) of the amount determined under clause (A) of this Subparagraph or (II) the average of the annual Bonuses paid to the Executive for the two Fiscal Years preceding the year in which the Executive’s Employment is Terminated.  Amounts payable under this Subparagraph (b)(1) will be deemed severance; and

 

(2)           a pro-rata Bonus amount, determined by multiplying (i) the greater of (A) 85%(3) of the amount determined under clause (A) of the preceding Subparagraph (b)(1) or (B) the average of the annual Bonuses paid to the Executive for the two years Fiscal Years preceding the Fiscal Year in which the Executive’s Employment is Terminated, by (ii) a fraction, (A) the numerator of which is the number of full or partial months since the end of the prior Fiscal Year in which the Executive has been employed by the Company, and (B) the denominator

 

(2), (3) This percentage represents the Executive’s bonus percentage in effect as of the date of this Agreement.  Such percentage shall increase automatically at any time the Executive’s bonus percentage is increased by the Company’s Compensation Committee of the Board (or by the Board itself).  Such increase shall be to the new approved bonus percentage as documented in resolutions of the Compensation Committee set forth in a written consent or minutes of proceedings of the Committee (or Board).

 

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of which is 12.  However, if the Executive did not receive the annual Bonus he would have earned under the applicable Bonus Plan for the preceding Fiscal Year if his employment had continued through the Bonus payment date, then the numerator shall be the number of full or partial months since the beginning of the preceding Fiscal Year to the date of termination in which the Executive was employed by the Company. To the extent that a Bonus is payable to the Executive under this Subparagraph (b)(2) for the Fiscal Year in which the Termination Date occurs or such preceding Fiscal Year, the Executive shall not also be entitled to any Bonus payment for such Fiscal Year under the terms of the applicable Bonus Plan. Amounts payable under this Subparagraph (b)(2) will be deemed payments attributable to the Executive’s employment prior to or on the Termination Date and not as severance.

 

Notwithstanding the foregoing, if the Release Effectiveness Date falls in the calendar year next succeeding the calendar year of the Termination Date, the lump sum payment will be made no earlier than the first business day of such next succeeding calendar year.

 

(c)           If the Executive is eligible for and properly elects Continuation Coverage for himself and/or one or more qualified beneficiaries (as defined in ERISA Section 607(3)) under the Company’s medical plan, the Company shall pay the premiums for such coverage (or reimburse the Executive for such premiums) for the twenty-four (24) month period following the Executive’s Termination of Employment (or such shorter period during which such person is eligible for Continuation Coverage).  Such payments or reimbursements shall constitute taxable income of the Executive to the extent required by law.

 

(d)           For the twenty-four (24) month period following the Executive’s Termination of Employment, the Company shall continue to provide term life insurance coverage substantially the same as that provided for the Executive immediately before his Termination Date (if any).

 

(e)           The Company shall pay the cost of outplacement services incurred by the Executive during the twelve (12) month period following his Termination of Employment and provided by a firm of the Executives’ choice, up to a total of Twenty Thousand Dollars ($20,000).  Payment for outplacement expenses shall be paid directly by the Company promptly following the Company’s receipt of appropriate invoices documenting such expenses.

 

(f)            Notwithstanding the preceding provisions of this Section, if the Executive is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), the Company shall promptly deliver written notice to the Executive advising him of the application of such Code Section. Solely to the extent necessary to avoid adverse personal tax consequences to the Executive under Code Section 409A, payments otherwise required to be made to the Executive pursuant to this Section 5 shall be delayed to the earlier of (i) six months and one day after the Executive’s Termination Date, or (ii) the Executive’s death.  For purposes of this Subparagraph, the Executive’s Termination Date shall be interpreted in a manner that is consistent with the term “separation from service” as defined in Code Section 409A and the Treasury Regulations thereunder. Interest shall accrue on unpaid amounts delayed under this subparagraph at the prime rate from time to time in effect at JP Morgan Chase Bank or any successor bank commencing from the date that such amounts would otherwise have been due under the applicable provision.

 

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6.             Provisions Relating to Parachute Payments.  If payments and benefits to or for the benefit of the Executive, whether pursuant to this Agreement or otherwise, would result in total Parachute Payments to the Executive with a value equal to or greater than one hundred percent (100%) of the Parachute Payment Limit, the Executive may, in his sole discretion, elect to reduce the amount payable pursuant to Section 5(b) so that the value of all Parachute Payments to the Executive, whether or not made pursuant to this Agreement, is equal to the Parachute Payment Limit minus One Dollar ($1.00).

 

7.             Termination of Employment by the Company for Cause, Unacceptable Performance, Disability, or Death.

 

(a)           The Company may cause a Termination of the Executive’s Employment for Disability at any time.  To do so, the Board must provide the Executive with a notice of termination specifying the Termination Date and the circumstances constituting Disability.

