Letter Agreement

Amendment to Letter Agreement

Change Of Control

Severance Plan

 

 

 

Exhibit 10.1

 

Via Federal Express

 

April 20, 2007

 

Mr. James Green

1684 Oakcottage Court

Thousand Oaks, CA 91361

 

Dear Jim:

 

We are delighted to offer you the position of President and Chief Executive Officer (CEO) of Analogic Corporation (Analogic). We are excited about the prospect of your joining Analogic and look forward to your vision and leadership in guiding our Company to achieve its goals.

 

The following provides the terms and conditions of your employment offer set forth in this letter Agreement (the “Agreement”):

 

1.   Start Date. Your employment will commence on or before May 21, 2007.

 

 

2.   Reporting Relationship. You will report to the Board of Directors.

 

 

3.   Term. Your initial term of employment will be three years with subsequent one year renewals unless either party gives notice to terminate at least ninety (90) days prior to any scheduled expiration date.

 

 

4.   Base Salary. Your starting annualized base salary will be $450,000 per year, with annual reviews at the discretion of the Compensation Committee. The first review will occur as part of normal year-end Company process for fiscal year 2008. Salary will be paid periodically in accordance with normal Company payroll practices.

 

 

5.   Annual Performance Bonus. Beginning in fiscal year 2008, you will be eligible to participate in the Company’s annual bonus program with an initial target of 65% of your base salary (i.e., $292,500).

 

 

  a.   Your bonus for fiscal year 2008 is guaranteed at target (i.e., $292,500).

 

 

  b.   Goals for earning additional bonus amounts for fiscal year 2008 and any portion of your bonus in future years are to be discussed and agreed with the Compensation Committee and approved by the full Board.

 

 

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6.   Equity Grants. You will be eligible to participate in the Company’s long-term incentive program, which currently consists of stock options and performance-based restricted stock. As soon as practicable upon hire you will receive the following:

 

 

  a.   An initial grant of 5,000 shares of performance-based restricted stock granted as part of the Company’s normal three (3) year performance cycle beginning as soon as practicable after the start of the next fiscal year;

 

 

i. Note that the performance criteria are to be determined and we would expect your input in determining the appropriate performance metrics and goals.

 

  ii.   If you are terminated by the Board without Cause (as defined below) within three (3) years from the date of hire, the performance goals will be deemed met and pro-rata shares shall vest based on your employment period completed to date.

 

 

  b.   An initial grant of 15,000 time-based stock options, vesting 25% per year beginning on second anniversary of grant date;

 

 

  i.   If you are terminated by the Board without Cause within three (3) years from the date of hire, 50% of outstanding unvested options will accelerate.

 

 

  c.   Other than the terms described above, these and future grants will be made under the same terms and conditions as other participants; and

 

 

  d.   Future grants, including the types of award, may be made from time to time based on Compensation Committee discretion.

 

 

7.   One-Time Equity Grant. You will receive a one-time grant of time-based stock options and restricted stock as follows:

 

 

  a.   35,000 stock options, vesting 25% per year beginning on the second anniversary of grant date;

 

 

  b.   10,000 shares of time-based restricted stock, vesting 25% per year beginning on second anniversary of grant date; and

 

 

  c.   If you are terminated by the Board without Cause within three (3) years from the date of hire, 100% of your outstanding stock options will immediately vest and become exercisable and vesting will accelerate on 50% of your outstanding unvested restricted stock.

 

 

8.   Vacation. You will be entitled to accrue up to four (4) weeks of paid vacation each year of employment plus sick leave on the same basis as all other executives of the Company in accordance with the terms and conditions of the vacation and sick leave policies of the Company.

 

 

9.   Perquisite Allowance. You will receive an annual perquisite allowance of $20,000 paid quarterly for use in connection with customary perquisites, such as a leased automobile and financial planning.

 

 

10.   Business Expenses. You will be reimbursed for customary business expenses incurred in connection with the performance of your duties and activities as CEO pursuant to the Company’s established policies.

 

 

11.   Relocation. You will be eligible for the standard Analogic relocation policy to assist your move from California to Massachusetts, including:

 

 

  a.   Reasonable number of house hunting trips for you and your spouse;

 

 

  b.   Temporary housing while transitioning from California;

 

 

  c.   Reasonable transportation and shipping costs;

 

 

  d.   Closing costs and/or legal fees related to the sale of your current home; and

 

 

  e.   Any imputed income will be grossed up for income tax purposes.

 

 

12.   Benefits. You will be eligible to participate in the Company’s standard benefit program generally applicable to similarly situated executives which includes medical, dental and life insurance, short and long-term disability protection and participation the Company’s 401(k) profit sharing plan, with the following enhancement:

 

 

  a.   If the medical options available under the current standard medical program do not provide for specialist coverage comparable to your current program, the Company will take efforts to secure appropriate coverage under an alternative arrangement.

