EXHIBIT 10.4
EXECUTIVE EMPLOYMENT ACREEMENT, AS AMENDED
This Executive Employment Agreement (the "Agreement") is entered into
effective as of February 1, 2000 (the "Effective Date"), as amended October
16, 2000, between Timothy Surgenor (the "Executive") resident at 201
Claybrook Road, Dover, MA 02030 and Haemonetics Corporation (the
"Company"), a Massachusetts corporation with its principal executive
offices at 400 Wood Road, Braintree, Massachusetts 02184.
ARTICLE 1. EMPLOYMENT OF EXECUTIVE
1.1 Employment. Subject to the terms and conditions of this
Agreement, the Company agrees to employ Executive in a full time capacity
to serve as Executive Vice President of the Company and to perform such
specific duties as any reasonably be assigned to Executive from time to
time by the Company's President and Chief Executive Officer for the period
commencing on the Effective Date and continuing until terminated as herein
provided. Executive hereby accepts such employment for the term hereof. The
parties acknowledge that Executive will be a candidate for the position of
CEO of the Company, at a future date not yet known, and that the final
decision regarding who to appoint as CEO as well as regarding all terms and
conditions of employment as CEO shall be determined exclusively by the
Haemonetics Board of Directors or its delegate.
1.2 Full Time Commitment. During the period of Executive's
employment with the Company, Executive will, unless prevented by ill
health, devote his whole attention and business time to the performance of
his duties hereunder for the business of the Company.
ARTICLE 2. COMPENSATION
For all services to be rendered by Executive to the Company pursuant
to this Agreement, the company shall pay to Executive the compensation and
provide for Executive the benefits set forth below:
2.1 Base Salary. The Company shall pay to Executive a base salary
at the rate of $260,000 per annum for one year, which will be reviewed for
a potential change, as of April 1, 2001 and annually thereafter. In
addition, the Executive will have a bonus plan, paid quarterly, based on
the achievement of performance objectives. For Q4 of FY00, the bonus plan
shall pay $25,000 at 100% achievement of objectives. If Executive commences
employment by at least February 1, 2000, Executive shall receive 100% of
the Q4 bonus. For FY01, the bonus plan shall pay $100,000 at 100%
achievement of objectives, and for FY01 only Executive shall be guaranteed
a minimum bonus pay out of $75,000. Executive's bonus plan will be reviewed
annually to correspond with the date of Executive's base salary review.
2.2 Fringe Benefits. During the term of Executive's employment
hereunder the Company shall provide Executive with such benefits as are
generally made available by the company to its other full time executive
employees, including reasonable travel expenses incurred while engaged in
Company business.
2.3 Participation In Share Option Plan. Executive shall be entitled
to participate in the Company's Non-Qualified Stock Option Plan (the
"Plan") as approved from time to time by the Board of Directors.
2.4 Option Grant. Upon execution of this Agreement, Executive shall
receive 250,000 non-qualified stock options for common stock of the Company
at the NYSE average daily price on the date on which the compensation
committee executes the vote not to be later than the date of the next board
meeting. All such options shall vest 25% per year over four years, with the
first 25% to vest 12 months after the respective dates of grant, and
additional 25% vesting to occur on each of the next three 12 month
anniversaries of the respective dates of grant.
ARTICLE 3. TERMINATION
3.1 Term. Unless earlier terminated as herein provided, Executive's
employment shall commence on February 1, 2000 and continue for an initial
period ending on January 30, 2001. Executive's employment with the company
shall automatically be renewed on a year-to-year basis unless either party
notifies the other party otherwise at least ninety (90) days prior to
termination of the initial term or of any renewal term.
3.2 Termination for Cause - by the Company. The Company may
terminate Executive's employment for "Cause" upon the occurrence of any of
the following events:
(i) Executive shall have engaged in (A) any misappropriation
of funds, properties or assets of the Company, (B) any malicious
damage or destruction of any property or assets of the Company,
whether resulting from Executive's willful action or omissions or
negligence, or (C) any falsification of any books, records, documents
of systems of the Company.
(ii) Executive shall (A) have been convicted of a crime
involving moral turpitude or constituting a felony, or (B) commit or
knowingly allow to be committed any illegal action on any premises
of, or involving any property or assets of, the Company.
3.3 Termination for Cause - by Executive. Executive may terminate
his employment with the Company for "Cause" upon the occurrence of any of
the following events:
(i) the Company shall breach any of the material provisions
of the Agreement and such breach shall remain uncured by or on behalf
of the company within thirty (30) days following its receipt of
notice from the Executive, which specifically identifies the manner
in which it is alleged that Company committed such breach;
(ii) the Company shall fail to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 3.4;
(iii) a materially adverse change in the responsibilities
assigned to Executive by the Company or in the compensation and
benefits paid by Company to the Executive shall have occurred and
such material adverse change shall remain uncured by or on behalf of
the Company within thirty (30) days following its receipt of notice
from Executive specifically identifying such material adverse change;
or
(iv) a materially adverse change in Executive's title shall
have occurred. Executive's continued employment shall not constitute
consent to, or waiver of rights with respect to, any circumstance
constituting a Cause for termination by the Executive or the Company.
