EXHIBIT 10.5
EXECUTIVE EMPLOYMENT AGREEMENT AS AMENDED
This Executive Employment Agreement (the "Agreement") is entered into
effective as of August 30, 2000 (the "Effective Date"), and amended as of
August 31, 2001, between Thomas D. Headley (the "Executive") a resident at
83 Westgate Road, Wellesley, Massachusetts 02481, 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 Approval by Stockholders of Transfusion Technologies
Corporation. This Agreement shall be binding upon the parties hereto only
upon approval of the payments and benefits to be provided hereunder by the
stockholders of Transfusion Technologies Corporation by a vote satisfying
the shareholder approval requirements of Section 280G(b)(5)(B) of the
Internal Revenue Code of 1986, as amended (the "Shareholder Approval"), and
upon the closing described in 1.2 below. Without such Shareholder Approval
and closing, this Agreement shall be null and void and no payments hereunder
shall be made.
1.2 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 may reasonably be assigned to Executive from time to time
by the Company's President and Chief Executive Officer for the period
commencing upon the closing of the Agreement and Plan of Merger by and among
Haemonetics Corporation, Transfusion Technologies Corporation, Transfusion
Merger Co. and certain stockholders of Transfusion Technologies (the
"Commencement Date") and continuing until two years from the Commencement
Date as herein provided. Executive hereby accepts such employment for the
term hereof.
1.3 Full Time Commitment. During the period of Executive's
employment with the Company, Executive will, unless prevented by ill health,
devote his 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 $230,000 per annum. In addition, the Executive will have a
target bonus based upon performance against agreed objectives. At 100%
performance against objectives, payout is set at $60,000 per year, paid
quarterly. Executive's salary will be reviewed annually and may be adjusted
at that time. Executive will also receive a sign-on bonus of $1,198,828.00,
of which $1,019,004.00 is to be paid within three (3) business days after
the Commencement Date and $179,824.00 to be paid at the end of the two year
period of employment, provided Executive is an active employee at such time.
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 four weeks of vacation annually, and including
reasonable travel expenses incurred while engaged in Company business. For
purposes of certain Company benefits which are based upon date of hire, such
as eligibility for health benefits, and calculation of vacation accrual and
employee service awards, Executive's date of hire will be deemed to be his
date of hire by Transfusion Technologies Corporation, which is May 19, 1993.
2.3 Participation In Share Option Plan. Subject to approval by the
Board of Directors, Executive shall be granted 70,000 non-qualified stock
options to purchase common stock of the Company, in accordance with the
Company's stock option plan, at the then current market price as set forth
in the grant. The Stock Option Agreement shall provide that said options
shall vest as follows: 20,545 options shall vest immediately; 24,728 options
shall vest twelve months from the Commencement Date; and the balance of
24,727 options shall vest twenty four months from the Commencement Date.
ARTICLE 3. TERMINATION
3.1 Term. Unless earlier terminated as herein provided, Executive's
employment pursuant to this Employment Agreement shall begin on the
Commencement Date and shall continue until two years from that date.
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
material 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 knowing 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 material 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 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
3.4 Change 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 position 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 1.5 times then current Base
Salary and provided further that the balance of Executive's sign-on bonus
provided in section 2.1 of the Agreement shall be accelerated and paid at
the same time as the lump sum severance payment made under this new section
3.4. 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 1934, 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 13d-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 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 designated by
the Company, one designated by Executive (or his personal representative)
and one designated 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,
the Company shall pay Executive, as a severance payment, an amount
equal to all of Executive's base salary remaining to be paid under this
employment agreement. Such payment shall be made in monthly installments
during the period commencing on the date such termination occurs and ending
two years from the Commencement Date.
4.2 Benefits. If Section 4.1 is applicable, the Company shall also
provide to Executive until two years from the Commencement Date, 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 benefit plan, program or policies.
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 payments or benefits described in the foregoing
Section 4.2 during the Severance Period, then the Company may choose to
provide to Executive substantially equivalent benefits or, at Executive's
election, the cash value of equivalent benefits. By way of example, this
provision shall apply to benefits or payments payable under the Company's
medical, dental, life and long term disability programs, as well as the
Company's matching contribution under the 401(k) plan. This provision shall
not apply to group travel accident coverage or to the Company's Employee
Stock Purchase Plan, which shall terminate upon termination of employment.
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 Executive or known by Executive (whether or not
invented, discovered or developed by Executive) as a consequence of or
through 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 Executive prior to or
after the date hereof.
5.1.2 Concepts and Ideas: Those concepts and ideas, in the area
of blood processing, known to Executive relating to the Company's
present and prospective activities and products.
5.1.3 Inventions: Discoveries and developments, in the area of
blood processing, 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 Executive, acting alone or in conjunction with
others, during or in connection with Executive's employment (or, if based on
or related to Proprietary Information, "made" by Executive within twelve
(12) months after the termination of such employment) and those Concepts and
Ideas held by Executive shall be the property of the Company, free of any
reserved or other rights of any kind on Executive's part in respect thereof.
5.3 Executive will promptly make full disclosure to the Company in
writing to the Chief Executive Officer of any such Inventions and Concepts.
Further, 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 Executive's duties hereunder, 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 Executive's possession or control by reasons of Executive's
employment,
whether prepared by Executive or others, are the property of the Company,
will not be used by Executive in any way adverse to the Company, will not be
removed from the Company's premises except as Executive's normal duties
require and, at the termination of Executive's employment with the Company,
will be left with or forthwith returned by Executive to the Company.
5.6 During the time Executive is an employee of the Company and for
a period of one (1) year thereafter, 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 Executive endeavor to entice away
from the Company any employee whether on Executive's behalf or on the behalf
of another while 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 be 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 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
Attention: James L. Peterson, CEO
If to Executive, to: Thomas D. Headley
83 Westgate Road
Wellseley, Massachusetts, 02481
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 of the Company 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 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.
6.9 Withholding. Any payments provided for hereunder shall be paid
after deducting any applicable withholding required under federal, state or
local law.
6.10 Entire Agreement. This Agreement sets for 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. 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.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement under seal as of the date first above written.
Haemonetics Corporation
s/ Thomas D. Headley s/ James L. Peterson
_____________________________ ______________________________
Thomas D. Headley By: James L. Peterson
President and CEO