EXHIBIT 10.1
FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made and dated as of the 13th day of September, 2001 by and
among the Lenders currently party to the Credit Agreement referred to below,
BANK ONE, NA, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), THE BANK OF NOVA SCOTIA, as documentation agent (in
such capacity, the "Documentation Agent"), SYNCOR INTERNATIONAL CORPORATION, a
Delaware corporation (the "Parent"), and SYNCOR MANAGEMENT CORPORATION, a
Delaware corporation (the "Borrower").
RECITALS
A. Pursuant to that certain First Amended and Restated Credit Agreement
dated as of May 10, 2001, by and among the Administrative Agent, the
Documentation Agent, the Lenders, the Parent and the Borrower (as amended,
extended and replaced from time to time, the "Credit Agreement"), the Lenders
agreed to extend credit to the Borrower on the terms and subject to the
conditions set forth therein. All capitalized terms not otherwise defined
herein are used with the meanings given such terms in the Credit Agreement.
B. The parties to the Credit Agreement have agreed to amend the same in
certain respects and desire to set forth the terms and conditions of such
amendment pursuant hereto.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Limited Recourse Sales of Assets. To reflect the agreement of the
parties hereto to permit the Parent and its Subsidiaries to engage in certain
limited recourse sales of assets, effective as of the First Amendment
Effective Date (as defined in Paragraph 10 below), a new subparagraph (iii) is
hereby added in correct numerical order to Section 6.13 of the Credit Agreement
to read in its entirety as follows:
"(iii) Any transfer of an interest in accounts or notes
receivable on a limited recourse basis, provided that such transfer
qualifies as a sale under Agreement Accounting Principles and that the
aggregate dollar amount owing by the obligors under the assets which
are the subject of such sales does not exceed at any time following
the consummation of such sales $100,000,000."
2. Modification of Permitted Indebtedness. To reflect the agreement of
the parties hereto to allow the Parent and its Subsidiaries to incur
Indebtedness in connection with limited recourse sales of assets and certain
Indebtedness subordinate to the Obligations, and to otherwise modify the
limitations associated with the incurrence of Indebtedness, effective as of the
First Amendment Effective Date:
(a) Section 6.11 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"6.11 Indebtedness. The Parent will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Obligations.
(ii) Indebtedness existing on the date hereof (other than
Indebtedness under the Bridge Facility) and described in SCHEDULE 6.11
hereto.
(iii) Indebtedness arising under Rate Hedging Agreements
involving notional amounts not in excess of $150,000,000 in the aggregate
at any one time.
(iv) Indebtedness issued following the Effective Date the
proceeds of which are applied as required pursuant to Section 2.17(i).
(v) Indebtedness assumed in connection with Acquisitions
consummated following the Effective Date and permitted pursuant to Section
6.14(vii), which does not exceed $50,000,000.
(vi) Subordinated Indebtedness with a scheduled maturity date no
earlier than twelve (12) full months following the scheduled Facility
Termination Date, as in effect on the date of issuance of such Subordinated
Indebtedness.
(vii) Indebtedness arising in connection with transactions
permitted by Section 6.13(iii).
(viii) Other Indebtedness, including, without limitation,
Indebtedness under Capitalized Leases (in addition to Indebtedness under
Capitalized Leases assumed in connection with Acquisitions permitted
pursuant to subsection (v) above), not otherwise permitted pursuant to
subsections (i) through (vii) above, in an aggregate amount outstanding at
any date not to exceed $75,000,000.
In the event the Parent or any Subsidiary wishes to assume any
Indebtedness in connection with any Acquisition after the date of this
Agreement in addition to that permitted in this Section 6.11 above,
the Parent shall provide all relevant documents in connection with
such Indebtedness to the Administrative Agent and the Lenders for
their review and prior approval. The Administrative Agent and the
Lenders shall use their reasonable judgment in reviewing such
documents and in deciding whether to grant such approval. "
(b) The parenthetical set forth in subsection (ii) of Section 2.17 is
hereby amended to read in its entirety as follows:
"(other than Indebtedness permitted to be incurred pursuant to
subsections (i), (iii), (v) and (viii) of Section 6.11 below)"
(c) The following new definition is hereby added in correct
alphabetical order to the definitions set forth in Article I of the Credit
Agreement:
"`Subordinated Indebtedness' means Indebtedness of the Parent or
any of its Subsidiaries which is subordinate to the Obligations on
terms and subject to conditions
acceptable to the Administrative Agent in its sole and absolute
discretion, but which Indebtedness shall in any event be unsecured."
3. Modification of Restrictions on Acquisitions. To reflect the
agreement of the parties to liberalize certain restrictions on Acquisitions set
forth in the Credit Agreement, subsection (vii) of Section 6.14 of the Credit
Agreement is hereby amended to read in its entirety as follows:
"(vii) Friendly Acquisitions involving (a) total
consideration, including, without limitation, Indebtedness assumed in
connection therewith, in an amount not to exceed (1) $30,000,000 in
any one transaction or series of transactions related to the same
entity (and as to which any Indebtedness assumed in connection
therewith does not exceed $15,000,000); or (2) in the aggregate
determined as of the last day of each fiscal quarter for the 12-month
period ending on such date, $100,000,000 (excluding, for purposes of
calculating compliance with this clause (2), Acquisitions consummated
prior to October 1, 2000 and as to which any Indebtedness assumed in
connection therewith does not exceed $30,000,000 in the aggregate),
(b) targets in a similar line of business (radioactive pharmaceuticals
and diagnostic imaging and related high technology medical services)
as the Parent, and (c) targets with a positive EBITDA; provided that
on a pro forma basis, the Parent shall remain in compliance with all
the covenants under this Agreement immediately upon consummation of
such Acquisition."
4. Modification of Restrictions on Capital Expenditures. To reflect the
agreement of the parties to liberalize certain restrictions on Capital
Expenditures set forth in the Credit Agreement, Section 6.16 of the Credit
Agreement is hereby amended to read in its entirety as follows:
"6.16 Capital Expenditures. The Parent will not, nor will it
permit any Subsidiary to, expend, or be committed to expend for
Capital Expenditures in the aggregate in excess of the sum of,
determined on a consolidated basis as of the last day of each fiscal
quarter for the 12-month period ending on such date: (i) 100% of all
depreciation, depletion and amortization expenses of the Parent and
its Subsidiaries on a consolidated basis, plus (ii) the following
percentage of the net income of the Parent and its Subsidiaries: (1)
as of the last day in each fiscal quarter of fiscal years 2001 and
2002, 75%, and (2) at all times thereafter, 50% ."
5. Increases in Aggregate Commitment Following Mandatory Prepayment. To
reflect the agreement of the parties that mandatory prepayments which reduce the
Aggregate Commitment are not intended to preclude subsequent increases in the
Aggregate Commitment as a result of the inclusion of additional Lenders under
the facility or the agreement of an existing Lender to increase its individual
Commitment thereunder, Section 2.17 of the Credit Agreement is hereby amended to
add the following sentence at the end of said Section:
"Nothing contained herein shall in any manner or to any extent be
deemed to prohibit the inclusion of a new Lender hereunder pursuant to
Section 2.3.1 or the increase by an existing Lender of its Commitment
pursuant to Section 2.4 (subject to the terms and conditions set forth
in said Sections and otherwise in this Agreement) following a
reduction of the Aggregate Commitment upon application of the proceeds
of a mandatory prepayment as provided above, notwithstanding that such
inclusion or increase shall thereafter increase the Aggregate
Commitment."
6. Leverage Ratios. To reflect the agreement of the parties hereto to
modify the required Leverage Ratio test set forth in the Credit Agreement in the
event that the Parent and its Subsidiaries elect to issue Subordinated
Indebtedness, effective as of the Effective Date:
(a) Section 6.19 of the Credit Agreement is hereby amended in its
entirety as follows:
"6.19. Leverage Ratios. The Parent will not permit, as of the
last day of each fiscal quarter:
(i) Prior to the issuance by the Parent or any of its
Subsidiaries of any Subordinated Indebtedness, its Leverage Ratio to
exceed: 2.50:1.00.
(ii) Following the issuance by the Parent or any of its
Subsidiaries of Subordinated Indebtedness:
(a) Its Leverage Ratio to exceed: 3.00:1.00.
(b) Its Adjusted Leverage Ratio to exceed: 2.00:1.00."
(b) The following new definition is hereby added in proper
alphabetical order to the definitions set forth in Article I of the Credit
Agreement to read in its entirety as follows:
"`Adjusted Leverage Ratio' means, as of any date of
determination, the ratio of (i) the total Indebtedness, minus any
Subordinated Indebtedness of the Parent and its Subsidiaries
(determined on a consolidated basis) with a scheduled maturity date no
earlier than twelve (12) full months following the then current
scheduled Facility Termination Date, divided by (ii) the EBITDA of the
Parent and its Subsidiaries (determined on a consolidated basis) for
the twelve (12) month period ending on such date."
7. Modification of Pricing. Effective as of the First Amendment
Effective Date the Pricing Schedule attached to the Credit Agreement as Annex 2
is hereby amended in its entirety and replaced and superseded by the Pricing
Schedule attached hereto as Replacement Annex 2.
8. Reaffirmation of Loan Documents. The Parent and Borrower hereby
affirm and agree that except to the extent expressly provided herein, the Credit
Agreement, the Notes and the other Loan Documents remain in full force and
effect.
9. Reaffirmation of Guaranties. By acknowledging and agreeing to this
Amendment as provided below, each of the Guarantors affirms and agrees that:
(a) the execution and delivery by the Borrower and the Parent and the
performance of their obligations under this Amendment shall not in any manner or
to any extent affect any of the obligations of the Guarantors or the rights of
the Lenders and the Administrative Agent under the Guaranties or any other
document, instrument or agreement made or given by the Guarantors in connection
therewith, (b) the term "Obligations" as used in the Guaranties includes,
without limitation, the Obligations under the Credit Agreement as amended
hereby, and (c) the Guaranties remain in full force and effect.
10. First Amendment Effective Date. This Amendment shall be effective as
of the date (the "First Amendment Effective Date") the Administrative Agent
shall have received each of the following:
(a) A copy of this Amendment duly executed by all parties hereto;
(b) An amendment fee in an amount equal to one tenth of one percent
(0.10%) of the Aggregate Commitment as of the First Amendment Effective Date to
be distributed to the Lenders in accordance with their Percentage Shares;
(c) Evidence of payment to the Arranger of any amounts due in
connection with that certain letter agreement between the Borrower, the Parent
and the Arranger dated August 20, 2001; and
(d) Such other documents, instruments, agreements, corporate
authorizations and opinions of legal counsel as the Administrative Agent or the
Lenders may reasonably request.
11. Representations and Warranties. The Borrower and the Parent hereby
represent and warrant to the Administrative Agent and the Lenders that as of the
date hereof and at and as of the First Amendment Effective Date and both before
and after giving effect hereto:
(a) Each of the Borrower and the Parent has the corporate power and
authority and the legal right to execute, deliver and perform the Amendment and
has taken all necessary corporate action to authorize such execution, delivery
and performance.
(b) The Amendment has been duly executed and delivered on behalf of
such Person and constitutes the legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, subject to
the effect of applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally and the effect of
equitable principles whether applied in an action at law or a suit in equity.
(c) The representations and warranties of the Borrower and the Parent
contained in the Credit Agreement as amended hereby are accurate and complete in
all material respects.
(d) There has not occurred a Default or Unmatured Default.
12. No Other Amendment. Except as expressly amended hereby, the Loan
Documents shall remain in full force and effect as written and amended to date.
13. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
[Signature pages following]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
SYNCOR MANAGEMENT CORPORATION, as the Borrower
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
SYNCOR INTERNATIONAL CORPORATION, as the Parent
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
BANK ONE, NA, as Administrative Agent
and as a Lender
By: /s/Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA, as Documentation Agent
and as a Lender
By: /s/X. X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
MELLON BANK, N.A., as a Lender
By:
Name:
Title:
THE NORTHERN TRUST COMPANY, as a Lender
By: /s/Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Vice President
UNITED CALIFORNIA BANK (formerly Sanwa Bank
California), as a Lender
By: /s/Xxxxx Xxxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxxx, CFA
Title: Vice President
UNION BANK OF CALIFORNIA, N.A., as a Lender
By: /s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
KEY CORPORATE CAPITAL INC., as a Lender
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Acknowledged and agreed to
as of the 13th day of September, 2001:
COMPREHENSIVE MEDICAL IMAGING, INC.,
as a Guarantor
By: /s/Xxxxx Xx
Name: Xxxxx Xx
Title:
SYNCOR OVERSEAS LTD.,
as a Guarantor
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
SYNCOR INTERNATIONAL CORPORATION,
as a Guarantor
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
REPLACEMENT ANNEX 2
PRICING SCHEDULE
APPLICABLE MARGIN LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
STATUS STATUS STATUS STATUS STATUS
Eurodollar Rate 1.125% 1.375% 1.625% 1.875% 2.25%
ABR -0-% -0-% -0-% 0.25% 0.625%
APPLICABLE FEE XXXXX X XXXXX XX XXXXX XXXXX XX LEVEL V
RATE STATUS STATUS III STATUS STATUS
STATUS
Commitment Fee 0.25% 0.275% 0.30% 0.35% 0.40%
Standby Letter of 1.125% 1.375% 1.625% 1.875% 2.25%
Credit Fee
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Parent delivered pursuant to the Credit Agreement.
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Parent referred to in the most recent Financials, the Leverage
Ratio is less than 1.25 to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Parent referred to in the most recent Financials, (i) the Parent
has not qualified for Level I Status and (ii) the Leverage Ratio is equal to or
greater than 1.25 to 1.00 but less than 1.75 to 1.00.
