Document:

EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

This
Agreement made and entered into this 6th day of July, 2005 (the “Agreement”),
by and between WII Components, Inc., a Delaware corporation (the “Company,”
which term shall include, where appropriate, any Entity (as hereinafter
defined) controlled directly or indirectly by the Company), and Rodney Cohen
(the “Indemnitee”):

 

WHEREAS,
it is essential to the Company that it be able to retain and attract as
directors the most capable persons available;

 

WHEREAS,
increased corporate litigation has subjected directors to litigation risks and
expenses, and the limitations on the availability of directors and officers
liability insurance have made it increasingly difficult for the Company to
attract and retain such persons;

 

WHEREAS,
the Company’s Certificate of Incorporation and Bylaws (the “Certificate” and “Bylaws,”
respectively) require it to indemnify its directors
to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements;

 

WHEREAS,
the Company desires to provide Indemnitee with specific contractual assurance
of Indemnitee’s rights to full indemnification against litigation risks and
expenses (regardless, among other things, of any amendment to or revocation of
the Certificate or Bylaws or any change in the ownership of the Company or the
composition of its Board of Directors);

 

WHEREAS,
the Company intends that this Agreement provide Indemnitee with greater
protection than that which is provided by the Company’s Certificate and Bylaws;
and

 

WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement in becoming
a director of the Company.

 

NOW,
THEREFORE, in consideration of the promises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

 

1.                                   Definitions.

 

(a)             “Corporate Status”
describes the status of a person who is serving or has served (i) as a
director or officer of the Company, (ii) in
any capacity with respect to any employee benefit plan of the Company, or (iii) as
a director, partner, trustee, officer, employee, or agent of any other Entity
at the request of the Company.  For
purposes of subsection (iii) of this Section 1(a), if Indemnitee is serving or has served as a
director, partner, trustee, officer, employee or agent of a Subsidiary,
Indemnitee shall be deemed to be serving at the request of the Company.

 

(b)            “Entity” shall
mean any corporation, partnership, limited liability company, joint venture,
trust, foundation, association, organization or other legal entity.

 

(c)             “Expenses”
shall mean all fees, costs and expenses incurred by Indemnitee in connection
with any Proceeding (as defined below), including, without limitation,
attorneys’

 

 

fees, disbursements and retainers (including, without
limitation, any such fees, disbursements and retainers incurred by Indemnitee
pursuant to Sections 10 and 11(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and professional
advisors (including, without limitation, accountants and investment bankers),
court costs, transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges, postage,
delivery services, secretarial services, and other disbursements and expenses.

 

(d)            “Indemnifiable
Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts”
shall have the meanings ascribed to those terms in Section 3(a) below.

 

(e)             “Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.

 

(f)               “Proceeding”
shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation, inquiry,
administrative hearing, appeal, or any other proceeding, whether civil,
criminal, administrative, arbitrative or investigative, whether formal or
informal, including a proceeding initiated by Indemnitee pursuant to Section 10
of this Agreement to enforce Indemnitee’s rights hereunder.

 

(g)            “Subsidiary”
shall mean any corporation, partnership, limited liability company, joint
venture, trust or other Entity of which the Company owns (either directly or
through or together with another Subsidiary of the Company) either (i) a
general partner, managing member or other similar interest or (ii) (A) 50%
or more of the voting power of the voting capital equity interests of such
corporation, partnership, limited liability company, joint venture or other
Entity, or (B) 50% or more of the outstanding voting capital stock or
other voting equity interests of such corporation, partnership, limited
liability company, joint venture or other Entity.

 

2.                                       Services of Indemnitee.  In consideration of the Company’s covenants and commitments hereunder,
Indemnitee agrees to serve or continue to serve as a director of the Company
for so long as he or she is duly elected and qualified or until he or she
resigns in accordance with the Bylaws or applicable law.  This Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee’s service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

 

3.                                       Agreement
to Indemnify.  The Company agrees to indemnify and hold
harmless, to the fullest extent permitted by the laws of the State of Delaware,
Indemnitee as follows:

 

(a)             Proceedings Other
Than By or In the Right of the Company. 
Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by reason
of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the
Company against all Expenses and Liabilities incurred or paid by Indemnitee in connection
with such Proceeding (referred to herein as “Indemnifiable Expenses” and
“Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable
Amounts”).

