EXECUTIVE SEVERANCE AGREEMENT-Xxxxxx X. Xxxxxxxxxx
AGREEMENT, dated as of January 2, 1992, by and between Lifecodes
Corporation, a New York corporation having offices at 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 (the "Company"), and Xxxxxx X. Xxxxxxxxxx, whose residence
address is Xxxxx Xxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000 (the "Executive).
The Company's Board of Directors considers the continued services of key
executives of and consultants to the Company to be in the best interest of the
Company and its stockholders.
The Company's Board of Directors desires to assure and has determined that
it is appropriate and in the best interests of the Company and its stockholders
to reinforce and encourage the continued attention and dedication of key
executives of and consultants to the Company to their duties without personal
distraction of conflict of interest in circumstances arising from the
possibility or occurrence of a change in control of the Company.
In consideration of the premises and the covenants and agreements contained
herein, and other good and valuable consideration, the Company and the Executive
agree as follows:
1. Services During Certain Events. In the event a proposal is made to
effect a Change in Control (as defined in Section 3 hereof), the Executive
agrees that he will not voluntarily leave the employ of or cancel his
consultancy with the Company and will render the services contemplated in the
recitals of this Agreement until such proposal for a Change in Control is
terminated or abandoned or until six (6) months after a Change in Control has
occurred.
2. Termination. For purposes of this Agreement, a "Termination" shall be
deemed to have occurred in the event that the Executive's employment by or
consultancy with the Company is terminated at any time from six months prior to
a Change in Control to two years following a Change in Control;
(a) by the Company for reasons other than "cause" (as defined in
Section 6 hereof), "disability" (as defined in Section 6 hereof), death or
attainment of age 65;
(b) by the Executive following the occurrence of any of the following
events without the Executive's consent:
(i) the assignment of the Executive to any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such change in
Control, or a change in his reporting responsibilities or
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titles within the Company in effect at such time resulting in a
reduction of his responsibilities or position at the Company;
(ii) a reduction of the Executive's annual salary unless it is
part of a general salary reduction plan affecting other Executives;
(iii) a material reduction in any year if the ratio of incentive
compensation or fringe benefits received by the Executive pursuant to
any bonus, incentive or fringe benefit plan (the "Benefit Plans") to
his annual salary in such year, which reduction is greater than the
average reduction in the ratio of such incentive compensation or
fringe benefits to annual salary received by all participants under
the Benefit Plans; as used here, adjustments to incentive compensation
based upon personal or general business performance will not be
considered material;
(iv) a material increase in the amount of travel required of the
Executive in connection with his employment by the Company, or the
transfer of the Executive to a location requiring a change in his
residence; or
(v) any failure by the Company to comply with and satisfy Section
8 of this Agreement; or
(c) by the Executive, if he shall determine in good faith (and give
written notice to the Company's Board of Directors specifying what it is
that prevents him from performing his duties) that due to the Change in
Control (including any changes in circumstances at the Company that
directly of indirectly affect the Executive's position, duties,
responsibilities or status immediately preceding the change in Control) he
is no longer able effectively to discharge his duties and responsibilities
and the situation is not remedied to the reasonable satisfaction of the
Executive within 30 days of receipt by the Company of written notice from
the Executive of such determination.
3. Change in Control. For purposes of this Agreement, a "Change in Control"
of the Company shall be deemed to have occurred if:
(a) the stockholders of the Company shall approve (i) any
consolidation or merger of the Company or any subsidiary of the Company
where (A) the stockholders of the Company, immediately prior to such
consolidation or merger, would not, immediately after such consolidation or
merger, beneficially own, directly or indirectly, Voting Securities (as
defined below) representing in the aggregate more than 50% of the combined
voting power of the Voting Securities of the surviving entity (or of its
ultimate parent corporation, if any) or (B) the members of the Board of
Directors of the Company, immediately prior to the consolidation or
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merger, would not, immediately after the consolidation or merger,
constitute a majority of the Board of Directors of the corporation issuing
cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any) or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company;
(b) individuals who, as of the date hereof, constitute the entire
Board of Directors of the Company (the "Incumbent Directors") cease for any
reason to constitute a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the then Incumbent Directors (other than an
election or nomination of an individual whose assumption of office is the
result of an actual or threatened election contest relating to the election
of directors of the Company, as such terms are used in Rule 14a-11 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall
be, for purposes of this Agreement, considered as though such individual
were an Incumbent Director; or
Notwithstanding the foregoing, a "Change in Control" of the Company shall not be
deemed to have occurred for purposes of the foregoing clause (c) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of Common Shares of other Voting Securities outstanding increases (i) the
proportionate number of Common Shares beneficially owned by any person to more
than 50% of the Common Shares then outstanding or (ii) the proportionate voting
power represented by more than 50% of the combined voting power of all then
outstanding Voting Securities beneficially owned by any person to more than 50%
of the combined voting power of all then outstanding Voting Securities;
As used herein, the term "Voting Securities" when used with respect to a
corporation shall mean all then outstanding securities of such corporation
entitled under ordinary circumstances to vote in the election of the directors
of such corporation.
4. Rights and Benefits upon Termination or Change in Control.
(a) Severance Payment. Subject to Sections 6 and 11(a) hereof, in the
event of a Termination the Company shall pay the Executive, in twelve equal
monthly installments, or, at the Executive's option, in twenty-four (24)
equal monthly installments, beginning no later than 30 days following the
Executive's Termination, the greater of the Executive's annual salary or
annual consultancy payment as in effect immediately prior to (i) the
Termination or (ii) a Change in Control. The Company agrees to pay a
minimum of four (4) monthly installments.
