Employment Agreement - Perkin-Elmer Corp. and Michael W. Hunkapiller
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of the 15th of September, 1994,
between THE PERKIN-ELMER CORPORATION, a New York corporation
having its principal place of business at Norwalk, Connecticut
(hereinafter referred to as the "Company") and Dr. Michael W.
Hunkapiller of 1333 Pebble Drive, San Carlos, CA 94070
(hereinafter referred to as the "Employee").
WHEREAS, the Employee has rendered and/or will render
valuable services to the Company and it is regarded essential by
the Company that it have the benefit of his services in future
years; and
WHEREAS, the Board of Directors of the Company believes that
it is essential that, in the event of the possibility of a change
in control of the Company, the Employee be able to continue his
attention and dedication to his assigned duties and to assess and
advise the Board of Directors whether such proposal would be in
the best interests of the Company and its shareholders without
distraction regarding an uncertainty concerning his future with
the Company; and
WHEREAS, the Employee is willing to agree to continue to
serve the Company in the future;
NOW, THEREFORE, it is mutually agreed as follows:
1. Employment. The Company agrees to employ the Employee,
and the Employee agrees to serve as an employee of the Company or
one or more of its subsidiaries during the Period of Employment
(as defined in Section 2 hereof) in such executive capacity as
Employee served immediately prior to the commencement of the
Period of Employment. The Employee also agrees to serve during
the Period of Employment, if elected or appointed thereto, as a
Director of the Board of Directors of the Company and as a member
of any committee of the Board of Directors.
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2. Period of Employment.
(a) The "Period of Employment" shall be the period of
thirty-six (36) months commencing on the date of a Change in
Control (as defined in Section 3 hereof) and the period of any
extension or extensions thereof in accordance with the provisions
of this Section. The Period of Employment shall be extended
automatically by one week for each week in which the Employee's
employment continues after the date of a Change in Control,
subject to the provisions of paragraph (b) hereof.
(b) Notwithstanding the provisions of paragraph (a)
hereof, the Period of Employment shall terminate upon the
occurrence of (i) the Employee's attainment of age 65, or the
election by the Employee to retire early from the Company under
any of its retirement plans, (ii) the death of the Employee,
(iii) the Disability of the Employee (as defined in Section 4
hereof), (iv) any other termination of Employee's employment with
the Company, regardless of whether for Cause (as defined in
Section 5 hereof), or for Good Reason (as defined in Section 9(c)
hereof) or not for Good Reason, or (v) the sixth anniversary of
the commencement of the Period of Employment.
(c) In the case of termination of the Period of
Employment pursuant to Section 2(b)(iv), "Termination Date" means
the date of receipt by the Employee or the Company of notice of
termination given by the other party, or such later date (but not
more than 30 days thereafter) as may be specified in such notice.
3. Change in Control. For purposes of this Agreement, a
"Change in Control" shall have occurred if an event occurs that
would be required to be reported (assuming such event has not
been "previously reported") in response to Item 1 (a) of the
Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15 (d) of the Securities Exchange Act
of 1934; provided that, without limitation, such a Change in
Control shall be deemed to have occurred at such time as (i) any
"person" within the meaning of section 14(d) of the Securities
Exchange Act of 1934 becomes the "beneficial owner" as defined in
Rule 13d-3 thereunder, directly or indirectly, of more than 25%
of the Company's Common Stock, (ii) during any two-year period,
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individuals who constitute the Board of Directors of the Company
(the "Incumbent Board") as of the beginning of the period cease
for any reason to constitute at least a majority thereof,
provided that any person becoming a director during such period
whose election or nomination for election by the Company's
stockholders was approved by a vote of at least three-quarters of
the Incumbent Board (either by a specific vote or by approval of
the proxy statement of the Company in which such person is named
as a nominee for director without objection to such nomination)
shall be, for purposes of this clause (ii), considered as though
such person were a member of the Incumbent Board, or (iii) the
approval by the Company's stockholders of the sale of all or
substantially all of the assets of the Company.
