Change in Control Agreement - ACLARA BioSciences Inc. and Joseph M. Limber
ACLARA BIOSCIENCES, INC.
1288 Pear Avenue, Mountain View, CA 94043
October 10, 2002
Joseph M. Limber
1515 Arriba Court
Los Altos, CA 94024
Re: Change in Control Agreement
Dear Mr. Limber:
In connection with General Release and Separation Agreement entered
into as of October 10, 2002 by you and ACLARA Biosciences, Inc. (the "Company"),
the Company hereby agrees that after this letter agreement (this "Agreement")
has been fully executed, you shall receive the severance benefits set forth in
this Agreement in the event of a Hostile Takeover (as defined below) or a Change
in Control (as defined below).
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through the termination of your service as
an executive officer of the Company on December 1, 2002 or such earlier date as
you and the Company shall agree in accordance with the General Release and
Separation Agreement (such service to be referred to herein as "Service").
2. Change in Control/Hostile Takeover. You shall receive no benefits
under this Agreement unless there has been a Change in Control or a Hostile
Takeover.
(a) For purposes of this Agreement, a "Change in Control" shall mean
(i) an acquisition of any voting securities of the Company (the "Voting
Securities") by any "person" (as the term "person" is used for purposes of
Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) immediately after which such person has "beneficial
ownership" (within the meaning of Rule 13d-3 promulgated under the 1934 Act)
("Beneficial Ownership") of 15% or more of the combined voting power of the
Company's then outstanding Voting Securities without the approval of the Board;
(ii) a merger or consolidation that results in more than 50% of the combined
voting power of the Company's then outstanding Voting Securities of the Company
or its successor changing ownership (whether or not approved by the Board);
(iii) the sale of all or substantially all of the Company's assets; (iv)
approval by the shareholders of the Company of a plan of complete liquidation of
the Company; or (v) the individuals constituting the Board as of the date of
this Agreement (the "Incumbent Board") cease for any reason to constitute at
least 1/2 of the members of the Board; provided, however, that if the election,
or nomination for election by the Company's stockholders, of any new director
was approved by a vote of the Incumbent Board, such new director shall be
considered a member of the Incumbent Board.
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(b) For purposes of this Agreement, a "Hostile Takeover" means a
transaction or series of transactions that results in any person acquiring
Beneficial Ownership of more than 50% of the combined voting power of the
Company's then outstanding Voting Securities without the approval of the Board.
3. Acceleration of Vesting Upon Change of Control or Hostile Takeover.
Upon a Change of Control or a Hostile Takeover during the term of this
Agreement, you shall immediately become 100% vested with respect to any options
to purchase the Company's capital stock that you then hold and/or any
restrictions with respect to restricted shares of the Company's capital stock
that you then hold shall immediately lapse.
4. Successors; Binding Agreement.
(a) The Company shall 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. Unless expressly provided otherwise, "Company" as used herein
shall mean the Company as defined in this Agreement and any successor to its
business and/or assets as aforesaid.
(b) This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
5. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the
attention of its Secretary, 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 receipt.
6. Parachute Payments. Notwithstanding anything contained in this
Agreement to the contrary, in the event that the benefits provided for in this
Agreement to you together with all other payments and the value of any benefit
received or to be received by you:
(a) constitute "parachute payments" within the meaning of Section
280G of the Code, and
(b) but for this Section, would be subject to the excise tax imposed
by Section 4999 of the Code, then your benefits pursuant to the terms of this
Agreement shall be payable either:
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(i) in full, or
(ii) as to such lesser amount which would result in no portion of
such benefits being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by you on an after-tax basis, of the greatest amount of benefits
under this Agreement, notwithstanding that all or some portion of such benefits
may be subject to the excise tax imposed under Section 4999 of the Code. Unless
the Company and you otherwise agree in writing, any determination required under
this Section 7 shall be made in writing by the Company's independent public
accountants serving immediately before the Hostile Takeover or Change in Control
(the "Accountants"), whose determination shall be conclusive and binding upon
you and the Company for all purposes. For purposes of making the calculations
required by this Section 7, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company shall cause the Accountants to provide detailed supporting
calculations of its determinations to you and the Company. You and the Company
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 7.
7. 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 you 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 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. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without regard to its conflicts of law
principles. All references to sections of the 1934 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. The section headings contained in this
Agreement are for convenience only, and shall not affect the interpretation of
this Agreement.
8. Severability. 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.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
10. Entire Agreement. This Agreement and the General Release and
Separation Agreement between the Company and you, dated as of October 10, 2002
sets forth
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the entire agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto, and any
prior agreement of the parties hereto in respect of the subject matter contained
herein, including, without limitation, any prior severance or change in control
agreements (including that certain Change in Control Agreement between you and
the Company dated November 7, 2001 (the "Prior Agreement")), is hereby
terminated and cancelled. By executing this Agreement you hereby waive (within
the meaning of Section 8 of the Prior Agreement) any rights you may currently
have or have in the future to any benefits of any sort under the Prior
Agreement. Any of your rights hereunder shall be in addition to any rights you
may otherwise have under benefit plans or agreements of the Company (other than
severance plans or agreements or the Prior Agreement) to which you are a party
or in which you are a participant, including, but not limited to, any Company
sponsored employee benefit plans and stock options plans. The provisions of this
Agreement shall not in any way abrogate your rights under such other plans and
agreements.
11. At-Will Employment. Nothing contained in this Agreement shall (a)
confer upon you any right to continue in the employ of the Company, (b)
constitute any contract or agreement of employment, or (c) interfere in any way
with the at-will nature of your employment with the Company.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
shall then constitute our agreement on this subject.
Sincerely,
ACLARA BIOSCIENCES, INC.
By: /s/ Thomas R. Baruch
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Its: Chairman
Agreed and Accepted,
this 10th day of October, 2002.
/s/ Joseph M. Limber
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Joseph M. Limber