 

2

 

(b)            Proceedings By or
In the Right of the Company.  Subject
to the exceptions contained in Section 4(b) below, if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding by or in
the right of the Company by reason of Indemnitee’s Corporate Status, Indemnitee
shall be indemnified by the Company against all Indemnifiable Expenses.

 

(c)             Conclusive
Presumption Regarding Standard of Care. 
In making any determination required to be made under Delaware law with
respect to entitlement to indemnification hereunder, the person, persons or
Entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee submitted a request therefor
in accordance with Section 5 of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
by any person, persons or Entity of any determination contrary to that
presumption.

 

4.                                       Exceptions
to Indemnification.  Indemnitee shall be
entitled to indemnification under Sections 3(a) and 3(b) above
in all circumstances other than with respect to any specific claim, issue or
matter involved in the Proceeding out of which Indemnitee’s claim for
indemnification has arisen, as follows:

 

(a)             Proceedings Other
Than By or In the Right of the Company. 
If indemnification is requested under Section 3(a) and it has
been finally adjudicated by a court of competent jurisdiction that, in
connection with such specific claim, issue or matter, Indemnitee failed to act (i) in
good faith and (ii) in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, or, with respect to any
criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.

 

(b)            Proceedings By or
In the Right of the Company.  If
indemnification is requested under Section 3(b) and:

 

(i)                 it
has been finally adjudicated by a court of competent jurisdiction that, in connection
with such specific claim, issue or matter, Indemnitee failed to act (A) in
good faith and (B) in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder; or

 

(ii)              it
has been finally adjudicated by a court of competent jurisdiction that
Indemnitee is liable to the Company with respect to such specific claim, no
Indemnifiable Expenses shall be paid with respect to such claim, issue or
matter unless the Court of Chancery or another court in which such Proceeding
was brought shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnification for such Indemnifiable
Expenses which such court shall deem proper; or

 

(iii)           it has been finally adjudicated by a court
of competent jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company pursuant to the

 

3

 

provisions of Section 16 of the Securities
Exchange Act of 1934, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or local
statutory law, Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder.

 

(c)             Insurance Proceeds.  To the extent payment is actually made to the
Indemnitee under a valid and collectible insurance policy in respect of
Indemnifiable Amounts in connection with such specific claim, issue or matter,
Indemnitee shall not be entitled to payment of Indemnifiable Amounts hereunder
except in respect of any excess beyond the amount of payment under such
insurance.

 

5.                                       Procedure
for Payment of Indemnifiable Amounts.  Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim.  The Company shall pay
such Indemnifiable Amounts to Indemnitee within sixty (60) calendar days of
receipt of the request.  At the request
of the Company, Indemnitee shall furnish such documentation and information as
are reasonably available to Indemnitee and necessary to establish that
Indemnitee is entitled to indemnification hereunder.

 

6.                                       Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.  If Indemnitee is
not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee against all Expenses
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
each successfully resolved claim, issue or matter.  For purposes of this Agreement, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, by reason of settlement, judgment, order or
otherwise, shall be deemed to be a successful result as to such claim, issue or
matter.

 

7.                                       Effect
of Certain Resolutions.  Neither the settlement or
termination of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable shall create a
presumption that Indemnitee is not entitled to indemnification hereunder.  In addition, the termination of any
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall not create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company or, with respect to
any criminal Proceeding, had reasonable cause to believe that Indemnitee’s
action was unlawful.

 

8.                                       Agreement
to Advance Expenses; Undertaking.  The Company shall advance all
Expenses incurred by or on behalf Indemnitee in connection with any Proceeding,
including a Proceeding by or in the right of the Company, in which Indemnitee
is involved by reason of such

 

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Indemnitee’s Corporate Status within five (5) business
days after the receipt by the Company of a written statement from Indemnitee
requesting such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. 
To the extent required by Delaware law, Indemnitee hereby undertakes to
repay, without interest, any and all of the amount of Indemnifiable Expenses
paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Expenses. 
This  undertaking is an unlimited
general obligation of Indemnitee.

 

9.                                       Procedure
for Advance Payment of Expenses.  Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement,
together with documentation evidencing that Indemnitee has incurred such
Indemnifiable Expenses.  Payment of
Indemnifiable Expenses under Section 8 shall be made no later than ten (10) calendar
days after the Company’s receipt of such request.

