Document:

Exhibit 10.23

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (the “Agreement”) is made
this 1st day of September 2010 by and among BioHorizons
Implant Systems, Inc., its parent BioHorizons, Inc. (together, the “Company”),
and Clark Barousse (the “Employee”).

 

WHEREAS, in consideration of the mutual covenants and
promises contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:

 

1.                                      EFFECT OF TERMINATION OF EMPLOYMENT

 

1.1                               In the
event that the Company terminates the Employee’s employment other than for “Cause”
as defined in Section 1.2, or the Employee resigns for “Good Reason” as defined
in Section 1.3 (regardless of whether such termination or resignation, as
applicable, occurs in the context of a “change in control” of the Company), the
Employee executes and does not revoke a full release of claims (the “Release”)
in the form and of a scope reasonably acceptable to the Company within sixty (60)
days following the effective date of the termination (the “Termination Date”),
the Release becomes binding and irrevocable at that time, and the Employee does
not breach any provision of this Agreement, the Company shall, commencing, on
the sixtieth (60th) day following the Termination Date: (a) pay to
the Employee the Employee’s then-current base salary for a period of twelve
(12) months in accordance with the Company’s regular payroll practices, and (b)
if the Employee exercises his right under the Consolidated Omnibus Budget
Reconciliation Act of 1986 (“COBRA”) to continue participation in the Company’s
health insurance plan, the Company shall pay its normal share of the costs for
such coverage for a period of twelve (12) months (retroactive to the Termination
Date) to the same extent that such insurance is provided to persons then
currently employed by the Company (the Employee’s co-pay, if any, shall be
deducted from the payments described in subsection (a) or, if no such payments
remain to be paid, shall be paid directly to the Company within seven (7) days
of receipt of notice of such payment due).

 

1.2                               For the
purposes of Section 1, “Cause” for termination shall be deemed to exist upon
the occurrence of any of the following:

 

(a)                                  A good faith finding by the Board
of Directors or a Committee appointed thereby that the Employee has engaged in
dishonesty, gross negligence or gross misconduct which if curable, has not been
cured by the Employee within 30 days after he has received written notice from
the Company stating with reasonable specificity the nature of such conduct;

 

(b)                                  Willful misconduct by the Employee
that materially injures the Company, whether such harm is economic or
non-economic, including, but not limited to, injury to the Company’s business
or reputation;

 

(c)                                  The Employee’s conviction or entry
of nolo contendere to any felony or crime involving moral turpitude, fraud or
embezzlement;

 

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(d)                                  The Employee’s failure to perform
the functions assigned to him by his direct supervisor, or the CEO, or the
Board of Directors; or

 

(e)                                  The Employee’s material breach of
this Agreement, including but not limited to Section 3, including all subparts,
hereof.

 

1.3                               For the
purposes of Section 1, a resignation by the Employee for “Good Reason” shall be
deemed to exist upon the occurrence of any of the following:

 

(a)                                  The Company materially diminished
the Employee’s base salary;

 

(b)                                  The Company materially diminished
the Employee’s authority, duties or responsibilities of the Employee as of the
date hereof; or

 

(c)                                  The Company required the Employee
to relocate permanently to an office more than fifty 50 miles from the Company’s
offices at which he performed services as of the date he commenced employment
with the Company.

 

Notwithstanding
the foregoing, the foregoing occurrences shall not constitute Good Reason
unless the Company has failed to cure the acts or omissions giving rise to
resignation by the Employee for Good Reason within thirty (30) days of receiving
written notice (the “Good Reason Notice”) from the Employee stating his intent
to resign his employment for Good Reason and specifying the Company’s acts or
omissions giving rise to Good Reason, and the Employee has provided the Good
Reason Notice to the Company within ninety (90) days of the dates the acts or
omissions giving rise to Good Reason first arose.  The Employee’s resignation for Good Reason
shall become effective on the thirty-first (31st) day following the date the Company receives the
Good Reason Notice.

 

1.4                               The
covenants set forth in Sections 3 and 4, including all subparts, shall survive
the termination of the Employee’s employment.

 

2.                                      SEPARATION FROM SERVICE

 

2.1                               The
payment provided for in Section 1.1 is intended to be an involuntary separation
pay plan, with respect to a termination without Cause and resignation for Good
Reason, pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), and thus not “nonqualified
deferred compensation” subject to Section 409A of the Code.  The following interpretations apply to Section
1.1 for any other termination of employment, or if Section 1.1 is deemed to
provide benefits that are deemed to be “nonqualified deferred compensation”
with respect to a termination without Cause or resignation for Good Reason. Any
termination of the Employee’s employment under Section 1.1 of this Agreement
triggering payment of benefits must constitute a “separation from service”
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before
distribution of such benefits can commence. 
To the extent that the termination of the Employee’s employment does not
constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code
and Treas. Reg. §1.409A-1(h) (as the result of further services that are
reasonably anticipated to be provided by the Employee to the Company at the
time the Employee’s employment terminates), any benefits payable under Section 1.1
that constitute deferred compensation under Section 409A of the Code shall be
delayed until after the 

 

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date of a subsequent event constituting a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas.
Reg. §1.409A-1(h).  For purposes of
clarification, this Section shall not cause any forfeiture of benefits on the
Employee’s part, but shall only act as a delay until such time as a “separation
from service” occurs. Further, if the Employee is a “specified employee” (as
that term is used in Section 409A of the Code and regulations and other guidance
issued thereunder) on the Termination Date and the payment of the amounts
described in Section 1.1 constitute non-qualified deferred compensation, the
payment of which would result in penalties under Section 409A of the Code, then
such payment shall be delayed until the business day following the six-month
anniversary of the Termination Date, but only to the extent necessary to avoid
such penalties under Section 409A of the Code. 
On the business day following the six-month anniversary of the
Termination Date, the Company shall pay the Employee in a lump sum the
aggregate value of the non-qualified deferred compensation that the Company
otherwise would have paid the Employee prior to that date under Section 1.1 of
this Agreement.  It is intended that each
installment of the payments and benefits provided under Section 1.1 of this
Agreement shall be treated as a separate “payment” for purposes of Section 409A
of the Code.  Neither the Company nor the
Employee shall have the right to accelerate or defer the delivery of any such
payments or benefits except to the extent specifically permitted or required by
Section 409A of the Code.

