Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS AGREEMENT between Mallinckrodt Group Inc., a New York
corporation (the "Company"), and Michael A. Rocca ("Executive"), is
made as of the 4th day of April, 1994, to become effective as provided
below;
WITNESSETH THAT:
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A. The Company wishes to attract and retain well-qualified
executive and key personnel and to assure itself of the continuity of
its management.
B. Executive is an officer or other key executive of the
Company with significant management responsibilities in the conduct of
its business.
C. The Company recognizes that Executive is a valuable resource
of the Company and the Company desires to be assured of the continued
services of Executive.
D. The Company is concerned that in the event of a possible or
threatened change in control of the Company, uncertainties necessarily
arise and Executive may have concerns about the continuation of his
employment status and responsibilities and may be approached by others
offering competing employment opportunities, and the Company therefore
desires to provide Executive assurance as to the continuation of his
employment status and responsibilities in such event.
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E. The Company further desires to assure that, if a
possible or threatened change in control should arise and Executive
should be involved in deliberations or negotiations in connection
therewith, Executive would be in a secure position to consider and
participate in such transaction as objectively as possible in the best
interests of the Company and to this end desires to protect Executive
from any direct or implied threat to his financial well being.
F. Executive is willing to continue to serve as
such but desires assurance that in the event of such a change in
control he will continue to have the employment status and
responsibilities he could reasonably expect absent such event and that
in the event this turns out not to be the case he will have fair and
reasonable severance protection on the basis of his service to the
Company to that time.
NOW, THEREFORE, it is hereby agreed by and between
the parties as follows:
1. Operation of Agreement.
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The "effective date of this Agreement" shall be the date on
which a change in control of the Company (as described in Section 2)
occurs. This Agreement shall not become effective, and the Company
shall have no obligation hereunder, if the employment of Executive
with the Company shall terminate for any reason prior to a change in
control of the Company. Executive shall have no right on account of
this Agreement to be retained in the employ of the Company or to be
retained in any particular position in the Company, unless and until a
change in control has occurred.
2. Change in Control.
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The term "change in control of the Company" shall mean, and
be deemed to have occurred, on the date of the first to occur of any
of the following:
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(a) there occurs a change in control of the Company of a
nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
or Item 1 of Form 8-K, promulgated under the Securities
Exchange Act of 1934 as in effect on the date of this
Agreement or, if neither item remains in effect, any
regulations issued under the Securities Exchange Act of
1934 which serve similar purposes;
(b) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is
or becomes a beneficial owner, directly or indirectly,
of securities of the Company representing 20% or more
of the combined voting power of the Company's then
outstanding securities except the event described in
this paragraph shall not be deemed to have occurred by
virtue of ownership of any securities of the Company by
the Company or by any employee benefit plan sponsored
by the Company;
(c) individuals who, on April 20, 1994, constitute the
Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a
majority thereof, provided that (i) any person becoming
a director subsequent to April 20, 1994, whose
election, or nomination for election, by the Company's
shareholders, was approved by a vote of at least
three-quarters of the directors comprising 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 paragraph (c), considered as though such person
were a member of the Incumbent Board, and (ii) in the
event that after April 20, 1994, the Board of Directors
by a vote of at least three-quarters of the directors
comprising the Incumbent Board shall have reduced or
enlarged the size of the Board of Directors or
recommended to shareholders such a reduction or
enlargement, upon such reduction or enlargement having
occurred, the Board of Directors as so reduced or
enlarged shall thereupon constitute the Incumbent Board
for all purposes including, without limitation, for the
purpose of determining what thereafter constitutes the
majority or three-quarters specified above;
(d) the Company shall have merged into or consolidated with
another corporation, or merged another corporation into
the Company, on a basis whereby less than 50% of the
total voting power of the surviving corporation is
represented by shares held by shareholders of the
Company prior to such merger or consolidation; or
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(e) the Company shall have sold all or, as determined by
the Board of Directors, substantially all of its assets
to another corporation or other entity or person.