"Level III Status" exists at any date if, as of the last day of the fiscal
quarter of the Parent referred to in the most recent Financials, (i) the Parent
has not qualified for Level I Status or Level II Status and (ii) the Leverage
Ratio is equal to or greater than 1.75 to 1.00 but less than 2.25 to 1.00.
"Level IV Status" exists at any date if, as of the last day of the fiscal
quarter of the Parent referred to in the most recent Financials, (i) the Parent
has not qualified for Level I Status, Level II Status or level III Status and
(ii) the Leverage Ratio is equal to or greater than 2.25 to 1.00 but less than
2.75 to 1.00.
"Level V Status" exists at any date if the Parent has not qualified for
Level I Status, Level II Status, Level III Status or Level IV Status.
"Status" means Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Parent's Status as reflected in
the then most recent Financials. Adjustments, if any, to the Applicable Margin
or Applicable Fee Rate shall be effective five Business Days after the Agent has
received the applicable Financials. If the Parent fails to deliver the
Financials to the Agent at the time required pursuant to the Credit Agreement,
then the Applicable Margin and Applicable Fee Rate shall be the highest
Applicable Margin and Applicable Fee Rate set forth in the foregoing table until
five days after such Financials are so delivered.
Exhibit 10.2
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxx Bagerdjian (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive
under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during
such period (other than any disability plan), until the
Executive's employment is terminated by the Company for
Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two and one-
quarter (2 1/4) times the sum of (i) the Executive's
base salary as in effect immediately prior to the
Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, and
(ii) the greater of the average annual bonus earned
by the Executive pursuant to any annual bonus or
incentive plan maintained by the Company in respect
of the three fiscal years ending immediately prior
to the fiscal year in which occurs the Date of
Termination or, if higher, immediately prior to the
fiscal year in which occurs the first event or
circumstance constituting Good Reason and the
Executive's target annual bonus under such plan for
the year in which occurs the Date of Termination or,
if higher, for the year immediately preceding the
year in which occurs the first event or circumstance
constituting Good Reason.
(B) For the twenty-seven (27) month
period immediately following the Date of
Termination, the Company shall arrange to provide
the Executive and his dependents life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination or, if more favorable to the Executive,
those provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to
the Executive immediately prior to such date or
occurrence; provided, however, that, unless the
Executive consents to a different method (after
taking into account the effect of such method on the
calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits
shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by
or made available to the Executive during the twenty-
seven (27) month period following the Executive's
termination of employment (and any such benefits
received by or made available to the
Executive shall be reported to the Company by the
Executive); provided, however, that the Company
shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of
any annual or long-term incentive plan to the
contrary, the Company shall pay to the Executive a
lump sum amount, in cash, equal to any unpaid
incentive compensation which has been allocated or
awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of
Termination under any such plan and which, as of the
Date of Termination, is contingent only upon the
continued employment of the Executive to a
subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the twenty-seven month anniversary of
the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all
such Pension Plans (without regard to any amendment
to any such Pension Plan made subsequent to a Change
in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of retirement benefits
thereunder), determined as if the Executive were
fully vested thereunder and had accumulated (after
the Date of Termination) twenty-seven (27)
additional months of service credit thereunder and
had been credited under each such Pension Plan
during such period with compensation equal to the
Executive's compensation (as defined in such Pension
Plan) during the twelve (12) months immediately
preceding Date of Termination or, if higher, during
the twelve months immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, over (ii) the actuarial equivalent of
the aggregate retirement pension (taking into
account any early retirement subsidies associated
therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than
the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the
Executive had accrued pursuant to the provisions of
the such Pension Plans as of the Date of
Termination. For purposes of this Section 6.1(D),
"actuarial equivalent" shall be determined using the
same assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf with respect to twenty-seven (27)
months immediately following the Date of
Termination, determined (x) as if the Executive made
the maximum permissible contributions thereto during
such period, (y) as if the Executive earned
compensation during such period at a rate equal to
the Executive's compensation (as defined in the
Pension Plan) during the twelve (12) months
immediately preceding the Date of Termination or, if
higher, during the twelve months immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, and (z) without regard to
any amendment to the Pension Plan made subsequent to
a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of benefits thereunder,
and (ii) the excess, if any, of (x) the Executive's
account balance under the Pension Plan as of the
Date of Termination over (y) the portion of such
account balance that is nonforfeitable under the
terms of the Pension Plan.
(E) If the Executive would have
become entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
seven (27) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether any of
the Total Payments will be subject to the Excise Tax and the
amount of such Excise Tax, (i) all of the Total Payments
shall be treated as "parachute payments" (within the
meaning of section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel ("Tax Counsel") reasonably
acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally
determined to be less than the amount taken into account
hereunder in calculating the Gross-Up Payment, the
Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the
Executive's taxable income and wages for purposes of
federal, state and local income and employment taxes,
plus interest on the amount of such repayment at 120% of
the rate provided in section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder in calculating
the Gross-Up Payment (including by reason of any payment
the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make
an additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A), (C)
and (D) of Section 6.1 hereof and in Section 6.2 hereof
shall be made not later than the fifth day following the
Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment
is calculated for purposes of Section 6.2 hereof);
provided, however, that if the amounts of such payments
cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the Executive
all legal fees and expenses incurred by the Executive in
disputing in good faith any issue hereunder relating to
the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax
audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery of the
Executive's written requests for payment accompanied with
such evidence of fees and expenses incurred as the
Company reasonably may require.
7. Termination Procedures and Compensation During
Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of Termination,"
with respect to any purported termination of the
Executive's employment after a Change in Control and
during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a purported
termination occurs following a Change in Control and
during the Term and the Date of Termination is extended
in accordance with Section 7.3 hereof, the Company shall
continue to pay the Executive the full compensation in
effect when the notice giving rise to the dispute was
given (including, but not limited to, salary) and
continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be
payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this Agreement,
notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the address
inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set
forth below, or to such other address as either party may
have furnished to the other in writing in accordance
herewith, except that notice of change of address shall
be effective only upon actual receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and
signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or unenforceability
of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute
one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1 All
claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Committee and
shall be in writing. Any denial by the Committee of a
claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth
the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Committee
shall afford a reasonable opportunity to the Executive
for a review of the decision denying a claim and shall
further allow the Executive to appeal to the Committee a
decision of the Committee within sixty (60) days after
notification by the Committee that the Executive's claim
has been denied.
14.2 Any further dispute or controversy arising
under or in connection with this Agreement shall be
settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this Agreement,
the following terms shall have the meanings indicated
below:
(A) "Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange
Act.
(B) "Auditor" shall have the meaning set forth in
Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set forth
in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors of
the Company.
(F) "Cause" for termination by the Company of the
Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the meaning
set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment,
if, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax imposed
under section 4999 of the Code.
(O) "Executive" shall mean the individual named in
the first paragraph of this Agreement.
(P) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence
(without the Executive's express written consent) after
any Change in Control, or prior to a Change in Control
under the circumstances described in clauses (ii) and
(iii) of the second sentence of Section 6.1 hereof
(treating all references in paragraphs (I) through
(VII) below to a "Change in Control" as references to a
"Potential Change in Control"), of any one of the
following acts by the Company, or failures by the Company
to act, unless, in the case of any act or failure to act
described in paragraph (I), (V), (VI) or (VII) below,
such act or failure to act is corrected prior to the Date
of Termination specified in the Notice of Termination
given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the
Executive's incapacity due to physical or mental illness.
The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any
act or failure to act constituting Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning set
forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the meaning
set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the
reason for the termination by the Executive of
the Executive's employment if such employment
is terminated in accordance with the Company's
retirement policy, including early retirement,
generally applicable to its salaried employees.
(W) "Severance Payments" shall have
the meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the
meaning set forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of
time described in Section 2 hereof (including
any extension, continuation or termination
described therein).
(Z) "Total Payments" shall mean
those payments so described in Section 6.2
hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By: /s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxx X. Bagerdjian
Xxxx Bagerdjian
Exhibit 10.3
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the case
with many publicly held corporations, the possibility of
a Change in Control exists and that such possibility, and
the uncertainty and questions which it may raise among
management, may result in the departure or distraction of
management personnel to the detriment of the Company and
its stockholders; and
WHEREAS, the Board has determined that appropriate
steps should be taken to reinforce and encourage the
continued attention and dedication of members of the
Company's management, including the Executive, to their
assigned duties without distraction in the face of
potentially disturbing circumstances arising from the
possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the Company and
the Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized
terms used in this Agreement are provided in the last
Section hereof.
2. Term of Agreement. The Term of this Agreement
shall commence on the date hereof and shall continue in
effect through December 31, 2002; provided, however, that
commencing on January 1, 2002 and each January 1
thereafter, the Term shall automatically be extended for
one additional year unless, not later than September 30
of the preceding year, the Company or the Executive shall
have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive,
as in effect immediately prior to the first occurrence of
an event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company
establishes to the Committee by clear and convincing
evidence that such position is not correct.
(A) In lieu of any further salary payments
to the Executive for periods subsequent to the Date of
Termination and in lieu of any severance benefit
otherwise payable to the Executive, the Company
shall pay to the Executive a lump sum severance
payment, in cash, equal to two times the sum of (i)
the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the twenty-four (24) month
period immediately following the Date of
Termination, the Company shall arrange to provide
the Executive and his dependents life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination or, if more favorable to the Executive,
those provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to
the Executive immediately prior to such date or
occurrence; provided, however, that, unless the
Executive consents to a different method (after
taking into account the effect of such method on the
calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits
shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by
or made available to the Executive during the
twenty-four (24) month period following the
Executive's termination of employment (and any such
benefits received by or made available to the
Executive shall be reported to the Company by the
Executive); provided, however, that the Company
shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary,
the Company shall pay to the Executive a lump sum
amount, in cash, equal to any unpaid incentive
compensation which has been allocated or awarded to
the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination
under any such plan and which, as of the Date of
Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.
(D) In addition to the retirement benefits to
which the Executive is entitled under each Pension Plan
(or any successor plan thereto) that constitutes a
defined benefit pension plan, the Company shall pay
the Executive a lump sum amount, in cash, equal to
the excess of (i) the actuarial equivalent of the
aggregate retirement pension (taking into account
any early retirement subsidies associated therewith
and determined as a straight life annuity commencing
at the date (but in no event earlier than the second
anniversary of the Date of Termination) as of which
the actuarial equivalent of such annuity is
greatest) which the Executive would have accrued
under the terms of all such Pension Plans (without
regard to any amendment to any such Pension Plan
made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment
adversely affects in any manner the computation of
retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) twenty-four (24) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the two years immediately
following the Date of Termination, determined (x) as
if the Executive made the maximum permissible
contributions thereto during such period, (y) as if
the Executive earned compensation during such period
at a rate equal to the Executive's compensation (as
defined in the Pension Plan) during the twelve (12)
months immediately preceding the Date of Termination
or, if higher, during the twelve months immediately
prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z)
without regard to any amendment to the Pension Plan
made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment
adversely affects in any manner the computation of
benefits thereunder, and (ii) the excess, if any, of
(x) the Executive's account balance under the
Pension Plan as of the Date of Termination over (y)
the portion of such account balance that is
nonforfeitable under the terms of the Pension Plan.
(E) If the Executive would have become
entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
four (24) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five
(5)business days following the time that the amount of
such reduction in the Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration.
14.1 All claims by the Executive for benefits
under this Agreement shall be directed to and determined
by the Committee and shall be in writing. Any denial by
the Committee of a claim for benefits under this
Agreement shall be delivered to the Executive in writing
and shall set forth the specific reasons for the denial
and the specific provisions of this Agreement relied
upon. The Committee shall afford a reasonable
opportunity to the Executive for a review of the decision
denying a claim and shall further allow the Executive to
appeal to the Committee a decision of the Committee
within sixty (60) days after notification by the
Committee that the Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially
owned by such Person any securities acquired
directly from the Company or its affiliates)
representing 25% or more of the combined voting
power of the Company's then outstanding
securities, excluding any Person who becomes
such a Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax imposed
under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected prior
to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the
reason for the termination by the Executive of
the Executive's employment if such employment
is terminated in accordance with the Company's
retirement policy, including early retirement,
generally applicable to its salaried employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above
written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Exhibit 10.4
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxxx Xxxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two and one-
quarter (2 1/4) times the sum of (i) the Executive's
base salary as in effect immediately prior to the
Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, and
(ii) the greater of the average annual bonus earned
by the Executive pursuant to any annual bonus or
incentive plan maintained by the Company in respect
of the three fiscal years ending immediately prior
to the fiscal year in which occurs the Date of
Termination or, if higher, immediately prior to the
fiscal year in which occurs the first event or
circumstance constituting Good Reason and the
Executive's target annual bonus under such plan for
the year in which occurs the Date of Termination or,
if higher, for the year immediately preceding the
year in which occurs the first event or circumstance
constituting Good Reason.