 

3.                                      PROTECTED INFORMATION, NONDISCLOSURE AND
NONCOMPETITION

 

3.1                               Definition of
Protected Information

 

(a)                                  For purposes of this Agreement,
the term “Protected Information” shall mean all of the following materials and
information (whether or not reduced to writing and whether or not patentable or
protectable by copyright) which the Employee receives, receives access to,
created, conceived or developed, in whole or in part, directly or indirectly,
alone or with others and whether or not conceived or developed during regular
business hours, in connection with his employment with the Company or in the
course of his employment with the Company (in any capacity, whether executive,
managerial, planning, technical, sales, research, development, manufacturing,
Engineering, or otherwise), or through the use of any of the Company’s
facilities or resources:

 

(i)                                    Production processes, marketing techniques
and arrangements, mailing lists, purchasing information, pricing policies,
quoting procedures, financial information, customer, client and prospect names
and requirements, employee, customer, supplier and distributor data and other
materials or information relating to the Company’s business and activities and
the manner in which the Company does business;

 

(ii)                                Discoveries, concepts, plans and
ideas including, without limitation, the nature and results of research and
development activities, processes, formulas, inventions, dental implant related
materials, equipment or technology, programs, systems, manuals, reports,
drafts, techniques, “know-how,” designs, drawings and specifications;

 

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(iii)                            Any other materials or information
related to the business or activities of the Company which are not generally
known to others engaged in similar businesses or activities;

 

(iv)                               Any information and materials
received by the Company from third parties in confidence (or subject to
non-disclosure or similar covenants); and

 

(v)                                   All ideas which are derived from
or relate to the Employee’s access to or knowledge of any of the above
enumerated materials and information.

 

(b)                                  Failure to mark any of the
Protected Information as confidential, proprietary or Protected Information
shall not affect its status as part of the Protected Information under the
terms of this Agreement.

 

(c)                                  For purposes of this Agreement,
the term “Protected Information” shall not include information which is or
becomes publicly available without breach of (i) this Agreement, (ii) any other
agreement or instrument to which the Company is a party, or a beneficiary or (iii)
any duty owed to the Company by the Employee or any third party; provided, however,
that the Employee hereby acknowledges and agrees that, except as otherwise
provided in Section 3.2 hereof, if the Employee shall seek to disclose,
divulge, reveal, report, publish, transfer or use, for any purpose whatsoever,
any Protected Information, he shall have the burden of proving that any such
information shall have become publicly available without any such breach.

 

3.2                               Ownership of
Information

 

The
Employee covenants and agrees that all right, title and interest in any
Protected Information shall be and shall remain the exclusive property of the
Company (or third party, as the case may be) and, to the maximum extent
permitted by applicable law, shall be deemed “works made for hire” as the term
is used in the United States Copyright Act; provided, however, that the
foregoing shall not apply to any invention for which no equipment, supplies,
facility, or Protected Information of the Company was used, which was developed
entirely on the Employee’s own time, and which does not (i) relate to the
business of the Company, (ii) relate to the Company’s actual or demonstrably
anticipated research or development or (iii) result from any work performed by
the Employee for the Company.  The
Employee agrees to disclose immediately to the Company all Protected
Information developed in whole or in part by the Employee during the term of
the Employee’s employment with the Company and to assign to the Company any
right, title or interest he may have in such Protected Information.  The Employee agrees to execute any
instruments and to do all other things reasonably requested by the Company
(both during and after the Employee’s employment with the Company) in order to
secure the Company’s rights in the Protected Information, including obtaining a
patent, registering a copyright, or otherwise (and I hereby irrevocably appoint
the Company and any of its officers as my attorney in fact to undertake such
acts in my name).  Employee agrees that
his obligation to execute written instruments and otherwise assist the Company
in 

 

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securing
its rights in the Protected Information will continue after the termination of
his employment for any reason.

 

3.3                               Covenants Not to
Solicit or Hire Employees

 

It
is recognized and understood by the Company and the Employee that the employees
of the Company are an integral part of its business and that it is extremely
important for the Company to use its maximum efforts to prevent it from losing
such employees.  It is therefore
understood and agreed by both parties that, because of the nature of the
Company’s business, it is necessary to afford fair protection to the Company
from the loss of such employees. Consequently, as a material inducement to the
Company to enter into this Agreement and to continue to employ the Employee,
the Employee covenants and agrees that, for the period commencing on the date
of Employee’s termination of employment for any reason whatsoever and ending
one (1) year after the Employee’s termination of employment with the Company,
the Employee shall not, directly or indirectly, hire or engage or attempt to
hire or engage, or communicate for business purposes with any individual who
shall have been an employee of the Company at any time during the one (1) year
period prior to the date of the Employee’s termination of employment with the
Company, whether for or on behalf of the Company or for any entity in which the
Employee shall have a direct or indirect interest (or any subsidiary or
affiliate of any such entity), whether as a proprietor, partner, co-venturer,
financier, investor, or stockholder, director, officer, employer, employee,
servant, agent, representative, or otherwise.

 

3.4                               Non-competition
and Non-solicitation

 

(a)                                  The parties acknowledge that as
prime consideration for the obligations of the Company hereunder, the Employee
has agreed and represented that for and during the duration of his employment,
and during a period of one (1) year from the date of his termination of
employment for any reason whatsoever, he will not directly or indirectly:

 

(i)                                    Provide services to, own, manage,
operate, control or participate in the ownership, management or control of, or
be connected as an officer, employee, partner, director, or otherwise with, or
have any financial interest in, or aid or assist anyone else in the conduct of,
any entity or business (existing on the date that Employee’s employment with
the Company terminates and/or during the one-year period thereafter) that is or
has current plans to be in competition with the Company or any of its
subsidiaries or affiliates within any area in which the Company conducts its
business on the date that Employee’s employment with the Company
terminates.  Notwithstanding the
foregoing, Employee’s ownership of securities of a public company engaged in
competition with the Company not in excess of two percent (2%) of any class of
such securities shall not be considered a breach of the covenants set forth
herein; or

 

(ii)                                Contact, call upon, communicate,
solicit or sell or attempt to contact, call upon, communicate, solicit or sell
any services or products which are 

 

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provided by or dealt in by, the Company to any of the present customers
of the Company, to any past customers of the Company who were customers during
the period of the Employee’s employment or to any prospective customers of the
Company’s whom the Employee solicited during the period of his employment.  It is the intent of the Employee and the
Company to preserve the exclusivity of the Company’s customer relations,
special knowledge, trade secrets and experience gained or to be gained in the
future by the Employee during his association with the Company, recognizing
that if such customer relations, experience, knowledge and trade secrets were
made available to competitors of the Company, it would irreparably damage the
Company’s business.

 

3.5                               Tolling

 

If
the Employee violates the restrictions set out in Sections 3.3 and 3.4, the
period during which the prohibitions set forth therein shall apply shall be
extended one (1) day for each day in which a violation occurs, and if suit is
brought to enforce the Company’s rights under Sections 3.3 or 3.4, and the
Company establishes one or more violations by the Employee, the Company shall
be entitled to an injunction restraining the Employee from further violations
for a period of one (1) year from the date of the final decree less only such
number of days that the Employee has not violated the covenants set forth in
Sections 3.3 or 3.4.

