EXHIBIT 10.10
February 21, 2001
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[Address]
PERSONAL AND CONFIDENTIAL
Dear ▇▇▇▇▇:
Last October you and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company
("▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb") executed a letter agreement dated October 19, 2000 (the
"2000 Agreement") that described the bonus payments and other incentives that
you would receive in the event that ▇▇▇▇▇▇, Inc. ("▇▇▇▇▇▇") was sold to a
third-party entity on or before September 30, 2001. It now appears possible that
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb may divest its interest in ▇▇▇▇▇▇ through a "spin-off"
transaction involving the distribution of ▇▇▇▇▇▇ stock to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
shareholders (the "Spin-Off"). The Spin-Off may be preceded by a public offering
of ▇▇▇▇▇▇ shares (the "IPO"). During the divestiture process, we believe that
operating the ▇▇▇▇▇▇ business as usual is in the best interests of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb, ▇▇▇▇▇▇ and its employees. To provide assurance to you and to help ensure
that the ▇▇▇▇▇▇ business is managed and operated efficiently and effectively
both before and after the divestiture, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ wish to
offer you the incentives described in this letter. If these incentives are
satisfactory and you wish to participate, please sign and return this letter in
the manner described on the last page of this letter.
The terms and conditions of this letter agreement will apply
in the event of an IPO or Spin-Off of ▇▇▇▇▇▇ that occurs on or before September
30, 2001 and, with respect to payments and benefits contingent upon a Spin-Off,
the consummation of the Spin-Off on or before March 31, 2002. In the event of a
disposition of ▇▇▇▇▇▇ which is not an IPO or Spin-Off occurring on or before
September 30, 2001 and, with respect to payments and benefits contingent upon a
Spin-Off, if the Spin-Off is not completed on or before March 31, 2002, the
terms and conditions of this letter agreement will terminate and will not apply.
Please note that if ▇▇▇▇▇▇ is sold to a third party entity on or before
September 30, 2001, you will receive the bonus payments and other incentives
subject to the conditions described in the 2000 Agreement.
As a member of the ▇▇▇▇▇▇ management team, you are expected to
carry out the duties and responsibilities of your job during the coming months.
In addition, your assistance
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
Page 2
will be necessary to complete the divestiture process. For your extra efforts
and cooperation in helping ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ during this period,
you will be provided with the following incentives, subject to all of the terms
and conditions of this letter agreement:
1. SPECIAL STOCK OPTION AWARD. Effective on the date of the Spin-Off or, if it
occurs first, the IPO (the "Effective Date"), you will receive an option to
purchase shares of ▇▇▇▇▇▇ stock with an economic value at the time of grant of
$175,000 using a generally accepted valuation methodology. This option will be
issued under a new option and equity compensation plan (the "▇▇▇▇▇▇ Stock
Incentive Plan") that will be adopted by ▇▇▇▇▇▇'▇ Board of Directors. Your
option will vest in equal installments over a period of four years provided that
you remain employed with ▇▇▇▇▇▇ during that time, or as provided otherwise under
the ▇▇▇▇▇▇ Stock Incentive Plan. The exercise price will equal the fair market
value of ▇▇▇▇▇▇ stock at the time the option is granted.
2. SPECIAL RESTRICTED STOCK AWARD. As of the Effective Date, you will receive a
grant of ▇▇▇▇▇▇ restricted stock with a value (determined as if no restrictions
applied) of $60,000. The restricted stock will vest in three equal installments
on the third, fourth and fifth anniversaries of the grant of the award provided
that you remain employed with ▇▇▇▇▇▇ during that time. Any dividends that are
payable on ▇▇▇▇▇▇ stock will be paid to you on this restricted stock on a
current basis. This restricted stock will also be issued under the ▇▇▇▇▇▇ Stock
Incentive Plan.
