EXHIBIT 10.21
EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made this 27th day of March, 1998 between Serologicals
Corporation having its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Employer"), and ________________ ("Employee").
The purpose of this Agreement is to afford Employee additional security
concerning his or her employment with Employer by providing for certain
termination payments to Employee in the event that there is a Change in Control
of Employer as described in the definition of "Change in Control" below. The
provisions of this Agreement shall only be effective in the event that there is
a Change in Control, and nothing in this Agreement extends or expands Employee's
present rights concerning employment with Employer in the absence of a Change in
Control or is intended to create a contract, guarantee or promise of continued
employment by the Employer or alter the compensation that the Employee could
reasonably expect in the absence of a Change in Control. The Employer shall have
no obligation hereunder if the Employee's employment shall have been terminated
for any reason prior to a Change in Control. It is acknowledged and agreed that
even if Employee is in fact an employee of a subsidiary of Employer the
provisions hereof shall nevertheless remain applicable as if Employee were
employed by Employer.
Based upon the foregoing, and in consideration of Employee's continued
employment with Employer, Employer agrees as follows:
1
1. TERM. This Agreement shall be effective as of the date first above
written through March 27, 2003, provided, however, that this Agreement shall be
automatically renewed for successive two (2) year periods thereafter unless one
hundred twenty (120) days written notice is given by either party to the other
prior to the end of the term then in effect; provided that no termination of the
Employee's employment shall affect receipt of a Termination Payment or other
benefits hereunder which are payable in respect of a Change in Control which
occurred prior to such termination.
2. TERMINATION.
(a) TERMINATION BY EMPLOYER OR CONSTRUCTIVE DISMISSAL BY
EMPLOYER AFTER A CHANGE IN CONTROL. Except in the case of a termination for
Disability by Employer, if any time within two (2) years after the occurrence of
a Change in Control, either (i) Employer terminates Employee's employment, or
(ii) Employee terminates his or her employment following a Constructive
Dismissal by Employer, then Employee shall be paid an amount equal to the
Termination Payment.
(b) TERMINATION PAYMENT. The Termination Payment shall be paid
in a lump sum and shall equal the product of (x) 2.0 and (y) the Employee's
combined annual base salary and bonus, averaged over the most recent three (3)
year period immediately prior to the Change in Control. With respect to the year
in which the Employee's employment is terminated, the above calculation shall
include the full year's base salary and any bonus or incentive compensation to
which the Employee would have been entitled had the Employee's employment not
been terminated in such year. In the event that Employee becomes entitled to the
Termination Payment, if any of the Termination Payment
2
will be subject to the tax (the "Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the Employer shall pay
to Employee, an additional amount (the "Gross-Up Payment") such that the net
amount retained by Employee, after deduction of any Excise Tax on the
Termination Payment and any federal, state and local income tax and Excise Tax
upon the payment provided for by this paragraph, shall be equal to the
Termination Payment. For purposes of determining whether any of the Termination
Payment will be subject to the Excise Tax and the amount of such Excise Tax, (x)
any other payments or benefits received or to be received by Employee in
connection with a Change in Control or the termination of Employee's employment
(whether pursuant to the terms of this agreement or any other plan, arrangement
or agreement with the Employer, any person whose actions result in a Change in
Control or any person having such a relationship with the Employer or such
person as to require attribution of stock ownership between the parties under
section 318(a) of the Code) shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Employer's
independent auditors and reasonably acceptable to Employee such other payments
or benefits (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code, (y) the amount of the Termination Payment which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (A) the
total amount of the
3
Termination Payment or (B) the amount of excess parachute payments within the
meaning of Sections 280G(b)(1) and (4) (after applying clause (x), above, and
after deducting any excess parachute payments in respect of which payments have
been made under this clause (y)), and (z) the value of any non-cash benefits or
any deferred payment or benefit shall be determined by the Employer's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation in the state and locality of residence upon the date
of termination, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of Employee's employment, Employee
shall repay to the Employer at the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to such reduction plus interest on the amount of such repayment at
the rate provided in section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the termination of Employee's employment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Employer shall make an additional gross-up payment in
respect of such excess (plus any
4
interest payable with respect to such excess) at the time that the amount of
such excess is finally determined.
(c) TIME OF PAYMENT. Employer shall pay any amounts due to
Employee under subparagraph 2(a) upon the later of (x) if Employee is requested
by Employer to be Reasonably Available during the Transition Period, the end of
the Transition Period or (x) termination of Employee's employment.