 

3.6                               Injunctive
Relief, Damages and Attorneys’ Fees

 

The
Employee understands and agrees that the Company shall suffer irreparable harm
in the event that the Employee breaches any of his obligations under this
Agreement and that monetary damages shall be inadequate to compensate the
Company for such breach. Accordingly, the Employee agrees that, in the event of
a breach or threatened breach by the Employee of any of the provisions of this
Agreement, the Company, in addition to and not in limitation of any other
rights, remedies or damages available to the Company at law or in equity, shall
be entitled to a temporary restraining order, preliminary injunction and
permanent injunction in order to prevent or to restrain any such breach by the
Employee, or by any or all of the Employee’s partners, co-venturers, employers,
employees, servants, agents, representatives and any and all persons directly
or indirectly acting for, on behalf or with the Employee.  The Employee further agrees that, in the event
he breaches or threatens to breach of any of the provisions of this Agreement,
the Company shall be entitled to recover all costs, including a reasonable
attorney’s fee, incurred in enforcing or attempting to enforce this Agreement.

 

3.7                               Materials

 

All
notes, data, tapes, reference items, sketches, drawings, memoranda, records,
and other materials in any way relating to any of the Protected Information or
to the Company’s business shall belong exclusively to the Company and the
Employee agrees to turn over to the Company all copies of such materials in the
Employee’s possession or under the Employee’s control at the request of the
Company or, in the absence of such a request, 

 

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within
three business days of the termination of Employee’s employment with the
Company.

 

3.8                               Accounting for
Profits; Indemnification

 

The
Employee covenants and agrees that, if he shall violate any of his covenants or
agreements under this Agreement, the Company shall be entitled to an accounting
and repayment of all profits, compensation, royalties, commissions,
remunerations or benefits which the Employee directly or indirectly shall have
realized or may realize relating to, growing out of or in connection with any
such violation; such remedy shall he in addition to and not in limitation of
any injunctive relief or other rights or remedies to which employer is or may
be entitled at law or in equity or otherwise under this Agreement.  The Employee hereby agrees to defend,
indemnify and hold harmless the Company against and in respect of, (i) any and
all losses and damages resulting from, of any warranty, covenant or agreement
made or contained in this Agreement; and (ii) any and all actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable attorneys’ fees) incident to the foregoing.

 

4.                                      REASONABLENESS OF RESTRICTIONS;
SEVERABILITY

 

4.1                               EMPLOYEE
HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF SECTION 3, INCLUDING ALL
SUBPARTS, AND HAVING DONE SO, AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTION
ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE
INTERESTS OF THE COMPANY AND ITS BUSINESS, OFFICERS, DIRECTORS, AND
EMPLOYEES.  The Employee further agrees
that the restrictions set forth in this Agreement shall not impair his ability
to secure employment within the field or fields of his choice including,
without limitation. those areas in which the Employee is, is to be or has been
employed by the Company.

 

4.2                               It is
the intent of the parties to enter into a reasonable-competition agreement,
among other things, for the maximum period and the maximum extent enforceable
under the laws of the State of Alabama, including, without limitation, Section 8-1-1
of the Alabama Code, and if its said geographic or temporal restrictions should
be deemed unreasonable by a court of competent jurisdiction, the parties intend
that such court should, in light of the facts and circumstances, reform this
Agreement specifying the maximum permissible scope (in time, location and
subject matter).

 

4.3                               The
provisions of this Agreement shall be deemed severable and shall be construed
to the fullest extent allowable under the applicable law.  The invalidity or unenforceability of any one
or more of the provisions hereof shall not affect the validity and
enforceability of the other provisions hereof. 
The Employee agrees that the breach or alleged breach by the Company of (i)
any covenant contained in another agreement (if any) between the Company and the
Employee or (ii) any obligation owed to the Employee by the Company, shall not
affect the validity or enforceability of the covenants and agreements of the
Employee set forth in this Agreement.

 

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5.                                      NO PRIOR AGREEMENTS

 

The
Employee represents that his performance of all the terms of this Agreement and
any services to be rendered as an employee of the Company, do not and shall not
breach any fiduciary or other duty or any covenant, agreement or understanding
(including, without limitation, any agreement relating to any proprietary
information, knowledge or data acquired by the Employee in confidence, trust or
otherwise prior to the Employee’s employment by the Company) to which the
Employee is a party or by the terms of which the Employee may he bound.  The Employee covenants and agrees that he
shall not disclose to the Company, or induce the Company to use, any, such
proprietary information, knowledge or data belonging to any previous employer
or others.  The Employee further
covenants and agrees not to enter into any agreement or understanding, either
written or oral, in conflict with the provisions of this Agreement.

 

6.                                      EMPLOYMENT AT WILL

 

Nothing
in this Agreement shall be construed as constituting a commitment, guarantee,
agreement or understanding of any kind or nature that the Company shall
continue to employee the Employee, nor shall this Agreement affect in any way
the right of the Employee to terminate his employment with the Company at any
time and for any reason whatsoever.  Both
the Employee and the Company acknowledge that the Employee’s employment is
strictly “at will”.

 

7.                                      BURDEN AND BENEFIT

 

7.1                               This
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and the Employee, and their respective heirs, personal and legal
representatives, successors and assigns. 
As used in this Agreement, the term the “Company”, shall also include
any corporation or entity which is a parent, subsidiary or affiliate of the
Company.  The Employee hereby consents to
the enforcement of any and all of the provisions of this Agreement by or for
the benefit of the Company and any such other corporation or entity as to any
Protected Information.

 

7.2                               The
Company shall be entitled to assign this Agreement, in whole or in part, at any
time without restrictions.  The Employee
may not assign this Agreement or any part hereof without the prior written
consent of the President of the Company. 
This consent may he withheld by the Company for any reason it deems
appropriate.

 

8.                                      GOVERNING LAW

 

8.1                               In view
of the fact that the principal office of the Company is located in Birmingham,
Alabama, and that the Agreement was negotiated, accepted and executed in the
State of Alabama, it is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all respects be
governed by the laws of the State of Alabama.

 

8.2                               Without
prejudice to the Company’s right to bring suit in the courts of any
jurisdiction, any proceeding to enforce the provisions of this Agreement or the
declaration of any rights arising from the provisions of this Agreement shall
only be 

 

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brought by the Employee
and may be brought by the Company in the Circuit Court of Jefferson County,
Alabama or, if federal jurisdictional requirements can be met, the United
States District Court for the Northern District of Alabama.  The Employee hereby waives any present or
future objection to such venue and irrevocably consents and submits to the
non-exclusive jurisdiction in personam of such courts.

 

8.3                               THE
COMPANY AND THE EMPLOYEE HEREBY EXPRESSLY AND KNOWINGLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER THE
COMPANY OR THE EMPLOYEE AGAINST THE OTHER WITH RESPECT TO THIS AGREEMENT AND
ITS SUBJECT MATTER.

 

9.                                      EFFECTIVE DATE

 

The
Effective Date of this Agreement is the date the Agreement is fully executed by
both the Company and the Employee.