 

 

The full range of benefits for you and the family is summarized in the attached 2007 Employee Benefits Summary. Note that the Company reserves the right to change or amend its benefit plans it offers to employees at any time.

 

13.   Change-In-Control. You will be eligible for the following Change-in-Control (CIC) benefits in the event your employment is terminated without Cause within twenty-four (24) months following a CIC:

 

 

  a.   Two (2) times your base salary plus greater of target or three (3) year average bonus;

 

 

  b.   Pro-rata bonus, greater of target or actual to the extent determinable, for year of termination;

 

 

  c.   Benefit continuation for twenty-four (24) months;

 

 

  d.   Equity acceleration; and

 

 

  e.   If excise taxes are imposed, you will be eligible for a modified gross up only if over safe harbor by greater of $50,000 or 10%, otherwise best after tax position of cut back or taxed with no cut back.

 

 

14.   General Severance. You will also be eligible for the following severance benefits in the event your employment is terminated by the Company without Cause and unrelated to a CIC

 

 

  a.   Twelve (12) months salary continuation plus a lump sum payment equal to your target bonus

 

 

  b.   Equity treatment as described in Sections 6 and 7 above

 

 

15.   Restrictive Covenants. Severance payments will be conditioned on your signing of a general waiver and release of claims, and your agreement not to compete against the interests of the Company, or solicit employees or customers for the severance period, and not disparage the Company nor disclose trade secrets or confidential information.

 

 

16.   Prior Agreements. You represent and warrant that you are not bound by any agreement with a previous employer or other party that you would breach by accepting employment with the Company or performing your duties as an employee of the Company. You further represent and warrant that, in the performance of your duties with the Company, you will not utilize or disclose any confidential information in breach of an agreement with a previous employer or any other party.

 

 

17.   Nature of Employment. Your employment with the Company is on an “at-will” basis, meaning that either you or the Company may terminate the employment relationship at any time, for any reason, with or without Cause and with or without notice, subject to the severance and acceleration provisions described above. As used in this Agreement, “Cause” means (a) any intentional, dishonest, illegal, or insubordinate conduct which is materially injurious to Analogic or any of its subsidiaries or which results in an improper substantial personal benefit, (b) breach of any provision of any employment, nondisclosure, non-competition, or similar agreement to which you are a party or by which you are bound, (c) nonperformance or gross dereliction of duty, (d) conviction of a felony, or (e) commission of an action involving moral turpitude.

 

 

18.   Final Agreement. This Agreement sets forth the terms of your service with the Company and supersedes any prior representations or agreements, whether written or oral. This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the Commonwealth of Massachusetts.

 

 

As has been previously communicated to you, and due to the nature of some of the work at Analogic, it would be necessary to pass a drug test for certain illicit substances, pass a background check, which includes credit and court records, and I-9 proof of U.S. employment eligibility. Also you should know that you will need to apply for a security clearance.

 

We hope that you find the aforementioned terms acceptable. Please confirm your agreement to accept this position by signing and returning one copy of this letter to us by May 4, 2007.

 

Jim, we are confident that you will make a significant contribution to Analogic and will successfully lead us in the future direction of the Company.

 

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Thank you and we enthusiastically look forward to working with you in your new role at Analogic.

 

    Sincerely,

 

 

    Analogic Corporation

 

 

    /s/ Bruce W. Steinhauer

 

 

    Bruce W. Steinhauer

 

 

    Chairman, Nominating and Corporate Governance Committee

 

 

    Accepted and agreed to on this 1st day of May 2007.

 

 

    /s/ James Green

 

 

    Mr. James Green

 

 

 

 

EX-10.2 3 dex102.htm AMENDMENT TO LETTER AGREEMENT BETWEEN ANALOGIC CORPORATION AND JAMES W. GREEN

Exhibit 10.2

December 24, 2008

Mr. James Green

7 Winthrop Road

Lexington MA 02421

Dear Jim:

Reference is made to your letter agreement with Analogic Corporation (the “Company”) dated April 20, 2007 (the “Agreement”). The purpose of this document is to amend the Agreement in view of certain regulations recently promulgated by the Internal Revenue Service (the “IRS”) in connection with Internal Revenue Code (“IRC”) Section 409A and to more clearly state our understanding with regard to certain payments that may be subject to excise taxes under the IRC. We do not intend to otherwise alter the terms of the Agreement. In all respects, the Agreement shall remain in full force and effect, provided, however, that:

 

1.

It is agreed that Sections 13 through 15 are hereby amended and restated in their entirety to read as follows:

13. Change-In-Control. You will be eligible for the following Change-in-Control (CIC) (as defined below) benefits in the event your employment is terminated without Cause within twenty-four (24) months following a CIC, the distribution of which is subject to the provisions of Section 19 hereof:

 

a.

Two (2) times your base salary plus the greater of your target or three (3) year average bonus, payable in a lump sum thirty (30) days following your termination;

 

b.