4. Disability. For purposes of this Agreement,
"Disability" means the absence of the Employee from his duties
with the Company on a full-time basis for one hundred eighty
(180) consecutive days as a result of incapacity due to physical
or mental illness.
5. Cause. For purposes of this Agreement, termination by
the Company of the employment of the Employee for "Cause" shall
mean termination upon (i) the willful and continued failure by
the Employee to perform substantially his duties with the Company
(other than any such failure resulting from the Employee's
incapacity due to physical or mental illness) after a demand for
a substantial performance is delivered to the Employee by the
Chairman of the Board or President of the Company which
specifically identifies the manner in which such executive
believes that the Employee has not substantially performed his
duties, or (ii) the willful engaging by the Employee in illegal
conduct which is materially and demonstrably injurious to the
Company. For purposes of this Section 5, no act, or failure to
act, on the part of the Employee shall be considered "willful"
unless done, or omitted to be done, by the Employee in bad faith
and without reasonable belief that the Employee's action or
omission was in, or not opposed to, the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Employee in
good faith and in the best interests of the Company.
Notwithstanding the foregoing, the Employee shall not be deemed
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to have been terminated for Cause unless and until there shall
have been delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board
called and held for the purpose (after reasonable notice to the
Employee and an opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good faith
opinion of the Board the Employee was guilty of the conduct set
forth above in (i) or (ii) of this Section 5 and specifying the
particulars thereof in detail.
6. Duties During the Period of Employment. The Employee
shall devote his full business time, attention and best efforts
to the affairs of the Company and its subsidiaries during the
Period of Employment; provided, however, that the Employee may
engage in other activities, such as activities involving
charitable, educational, religious and similar types of
organizations, speaking engagements, membership on the board of
directors of other organizations, and similar type activities to
the extent that such other activities do not prohibit the
performance of his duties under this Agreement, or inhibit or
conflict in any material way with the business of the Company and
its subsidiaries.
7. Current Cash Compensation.
(a) Base Annual Salary. The Company will pay to
the Employee during the Period of Employment a base annual salary
in an amount determined by the Board of Directors or its
Compensation Committee which shall in no event be less than the
higher of (i) his base annual salary prior to the commencement of
the Period of Employment or (ii) his base annual salary during the
preceding year of the Period of Employment; provided, however, it
is agreed between the parties that the Company shall review
annually, and in light of such review may, in the discretion of
the Board of Directors or its Compensation Committee, increase
such Base Annual Salary taking into account the Employee's
responsibilities, inflation in the cost of living, increases in
compensation of other executives of the Company and its
subsidiaries, increase in salaries of executives of other
corporations, performance by the Employee, and other pertinent
factors. The Base Annual Salary shall be paid in substantially
equal biweekly installments during the Period of Employment.
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(b) Incentive Compensation. During the Period of
Employment the Employee shall continue to participate in such of
the Company's incentive compensation programs for executives that
he participated in prior to the commencement of the Period of
Employment. Any amount awarded to the Employee under such
programs shall be paid to Employee in accordance with the terms
thereof.
8. Employee Benefits.
(a) Vacation and Sick Leave. The Employee shall be
entitled to a paid annual vacation of not less than four (4)
weeks during each calendar year in the Period of Employment and
to reasonable sick leave.
(b) Regular Reimbursed Business Expenses. The Company
shall reimburse the Employee for all expenses and disbursements
reasonably incurred by the Employee in the performance of his
duties during the Period of Employment.
(c) Employee Benefit Plans or Arrangements. In
addition to the cash compensation provided for in Section 7
hereof and the benefits provided in this Section, the Employee,
during the Period of Employment, subject to meeting eligibility
provisions and to the provisions of this Agreement, shall be
entitled to participate in all employee benefit plans or
arrangements of the Company as presently in effect or as they may
be modified or added to by the Company from time to time, which
provide benefits to officers or employees of the Company. For
purposes of this Agreement, such benefit plans or arrangements,
herein "Benefit Plans", shall mean any compensation plan such as
an incentive, deferred, stock option or restricted stock plan or
any employee benefit plan such as a thrift, pension, profit
sharing, medical, dental, disability, salary continuation,
accident, life insurance plan or a relocation plan or policy or
any other plan, program or policy of the Company intended to
benefit employees.