 

(b)           The Company may cause a Termination of the Executive’s Employment for Unacceptable Performance at any time during the Term other than during a Change in Control Coverage Period. To do so, the Executive must be provided with a notice of termination from either (i) the Board or (ii) the Chairman of the Board of the Company with approval of the Board, which in either case specifies the Termination Date and the specific act(s) or failure(s) constituting Unacceptable Performance.  If the notice identifies an act or failure constituting Unacceptable Performance, it shall be accompanied by a resolution duly adopted by a majority of the entire membership of the Board and, if the act or failure is subject to correction under the definition of Unacceptable Performance and related definitions in this Agreement, the notice shall also specify the period during which the act or failure must be corrected, which in no event shall be less than thirty (30) days.  If the Board reasonably determines that the Executive has not corrected the act or failure in all material respects within the required correction period, the Board or the Chairman of the Board must then provide a second notice of termination stating the reasons for the termination and the Termination Date, and the Executive’s Employment shall terminate on such Date.

 

(c)             The Company may cause a Termination of the Executive’s Employment for Cause at any time.  To do so, the Executive must be provided with a notice of termination from either (i) the Board or (ii) the Chairman of the Board of the Company with approval of the Board, which in either case specifies the Termination Date and the specific act(s) or failure(s) constituting Cause.  If the notice identifies an act or failure constituting Cause, it shall be accompanied by a resolution duly adopted by not less than a majority of the entire membership of the Board (after reasonable notice to the Executive and an opportunity for the Executive, together with legal counsel, to be heard by the Board), finding, in the reasonable opinion of the Board, that one or more of the events of Cause has occurred and specifying in reasonable detail the acts or omissions constituting Cause.  If the act or failure constituting Cause is subject to correction under the definition of Cause and related definitions in this Agreement, the notice shall also specify the period during which the act or failure must be corrected, which in no event shall be less than thirty (30) days.  If the Board acting in good faith determines that the Executive has not corrected the act or failure in all material respects within the required correction period, the Board or the Chairman of the Board must then provide a second notice of termination stating the

 

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reasons for the termination and the Termination Date, and the Executive’s Employment shall terminate on such Date.

 

(d)             If the Executive dies before a Termination of Employment, his Employment shall terminate automatically on the date of his death.

 

(e)             In the case of a Termination of Employment for Cause or Unacceptable Performance pursuant to this Section, the Executive shall not be entitled to benefits or payments pursuant to Section 4 or 5; provided, however, if the Company causes a Termination of the Executive’s Employment for Unacceptable Performance and the Termination Date of such termination occurs during a Change in Control Coverage Period, then such termination shall be deemed a Termination of the Executive’s Employment “other than a termination for Cause” under Section 5(a) and thereby obligate the Company to provide the Executive with the payments and benefits set forth in Section 5.

 

(f)              In the case of a Termination of Employment due to Disability (at any time during the Term other than during a Change in Control Coverage Period) or death pursuant to this Section, the Company shall continue to pay to the Executive, if living, or other person or persons as the Executive may from time to time designate in writing as the beneficiary of such payments, the Annual Base Salary in effect at the time when such Disability or death occurred, during the three-month period following such Disability or death.  The Company shall also pay a pro rated Bonus for the Fiscal Year in which the Termination Date occurs, determined by multiplying (i) the amount of the Executive’s full Bonus for such Fiscal Year that would have been earned under the terms of the Bonus Plan for such Fiscal Year (as in effect immediately prior to the Termination Date) if the Executive’s employment had continued through the next Bonus payment date, by (ii) a fraction, (A) the numerator of which is the number of full or partial months since the end of the prior Fiscal Year in which the Executive was employed by the Company, and (B) the denominator of which is 12.  Such amount shall be paid to the Executive not later than seventy five (75) days following the close of such Fiscal Year.  To the extent that a Bonus is payable to the Executive under this Section 7(f) for the Fiscal Year in which the Termination Date occurs, the Executive will not also be entitled to a Bonus payment for such Fiscal Year under the terms of the applicable Bonus Plan. Except for such Annual Base Salary and Bonus, the Company shall have no further obligation pursuant to this Section.

 

8.             Accelerated Vesting of Equity Awards upon Certain Events.

 

(a)           In the event of any termination described in Section 4(a) or 5(a) or in the event that the Executive terminates his Employment for Adequate Reason or Good Reason pursuant to Section 9, in any such case prior to the full vesting of stock options or restricted stock then held by the Executive (i.e., the options becoming exercisable in their entirety and the restricted stock ceasing to have any risks of forfeiture), then, effective as of the Termination Date, all such options and restricted stock then held by the Executive will become automatically fully exercisable and all restrictions of such options and restricted stock awards will automatically lapse.  In the event of any termination of the Executive’s Employment as a result of the Executive’s Retirement prior to the full vesting of stock options then held by the Executive, then effective as of the Termination Date, all such stock options will become automatically fully exercisable and all restrictions of such options will automatically lapse.