 

10.                               ENTIRE AGREEMENT

 

This
Agreement contains the entire agreement and understanding by and between the
Company and the Employee with respect to the terms and conditions of the
Employee’s employment with the Company (including but not limited to the
compensation to be paid to the Employee during his employment and any payments
that may be owed to the Employee upon a “change in control” and/or termination
of employment), and no representations, promises, agreement or understanding,
written or oral, not herein contained shall be of any force or effect
(including, but not limited to, the Employee’s May 15, 2008 offer letter with
the Company and July 29, 2008 employment agreement with the Company, both of
which shall be superseded by this Agreement and be of no further force or
effect).  No change or modification
hereof shall be valid or binding unless the same is in writing and signed by
the party intended to be bound.  No
waiver of any provision of this Agreement shall be valid unless the same is in
writing and signed by the party against whom such waiver is sought to be
enforced, moreover, no valid waiver or any provision of this Agreement at any
time shall be deemed a waiver of any other provision of this Agreement at such
time or shall be deemed a valid waiver of such provision at any other time.

 

11.                               AMENDMENT

 

This
Agreement may be amended, modified or supplemented only by written instrument
executed by both the Company and the Employee.

 

12.                               HEADINGS

 

The
Headings and other captions in this Agreement are for convenience and reference
only and shall not be used in interpreting, construing or enforcing any of the
provisions of this Agreement.

 

13.                               COUNTERPART

 

This
Agreement may be executed in several counterparts, each of which shall he
deemed to be an original but all of which together shall constitute one in the
same instrument.

 

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14.                               SURVIVAL

 

Except
as otherwise provided herein, all provisions to this Agreement shall survive
the termination of the Employee’s employment with the Company.

 

READ THIS AGREEMENT CAREFULLY. BY SIGNING BELOW, THE PARTIES
ACKNOWLEDGE THAT:  (1) EACH HAS REVIEWED
THIS AGREEMENT FULLY AND CAREFULLY; (2) EACH HAS HAD AN OPPORTUNITY TO ASK
QUESTIONS ABOUT ITS CONTENT; AND, (3) EACH HAS BEEN ADVISED BY COUNSEL OF HIS
OR ITS OWN CHOOSING OR HAS DECIDED NOT TO RETAIN HIS OR ITS OWN COUNSEL.

 

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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year set forth below.

 

	
  Employee:

  	
   

  	
  BioHorizons,
  Inc.:

  
	
   

  	
   

  	
   

  
	
  /s/
  Clark Barousse 

  	
   

  	
  /s/
  Andrea G. McCaskey 

  
	
  Name:

  	
   

  	
  Andrea
  G. McCaskey 

  
	
   

  	
   

  	
  Vice-President
  , Human Resources

  
	
   

  	
   

  	
   

  
	
  09/01/10
  

  	
   

  	
  09/01/10
  

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Andrea G. McCaskey 

  
	
   

  	
   

  	
  Andrea
  G. McCaskey 

  
	
   

  	
   

  	
  Vice-President
  , Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  09/01/10
  

  
	
   

  	
   

  	
  Date

  

 

11Exhibit 10.1

 

HEWLETT-PACKARD COMPANY

 

LÉO APOTHEKER EMPLOYMENT AGREEMENT

 

This Agreement is entered
into on September 29, 2010 by and between Hewlett-Packard Company (the “Company”)
and Léo Apotheker (“Executive”).

 

1.                                    Duties and Scope of Employment.

 

(a)                               Positions and
Duties.  As of November 1, 2010,
Executive will serve as President and Chief Executive Officer of the Company,
reporting to the Company’s Board of Directors (the “Board”), provided that
Executive has obtained a United States visa permitting him to accept an
executive position with the Company for the intended Employment Term, as
defined below (the “Effective Date”). 
Executive will render such business and professional services in the
performance of his duties, consistent with Executive’s position within the
Company.  Executive will be the highest
ranking executive officer of the Company, with the full powers,
responsibilities and authorities customary for the chief executive officer of
corporations of the size, type and nature of Company, together with such other
powers, authorities and responsibilities as may reasonably be assigned to him
by the Board.  Executive will report
solely and directly to the Board.  The
period Executive is employed by the Company under this Agreement is referred to
herein as the “Employment Term.”

 

(b)                              Board Membership.  Executive will be appointed to serve as a
member of the Board as of the Effective Date. 
Thereafter, at each annual meeting of the Company’s stockholders during
the Employment Term, the Company will nominate Executive to serve as a member
of the Board.  Executive’s service as a
member of the Board will be subject to any required stockholder approval.  Upon the termination of Executive’s
employment for any reason, Executive will be deemed to have resigned from the
Board (and any boards of subsidiaries) voluntarily, without any further
required action by Executive, as of the end of Executive’s employment and
Executive, at the Board’s request, will execute any documents necessary to
reflect his resignation.

 

(c)                               Obligations.  During the Employment Term, Executive will
devote Executive’s full business efforts and time to the Company and will use
good faith efforts to discharge Executive’s obligations under this Agreement to
the best of Executive’s ability.  For the
duration of the Employment Term, Executive agrees not to actively engage in any
other employment, occupation, or consulting activity for any direct or indirect
remuneration without the prior approval of the Board (which approval will not
be unreasonably withheld); provided, however, that Executive may, without the
approval of the Board, serve in any capacity with any civic, educational, or
charitable organization and serve on the board(s) set forth on Schedule A
attached hereto, provided such services do not materially interfere with
Executive’s obligations to the Company. 
Executive represents that he is not subject to any non-competition,
confidentiality, trade secrets or other agreement(s) that would preclude,
or restrict in any way, Executive from fully performing his services hereunder
during his employment with the Company.

 

 

2.                                    At-Will Employment. 
Executive and the Company agree that Executive’s employment with the
Company constitutes “at-will” employment. 
Executive and the Company acknowledge that this employment relationship
may be terminated at any time, upon written notice to the other party, with or
without good cause or for any or no cause, at the option either of the Company
or Executive.  However, as described in
this Agreement, Executive may be entitled to severance and other benefits
depending upon the circumstances of Executive’s termination of employment.

 

3.                                    Term of Agreement.  This
Agreement will have a term of four (4) years commencing on the Effective
Date.  No later than 90 days before the
end of the term of this Agreement, the Company and Executive will discuss
whether and under what circumstances the Agreement will be renewed.