 

10.                                 Remedies of
Indemnitee.

 

(a)             Right to Petition
Court.  In the event that Indemnitee
makes a request for payment of Indemnifiable Amounts under Sections 3
and 5 above or a request for an advancement of Indemnifiable Expenses
under Sections 8 and 9 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this Agreement or in
the event that the Company or any other person takes or threatens to take any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other action or proceeding designed to deny or to recover from
the Indemnitee the benefits provided or intended to be provided to the Indemnitee
under this Agreement, Indemnitee may petition the Court of Chancery to enforce
the Company’s obligations under this Agreement and the Company irrevocably
authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s
choice, at the expense of the Company as hereafter provided, to advise and
represent the Indemnitee in connection with any such interpretation,
enforcement or defense, including without limitation, the initiation or defense
of any litigation or other legal action, whether brought by or against the
Company or any director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. 
Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents to the
Indemnitee’s entering into an attorney-client relationship with such counsel,
and in that connection therewith, the Company and the Indemnitee agree that a
confidential relationship shall exist between the Indemnitee and such counsel.

 

(b)            Burden of Proof.  In any judicial proceeding brought under Section 10(a) above,
the Company shall have the burden of proving that Indemnitee is not entitled to
payment of Indemnifiable Amounts hereunder.

 

(c)             Expenses.  The Company agrees to reimburse Indemnitee in
full for any Expenses incurred by Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any action brought by
Indemnitee under Section 10(a) above, or in connection with any

 

5

 

claim or counterclaim brought by the Company in
connection therewith, whether or not Indemnitee is successful in whole or in
part in connection with any such action.

 

(d)            Failure to Act Not
a Defense.  The failure of the Company
(including its Board of Directors or any committee thereof, independent legal
counsel, or stockholders) to make a determination concerning the permissibility
of the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses under this Agreement shall not be a defense in any action brought
under Section 10(a) above, and shall not create a presumption that
such payment or advancement is not permissible.

 

11.                                 Defense
of the Underlying Proceeding.

 

(a)             Notice by
Indemnitee.  Indemnitee agrees to notify the Company
promptly upon being served with any summons, citation, subpoena, complaint,
indictment, information, or other document relating to any Proceeding which may
result in the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses hereunder; provided, however, that the failure to give
any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to receive payments of
Indemnifiable Amounts or advancements of Indemnifiable Expenses unless the
Company’s ability to defend in such Proceeding is materially and adversely
prejudiced thereby.

 

(b)            Defense by Company.  Subject to the provisions of the last
sentence of this Section 11(b) and of Section 11(c) below,
the Company shall have the right to defend Indemnitee in any Proceeding which
may give rise to the payment of Indemnifiable Amounts hereunder; provided,
however, that the Company shall notify Indemnitee of any such decision
to defend within ten (10) calendar days of receipt of notice of any such
Proceeding under Section 11(a) above. 
The Company shall not, without the prior written consent of Indemnitee,
consent to the entry of any judgment against Indemnitee or enter into any
settlement or compromise which (i) includes an admission of fault of
Indemnitee or (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to
Indemnitee.  This Section 11(b) shall
not apply to a Proceeding brought by Indemnitee under Section 10(a) above
or pursuant to Section 18 below.

 

(c)             Indemnitee’s Right
to Counsel.  Notwithstanding the
provisions of Section 11(b) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee
reasonably concludes that he or she may have separate defenses or counterclaims
to assert with respect to any issue which may not be consistent with the position
of other defendants in such Proceeding, (ii) a conflict of interest or
potential conflict of interest exists between Indemnitee and the Company
(including an actual or potential conflict between the Indemnitee and the
counsel selected by the Company), (iii) if the Company fails to assume the
defense of such proceeding in a timely manner, or (iv) any such
representation by the Company fails to meet any applicable standards of
professional conduct then prevailing, Indemnitee shall be entitled to be represented
by separate legal counsel of Indemnitee’s choice at the expense of the
Company.  In addition, if the Company
fails to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes any

 

6

 

action to declare this Agreement void or
unenforceable, or institutes any action, suit or proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

 

12.                                 Representations
and Warranties of the Company.  The Company hereby
represents and warrants to Indemnitee as follows:

 

(a)             Authority.  The Company has all necessary power and
authority to enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated by this
Agreement have been duly authorized by the Company.

 

(b)            Enforceability.  This Agreement, when executed and delivered
by the Company in accordance with the provisions hereof, shall be a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the enforcement of creditors’ rights generally.