(d) BENEFITS. In the event of a termination of employment of
the Employee pursuant to paragraph 2, the Employee shall be entitled to the
following provisions:
(i) all Employer provided executive perquisites,
including, without limitation, any automobile allowance, provided to Employee at
the time of the Change in Control shall continue to be provided to Employee for
two (2) years at the Employer's sole expense;
(ii) all Employer provided employee health insurance
benefits provided to Employee at the time of the Change in Control shall
continue to be provided to Employee for two (2) years at the Employer's sole
expense or the Employer may, at its election, provide the Employee with the cash
equivalent of the premiums then payable by the Employer for such health
insurance;
(iii) Employer shall contribute for two (2) years to the
Employee's 401(k) Plan account an amount equal to the average of the Employer's
contribution, if any, for the three (3) years prior to the Change in Control;
5
(iv) the Employee shall immediately vest in any Employer
contributions to the Employee's 401(k) Plan account; and
(v) except to the extent such actions shall make "pooling
of interests" accounting unavailable to a Change of Control transaction approved
by the Employer's Board of Directors, all outstanding and unvested stock options
held by the Employee shall immediately vest and become exercisable and such
exercise period shall extend for the remainder of the original term of such
options without giving effect to any shorter term of such options as a result of
the termination of the Employee's employment.
(e) NO OTHER SEVERANCE PAYMENTS. If Employee receives a payment under
subparagraph 2(a), Employee shall not be entitled to any severance payments that
might otherwise be payable to Employee, whether by employment contract or
otherwise.
(f) TRANSITION PERIOD. Upon the termination of Employee's employment
resulting in the Employee being entitled to receive the Termination Payment,
Employee shall be Reasonably Available during the Transition Period to assist
the Employer in the transition of the business of the Employer and the
transactions effected as part of the Change of Control, and the Employer shall
continue for the Transition Period to (x) pay Employee at a rate equal to the
higher of (i) the average annual base salary and bonus used to calculate the
Termination Payment and (ii) the Employee's rate of pay immediately prior to
Employee's termination of employment and (y) provide benefits to Employee that
Employee was receiving immediately prior to the Transition Period.
3. CERTAIN DEFINITIONS. For purposes of this agreement, the following
terms have the meanings indicated:
6
(a) "Constructive Dismissal by Employer" shall occur if
Employer demotes Employee from his or her present position; changes Employee's
title or reporting relationship which results in a diminution of the position,
duties, authority or responsibility of Employee; significantly reduces
Employee's duties; materially decreases Employee's benefits or compensation by
10% or greater; significantly increases Employee's duties or responsibilities
without a corresponding change of title and increase in compensation; or
relocates Employee to a location outside of the community where Employee is
employed as of the date of the Change in Control.
(b) "Change in Control" shall mean the occurrence of any of
the events described below:
(i) a change, within a period of 24 months or less, in the
composition of the Board of Directors of the Employer, such that at any time the
majority of directors who are then serving were not serving at the beginning of
such period, unless at such date of determination, such directors were nominated
upon the recommendation of a majority of the Board of Directors who were
directors at the beginning of such period;
(ii) any "person" (as such term is defined in Section
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")), other than the Employee, or any group of which the Employee is a
member (within the meaning of Rule 13d-1(f) of the Rules and Regulations
promulgated under the 1934 Act), or an "Affiliate" or "Associate" (as such terms
are defined in Rule 405 of the Rules and Regulations promulgated under the
Securities Act of 1933, as amended) thereof, becomes a beneficial owner (as
defined in Section 13(d)(3) of the 1934 Act), directly or indirectly, of
7
(x) securities of the Employer representing thirty percent (30%) or more of the
Employer's then outstanding securities having the right to vote for the election
of directors; PROVIDED, that the acquisition by the Employer of another
corporation or the assets thereof or a similar transaction in which the Employer
issues securities representing 30% or more of the total number of votes that may
be cast for the election of directors of the Employer to such a "person" shall
not constitute a "Change in Control" if (1) the Employer is the surviving
corporation, (2) within a 12 month period after the closing of such transaction
the Chief Executive Officer of the Employer who was serving as such immediately
preceding the signing of the acquisition (or similar) agreement relating to such
transaction neither had been terminated by the Employer (other than for cause)
nor has such Chief Executive Officer terminated his or her employment following
a Constructive Dismissal by Employer and (3) the Board of Directors of the
Employer shall not change over a 24 month period, in connection with or as a
consequence of such transaction, by more than 30%; or (y) all or substantially
all of the assets of the Employer;
(iii) commencement (within the meaning of Rule 14d-2 of the
Rules and Regulations promulgated under the ▇▇▇▇ ▇▇▇) of a "tender offer" for
capital stock of the Employer subject to Section 14(d)(2) of the 1934 Act by any
"person" (as defined above) other than the Employer or any group of which the
Employee is a member; or
(iv) the stockholders of the Employer approve a plan of
complete liquidation of the Employer or an agreement for the sale or disposition
by the Employer of all or substantially all of the Employer's assets.
