EXHIBIT 10.12
AGREEMENT REGARDING TERMINATION BENEFITS
This "Agreement Regarding Termination Benefits" ("Agreement") is entered into on
April 21, 2003 (the "Effective Date") between GSI Lumonics Inc., a New
Brunswick, Canada Corporation with Canadian offices at 00 Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxx X0X 0X0 Xxxxxx (the "Company") and Xxxxx Xxxxxxxx with a residential
address of 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 ("Employee").
WHEREAS, Employee is employed by the Company as Vice President, Business
Development, a position that the Company has designated as a key managerial
position; and
WHEREAS, the Company and Employee have agreed on certain Termination Benefits in
the event the Employee's employment with the Company terminates under the
conditions described herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Company and the Employee agree as follows:
1. Effective Date and Term: This Agreement shall become effective as of
the date set forth in the opening paragraph. Subject to the provisions
of Sections 3 and 5 below, this Agreement shall continue in effect for
a period of one year from the Effective Date and may only be extended
or renewed by a written amendment, signed by the parties hereto.
2. Definitions: For purposes of this Agreement, capitalized terms shall be
defined as follows:
"Base Salary" shall mean the Employee's annual salary, exclusive of
benefits, stock options, bonuses, commissions, and incentive payments,
in effect on the Date of Termination.
"Cause" shall mean: (i) any material breach by the Employee of any
agreement between the Employee and the Company or the Company's
subsidiaries, affiliates or divisions, including without limitation any
non-competition, non-disclosure, non-solicitation, confidentiality,
trade secret or other such agreements; (ii) any act (other than
termination of employment for Good Reason) or omission to act by the
Employee that would reasonably be likely to have a material adverse
effect on the business of the Company or the Company's subsidiaries,
affiliates or divisions, as the case may be; (iii) the failure by the
Employee to substantially performance the Employee's material duties;
(iv) the use by the Employee of drugs or of alcohol in a manner which
materially affects his/her ability to perform his/her employment
duties; (v) the conviction of the Employee by a court of competent
jurisdiction of any criminal offense involving dishonesty or breach of
trust or any felony; or (vi) any material misconduct or material
violation of the Company's policies by the Employee.
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"Change in Control" shall mean (i) any Person becomes a beneficial
owner of thirty percent (30%) or more of the then outstanding shares of
common stock of the Company or the combined voting power of the
Company's then outstanding securities; (ii) the Company's stockholders
approve a complete liquidation or dissolution of the Company, a merger
or consolidation, or the sale or other disposition of all or
substantially all of the Company's assets or stock; or (iii) there is
consummated a merger or consolidation of the Company with another
corporation. Notwithstanding the foregoing, a Change of Control shall
not include (x) a consummated merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person is or becomes a beneficial owner of thirty percent
(30%) or more of the then outstanding shares of common stock of the
Company or the combined voting power of the Company's then outstanding
securities; or (y) a consummated merger or consolidation of the Company
resulting in the voting securities of the Company immediately prior to
such merger or consolidation continuing to represent (by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 60% of the combined
voting power of the securities of the Company or such surviving entity
or parent thereof outstanding immediately after such merger or
consolidation; or (z) a shareholder approved sale or disposition of all
or substantially all of the Company's assets or stock to an entity in
which at least 60% of the combined voting power of the voting
securities owned by shareholders are in substantially the same
ownership proportions immediately before and after such sale or
disposition.
"Company" shall mean "GSI Lumonics Inc. and, except in determining
whether or not a Change of Control of the Company has occurred, shall
include its successor and assigns, and any corporation or other entity
which is the surviving or continuing entity following a merger,
consolidation, or sale of all or substantially all of the Company's
assets or stock.
"Date of Termination" shall mean the date the Company designates as the
last day of Employee's employment with the Company.
"Disability" shall mean incapacity of the Employee due to physical or
mental illness such that the Employee shall have been absent from the
full time performance of his/her duties with the Company for a period
of six (6) consecutive months or two-hundred and forty (240) days in
any period of 365 days but such term shall not include death.