 

13.                                 Contract
Rights Not Exclusive.  The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by
this Agreement shall be in addition to, but not exclusive of, any other rights
which Indemnitee may have at any time under applicable law, the Company’s
Certificate or Bylaws or any other agreement, vote of stockholders or directors
(or a committee of directors), or otherwise (collectively, “Other Indemnity
Provisions”), both as to action in Indemnitee’s official capacity and as to
action in any other capacity as a result of Indemnitee’s serving as a director
of the Company; provided, however, that (i) to the extent
that Indemnitee otherwise would have any greater right to indemnification under
any Other Indemnity Provision, Indemnitee will be deemed to have such greater
right hereunder and (ii) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to indemnification
than that provided under this Agreement as of the date hereof, Indemnitee will
be deemed to have such greater right hereunder. 
The Company shall not adopt any amendment to either the Certificate or
the By-laws the effect of which would be to deny, diminish or encumber
Indemnitee’s right to indemnification under this Agreement or any Other
Indemnity Provision.

 

14.                                 Successors.  This Agreement shall be (a) binding upon all successors and assigns
of the Company (including, without limitation, any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of
Indemnitee.  This Agreement shall
continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.

 

15.                                 Subrogation.  In the event of any payment of Indemnifiable Amounts under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of

 

7

 

contribution or recovery of Indemnitee against other
persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

 

16.                                 Change in Law.  To the extent that a change in Delaware law (whether by statute or
judicial decision) shall permit broader indemnification or advancement of
expenses than is provided under the terms of the Bylaws and this Agreement,
Indemnitee shall be entitled to such broader indemnification and advancements,
and this Agreement shall be deemed to be amended to such extent.

 

17.                                 Severability.  Whenever possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement, or any clause thereof, shall be determined by a
court of competent jurisdiction to be illegal, invalid or unenforceable, in
whole or in part, such provision or clause shall be limited or modified in its
application to the minimum extent necessary to make such provision or clause
valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.

 

18.                                 Indemnitee
as Plaintiff.  Except as provided in Section 10(c) of
this Agreement and in the next sentence, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with
respect to any Proceeding brought by Indemnitee against the Company, any Entity
which it controls, any director or officer thereof, or any third party, unless
the Board of Directors of the Company has consented to the initiation of such
Proceeding.  This Section shall not
apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.

 

19.                                 Modifications
and Waiver.  Except as provided in Section 16 above
with respect to changes in Delaware law which broaden the right of Indemnitee
to be indemnified by the Company, no supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by each of the
parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions of this Agreement (whether or not similar), nor shall such
waiver constitute a continuing waiver.

 

20.                                 General
Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by
facsimile and receipt is acknowledged, or (c) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

 

8

 

(i)                                     If
to Indemnitee, to:

 

At his
address as shown

on the
signature page to this Agreement

 

(ii)                                  If
to the Company, to:

 

WII
Components, Inc.

525
Lincoln Avenue SE

St.
Cloud, MN  56304

 

or to such other address
as may have been furnished in the same manner by any party to the others.

 

21.                                 Governing Law; Consent
to Jurisdiction; Service of Process.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to its rules of conflict of laws.  Each of the Company and the Indemnitee hereby
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the Court of Chancery of the State of Delaware and the courts
of the United States of America located in the State of Delaware (the “Delaware
Courts”) for any litigation arising out of or relating to this Agreement
and the transactions contemplated hereby (and agrees not to commence any
litigation relating thereto except in such courts), waives any objection to the
laying of venue of any such litigation in the Delaware Courts and agrees not to
plead or claim in any Delaware Court that such litigation brought therein has
been brought in an inconvenient forum. 
Each of the parties hereto agrees, (a) to the extent such party is
not otherwise subject to service of process in the State of Delaware, to
appoint and maintain an agent in the State of Delaware as such party’s agent
for acceptance of legal process, and (b) that service of process may also
be made on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid
service.  Service made pursuant to (a) or
(b) above shall have the same legal force and effect as if served upon
such party personally within the State of Delaware.  For purposes of implementing the parties’
agreement to appoint and maintain an agent for service of process in the State
of Delaware, each such party does hereby appoint The Corporation Trust Company,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, as such
agent and each such party hereby agrees to complete all actions necessary for
such appointment.