 

4.                                    Compensation.

 

(a)                               Base Salary.  As of the Effective Date, and until October 31,
2012, the Company will pay Executive an annual salary of $1,200,000 as
compensation for his services (such annual salary, as is then effective, to be
referred to herein as “Base Salary”). 
The Base Salary will be paid periodically in accordance with the Company’s
normal payroll practices and be subject to the usual, required
withholdings.  Executive’s annual salary
beginning November 1, 2012, and thereafter, will be $1,200,000 and will be
subject to review by the HR/Compensation Committee of the Board, or any successor
thereto (the “Committee”) not less than annually, and adjustments will be made
in the discretion of the Committee. 
Notwithstanding the foregoing, the Base Salary will not be reduced other
than (i) pursuant to a reduction that also is applied to substantially all
other executive officers of the Company in a substantially similar manner and
proportion or (ii) to give effect to the Committee’s policy, as published
in the Compensation Discussion and Analysis section of the Company’s annual
proxy statement or other documents filed with the Securities and Exchange
Commission, for aligning Executive’s compensation with the compensation of
chief executive officers of the Company’s peer group.

 

(b)                              Annual Incentive.  Executive will be eligible to receive annual cash
incentives payable for the achievement of performance goals established by the
Committee beginning with the Company’s 2011 fiscal year.  Executive’s target annual incentive for
fiscal 2011 will be at least 200% of Base Salary and his maximum target opportunity
will be 500% of Base Salary, based upon specified levels of performance goals
being achieved.  For subsequent fiscal
years, beginning with fiscal 2012, Executive’s target bonus shall be at least
200% of the Base Salary, and maximum target opportunity shall be as determined
by the Committee; provided, however, that, except as otherwise provided herein,
Executive’s future participation in the Company’s Pay for Results Plan, or any
successor thereto (the “Annual Incentive Plan”), shall be on the same terms and
conditions that apply to other senior executives generally.  The actual earned annual cash incentive, if
any, payable to Executive for any performance period will depend upon the
extent to which the applicable performance goal(s) specified by the
Committee under the Annual Incentive Plan are achieved and will be decreased or
increased for under- or over-performance. 
Except as specifically provided herein, Executive’s annual cash
incentive will be subject to the terms and conditions of the Annual Incentive
Plan, including payment date and continued employment obligations.  The Company agrees, for fiscal year 2011,
that all performance goals will be deemed to have been achieved at least at
target level.

 

-2-
 

 

(c)                               Long-Term
Incentives.

 

(i)                                  Restricted Stock. 
Within 30 days of the Effective Date, Executive will be granted 76,000
shares of the Company’s common stock under the Company’s 2004 Stock Incentive
Plan as in effect on the Effective Date (the “Stock Plan”).  Except as otherwise provided in the Stock
Plan or hereunder, 50% of those shares (38,000) will vest and be
non-forfeitable if Executive is employed on October 31, 2011 and the
remaining 50% (38,000) will vest and be non-forfeitable if Executive is
employed on October 31, 2012.  In
all other respects, and except as specifically provided herein, such grant will
be subject to terms and conditions of the Stock Plan and the Committee’s
standard terms and conditions for this type of award.

 

(ii)                              Performance Restricted Units. 
Within 30 days of the Effective Date, Executive will also be granted two
tranches of Performance Restricted Units (“PRUs”) under the Stock Plan, 304,000
PRUs relating to the three-year period beginning November 1, 2009 and vesting
on October 31, 2012 (“Grant 1”) and 304,000 PRUs to be earned over the
three-year period beginning November 1, 2010, and vesting on October 31,
2013 (“Grant 2”), to the extent the applicable performance metrics are achieved
and Executive is still employed on the vesting date, except as otherwise
provided in the Stock Plan or as specifically provided herein.  The PRUs metrics regarding cash flow and
Total Shareholder Return will be as set forth in Executive’s grant instrument
under the Stock Plan and, in the case of Grant 1, will be the same as for the
PRUs previously awarded to Company employees in respect of the three-year
period beginning November 1, 2009 and ending on October 31, 2012.  Following
the close of the performance period for Grant 1, the Committee shall determine
the number of PRUs earned based on actual performance for the three-year
performance period and that number shall be reduced by one-third reflecting the
fact that Executive was not employed for the first year of the performance period.  For Grant 2, the cash flow metric for the
first year of the three-year period, November 1, 2011 through October 31,
2012, but not any subsequent year, shall be deemed to have been achieved at no
less than target level.  In all other
respects, such grants will be subject to terms and conditions of the Stock
Plan, and the Committee’s standard terms and conditions for this type of award.

 

(iii)                          For each Company fiscal year, beginning with
2012, and so long as the Stock Plan, or any successor thereto, is in effect and
other senior executives are granted PRUs or other long-term incentive awards,
Executive will be eligible for a grant, with the number of PRUs (or other
long-term incentive award) and the relevant terms and conditions, to be
determined in the sole discretion of the Committee; provided, however, that any
future grants of PRUs (or other long-term incentive award) to Executive shall
be on terms no less favorable than those that apply to the other senior
executives generally.

 

(d)                             One-Time Sign-On Grants:
Restricted Shares and PRUs.

 

(i)                                  Restricted Stock. 
Within 30 days of the Effective Date, Executive will be granted 80,000
shares of the Company’s common stock under the Stock Plan.  Except as otherwise provided in the Stock
Plan or hereunder, 50% of those shares (40,000) will vest and be
non-forfeitable if Executive is employed on October 31, 2011 and the
remaining 50% (40,000) will vest and be non-forfeitable if Executive is
employed on October 31, 2012.  In
all other 

 

-3-
 

 

respects, such grant will be subject to terms and
conditions of the Stock Plan, and the Committee’s standard terms and conditions
for this type of award.

 

(ii)                              Performance Restricted Units. 
Within 30 days of the Effective Date, Executive will also be granted
120,000 PRUs under the Stock Plan.  The
PRUs are to be earned over the three-year period beginning November 1,
2010, and will vest on October 31, 2013, to the extent the performance
metrics are achieved and Executive is still employed on the vesting date,
except as otherwise provided in the Stock Plan or hereunder.  The PRUs metrics regarding cash flow and
Total Shareholder Return will be as set forth in Executive’s grant instrument
under the Stock Plan, except that the cash flow metric for the first year of
the three-year period, November 1, 2011 through October 31, 2012, but
not any subsequent year, shall be deemed to have been achieved at no less than
target level.  In all other respects,
such grant will be subject to terms and conditions of the Stock Plan, and the
Committee’s standard terms and conditions for this type of award.

 

(iii)                          Stock Ownership Guidelines. 
Executive shall be subject to, and shall comply with, the Company’s
Stock Ownership Guidelines; provided, however, that no holding requirement
shall be imposed upon common shares issued to Executive under clauses (i) and
(ii) hereof notwithstanding any contrary provisions in those Guidelines.

 

(e)                               Signing Bonus.  On the sixtieth (60th) day after this Agreement
is executed by both parties, Executive will receive a signing bonus equal to
$4,000,000 (the “Signing Bonus”).  If
Executive’s employment terminates other than by reason of death, Disability (as
defined below) or termination without Cause (as defined below) within eighteen
(18) months  of the Effective Date,
Executive will return to the Company an amount equal to the Signing Bonus
multiplied by a fraction with the numerator equaling 18 less the number of
whole months that have elapsed from the Effective Date to the date of Executive’s
termination of employment (the “Date of Termination”) and a denominator equal
to eighteen (18).