9. Termination of Employment.
(a) Termination by the Company for Cause or
Termination by the Employee Other Than for Good Reason. If the
Company terminates the employment of the Employee for Cause (as
defined in Section 5 hereof), or if the Employee terminates his
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employment other than for Good Reason (as defined in paragraph
(c) of this Section) the Company will pay the Employee (i) his
Base Annual Salary, as provided in paragraph (a) of Section 7
hereof, through the end of the month in which the Termination
Date occurs, (ii) any Incentive Compensation payable to him
pursuant to paragraph (b) of Section 7 hereof, including a pro
rata share for any partial year, (iii) any accrued vacation pay,
and (iv) any benefits payable to him pursuant to the Company's
employee benefit plans and arrangements as provided in paragraph
(c) of Section 8 hereof through the end of the month in which the
Termination Date occurs.
(b) Termination by the Company Without Cause or by the
Employee for Good Reason. If the Company terminates the
Employee's employment with the Company without Cause, or if the
Employee terminates his employment with the Company for Good
Reason, the Company will pay or provide to the Employee the
following:
(i) The Company will pay to the Employee within
thirty (30) days after the Termination Date a lump
sum equal to (x) times (y), where (x) equals the
Employee's Base Annual Salary; and (y) equals the
greater of either (A) one year, or (B) the number
of years, including partial years, remaining in
the Period of Employment as of the Employee's
Termination Date.
(ii) The Company will pay to the Employee within
thirty (30) days after the Termination Date a lump
sum equal to (x) times (y), where (x) equals the
Employee's average annual Incentive Compensation
paid for the two calendar years immediately
preceding the calendar year in which occurs (A)
the Termination Date, or (B) the first day of the
Period of Employment, whichever is higher; and (y)
equals the greater of either (A) one year, or (B)
the number of years, including partial years,
remaining in the Period of Employment as of the
Employee's Termination Date.
(iii) For a period of three years immediately
following his Termination Date, the Employee and
his family shall continue to participate in all
employee Benefit Plans of the Company (as defined
in Section 8(c) hereof) in which he or his family
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participated at any time during the one-year
period ending on the date immediately preceding
his Termination Date, provided that (a) such
continued participation is possible under the
terms of such Benefit Plans, and (b) the Employee
continues to pay contributions for such
participation at the rates paid for similar
participation by active Company employees in
similar positions to that held by the Employee
immediately prior to the Termination Date. If
such continued participation is not possible, the
Company shall provide, at its sole cost and
expense, identical benefits to the Employee plus
pay an additional amount to the Employee equal to
the Employee's liability for federal, state and
local income taxes on such amounts.
The amounts payable to the Employee under this paragraph (b)
shall be absolutely owing and shall not be subject to reduction
or mitigation as a result of employment of the Employee elsewhere
after the Termination Date.