8
(c) "Disability" shall mean termination because of the
Employee's failure to properly and fully perform the duties and responsibilities
of his or her employment with the Employer, due to mental or physical illness,
for a period of 120 consecutive days, or 180 days, even though not consecutive,
within any 360-day period, all as determined in good faith by the Board of
Directors of the Employer and supported by medical evidence.
(d) "Reasonably Available" shall mean being available in
person during regular business hours at the facilities of the Employer where the
Employee was principally employed during the twelve (12) month period
immediately prior to termination, approximately seven (7) hours per day for each
weekday that such facilities are open for business.
(e) "Transition Period" shall mean the period of up to two (2)
months commencing upon the termination of Employee's employment during which the
Employee shall be Reasonably Available at the request of the Employer. The
Employer shall specify in writing upon such termination of employment the exact
number of days it desires to have the Employee be Reasonably Available.
4. EFFECT OF EMPLOYER'S MERGER, TRANSFER OF ASSETS OR DISSOLUTION. This
Agreement shall not be terminated by any merger or consolidation where Employer
is not the consolidated or surviving corporation, transfer of substantially all
of the assets of Employer, or voluntary or involuntary dissolution of Employer.
In the event of any such merger, consolidation or transfer of assets, the
surviving corporation or the transferee of Employer's assets shall be bound by
the provisions of this Agreement, and Employer shall
9
take all actions necessary to insure that such corporation or transferee is
bound by the provisions of this Agreement.
5. ARBITRATION. Any controversy between Employer and Employee involving
the construction or application of any of the terms, provisions or conditions of
this Agreement, any claim hereunder, or any claim pertaining to any covenant of
good faith and fair dealing or any other duty implied by law, shall on the
written request of either party served on the other be submitted to arbitration,
and such arbitration shall proceed and be governed by the provisions of the
American Arbitration Association. Employer and Employee shall, within fourteen
(14) days after such notice, each appoint one person to hear and determine the
dispute, and the two appointees, within fourteen (14) days after appointment of
both of them, shall jointly select a third impartial arbitrator whose decision
shall be final and conclusive upon both parties. The arbitrators shall have the
power to alter, amend or modify the terms of this Agreement. The decision of the
arbitrators shall be final and binding. The costs of arbitration, including the
reasonable attorneys fees of the prevailing party, shall be borne by the losing
party. Any such arbitration shall be conducted in Atlanta, Georgia. Arbitration
as provided herein shall be the exclusive means to resolve any of the
controversies referred to in this paragraph 5.
6. PARTIAL INVALIDITY. If any provision of this Agreement is held by a
court of competent jurisdiction be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
7. AGREEMENT SUPERSEDES ANY INCONSISTENT PRIOR AGREEMENTS OR
UNDERSTANDINGS. The terms of this Agreement supersede any inconsistent prior
promises,
10
policies, representations, understandings, arrangements or agreements between
the parties with respect to the subject matter hereof, whether by employment
contract or otherwise.
8. NOTICES. All notices required or permitted to be given by either
party hereunder, including notice of change of address, shall be in writing and
delivered by hand, or mailed, postage prepaid, certified or registered mail,
return receipt requested, to the other party as follows:
If to the Employer: Serologicals Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
If to the Employee: [NAME]
[ADDRESS]
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Georgia applicable to
contracts executed in and to be performed solely within such State.
10. FURTHER ASSURANCES. The parties hereto agree that, after the
execution of this Agreement, they will make, do, execute or cause or permit to
be made, done or executed all such further and other lawful acts, deeds, things,
devices, conveyances and assurances in law whatsoever as may be required to
carry out the true intention and to give full force and effect to this
Agreement.
11
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts with the same effect as if the signatures to all such counterparts
were upon the same instrument, and all counterparts shall constitute but one
instrument.
12. HEADINGS. All headings in this Agreement are for convenience only
and are not intended to affect the meaning of any provision hereof.
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of, and be binding upon, the Employer, its successors and assigns and any
corporation with which the Employer merges or consolidates or to which the
Employer sells all or substantially all of its assets, and upon the Employee and
his or her executors, administrators, heirs and legal representatives.
IN WITNESS WHEREOF, the Employee has executed this Agreement and the
Employer has caused this Agreement to be executed by a duly authorized officer
as of the day and year first above written.
SEROLOGICALS CORPORATION
By:___________________________
------------------------------
Employee Name
12