 

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(b)           In the event of a termination of the Executive’s Employment pursuant to Section 7 due to death, in any such case prior to the full vesting of stock options and restricted stock then held by the Executive, all of the Executive’s stock options and restricted stock awards will automatically vest as of the Termination Date.  In the event of a termination of the Executive’s Employment pursuant to Section 7 due to Disability, those tranches of the Executive’s stock option and restricted stock awards which would have vested within the twelve (12) month period following the Termination Date but for the Executive’s termination of Employment will automatically vest as of the Termination Date.

 

(c)           The accelerated vesting provided for in this Agreement in connection with certain Terminations following a Change in Control shall not be deemed to limit any acceleration of vesting that the Executive is entitled to upon a Change in Control under the Company’s Long Term Incentive Plan or any other benefit plan that the Executive is covered by as of the effective time of the Change in Control.

 

(d)           Nothing herein shall be deemed to cause the acceleration of the vesting of a Performance Award issued under the Equity Plan.

 

(e)           Notwithstanding anything set forth herein, the Company may in its discretion accelerate the vesting of any stock options or restricted stock held by the Executive in the event of a termination of the Executive’s Employment for any reason.

 

9.             Resignation by Executive for Adequate Reason or Good Reason.  If an event of Adequate Reason or Good Reason occurs during the Term, the Executive may, at any time within the ninety (90) day period following such event, provide the Company with a notice of termination under Section 4 (in the case of Adequate Reason) or Section 5, if applicable (in the case of Good Reason) specifying the event of Adequate Reason or Good Reason and notifying the Company of his intention to Terminate Employment upon the Company’s failure to correct the event of Adequate Reason or Good Reason (as applicable) within thirty (30) days following receipt of the Executive’s notice of termination.  If the Company fails to correct the event of Adequate Reason or Good Reason (as applicable) and provide the Executive with notice of such correction within such thirty (30) day period, the Executive’s Employment shall terminate as of the end of such period, and the Executive shall be entitled to benefits as provided in Section 3 and Section 4 or 5, as applicable.

 

10.          Limitation on Payments and Benefits.  Notwithstanding any other provision of this Agreement, payments pursuant to this Agreement shall be subject to the following limitations:

 

(a)           No payment (other than a payment pursuant to Section 3) shall be made pursuant to this Agreement until the Release has become effective according to its terms.

 

(b)           If the Executive intentionally and materially breaches any provision of the Confidentiality and Non-Competition Agreement, and fails to cure such breach (if curable) within thirty (30) days, he shall promptly repay to the Company any and all severance amounts previously paid to him pursuant to Section 4 and/or 5, and he shall have no further rights pursuant to this Agreement.

 

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(c)           Payments hereunder shall be limited to the extent provided in Section 6.

 

11.          No Obligation to Mitigate.  The Executive shall not be required to mitigate the amount of any payment or benefits provided for under Section 4 or 5 by seeking other employment or otherwise, and the amount of any payment or benefits provided for under Section 4 or 5 shall not be reduced by any payments or benefits received by the Executive as the result of employment by another employer after the Termination Date, or otherwise; provided, however, that the amount payable under Section 4 or 5 shall be reduced by the amount of any severance, termination, or notice pay (or any other similar amounts) required by law to be paid to the Executive by the Company or its subsidiaries and by any salary or other amounts paid to the Executive during any notice period that the Company or its subsidiaries is required by law to provide.

 

12.          Withholding and Taxes.  The Company may withhold from any payment made hereunder (i) any taxes that the Company reasonably determines are required to be withheld under federal, state, or local tax laws or regulations, and (ii) any other amounts that the Company is authorized to withhold.  Except for employment taxes that are the obligation of the Company, the Executive shall pay all federal, state, local, and other taxes (including, without limitation, interest, fines, and penalties) imposed on him under applicable law by virtue of or relating to the payments and/or benefits contemplated by this Agreement, subject to any reimbursement provisions of this Agreement.

 

13.          Indemnification.  The Executive shall continue to be entitled to any rights to insurance and indemnification under the Company’s or a Related Employer’s directors and officers liability insurance (“D&O Insurance”), Certificate of Incorporation, and Bylaws, as in effect before the earlier of the Executive’s Termination of Employment or a Change in Control (or rights to insurance and indemnification that are substantially the same thereto), with respect to any claims relating to the period before his Termination Date.  Additionally, any and all D&O Insurance policies obtained by the Company or a Related Employer following the Termination Date that are “claims made” polices shall cover the Executive to the same extent as other former officers of the Company.