Pro-rata portion of the greater of your target or actual bonus, to the extent determinable, for your year of termination, payable in a lump sum thirty (30) days following your termination;

 

c.

Benefit continuation for twenty-four (24) months, payable in accordance with the Company’s regular payroll practice for benefits;

 

d.

Equity acceleration, and

 

e.

If any Internal Revenue Code Section 4999 parachute payment excise taxes are imposed, you will be eligible for a modified gross up only if your CIC payments exceed the safe harbor amount by the greater of $50,000 or 10%. However, should your CIC payments exceed the safe harbor amount by less than $50,000 or 10% of your safe harbor amount; you will receive the greater of: (1) your total CIC payments less the estimated cost of your excise tax or (2) your safe harbor amount. If and to the extent that any payments or benefits are required to be cut back pursuant to this Section 13(e), the payments or benefits shall be reduced or eliminated as determined by the Company, in the following order: (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits, and (iv) any vesting of equity awards, in each case in reverse order beginning with payments or benefits that are to be paid the farthest in time from the date that triggers any excise tax, all and in each case as is necessary to maximize your after-tax position.

For purposes of this Agreement, CIC shall have the meaning set forth in the Company’s May 2007 form CIC Agreement as amended in December, 2008.


14. General Severance. You will also be eligible for the following severance benefits in the event your employment is terminated by the Company without Cause and unrelated to a CIC, the distribution of which is subject to the provisions of Section 19 hereof:

 

a.

Twelve (12) months salary continuation, with payment commencing thirty (30) days following your termination, plus a lump sum payment equal to your target bonus, payable thirty (30) days following your termination; and

 

b.

Equity treatment as described in Sections 6 and 7 above.

15. Restrictive Covenants. Severance payments will be conditioned on your signing of a general waiver and release of claims and the expiration of any applicable revocation period occurring within sixty (60) days following your termination date, and your agreement not to compete against the interests of the Company, or solicit employees or customers for the severance period, and not disparage the Company nor disclose trade secrets or confidential information.

 

2.

It is further agreed that Section 18 is hereby amended and restated in its entirety to read as follows:

18. Final Agreement. This Agreement, as amended, sets forth the terms of your service with the Company and supersedes any prior representations or agreements, whether written or oral. This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the Commonwealth of Massachusetts.

 

3.

It is further agreed that Section 19 is hereby added to read as follows:

19. Payments Subject to Section 409A. Subject to the provisions in this Section 19, any severance payments or benefits under this Agreement shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the date of termination of employment. The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to you under this Agreement:

 

a.

It is intended that each installment of the severance payments and benefits provided under this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”). Neither you nor the Company shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

 

b.

If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments and benefits shall be made on the dates and terms set forth in this Agreement

 

c.

If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:

 

 

i.

Each installment of the severance payments and benefits due under this Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A; and

 

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ii.

Each installment of the severance payments and benefits due under this Agreement that is not described in paragraph (i) above and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of severance payments and benefits if and to the maximum extent that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs.

 

d.

The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this paragraph (d), “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-(h)(3).

 

e.

All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

 

f.

The Company may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling.

 

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By execution of this letter, you hereby agree to the foregoing amendment of the Agreement and reaffirm your obligations under the Agreement.

 

Very truly yours,

Analogic Corporation

By:

 

/s/ Fred B. Parks

 

Fred B. Parks

 

Chairman, Compensation Committee

 

Acknowledged and Agreed:

/s/ James W. Green

James Green

 

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Exhibit 10.1

Form of Change of Control Agreement

ANALOGIC CORPORATION

CHANGE OF CONTROL AGREEMENT

THIS AGREEMENT (the “Agreement”) by and between Analogic Corporation, a Massachusetts corporation (the “Company”), and                  (the “Executive”), dated as of May         , 2007 (the “Agreement Date”).

The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below). Therefore, to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions

(a) An “Affiliate” of, or a Person “Affiliated” with, a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified.

(b) “Effective Date” means the first date during the Change of Control Period on which a Change of Control occurs; provided that the Executive is employed by the Company on that date.

(c) “Change of Control Period” means the period beginning on the Agreement Date and ending on the third anniversary of the Agreement Date. However, beginning on the first anniversary of the Agreement Date, and on each successive anniversary of the Agreement Date (each of such first and successive anniversaries being referred to herein as a “Renewal Date”), the Change of Control Period will be automatically extended so that it terminates 36 months after the Renewal Date, unless, at least 60 days prior to that Renewal Date, the Company notifies the Executive that the Change of Control Period will not be so extended.

(d) “Company” means, collectively, the Company and its Subsidiaries except for purposes of Section 2 or where the context clearly requires otherwise.

(e) “Person” has the meaning given to that term in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but excluding any Person described in and satisfying the conditions of Rule 13d-1(b)(1) under Section 13 of the Exchange Act.

(f) “Subsidiary” means any corporation, limited liability company, partnership or other entity that is an Affiliate of the Company.