"Good Reason" shall mean any of the following acts by the Company or
failures by the Company to act unless such act or failure to act is
corrected within ten (10) days of the Date of Termination specified in
the Notice of Termination given by the Employee to the Company: (i) a
substantial adverse change in the nature or scope of the Employee's
responsibilities, authorities, powers, functions or duties; (ii) a
reduction in the Employee's annual Base Salary or benefits, except for
across-the-board reductions similarly affection all or substantially
all key managerial employees; (iii) the relocation of the office at
which the Employee is principally employed to a location more than
fifty (50) miles from such office; or (iv) the Company's failure to
offer the Employee participation in any benefit plan(s) or include the
Employee in any incentive plan(s) made available to all or
substantially all other key managerial employees; provided however,
that the Employee's failure
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to meet the participation requirements in such incentive plan or other
benefit plan or the Employee's failure to meet the requirements for
receipt of such incentive plan payment or benefit under any such other
plan will not constitute "Good Reason" within the meaning of this
Agreement.
"Notice of Termination: shall mean a written letter from one party to
the other party indicating in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee's employment and the specific provision in this Agreement
relied upon.
"Person" shall mean an individual, corporation, partnership, trust or
other entity, other than (i) the Company, or its subsidiaries,
affiliates or divisions, (ii) a trustee or fiduciary holding securities
under an employee benefit plan of the Company or its subsidiaries or
affiliates; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; and (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.
3. Termination Benefits:
The Company shall provide the following Termination Benefits to the
Employee if his/her employment with the Company is terminated (i) by
the Company for any reason other than for Death, Disability, or Cause,
regardless of whether prior to, following or relating to a Change of
Control; or (ii) by the Employee for Good Reason.
Salary Continuation: The Company shall continue to pay the Employee his
/her Base Salary as of the Date of Termination for a period of twelve
(12) months. Under no circumstances shall the Employee receive more
than a total of twelve (12) months of salary continuation under this
Agreement. All salary continuation payments shall be in accord with the
Company's usual pay practices.
Bonus: At such time as the Company would customarily pay bonuses, the
Company shall pay the Employee an amount equal to the bonus Employee
earned pursuant to the terms of the applicable bonus plan, prorated
based on the number of days the Employee actually worked in the
calendar year in which the Date of Termination occurs and the bonus was
earned. No additional bonus payment, other than that which was earned
prior to the Date of Termination, shall be paid to the Employee.
Benefits: The Employee's COBRA period shall commence on the first day
following the expiration of the Employee's salary continuation period.
During the salary continuation period, the Company shall continue
contributing to the Employee's medical and dental insurance premiums on
the same basis it contributes to such premiums for other key managerial
employees and at the same level in existence prior to the Date of
Termination. After the expiration of the salary continuation period,
the Employee may continue his/her medical and dental insurance under
the Company's medical and dental group plans at his/her own expense for
the remainder of the COBRA period. All other benefits, including but
not limited to short and long term disability insurance, life
insurance, and participation in the employee stock purchase plan shall
cease as of the Date of Termination.
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Stock Options: All stock options held by the Employee shall be governed
exclusively by the terms of the applicable Stock Option Plan and Stock
Option Agreement (including any successor plan and agreement) under
which the stock options were granted to the Employee, except that all
stock options which are outstanding and unexercised as of the Date of
Termination shall remain outstanding and exercisable for the shorter of
(a) six (6) months from the Date of Termination, or (b) the remainder
of the full term of the option pursuant to the applicable Stock Option
Plan and Agreement. Except as otherwise expressly stated herein, this
Agreement shall not modify or alter any of the terms applicable to the
Employee's stock options, including but not limited to the vesting
schedule.
Conditions: The Company's obligation to provide and the Employee's
right to receive any of the Termination Benefits described in this
Section 3 are conditioned on the (i) Employee signing a release of any
claims he/she may have against the Company in connection with his/her
employment by and termination from employment with the Company in a
form, mutually agreed upon that is customary for such transactions; and
(ii) Employee's compliance with any post-termination obligations he/she
may have to the Company arising from any agreement the Employee has
with the Company, its subsidiaries, affiliates or divisions, including
but not limited to any non-competition, non-disclosure,
non-solicitation, confidentiality, trade secret protection or other
such obligations.
Taxes and Withholdings: All payments made by the Company to the
Employee under this Agreement shall be net of any taxes (whether local,
state, federal, provincial or otherwise) or other required or voluntary
withholdings or deductions.
The Employee shall not be eligible for or receive any Termination
Benefits described above upon the Employee's resignation of or
retirement from employment with the Company.