(B) For the twenty-seven (27) month
period immediately following the Date of
Termination, the Company shall arrange to provide
the Executive and his dependents life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination or, if more favorable to the Executive,
those provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to
the Executive immediately prior to such date or
occurrence; provided, however, that, unless the
Executive consents to a different method (after
taking into account the effect of such method on the
calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits
shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by
or made available to the Executive during the twenty-
seven (27) month period following the Executive's
termination of employment (and any such benefits
received by or made available to the Executive shall
be reported to the Company by the Executive);
provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the cost of
such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of
any annual or long-term incentive plan to the
contrary, the Company shall pay to the Executive a
lump sum amount, in cash, equal to any unpaid
incentive compensation which has been allocated or
awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of
Termination under any such plan and which, as of the
Date of Termination, is contingent only upon the
continued employment of the Executive to a
subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the twenty- seven month anniversary of
the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all
such Pension Plans (without regard to any amendment
to any such Pension Plan made subsequent to a Change
in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of retirement benefits
thereunder), determined as if the Executive were
fully vested thereunder and had accumulated (after
the Date of Termination) twenty-seven (27)
additional months of service credit thereunder and
had been credited under each such Pension Plan
during such period with compensation equal to the
Executive's compensation (as defined in such Pension
Plan) during the twelve (12) months immediately
preceding Date of Termination or, if higher, during
the twelve months immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, over (ii) the actuarial equivalent of
the aggregate retirement pension (taking into
account any early retirement subsidies associated
therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than
the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the
Executive had accrued pursuant to the provisions of
the such Pension Plans as of the Date of
Termination. For purposes of this Section 6.1(D),
"actuarial equivalent" shall be determined using the
same assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf with respect to twenty-seven (27)
months immediately following the Date of
Termination, determined (x) as if the Executive made
the maximum permissible contributions thereto during
such period, (y) as if the Executive earned
compensation during such period at a rate equal to
the Executive's compensation (as defined in the
Pension Plan) during the twelve (12) months
immediately preceding the Date of Termination or, if
higher, during the twelve months immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, and (z) without regard to
any amendment to the Pension Plan made subsequent to
a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of benefits thereunder,
and (ii) the excess, if any, of (x) the Executive's
account balance under the Pension Plan as of the
Date of Termination over (y) the portion of such
account balance that is nonforfeitable under the
terms of the Pension Plan.
(E) If the Executive would have
become entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
seven (27) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive
becomes entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining
whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments shall be treated as "parachute
payments" (within the meaning of section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and
selected by the accounting firm which was, immediately
prior to the Change in Control, the Company's independent
auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code,
(ii) all "excess parachute payments" within the meaning
of section 280G(b)(l) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services
actually rendered (within the meaning of section
280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the
value of any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay
federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the
Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment
is calculated for purposes of this Section 6.2), net of
the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax
is finally determined to be less than the amount taken
into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within
five (5) business days following the time that the amount
of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes
imposed on the Gross-Up Payment being repaid by the
Executive), to the extent that such repayment results in
a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for
purposes of federal, state and local income and
employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including
by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest,
penalties or additions payable by the Executive with
respect to such excess) within five (5) business days
following the time that the amount of such excess is
finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection
with any administrative or judicial proceedings
concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the
Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this Agreement,
the following terms shall have the meanings indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxxx Xxxxx
Xxxxxx Xxxxx
Exhibit 10.5
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxx Xxxxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods
subsequent to the Date of Termination and in
lieu of any severance benefit otherwise payable
to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in
cash, equal to two times the sum of (i) the
Executive's base salary as in effect
immediately prior to the Date of Termination
or, if higher, in effect immediately prior to
the first occurrence of an event or
circumstance constituting Good Reason, and (ii)
the greater of the average annual bonus earned
by the Executive pursuant to any annual bonus
or incentive plan maintained by the Company in
respect of the three fiscal years ending
immediately prior to the fiscal year in which
occurs the Date of Termination or, if higher,
immediately prior to the fiscal year in which
occurs the first event or circumstance
constituting Good Reason and the Executive's
target annual bonus under such plan for the
year in which occurs the Date of Termination
or, if higher, for the year immediately
preceding the year in which occurs the first
event or circumstance constituting Good Reason.
(B) For the twenty-four (24) month
period immediately following the Date of
Termination, the Company shall arrange to
provide the Executive and his dependents life,
disability, accident and health insurance
benefits substantially similar to those
provided to the Executive and his dependents
immediately prior to the Date of Termination
or, if more favorable to the Executive, those
provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason,
at no greater cost to the Executive than the
cost to the Executive immediately prior to such
date or occurrence; provided, however, that,
unless the Executive consents to a different
method (after taking into account the effect of
such method on the calculation of "parachute
payments" pursuant to Section 6.2 hereof), such
health insurance benefits shall be provided
through a third-party insurer. Benefits
otherwise receivable by the Executive pursuant
to this Section 6.1 (B) shall be reduced to the
extent benefits of the same type are received
by or made available to the Executive during
the twenty-four (24) month period following the
Executive's termination of employment (and any
such benefits received by or made available to
the Executive shall be reported to the Company
by the Executive); provided, however, that the
Company shall reimburse the Executive for the
excess, if any, of the cost of such benefits to
the Executive over such cost immediately prior
to the Date of Termination or, if more
favorable to the Executive, the first
occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of
any annual or long-term incentive plan to the
contrary, the Company shall pay to the
Executive a lump sum amount, in cash, equal to
any unpaid incentive compensation which has
been allocated or awarded to the Executive for
a completed fiscal year or other measuring
period preceding the Date of Termination under
any such plan and which, as of the Date of
Termination, is contingent only upon the
continued employment of the Executive to a
subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled
under each Pension Plan (or any successor plan
thereto) that constitutes a defined benefit
pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to
the excess of (i) the actuarial equivalent of
the aggregate retirement pension (taking into
account any early retirement subsidies
associated therewith and determined as a
straight life annuity commencing at the date
(but in no event earlier than the second
anniversary of the Date of Termination) as of
which the actuarial equivalent of such annuity
is greatest) which the Executive would have
accrued under the terms of all such Pension
Plans (without regard to any amendment to any
such Pension Plan made subsequent to a Change
in Control and on or prior to the Date of
Termination, which amendment adversely affects
in any manner the computation of retirement
benefits thereunder), determined as if the
Executive were fully vested thereunder and had
accumulated (after the Date of Termination)
twenty-four (24) additional months of service
credit thereunder and had been credited under
each such Pension Plan during such period with
compensation equal to the Executive's
compensation (as defined in such Pension Plan)
during the twelve (12) months immediately
preceding Date of Termination or, if higher,
during the twelve months immediately prior to
the first occurrence of an event or
circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any
early retirement subsidies associated therewith
and determined as a straight life annuity
commencing at the date (but in no event earlier
than the Date of Termination) as of which the
actuarial equivalent of such annuity is
greatest) which the Executive had accrued
pursuant to the provisions of the such Pension
Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for
salaried employees immediately prior to the
Date of Termination. or, if more favorable to
the Executive, immediately prior to the first
occurrence of an event or circumstance
constituting Good Reason. In addition to the
benefits to which the Executive is entitled
under the Pension Plan (or any successor plan
thereto) that constitutes a defined
contribution pension plan, the Company shall
pay the Executive a lump sum amount, in cash,
equal to the sum of (i) the amount that would
have been contributed thereto by the Company on
the Executive's behalf during the two years
immediately following the Date of Termination,
determined (x) as if the Executive made the
maximum permissible contributions thereto
during such period, (y) as if the Executive
earned compensation during such period at a
rate equal to the Executive's compensation (as
defined in the Pension Plan) during the twelve
(12) months immediately preceding the Date of
Termination or, if higher, during the twelve
months immediately prior to the first
occurrence of an event or circumstance
constituting Good Reason, and (z) without
regard to any amendment to the Pension Plan
made subsequent to a Change in Control and on
or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of benefits thereunder, and (ii)
the excess, if any, of (x) the Executive's
account balance under the Pension Plan as of
the Date of Termination over (y) the portion of
such account balance that is nonforfeitable
under the terms of the Pension Plan.
(E) If the Executive would have
become entitled to benefits under the Company's
post-retirement health care or life insurance
plans, as in effect immediately prior to the
Date of Termination or, if more favorable to
the Executive, as in effect immediately prior
to the first occurrence of an event or
circumstance constituting Good Reason, had the
Executive's employment terminated at any time
during the period of twenty-four (24) months
after the Date of Termination, the Company
shall provide such post-retirement health care
or life insurance benefits to the Executive and
the Executive's dependents commencing on the
later of (i) the date on which such coverage
would have first become available and (ii) the
date on which benefits described in subsection
(B) of this Section 6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable
to the Executive's position for a period of one
(1) year or, if earlier, until the first
acceptance by the Executive of an offer of
employment; provided, however, that in no event
shall the cost for such outplacement services
exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration.
14.1 All claims by the Executive for benefits under this
Agreement shall be directed to and determined by
the Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxx X. Xxxxxx
Xxxx Xxxxxx
Exhibit 10.6
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxxx Xxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates her employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two times the
sum of (i) the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the twenty-four (24) month period
immediately following the Date of Termination, the
Company shall arrange to provide the Executive and
her dependents life, disability, accident and health
insurance benefits substantially similar to those
provided to the Executive and her dependents
immediately prior to the Date of Termination or, if
more favorable to the Executive, those provided to
the Executive and her dependents immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately
prior to such date or occurrence; provided, however,
that, unless the Executive consents to a different
method (after taking into account the effect of such
method on the calculation of "parachute payments"
pursuant to Section 6.2 hereof), such health
insurance benefits shall be provided through a third-
party insurer. Benefits otherwise receivable by the
Executive pursuant to this Section 6.1 (B) shall be
reduced to the extent benefits of the same type are
received by or made available to the Executive
during the twenty-four (24) month period following
the Executive's termination of employment (and any
such benefits received by or made available to the
Executive shall be reported to the Company by the
Executive); provided, however, that the Company
shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary,
the Company shall pay to the Executive a lump sum
amount, in cash, equal to any unpaid incentive
compensation which has been allocated or awarded to
the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination
under any such plan and which, as of the Date of
Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the second anniversary of the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive would
have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such
Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) twenty-four (24) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the two years immediately
following the Date of Termination, determined (x) as
if the Executive made the maximum permissible
contributions thereto during such period, (y) as if
the Executive earned compensation during such period
at a rate equal to the Executive's compensation (as
defined in the Pension Plan) during the twelve (12)
months immediately preceding the Date of Termination
or, if higher, during the twelve months immediately
prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z)
without regard to any amendment to the Pension Plan
made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment
adversely affects in any manner the computation of
benefits thereunder, and (ii) the excess, if any, of
(x) the Executive's account balance under the
Pension Plan as of the Date of Termination over (y)
the portion of such account balance that is
nonforfeitable under the terms of the Pension Plan.
(E) If the Executive would have become
entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
four (24) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by
the Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxxx Xxxx
Xxxxxx Xxxx
Exhibit 10.7
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxxxx Xxxxxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two times the
sum of (i) the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the twenty-four (24) month period
immediately following the Date of Termination, the
Company shall arrange to provide the Executive and
his dependents life, disability, accident and health
insurance benefits substantially similar to those
provided to the Executive and his dependents
immediately prior to the Date of Termination or, if
more favorable to the Executive, those provided to
the Executive and his dependents immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately
prior to such date or occurrence; provided, however,
that, unless the Executive consents to a different
method (after taking into account the effect of such
method on the calculation of "parachute payments"
pursuant to Section 6.2 hereof), such health
insurance benefits shall be provided through a third-
party insurer. Benefits otherwise receivable by the
Executive pursuant to this Section 6.1 (B) shall be
reduced to the extent benefits of the same type are
received by or made available to the
Executive during the twenty-four (24) month period
following the Executive's termination of employment
(and any such benefits received by or made available
to the Executive shall be reported to the Company by
the Executive); provided, however, that the Company
shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary,
the Company shall pay to the Executive a lump sum
amount, in cash, equal to any unpaid incentive
compensation which has been allocated or awarded to
the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination
under any such plan and which, as of the Date of
Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the second anniversary of the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive would
have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such
Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) twenty-four (24) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the two years immediately
following the Date of Termination, determined (x) as
if the Executive made the maximum permissible
contributions thereto during such period, (y) as if
the Executive earned compensation during such period
at a rate equal to the Executive's compensation (as
defined in the Pension Plan) during the twelve (12)
months immediately preceding the Date of Termination
or, if higher, during the twelve months immediately
prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z)
without regard to any amendment to the Pension Plan
made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment
adversely affects in any manner the computation of
benefits thereunder, and (ii) the excess, if any, of
(x) the Executive's account balance under the
Pension Plan as of the Date of Termination over (y)
the portion of such account balance that is
nonforfeitable under the terms of the Pension Plan.
(E) If the Executive would have become
entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
four (24) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the
Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Exhibit 10.8
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxx Xx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4 The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to three times the
sum of (i) the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the thirty-six (36) month period
immediately following the Date of Termination, the
Company shall arrange to provide the Executive and
his dependents life, disability, accident and health
insurance benefits substantially similar to those
provided to the Executive and his dependents
immediately prior to the Date of Termination or, if
more favorable to the Executive, those provided to
the Executive and his dependents immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately
prior to such date or occurrence; provided, however,
that, unless the Executive consents to a different
method (after taking into account the effect of such
method on the calculation of "parachute payments"
pursuant to Section 6.2 hereof), such health
insurance benefits shall be provided through a third-
party insurer. Benefits otherwise receivable by the
Executive pursuant to this Section 6.1 (B) shall be
reduced to the extent benefits of the same type are
received by or made available to the Executive
during the thirty-six (36) month period following
the Executive's termination of employment (and any
such benefits received by or made available to the
Executive shall be reported to the Company by the
Executive); provided, however, that the Company
shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive
over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
the first occurrence of an event or circumstance
constituting Good Reason.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary,
the Company shall pay to the Executive a lump sum
amount, in cash, equal to any unpaid incentive
compensation which has been allocated or awarded to
the Executive for a completed fiscal year or other
measuring period preceding the Date of Termination
under any such plan and which, as of the Date of
Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the third anniversary of the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive would
have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such
Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) thirty-six (36) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the three years
immediately following the Date of Termination,
determined (x) as if the Executive made the maximum
permissible contributions thereto during such
period, (y) as if the Executive earned compensation
during such period at a rate equal to the
Executive's compensation (as defined in the Pension
Plan) during the twelve (12) months immediately
preceding the Date of Termination or, if higher,
during the twelve months immediately prior to the
first occurrence of an event or circumstance
constituting Good Reason, and (z) without regard to
any amendment to the Pension Plan made subsequent to
a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of benefits thereunder,
and (ii) the excess, if any, of (x) the Executive's
account balance under the Pension Plan as of the
Date of Termination over (y) the portion of such
account balance that is nonforfeitable under the
terms of the Pension Plan.