 

(f)                                Relocation Benefit.  In accordance with Company’s relocation
policy, Executive will receive the standard Company relocation package.  However, in light of the substantial payments
and benefits Executive is forfeiting from his prior employment to accept
employment by the Company, and the substantial expense Executive will incur to
move his residence to, and acquire a new residence in, the United States,
Executive’s relocation allowance will equal $4,600,000 (the “Relocation
Allowance”), allocable $2,900,000 to relocation (the “Relocation Payment”) and
$1,700,000 to the forfeiture of payments and benefits (the “Forfeiture Payment”).  The payment to Executive of the Relocation
Allowance will be made on the sixtieth (60th) day after this Agreement is
executed by both parties and shall be in lieu of the relocation allowance
otherwise provided for under the Company’s relocation policy.  The Relocation Payment will be fully vested
and will not be subject to repayment by Executive, in whole or in part,
provided Executive is employed by the Company for at least sixty (60) calendar
days following the Effective Date; provided, however, that the Executive will
not be obligated to repay the Relocation Payment if his employment is
terminated without Cause during such 60-day period.  The Forfeiture Payment will be fully vested
upon payment and will not be subject to repayment by Executive, in whole or in
part.

 

-4-
 

 

5.                                    Employee Benefits, etc.

 

(a)                               Generally.  Executive will be eligible to participate in
accordance with the terms of all Company employee benefit plans, policies, and
arrangements that are applicable to other executive officers of the Company, as
such plans, policies, and arrangements may exist from time to time.  The Company represents that it currently
sponsors one or more health insurance plans for which Executive will be
eligible and which cover, subject to the terms and limitations of the plan,
medical treatment received outside the United States.

 

(b)                              Vacation.  Executive will be entitled to receive paid
annual vacation in accordance with Company policy for other senior executive
officers.  In no event will Executive
receive less than twenty-five (25) days of paid vacation time per employment
year.

 

(c)                               Perquisites.  Executive will receive Company perquisites on
at least the same level as the Company’s other senior executive officers;
provided that access to the Company’s jet aircraft, in accordance with the
Company’s aircraft policy, will commence on the date that Executive’s
appointment to the positions under this Agreement is publicly announced.

 

(d)                             Security.  The Company will provide Executive with
appropriate security in accordance with what Executive and the Company’s Global
Security Department agree from time to time and as approved by the
Committee.  Such security will be
provided beginning on the date that Executive’s appointment to the positions
under this Agreement is publicly announced.

 

(e)                               United States
Residency.  The Company and Executive
understand that there are specific requirements and rules which govern
Executive’s residency in France and whether Executive will be a non-resident of
France and a resident of the United States for purposes of his employment under
this Agreement.  The Company will use
reasonable commercial efforts to assist Executive (and his spouse) in obtaining
an appropriate visa and in qualifying as a non-resident of France during the
Term but Executive agrees to take all reasonable steps necessary to assume
non-resident status in France and appropriate immigration status in the United
States and acknowledges that he assumes all risks associated with these requirements,
including without limitation the personal French income and social tax
requirements.

 

6.                                    Expenses.  The Company will reimburse
Executive for reasonable travel, entertainment, and other expenses incurred by
Executive in the furtherance of the performance of Executive’s duties
hereunder, in accordance with the Company’s expense reimbursement policy as in
effect from time to time.

 

7.                                    Termination of Employment.  In
the event Executive’s employment with the Company terminates for any reason,
Executive will be entitled to any (a) unpaid Base Salary accrued up to the
Date of Termination, (b) unpaid, but earned annual incentive for any
completed fiscal year as of the Date of Termination, (c) pay for accrued
but unused vacation, (d) benefits or compensation as provided under the
terms of any employee benefit and compensation agreements or plans applicable
to Executive and under which he has a vested right (including any right that
vests in connection the termination of his employment), (e) unreimbursed
business expenses to which Executive is entitled to reimbursement under the
Company’s expense reimbursement policy, and (f) rights to indemnification
Executive may have under the

 

-5-
 

 

Company’s Articles of Incorporation, Bylaws, the
Employment Agreement, or separate indemnification agreement, as applicable,
including any rights Executive may have under directors and officers insurance
policies.  In addition, if the termination
is by the Company without Cause, Executive will be entitled to the amounts and
benefits specified in Section 8.

 

8.                                    Severance.

 

(a)                               Termination
Without Cause.  If Executive’s employment is
terminated by the Company without Cause, then, subject to compliance with Section 9,
Executive will be eligible to participate in the then existing Severance Plan
for Executive Officers (the “Severance Program”); provided, however, that
payment to Executive shall be made in monthly installments (on the first
business day of each month) over the 18-month period following the Date of
Termination.  The first such installment
shall be made on the first business day of the month following the sixtieth (60th) day after
the Date of Termination and shall be in the amount of one-ninth (1/9) of the
total severance amount due to Executive, and each of the remaining sixteen (16)
installments shall be in the amount of one-eighteenth (1/18) of the total
severance amount due to Executive.  It is
understood that the Severance Program is reviewed annually by the Committee and
may be revised by it.  Notwithstanding
the preceding sentence, until the third anniversary of the Effective Date,
Executive’s entitlement to cash severance if his employment is terminated by
the Company without Cause shall not be less than 2.0 times the sum of (A) the
Base Salary as in effect immediately before the Date of Termination and
(B) a “Bonus Component” determined as follows:

 

i)               if the Date of
Termination occurs before the end of the Company’s 2011 fiscal year, the Bonus
Component will be Executive’s target annual incentive compensation for such
fiscal year;

 

ii)           if the Date of
Termination occurs on or after the end of the Company’s 2011 fiscal year but
before the end of the Company’s 2012 fiscal year, the Bonus Component will be
Executive’s actual annual incentive compensation for the Company’s 2011 fiscal
year; and

 

iii)       if the Date of
Termination occurs on or after the end of the Company’s 2012 fiscal year but
before the end of the Company’s 2013 fiscal year, the Bonus Component will be
the average of Executive’s actual annual cash incentive compensation for the
Company’s 2011 and 2012 fiscal years.

 

In addition, and notwithstanding the terms of the
Severance Program, if, without his consent, (w) Executive’s titles,
authority, duties or responsibilities under this Agreement are materially
reduced, (x) Executive’s salary, annual incentive or long-term incentive
opportunities are materially reduced in violation of this Agreement, (y) the
Company requires Executive to materially change the location at which he
performs services under this Agreement and that increases the distance of the
commute to his workplace by more than 50 miles, and, in the case of any of the
foregoing clauses (w), (x) or (y) Executive notifies the Company
within 90 days of the alleged reduction or relocation and the Company does not
cure the same within 30 days thereafter, or (z) Executive is not reelected
to the Board during the Employment Term, then Executive will be deemed to have
been terminated without Cause and his employment shall 

 

-6-
 

 

cease on the 30th day following the end of the cure
period or his failure to be reelected to the Board.  Notwithstanding the foregoing, the amount of
severance benefits received by Executive under this Section 8(a) will
not exceed 2.99 times the sum of Executive’s Base Salary and annual incentive
as determined by the HP Severance Policy for Senior Executives, unless such
benefits are approved by the Company’s stockholders pursuant to the Company’s
established policy.

