Exhibit 10.31
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), dated this
17th day of June, 2001, is made and entered into by and between Packard
BioScience Company, a Delaware corporation (the "Company"), and
Franklin R. Witney (the "Executive").
WHEREAS, the Company and the Executive entered into an employment agreement,
dated December 18, 2000 (the "Employment Agreement"); and
WHEREAS, the Company and Executive desire to amend the Employment Agreement to
extend the term of the Employment Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the Company and Executive hereby amend the Employment
Agreement as follows:
1. Section 7(c), (A) and (B) of the Employment Agreement are hereby deleted
in their entirety and replaced with the following:
(A) The "Noncompetition Period" means the period from the date
hereof through the date that is two years after the date on which
the Employee's employment with the Company terminates.
(B) "Competitive Business" means any business identified on
EXHIBIT A attached hereto;
2. The EXHIBIT A attached hereto is hereby added to the Employment
Agreement as EXHIBIT A thereto.
3. The following provision is hereby added to the Employment Agreement as
new Section 13:
13. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that
any payment or distribution by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section 13) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or any
interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding
the foregoing provisions of this Section 13(a), if it shall be
determined that the Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the Payments and the
Gross-Up Payment, would not receive a net after-tax benefit of at
least $30,000 (taking into account both income taxes and any Excise
Tax) as compared to the net after-tax proceeds to the Executive
resulting from an elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to an amount (the
"Reduced Amount") such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to
the Executive and the Payments, in the aggregate, shall be reduced
to the Reduced Amount.
(b) Subject to the provisions of Section 13 (a), all determinations
required to be made under this Section 13, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Arthur Andersen LLP or such other
certified public accounting firm as may be designated by the
Executive (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by
the Company. All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 13, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 13(c) and
the Gross-Up
Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 13(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than
ten business days after the Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions
of this Section 13(c), the Company shall control all proceedings
taken in connection with such contest, and, at
its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to
be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 13(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 13(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to
Section 13(c), a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.
4. Except as specifically amended hereby, the Employment Agreement shall
remain in full force and effect.
5. The Company and the Executive acknowledge that this Agreement supersedes
any other agreement between them with respect to the subject matter
hereof, and that this Amendment shall be incorporated into and shall form
an integral part of the Employment Agreement.
6. This Amendment may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the Executive has executed this Amendment and, pursuant to
the authorization of its Board of Directors, the Company has caused this
Amendment to be executed on its behalf, all as of the date first above written.
EXECUTIVE
/s/ Frank R. Witney 6/17/01
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Frank R. Witney
PACKARD BIOSCIENCE COMPANY
/s/ Emery G. Olcott
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Emery G. Olcott