3. Employment.
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The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the
Company, for the period commencing on the effective date of this
Agreement and ending on the last day of the month in which occurs the
third anniversary of the effective date of this Agreement (the
"Employment Period"). During the Employment Period, Executive shall
exercise such position and authority and perform such responsibilities
as are commensurate with the position and authority being exercised
and duties being performed by the Executive immediately prior to the
effective date of this Agreement, which services shall be performed at
the location where the Executive was employed immediately prior to the
effective date of this Agreement or at such other location as the
Company may reasonably require provided that the Executive shall not
be required to accept any such other location that he deems
unreasonable in the light of his personal circumstances. The
Executive agrees that during the Employment Period he shall devote his
full business time exclusively to his responsibilities as described
herein and shall perform faithfully and efficiently such
responsibilities and the responsibilities set forth in the Employee
Invention and Secrecy Agreement, attached to and made a part hereof as
Exhibit A.
4. Compensation and Benefits.
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During the Employment Period, the Executive shall receive
the following compensation and benefits:
(a) He shall receive an annual base salary which is not
less than his annual base salary immediately prior to
the effective date of this Agreement, with the
opportunity for increases, from time to time thereafter
which are in accordance with the Company's regular
executive compensation practices.
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(b) He shall be eligible to participate on a reasonable
basis, and to continue his existing participation, in
annual incentive, stock option, restricted stock,
long-term incentive performance, and any other
incentive compensation plan which provides
opportunities to receive compensation in addition to
his annual base salary which are the greater of (i) the
opportunities provided by the Company for executives
with comparable duties or (ii) the opportunities under
any such plans in which he was participating
immediately prior to the effective date of this
Agreement.
(c) He shall be entitled to receive and participate in
salaried employee benefits (including, but not limited
to, medical, life and accident insurance, investment,
stock ownership, and disability benefits) and
perquisites which are the greater of (i) the employee
benefits and perquisites provided by the Company to
executives with comparable duties or (ii) the employee
benefits and perquisites to which he was entitled or in
which he participated immediately prior to the
effective date of this Agreement.
(d) He shall be entitled to continue to accrue credited
service for retirement benefits and to be entitled to
receive retirement benefits under and pursuant to the
terms of the Company's qualified retirement plan for
salaried employees; the Company's supplemental
executive retirement plan if, on the effective date, he
is a participant in such plan; and, any successor or
other retirement plan or agreement in effect on the
effective date of this Agreement in respect of his
retirement, whether or not a qualified plan or
agreement, so that his aggregate monthly retirement
benefit from all such plans and agreements (regardless
when he begins to receive such benefit) will be not
less than it would be had all such plans and agreements
in effect immediately prior to the effective date of
this Agreement continued to be in effect without change
until and after he begins to receive such benefit.
5. Termination.
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The term "Termination" shall mean termination, prior to the
expiration of the Employment Period, of the employment of the
Executive with the Company for any reason other than death, disability
(as described below), cause (as described below), or voluntary
resignation (as described below).
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(a) The term "disability" means physical or mental
incapacity qualifying the Executive for long term
disability under the Company's long term disability
plan.
(b) The term "cause" means (i) the willful and continued
failure of the Executive to perform substantially his
duties with the Company (other than any failure due to
physical or mental incapacity) after a demand for
substantial performance is delivered to him by the
Board of Directors which specifically identifies the
manner in which the Board believes he has not
substantially performed his duties or (ii) willful
misconduct materially and demonstrably injurious to the
Company. No act or failure to act by the Executive
shall be considered "willful" unless done or omitted to
be done by him not in good faith and without reasonable
belief that his action or omission was in the best
interest of the Company. The unwillingness of the
Executive to accept any or all of a change in the
nature or scope of his position, authorities or duties,
a reduction in his total compensation or benefits, a
relocation that he deems unreasonable in light of his
personal circumstances, or other action by or request
of the Company in respect of his position, authority,
or responsibility that he reasonably deems to be
contrary to this Agreement, may not be considered by
the Board of Directors to be a failure to perform or
misconduct by the Executive. Notwithstanding the
foregoing, the Executive shall not be deemed to have
been terminated for cause for purposes of this
Agreement unless and until there shall have been
delivered to him a copy of a resolution, duly adopted
by a vote of three-quarters of the entire Board of
Directors of the Company at a meeting of the Board
called and held (after reasonable notice to the
Executive and an opportunity for the Executive and his
counsel to be heard before the Board) for the purpose
of considering whether the Executive has been guilty of
such a willful failure to perform or such willful
misconduct as justifies termination for cause
hereunder, finding that in the good faith opinion of
the Board the Executive has been guilty thereof and
specifying the particulars thereof.