"Materially adverse change" in responsibilities or title, as used in
Sections 3.3 (iii) and (iv) hereof, shall not be construed to include
Executive's failure to be promoted to the position of CEO of the
Company.
3.4 Chance in Control. If following a "Change in Control" (as
defined below). Executive's full time position with the Company is
eliminated or permanently transferred to a location other than its present
location, and following such elimination or transfer, the Company does not
offer to employ Executive in a comparable or better posit ion in his
current location, on a full-time basis, at a comparable or better rate of
pay, then Executive shall be entitled to severance payments and benefits in
accordance with Article 4 below, provided however that severance payments
shall be made in lump sum, and in an amount which equals two (2) times then
current Base Salary. For purposes of this Agreement. a "Change in Control"
shall mean 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 promulgated under the Securities Exchange Act of 1"4, as
amended (the "Exchange Act"), whether or not the Company is, in fact,
required to comply therewith; provided that, without limitation, such a
change in control for purposes of this Agreement shall be deemed to have
occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or
other fiduciary holding securities under an; employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the
stockholder of the Company in substantially the same proportions as
their ownership of stock of the Company is or becomes the "beneficial
owner" (as defined in Rule I 3d-3 under the Exchange Act), directly
or indirectly, of securities of the company representing 51% or more
of the combined voting power of the Company's then outstanding
securities;
(ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least
50% of the combined voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement
a recapitalization of the company (or similar transaction) in which
no "person" (as herein above defined) acquires 50% or more of the
combined voting power of the Company's then outstanding securities;
or
(iii) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
3.5 Death. In the event of the death of Executive, Executive's
employment by the Company shall automatically terminate as of the date of
his death.
3.6 Disability. In the event of the Disability of the Executive, as
defined herein, the Company may terminate Executive's employment hereunder
upon written notice to Executive. The term "Disability" shall mean the
inability of Executive to perform substantially his material duties
hereunder due to physical or mental disablement which continues for a
period of one hundred eighty (180) consecutive days, as determined by an
independent qualified physician mutually acceptable to the Company and
Executive (or his personal representative) or, if the Company and Executive
(or such representative) are unable to agree on an independent qualified
physician, as determined by a panel of three physicians, one designed by
the Company, one designated by Executive (or his personal representative)
and one designate by the two physicians so designated.
ARTICLE 4. SEVERANCE PAYMENTS AND BENEFITS
4.1 Termination Events Resulting in Severance Payments. In the
event of the termination of the Executive's employment:
(i) by the company without "Cause," or
(ii) under Section 3.3,
then the Company shall pay Executive, as a severance payment, an
amount equal to Executive's annual base salary as set forth in section 2.1
and such payment shall be made; in twelve (12) equal monthly payments
during the period commencing on the date such termination occurs (the
"Termination Date") and ending one (1) year thereafter (the "Severance
Period"), together with a one time average bonus over the preceding 3
years, made in twelve (12) equal monthly payments commending on the date
such termination occurs and ending one (1) year thereafter.
4.2 Benefits. If Section 4.1 is applicable, the Company shall also
provide to Executive during the Severance Period, at the Company's expense,
such benefits as are in effect and applicable to Executive as of the
Termination Date, except to the extent expressly prohibited by the terms of
such benefits.
4.3 Comparable Benefits: Continuation of Benefits. If by operation
of law or under the terms of the relevant plan, program or policy,
Executive is not eligible to receive any of the payments or benefits
described in the foregoing Section 4.2 during the Severance Period, then
the Company shall provide to Executive substantially equivalent benefits
or, at Executive's election, the cash value of equivalent benefits.
ARTICLE 5. PROPRIETARY INFORMATION AND NON-COMPETITION
5.1 For the purposes of this Article, the following shall have the
designated meanings.
5.1.1. Proprietary Information: Information of value to the
Company and not generally available to the public of whatever kind of
nature disclosed to the Executive or known by the executive (whether
or not invented, discovered or developed by the Executive) as a
consequence of or through the Executive's employment with the
Company. Proprietary Information shall include information relating
to the design, manufacture, application, know-how, research and
development
relating to the Company's products, sources of supply and; materials,
operating and other cost data, lists of present, past, or prospective
customers, customer proposals, price lists and data relating to
pricing of the Company's products or services, and shall specifically
include all information contained in manuals, memoranda, formulae,
plans, drawings and designs, specifications, supply sources, and
records of the Company legended or otherwise identified by the
company as Proprietary Information, whether learned by the Executive
prior to or after the date hereof.
5.1.2 Concepts and Ideas: Those concepts and ideas known to the
Executive relating to the Company's present prospective activities
and products.
5.1.3 Inventions: Discoveries and developments, whether or not
patentable. Such terms shall not be limited to the meaning of
"invention" under the United States Patent Laws.
