Employment Agreement - Perkin-Elmer Corp. and Manuel Baez
June 3, 1996
Mr. Manuel Baez
3502 Derby Lane
Ft. Lauderdale, FL 33331
Dear Manny:
Subject to the formal election by the Board of Directors, I am pleased to
offer you the position of Senior Vice President of the Corporation and
President, Analytical Instruments Division, reporting to Tony L. White,
Chairman, President and Chief Executive Officer.
Reporting to you in this position will be:
Dr. David Binkley, Vice President and General Mgr. Organic Div.
Peter Macintyre, Vice President and General Mgr., Chromatography Div.
Joseph Malandrakis, Vice President and General Mgr., Inorganic Div.
Dr. Nino Portolan, Vice President and Managing Director, Europe
Dr. Luigi Strassorier, Vice President and Managing Director, Far East
Luis Carmona, General Manager, Latin America
The annual salary for this position is $375,000. Your salary will be
reviewed by the Management Resources Committee of the Board in September
of each year along with the other officers of the Corporation. You will
also participate in Perkin-Elmer's Contingent Compensation Plan, which is
our annual bonus plan. In this program, you will have a targeted annual
bonus opportunity of 60% of your base salary. The plan provides a range
of bonus payouts from 0 - 90% of salary based upon accomplishment of our
annual financial targets. For FY 96 you will be guaranteed a minimum
payment of $37,500. This payment will be made following the Board
meeting in August.
Mr. Manuel Baez
June 3, 1996
Page 2
On your first day of employment, the Management Resources Committee will
formally review our recommendation of a Restricted Stock Award of 15,000
shares of Perkin-Elmer stock. This grant will vest according to the
following schedule:
Average Market Price for 90 Days % Vested
$59 33%
$66 33%
$73 33%
Additionally as each increment is earned, the Board has agreed to accept
a recommendation to "reload" your Restricted Stock Plan with an amount to
be earned against new performance measures. You will immediately begin
receiving dividends from this award, which under current dividend policy
equals $10,200.
Since we have exhausted our current pool of restricted stock, your grant
will be made by the Board conditional upon shareholder approval at our
Annual Meeting in October. Until shareholder approval, the grant will be
treated as a performance unit grant which mirrors our restricted stock in
all aspects except that you will not be entitled to vote these shares.
The Board has established ownership guidelines for all officers of the
Corporation and this restricted stock grant, is "credited" towards these
ownership guidelines. The Management Resources Committee set an
ownership target of two times annual salary for your position. This
program, initiated last year, allows five years for you to achieve this
target.
Upon your employment, the Management Resources Committee will also
formally review the recommendation to provide you a stock option grant of
50,000 shares of Perkin-Elmer stock. The option will be valued at the
average market price of the stock on the day of your election. This
stock option will vest 50% per year over two years and, subject to the
other terms of our stock plan, will expire ten years following the date
of the grant.
In April of each year, the Management Resources Committee considers
recommendations for stock option grants. Beginning in April 1997, you
will be recommended for an annual stock option grant, which based upon
our current grant practice, would be approximately 25,000 shares.
Mr. Manuel Baez
June 3, 1996
Page 3
As we have discussed, we are designing a divisionalized "Phantom Stock
Option Plan" to provide you with an opportunity to more closely tie the
long-term incentives of your team to the "value creation" which they
accomplish for the Analytical Instruments business. Likewise, Tony wants
a portion of your long-term incentives tied to the Analytical Instrument
business. When this "Phantom Stock Option" grant is determined, it will
not be additive but rather will be integrated with Perkin-Elmer stock
options to achieve an equivalent value to your annual Perkin-Elmer stock
option as described above.
Your Option Grants and Restricted Stock Awards will be subject to terms
of Perkin-Elmer's Employee Stock Incentive Plan, a copy of which will be
provided to you.
In our discussions, you raised the issue of your retirement benefit. We
propose that when you join PE you will be credited with 13 years of past-
service credit for purposes of calculating your benefit. For purposes of
vesting, we have a five year vesting requirement in our qualified plans
that must remain in place. However, you will vest immediately in our
non-qualified plan. If for any reason you resigned before you were
vested in the qualified plan, your total benefit would be derived from
the non-qualified plan.
You will receive a Change of Control Agreement, which applies to all
Executive Officers of the Corporation. This Agreement provides for three
year salary and bonus continuation in the event of a change of control of
the Corporation and the resulting loss of your position.
In addition to the foregoing, you will receive an annual car allowance of
$15,000, financial planning and tax preparation assistance, and four
weeks annual vacation. The usual range of benefits is also included as
described in the accompanying summary.
Obviously, we do not want you to experience any financial burden
associated with your move to Connecticut, and the Corporation will bear
all reasonable expenses regarding this move. As well as our normal
relocation benefits, you will receive a payment of $150,000 at the time
you join the Company in order to assist in your move from Florida.
Mr. Manuel Baez
June 3, 1996
Page 4
Manny, we hope you will accept this offer and join our team at Perkin-
Elmer. Speaking personally, I believe you will find Perkin-Elmer to be a
company that will provide the career opportunity, professional challenges
and personal rewards which you seek.
Please give me a call if you have any questions or concerns regarding any
of the above issues. You can reach me at any time at either my office at
203-761-5451 or my home at 203-259-6012.
Sincerely,
/jk
Agreed: ____________________________
Manuel Baez