(c) The resignation of the Executive shall be deemed
"voluntary" if it is for any reason other than one or
more of the following:
(i) The Executive's resignation or retirement is
requested by the Company other than for cause;
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(ii) Any other significant change in the nature or
scope of the Executive's position, authorities
or duties from those described in Section 3;
(iii) Any other reduction in his total compensation
or benefits from that provided in Section 4;
(iv) The breach by the Company of any other
provision of this Agreement; or
(v) The reasonable determination by the Executive
that, as a result of a change in control of
the Company and a change in circumstances
thereafter significantly affecting his
position, he is unable to exercise the
authorities and responsibilities attached to
his position and contemplated by Section 3.
(d) Termination that entitles the Executive to the payments
and benefits provided in Section 6 shall not be deemed
or treated by the Company as the termination of the
Executive's employment or the forfeiture of his
participation, award, or eligibility for the purpose of
any plan, practice or agreement of the Company referred
to in Section 4.
6. Termination Payments and Benefits.
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In the event of and within 30 days following Termination,
the Company shall pay to the Executive:
(a) His base salary and all other benefits due him as if he
had remained an employee pursuant to this Agreement
through the remainder of the month in which Termination
occurs less applicable withholding taxes and other
authorized payroll deductions;
(b) The amount equal to the target award for the Executive
under the Company's annual incentive compensation plan
for the fiscal year in which Termination occurs,
reduced pro rata for that portion of the fiscal year
not completed as of the end of the month in which
Termination occurs, provided that if the Executive has
deferred his award for such year under the plan, the
payment due the Executive under this Paragraph (b)
shall be paid in accordance with the terms of the
deferral; and
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(c) A lump sum severance allowance in an amount which is
equal to the sum of the amounts determined in
accordance with the following subparagraphs (i) and
(ii):
(i) an amount equivalent to twice his annual base
salary at the rate in effect immediately prior
to Termination; and
(ii) an amount equivalent to twice the average of
the annual incentive compensation received or
deferred by the Executive for the three (3)
fiscal years immediately prior to the fiscal
year in which Termination occurs.
7. Non-Competition and Confidentiality.
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The Executive agrees that:
(a) there shall be no obligation on the part of the Company
to provide any further payments or benefits (other than
payments or benefits already earned or accrued)
described in Section 6 if, when, and so long as the
Executive shall be employed by or otherwise engage in
any business which is competitive with any business of
the Company or of any of its subsidiaries, as such
business existed as of the effective date of this
Agreement, in which the Executive was engaged during
his employment, and if such employment or activity is
likely to cause or causes serious damage to the Company
or any of its subsidiaries; and
(b) during and after the Employment Period, he will not
divulge or appropriate to his own use or the use of
others any secret or confidential information
pertaining to the business of the Company or any of its
subsidiaries obtained during his employment by the
Company, it being understood that this obligation shall
not apply when and to the extent any of such
information becomes publicly known or available other
than because of his act or omission.
8. Arrangements Not Exclusive or Limiting.
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The specific arrangements referred to herein are not
intended to exclude or limit Executive's participation in other
benefits available to executive personnel generally, or to preclude or
limit other compensation or benefits as may be authorized by the Board
of Directors of the Company at any time, or to limit or reduce any
compensation or benefit to which Executive would be entitled but for
this Agreement.
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9. Enforcement Costs.