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(b) Stock Options. Immediately prior to a change in Control, all
outstanding options to buy Company stock held by the Executive shall become
fully vested and immediately exercisable.
(c) Restricted Stock. Immediately prior to Change in Control, any (i)
repurchase agreement or (ii) right first refusal agreement between the
Executive and the Company with respect to the Company stock shall terminate
and the Executive's ownership of all shares of company stock shall fully
vest.
5. Certain Additional Payments by the Company. The Company covenants that
all material facts concerning the payments provided under this Agreement will be
adequately disclosed to the stockholders of the company and that it will use its
best efforts to obtain stockholder approval of the Agreement.
6. Conditions to the Obligations of the Company. The rights and benefits
provided in Section 4 hereof shall not accrue to the Executive if any of the
following events shall occur:
(a) The Company shall terminate the Executive's employment or
consultancy for "cause". For purposes of this Agreement, termination of
employment or consultancy for "cause" shall mean (i) the Executive's
conviction for, or plea of nolo contendere to, a crime involving moral
turpitude or a felony, (ii) the Executive's commission of an act of
personal dishonesty or breach of fiduciary duty resulting in substantial
personal profit in connection with the Executive's employment by the
company, (iii) willful and gross misconduct by the Executive in the course
of his duties, or (iv) deliberate and intentional continuing refusal by the
Executive to perform duties or responsibilities that are properly assigned
to the Executive (except for nonperformance because of incapacity due to
illness or accident).
(b) Following a Termination, the Executive shall not, upon receiving a
written request to do so, resign as a director and/or officer of the
Company and of each subsidiary and affiliate of the Company of which he is
then serving as a director and/or officer.
(c) The Company shall terminate the Executive's employment or
consultancy for "disability". For purposes of this Agreement, "disability"
shall mean a physical or psychological condition of the Executive which
renders him unable to perform his duties for the Company for a period for
six months or longer, as confirmed in writing by the Executive's
independent physician.
7. Arbitration and Expenses.
(a) Any dispute or controversy arising under or in connection with
this Agreement shall be settled by arbitration,
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conducted before a panel of three arbitrators in Stamford, Connecticut, in
accordance with the rules of the American Arbitration Association then in
effect. The arbitrators shall be approved by both the Company and the
Executive and their decision shall be binding on the parties and conclusive
for all purposes. Judgment may be entered on the arbitrators' award in any
court having jurisdiction. The expense of such arbitration shall be borne
by the Company.
(b) The Company shall pay or reimburse the Executive for all
reasonable costs and expenses (including, without limitation, attorneys'
fees) incurred by the Executive as a result of any claim, action or
proceeding (including a claim, action or proceeding in which the Executive
prevails against the Company) arising out of, or challenging the validity,
advisability or enforceability of, this Agreement or any provision hereof.
8. Successors. The Company shall use its reasonable best efforts to cause
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company,
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
had taken place. Upon transfer of the business the new entity will be
responsible for execution of this contract. As used herein, "the Company" shall
include any successor to all or substantially all of the Company's business or
assets which executes and delivers an agreement provided for in this Section 8
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
9. Notice of Termination. Any termination of the Executive's employment by
or consultancy with the Company shall be communicated to the Executive at the
address set forth above (or such other address as the Executive shall have
notified the Company in writing for purposes of this Agreement) in a written
notice and, except for termination of "cause", shall specify a termination date
no sooner than 15 days after the giving of such notice.
10. Term of Agreement. This Agreement shall terminate on December 31, 1994;
provided, however, that this Agreement shall automatically renew upon the
anniversary date for successive one-year terms unless the Company's Board of
Directors notifies the Executive in writing at least 30 days prior to a December
31st expiration date that it does not wish to renew the Agreement for an
additional term; and provided further that if a Change in Control occurs during
the term of an additional term of this Agreement, the Agreement shall continue
in effect for two years following such Change in Control.
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11. Miscellaneous.
(a) Duty to Mitigate; Other Severance Payments. If a Termination is
deemed to occur, the Executive shall during the one-year period subsequent
to his termination notify the Company of any employment when obtained, and
the severance payment provided under Section 4(a) hereof shall be offset by
any compensation which he receives from such employment during the one-year
period subsequent to his Termination. Furthermore, the severance payment
provided under Section 4(a) hereof shall also be offset by any other
severance payment which the Executive receives under any employment
agreement with the Company, including damages for breach of any such
agreement. Such mitigation shall not reduce the minimum four (4) month
severance as described in paragraph 4(a).
(b) Assignment. No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or
litigation, or to execution, attachment, levy or similar process; provided,
however, that the Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms of any plan or
policy of insurance or annuity contract governing such right, benefit or
interest.
(c) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Company. This
Agreement is not, and nothing herein shall be deemed to create, a
commitment of continued employment or consultancy of the Executive by the
Company.
(d) Amendment. This agreement may not be amended, modified or canceled
except by written agreement of the parties.
(e) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
(f) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall remain in full
force and effect to the fullest extent permitted by law.
(g) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use
its best efforts to satisfy promptly all such requirements.
(h) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of
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Connecticut.
(i) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the matters covered
hereby.
LIFECODES CORPORATION
By: /s/ Xxxxx Xxxxxx
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Vice President
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