 

14.          Default in Payment.  Any payment not made within ten (10) days after it is due in accordance with this Agreement shall thereafter bear interest, compounded quarterly, at 5% above the prime rate from time to time in effect at JP Morgan Chase Bank or any successor bank.

 

15.          Effect on Other Plans, Agreements, and Benefits.  Except to the extent expressly set forth herein, any benefit or compensation to which the Executive is entitled under any agreement between the Executive and the Company or any of its subsidiaries or under any plan maintained by the Company or any of its subsidiaries in which the Executive participates or participated shall not be modified or lessened in any way, but shall be payable according to the terms of the applicable plan or agreement.  The terms of this Agreement shall supersede and terminate any prior change in control and/or severance agreement, and (except as expressly provided herein and other than pursuant to the Equity Plan or any predecessor equity plan under which awards are granted to the Executive) the provisions of any other agreement or plan providing benefits following a change in control or termination of employment, entered into

 

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between the Executive and the Company or any subsidiary thereof.  Notwithstanding the above, any severance benefits received by the Executive pursuant to this Agreement shall be in lieu of any severance benefits to which the Executive would otherwise be entitled under any general severance policy maintained by the Company or the relevant subsidiary for its management personnel or under any employment contract between the Executive and the Company or any subsidiary thereof provided that, for purposes of this sentence, the Long Term Incentive Plan and equity award plans shall not be deemed general severance policies of the Company.  Any and all employment agreements between the Company and the Executive, inclusive of provisions that in accordance with the terms of such agreements survive termination, are hereby terminated and void.

 

16.          Unsecured Obligation.  All rights of the Executive or any beneficiary of the Executive who succeeds to the Executive’s rights to payments or benefits under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Company or payment of any amounts due hereunder.  Neither the Executive nor any such beneficiary shall have any interest in or rights against any specific assets of the Company or any of its subsidiaries, and the Executive and any such beneficiary shall have only the rights of a general unsecured creditor of the Company.

 

17.          Prohibition Against Assignment.  The Executive may not assign, pledge, anticipate, or transfer any benefit or amount payable hereunder (other than benefits payable upon or following his death), and any attempt to assign, pledge, anticipate, or transfer such and benefit or amount hereunder, whether voluntary or involuntary, shall be null and void.

 

18.          Successors.

 

(a)           The Company 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, by agreement in form and substance satisfactory to the Executive, to expressly 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 had taken place.  Failure of the Company to obtain such agreement before the effectiveness of any such succession shall be a material breach of this Agreement.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined, and any successor to its business and/or assets as aforesaid that executes and delivers the agreement provided for in this Subparagraph or otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

 

(b)           This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.  If the Executive should die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.

 

19.          Release.  In consideration of the Company’s promises and covenants and the performance thereof, the Executive agrees that the Company’s payment obligations under Sections 4 and 5 shall be conditioned on the Executive’s release of the Company and all other

 

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persons named in the Release from any and all causes of causes of action that the Executive has or may have against the Company or any such person before the effective date of the Release, other than a cause based on a breach hereof.  The Release shall be substantially in the form attached hereto as Exhibit I.  For the Release to be effective, the Executive (or his representative or agent) must have provided a signed version of the Release to the Company and such Release shall have become effective and irrevocable by its terms within sixty (60) days after the Executive’s Termination of Employment.

 

20.          Disputes.

 

(a)           In any judicial or other proceedings in which the Executive’s right to, or the amount of, benefits hereunder is disputed, the ultimate burden of proof shall be on the Company.

 

(b)           Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Little Falls, New Jersey by three arbitrators, one of whom shall be appointed by the Company, one of whom shall be appointed by the Executive, and the third of whom shall be appointed by the first two arbitrators.  If either the Company or the Executive fails to appoint an arbitrator within 20 days of a request in writing by the other to do so, or if the first two arbitrators cannot agree on the appointment of a third arbitrator within 20 days after the second arbitrator is designated, then such arbitrator shall be appointed by the Chief Judge of the United States District Court located in the city of Newark, New Jersey, or upon his failure to act, by the American Arbitration Association so as to enable the arbitrators to render an award within 90 days after the three arbitrators have been appointed.  Following the selection of arbitrators as set forth above, the arbitration shall be conducted promptly and expeditiously and in accordance with the rules of the American Arbitration Association.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance of his right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

(c)           The Company shall pay all reasonable out-of-pocket expenses, including reasonable legal fees and legal expenses, incurred by the Executive in connection with any judicial or other proceeding, including any arbitration proceeding, to enforce this Agreement or to construe, determine, or defend the validity of this Agreement.  The Company shall pay (or reimburse the Executive) for any such expense as soon as administratively practicable after the Executive demonstrates evidence that such expense have been incurred and not later than thirty (30) days following the Executive’s submission of such expenses to the Company with a request for reimbursement.