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The Company is aware that upon the occurrence of a change in
control, the Board of Directors or a stockholder of the Company may
then cause or attempt to cause the Company to refuse to comply with
its obligations under this Agreement, or may cause or attempt to cause
the Company to institute, or may institute, litigation seeking to have
this Agreement declared unenforceable, or may take, or attempt to
take, other action to deny Executive the benefits intended under this
Agreement. In these circumstances, the purpose of this Agreement
could be frustrated. It is the intent of the parties that Executive
not be required to incur the legal fees and expenses associated with
the protection or enforcement of his rights under this Agreement by
litigation or other legal action because such costs would
substantially detract from the benefits intended to be extended to
Executive hereunder, nor be bound to negotiate any settlement of his
rights hereunder under threat of incurring such costs. Accordingly,
if at any time after the effective date of this Agreement, it should
appear to Executive that the Company is or has acted contrary to or is
failing or has failed to comply with any of its obligations under this
Agreement for the reason that it regards this Agreement to be void or
unenforceable, or for any other reason, or that the Company has
purported to terminate his employment for cause or is in the course of
doing so in either case contrary to this Agreement, or in the event
that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation or other
legal action designed to deny, diminish or to recover from Executive
the benefits provided or intended to be provided to him hereunder, and
the Executive has acted in good faith to perform his obligations under
this Agreement, the Company irrevocably authorizes Executive from time
to time to retain
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counsel of his choice at the expense of the Company to represent him
in connection with the protection and enforcement of his rights
hereunder, including without limitation representation in connection
with termination of his employment contrary to this Agreement or with
the initiation or defense of any litigation or other legal action,
whether by or against the Executive or the Company or any director,
officer, stockholder or other person affiliated with the Company, in
any jurisdiction. The reasonable fees and expenses of counsel
selected from time to time by Executive as hereinabove provided shall
be paid or reimbursed to Executive by the Company on a regular,
periodic basis upon presentation by Executive of a statement or
statements prepared by such counsel in accordance with its customary
practices, up to a maximum aggregate amount of $200,000. Counsel so
retained by Executive may be counsel representing other officers or
key executives of the Company in connection with the protection and
enforcement of their rights under similar agreements between them and
the Company and unless, in his sole judgment, use of common counsel
could be prejudicial to him or would not be likely to reduce the fees
and expenses chargeable hereunder to the Company, the Executive agrees
to use his best efforts to agree with such other officers or
executives to retain common counsel.
10. Notices.
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Any notices, requests, demands and other communications
provided for by this Agreement shall be in writing and personally
delivered by hand or sent by registered or certified mail, if to the
Executive, to him at the last address he has filed in writing with the
Company or, if to the Company, to its corporate secretary at its
principal executive office.
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11. Non-Alienation.
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The Executive shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any amounts
provided under this Agreement, and no payments or benefits due
hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law. So long as the
Executive lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter
hereof.
12. Entire Agreement; Amendment.
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This Agreement constitutes the entire agreement of the
parties in respect of the subject matter hereof. No provision of this
Agreement may be amended, waived, or discharged except by the mutual
written agreement of the parties. The consent of any other person to
any such amendment, waiver or discharge shall not be required.
13. Successors and Assigns.
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This Agreement shall be binding upon and inure to the
benefit of the Company, its successors or assigns, by operation of law
or otherwise, including without limitation any corporation or other
entity or person which shall succeed (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially
all of the business and/or assets of the Company, and the Company will
require any successor, by agreement in form and substance satisfactory
to Executive, expressly to assume and agree to perform this Agreement.
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of Executive and his legal
representatives, heirs, and assigns, provided, however, that in the
event of Executive's death prior to payment or distribution of all
amounts, distributions, and benefits due him hereunder, each such
unpaid amount and distribution shall be paid in accordance with this
Agreement to the person or persons designated
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by Executive to the Company to receive such payment or distribution
and, in the event Executive has made no applicable designation, to the
person or persons designated by Executive as the beneficiary or
beneficiaries of proceeds of life insurance payable in the event of
Executive's death under the Company's group life insurance plan.
14. Governing Law.
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Except to the extent required to be governed by the law of
the State of New York because the Company is incorporated under the
laws of that state, the validity, interpretation, and enforcement of
this Agreement shall be governed by the law of whichever of the State
of Illinois or the State of New York that to the greater extent
permits or does not prevent the enforcement of this Agreement in
accordance with its terms.
15. Severability.
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In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
16. Counterparts.
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This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf,
and its corporate seal to be hereunto affixed and attested by its
Secretary or Assistant Secretary, all as of the day and year first
shown above written.
MICHAEL A. ROCCA
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Michael A. Rocca
Executive
Mallinckrodt Group Inc.
By C. RAY HOLMAN
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Its Chief Executive Officer
C. Ray Holman
(SEAL)
ATTEST:
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Secretary