(c) Good Reason. Termination by the Employee of
employment for "Good Reason" shall mean termination based on:
(i) an adverse change in the status of the
Employee (other than any such change primarily
attributable to the fact that the Company may no
longer be publicly owned) or position(s) as an
officer of the Company as in effect immediately
prior to the commencement of the Period of
Employment or the assignment to the Employee of
any duties or responsibilities which, in his
reasonable judgement, are inconsistent with such
status or position(s), or any removal of the
Employee from or any failure to reappoint or
reelect him to such position(s) (except in
connection with the termination of the Employee's
employment for Cause, Disability or upon attaining
age 65 or upon taking early retirement under any
of the Company's retirement plans, or as a result
of death or by the Employee other than for Good
Reason);
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(ii) a reduction by the Company in the Employee's
Base Annual Salary;
(iii) a material reduction in the Employee's total
annual compensation; a reduction for any year of
over 10% of total compensation measured by the
preceding year without a substantially similar
reduction to all other executives participating in
incentive compensation plans shall be considered
"material", provided, however, the failure of the
Company to adopt or renew a stock option plan or
to grant stock options to the Employee shall not
be considered a reduction;
(iv) the failure by the Company to continue in
effect any Benefit Plan (as defined in Section
8(c) hereof) in which Employee was participating
at the time of the Change in Control (or Benefit
Plans providing Employee with at least
substantially similar benefits) other than as a
result of the normal expiration of any such
Benefit Plan in accordance with its terms as in
effect at the time of the Change in Control, or
the taking of any action, or the failure to act,
by the Company which would adversely affect
Employee's continued participation in any such
Benefit Plans on at least as favorable a basis to
Employee as is the case on the date of the Change
in Control or which would materially reduce
Employee's benefits in the future under any of
such Benefit Plans or deprive Employee of any
material benefit enjoyed by Employee at the time
of the Change in Control;
(v) the failure by the Company to provide and
credit Employee with the number of paid vacation
days to which Employee was then entitled in
accordance with the Company's normal vacation
policy as in effect immediately prior to the
Change in Control; or
(vi) the Company's requiring the Employee to be
based more than fifty miles from Norwalk,
Connecticut, except for required travel on the
Company's business to an extent substantially
consistent with the business travel obligations
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which he undertook on behalf of the Company prior
to the commencement of the Period of Employment.
10. Governing Law. This Agreement is governed by, and is
to be construed and enforced in accordance with, the laws of the
State of Connecticut. If under such law any portion of this
Agreement is at any time deemed to be in conflict with any
applicable statute, rule, regulation or ordinance, such portion
shall be deemed to be modified or altered to conform thereto or,
if that is not possible, to be omitted from this Agreement; and
the invalidity of any such portion shall not affect the force,
effect and validity of the remaining portion hereof.
11. Notices. All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person
(in the Company's case, to its Secretary) or seventy-two (72)
hours after deposit thereof in the U.S. mails, postage prepaid,
for delivery as registered or certified mail -- addressed, in the
case of the Employee, to him at this residential address, and in
the case of the Company, to its corporate headquarters, attention
of the Secretary, or to such other address as the Employee or the
Company may designate in writing at any time or from time to time
to the other party. In lieu of personal notice or notice by
deposit in the U.S. mail, a party may give notice by telegram,
fax or telex.
12. Miscellaneous. This Agreement constitutes the entire
understanding between the Company and the Employee relating to
the employment of the Employee by the Company and cancels all
prior written and oral agreements and understandings with respect
to the subject matter of this Agreement. This Agreement may be
amended only by a subsequent written agreement of the Employee
and the Company. This Agreement shall be binding upon and shall
inure to the benefit of the Employee, his heirs, executors,
administrators, beneficiaries and assigns and to the benefit of
the Company and its successors. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall terminate if
Employee or the Company terminate Employee's employment prior to
a Change in Control of the Company.
13. Fees and Expenses/Arbitration.
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(a) The Company shall pay all reasonable legal fees
and related expenses incurred by the Employee in connection with
the Agreement following a Change in Control of the Company,
including, without limitation, all such fees and expenses, if
any, incurred in connection with: (i) contesting or disputing
any termination of the Employee's employment hereunder; or (ii)
the Employee seeking to obtain or enforce any right or benefit
provided by the Agreement.
(b) Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Connecticut by three arbitrators in accordance
with the rules of the American Arbitration Association then in
effect. Judgement may be entered on the arbitrator's award in
any court having jurisdiction; provided, however, that Employee
shall be entitled to seek specific performance of Employee's
right to be paid until the Termination Date during the pendency
of any dispute or controversy arising under or in connection with
this Agreement. The Company shall bear all costs and expenses
arising in connection with any arbitration proceeding pursuant to
this Section 13(b).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the year and day first above written.
THE PERKIN-ELMER CORPORATION
By: /s/ G. N. Kelley
Gaynor N. Kelley
Chairman and
Chief Executive Officer
ATTEST:
By: /s/ W. B. Sawch ACCEPTED AND AGREED:
William B. Sawch
Vice President
General Counsel & Secretary
/s/ Michael W. Hunkapiller
Dr. Michael W. Hunkapiller
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