 

21.          Miscellaneous Provisions.

 

(a)           Entire Agreement.  Except as expressly provided herein, this Agreement contains the entire agreement and understanding of the parties regarding the transactions contemplated herein and supersedes all prior agreements, arrangements, or understandings, whether written or oral, relating to the subject matter hereof, including, without limitation, any letters, agreements, or understandings between the Executive and the Company or any subsidiary

 

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thereof before the date hereof.  By entering into this Severance Agreement, the Executive waives any right that he may otherwise have to participate in any generally applicable severance plan of the Company or any Related Employer.  Notwithstanding the foregoing, nothing herein shall be deemed to limit any rights the Executive may have in connection with his equity awards under the Long Term Incentive Plan or the Company’s Equity Plan and the equity award agreements issued thereunder.

 

(b)           Amendment.  No provision of this Agreement may be amended or waived, except by written agreement signed by both the Company and the Executive.

 

(c)           Governing Law.  This Agreement is intended to comply with the requirements of Code Section 409A, and it shall be construed in accordance with such intent.  Subject to the preceding sentence, this Agreement shall be construed in accordance with, and governed by, the internal laws of the State of New Jersey without regard to principles of conflict of laws.

 

(d)           Headings.  The headings in this Agreement have been inserted solely for ease of reference and shall not be considered in the interpretation or enforcement of this Agreement.

 

(e)           Severability.  If any provision of the Agreement is held to be invalid, illegal, or unenforceable, the remainder of this Agreement shall not be affected thereby.  If any provision of this Agreement is held by a court of competent jurisdiction to conflict with any federal, state, or local law, such provision is hereby declared to be of such force and effect as is permissible in such jurisdiction.

 

(f)            Rights and Waivers.  All rights and remedies of the parties hereto are separate and cumulative, and no one of them, whether exercised or not, shall be deemed to exclude, limit, or prejudice any other right or remedy that either of the parties hereto may have.  No party to this Agreement shall be deemed to waive any right or remedy under this Agreement, unless such waiver is in writing and signed by such party.  No delay or omission on the part of either party in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy.  A waiver on any one occasion shall not be construed as a bar to or a waiver of any right or remedy on any future occasion.

 

(g)           Notices.  All notices hereunder shall be in writing.  A notice by the Company shall be deemed to have been given only when delivered in person to the Executive or mailed by first class United States Mail, Return Receipt Requested, or sent by overnight delivery (or the fastest delivery available, if overnight delivery is not available) by means of an internationally recognized delivery service, to the Executive at his most recent address on the records of the Company.  A notice by the Executive to the Company shall be deemed to have been given only when delivered in person to the Company’s General Counsel or mailed by first class United States Mail, Return Receipt Requested, or sent by overnight delivery (or the fastest delivery available, if overnight delivery is not available) by means of an internationally recognized delivery service, to the Company’s General Counsel at the Company’s headquarters.

 

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(h)           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument, and may be delivered by facsimile or pdf.

 

22.          No Reliance.  The Executive represents and acknowledges that in executing this Agreement, the Executive does not rely and has not relied upon any representation or statement by the Company or its agents, other than statements contained in this Agreement.

 

The parties hereto have caused this Agreement to be executed on the day and year first above written.

 

	
 
    	
 
    	
CANTEL MEDICAL CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Andrew A. Krakauer
    	
 
    	
 
    	
Eric W. Nodiff, Senior Vice President and
    
	
 
    	
 
    	
 
    	
General Counsel
    

 

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APPENDIX A

 

DEFINED TERMS

 

For purposes of this Agreement, the following terms shall have the meanings specified below:

 

“Adequate Reason” means any of the following without the express written consent of the Executive:

 

(i)            a material reduction in the Executive’s authority, duties, or responsibilities or the assignment to the Executive of duties of a substantial nature and on a continuous or regular basis that are materially inconsistent with the duties of the Executive;

 

(ii)           a reduction in the Executive’s base compensation (other than in connection with an “across-the-board” reduction in base compensation of the senior executives of the Company approved in advance by the Company’s CEO) or failure to include the Executive with other similarly situated employees in any incentive, bonus, or benefit plans as may be offered by the Company from time to time;

 

(iii)          a change in the primary location at which the Executive is required to perform the duties of his employment to a location that is more than thirty (30) miles from the location at which his office is located on the effective date of this Agreement; or

 

(iv)          the Company’s material breach of this Agreement.

 

“Annual Base Salary” means the annual base cash compensation payable to the Executive at the rate in effect as of the applicable date (excluding bonuses, incentive compensation, taxable fringe benefits, and any other type of special pay), before any reduction on account of salary reduction contributions pursuant to Code Section 125 or 401(k) or pursuant to a nonqualified deferred compensation plan.