2. Change of Control. “Change of Control” means:

(a) any acquisition or series of acquisitions by any Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefit plan of the Company or any Subsidiary, or (iv) any Person holding common shares of the Company for or pursuant to the terms of such employee benefit plan, which acquisition or acquisitions result in such Person (such Person being referred to herein as the “Acquirer”) becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (the “Acquired Company Securities”) constituting 35% or more of either (i) the then outstanding shares of the common stock of the Company (“Outstanding Company Common Stock”), or (ii) the combined voting power of the Company’s then outstanding securities that are then entitled to vote generally in the election of directors of the Company (“Outstanding Company Voting Securities”), except that any such acquisition or acquisitions of Outstanding Company Common Stock or Outstanding Company Voting Securities by the Acquirer will not constitute a Change of Control where, and so long as, the Acquirer (i) does not ever exercise the voting power of its Outstanding Company Common Stock or its Outstanding Company Voting Securities, (ii) does not ever otherwise exercise control with respect to any matter concerning or affecting the Company, and (iii) promptly, but in no event longer than six (6) months after it acquires the Outstanding Company Common Stock or Outstanding Company Voting Securities, sells, transfers, assigns, or otherwise disposes of, to a person that is not an Affiliate of the Acquirer, that portion of the Acquired Company Securities which is necessary to achieve all of the following results and objectives: to cause the Acquirer to become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Acquired Company Securities that constitute less than 20% of (A) the then existing Outstanding Company Common Stock, and (B) the then existing Outstanding Company Voting Securities; or

(b) approval by the stockholders of the Company of an agreement to merge or consolidate or otherwise reorganize, with or into one or more Persons that are not Affiliates of the Company, as a result of which less than 50% of the outstanding voting securities of the surviving or resulting entity immediately after any such merger, consolidation, or reorganization are, or will be, owned, directly or indirectly, by Persons that were stockholders of the Company immediately before such merger, consolidation, or reorganization.

3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company, for the period commencing on the Effective Date and ending at the end of the 12th month following the Effective Date (the “Employment Period”).

4. Terms of Employment

(a) Position and Duties.

(i) During the Employment Period, (A) the Executive’s position (including, without limitation, offices, titles, and reporting requirements), authority, duties, and responsibilities shall be at least commensurate in all material respects with the most significant of, and the highest grade or level of, those that were held or exercised by the Executive or assigned to the Executive at any time during the 120-day period immediately preceding the Effective Date, and (B) the Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any other location less than 35 miles from                                   .

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote full-time attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic, or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements, or teach at educational institutions, and (C) manage personal investments, so long as these activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement, if and to the extent that any such activities have been conducted by the Executive prior to the Effective Date.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Executive shall receive from the Company an annual base salary (“Annual Base Salary”), paid at a biweekly rate, equal to the base salary in effect immediately prior to the Effective Date. During the Employment Period, the Executive’s Annual Base Salary shall be reviewed at least annually and shall be adjusted at any time and from time to time as shall be consistent with adjustments in base salary generally awarded in the ordinary course of business to other peer executives of the Company. Annual Base Salary shall not be reduced after any such increase, and, after any such increase, the term “Annual Base Salary” shall refer to the Annual Base Salary as so increased.

(ii) Annual Bonus. The Executive shall be eligible for an annual bonus (the “Annual Bonus”) in accordance with the Company’s then existing incentive plan.

(iii) Incentive, Savings, Retirement and Welfare Plans. The Executive, and the Executive’s family, as the case may be, shall be eligible to participate in and shall receive benefits under, during the Employment Period, all incentive, savings, retirement and welfare plans, practices, policies, and programs generally applicable to other peer executives of the Company, but in no event shall such plans, practices, policies, and programs provide the Executive (or the Executive’s family) with incentive opportunities (measured with respect to both regular and special incentive opportunities), savings opportunities, retirement benefits opportunities or welfare benefits that are, in each case, less favorable, in the aggregate, than the most favorable of the corresponding opportunities that were provided by the Company for the Executive under such plans, practices, policies, and programs as were in effect at any time during the 120-day period immediately preceding the Effective Date.

(iv) Business Expenses. During the Employment Period, the Executive shall be entitled to receive from the Company prompt reimbursement for all reasonable business expenses incurred by the Executive in accordance with the practices, policies, and procedures of the Company.

(v) Fringe Benefits. During the Employment Period, the Executive shall be entitled to receive from the Company fringe benefits in accordance with the practices, policies, and programs of the Company as were in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date.

(vi) Vacation. During the Employment Period, the Executive shall be entitled to receive from the Company paid vacation in accordance with the most favorable plans, practices, policies, and programs of the Company as were in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date.

5. Termination of Employment.

(a) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Company determines in good faith that a Disability (as defined below) of the Executive has occurred during the Employment Period, it may give to the Executive written notice of its intent to terminate the Executive’s employment with the Company. The Executive’s employment with the Company shall terminate effective on the Executive’s receipt of such notice (the “Disability Effective Date”). “Disability” means the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 60 consecutive business days as a result of incapacity due to mental or physical illness which is determined by the Board acting reasonably to be total and permanent.