(E) If the Executive would have become
entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of thirty-
six (36) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party including but not limited to the Employment
Agreement entered into between the Executive and the
Company dated as of January 1, 2000 (the "Employment
Agreement"); provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the
Company, including but not limited to the Employment
Agreement, only in the event that the Executive's
employment with the Company is terminated on or following
a Change in Control, by the Company other than for Cause
or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the
Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxx Xx
Xxxxx Xx
Exhibit 10.9
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxxx Xxxxxx (the "Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to three times the
sum of (i) the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the thirty-six (36) month
period immediately following the Date of
Termination, the Company shall arrange to provide
the Executive and his dependents life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination or, if more favorable to the Executive,
those provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to
the Executive immediately prior to such date or
occurrence; provided, however, that, unless the
Executive consents to a different method (after
taking into account the effect of such method on the
calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits
shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by
or made available to the Executive during the thirty-
six (36) month period following the Executive's
termination of employment (and any such benefits
received by or made available to the Executive shall
be reported to the Company by the Executive);
provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the cost of
such benefits to the Executive over such cost
immediately prior to the Date of Termination or, if
more favorable to the Executive, the first
occurrence of an event or circumstance constituting
Good Reason.
(C) Notwithstanding any provision of
any annual or long-term incentive plan to the
contrary, the Company shall pay to the Executive a
lump sum amount, in cash, equal to any unpaid
incentive compensation which has been allocated or
awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of
Termination under any such plan and which, as of the
Date of Termination, is contingent only upon the
continued employment of the Executive to a
subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the third anniversary of the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive would
have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such
Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) thirty-six (36) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the three years
immediately following the Date of Termination,
determined (x) as if the Executive made the maximum
permissible contributions thereto during such
period, (y) as if the Executive earned compensation
during such period at a rate equal to the
Executive's compensation (as defined in the Pension
Plan) during the twelve (12) months immediately
preceding the Date of Termination or, if higher,
during the twelve months immediately prior to the
first occurrence of an event or circumstance
constituting Good Reason, and (z) without regard to
any amendment to the Pension Plan made subsequent to
a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in
any manner the computation of benefits thereunder,
and (ii) the excess, if any, of (x) the Executive's
account balance under the Pension Plan as of the
Date of Termination over (y) the portion of such
account balance that is nonforfeitable under the
terms of the Pension Plan.
(E) If the Executive would have
become entitled to benefits under the Company's
post-retirement health care or life insurance plans,
as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of thirty-
six (36) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the
Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such
payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of
itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining whether
any of the Total Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the
Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by
reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise
Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or
if there is no Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of
this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment,
the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent
that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's
taxable income and wages for purposes of federal, state
and local income and employment taxes, plus interest on
the amount of such repayment at 120% of the rate provided
in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence
or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the
Company shall each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Employment
Agreement entered into between the Executive and the
Company dated as of January 1, 2000 (the "Employment
Agreement"); provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the
Company, including but not limited to the Employment
Agreement, only in the event that the Executive's
employment with the Company is terminated on or following
a Change in Control, by the Company other than for Cause
or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the
Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxx Xx
Name: Xxxxx Xx
Title: Chairman
/s/Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
Exhibit 10.10
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made
by and between, Syncor International Corporation (the
"Company"), and Xxxxx Xxxxxxx Xxxxx, Xx. (the
"Executive").
WHEREAS, the Company considers it essential to
the best interests of its stockholders to xxxxxx the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the
possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it
may raise among management, may result in the departure
or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of
members of the Company's management, including the
Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the
Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of
capitalized terms used in this Agreement are provided in
the last Section hereof.
2. Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall
continue in effect through December 31, 2002; provided,
however, that commencing on January 1, 2002 and each
January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term
shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control
occurred.
3. Company's Covenants Summarized. In order
to induce the Executive to remain in the employ of the
Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof, there
shall be deemed to have been) a termination of the
Executive's employment with the Company following a
Change in Control and during the Term. This Agreement
shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the
Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants. The Executive
agrees that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ
of the Company until the earliest of (i) a date which is
six (6) months from the date of such Potential Change in
Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during
the Term, during any period that the Executive fails to
perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full
salary to the Executive at the rate in effect at the
commencement of any such period, together with all
compensation and benefits payable to the Executive under
the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's
employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date
of Termination at the rate in effect immediately prior to
the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive
through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or
arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as
in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
5.3 If the Executive's employment shall be
terminated for any reason following a Change in Control
and during the Term, the Company shall pay to the
Executive the Executive's normal post-termination
compensation and benefits as such payments become due.
Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or
circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is
terminated following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive
without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under
Section 5 hereof. For purposes of this Agreement, the
Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason, if
(i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control
(whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person
who has entered into an agreement with the Company the
consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control (whether or not
a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request
or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason
is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control
ever occurs). For purposes of any determination
regarding the applicability of the immediately preceding
sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such
position is not correct.
(A) In lieu of any further salary
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two times the
sum of (i) the Executive's base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, and (ii) the greater of the average
annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the
Company in respect of the three fiscal years ending
immediately prior to the fiscal year in which occurs
the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the first
event or circumstance constituting Good Reason and
the Executive's target annual bonus under such plan
for the year in which occurs the Date of Termination
or, if higher, for the year immediately preceding
the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the twenty-four (24) month
period immediately following the Date of
Termination, the Company shall arrange to provide
the Executive and his dependents life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination or, if more favorable to the Executive,
those provided to the Executive and his dependents
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to
the Executive immediately prior to such date or
occurrence; provided, however, that, unless the
Executive consents to a different method (after
taking into account the effect of such method on the
calculation of "parachute payments" pursuant to
Section 6.2 hereof), such health insurance benefits
shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by
or made available to the Executive during the twenty-
four (24) month period following the Executive's
termination of employment (and any such benefits
received by or made available to the Executive shall
be reported to the Company by the Executive);
provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the cost of
such benefits to the Executive over such cost
immediately prior to the Date of Termination or, if
more favorable to the Executive, the first
occurrence of an event or circumstance constituting
Good Reason.
(C) Notwithstanding any provision of
any annual or long-term incentive plan to the
contrary, the Company shall pay to the Executive a
lump sum amount, in cash, equal to any unpaid
incentive compensation which has been allocated or
awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of
Termination under any such plan and which, as of the
Date of Termination, is contingent only upon the
continued employment of the Executive to a
subsequent date.
(D) In addition to the retirement
benefits to which the Executive is entitled under
each Pension Plan (or any successor plan thereto)
that constitutes a defined benefit pension plan, the
Company shall pay the Executive a lump sum amount,
in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight
life annuity commencing at the date (but in no event
earlier than the second anniversary of the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive would
have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such
Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which
amendment adversely affects in any manner the
computation of retirement benefits thereunder),
determined as if the Executive were fully vested
thereunder and had accumulated (after the Date of
Termination) twenty-four (24) additional months of
service credit thereunder and had been credited
under each such Pension Plan during such period with
compensation equal to the Executive's compensation
(as defined in such Pension Plan) during the twelve
(12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, over
(ii) the actuarial equivalent of the aggregate
retirement pension (taking into account any early
retirement subsidies associated therewith and
determined as a straight life annuity commencing at
the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of
such annuity is greatest) which the Executive had
accrued pursuant to the provisions of the such
Pension Plans as of the Date of Termination. For
purposes of this Section 6.1(D), "actuarial
equivalent" shall be determined using the same
assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of
Termination. or, if more favorable to the Executive,
immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. In
addition to the benefits to which the Executive is
entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
sum of (i) the amount that would have been
contributed thereto by the Company on the
Executive's behalf during the two years immediately
following the Date of Termination, determined (x) as
if the Executive made the maximum permissible
contributions thereto during such period, (y) as if
the Executive earned compensation during such period
at a rate equal to the Executive's compensation (as
defined in the Pension Plan) during the twelve (12)
months immediately preceding the Date of Termination
or, if higher, during the twelve months immediately
prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z)
without regard to any amendment to the Pension Plan
made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment
adversely affects in any manner the computation of
benefits thereunder, and (ii) the excess, if any, of
(x) the Executive's account balance under the
Pension Plan as of the Date of Termination over (y)
the portion of such account balance that is
nonforfeitable under the terms of the Pension Plan.
(E) If the Executive would have
become entitled to benefits under the Company's post-
retirement health care or life insurance plans, as
in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,
as in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
four (24) months after the Date of Termination, the
Company shall provide such post-retirement health
care or life insurance benefits to the Executive and
the Executive's dependents commencing on the later
of (i) the date on which such coverage would have
first become available and (ii) the date on which
benefits described in subsection (B) of this Section
6.1 terminate.
(F) The Company shall provide the
Executive with outplacement services suitable to the
Executive's position for a period of one (1) year
or, if earlier, until the first acceptance by the
Executive of an offer of employment; provided,
however, that in no event shall the cost for such
outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the payments
or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's
termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement
with the Company, any Person whose actions result in a Change
in Control or any Person affiliated with the Company or such
Person) (all such payments and benefits, excluding the Gross-Up
Payment, being hereinafter referred to as the "Total Payments")
will be subject to the Excise Tax, the Company shall pay to the
Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction
of any Excise Tax on the Total Payments and any federal, state
and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, and after taking into account the phase out
of itemized deductions attributable to the Gross-Up Payment,
shall be equal to the Total Payments.
(B) For purposes of determining
whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments shall be treated as "parachute
payments" (within the meaning of section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and
selected by the accounting firm which was, immediately
prior to the Change in Control, the Company's independent
auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code,
(ii) all "excess parachute payments" within the meaning
of section 280G(b)(l) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services
actually rendered (within the meaning of section
280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the
value of any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay
federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the
Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment
is calculated for purposes of this Section 6.2), net of
the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax
is finally determined to be less than the amount taken
into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within
five (5) business days following the time that the amount
of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes
imposed on the Gross-Up Payment being repaid by the
Executive), to the extent that such repayment results in
a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for
purposes of federal, state and local income and
employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including
by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest,
penalties or additions payable by the Executive with
respect to such excess) within five (5) business days
following the time that the amount of such excess is
finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection
with any administrative or judicial proceedings
concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
6.3 The payments provided in subsections (A),
(C) and (D) of Section 6.1 hereof and in Section 6.2
hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such
day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on
all such payments to the extent the Company fails to make
such payments when due) at 120% of the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In
the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a
written statement setting forth the manner in which such
payments were calculated and the basis for such
calculations including, without limitation, any opinions
or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing
shall be attached to the statement).
6.4 The Company also shall pay to the
Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days
after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation
During Dispute.
7.1 Notice of Termination. After a Change in
Control and during the Term, any purported termination of
the Executive's employment (other than by reason of
death) shall be communicated by written Notice of
Termination from one party hereto to the other party
hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of
Termination," with respect to any purported termination
of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty
(30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty
(30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of
Termination is given).
7.3 Dispute Concerning Termination. If within
fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii)
the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if
such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a
purported termination occurs following a Change in
Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary)
and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise
to the dispute was given, until the Date of Termination,
as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than
those due under Section 5.2 hereof) and shall not be
offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if
the Executive's employment with the Company terminates
during the Term, the Executive is not required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant
to Section 6 hereof or Section 7.4 hereof. Further, the
amount of any payment or benefit provided for in this
Agreement (other than Section 6.1(B) hereof) shall not be
reduced by any compensation earned by the Executive as
the result of employment by another employer, by
retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by
law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators
of the Executive's estate.
10. Notices. For the purpose of this
Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the
Company, to the address set forth below, or to such other
address as either party may have furnished to the other
in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual
receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as
may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with,
any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. This Agreement
supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either
party, including but not limited to the Benefits
Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall
supersede any agreement setting forth the terms and
conditions of the Executive's employment with the Company
only in the event that the Executive's employment with
the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the
Executive for Good Reason. The validity,
interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any
applicable withholding required under federal, state or
local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and
the Executive under this Agreement which by their nature
may require either partial or total performance after the
expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such
expiration.
12. Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Counterparts. This Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. 14.1
All claims by the Executive for benefits under this
Agreement shall be directed to and determined by
the Committee and shall be in writing. Any denial by the
Committee of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim
and shall further allow the Executive to appeal to the
Committee a decision of the Committee within sixty (60)
days after notification by the Committee that the
Executive's claim has been denied.
14.2 Any further dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Woodland Hills,
California in accordance with the rules of the American
Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek
specific performance of the Executive's right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection
with this Agreement.
15. Definitions. For purposes of this
Agreement, the following terms shall have the meanings
indicated below:
(A) "Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
(B) "Auditor" shall have the meaning set forth
in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors
of the Company.
(F) "Cause" for termination by the Company of
the Executive's employment shall mean (i) the willful and
continued failure by the Executive to substantially
perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive
pursuant to Section 7.1 hereof) that has not been cured
within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which
the Board believes that the Executive has not
substantially performed the Executive's duties, or (ii)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or
its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event
of a dispute concerning the application of this
provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to
the Committee by clear and convincing evidence that Cause
exists.