4. Termination Notice: Any purported termination of the Employee's
employment (other than by reason of Death) shall be communicated by
written Notice of Termination from one party to the other party and
shall be deemed to have been duly given when (a) mailed by U.S.
registered mail, return receipt requested, postage prepaid; (b) sent
via facsimile with a confirmed facsimile transmission receipt; (c) hand
delivered to the Employee or to the Chief Executive Officer; or (c)
sent via overnight delivery with a confirmed receipt of delivery; in
each instance addressed, if to the Employee or the Company, as the case
may be at the address noted below or to such other address as either
party may furnish to the other in writing in accordance herewith,
except that notice of a change of address shall be effective only upon
actual receipt.
To the Company:
GSI Lumonics Inc.
X/x XXX Xxxxxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000 XXX
Attention: General Counsel
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To the Employee:
__________________________
__________________________
__________________________
5. At-Will Employment: Nothing in this Agreement shall be construed as an
express or implied contract of employment between the Employee and the
Company (or its subsidiaries, affiliate or divisions) or as a
commitment on the part of the Company to retain Employee in any
capacity for any period of time. Employee acknowledges and agrees that
his/her employment with the Company is on an at-will basis and may be
terminated at any time, with or without Cause or for any reason, at the
option of either the Company or Employee, with notice, subject to the
Company's obligation to provide the Termination Benefits as provided
for herein.
6. Successors and Assigns/No Third Party Beneficiaries: This Agreement
shall inure to the benefit of and be binding upon the successor and
assigns of each of the parties; provided however, that neither party
shall assign or delegate any of the obligations created under this
Agreement without the prior written consent of the other party.
Notwithstanding the foregoing (i) the Company shall have the
unrestricted right to assign this Agreement and to delegate all or any
part of its obligations hereunder to any of its subsidiaries,
affiliates or divisions, but in such event such assignee shall
expressly assume all obligations of the Company hereunder and (ii) the
Company may assign its rights and obligations hereunder to any Person
who succeeds to all or substantially all of the Company's business,
assets or stock, whether by merger, consolidation, or purchase of all
or substantially all of the Company's assets, stock, or business.
Nothing in this Agreement shall confer upon any Person not a party to
this Agreement, or the legal representative, executor, administrator or
heir of such Person, any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement, except that (and
notwithstanding anything in this Agreement to the contrary) if the
Employee's employment is terminated with the Company as a result of
Death, then the Employee's heirs shall be entitled to the Salary
continuation and Bonus payments in Section 3, Termination Benefits in
addition to any applicable life insurance payments made to such heirs
as beneficiaries under such life insurance policy, provided such heirs
sign a release of any assigned claims described under section (i) in
the Conditions paragraph of Section 3, Termination Benefits.
7. Waiver and Amendments: Any waiver, alteration, amendment or
modification o any of the terms of this Agreement shall be valid only
if made in writing and signed by the parties hereto. No waiver by
either of the parties hereto of their rights hereunder shall be deemed
to constitute a waiver with respect to any subsequent occurrences or
transactions hereunder unless such waiver is in writing and
specifically states that it is to be construed as a continuing waiver.
8. Severability and Governing Law: Employee acknowledges and agrees that
the covenants set forth herein are reasonable and valid. If any of such
covenants or such other provisions of this Agreement are found to be
invalid or unenforceable by a final determination of a court of
competent jurisdiction (i) the remaining terms
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and provisions hereof shall be unimpaired and (ii) the invalid or
unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid and unenforceable term or
provision. The validity, interpretation, construction and performance
of this Agreement shall be governed by and the laws of the Commonwealth
of Massachusetts without regard to its conflict of law principles.
9. Section Heading: The headings of the Sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, or affect the meaning or interpretation of
this Agreement or of any term of provision hereof.
10. Entire Agreement: This Agreement constitutes the entire understanding
and agreement of the parties regarding the subject matter of this
Agreement and supercedes all prior negotiations, discussions,
correspondence, communications, understandings, representations and
agreements between the parties, oral or otherwise, express or implied,
relating to the subject matter of this Agreement.
11. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company, by a duly authorized officer, and by the Employee.
GSI LUMONICS INC. EMPLOYEE:
\s\ Xxxxxxx X. Xxxxxxx \s\ Xxxxx Xxxxxxxx
---------------------------- ---------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxx
Title: President and Chief Executive Officer
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