 

[Signature Page Follows]

 

9

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

 

	
   

  	
  WII COMPONENTS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dale B.
  Hebrst

  	
   

  
	
   

  	
  Name: Dale B.
  Hebrst

  
	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rodney Cohen

  	
   

  
	
   

  	
  Rodney Cohen,
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 

  	
  c/o Behrman
  Capital

  
	
   

  	
   

  	
  126 East 56th Street

  
	
   

  	
   

  	
  New York, NY 10022Exhibit
10.1

 

RETIREMENT AND CONSULTING AGREEMENT

 

This RETIREMENT AND CONSULTING
AGREEMENT (this “Agreement”) is entered into as of June 30, 2005 by
and between BECKMAN COULTER, INC.,
a Delaware corporation (the “Company”), and JOHN
P. WAREHAM, (“Mr. Wareham”).

 

RECITALS

 

WHEREAS,
Mr. Wareham was the Chairman of the Board of Directors (the “Board”) until April 7,
2005 and Chief Executive Officer (“CEO”) of the Company until February 21,
2005;

 

WHEREAS,
the Company desires to have the continued benefit of Mr. Wareham’s knowledge
and expertise for a three-year period following the date that Mr. Wareham
ceases to be an employee of the Company on or about June 30, 2005 (“Company
Retirement Date”) and Mr. Wareham desires to provide such services as the
Company may reasonably require during such period of time;

 

NOW, THEREFORE,
in consideration of the premises and the mutual agreements set forth below, the
parties hereby agree as follows:

 

1.  Retirement
Benefits.

 

(a)                                  Mr.
Wareham’s rights to receive benefits under retirement, deferred compensation, equity based plans, the option gain deferral plan and
welfare plans and programs of the Company will be determined in accordance with
the existing terms of such plans and programs. 
However, the vesting of all of Mr. Wareham’s unvested stock option grants
will be accelerated to the Company Retirement Date.  Also, the 2003 restricted stock grant will be
vested upon the Company Retirement Date. 
Mr. Wareham will continue to be eligible to participate in the Option
Gain Deferral program if it continues to be available to the employees of
Beckman Coulter, Inc. and its successors.

 

(b)                                 Vacation
Accrual.  Upon or as soon as
practicable after the Company Retirement Date, Mr. Wareham shall be entitled
pursuant to Company practice to the aggregate of $62,000 for twenty (20) “excess”
accrued, but not used, vacation days accumulated by Mr. Wareham.

 

2.  Consulting
Services.

 

Upon Mr. Wareham’s retirement he shall serve
as a consultant, not an employee or a Board member of the Company, and shall
perform such consulting services as may be reasonably requested by the Board or
the Chief Executive Officer of the Company, for a term of three (3) years
following the Company Retirement Date.

 

1

 

Mr. Wareham agrees to render on a non-cumulative basis: (1) up to
forty-five (45) days of consulting services during the first year of the
Consulting term; (2) up to twenty-five (25) days during the second year of the
Consulting Term; and, (3) up to twenty (20) days during the third year of the
Consulting Term.  For this purpose, a day
shall be eight hours, including travel time. 
During the Consulting Term, Mr. Wareham shall continue to abide by the
Company’s Code of Ethics and Standards of Conduct (including compliance with
the Company’s stock trading limitations regarding trading windows; however, he
may trade outside a trading window on an exception basis after consulting with
the Company’s general counsel). 
Notwithstanding anything else contained herein to the contrary, this
Agreement shall be null and void in its entirety if Mr. Wareham does not retire
from employment with the Company and its affiliates on or about June 30,
2005.

 

3.  Compensation
and Benefits during the Consulting Term.

 

As compensation for the performance by Mr.
Wareham of his consulting services during the Consulting Term, the Company
shall pay Mr. Wareham an annual retainer of $330,000 for the first year,
$210,000 for the second year and $170,000 for the third year, payable monthly
in advance.  Mr. Wareham shall be
entitled to payment at a per diem rate of $10,000 for any time in excess of the
applicable number of days stated for each year of the Consulting Term.

 

Mr. Wareham will continue to be eligible
during the term of the consulting agreement to participate in the Corporate
Donation Matched program if it continues to be available to the employees of
the Company and its successors.  In
addition, the Company will compensate Mr. Wareham during the term of the
consulting agreement for the costs of COBRA (dental and vision coverage), Life
Plus and Executive Physicals.