(G) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the
Company or its affiliates) representing 25% or
more of the combined voting power of the
Company's then outstanding securities,
excluding any Person who becomes such a
Beneficial Owner in connection with a
transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on the date hereof, constitute the Board
and any new director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited to
a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the date hereof or whose
appointment, election or nomination for
election was previously so approved or
recommended; or;
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation immediately following which the
individuals who comprise the Board immediately
prior thereto constitute at least a majority of
the board of directors of the Company, the
entity surviving such merger or consolidation
or any parent thereof (or a majority plus one
member where such board comprises an odd number
of members), or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Company (not including in the securities
Beneficially Owned by such Person any
securities acquired directly from the Company
or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or
dissolution of the Company or there is
consummated an agreement for the sale or
disposition by the Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company
of all or substantially all of the Company's
assets to an entity a majority of the board of
directors of which (or of any parent thereof)
immediately following such sale or disposition
comprise the individuals or who comprised the
Board immediately prior thereto (or a majority
plus one member where such board comprises an
odd number of members).
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the common stock of the Company immediately
prior to such transaction or series of transactions
continue to have substantially the same proportionate
ownership in an entity which owns all or substantially
all of the assets of the Company immediately following
such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals
(not fewer than three in number) who, on the date six
months before a Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the
event that fewer than three individuals are available
from the group specified in clause (i) above for any
reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section
15(E) hereof whether or not any Change in Control of the
Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the
meaning set forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason
for the termination by the Company of the Executive's
employment, if, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the
Executive's duties with the Company for a period of six
(6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(O) "Executive" shall mean the individual
named in the first paragraph of this Agreement.
(P) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the
occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a
Change in Control under the circumstances described in
clauses (ii) and (iii) of the second sentence of Section
6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as
references to a "Potential Change in Control"), of any
one of the following acts by the Company, or failures by
the Company to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or
(VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice
of Termination given in respect thereof:
(I) the assignment to the Executive
of any duties inconsistent with the Executive's
status as a senior executive officer of the
Company or a substantial adverse alteration in
the nature or status of the Executive's
responsibilities from those in effect
immediately prior to the Change in Control
including, without limitation, if the Executive
was, immediately prior to the Change in
Control, an executive officer of a public
company, the Executive ceasing to be an
executive officer of a public company;
(II) a reduction by the Company in
the Executive's annual base salary as in effect
on the date hereof or as the same may be
increased from time to time;
(III) the relocation of the
Executive's principal place of employment to a
location more than 50 miles from the
Executive's principal place of employment
immediately prior to the Change in Control or
the Company's requiring the Executive to be
based anywhere other than such principal place
of employment (or permitted relocation thereof)
except for required travel on the Company's
business to an extent substantially consistent
with the Executive's present business travel
obligations;
(IV) the failure by the Company to
pay to the Executive any portion of the
Executive's current compensation or to pay to
the Executive any portion of an installment of
deferred compensation under any deferred
compensation program of the Company, within
seven (7) days of the date such compensation is
due;
(V) the failure by the Company to
continue in effect any compensation plan in
which the Executive participates immediately
prior to the Change in Control which is
material to the Executive's total compensation,
unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has
been made with respect to such plan, or the
failure by the Company to continue the
Executive's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable, both in terms of the
amount or timing of payment of benefits
provided and the level of the Executive's
participation relative to other participants,
as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension,
savings, life insurance, medical, health and
accident, or disability plans in which the
Executive was participating immediately prior
to the Change in Control, the taking of any
other action by the Company which would
directly or indirectly materially reduce any of
such benefits or deprive the Executive of any
material fringe benefit enjoyed by the
Executive at the time of the Change in Control,
or the failure by the Company to provide the
Executive with the number of paid vacation days
to which the Executive is entitled on the basis
of years of service with the Company in
accordance with the Company's normal vacation
policy in effect at the time of the Change in
Control; or
(VII) any purported termination of
the Executive's employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate the
Executive's employment for Good Reason shall not be
affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment
shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that
Good Reason exists shall be presumed to be correct unless
the Company establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning
set forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the
meaning set forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-
qualified, supplemental or excess defined benefit pension
plan maintained by the Company and any other defined
benefit plan or agreement entered into between the
Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined
contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into
between the Executive and the Company.
(T) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
stock of the Company.
(U) "Potential Change in Control" shall be
deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would
result in the occurrence of a Change in
Control;
(II) the Company or any Person
publicly announces an intention to take or to
consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or
more of either the then outstanding shares of
common stock of the Company or the combined
voting power of the Company's then outstanding
securities (not including in the securities
beneficially owned by such Person any
securities acquired directly from the Company
or its affiliates); or
(IV) the Board adopts a resolution
to the effect that, for purposes of this
Agreement, a Potential Change in Control has
occurred.
(V) "Retirement" shall be deemed the reason
for the termination by the Executive of the Executive's
employment if such employment is terminated in accordance
with the Company's retirement policy, including early
retirement, generally applicable to its salaried
employees.
(W) "Severance Payments" shall have the
meaning set forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set
forth in Section 6.2 hereof.
(Y) "Term" shall mean the period of time
described in Section 2 hereof (including any extension,
continuation or termination described therein).
(Z) "Total Payments" shall mean those payments
so described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxx X. Xxxxx, Xx.
Xxxxx Xxxxxxx Xxxxx, Xx.
Exhibit 10.11
SEVERANCE AGREEMENT
THIS AGREEMENT, dated August 24, 2001, is made by and
between, Syncor International Corporation (the "Company"), and
Xxxxx Xxxx (the "Executive").
WHEREAS, the Company considers it essential to the best
interests of its stockholders to xxxxxx the continued employment
of key management personnel; and
WHEREAS, the Board recognizes that, as is the case with
many publicly held corporations, the possibility of a Change in
Control exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment
of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate
steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management,
including the Executive, to their assigned duties without distraction
in the face of potentially disturbing circumstances arising from
the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the Company and the
Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized
terms used in this Agreement are provided in the last Section
hereof.
2. Term of Agreement. The Term of this Agreement
shall commence on the date hereof and shall continue in effect
through December 31, 2002; provided, however, that commencing on
January 1, 2002 and each January 1 thereafter, the Term shall
automatically be extended for one additional year unless, not
later than September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term; and
further provided, however, that if a Change in Control shall have
occurred during the Term, the Term shall expire no earlier than
twenty-four (24) months beyond the month in which such Change
in Control occurred.
3. Company's Covenants Summarized. In order to induce
the Executive to remain in the employ of the Company and in
consideration of the Executive's covenants set forth in Section 4
hereof, the Company agrees, under the conditions described
herein, to pay the Executive the Severance Payments and the other
payments and benefits described herein. Except as provided in
Section 9.1 hereof, no Severance Payments shall be payable under
this Agreement unless there shall have been (or, under the terms
of the second sentence of Section 6.1 hereof, there shall be
deemed to have been) a termination of the Executive's employment
with the Company following a Change in Control and during the
Term. This Agreement shall not be construed as creating an
express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the
Company, the Executive shall not have any right to be retained in
the employ of the Company.
4. The Executive's Covenants. The Executive agrees
that, subject to the terms and conditions of this Agreement, in
the event of a Potential Change in Control during the Term, the
Executive will remain in the employ of the Company until the
earliest of (i) a date which is six (6) months from the date of
such Potential Change in Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the
Executive's employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the Company
of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control and during the Term,
during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of
incapacity due to physical or mental illness, the Company shall
pay the Executive's full salary to the Executive at the rate in
effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period (other
than any disability plan), until the Executive's employment is
terminated by the Company for Disability.
5.2 If the Executive's employment shall be terminated
for any reason following a Change in Control and during the Term,
the Company shall pay the Executive's full salary to the
Executive through the Date of Termination at the rate in effect
immediately prior to the Date of Termination or, if higher, the
rate in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive through the
Date of Termination under the terms of the Company's compensation
and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
first occurrence of an event or circumstance constituting Good
Reason.
5.3 If the Executive's employment shall be terminated
for any reason following a Change in Control and during the Term,
the Company shall pay to the Executive the Executive's normal
post-termination compensation and benefits as such payments become
due. Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans,
programs and arrangements as in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as
in effect immediately prior to the occurrence of the first event
or circumstance constituting Good Reason.
6. Severance Payments.
6.1 If the Executive's employment is terminated
following a Change in Control and during the Term, other than (A)
by the Company for Cause, (B) by reason of death or Disability,
or (C) by the Executive without Good Reason, then the Company
shall pay the Executive the amounts, and provide the Executive
the benefits, described in this Section 6.1 ("Severance
Payments") and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under Section 5
hereof. For purposes of this Agreement, the Executive's
employment shall be deemed to have been terminated following a
Change in Control by the Company without Cause or by the
Executive with Good Reason, if (i) the Executive's employment is
terminated by the Company without Cause prior to a Change in
Control (whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person who has
entered into an agreement with the Company the consummation of
which would constitute a Change in Control, (ii) the Executive
terminates his employment for Good Reason prior to a Change in
Control (whether or not a Change in Control ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the
request or direction of such Person, or (iii) the Executive's
employment is terminated by the Company without Cause or by the
Executive for Good Reason and such termination or the
circumstance or event which constitutes Good Reason is otherwise
in connection with or in anticipation of a Change in Control
(whether or not a Change in Control ever occurs). For purposes
of any determination regarding the applicability of the
immediately preceding sentence, any position taken by the
Executive shall be presumed to be correct unless the Company
establishes to the Committee by clear and convincing
evidence that such position is not correct.
(A) In lieu of any further salary payments
to the Executive for periods subsequent to the Date of
Termination and in lieu of any severance benefit otherwise
payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to
two and one-quarter (2 1/4) times the sum of (i) the
Executive's base salary as in effect immediately prior to
the Date of Termination or, if higher, in effect immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason, and (ii) the greater of the
average annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the Company in
respect of the three fiscal years ending immediately prior
to the fiscal year in which occurs the Date of Termination
or, if higher, immediately prior to the fiscal year in which
occurs the first event or circumstance constituting Good Reason
and the Executive's target annual bonus under such plan for the
year in which occurs the Date of Termination or, if higher, for
the year immediately preceding the year in which occurs the
first event or circumstance constituting Good Reason.
(B) For the twenty-seven (27) month period
immediately following the Date of Termination, the Company
shall arrange to provide the Executive and his dependents
life, disability, accident and health insurance benefits
substantially similar to those provided to the Executive and
his dependents immediately prior to the Date of Termination
or, if more favorable to the Executive, those provided to
the Executive and his dependents immediately prior to the
first occurrence of an event or circumstance constituting
Good Reason, at no greater cost to the Executive than the
cost to the Executive immediately prior to such date or
occurrence; provided, however, that, unless the Executive
consents to a different method (after taking into account
the effect of such method on the calculation of "parachute
payments" pursuant to Section 6.2 hereof), such health
insurance benefits shall be provided through a third-party
insurer. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1 (B) shall be reduced to the
extent benefits of the same type are received by or made
available to the Executive during the twenty-seven (27)
month period following the Executive's termination of
employment (and any such benefits received by or made
available to the Executive shall be reported to the
Company by the Executive); provided, however, that the
Company shall reimburse the Executive for the excess, if
any, of the cost of such benefits to the Executive over such
cost immediately prior to the Date of Termination or, if
more favorable to the Executive, the first occurrence of an
event or circumstance constituting Good Reason.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary, the
Company shall pay to the Executive a lump sum amount, in
cash, equal to any unpaid incentive compensation which has
been allocated or awarded to the Executive for a completed
fiscal year or other measuring period preceding the Date of
Termination under any such plan and which, as of the Date of
Termination, is contingent only upon the continued
employment of the Executive to a subsequent date.
(D) In addition to the retirement benefits
to which the Executive is entitled under each Pension Plan
(or any successor plan thereto) that constitutes a defined
benefit pension plan, the Company shall pay the Executive
a lump sum amount, in cash, equal to the excess of (i) the
actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies associated
therewith and determined as a straight life annuity commencing
at the date (but in no event earlier than the twenty- seven
month anniversary of the Date of Termination) as of which the
actuarial equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all such Pension
Plans (without regard to any amendment to any such Pension Plan
made subsequent to a Change in Control and on or prior to
the Date of Termination, which amendment adversely affects
in any manner the computation of retirement benefits
thereunder), determined as if the Executive were fully
vested thereunder and had accumulated (after the Date of
Termination) twenty-seven (27) additional months of service
credit thereunder and had been credited under each such
Pension Plan during such period with compensation equal to the
Executive's compensation (as defined in such Pension Plan)
during the twelve (12) months immediately preceding Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, over (ii) the
actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies
associated therewith and determined as a straight life
annuity commencing at the date (but in no event earlier than
the Date of Termination) as of which the actuarial
equivalent of such annuity is greatest) which the Executive
had accrued pursuant to the provisions of the such Pension
Plans as of the Date of Termination. For purposes of this
Section 6.1(D), "actuarial equivalent" shall be determined
using the same assumptions utilized under the Company's tax-
qualified defined benefit pension plan for salaried
employees immediately prior to the Date of Termination.
or, if more favorable to the Executive, immediately prior to
the first occurrence of an event or circumstance constituting
Good Reason. In addition to the benefits to which the
Executive is entitled under the Pension Plan (or any successor
plan thereto) that constitutes a defined contribution pension
plan, the Company shall pay the Executive a lump sum amount,
in cash, equal to the sum of (i) the amount that would have
been contributed thereto by the Company on the Executive's
behalf with respect to twenty-seven (27) months immediately
following the Date of Termination, determined (x) as if the
Executive made the maximum permissible contributions thereto
during such period, (y) as if the Executive earned compensation
during such period at a rate equal to the Executive's
compensation (as defined in the Pension Plan) during the
twelve (12) months immediately preceding the Date of
Termination or, if higher, during the twelve months
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (z) without regard
to any amendment to the Pension Plan made subsequent to a Change in
Control and on or prior to the Date of Termination, which
amendment adversely affects in any manner the computation of
benefits thereunder, and (ii) the excess, if any, of (x) the
Executive's account balance under the Pension Plan as of the
Date of Termination over (y) the portion of such account
balance that is nonforfeitable under the terms of the
Pension Plan.