3. CONVERSION OF OUTSTANDING STOCK OPTIONS. Any ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb stock
options granted to you prior to the Effective Date (including, but not limited
to, the options awarded to you on January 3, 2000 pursuant to a 50% reduction in
target cash bonus under the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company Performance Incentive
Plan ("PIP")) that are outstanding on the date of the Spin-Off, will be
converted into new ▇▇▇▇▇▇ stock options. The number of shares and the exercise
price of your new ▇▇▇▇▇▇ options will be determined by the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Board of Directors based upon a conversion ratio that will be used for all
▇▇▇▇▇▇ employees and that preserves any gains earned through the date of
conversion. Your new ▇▇▇▇▇▇ options will be vested in the same proportion that
your ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb options were vested and the nonvested portion of your
new ▇▇▇▇▇▇ options will vest from the original grant date of your ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb options according to the vesting schedule in such ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
options. Certain of your ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb options were subject to a price
appreciation threshold of 30% for a period of eight years following grant. Your
new ▇▇▇▇▇▇ options will also be subject to a 30% price appreciation threshold
that will be based upon the adjusted exercise price of your ▇▇▇▇▇▇ options and
future share price appreciation of ▇▇▇▇▇▇ shares subject to the requirement that
the price appreciation threshold be met for 15 consecutive trading days. Any
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb stock options granted to you after the date of this letter
agreement that are converted into new ▇▇▇▇▇▇ stock options will reflect any
applicable conditions to exercisability such as vesting requirements or price
appreciation thresholds.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
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4. CONVERSION OF RESTRICTED STOCK AWARDS. Your ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb restricted
shares that are unvested as of the Effective Date, including those that you have
held less than one year from their date of grant, will be exchanged for ▇▇▇▇▇▇
restricted shares of equal value (in each case determined as if no restrictions
applied) determined on the Effective Date. Your restricted ▇▇▇▇▇▇ shares shall
be subject to vesting based upon the vesting schedule of the original
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb restricted share grant.
5. 2001 PERFORMANCE INCENTIVE PLAN. Your 2001 payment under the PIP will be
calculated in accordance with the following terms and conditions: (i) your full
target bonus will be in effect in 2001; (ii) your payment will be based upon
actual results versus targeted performance criteria through the Effective Date,
subject to the established PIP payout schedule; (iii) if the Effective Date is
on or before June 30, 2001, a six-month bonus payment will be made; (iv) if the
Effective Date occurs after June 30, 2001, you will accrue additional months of
bonus credit beyond six months subject to any applicable conditions of the PIP;
and (v) your 2001 PIP payment will be made on December 15, 2001 and February 15,
2002 consistent with the current plan provisions, provided that you remain
employed with ▇▇▇▇▇▇ through the aforementioned payment dates.
6. SPECIAL SEVERANCE UPON TERMINATION OF EMPLOYMENT. In addition to the other
payments specified in this letter agreement, you may be eligible for special
severance payments pursuant to either (A) or (B) below (note that should you
become reemployed by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any of its affiliates following
your receipt of severance payments, you may be obligated to repay a portion of
any severance payments as required by the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company Severance
Plan ("BMS Severance Plan")). The special severance payments described in this
letter agreement will be in lieu of, and not in addition to, the severance (if
any) that might ordinarily have been payable to you under the terms of the BMS
Severance Plan.
A. EMPLOYMENT CONTINUED BY ▇▇▇▇▇▇ BUT TERMINATED WITHIN 12 MONTHS. In
the event that your employment with ▇▇▇▇▇▇ is initially continued
after the Effective Date, but is subsequently terminated prior to
the first anniversary of the date of the Spin-Off, and you do not at
such time become reemployed by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any of its
affiliates, you will receive severance "make-up" benefits (in lieu
of any amount payable pursuant to the BMS Severance Plan). The
severance benefits hereunder, when combined with any severance
payments from ▇▇▇▇▇▇ for which you may be eligible, will increase
your total severance benefits under this paragraph to an amount
equal to one year of your base salary at the rate in effect on the
date immediately prior to the Effective Date (regardless of the
amount that you would otherwise be entitled to receive under the
terms of the BMS Severance Plan, unless such amount would be greater
than one year of your base salary, in which case your total
severance amount will be increased to such greater amount). The
severance make-up benefits described in this paragraph will be paid
to you in accordance with the payment schedule and subject to all of
the
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
Page 4
terms and conditions of the BMS Severance Plan in effect as of the
Effective Date, (including but not limited to the terms providing
for the eligibility for severance pay, and the determination of
which circumstances constitute a termination pursuant to which
severance pay would be payable).
