Mr. Eugene G. Banucci
You and ATMI, Inc. agree that it is in our mutual best interest to amend your Employment Agreement with the Company dated September 19, 2005 as follows:
2.3 You shall have the right to terminate your employment for “Good Reason,” which shall mean a resignation of your employment and your Separation from Service (as defined for purposes of §409A of the Internal Revenue Code) within less than two years following the initial existence of one or more of the following conditions arising without your consent:
(b) any other material breach by the Company of any of its obligations to you under this Agreement; or
(d) any failure of the Company to have any successor to all or substantially all of the business and properties of the Company assume all of the liabilities and obligations of the Company under this Agreement (and any stock option or restricted stock agreement referred to herein, unless such awards have fully vested);
provided, in each case, that a prior written notice specifying the reasons within ninety (90) after the initial existence of the condition and an opportunity to cure such condition (if curable) shall be afforded the Company, and that “Good Reason” shall exist only if the Company shall fail to cure such condition within 31 days after its receipt of such prior written notice. In addition, until your actual Separation from Service you must remain willing and able to continue to perform services in accordance with the terms of this Agreement and you must not be in breach of any of your obligations hereunder.
2. | Section 2.5 of your Employment Agreement shall be amended in its entirety to read as follows: |
2.5 Subject to Section 2.7 and in addition to any amounts specified in Section 2.8, in the event of the termination of your employment pursuant to Section 2.2(b) or Section 2.3 under circumstances that constitute a Involuntary Separation from Service with the Company (as defined for purposes of §409A of the Internal Revenue Code), or in the event of your death or your Disability (as defined for purposes of Code §409A), the Company shall pay to you or your estate (as the case may be) an amount equal to the amount of Base Salary (as of the date of your Separation from Service, death or Disability) that would have been paid to you had you completed the Term of this Agreement. Payment of this separation pay benefit shall be made in a single lump sum within 60 days after your Separation from Service, death or Disability, provided that in no event shall you have the right to designate the year of payment, and in no event shall payments be accelerated, nor shall you be eligible to defer the payment to a later date.
In addition, if you elect COBRA continuation of your medical and/or dental insurance benefits, until the earlier of the time you are no longer eligible for COBRA coverage or June 5, 2008, the Company shall contribute to cost of such benefits on the same basis the Company would have contributed to the cost of your coverage had you continued to be an active employee of the Company.
3. | Section 2.6 of your Employment Agreement shall be amended in its entirety to read as follows: |
2.6 Subject to Section 2.7 and in addition to amounts specified in Section 2.5, in the event of the termination of your employment pursuant to either Section 2.2(b) (termination by the Company without Cause) or Section 2.3 (termination by you for Good Reason) under circumstances that constitute a Involuntary Separation from Service with the Company (as defined for purposes of §409A of the Internal Revenue Code) and within 548 days after a “change in control” of the Company:
(a) (i) unless the Board determines otherwise pursuant to clauses (ii) or (iii) of Section 10 of the ATMI, Inc,. 2003 Stock Plan (the “2003 Plan”) (relating to the Board’s discretion to cash out or require the exercise of all vested and unvested options in connection with the change in control) or a comparable provision of any other plan, which in no event may cause the forfeiture of unvested options, all stock options held by you to purchase shares of the
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Company common stock shall become fully vested and immediately exercisable and shall remain exercisable for no less than one year after such termination, notwithstanding the vesting and exercise provisions of any stock option award agreement concerning such options but subject to the expiration date provided in such option agreement without regard to a termination of employment, and (ii) all restricted stock issued to you in connection with your employment shall be fully vested notwithstanding the vesting provisions of any restricted stock agreement concerning such restricted stock; and
(b) you will be entitled at a minimum to the target amount under any bonus plans then in effect as if fully earned, which amount shall be paid to you within two and one-half months after the end of the year in which your Separation from Service occurs.
To the extent that the vesting of all or some of your restricted stock, as provided in the preceding sentence, is not permitted under Section 7.3 of the ATMI Inc. 2003 Stock Plan (the “2003 Plan”) or a comparable provision of any other plan under which such shares are granted, such shares shall not vest. In lieu thereof, the Company will pay you within ten (10) days after your Separation from Service an amount in cash equal to the fair market value as of the date of your termination of employment of those restricted shares that do not vest, determined pursuant to Section 6.1(c) of the 2003 Plan or a comparable provision of any other plan under which such shares are granted.
Benefits payable under this Section 2.6 or Section 2.5 or Section 2.8 upon or following a change in control may subject you to an excise tax on “excess parachute payments” under Section 4999 of the Internal Revenue Code. The Company will reimburse you for any such excise tax imposed on a “fully grossed up basis,” such that you will receive the same net amount (after payment of all income, employment and excise taxes imposed with respect to such benefits and such tax reimbursements, and of any interest or penalties relating to any such excise taxes or to the income tax due on any such tax reimbursements (other than interest or penalties arising as a result of your failure to timely pay such excise or income taxes with respect to which you had previously received reimbursement)) as you would have received if such excise tax had not been imposed in the first place. Such reimbursement payment shall be made, if at all, by the end of the calendar year following the calendar year in which you remit the relevant taxes to the applicable tax authorities and in accordance with Treasury Regulation Section 1.409A-3(i)(1)(v).
With respect to any payments made pursuant to this Section 2.6, in no event shall you have the right to designate the year of payment.
For purposes of this Section 2.6, a “change in control” of the Company shall be deemed to have taken place if: (i) a third person, including a “person” as defined in Section 13(d)(3) of the Securities Exchange Act, becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act), directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the total number of votes
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that may be cast for the election of the directors of the Company; (ii) as the result of, or in connection with, any tender or exchange offer, merger, consolidation or other business combination, sale of assets or one or more contested elections, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Company immediately prior to the Transaction shall cease to constitute a majority of the Board of Directors of the Company or of any successor to the Company; (iii) the sale of all or substantially all of the assets of the Company (on a consolidated basis) in one or more related transactions to a person other than such a sale to a subsidiary of the Company which does not involve a change in the equity holdings of the Company; or (iv) the following individuals cease, for any reason (other than an act of God), to constitute a majority of the number of directors of the Company then serving: individuals who, on the Effective Date, constitute the Board of Directors of the Company 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 of Directors of the Company or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment or election or nomination for election was previously so approved.
4. | Section 10.3 of the Employment Agreement is amended to provided that any notices shall be sent as follows: |
If to the Company:
ATMI, Inc.
7 Commerce Drive
Danbury, CT 06810
Facsimile No. (203) 797-2544
Attention: Chief Legal Officer
If to you:
20 Shore Road
Danbury, CT 06810
Except as expressly amended herein, all provisions of the Employment Agreement remain in full force and effect.
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If you concur with all of the above, please indicate your agreement by signing and dating a copy of this letter in the spaces indicated below.
ATMI, Inc.
By: /s/ Douglas A. Neugold
Name: Douglas A. Neugold
Title: Chief Executive Officer
Acknowledged and Accepted:
/s/ Eugene G. Banucci
EUGENE G. BANUCCI
Date: April 14, 2008