(E) If the Executive would have become
entitled to benefits under the Company's post-retirement
health care or life insurance plans, as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior
to the first occurrence of an event or circumstance
constituting Good Reason, had the Executive's employment
terminated at any time during the period of twenty-
seven (27) months after the Date of Termination, the Company
shall provide such post-retirement health care or life
insurance benefits to the Executive and the Executive's
dependents commencing on the later of (i) the date on which
such coverage would have first become available and (ii) the
date on which benefits described in subsection (B) of this
Section 6.1 terminate.
(F) The Company shall provide the Executive
with outplacement services suitable to the Executive's
position for a period of one (1) year or, if earlier, until
the first acceptance by the Executive of an offer of
employment; provided, however, that in no event shall the
cost for such outplacement services exceed $50,000.
6.2 (A) Whether or not the Executive becomes entitled
to the Severance Payments, if any of the payments or benefits
received or to be received by the Executive in connection with a
Change in Control or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any Person
whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (all such payments
and benefits, excluding the Gross-Up Payment, being hereinafter
referred to as the "Total Payments") will be subject to the Excise
Tax, the Company shall pay to the Executive an additional amount
(the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments
and any federal, state and local income and employment taxes and
Excise Tax upon the Gross-Up Payment, and after taking into account
the phase out of itemized deductions attributable to the Gross-Up
Payment, shall be equal to the Total Payments.
(B) For purposes of determining whether any of
the Total Payments will be subject to the Excise Tax and the
amount of such Excise Tax, (i) all of the Total Payments shall be
treated as "parachute payments" (within the meaning of section
280G(b)(2) of the Code) unless, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to the Executive and
selected by the accounting firm which was, immediately prior
to the Change in Control, the Company's independent auditor
(the "Auditor"), such payments or benefits (in whole or in part)
do not constitute parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all "excess parachute
payments" within the meaning of section 280G(b)(l) of the Code
shall be treated as subject to the Excise Tax unless, in the
opinion of Tax Counsel, such excess parachute payments (in whole
or in part) represent reasonable compensation for services
actually rendered (within the meaning of section 280G(b)(4)(B)
of the Code) in excess of the Base Amount allocable to such
reasonable compensation, or are otherwise not subject to the
Excise Tax, and (iii) the value of any noncash benefits or
any deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections 280G(d)(3)
and (4) of the Code. For purposes of determining the amount
of the Gross-Up Payment, the Executive shall be deemed to pay
federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality
of the Executive's residence on the Date of Termination (or if
there is no Date of Termination, then the date on which the
Gross-Up Payment is calculated for purposes of this Section 6.2),
net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally
determined to be less than the amount taken into account
hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up Payment
being repaid by the Executive), to the extent that such repayment
results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for
purposes of federal, state and local income and employment taxes,
plus interest on the amount of such repayment at 120% of the rate
provided in section 1274(b)(2)(B) of the Code. In the event that
the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including
by reason of any payment the existence or amount of which cannot
be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such
excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5) business
days following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
6.3 The payments provided in subsections (A), (C) and
(D) of Section 6.1 hereof and in Section 6.2 hereof shall be made
not later than the fifth day following the Date of Termination
(or if there is no Date of Termination, then the date on which
the Gross-Up Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such payments
cannot be finally determined on or before such day, the Company
shall pay to the Executive on such day an estimate, as determined
in good faith by the Executive or, in the case of payments under
Section 6.2 hereof, in accordance with Section 6.2 hereof, of the
minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together
with interest on the unpaid remainder (or on all such payments to
the extent the Company fails to make such payments when due) at
120% of the rate provided in section 1274(b)(2)(B) of the Code)
as soon as the amount thereof can be determined but in no event
later than the thirtieth (30th) day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the
fifth (5th) business day after demand by the Company (together
with interest at 120% of the rate provided in section 1274(b)(2)(B)
of the Code). At the time that payments are made under this Agreement,
the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated
and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received
from Tax Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing shall be
attached to the statement).
6.4 The Company also shall pay to the Executive all
legal fees and expenses incurred by the Executive in disputing
in good faith any issue hereunder relating to the termination
of the Executive's employment, in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to
any payment or benefit provided hereunder. Such payments shall
be made within five (5) business days after delivery of the
Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably
may require.
7. Termination Procedures and Compensation During
Dispute.
7.1 Notice of Termination. After a Change in Control
and during the Term, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated
by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination for
Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board
which was called and held for the purpose of considering such
termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive was guilty of conduct
set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's
employment after a Change in Control and during the Term,
shall mean (i) if the Executive's employment is terminated for
Disability, thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to
the full-time performance of the Executive's duties during such
thirty (30) day period), and (ii) if the Executive's employment
is terminated for any other reason, the date specified in the
Notice of Termination (which, in the case of a termination
by the Company, shall not be less than thirty (30) days (except
in the case of a termination for Cause) and, in the case of a
termination by the Executive, shall not be less than fifteen (15)
days nor more than sixty (60) days, respectively, from the date
such Notice of Termination is given).
7.3 Dispute Concerning Termination. If within fifteen
(15) days after any Notice of Termination is given, or, if later,
prior to the Date of Termination (as determined without regard to
this Section 7.3), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii) the date
on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order
or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if such notice
is given in good faith and the Executive pursues the resolution
of such dispute with reasonable diligence.
7.4 Compensation During Dispute. If a purported
termination occurs following a Change in Control and during the
Term and the Date of Termination is extended in accordance with
Section 7.3 hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to,
salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive
was participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance
with Section 7.3 hereof. Amounts paid under this Section 7.4 are
in addition to all other amounts due under this Agreement (other
than those due under Section 5.2 hereof) and shall not be offset
against or reduce any other amounts due under this Agreement.
8. No Mitigation. The Company agrees that, if the
Executive's employment with the Company terminates during the
Term, the Executive is not required to seek other employment or
to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 6 hereof or Section
7.4 hereof. Further, the amount of any payment or benefit
provided for in this Agreement (other than Section 6.1(B) hereof)
shall not be reduced by any compensation earned by the Executive
as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if
no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die
while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued
to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the
Executive's estate.
10. Notices. For the purpose of this Agreement,
notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered
mail, return receipt requested, postage prepaid, addressed, if to
the Executive, to the address inserted below the Executive's
signature on the final page hereof and, if to the Company, to the
address set forth below, or to such other address as either party
may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be
effective only upon actual receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
11. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by
the Executive and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of, or of any lack of
compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof which have
been made by either party, including but not limited to the
Benefits Agreement entered into between the Executive and the
Company; provided, however, that this Agreement shall supersede
any agreement setting forth the terms and conditions of the
Executive's employment with the Company only in the event that
the Executive's employment with the Company is terminated on or
following a Change in Control, by the Company other than for
Cause or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of California. All
references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state
or local law and any additional withholding to which the Executive
has agreed. The obligations of the Company and the Executive
under this Agreement which by their nature may require either
partial or total performance after the expiration of the Term
(including, without limitation, those under Sections 6 and 7 hereof)
shall survive such expiration.
12. Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
14. Settlement of Disputes; Arbitration. 14.1 All
claims by the Executive for benefits under this Agreement shall
be directed to and determined by the Committee and shall be in
writing. Any denial by the Committee of a claim for benefits
under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial
and the specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the Executive
for a review of the decision denying a claim and shall further
allow the Executive to appeal to the Committee a decision of the
Committee within sixty (60) days after notification by the
Committee that the Executive's claim has been denied.
14.2 Any further dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively
by arbitration in Woodland Hills, California in accordance with
the rules of the American Arbitration Association then in effect;
provided, however, that the evidentiary standards set forth in
this Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary,
the Executive shall be entitled to seek specific performance of
the Executive's right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange Act.
(B) "Auditor" shall have the meaning set forth in
Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set forth in
section 280G(b)(3) of the Code.
(D) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(E) "Board" shall mean the Board of Directors of the
Company.
(F) "Cause" for termination by the Company of the
Executive's employment shall mean (i) the willful and continued
failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness
or any such actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive pursuant
to Section 7.1 hereof) that has not been cured within 30 days
after a written demand for substantial performance is delivered
to the Executive by the Board, which demand specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties,
or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses
(i) and (ii) of this definition, (x) no act, or failure to act,
on the Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's act, or failure
to act, was in the best interest of the Company and (y) in the
event of a dispute concerning the application of this provision,
no claim by the Company that Cause exists shall be given effect
unless the Company establishes to the Committee by clear and
convincing evidence that Cause exists.
(G) A "Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially
owned by such Person any securities acquired directly
from the Company or its affiliates) representing 25% or
more of the combined voting power of the Company's then
outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction
described in clause (i) of paragraph (III) below; or
(II) the following individuals cease for any
reason to constitute a majority of the number of
directors then serving: individuals who, on the date
hereof, constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company) whose appointment or election
by the Board or nomination for election by the
Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date
hereof or whose appointment, election or nomination
for election was previously so approved or recommended; or;
(III) there is consummated a merger or
consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation,
other than (i) a merger or consolidation immediately
following which the individuals who comprise the Board
immediately prior thereto constitute at least a
majority of the board of directors of the Company, the
entity surviving such merger or consolidation or any
parent thereof (or a majority plus one member where
such board comprises an odd number of members), or (ii)
a merger or consolidation effected to implement a
recapitalization of the Company (or similar
transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities
Beneficially Owned by such Person any securities
acquired directly from the Company or its Affiliates)
representing 25% or more of the combined voting power
of the Company's then outstanding securities; or
(IV) the stockholders of the Company approve
a plan of complete liquidation or dissolution of the
Company or there is consummated an agreement for the
sale or disposition by the Company of all or
substantially all of the Company's assets, other than a
sale or disposition by the Company of all or
substantially all of the Company's assets to an entity
a majority of the board of directors of which (or of
any parent thereof) immediately following such sale or
disposition comprise the individuals or who comprised
the Board immediately prior thereto (or a majority
plus one member where such board comprises an odd
number of members).
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of the
Company immediately prior to such transaction or series of
transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately
following such transaction or series of transactions.
(H) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(I) "Committee" shall mean (i) the individuals (not
fewer than three in number) who, on the date six months before a
Change in Control, constitute the Compensation Committee of the
Board, plus (ii) in the event that fewer than three individuals
are available from the group specified in clause (i) above for
any reason, such individuals as may be appointed by the
individual or individuals so available (including for
this purpose any individual or individuals previously so
appointed under this clause (ii)).
(J) "Company" shall mean Syncor International
Corporation and, except in determining under Section 15(E) hereof
whether or not any Change in Control of the Company has occurred,
shall include any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law,
or otherwise.
(K) "Date of Termination" shall have the meaning set
forth in Section 7.2 hereof.
(L) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as
a result of the Executive's incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time
performance of the Executive's duties with the Company for a
period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and,
within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the full-time
performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(N) "Excise Tax" shall mean any excise tax imposed
under section 4999 of the Code.
(O) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(P) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence (without the
Executive's express written consent) after any Change in Control,
or prior to a Change in Control under the circumstances described
in clauses (ii) and (iii) of the second sentence of Section 6.1
hereof (treating all references in paragraphs (I) through (VII)
below to a "Change in Control" as references to a "Potential
Change in Control"), of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case
of any act or failure to act described in paragraph (I), (V),
(VI) or (VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive of any
duties inconsistent with the Executive's status as a
senior executive officer of the Company or a
substantial adverse alteration in the nature or status
of the Executive's responsibilities from those in
effect immediately prior to the Change in Control
including, without limitation, if the Executive was,
immediately prior to the Change in Control, an
executive officer of a public company, the Executive
ceasing to be an executive officer of a public company;
(II) a reduction by the Company in the
Executive's annual base salary as in effect on the date
hereof or as the same may be increased from time to
time;
(III) the relocation of the Executive's
principal place of employment to a location more than 50
miles from the Executive's principal place of employment
immediately prior to the Change in Control or the Company's
requiring the Executive to be based anywhere other than such
principal place of employment (or permitted relocation
thereof) except for required travel on the Company's
business to an extent substantially consistent with the
Executive's present business travel obligations;
(IV) the failure by the Company to pay to
the Executive any portion of the Executive's current
compensation or to pay to the Executive any portion of
an installment of deferred compensation under any
deferred compensation program of the Company, within
seven (7) days of the date such compensation is due;
(V) the failure by the Company to continue
in effect any compensation plan in which the Executive
participates immediately prior to the Change in Control
which is material to the Executive's total compensation,
unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable,
both in terms of the amount or timing of payment of benefits
provided and the level of the Executive's participation
relative to other participants, as existed immediately
prior to the Change in Control;
(VI) the failure by the Company to continue
to provide the Executive with benefits substantially
similar to those enjoyed by the Executive under any of
the Company's pension, savings, life insurance,
medical, health and accident, or disability plans
in which the Executive was participating immediately
prior to the Change in Control, the taking of any
other action by the Company which would directly or
indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in
Control, or the failure by the Company to provide the
Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years
of service with the Company in accordance with the
Company's normal vacation policy in effect at the time
of the Change in Control; or
(VII) any purported termination of the
Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements
of Section 7.1 hereof; for purposes of this Agreement,
no such purported termination shall be effective.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the
Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
For purposes of any determination regarding the
existence of Good Reason, any claim by the Executive that Good
Reason exists shall be presumed to be correct unless the Company
establishes to the Committee by clear and convincing evidence
that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning set
forth in Section 6.2 hereof.