(b) Cause. The Company may terminate the Executive’s employment with the Company during the Employment Period for Cause (as defined below). “Cause” means a material breach by the Executive of this Agreement, gross negligence or willful misconduct in the Executive’s performance of his or her duties with the Company, dishonesty to the Company on the part of the Executive, or the commission by the Executive of a felony that results in a felony conviction of the Executive in a court of competent jurisdiction.

(c) Good Reason. The Executive may terminate the Executive’s employment with the Company during the Employment Period for Good Reason (as defined below). “Good Reason” means:

(i) the assignment to the Executive of any responsibilities or duties inconsistent in any respect with the Executive’s position (including, without limitation, offices, titles, and reporting requirements), authority, duties, or responsibilities as contemplated by Section 4(a), excluding any action that is remedied by the Company promptly after receipt of written notice given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b), excluding any failure that is remedied by the Company promptly after receipt of written notice given by the Executive;

(iii) the Company requiring the Executive to be based at any location other than those locations described in Section 4(a)(i);

(iv) any purported termination by the Company of the Executive’s employment other than as expressly permitted by this Agreement; or

(v) any failure by any successor to the Company to comply with and satisfy Section 12(c), provided that such successor has received at least ten days prior written notice from the Company or the Executive of the requirements of Section 12(c).

(d) Notice of Termination. Any termination by the Company for Cause or by the Executive for Good Reason shall be communicated by a Notice of Termination (as defined below) to the other party. A “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Date of Termination (which shall be not more than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause, as the case may be, shall not waive any right of the Executive or the Company or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights.

(e) Date of Termination. “Date of Termination” means the date of receipt of the Notice of Termination or any later date of termination that may be specified in the Notice of Termination, provided, however, that (i) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination means the date on which the Company notifies the Executive of such termination, and (ii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination means the date of death of the Executive or the Disability Effective Date, respectively.

6. Obligations of the Company upon Termination.

(a) Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations under this Agreement to the Executive’s legal representatives, except for the following obligations (the amounts described in clauses (i), (ii), and (iii) are “Accrued Obligations”):

(i) payment of the Executive’s Annual Base Salary through the Date of Termination to the extent not yet paid;

(ii) payment of any Annual Bonus earned but not yet paid; and

(iii) payment of any accrued vacation pay not yet paid.

All Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, at the option of the Company, either (x) in a lump sum in cash within 30 days after the Date of Termination, or (y) in 12 equal consecutive monthly installments, with the first installment to be paid within 30 days of the Date of Termination.

(b) Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations under the Agreement to the Executive, except for all Accrued Obligations. All Accrued Obligations shall be paid to the Executive, at the option of the Company, either (x) in a lump sum in cash within 30 days after the Date of Termination, or (y) in 12 equal consecutive monthly installments, with the first installment to be paid within 30 days after the Date of Termination.

(c) Cause; Other Termination by the Executive. If the Executive’s employment is terminated for Cause, or if Executive terminates employment for other than Good Reason, in either case during the Employment Period, this Agreement shall terminate without further obligations under this Agreement to the Executive, except for the obligation to pay to the Executive the Annual Base Salary through the Date of Termination to the extent not yet paid.

(d) Other Termination by the Company; Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause and not by reason of the Executive’s Disability, or the Executive shall terminate his or her employment for Good Reason:

(i) the Company shall pay to the Executive the aggregate of the following amounts, such amounts to be payable by the Company in a lump sum in cash within 30 days after the Date of Termination:

A. all Accrued Obligations;

B. one times the sum of (i) the Executive’s Annual Base Salary, and (ii) any Annual Bonus to which the Executive is entitled under the Company’s then existing incentive plan;

C. the Company shall pay the Executive up to $25,000 for executive outplacement services utilized by the Executive, on the receipt by the Company of written receipts or other appropriate documentation;

(ii) for 12 months, or such longer period as any plan, practice, policy, or program may provide, the Company shall continue welfare benefits to the Executive and, where applicable, the Executive’s family at least equal to those which would have been provided to them in accordance with the plans, practices, policies, and programs described in Section 4(b)(iii) if the Executive’s employment had not been terminated; provided, however, that if the Executive becomes employed elsewhere during the Employment Period and is thereby afforded welfare and insurance benefits that are comparable to those described in Section 4(b)(iii), the Company’s obligation to continue providing the Executive with such benefits shall cease or be correspondingly reduced, as the case may be.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive, or other plans, practices, policies, or programs provided by the Company and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company. Amounts that are vested benefits or that the Executive otherwise is entitled to receive under any plan, practice, policy, or program of the Company on or subsequent to the Date of Termination shall be payable in accordance with such plan, practice, policy, or program, except as may be explicitly provided otherwise in this Agreement.