B. EMPLOYMENT NOT CONTINUED BY ▇▇▇▇▇▇. In the event that your
employment is not continued by ▇▇▇▇▇▇ as of the Effective Date, and
you have neither been retained nor reemployed by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb at such time, you will be eligible to receive a severance
benefit in an amount equal to one year of your base salary at the
rate in effect on the date immediately prior to the Effective Date,
(regardless of the amount that you would otherwise be entitled to
receive under the terms of the BMS Severance Plan, unless such
amount would be greater than one year of your base salary, in which
case your total severance amount will be increased to such greater
amount). The severance benefits described herein will be paid to you
in accordance with the payment schedule and subject to all of the
terms and conditions of the BMS Severance Plan in effect as of the
Effective Date, (including but not limited to the terms providing
for the eligibility for severance pay, and the determination of
which circumstances constitute a termination pursuant to which
severance pay would be payable). You acknowledge and agree that, in
the event that ▇▇▇▇▇▇ provides severance payments to you, whether
through contractual obligation or otherwise, the amount of severance
payments that you actually receive from ▇▇▇▇▇▇ will set off and
reduce ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's obligations under this subparagraph
(B) on a dollar-for-dollar basis.
7. VESTING IN PENSION PLAN AND SAVINGS PLAN. In addition to the incentives
specified in this letter agreement, your unvested benefits under the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company Retirement Income Plan and the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Company Savings and Investment Program will become fully vested as of the
consummation of the Spin-Off.
8. CONDITIONS OF THIS LETTER AGREEMENT. The incentive payments and benefits
described in this letter agreement are contingent upon: (a) the Effective Date
occurring on or before September 30, 2001 and, with respect to payments and
benefits contingent upon a Spin-Off, the consummation of the Spin-Off on or
before March 31, 2002; (b) your continuous employment with ▇▇▇▇▇▇ through and
including the date of the relevant award, and your cessation of employment
within the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb controlled group (as defined under section
1563(a) of the Internal Revenue Code) as a result of the Spin-Off; (c) your
execution on the date of the consummation of the Spin-Off, and the
effectiveness, of a general release in favor of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, its
affiliates, and others related to such entities (including but not limited to
their directors, officers, employees) and a limited release of ▇▇▇▇▇▇, its
affiliates, and others related to such entities (including but not limited to
their directors, officers, employees) with respect to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
Page 5
▇▇▇▇▇▇'▇ obligations in connection with the Spin-Off, in form and substance
satisfactory to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, (d) your honoring the need for
strict confidentiality regarding the IPO and the Spin-Off and the terms of this
letter agreement, neither of which should be discussed with anyone (other than
your personal financial or legal advisors) without the express and specific
permission of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President, Corporate Development,
it being acknowledged that matters relating to the IPO and the Spin-Off (except
the terms of this letter agreement) may be discussed only with employees of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its affiliates and their legal and financial advisors
who are participating in the IPO and the Spin-Off process and no others (and
then only with those individuals on a "need to know" basis); (e) your providing
full support and cooperation in the best interests of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and
▇▇▇▇▇▇ up to and including the date of the Spin-Off; and (f) following the
Spin-Off, your taking no action, excluding normal competitive activity not
contrary to law and not inconsistent with your other contractual obligations to
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or their affiliates, but including any actions
prohibited by this letter agreement, which would be considered contrary to the
best interests of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or their affiliates.