 

(b)                              Termination
without Cause: Treatment of Equity Incentive Awards.  If Executive’s employment is terminated by
the Company without Cause prior to the third anniversary of the Effective Date,
then in addition to the benefits provided for in Section 8(a) above,
the following shall apply:

 

i)               The restricted
stock awarded to Executive pursuant to Sections 4(c)(i) and 4(d)(i), and
all other awards of restricted stock or restricted stock units made to
Executive after the Effective Date, will vest in full and be non-forfeitable as
of the Date of Termination;

 

ii)           All continued
service requirements to the vesting of the PRUs awarded pursuant to Sections
4(c)(ii) and 4(d)(ii) will be deemed satisfied as of the Date of
Termination.  The PRUs included in Grant
2 will be based on actual performance; for the first year of the award only,
the cash flow metric will be considered to have been achieved at no less than
target.  The PRUs included in Grant 2
will be payable at the end of the performance period subject to any
discretionary adjustment that the Committee makes generally to PRUs for that
performance period.  The PRUs included in
Grant 1 will be payable at the end of the applicable performance period, determined
based on actual performance subject to any discretionary adjustment that the
Committee makes generally to PRUs for that performance period;

 

iii)       With respect to
other awards of PRUs (or other long-term incentive awards) made to Executive on
or after the Effective Date, Executive will vest in a pro rata amount of the
PRU award (or other long-term incentive award), payable at the end of the
applicable performance period, determined based on the number of whole months
worked during the relevant performance period plus, if the Date of Termination
occurs on or after the second anniversary of the Effective Date, twelve
(12).  Payment will be based on actual
performance during the performance period (subject to any discretionary
adjustment that the Committee makes generally to PRUs (or such other long-term
incentive awards) for the relevant performance period).

 

(c)                               Termination for
Cause.  If Executive’s employment is
terminated for Cause by the Company, then, except as provided in Section 7,
(i) all further vesting of Executive’s outstanding equity awards will
terminate immediately; (ii) all payments of compensation by the Company to
Executive hereunder will terminate immediately, and (iii) Executive will
be eligible for severance benefits only in accordance with the Company’s then
established plans, programs, and practices.

 

-7-
 

 

(d)                             Other Termination
Including due to Death or Disability.  If
Executive’s employment terminates for any other reason, including but not
limited to, death or Disability, then, except as provided in Section 7, (i) Executive’s
outstanding equity awards will be treated in accordance with the terms and
conditions of the applicable award agreement(s); (ii) all payments of
compensation by the Company to Executive hereunder will terminate immediately,
and (iii) Executive will be entitled to receive benefits only in
accordance with the Company’s then established plans, programs, and practices.

 

9.                                    Covenants; Conditions to Receipt of
Severance; Mitigation.

 

(a)                               Nondisparagement.  During the Employment Term and for the twelve
(12) months thereafter, Executive will not, and will cause his relatives,
agents, and representatives to not, knowingly disparage, criticize, or
otherwise make any derogatory statements regarding the Company, its directors,
or its officers, and the Company will not knowingly disparage, criticize or
otherwise make any derogatory statements regarding Executive.  The Company’s obligations under the preceding
sentence shall be limited to communications by its senior corporate executives
having the rank of Senior Vice President or above and members of the
Board.  The foregoing restrictions will
not apply to any statements that are made truthfully in response to a subpoena
or other compulsory legal process. 
Payments of severance to Executive, in accordance with Section 8
above, shall immediately cease, and no further payments shall be made, in the
event that Executive materially breaches the provisions of this Section 9(a).

 

(b)                              Other Requirements.  Any general release of claims required to be
executed by Executive as a condition to the receipt of severance will be
consistent in substance with the releases of claims used at the time by the
Company in connection with separations of senior corporate executives
generally.

 

(c)                               Mitigation.  Payments of severance to Executive, in
accordance with Section 8 above, shall immediately cease, and no further
payments shall be made, in the event that (x) Executive materially
breaches the Confidential Information Agreement (provided, however, that
Executive’s right to future payments will be restored, and any omitted payments
will be made to Executive promptly, if the Board in its reasonable good faith
judgment determines that such breach is curable, and Executive cures the breach
to the reasonable satisfaction of the Board within 30 days of having been
notified thereof); or (y) Executive is employed or self-employed in any
gainful employment during the eighteen (18) month severance period,
irrespective of whether Executive receives current or deferred compensation,
without the prior consent of the Board, such consent to be withheld only if the
Board determines in good faith that it is reasonably likely that, in connection
with such employment, Executive would utilize or disclose material confidential
or proprietary information concerning the Company.  Executive agrees to cooperate with the
Company and to provide timely notice as to his activities following a
termination without Cause so that the Company may monitor its obligation under Section 8.

 

-8-
 

 

10.                            Definitions.

 

(a)                               Cause.  For purposes of this Agreement, “Cause” will
mean (i) Executive’s material neglect (other than as a result of illness
or disability) of his duties or responsibilities to the Company or (ii) Executive’s
conduct (including action or failure to act) that Executive knew or should have
known is materially inconsistent with the best interests of, or is materially
injurious to, the Company.  Except for
actions or circumstances which, in the reasonable good faith judgment of the
Board cannot be cured, Executive will have thirty (30) calendar days from
Executive’s receipt of notice from the Company setting forth in reasonable
detail the circumstances constituting Cause within which to cure.  Executive’s termination of employment will
not be considered to be for Cause unless it is approved by a majority vote of
the members of the Board of Directors or an independent committee thereof.  It is understood that good faith decisions of
the Executive relating to the conduct of the Company’s business or the Company’s
business strategy will not constitute “Cause”.

 

(b)                              Disability.  For purposes of this Agreement, Disability
will mean Executive’s absence from his responsibilities with the Company on a
full-time basis for 180 calendar days in any consecutive twelve (12) months
period as a result of Executive’s mental or physical illness or injury.

 

11.                            Indemnification. 
Subject to applicable law, Executive will be provided indemnification to
the maximum extent permitted by the Company’s bylaws and Certificate of
Incorporation, including coverage, if applicable, under any directors and
officers insurance policies, with such indemnification determined by the Board
or any of its committees in good faith based on principles consistently applied
(subject to such limited exceptions as the Board may approve in cases of
hardship) and on terms no less favorable than provided to any other Company
executive officer or director.

 

12.                            Confidential Information. 
Executive will execute the Company’s Agreement Regarding Confidential
Information and Proprietary Developments appended hereto as Exhibit A (the
“Confidential Information Agreement”).