 

“Board” means the Company’s Board of Directors.

 

“Bonus” means an annual cash bonus payable under any Bonus Plan.

 

“Bonus Plan” means any bonus plan, short term incentive compensation plan or other like benefit plan in which the Executive participates, whether or not awards thereunder are discretionary, including without limitation, the Annual Incentive Compensation Plan as in effect for the fiscal year ending July 31, 2011, as amended.

 

“Cause” means the Executive’s:

 

(i)            act of fraud, embezzlement, theft, or other intentional material violation of the law in connection with or in the course of his employment;

 

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(ii)           willful gross misconduct that is likely to materially injure the reputation, business, or a business relationship of the Company; or

 

(iii)          willful material violation of the Confidentiality and Non-Competition Agreement.

 

For purposes of the definition of “Cause”, no act, or failure to act, on the part of the Executive shall be deemed “willful,” if it was done or omitted by the Executive in good faith or with a reasonable belief that the act or omission was not opposed to the best interests of the Company.

 

“Change in Control” means the occurrence of any of the following events: (i) at any time after the Effective Date at least a majority of the Board shall cease to consist of “Continuing Directors” (meaning directors of the Company who either were directors on the Effective Date or who subsequently became directors and whose election, or nomination for election by the Company’s stockholders, was approved by a majority of the then Continuing Directors); or (ii) any “person” or “group” (as determined for purposes of Section 13(d)(3) of the Exchange Act), except any majority-owned subsidiary of the Company or any employee benefit plan of the Company or any trust thereunder, shall have acquired “beneficial ownership” (as determined for purposes of Securities and Exchange Commission (“SEC”) Regulation 13d-3) of Shares having more than 50% of the voting power of all outstanding Shares; or (iii) a merger or consolidation occurs to which the Company is a party, in which outstanding Shares are converted into shares of another company (other than a conversion into shares of voting common stock of the successor corporation or a holding company thereof representing 80% of the voting power of all capital stock thereof outstanding immediately after the merger or consolidation) or other securities (of either the Company or another company) or cash or other property; or (iv) the sale of all, or substantially all, of the Company’s assets occurs; or (v) the stockholders of the Company approve a plan of complete liquidation of the Company.

 

“Change in Control Date” means the effective date of an event constituting a Change in Control.

 

“Change in Control Period” means the period beginning on the date of a Change in Control and ending two years thereafter.

 

“Change in Control Coverage Period” means the period (A) commencing on the earlier to occur of (i) the first day of a Potential Change Period or (ii) the first day of the six (6) month period ending on the Change in Control Date and (B) ending on the last day of a Change in Control Period.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Company” means Cantel Medical Corp. and any successor, to the extent provided in Section 18.

 

“Confidentiality and Non-Competition Agreement” means the confidentiality and non-competition agreement between the Company and the Executive, as in effect from time to time.

 

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“Continuation Coverage” means continuation coverage within the meaning of ERISA Sections 601 through 607.

 

“Disability” means an illness or injury that qualifies the Executive for disability benefits under a long-term disability plan of the Company or a Related Employer in which the Executive is a participant; provided, however, that a Disability shall not be deemed to have occurred hereunder unless the Executive is absent from work or otherwise substantially unable to assume his normal duties for a period of ninety (90) successive days or an aggregate of one hundred twenty (120) days during any consecutive twelve-month period during the Term.

 

“Equity Plan” means that Cantel Medical Corp. 2006 Equity Incentive Plan, as amended and any successor equity plan thereto.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect on the date of this Agreement.

 

“Fiscal Year” means the fiscal year of the Company.

 

“Good Reason” means any of the following during a Change in Control Coverage Period without the Executive’s express written consent:

 

(i)            a material reduction in the Executive’s authority, duties, or responsibilities or the assignment to the Executive of duties of a substantial nature and on a continuous or regular basis that are materially inconsistent with the duties of the Executive;

 

(ii)           a reduction in the Executive’s base compensation or failure to include the Executive with other similarly situated employees in any incentive, bonus, or benefit plans as may be offered by the Company from time to time;

 

(iii)          a change in the primary location at which the Executive is required to perform the duties of his employment to a location that is more than thirty (30) miles from the location at which his office is located on the Change in Control Date;

 

(iv)          the Company’s material breach of this Agreement;

 

(v)           a material reduction in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report; or

 

(vi)          a material reduction in the scope of the budget over which the Executive retains authority or responsibility.

 

“Long Term Incentive Plan” means the Company’s Long Term Incentive Plan as in effect for the Company’s fiscal year ending July 31, 2011, as amended, and any successor plan thereto.

 

“Monthly Base Salary” means Annual Base Salary, divided by twelve (12).

 

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“Parachute Payment” has the meaning given to such term in Code Section 280G(b)(2).