 

4.  Expenses
and Other Benefits.

 

The Company shall promptly reimburse Mr.
Wareham for all reasonable business expenses incurred in connection with the
consulting services in accordance with its applicable policies and procedures
then in force and provide during the Consulting Term Mr. Wareham with the
necessary business support, including office support, travel department
support, appropriate business periodicals, use of the Yorba Linda Country Club,
and the dinner clubs of the Balboa Bay Club and the Center Club.  Mr. Wareham will have use of up-to-date model
computers and business equipment, which will be available for his purchase at
the end of the Consulting Term at depreciated cost.  In addition, Mr. Wareham will have access
during the Consulting Term to the Company’s Lotus Notes as an approved
contractor.

 

5.  Renewal
and Termination.

 

Mr. Wareham’s consulting services and this
Agreement shall terminate at the end of the Consulting Term, unless extended by
the Company and Mr. Wareham on such terms and conditions as they agree.

 

2

 

6.  Tax
Status.

 

Mr. Wareham’s status during the Consulting
Term shall be that of an independent contractor and not, for any purpose, that
of an employee or agent with authority to bind the Company in any respect.  All payments and other consideration made or
provided to Mr. Wareham in respect of services performed during the Consulting
Term shall be made or provided without withholding or deduction of any kind,
and Mr. Wareham shall assume sole responsibility for discharging all tax and
other obligations associated therewith.

 

7.  Confidential
Information.

 

Mr. Wareham hereby acknowledges that, as a
former employee and a consultant of the Company, he will be making use of,
acquiring and adding to confidential information of a special and unique nature
and value relating to the Company and its strategic plan and financial
operations.  Mr. Wareham further
recognizes and acknowledges that all confidential information is the exclusive
property of the Company, is material and confidential, and is critical to the
successful conduct of the Company’s business. 
Accordingly, Mr. Wareham hereby covenants and agrees that he will use
confidential information for the benefit of the Company only and shall not at
any time, directly or indirectly, during the term of this Agreement and
thereafter divulge, reveal or communicate any confidential information to any person,
firm, corporation or entity whatsoever, or use any confidential information for
his own benefit or for the benefit of others. 
Notwithstanding the foregoing, Mr. Wareham shall be authorized to
disclose confidential information (i) as may be required by law or legal
process after providing the Company with prior written notice and an
opportunity to respond to such disclosure (unless such notice is prohibited by
law) and (ii) with the prior written consent of the Company.

 

8.  Indemnification.

 

The Company agrees to indemnify, protect,
defend and hold Mr. Wareham and his estate, heirs, and person representatives,
harmless from and against any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a “proceeding”),
and all losses, liabilities, damages and expenses, including reasonable
attorney’s fees incurred by counsel reasonably designated or approved by him,
in connection with this Agreement or his services hereunder, provided that any
consulting services giving rise to such indemnification shall have been
performed by Mr. Wareham in good faith and, to the best of his knowledge, in a
lawful manner.

 

9.  Successors.

 

This Agreement is personal to Mr. Wareham and
without the prior written consent of the Company shall not be assignable by Mr.
Wareham otherwise than by will

 

3

 

or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by Mr. Wareham’s legal
representatives.

 

(a)                                  This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

 

(b)                                 The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its business
and/or assets to assume expressly 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.  As used in this Agreement, “the Company,”
shall mean Beckman Coulter, Inc. as hereinbefore defined and any successor to
its business and/or assets which assumes and agrees to perform this Agreement
by operation of law, or otherwise.

 

10.  Conflicts
of Interest.

 

No business or legal conflicts of interest
shall exist between services performed or to be performed by Mr. Wareham on
behalf of the Company and by Mr. Wareham on behalf of any other client.  The identity of Mr. Wareham’s directorships,
other employment and clients shall be fully disclosed by Mr. Wareham to the
Company.  Mr. Wareham shall promptly
notify the Company in writing of any change in his directorships, employment,
and clients.

 

11.  Exclusivity
of Consulting Arrangement.

 

During the Consulting Term Mr. Wareham shall
not directly or indirectly engage in any activities designed to deprive or
which may have the effect of depriving the Company of the good will of
customers or potential customers of its products and services.  Further, Mr. Wareham shall not, prior to the
expiration of the Consulting Term, represent, act as representative for, or
market or sell, directly or indirectly, products competing with major products
and services of the Company.  A competing
major product or service is defined as a line of business that represents more
than 5% of the Company’s sales or where R&D investment is more than $5M per
year.