 

13.                            Assignment.  This Agreement will be binding
upon and inure to the benefit of (a) the heirs, executors, and legal
representatives of Executive upon Executive’s death, and (b) any successor
of the Company.  Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes.  For this
purpose, “successor” means any person, firm, corporation, or other business
entity which at any time, whether by purchase, merger, or otherwise, directly
or indirectly acquires all or substantially all of the assets or business of the
Company.  None of the rights of Executive
to receive any form of compensation payable pursuant to this Agreement may be
assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer,
conveyance, or other disposition of Executive’s right to compensation or other
benefits will be null and void.

 

14.                            Notices.  All notices, requests, demands,
and other communications called for hereunder will be in writing and will be
deemed given (a) on the date of delivery if delivered personally, (b) one
(1) day after being sent overnight by a well established commercial
overnight service, or (c) four (4) days after being mailed by
registered or certified mail, return receipt 

 

-9-
 

 

requested, prepaid and addressed to the parties or
their successors at the following addresses, or at such other addresses as the
parties may later designate in writing:

 

If to the Company:

 

Attn: Chairman of the
HR/Compensation Committee

c/o Corporate Secretary

Hewlett-Packard Company

3000 Hanover Street

Palo Alto, CA 94304

 

If to Executive:

 

at the last residential
address known by the Company.

 

15.                            Severability.  If
any provision hereof becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable, or void, this Agreement will continue in full
force and effect without said provision.

 

16.                            Arbitration.  The Parties agree that any and
all disputes arising out of the terms of this Agreement, Executive’s employment
by the Company, Executive’s service as an officer or director of the Company,
or Executive’s compensation and benefits, their interpretation, and any of the
matters herein released, will be subject to binding arbitration in Santa Clara,
California before the Judicial Arbitration and Mediation Services, Inc.
under the American Arbitration Association’s National Rules for the
Resolution of Employment Disputes, supplemented by the California Rules of
Civil Procedure.  The Parties agree that
the prevailing party in any arbitration will be entitled to injunctive relief
in any court of competent jurisdiction to enforce the arbitration award.  The Parties hereby agree to waive their right
to have any dispute between them resolved in a court of law by a judge or jury.  This paragraph will not prevent either party
from seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the Parties and the subject matter of their dispute
relating to Executive’s obligations under this Agreement and the Confidential
Information Agreement.

 

17.                            Integration.  This Agreement, together with
the Confidential Information Agreement and the standard forms of equity award
grants that describe Executive’s outstanding equity awards, represents the entire
agreement and understanding between the parties as to the subject matter herein
and supersedes all prior or contemporaneous agreements whether written or
oral.  No waiver, alteration, or
modification of any of the provisions of this Agreement will be binding unless
in a writing and is signed by duly authorized representatives of the parties
hereto.  In entering into this Agreement,
no party has relied on or made any representation, warranty, inducement,
promise or understanding that is not in this Agreement.

 

18.                            Waiver of Breach.  The
waiver of a breach of any term or provision of this Agreement, which must be in
writing, will not operate as or be construed to be a waiver of any other
previous or subsequent breach of this Agreement.

 

-10-
 

 

19.                            Survival.  The Confidential Information
Agreement and the Company’s and Executive’s responsibilities under Sections 7,
8, 9, 10, 11, 13, 14, 15 and 16 will survive the termination of this Agreement.

 

20.                            Headings.  All captions and Section headings
used in this Agreement are for convenient reference only and do not form a part
of this Agreement.

 

21.                            Tax Withholding.  All
payments made pursuant to this Agreement will be subject to withholding of
applicable taxes.

 

22.                            Governing Law.  This
Agreement will be governed by the laws of the State of California.

 

23.                            Acknowledgment. 
Executive acknowledges that he has had the opportunity to discuss this
matter with and obtain advice from his private attorney, has had sufficient time
to, and has carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this Agreement.

 

24.                            Internal Revenue Code Section 409A. 
Notwithstanding any provision of this Agreement, this Agreement shall be
construed and interpreted to comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and if necessary, any provision shall be held
null and void to the extent such provision (or part thereof) fails to comply
with Section 409A of the Code or regulations thereunder.  For purposes of the limitations on
nonqualified deferred compensation under Section 409A of the Code, each
payment of compensation under the Agreement shall be treated as a separate
payment of compensation for purposes of applying the Section 409A of the
Code deferral election rules and the exclusion from Section 409A of
the Code for certain short-term deferral amounts.  Any amounts payable solely on account of an
involuntary separation from service within the meaning of Section 409A of
the Code shall be excludible from the requirements of Section 409A of the
Code, either as involuntary separation pay or as short-term deferral amounts (e.g., amounts payable under the schedule
prior to March 15 of the calendar year following the calendar year of
involuntary separation) to the maximum possible extent.  If, as of the Date of Termination, Executive
is a “specified employee” as determined by the Company, then to the extent that
any amount or benefit that would be paid or provided to Executive under this
Agreement within six (6) months of his “separation from service” (as
determined under Section 409A) constitutes an amount of deferred
compensation for purposes of Section 409A and is considered for purposes
of Section 409A to be owed to Executive by virtue of his separation from
service, then such amount or benefit will not be paid or provided during the
six-month period following the date of Executive’s separation from service and
instead shall be paid or provided on the first business day that is at least
seven (7) months following the date of Executive’s separation from
service, except to the extent that, in the Company’s reasonable judgment,
payment during such six-month period would not cause Executive to incur
additional tax, interest or penalties under Section 409A.  Further, any reimbursements or in-kind
benefits provided under the Agreement shall be made or provided in accordance
with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement is for expenses
incurred during the period of time specified in the Agreement, (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement, 

 

-11-
 

 

or in-kind benefits to be provided, in any other
calendar year, (iii) the reimbursement of an eligible expense will be made
no later than the last day of the calendar year following the year in which the
expense is incurred, and (iv) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.

 

25.                            Counterparts.  This
Agreement may be executed in counterparts, and each counterpart will have the
same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.

 

-12-
 

 

IN WITNESS WHEREOF, each
of the parties has executed this Agreement, in the case of the Company by a
duly authorized officer, on the day and year written below.

 

 

	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HEWLETT-PACKARD COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Lawrence T.
  Babbio, Jr.

  	
   

  	
  Date:
  September 29, 2010

  
	
  By:

  	
  Lawrence T.
  Babbio, Jr.

  	
   

  	
   

  
	
  Title:

  	
  Director and Chair of
  HR and Compensation Committee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTIVE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Léo Apotheker

  	
   

  	
  Date:
  September 29, 2010

  
	
  LÉO APOTHEKER

  	
   

  	
   

  

 

 

Schedule
A

 

Board Memberships

 

Schneider Electric SA

 

PlaNet Finance (a French
not-for-profit association)

 

-14-

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