 

“Parachute Payment Limit” means three (3) times the base amount, as defined by Code Section 280G(b)(3).

 

“Potential Change in Control” means that:

 

(i)            the Company has entered into an agreement with any person or persons, the consummation of which would constitute or result in a Change in Control; or

 

(ii)           any person has publicly announced its intention to take or consider taking actions that, if consummated, would constitute or result in a Change in Control; or

 

(iii)          any person has begun a solicitation (as defined in Rule 14a-1 of the Securities Exchange Act) of proxies or consents that has the purpose of effecting or would (if successful) result in a Change in Control; or

 

(iv)          any person has initiated a tender offer or exchange offer that would, if consummated, result in a Change in Control; or

 

(v)           the Board has adopted a resolution to the effect that any person has begun actions that, if consummated, would result a Change in Control.

 

“Potential Change Period” means the period beginning on the first day of a Potential Change in Control and ending on the adoption by the Board of a resolution to the effect that the agreement, announced intention or actions, solicitation, tender offer, exchange offer, or other actions constituting a Potential Change in Control has been consummated.

 

“Related Employer” means the Company and any other employer that is required to be aggregated with the Company pursuant to Code Section 414(b), (c), or (m).

 

“Release” means a Release of All Claims, in substantially the same form as set out in Exhibit A hereto.

 

“Retirement” means the Executive’s termination of his employment with the Company or its subsidiary (other than as a result of death or Disability) on or after (A) the Executive’s 65th birthday if the Executive has completed at least ten years of employment with the Company or any of its subsidiaries, or (B) the Executive’s 60th birthday if the Executive has completed at least 15 years of employment with the Company or any of its subsidiaries.

 

“Shares” means shares of common stock of the Company.

 

“Term” means the term of this Agreement, as determined pursuant to Section 2.

 

“Terminates Employment”, “Terminate(s) the Executive’s Employment”, “Termination of Employment,” or any other variation of such term means a “separation from service” within the meaning of Code Section 409A(a)(2)(A).

 

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“Termination Date” means the effective date of the Executive’s Termination of Employment.

 

“Unacceptable Performance” means any of the following:

 

(i)            the Executive’s act or failure to act constituting willful misconduct or gross negligence that is materially injurious to the Company or its reputation;

 

(ii)           the Executive’s material failure to perform the duties of his employment (except in the case of a Termination of Employment for Good Reason or Adequate Reason or on account of the Executive’s physical or mental inability to perform such duties) and the failure to correct such failure within a reasonable period after receiving written notice from the Board describing such failure in detail; provided, however, that the quality of the Executive’s performance (determined by achievement of Company or personal targets or otherwise) shall not be a factor in determining whether Executive has performed his duties.

 

(iii)          the Executive’s violation of any code of ethics or business conduct or written harassment policies of the Company that continues after the Board has provided notice to the Executive that the continuation of such conduct will result in the Termination of the Executive’s Employment;

 

(iv)          willful material violation of the Confidentiality and Non-Competition Agreement;

 

(v)           the Executive’s arrest or indictment for (i) a felony or (ii) lesser criminal offense involving dishonesty, breach of trust, or moral turpitude; or

 

(vi)          the Executive’s breach of a material term, condition, or covenant of this Agreement and the failure to correct such breach promptly following receipt of written notice from the Board describing such breach in detail.

 

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EXHIBIT I
 RELEASE OF ALL CLAIMS

 

This Release of All Claims (“Release”) has been signed by                      (“Executive”) on the date indicated below.

 

Background

 

A.            The Executive and Cantel Medical Corp. (“Company”) entered into an Amended and Restated Executive Severance Agreement, effective as of November     , 2011 (“Agreement”), which provides for the payment of benefits to the Executive under certain circumstances following his Termination of Employment.

 

B.            The Executive’s Employment with the Company Terminated/will Terminate on               , under circumstances that entitle him to payments under the Agreement, subject to the terms thereof.

 

C.            The Company’s obligations under the Agreement are contingent on the Executive signing and providing this Release to the Company within 60 days after receiving it and allowing this Release to become effective as provided herein.

 

D.            As a condition of receiving benefits under the Agreement, the Executive wishes to sign this Release.

 

In consideration of the premises and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive agrees as follows:

 

Release

 

1.             If the Executive (i) signs and dates this Release and submits it to the Company not later than 60 days after it is provided to the Executive, (ii) complies with the other requirements of this Release and the Agreement, and (iii) and does not provide written revocation of this Agreement to the Company within the seven-day revocation period referred to in Paragraph 8, the Company shall make the payments and pay the benefits required by the Agreement.

