Document:

Exhibit 10.2

 

 

Exhibit A

Robert Koska Offer letter

 

 

Change of Control Retention
and Severance Agreement

 

 

This Change of Control
Retention and Severance Agreement (the “Agreement”) is made and entered into as of                   
[hire date]   , 2004 (the “Effective Date”), by and between Cepheid and
Robert Koska (the “Executive”).  Capitalized terms used in this Agreement
shall have the meanings set forth in Section 3 below.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

3.5                                 “Termination Upon
Change of Control” means:

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

9.                                       Miscellaneous.

 

9.1                                 Successors of the Company.  The
Company will require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place.

 

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

 

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

 

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

 

	
  EXECUTIVE

  	
  CEPHEID

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Robert
  Koska

  	
   

  
	
   

  	
  Name: 

  	
  John
  L. Bishop

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive OfficerExhibit
10.1

 

SEALED AIR CORPORATION

PERFORMANCE-BASED COMPENSATION PROGRAM

(as amended effective for the 2005 fiscal year)

 

In order to entitle
Sealed Air Corporation (the “Corporation”) to deduct for U.S. income tax
purposes the compensation expense resulting from certain performance-based
compensation provided to certain officers and other eligible employees (as
defined below) pursuant to awards under the Corporation’s 2005 Contingent Stock
Plan or under annual cash bonus arrangements, the following are the terms under
which such awards may be granted to such eligible employees as provided in
Internal Revenue Code Section 162(m) and the regulations thereunder, as
the same may be amended from time to time (“Section 162(m)”):

 

I.   Eligible Employees:

 

The class of employees
eligible for awards under this program (“eligible employees”) consists of the
chief executive officer of the Corporation, the other four most highly
compensated executive officers of the Corporation, and other officers and key
employees of the Corporation or any of its subsidiaries selected by the
committee of the Board of Directors (the “Committee”) that is authorized by the
Board of Directors to establish and administer performance goals under this
program.  The Committee will be comprised
of “outside directors” as that term is defined in Section 162(m).

 

II.  Performance-based Awards of Common Stock:

 

Performance-based awards
payable in shares of the Corporation’s Common Stock under the 2005 Contingent
Stock Plan of Sealed Air Corporation or a successor plan can be made based upon
achievement of pre-established objective goals during a performance period
(which may be the calendar year) established by the Committee, consistent with
the requirements of Section 162(m). 
If such goals are achieved, then an eligible employee may be granted one
or more awards payable in shares of Common Stock under the 2005 Contingent
Stock Plan during the 12-month period following the performance period in an
aggregate amount up to the pre-established award level.

 

The maximum amount of
performance-based awards payable in shares of the Corporation’s Common Stock
under the 2005 Contingent Stock Plan to any eligible employee under this
program during any 12-month period may not exceed two-tenths of 1% (0.2%) of the issued and outstanding shares of the
Corporation’s Common Stock at the beginning of such period.  The Committee retains the sole and exclusive
discretion to set pre-established award levels for awards under the Corporation’s
2005 Contingent Stock Plan at an amount less than the maximum level specified
in the prior sentence and to reduce (including a reduction to zero) any award
payable in shares of Common Stock under the 2005 Contingent Stock Plan that is
otherwise payable under the program.

 

1

 

III.  Performance-based Awards of Cash:

 

Performance-based awards
of cash under the Corporation’s annual cash bonus arrangements can be made to
eligible employees based upon achievement of pre-established objective goals
during a calendar year performance period. 
If such goals are achieved, the eligible employee may be granted an
annual cash bonus for such year in an amount of up to the greater of one percent (1%) of the
Corporation’s net earnings for that fiscal year or $1 million, provided,
however, that the Committee in its sole and exclusive discretion may reduce
(including a reduction to zero) any award to be made in cash to any eligible
employee that is otherwise payable under the program for such year.  At the sole and exclusive discretion of the
Committee, an annual cash bonus may be paid although such goals have not been
achieved if the eligible employee dies or becomes disabled during the
performance period or a “change in control” (as defined in the 2005 Contingent
Stock Plan) occurs during the performance period.