5.2 All Inventions which are at any time "made" i.e., conceived or
reduced to practice by the Executive, and all Concepts and Ideas held by
Executive, acting alone or in conjunction with others, during or in
connection with the Executive's employment (or, as to Inventions, if based
on or related to Proprietary Information, "made" by the Executive within
twelve (12) months after the termination of such employment) shall be the
property of the Company, free of any reserved or other rights of any kind
on the Executive's part in respect thereof.
5.3 The Executive will promptly make full disclosure to the Company
in writing to the Manager of Engineering or the Manager of Research and
Development of any such Inventions and Concepts and Ideas. Further, the
Executive will, at the Company's costs and expense, promptly execute formal
applications for patents and also do all other acts and things (including,
among other, the execution and delivery of instruments of further assurance
or confirmation) deemed by the Company to be necessary or desirable at any
time or times in order to effect the full assignment to the company of all
right and title to; such Inventions and Concepts and Ideas, without, during
the term of this Agreement, further compensation. The absence of a request
by the Company for information, or for the making of an oath, or for the
execution of any document, shall in no way be construed to constitute a
waiver of the Company's rights under this Agreement.
5.4 Except as required by the Executive's duties hereunder, the
Executive will not, directly or indirectly, use, publish, disseminate, or
otherwise disclose any Proprietary Information, Concepts and Ideas or
Inventions without the prior written consent of the Company.
5.5 All documents, procedural manuals, guides, specifications,
plans, drawings, designs and similar materials, lists of present, past or
prospective customers, customer proposals, invitations to submit proposals,
price lists and data relating to pricing of the Company's products and
services, records, notebooks and similar repositories of or containing
Proprietary Information and Inventions, including all copies thereof, that
come into the Executive's possession or control by reasons of the
Executive's employment, whether prepared by the Executive or others, are
the property of the Company, will not be used by the Executive in any way
adverse to the Company, will not be removed from the Company's premises
except as the Executive's normal duties require and, at the termination of
the Executive's employment with the company, will be left with or forthwith
returned by the Executive to the Company.
5.6 During the time the Executive is an employee of the Company and
for a period of one (1) year thereafter, the Executive will not engage in
any activity, on his own behalf or on behalf of any competitor of the
Company, which is in the field of blood processing and involves activities
similar to those performed at the Company, nor will the Executive endeavor
to entice away from the Company any employee whether on the Executive's
behalf or on the behalf of another while the Executive is an employee and
for a period of one (1) year thereafter.
ARTICLE 6. MISCELLANEOUS
6.1 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall e deemed to be one and the same instrument.
6.2 Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs,
successors and assigns. If Executive should die while any amount due to him
at such time remains unpaid, such amount, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his
devisee, legatee or other designee or if there is no such designee, to his
estate.
6.3 Assignment. Except as otherwise provided in Section 5.4,
neither this Agreement nor any rights or obligations hereunder shall be
assignable by either party hereto without the prior written consent of the
other party.
6.4 Obligation of the Company's Successors. Any successor to the
business of the Company, whether directly or indirectly by merger,
consolidation, recapitalization, combination, purchase of stock, purchase
of assets or otherwise, shall succeed to the rights and obligations of the
Company hereunder. The Company will require any such successor to expressly
assume and agree to perform this Agreement in the same a manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.
6.5 Notices. All notices, requests, demands and other
communications to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given if delivered by hand or mailed
by registered or certified mail, return receipt requested, postage prepaid,
as follows:
If to the Company, to:
Haemonetics Corporation
400 Wood Road
Braintree, MA 02184
Attn: James L. Peterson, President
If to Executive, to: 201 Claybrook Road
Dover, MA 02030
or such other address as either party hereto shall have designated by
notice in writing to the other party.
6.6 Amendments. 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 Executive 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 the 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.
6.7 Governing Law. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
6.8 Dispute Resolution. Any dispute, controversy or claim arising
out of or relating to this Agreement or the performance by the parties of
its terms, shall be settled by; binding arbitration held in Boston,
Massachusetts in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. The arbitrator shall have
the authority to award relief under legal or equitable principles,
including interim or preliminary relief Each party shall bear its/his own
attorneys fees and expenses.
6.9 Severability. In case of any provision hereof shall, for any
reason, be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof,
and this Agreement shall be construed as if such invalid or unenforceable
provision had not been included herein. If any provision hereof shall, for
any reason, be held by a court to be excessively broad as to duration,
geographical scope, activity or subject matter, it shall be construed by
limiting and reducing it to make it enforceable to the extent compatible
with applicable law then in effect.
6.10 Withholding. Any payments provided for hereunder shall be paid
after deducting any applicable withholding required under federal, state or
local law.
6.11 Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein, and supersedes the provisions of all prior agreements, promises,
covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any
party hereto with respect to the subject matter hereof, with the exception
of the offer letter dated December 10, 1999, points 5 (providing for four
weeks of annual vacation) and 7 (providing for a Company leased
automobile). A copy of the offer letter is attached hereto. 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.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement under seal as of the date first above written.
s/ Timothy Surgenor s/ James L. Peterson
_____________________________ ______________________________
Timothy Surgenor James L. Peterson
President, CEO
Haemonetics Corporation