 

2.             In consideration of the Company’s payment obligations under this Agreement, the Executive releases and discharges the Company, all of its past and/or present divisions, affiliates, officers, directors, shareholders, partners, trustees, employees, agents, representatives, administrators, attorneys, insurers, fiduciaries, successors, and assigns, in their individual and/or representative capacities (hereinafter collectively referred to as “Released Persons”), from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments, claims, and demands of any kind whatsoever (“Claims”) that the Executive and/or his heirs, executors, administrators, successors, and assigns ever had, now have, or may have against any Released Person by reason of his employment and/or cessation of employment with the Company or a Related Employer, or otherwise involving facts that occurred on or before the date on which the Executive signed this Release, other than (i) a Claim that the

 

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Company has failed to pay the Executive a payment described in or contemplated by the Agreement or has otherwise breached the terms of the Agreement, or (ii) a Claim that the Company has failed to pay the Executive any vested benefits to which he is entitled under a plan or program of the Company or a Related Employer (collectively, “Excluded Claims”).  Claims, other than Excluded Claims, are hereafter referred to a “Released Claims.”  The Executive gives this Release regardless of whether the Released Claims are known or unknown.  Such Released Claims include, without limitation, any and all Claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1871, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and any and all other federal, state or local laws, statutes, rules, and regulations pertaining to employment, as well as any and all claims under state contract or tort law including, but not limited, to those based on allegations of wrongful discharge, breach of contract, promissory estoppel, defamation, and infliction of emotional distress.

 

3.             The Executive hereby covenants not to sue or commence or maintain any action or proceeding against any Released Person, none of whom admit any liability, as to any Released Claim.  The Executive hereby agrees that if he hereafter institutes or maintains an action against any Released Person with respect to a Released Claim, and it is determined in such action that a claim or claims brought by the Executive in such action is barred by this Release, he will pay the Released Person for all costs and expenses, including attorneys’ fees, incurred in defending against such claims.  The Executive understands that this Release is final and binding, except as expressly provided herein.  Nothing herein shall (i) prevent the Executive from filing a charge or complaint, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”), (ii) prevent the Executive from participating in any investigation or proceeding conducted by the EEOC, or (iii) establish a condition precedent or other barrier to exercising the aforesaid rights.  While the Executive has a right to participate in any such investigation, he understands that he is waiving his right to any monetary recovery arising from any investigation or pursuit of a claim on his behalf.  The Executive acknowledges that he has the right to file a charge alleging a violation of the ADEA with any administrative agency and/or to challenge the validity of the waiver and release of any claim that he may have under the ADEA without either (i) repaying the Company the amounts paid to him as a result of this Release or (ii) paying the Company any other monetary amounts (such as attorneys’ fees and damages).

 

4.             The Executive agrees that if this Release is ever held to be invalid or unenforceable (in whole or in part) as to any particular type of claim or as to any particular circumstance, it shall remain fully valid and enforceable as to all other claims and circumstances.

 

5.             Except as permitted by paragraph 3, the Executive represents that he has not filed, and will not hereafter file, any lawsuit against any Released Person relating to his employment and/or cessation of employment with the Company or any Related Employer, or otherwise involving facts that occurred on or before the date on which he signed this Release, other than with respect to any Excluded Claim.  The Executive further understands and agrees that, other than as provided under paragraph 3, if he commences, continues, joins in, or in any other manner attempts to assert any lawsuit released herein against a Released Person with regard to a Released

 

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Claim, or otherwise violates the terms of this Release, he shall be required to return all severance payments paid to him by the Company pursuant to the Executive Severance Agreement (together with interest thereon), and he agrees to reimburse the Released Person for all attorneys’ fees and expenses incurred by it in defending against such a lawsuit, provided that the right to receive such payments is without prejudice to the Released Person’s other rights hereunder.

 

6.             The Executive understands and agrees that the Company’s payments to him and the signing of this Release do not in any way indicate that he has any viable Claims against the a Released Person or that any Released Person admits any liability to him whatsoever.

 

7.             The Executive has read this Release carefully, has been given at least 21 days to consider all of its terms and any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original 21 calendar day consideration period.  The Executive has been advised to consult with an attorney and any other advisors of his choice and fully understands that by signing below he is giving up any right that he may have to sue or bring any Claims (other than the Excluded Claims) against a Released Person.  The Executive has not been forced or pressured in any manner whatsoever to sign this Release, and he agrees to all of its terms voluntarily.

 

8.             The Executive understands that he has 7 days from the date on which he signed this Release below to revoke this Release by notifying the Company of his revocation, that this Release will not become effective until the eighth day following the date on which he has signed this Release, and that if he revokes this Release within such period, the Executive Severance Agreement shall be void.

 

9.             The Executive understands and agrees that this Release will be governed by the internal laws of the State of New Jersey, without regard to conflict of law principles, to the extent not preempted by federal law.

 

 

	
 
    	
 
    	
 
    
	
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