8. General Release and Waiver. In exchange for the consideration provided under this Agreement, the Executive agrees to sign a General Release and Waiver of age and other discrimination claims on a form provided by the Company at the time of separation.

9. Confidential Information; Non-Compete.

(a) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge, or data relating to the Company and its respective businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such secret or confidential information, knowledge, or data to anyone other than the Company and those designated by it. In addition, to the extent that the Executive is a party to any other agreements relating to non-competition, confidential information, inventions, or similar matters with the Company, the Executive shall continue to comply with the provisions of such other agreements. In addition to the obligations under this Section 9(a), the Executive shall execute any other documents which relate to the subject matter of this Section 9(a) and which are required generally by the Company of its executive officers, and such other documents already executed or executed after the effective date of this Agreement shall thereby become part of this Agreement. Nothing in this Agreement shall be construed as modifying any provisions of such other agreements or documents. In the case of any inconsistency between such other agreements and documents and this Agreement, the broader provision shall prevail. If the Executive breaches this Section 9(a) or a covenant not to compete or confidentiality provision in any such other agreement or document, that breach shall be considered a breach of this Agreement. In addition to any other rights the Company may have for such breach if such breach occurs after the termination of employment, the Executive shall forfeit the benefits under Section 6(d). If such breach is determined retroactively, the Executive shall pay promptly to the Company the amount the Company paid or incurred to provide any benefits to Executive after the date of such breach.

(b) The Executive acknowledges that the Company will suffer damages incapable of ascertainment if any of the provisions of subsection (a) are breached and that the Company will be irreparably damaged if the provisions of subsection (a) are not enforced. Therefore, should any dispute arise with respect to the breach or threatened breach of subsection (a), the Executive agrees and consents that in addition to any other remedies available to the Company, an injunction or restraining order or other equitable relief may be issued or ordered by a court of competent jurisdiction restraining any breach or threatened breach of subsection (a). The Executive agrees not to urge in any such action that an adequate remedy exists at law.

10. Public Announcements. The Executive shall not issue any press release or otherwise make any public statement with respect to the Company, this Agreement, or the transactions contemplated herein.

11. Arbitration. Any dispute, controversy, or claim arising out of or relating to this Agreement, or any breach hereof, shall be determined and settled by arbitration to be held in Boston, Massachusetts, pursuant to the commercial rules of the American Arbitration Association or any successor organization and before a panel of three arbitrators. Any award rendered shall be final, conclusive, and binding on the parties.

12. Successors.

(a) This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to all or substantially all of its business or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.

13. Miscellaneous.

(a) All notices and other communications given pursuant to this Agreement shall be in writing and shall be deemed received (i) on the calendar day following the date such notice is sent if (A) delivered by hand, or (B) delivered via overnight delivery by Express Mail, Federal Express, or other national overnight delivery service, or (ii) on the fifth (5th) calendar day following the date such notice is sent, if sent by registered or certified mail, return receipt requested, in every case, to the appropriate party at the address given below for such party (or to such other address designated by the party in writing and delivered to the other party pursuant to this Section 13(a)).

If to the Executive:

                                   

                                   

                                   

                                   

If to the Company:

Analogic Corporation

8 Centennial Drive

Peabody, Massachusetts 01960

Attn: President

(b) The Company shall deduct or withhold from salary payments, and from all other payments made to the Executive pursuant to this Agreement, all amounts that may be required to be deducted or withheld under any applicable law now in effect or that may become effective during the term of this Agreement (including, without limitation, social security contributions and income tax withholdings).

(c) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to principles of conflict of laws. The Executive consents to jurisdiction in Massachusetts and venue in Suffolk County for purposes of all claims arising under this Agreement. The captions of this Agreement are not part of the provisions of this Agreement and shall have no force or effect. Except as specifically referenced in this Agreement (including, without limitation, agreements referenced in Section 7 which shall be treated as being specifically referenced in this Agreement), no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Agreement, have been made by either party that are not expressly set forth in this Agreement. No provision of this Agreement may be waived, modified, or amended, orally or by any course of conduct, unless such waiver, modification, or amendment is set forth in a written agreement duly executed by the parties or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. The Executive’s or the Company’s failure to insist on strict compliance with any provision in any particular instance shall not be deemed to be a waiver of that provision or any other provision.

[The next page is the signature page.]

1

IN WITNESS WHEREOF, the Executive has set his or her hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above.