 

12.  Settlement
of Disputes.

 

(a)                                  The Company
and Mr. Wareham hereby consent to the resolution by arbitration of all
disputes, issues, claims or controversies arising out of or in connection with
this Agreement, Mr. Wareham’s employment with and/or retirement from the
Company, and/or Mr. Wareham’s services to the Company that the Company may have
against Mr. Wareham or that Mr. Wareham may have against the Company, or
against its officers, directors, employees or agents acting in their capacity
as such.  Each party’s promise to resolve
all such claims, issues, or disputes by

 

4

 

arbitration in
accordance with this Agreement rather than through the course of litigation, is
consideration for the other party’s like promise.  It is further agreed that the decision of an
arbitrator on any issue, dispute, claim or controversy submitted for arbitration,
shall be final and binding upon the Company and Mr. Wareham and that judgment
may be entered on the award of the arbitrator in any court having proper
jurisdiction.

 

(b)                                 However,
thirty (30) days prior to submittal of any dispute to formal arbitration Mr.
Wareham and the Company, represented by the Chairperson of the Board of
Director’s Organization and Compensation Committee, agree to meet to resolve
said dispute.  If no resolution appears
possible, the dispute will be submitted to formal arbitration after said 30-day
period pursuant to the procedure set forth herein.

 

(c)                                  Except
as otherwise provided herein or by mutual agreement of the parties, any
arbitration shall be administrated in accordance with the then-current
Commercial Arbitration Procedures of the American Arbitration Association (AAA)
before a single arbitrator who is a retired federal or state court judge in the
state in which the arbitration is convened. 
The arbitration shall be held in Los Angeles, California, or at any
other location mutually agreed upon by the parties.

 

(d)                                 The parties
shall attempt to agree upon the arbitrator. 
If the parties cannot agree on the arbitrator, the AAA shall then
provide the names of nine (9) arbitrators experienced in business employment
matters along with their resumes and fee schedules.  Each party may strike all names on the list
it deems unacceptable.  If more than one
common name remains on the list of all parties, the parties shall strike names
alternately until only one remains.  The
party who did not initiate the claim shall strike first.  If no common name remains on the lists of the
parties, the AAA shall furnish an additional list until an arbitrator is
selected.

 

(e)                                  The
arbitrator shall interpret this Agreement, and any applicable Company policy or
rules and regulations, any applicable substantive law (and the law of remedies,
if applicable) of the State of California, or applicable federal law.  In reaching his or her decision, the
arbitrator shall have no authority to change or modify any lawful Company
policy, rule or regulation, or this Agreement. The arbitration, and not any
federal, state or local court or agency, shall have exclusive and broad
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including, but not limited to,
any claim that all or any part of this Agreement is voidable.

 

5

 

12.  Miscellaneous.

 

This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
reference to principles of conflict of laws. 
The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect.  This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

 

(a)                                  All notices
and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

If to Mr.
Wareham:              571 N. Turnabout
Road

Orange, CA
92869

 

If to the
Company:               Attention:  General Counsel

Beckman
Coulter, Inc.

4300 N. Harbor
Boulevard

Fullerton, CA
92834

 

or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice
and communications shall be effective when actually received by the addressee.

 

(b)                                 The
invalidity or unenforceability of any provision (or portion thereof) of this
Agreement shall not affect the validity or enforceability of any other
provision (or portion thereof) of this Agreement.

 

(c)                                  This
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.

 

(d)                                 This
Agreement may be executed in several counterparts, each of which shall be
deemed an original, and said counterparts shall
constitute but one and the same instrument.

 

(e)                                  Nothing
in this Agreement will affect in any way the terms and conditions of the
Transition Agreement dated April 7, 2005 between the Company and Mr.
Wareham.

 

(f)                                    Mr.
James T. Glover, the Company’s CFO, or his delegate will be the contact person
for Mr. Wareham regarding any administrative or implementation questions Mr.
Wareham may have.

 

6

 

(g)                                 IN
WITNESS WHEREOF, Mr. Wareham has hereunto set his hand and, pursuant to the
authorization from its Board, the Company has caused its present to be executed
in its name on its behalf, all as of the day and year first above written.

 

 

	
   

  	
  /s/ JOHN P. WAREHAM

  	
   

  
	
   

  	
  John P. Wareham

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BECKMAN COULTER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BETTY WOODS

  	
   

  
				

 

7

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