 

IV.   Pre-established Objective Goals:

 

A.  Performance-based awards under this program
will require attainment of objective, pre-established goals based on one or
more of the following criteria: growth in net sales; operating profit; net
earnings; measures of cash flow; measures of expense control; earnings before
interest and taxes (commonly called EBIT); earnings before interest, taxes,
depreciation and amortization (commonly called EBITDA); earnings per share;
successful completion of strategic acquisitions, joint ventures or other
transactions; measures of return on assets, return on invested capital or
return on equity; shareholder value added (net operating profit after tax
(NOPAT), excluding non-recurring items, less the Corporation’s cost of
capital); and the ratio of net sales to net working capital, or any combination
of the foregoing goals.  Goals may be
established on a corporate-wide basis or with respect to one or more business
units, divisions or subsidiaries, and may be either in absolute terms or
relative to the performance of one or more comparable companies or an index
covering multiple companies.  For the
purpose of determining whether a goal has been attained, the Committee may
exclude the impact of charges, credits and related costs for restructurings,
discontinued operations, extraordinary items, debt redemption or retirement,
and the cumulative effects of accounting changes, each as defined by generally
accepted accounting principles, and other unusual or non-recurring items as
defined by the Committee when the goals are established.

 

B.  Pre-established goals and award levels will
be established by the Committee in writing during the first 90 days of the
performance period (or during the first 25% of the performance period if the
performance period is less than a year), provided that the outcome is
substantially uncertain at the time the Committee establishes the goal. Except
as specified in this program, performance goals may not be changed once
set.  No awards under the 2005 Contingent
Stock Plan or cash payments will be made until the Committee has certified that
the performance goals have been met.

 

2

 

V.  Additional Provisions:

 

A.  The limits on awards made under the 2005
Contingent Stock Plan and in cash are cumulative, that is, the Corporation may
grant to any eligible employee in any year awards up to the specified limits
both for Common Stock and for cash. 
While the limits are annual, performance-based awards need not be made
every year, and the Committee shall have the discretion to determine the
intervals between successive performance-based awards.

 

B.  In the event of any change in the Corporation’s
capitalization, such as through a stock split, stock dividend,
recapitalization, merger or consolidation, appropriate adjustments will be made
by the Board of Directors to the maximum amount of performance-based awards
payable in shares of the Corporation’s Common Stock during any 12-month period
to an eligible employee, to the pre-established award level for any award payable
in shares of the Corporation’s Common Stock, to the amount of any
performance-based award payable in shares of the Corporation’s Common Stock
that has been approved by the Committee before such change occurred but not yet
made as of such change, and to any pre-established goal that is based upon the
Corporation’s capitalization, such as earnings per share.

 

C.  The Committee shall be entitled at its discretion
to approve awards under the 2005 Contingent Stock Plan, cash bonuses or
compensation under any other compensation plan or arrangement that does not
meet the requirements of Section 162(m) and thus may be partly or fully
non-deductible by the Corporation for U.S. income tax purposes.

 

D.  Except as provided above and subject to the
stockholder approval requirements of Section 162(m), the Committee shall
have complete power and authority to amend, suspend or terminate any or all
terms of the performance-based compensation program, except that it may not
alter performance goals or increase pre-established award levels once they have
been established for a performance period. 
The Committee shall have full authority to administer the
performance-based compensation program and to interpret the program’s terms and
establish rules for the administration of the program, although the Committee
may consider recommendations from the Chief Executive Officer of the
Corporation or from directors who are not members of the Committee.  The Committee’s determinations under the
program shall be final.

 

E.  An eligible employee’s rights and interests
under the program may not be assigned or transferred by the eligible
employee.  To the extent an eligible
employee acquires a right to receive an award under the program, such right
shall be no greater than the right of any unsecured general creditor of the
Corporation.  Nothing contained in the
program shall be deemed to create a trust of any kind or any fiduciary
relationship between the Corporation and an eligible employee.  Designation as an eligible employee under the
program shall

 

 

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not entitle the employee
to continued employment with or, if applicable, continuation as an officer of
the Corporation or any of its subsidiaries.

 

F.  The program shall be construed and governed
in all respects under the laws of the United States to the extent applicable
and, to the extent such laws are not applicable, under the laws of the State of
New Jersey.

 

The foregoing terms of
the amended performance-based compensation program shall become effective as of
the Corporation’s 2005 fiscal year, subject to the approval by the affirmative
vote of a majority of votes cast by the stockholders of the Corporation at the
2005 annual meeting of stockholders.

 

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