ANALOGIC CORPORATION

By:                                                                        

Name:
Title:

EXECUTIVE:

                                                                       

Name

 

 

 

EX-10.4 5 dex104.htm ANALOGIC CORPORATION SEVERANCE PLAN FOR MANAGEMENT EMPLOYEES

Exhibit 10.4

ANALOGIC CORPORATION

SEVERANCE PLAN FOR MANAGEMENT EMPLOYEES

 

 

As Amended and Restated, Effective As Of

December 31, 2008


ANALOGIC CORPORATION

SEVERANCE PLAN FOR MANAGEMENT EMPLOYEES

 

 

TABLE OF CONTENTS

 

 

 

 

  

 

  

Page

ARTICLE I - PURPOSE

  

1

ARTICLE II - DEFINITIONS

  

1

2.1

  

“COMPENSATION

  

1

2.2

  

“CAUSEOR “FOR CAUSE

  

1

2.3

  

“CODE

  

2

2.4

  

“ELIGIBLE MANAGEMENT EMPLOYEE

  

2

2.5

  

“EMPLOYEE

  

2

2.6

  

“EMPLOYER

  

2

2.7

  

“ERISA”

  

2

2.8

  

“JOB ELIMINATION

  

2

2.9

  

“NOTICE OF JOB ELIMINATION

  

3

2.10

  

“NOTICE PERIOD

  

3

2.11

  

“NOTICE PERIOD DATE

  

3

2.12

  

“PARTICIPANT

  

3

2.13

  

“PARTICIPATING EMPLOYER

  

3

2.14

  

“PAYMENT COMMENCEMENT DATE

  

3

2.15

  

“PLAN

  

3

2.16

  

“PLAN ADMINISTRATOR

  

4

2.17

  

“PLAN YEAR

  

4

2.18

  

“RETURN DATE

  

4

2.19

  

“REVOCATION PERIOD

  

4

2.20

  

“SEVERANCE AGREEMENT

  

5

2.21

  

“SEVERANCE BENEFITS

  

5

2.22

  

“SEVERANCE PERIOD

  

5

2.23

  

“TERMINATION DATE

  

5

2.24

  

“VOLUNTARY SEPARATION PROGRAM

  

5

2.25

  

“WARN” OR “WARN ACT

  

5

ARTICLE III - PARTICIPATION

  

5

ARTICLE IV- EFFECT ON OTHER BENEFITS

  

6

ARTICLE V – NOTICE PERIOD, SEVERANCE PERIOD, AND ACCELERATIONS OF TERMINATION DATE

  

6

5.1

  

NOTICE PERIOD

  

6

5.2

  

ACCELERATION OF TERMINATION DATE

  

6

5.3

  

SEVERANCE PERIOD

  

6

ARTICLE VI - BENEFITS

  

7

6.1

  

RETURNING SEVERANCE AGREEMENT

  

7

6.2

  

SEVERANCE BENEFIT

  

7

6.3

  

ADDITIONAL PROVISIONS RELATED TO SEVERANCE BENEFITS

  

8

6.4

  

PAYMENTS SUBJECT TO SECTION 409A

  

8


ARTICLE VII – WARN

  

9

ARTICLE VIII - FUNDING

  

9

ARTICLE IX – PLAN ADMINISTRATION AND FIDUCIARY

  

10

9.1

  

NAMED FIDUCIARY

  

10

9.2

  

PLAN ADMINISTRATION

  

10

9.3

  

DELEGATION OF DUTIES

  

11

9.4

  

INDEMNIFICATION

  

11

9.5

  

FIDUCIARY DUTIES AND RESPONSIBILITIES

  

11

ARTICLE X – CLAIMS PROCEDURE

  

11

10.1

  

CLAIMS PROCEDURE

  

11

10.2

  

REVIEW OF DENIED CLAIM

  

12

10.3

  

DECISION ON REVIEW

  

12

10.4

  

NOTIFICATION OF DECISION ON REVIEW

  

12

ARTICLE XI – AMENDMENT AND TERMIANTION

  

13

11.1

  

AMENDMENT

  

13

11.2

  

TERMINATION

  

13

ARTICLE XII – MISCELLANEOUS

  

13

12.1

  

EXCLUSIVE BENEFIT

  

13

12.2

  

NON-ALIENATION OF BENEFITS

  

13

12.3

  

LIMITATION OF RIGHTS

  

14

12.4

  

GOVERNING LAWS AND JURISDICTION AND VENUE

  

14

12.5

  

SEVERABILITY

  

14

12.6

  

CONSTRUCTION

  

14

12.7

  

TITLES

  

14

12.8

  

EXPENSES

  

14

ARTICLE XIII – EFFECTIVE DATE

  

14

 

ii


ANALOGIC CORPORATION

SEVERANCE PLAN FOR MANAGEMENT EMPLOYEES

Analogic Corporation (the “Employer”) hereby adopts the Analogic Corporation Severance Plan for Management Employees (the “Plan”), effective as of January 1, 2006 as amended and restated effective December 31, 2008. All prior existing severance pay plans, programs or practices applicable to Eligible Management Employees, whether formal or informal, are hereby expressly superseded by this Plan as applicable to Eligible Management Employees.

ARTICLE I

Purpose

The purpose of the Plan is to grant severance benefits to Eligible Management Employees of the Employer whose employment with the Employer is terminated under the circumstances described herein. This Plan is intended to constitute an employee welfare benefit plan within the meaning of Section 3(1) of ERISA, and is intended to be exempt from the requirements under Section 409A of the Code.