9. NON-COMPETE AND NON-SOLICITATION. As a condition to your receipt of any
payments or benefits under this letter agreement, you agree that, for a period
commencing on the date of your execution of this letter agreement and ending on
the date which is one year after the consummation of the Spin-Off you will not,
directly or indirectly, (i) own, manage, control or participate in the
ownership, management or control of, be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or otherwise
with, any other corporation, partnership, proprietorship, firm, association, or
other business entity, or otherwise engage in any business, which is engaged in
any manner in, or otherwise competes with, the business of ▇▇▇▇▇▇ or any of its
affiliates in the United States of America or any of the countries in which
▇▇▇▇▇▇ or any of its affiliates is doing business, (ii) solicit on behalf of any
other corporation, partnership, proprietorship, firm, association, or other
business entity, any person or business that is a customer or supplier of ▇▇▇▇▇▇
or any of its affiliates, or (iii) solicit for employment, hire, employ, or
retain in any capacity (including but not limited to as an employee, director,
independent contractor, consultant or otherwise), other than for employment
within ▇▇▇▇▇▇ or its affiliates in conjunction with the IPO and Spin-Off or
within ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or its affiliates, any person who is employed or
otherwise engaged on a full or part-time basis by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or its
affiliates (including but not limited to ▇▇▇▇▇▇). You understand and agree that
a breach by you of this paragraph would be a material breach of your obligations
under this letter agreement, and that, if any amounts have been provided to you
under the terms of this letter agreement prior to any such breach, in addition
to any other remedy that may be available to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb in law or at
equity, upon demand, you will promptly return all such amounts to ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb or ▇▇▇▇▇▇ as appropriate.
10. NOT AN EMPLOYMENT AGREEMENT. The terms of this letter agreement neither bind
you to continued employment with ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇, their affiliates
or any successor
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
Page 6
thereto, nor confer any rights upon you with respect to the continuation of
employment by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇, their affiliates or any successor
thereto.
11. WITHHOLDING. It is understood and agreed that all amounts, payments or
benefits payable to you as described in this letter agreement represent gross
amounts (as opposed to net after-tax amounts), and that ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb,
▇▇▇▇▇▇ or its affiliates or agents are hereby authorized to withhold any and all
applicable withholdings and taxes from any such amounts, payments or benefits.
12. EXCLUSIVE RETENTION AND SEVERANCE BENEFIT. In the event that any or all
other employees of ▇▇▇▇▇▇ receive or are offered either a retention or similar
bonus payable upon or in connection with the IPO or the Spin-Off (a "Retention
Bonus"), or an enhanced severance benefit payable upon or in connection with the
IPO or the Spin-Off, you understand and agree that you will not be eligible to
receive such Retention Bonus or enhanced severance benefit, except as explicitly
set forth in this letter agreement.
13. RETURN OF COMPANY PROPERTY AND USE OF COMPANY PERQUISITES. In the event of
your separation from ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or their affiliates (whether
prior to or in connection with the IPO or Spin-Off), you agree to return all
property belonging to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or their affiliates
(including but not limited to any company laptop or computers, and other
equipment, documents and property belonging to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or
their affiliates) upon such separation (in accordance with the normal practice
relating thereto); provided, however, at ▇▇▇▇▇▇'▇ discretion, you may continue
to retain use of your employer-provided automobile.
14. GOVERNING LAW; JURISDICTION. This letter agreement will be governed by and
construed under the laws of the State of New York, without regard to its
principles of conflict of laws. You and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb agree to submit to
the jurisdiction of the courts of the state of New York in the event of any
dispute regarding this letter agreement.
Please acknowledge your understanding of and agreement to the provisions of this
letter agreement by signing and returning a copy of this letter to me by March
9, 2001.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
Corporate Development
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
February 21, 2001
Page 7
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Inc.
AGREED TO AND ACCEPTED:
___________________________________
DATE: ____________________________