(R) "Notice of Termination" shall have the meaning set
forth in Section 7.1 hereof.
(S) "Pension Plan" shall mean (i) any tax-qualified,
supplemental or excess defined benefit pension plan maintained by
the Company and any other defined benefit plan or agreement entered
into between the Executive and the Company which is designed to
provide the Executive with supplemental retirement benefits and
(ii) tax-qualified, supplemental or excess defined contribution
plan maintained by the Company and any other defined contribution
plan or agreement entered into between the Executive and the Company.
(T) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include
(i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(U) "Potential Change in Control" shall be deemed to
have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(I) the Company enters into an agreement,
the consummation of which would result in the
occurrence of a Change in Control;
(II) the Company or any Person publicly
announces an intention to take or to consider taking
actions which, if consummated, would constitute a
Change in Control;
(III) any Person becomes the Beneficial
Owner, directly or indirectly, of securities of the
Company representing 10% or more of either the then
outstanding shares of common stock of the Company or
the combined voting power of the Company's then
outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired
directly from the Company or its affiliates); or
(IV) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(V) "Retirement" shall be deemed the reason for the
termination by the Executive of the Executive's employment if
such employment is terminated in accordance with the Company's
retirement policy, including early retirement, generally
applicable to its salaried employees.
(W) "Severance Payments" shall have the meaning set
forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set forth in
Section 6.2 hereof.
(Y) "Term" shall mean the period of time described in
Section 2 hereof (including any extension, continuation or
termination described therein).
(Z) "Total Payments" shall mean those payments so
described in Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
SYNCOR INTERNATIONAL CORPORATION
By:/s/Xxxxxx X. Xxxxxx
Name:
Title:
/s/Xxxxx Xxxx
Xxxxx Xxxx
Exhibit 10.12
SYNCOR INTERNATIONAL CORPORATION
SPECIAL SEVERANCE PLAN
WHEREAS, Syncor International Corporation
(the "Company") considers it essential to the best interests of
its stockholders to xxxxxx the continued employment of key
management personnel; and
WHEREAS, the Board recognizes that, as is the
case with many publicly held corporations, the possibility of a
Change in Control exists and that such possibility, and the
uncertainty and questions which it may raise among management,
may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders;
and
WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company's
management to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the
possibility of a Change in Control;
NOW, THEREFORE, the Company hereby adopts the
Syncor International Corporation Special Severance Plan (the
"Plan") for the benefit of certain employees of the Company, on
the terms and conditions hereinafter stated.
SECTION 1. DEFINITIONS. As hereinafter used:
1.1 "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
1.2 "Auditor" shall have the meaning set forth in Section 2.2
hereof.
1.3 "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.
1.4 "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
1.5 "Board" shall mean the Board of Directors of the Company.
1.6 "Cause" for termination by the Company of the
Participant's employment shall mean (i) the willful and continued
failure by the Participant to substantially perform the
Participant's duties with the Company (other than any such
failure resulting from the Participant's incapacity due to
physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination for Good
Reason by the Participant pursuant to Section 3.1 hereof) that
has not been cured within 30 days after a written demand for
substantial performance is delivered to the Participant by the
Board, which demand specifically identifies the manner in which
the Board believes that the Participant has not substantially
performed the Participant's duties, or (ii) the willful engaging
by the Participant in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of
this definition, no act, or failure to act, on the Participant's
part shall be deemed "willful" unless done, or omitted to be
done, by the Participant not in good faith and without reasonable
belief that the Participant's act, or failure to act, was in the
best interest of the Company.
1.7 "Change in Control" shall mean the occurrence of any of
the following events:
(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates)
representing 25% or more of the combined voting power of the
Company's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction
described in clause (a) of paragraph (iii) below; or
(ii) the following individuals cease for any reason
to constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election
by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously
so approved or recommended; or
(iii) there is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (a) a merger or
consolidation immediately following which the individuals who
comprise the Board immediately prior thereto constitute at least
a majority of the board of directors of the Company, the entity
surviving such merger or consolidation or any parent thereof (or
a majority plus one member where such board comprises an odd
number of members), or (b) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its Affiliates)
representing 25% or more of the combined voting power of the
Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity a majority
of the board of directors of which (or of any parent thereof)
immediately following such sale or disposition comprise the
individuals who comprised the Board immediately prior thereto
(or a majority plus one member where such board comprises an odd
number of members).
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of the
Company immediately prior to such transaction or series of
transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately
following such transaction or series of transactions.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.9 "Committee" shall mean (i) the individuals (not fewer than
three in number) who, on the date six months before a Change in
Control, constitute the compensation committee of the Board, plus
(ii) in the event that fewer than three individuals are available
from the group specified in clause (i) above for any reason, such
individuals as may be appointed by the individual or individuals
so available (including for this purpose any individual or
individuals previously so appointed under this clause (ii)).
1.10 "Company" shall mean Syncor International Corporation and,
except in determining under Section 1.7 hereof whether or not any
Change in Control of the Company has occurred, shall include any
successor to its business and/or assets which assumes and agrees
to perform this Plan by operation of law, or otherwise.
1.11 "Date of Termination" shall have the meaning set forth in
Section 3.2 hereof.
1.12 "Disability" shall be deemed the reason for the
termination by the Company of the Participant's employment, if,
as a result of the Participant's incapacity due to physical or
mental illness, the Participant shall have been absent from the
full-time performance of the Participant's duties with the
Company for a period of six (6) consecutive months, the Company
shall have given the Participant a Notice of Termination for
Disability, and, within thirty (30) days after such
Notice of Termination is given, the Participant shall not have
returned to the full-time performance of the Participant's
duties.
1.13 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
1.14 "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
1.15 "Good Reason" for termination by the Participant of the
Participant's employment shall mean the occurrence (without the
Participant's express written consent) after any Change in
Control, or prior to a Change in Control under the circumstances
described in clauses (ii) and (iii) of the second sentence of
Section 2.1 hereof (treating all references in paragraphs (i)
through (vii) below to a "Change in Control" as references to a
"Potential Change in Control"), of any one of the following acts
by the Company, or failures by the Company to act, unless, in the
case of any act or failure to act described in paragraph (i),
(v), (vi) or (vii) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment to the Participant of any duties
inconsistent with the Participant's status as a key employee of
the Company or a substantial adverse alteration in the nature or
status of the Participant's responsibilities from those in effect
immediately prior to the Change in Control;
(ii) a reduction by the Company in the Participant's
annual base salary as in effect on the date hereof or as the
same may be increased from time to time;
(iii) the relocation of the Participant's
principal place of employment to a location more than 50
miles from the Participant's principal place of employment
immediately prior to the Change in Control or the Company's
requiring the Participant to be based anywhere other
than such principal place of employment (or permitted
relocation thereof) except for required travel on the
Company's business to an extent substantially
consistent with the Participant's present business
travel obligations;
(iv) the failure by the Company to pay to the
Participant any portion of the Participant's current
compensation or to pay to the Participant any portion of an
installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days
of the date such compensation is due;
(v) the failure by the Company to continue in
effect any compensation plan in which the Participant
participates immediately prior to the Change in Control which
is material to the Participant's total compensation, unless
an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan,
or the failure by the Company to continue the Participant's
participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms
of the amount or timing of payment of benefits provided and
the level of the Participant's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(vi) the failure by the Company to continue to
provide the Participant with benefits substantially similar
to those enjoyed by the Participant under any of the Company's
pension, savings, life insurance, medical, health and accident,
or disability plans in which the Participant was
participating immediately prior to the Change in Control,
the taking of any other action by the Company which would
directly or indirectly materially reduce any of such benefits
or deprive the Participant of any material fringe benefit
enjoyed by the Participant at the time of the Change in
Control, or the failure by the Company to provide the
Participant with the number of paid vacation days to
which the Participant is entitled on the basis of years
of service with the Company in accordance with the
Company's normal vacation policy in effect at the time
of the Change in Control; or
(vii) any purported termination of the Participant's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 3.1 hereof;
for purposes of this Plan, no such purported termination shall be
effective.
The Participant's right to terminate the Participant's
employment for Good Reason shall not be affected by the
Participant's incapacity due to physical or mental illness. The
Participant's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any act or failure to
act constituting Good Reason hereunder.
1.16 "Notice of Termination" shall have the meaning set forth
in Section 3.1 hereof.
1.17 "Participant" shall mean (i) each individual who, on the
date hereof, is employed by the Company at the Director,
Executive Director or Vice President level, including but limited
to the individuals listed on Exhibit A hereto and (ii) each
individual who, on the date of a Change in Control, is employed
by the Company at the Director, Executive Director or Vice
President level; provided, however, that no person with respect
to whom an individual Benefits Agreement, severance arrangement
or employment agreement is in
effect as of the Change in Control (unless waived by such person)
shall be considered a Participant under the Plan.
1.18 "Pension Plan" shall mean (i) any tax-qualified,
supplemental or excess defined benefit pension plan maintained by
the Company and any other defined benefit plan or agreement
entered into between the Participant and the Company which is
designed to provide the Participant with supplemental retirement
benefits and (ii) any tax-qualified, supplemental or excess
defined contribution plan maintained by the Company and any other
defined contribution plan or agreement entered into between the
Participant and the Company.
1.19 "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
1.20 "Potential Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a
Change in Control;
(ii) the Company or any Person publicly announces
an intention to take or to consider taking actions which,
if consummated, would constitute a Change in Control;
(iii) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing 10% or more of either the then outstanding
shares of common stock of the Company or the combined voting
power of the Company's then outstanding securities (not
including in the securities beneficially owned by such Person
any securities acquired directly from the Company or its
affiliates); or
(iv) the Board adopts a resolution to the effect
that, for purposes of this Plan, a Potential Change in Control
has occurred.
1.21 "Severance Payments" shall have the meaning set forth
in Section 2.1 hereof.
1.22 "Tax Counsel" shall have the meaning set forth in
Section 2.2 hereof.
1.23 "Term" shall mean the period commencing on the date
hereof and ending on December 31, 2002; provided, however, that
commencing on January 1, 2002 and each January 1 thereafter, the
Term shall automatically be extended for one additional year
unless, not later than September 30 of the preceding year, the
Company shall have given notice to each Participant not to extend
the Term; and further provided, however, that if a Change in
Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the month
in which such Change in Control occurred.
1.24 "Total Payments" shall mean those payments so
described in Section 2.2 hereof.
SECTION 2. BENEFITS.
2.1 Subject to the provisions of Section 2.2 hereof,
if the Participant's employment is terminated following a Change
in Control and during the Term, other than (A) by the Company for
Cause, (B) by reason of death or Disability, or (C) by the
Participant without Good Reason, then the Company shall pay the
Participant the amounts, and provide the Participant the
benefits, described in this Section 2.1 ("Severance Payments").
For purposes of this Plan, the Participant's employment shall be
deemed to have been terminated following a Change in Control by
the Company without Cause or by the Participant with Good Reason,
if (i) the Participant's employment is terminated by the Company
without Cause prior to a Change in Control (whether or not a
Change in Control ever occurs) and such termination was at the
request or direction of a Person who has entered into an
agreement with the Company the consummation of which would
constitute a Change in Control, (ii) the Participant terminates
his employment for Good Reason prior to a Change in Control
(whether or not a Change in Control ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the
request or direction of such Person, or (iii) the Participant's
employment is terminated by the Company without Cause or by the
Participant for Good Reason and such termination or the
circumstance or event which constitutes Good Reason is otherwise
in connection with or in anticipation of a Change in Control
(whether or not a Change in Control ever occurs).
(A) In lieu of any further salary payments
to the Participant for periods subsequent to the Date of
Termination and in lieu of any severance benefit otherwise
payable to the Participant, the Company shall pay to the
Participant a lump sum severance payment, in cash, equal to the
sum of (i) the Participant's base salary as in effect immediately
prior to the Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (ii) the greater of
the average annual bonus earned by the Participant pursuant to
any annual bonus or incentive plan maintained by the Company in
respect of the three fiscal years ending immediately prior to the
fiscal year in which occurs the Date of Termination or, if
higher, immediately prior to the fiscal year in which occurs the
first event or circumstance constituting Good Reason and the
Participant's target annual bonus under such plan for the year in
which occurs the Date of Termination or, if higher, for the year
immediately preceding the year in which occurs the first event or
circumstance constituting Good Reason.
(B) For the twelve (12) month period
immediately following the Date of Termination, the Company shall
arrange to provide the Participant and his dependents life,
disability, accident and health insurance benefits substantially
similar to those provided to the Participant and his dependents
immediately prior to the Date of Termination or, if more
favorable to the Participant, those provided to the Participant
and his dependents immediately prior to the first occurrence of
an event or circumstance constituting Good Reason, at no greater
cost to the Participant than the cost to the Participant
immediately prior to such date or occurrence; provided, however,
that, unless the Participant consents to a different method
(after taking into account the effect of such method on the
calculation of "parachute payments" pursuant to Section 2.2
hereof), such health insurance benefits shall be provided through
a third-party insurer. Benefits otherwise receivable by the
Participant pursuant to this Section 2.1 (B) shall be reduced to
the extent benefits of the same type are received by or made
available to the Participant during the twelve (12) month period
following the Participant's termination of employment (and any
such benefits received by or made available to the Participant
shall be reported to the Company by the Participant); provided,
however, that the Company shall reimburse the Participant for the
excess, if any, of the cost of such benefits to the Participant
over such cost immediately prior to the Date of Termination or,
if more favorable to the Participant, the first occurrence of an
event or circumstance constituting Good Reason. If the Severance
Payments shall be decreased pursuant to Section 2.2 hereof, and
the Section 2.1(B) benefits which remain payable after the
application of Section 2.2 hereof are thereafter reduced pursuant
to the immediately preceding sentence, the Company shall, no
later than five (5) business days following such reduction, pay
to the Participant the least of (a) the amount of the decrease
made in the Severance Payments pursuant to Section 2.2 hereof,
(b) the amount of the subsequent reduction in these Section
2.1(B) benefits, or (c) the maximum amount which can be paid to
the Participant without being, or causing any other payment to
be, nondeductible by reason of section 280G of the Code.
(C) Notwithstanding any provision of any
annual or long-term incentive plan to the contrary, the Company
shall pay to the Participant a lump sum amount, in cash, equal to
any unpaid incentive compensation which has been allocated or
awarded to the Participant for a completed fiscal year or other
measuring period preceding the Date of Termination under any such
plan and which, as of the Date of Termination, is contingent only
upon the continued employment of the Participant to a subsequent
date.
(D) In addition to the retirement benefits
to which the Participant is entitled under each Pension Plan (or
any successor plan thereto) that constitutes a defined benefit
pension plan, the Company shall pay the Participant a lump sum
amount, in cash, equal to the excess of (i) the actuarial
equivalent of the aggregate retirement pension (taking into
account any early retirement subsidies associated therewith and
determined as a straight life annuity commencing at the date (but
in no event earlier than the first anniversary of the Date of
Termination) as of which the actuarial equivalent of such annuity
is greatest) which the Participant would have accrued under the
terms of all such Pension Plans (without regard to any amendment
to any such Pension Plan made subsequent to a Change in Control
and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of retirement
benefits thereunder), determined as if the Participant were fully
vested thereunder and had accumulated (after the Date of
Termination) twelve (12) additional months of service credit
thereunder and had been credited under each such Pension Plan
during such period with compensation equal to the Participant's
compensation (as defined in such Pension Plan) during the twelve
(12) months immediately preceding the Date of Termination or, if
higher, during the twelve months immediately prior to the first
occurrence of an event or circumstance constituting Good Reason,
over (ii) the actuarial equivalent of the aggregate retirement
pension (taking into account any early retirement subsidies
associated therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of such annuity
is greatest) which the Participant had accrued pursuant to the
provisions of the such Pension Plans as of the Date of
Termination. For purposes of this Section 2.1(D), "actuarial
equivalent" shall be determined using the same assumptions
utilized under the Company's tax-qualified defined benefit
pension plan for salaried employees immediately prior to the Date
of Termination. or, if more favorable to the Participant,
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason. In addition to the
benefits to which the Participant is entitled under the Pension
Plan (or any successor plan thereto) that constitutes a defined
contribution pension plan, the Company shall pay the Participant
a lump sum amount, in cash, equal to the sum of (i) the amount
that would have been contributed thereto by the Company on the
Participant's behalf during the one year immediately following
the Date of Termination, determined (x) as if the Participant
made the maximum permissible contributions thereto during such
period, (y) as if the Participant earned compensation during such
period at a rate equal to the Participant's compensation (as
defined in the Pension Plan) during the twelve (12) months
immediately preceding the Date of Termination or, if higher,
during the twelve months immediately prior to the first
occurrence of an event or circumstance constituting Good Reason,
and (z) without regard to any amendment to the Pension Plan made
subsequent to a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in any manner the
computation of benefits thereunder, and (ii) the excess, if any,
of (x) the Participant's account balance under the Pension Plan
as of the Date of Termination over (y) the portion of such
account balance that is nonforfeitable under the terms of the
Pension Plan.
(E) If the Participant would have become
entitled to benefits under the Company's post-retirement health
care or life insurance plans, as in effect immediately prior to
the Date of Termination or, if more favorable to the Participant,
as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, had the
Participant's employment terminated at any time during the period
of twelve (12) months after the Date of Termination, the Company
shall provide such post-retirement health care or life insurance
benefits to the Participant and the Participant's dependents
commencing on the later of (i) the date on which such coverage
would have first become available and (ii) the date on which
benefits described in subsection (B) of this Section 2.1
terminate.
(F) The Company shall provide the
Participant with outplacement services suitable to the
Participant's position for a period of one (1) year or, if
earlier, until the first acceptance by the Participant of an
offer of employment; provided, however, that in no event shall
the cost for such outplacement services exceed $50,000.
2.2 (A) Notwithstanding any other provisions of
this Plan, in the event that any payment or benefit received or
to be received by the Participant in connection with a Change in
Control or the termination of the Participant's employment
(whether pursuant to the terms of this Plan or any other plan,
arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated
with the Company or such Person) (all such payments and benefits,
including the Severance Payments, being hereinafter referred to
as the "Total Payments") would be subject (in whole or part), to
the Excise Tax, then, after taking into account any reduction in
the Total Payments provided by reason of section 280G of the Code
in such other plan, arrangement or agreement, the cash Severance
Payments shall first be reduced, and the noncash Severance
Payments shall thereafter be reduced, to the extent necessary so
that no portion of the Total Payments is subject to the Excise
Tax but only if (A) the net amount of such Total Payments, as so
reduced (and after subtracting the net amount of federal, state
and local income taxes on such reduced Total Payments and after
taking into account the phase out of itemized deductions
attributable to such reduced Total Payments) is greater than or
equal to (B) the net amount of such Total Payments without such
reduction (but after subtracting the net amount of federal, state
and local income taxes on such Total Payments and the amount of
Excise Tax to which the Participant would be subject in respect
of such unreduced Total Payments and after taking into account
the phase out of itemized deductions attributable to such
unreduced Total Payments); provided, however, that the
Participant may elect to have the noncash Severance Payments
reduced (or eliminated) prior to any reduction of the cash
Severance Payments.
(B) For purposes of determining whether and
the extent to which the Total Payments will be subject to the
Excise Tax, (i) no portion of the Total Payments the receipt or
enjoyment of which the Participant shall have waived at such time
and in such manner as not to constitute a "payment" within the
meaning of section 280G(b) of the Code shall be taken into
account, (ii) no portion of the Total Payments shall be taken
into account which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Participant and selected by the
accounting firm (the "Auditor") which was, immediately prior to
the Change in Control, the Company's independent auditor, does
not constitute a "parachute payment" within the meaning of
section 280G(b)(2) of the Code (including by reason of section
280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no
portion of such Total Payments shall be taken into account which,
in the opinion of Tax Counsel, constitutes reasonable
compensation for services actually rendered, within the meaning
of section 280G(b)(4)(B) of the Code, in excess of the Base
Amount allocable to such reasonable compensation, and (iii) the
value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Auditor
in accordance with the principles of sections 280G(d)(3) and (4)
of the Code.
(C) At the time that payments are made under
this Plan, the Company shall provide the Participant with a
written statement setting forth the manner in which such payments
were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Company has
received from Tax Counsel, the Auditor or other advisors or
consultants (and any such opinions or advice which are in writing
shall be attached to the statement). If the Participant objects
to the Company's calculations, the Company shall pay to the
Participant such portion of the Severance Payments (up to 100%
thereof) as the Participant determines is necessary to result in
the proper application of subsection A of this Section 2.2.
2.3 The payments provided in subsections (A), (C) and
(D) of Section 2.1 hereof shall be made not later than the fifth
day following the Date of Termination; provided, however, that if
the amounts of such payments, and the limitation on such payments
set forth in Section 2.2 hereof, cannot be finally determined on
or before such day, the Company shall pay to the Participant on
such day an estimate, as determined in good faith by the
Participant, of the minimum amount of such payments to which the
Participant is clearly entitled and shall pay the remainder of
such payments (together with interest on the unpaid remainder (or
on all such payments to the extent the Company fails to make such
payments when due) at 120% of the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth (30th) day
after the Date of Termination. In the event that the amount of
the estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the
Company to the Participant, payable on the fifth (5th) business
day after demand by the Company (together with interest at 120%
of the rate provided in section 1274(b)(2)(B) of the Code).
2.4 The Company also shall pay to the Participant all
legal fees and expenses incurred by the Participant in disputing
in good faith any issue hereunder relating to the termination of
the Participant's employment, in seeking in good faith to obtain
or enforce any benefit or right provided by this Plan or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to
any payment or benefit provided hereunder. Such payments shall
be made within five (5) business days after delivery of the
Participant's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably
may require.
SECTION 3. TERMINATION PROCEDURES AND COMPENSATION DURING
DISPUTE.
3.1 Notice of Termination. After a Change in Control
and during the Term, any purported termination of the
Participant's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Section 6
hereof. For purposes of this Plan, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Plan relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Participant's employment under the
provision so indicated. Further, a Notice of Termination for
Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board
which was called and held for the purpose of considering such
termination (after reasonable notice to the Participant and an
opportunity for the Participant, together with the Participant's
counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Participant was guilty of conduct
set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
3.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Participant's
employment after a Change in Control and during the Term, shall
mean (i) if the Participant's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given
(provided that the Participant shall not have returned to the
full-time performance of the Participant's duties during such
thirty (30) day period), and (ii) if the Participant's employment
is terminated for any other reason, the date specified in the
Notice of Termination (which, in the case of a termination by the
Company, shall not be less than thirty (30) days (except in the
case of a termination for Cause) and, in the case of a
termination by the Participant, shall not be less than fifteen
(15) days nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given).
3.3 Dispute Concerning Termination. If within fifteen
(15) days after any Notice of Termination is given, or, if later,
prior to the Date of Termination (as determined without regard to
this Section 3.3), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii) the date
on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or
decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended
by a notice of dispute given by the Participant only if such
notice is given in good faith and the Participant pursues the
resolution of such dispute with reasonable diligence.
3.4 Compensation During Dispute. If a purported
termination occurs following a Change in Control and during the
Term and the Date of Termination is extended in accordance with
Section 3.3 hereof, the Company shall continue to pay the
Participant the full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited
to, salary) and continue the Participant as a participant in all
compensation, benefit and insurance plans in which the
Participant was participating when the notice giving rise to the
dispute was given, until the Date of Termination, as determined
in accordance with Section 3.3 hereof. Amounts paid under this
Section 3.4 are in addition to all other amounts due under this
Plan and shall not be offset against or reduce any other amounts
due under this Plan.
SECTION 4. NO MITIGATION. The Company agrees that, if the
Participant's employment with the Company terminates during the
Term, the Participant is not required to seek other employment or
to attempt in any way to reduce any amounts payable to the
Participant by the Company pursuant to Section 2 hereof or
Section 3.4 hereof. Further, the amount of any payment or
benefit provided for in this Plan (other than Section 2.1(B)
hereof) shall not be reduced by any compensation earned by the
Participant as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be
owed by the Participant to the Company, or otherwise.
SECTION 5. SUCCESSORS; BINDING AGREEMENT.
5.1 In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and
agree to perform this Plan in the same manner and to the same
extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness
of any such succession shall be a breach of its obligations under
this Plan and shall entitle each Participant to compensation from
the Company in the same amount and on the same terms as the
Participant would be entitled to hereunder if the Participant
were to terminate the Participant's employment for Good Reason
after a Change in Control, except that, for purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
5.2 The Company's obligations under this Plan shall
inure to the benefit of and be enforceable by the Participant's
personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the
Participant shall die while any amount would still be payable to
the Participant hereunder (other than amounts which, by their
terms, terminate upon the death of the Participant) if the
Participant had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Plan to the executors, personal representatives or
administrators of the Participant's estate.
SECTION 6. NOTICES. Notices and all other communications
provided for hereunder shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid,
addressed, if to the Participant, to the most recent address
shown in the personnel records of the Company and, if to the
Company, to the address set forth below, or to such other address
as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address
shall be effective only upon actual receipt:
To the Company:
Syncor International Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
SECTION 7. SETTLEMENT OF DISPUTES; ARBITRATION.
7.1 All claims by the Participant for benefits under
this Plan shall be directed to and determined by the Committee
and shall be in writing. Any denial by the Committee of a claim
for benefits under this Plan shall be delivered to the
Participant in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Plan relied
upon. The Committee shall afford a reasonable opportunity to the
Participant for a review of the decision denying a claim and
shall further allow the Participant to appeal to the Committee a
decision of the Committee within sixty (60) days after
notification by the Committee that the Participant's claim has
been denied.
7.2 Any further dispute or controversy arising under
or in connection with this Plan shall be settled exclusively by
arbitration in Woodland Hills, California in accordance with the
rules of the American Arbitration Association then in effect;
provided, however, that the evidentiary standards set forth in
this Plan shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Plan to the contrary, the
Participant shall be entitled to seek specific performance of the
Participant's right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under
or in connection with this Plan.
SECTION 8. PLAN MODIFICATION OR TERMINATION.
The Plan may be amended or terminated by the Board at
any time; provided, however, that during the pendency of a
Potential Change in Control and during the two (2) period
following a Change in Control, the Plan (Including Exhibit A
hereto) may not be terminated or amended, if such amendment would
be adverse to the interests of any Participant, without the
consent of such Participant.
SECTION 9. GENERAL PROVISIONS.
9.1 The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of California. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding
required under federal, state or local law and any additional
withholding to which the Participant has agreed. The obligations
of the Company and the Participant under this Agreement which by
their nature may require either partial or total performance
after the expiration of the Term (including, without limitation,
those under Sections 2 and 3 hereof) shall survive such
expiration.
9.2 Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefits shall be construed as
giving any Participant, or any person whomsoever, the right to be
retained in the service of the Company, and all Participants
shall remain subject to discharge to the same extent as if the
Plan had never been adopted.
9.3 The headings and captions herein are provided for
reference and convenience only, shall not be considered part of
the Plan, and shall not be employed in the construction of the
Plan.
9.4 The Plan shall not be funded. No Participant
shall have any right to, or interest in, any assets of the
Company which may be applied by the Company to the payment of
benefits or other rights under this Plan.
9.5 The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or
enforceability of any other provision of this Plan, which shall
remain in full force and effect.