This Plan is a “Welfare Program” as defined in the Analogic Corporation Welfare Benefit Plan (the “Welfare Benefit Plan”).

ARTICLE II

Definitions

2.1 “Compensation” means the Participant’s rate of regular annual base pay, determined as of the date of the Eligible Management Employee’s Notice of Job Elimination. Compensation does not include bonuses, overtime, commissions, shift differential pay, incentive pay, and the value of any employee benefits.

2.2 “Cause” or “For Cause” means:

(a) the Eligible Management Employee is convicted of a felony or misdemeanor involving fraud, dishonesty or moral turpitude, or

(b) the Eligible Management Employee, in carrying out his duties, acts or fails to act in such a manner which is determined in the sole discretion of the Employer’s Board of Directors to be:

(i) willful gross neglect, and/or

 

1


(ii) willful gross misconduct

resulting, in either case, in harm to the Employer unless such act, or failure to act, was believed by the Eligible Management Employee, in reasonable good faith, to be in the best interest of the Employer.

2.3 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.4 “Eligible Management Employee” means any one of the following:

(a) the President and Chief Executive Officer of the Employer,

(b) a designated corporate officer of the Employer, or

(c) other designated officers of the Employer to include:

(i) divisional, operations, technical and administrative officers of the Employer, and

(ii) presidents/general managers of subsidiary corporations of the Employer.

All of the above Eligible Management Employees will occupy a position with an executive salary grade above E08.

2.5 “Employee” means each individual who is a common law employee of the Employer. The term Employee does not include temporary employees as defined in the Analogic 401(k) Plan, independent contractors (even if the Internal Revenue Service characterizes or recharacterizes such person as an employee), leased employees within the meaning of Section 414(n)(2) or Section 414(o)(2) of the Code, or non-resident aliens.

2.6 “Employer” means Analogic Corporation, a Massachusetts corporation, and any entity which succeeds to the business and assumes the obligations of the Employer hereunder.

2.7 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.8 “Job Elimination” means an involuntary termination of employment including, but not limited to, termination of employment on account of changes in the Employer’s operations or organization, reorganizations, staffing changes, job elimination, or job force reductions, as determined by the Employer in its sole discretion.

Notwithstanding anything to the contrary contained herein, Job Elimination shall not result:

(a) from an Eligible Management Employee’s termination of employment on account of voluntary resignation, retirement or death prior to provision of a Notice of Job Elimination;

 

2


(b) if the Employer or a Participating Employer has offered the Eligible Management Employee a comparable replacement position (as determined by the Employer, in its sole and absolute discretion, taking into account the similarity of duties, similarity of exempt status and salary range; provided that a new position will not be considered “comparable” if it is not within reasonable commuting distance from the Eligible Management Employee’s home, offers a salary significantly less than the Eligible Management Employee’s former position, or is of a grade more than one grade below the Eligible Management Employee’s former position);

(c) if the Eligible Management Employee’s employment is terminated For Cause;

(d) if, following the sale or outsourcing of any portion of the Employer, an Eligible Management Employee is offered by the successor organization a position at a base compensation rate not significantly lower than that for the Eligible Management Employee’s former position, or of a grade not more than one grade lower than the Eligible Management Employee’s former position;

(e) from the Eligible Management Employee’s failure to return to work within the time required following an approved leave of absence;

(f) from a change in employment that results from a natural disaster, unforeseeable governmental action, act of war, or other similar unanticipated business disaster; or

(g) from a voluntary transfer of employment between the Employer and any Participating Employer.

2.9 “Notice of Job Elimination” means a written notice provided by the Employer to an Eligible Management Employee informing that employee of a Job Elimination.

2.10 “Notice Period” means the sixty (60) day period beginning on the day immediately following the date the Employer provides a Notice of Job Elimination, or on such other date as the Employer shall determine in its sole discretion. In no event may the Notice Period end prior to the Return Date. In the event of any material change in the Notice of Job Elimination, a new Notice Period must begin on the day immediately following the date the Employer provides a revised Notice of Job Elimination reflecting the material change. However, if the Employer and the Eligible Management Employee agree, the prior Notice Period may continue to apply.

2.11 “Notice Period Date” means the first day of any Notice Period.

2.12 “Participant” means any Eligible Management Employee who has been provided a Notice of Job Elimination and who satisfies the requirements of Section 6.1.

2.13 “Participating Employer” means the term as it is defined in the Welfare Benefit Plan.

2.14 “Payment Commencement Date” means the first payroll date following the later of (i) the Return Date and (ii) the end of the Revocation Period, if applicable.

2.15 “Plan” means the Analogic Corporation Severance Plan for Management Employees as set forth herein and as it may be amended from time to time.

 

3


2.16 “Plan Administrator” means the Employer or such other individual, committee or firm as the Employer shall designate from time to time.

2.17 “Plan Year” means the twelve (12) consecutive month period beginning January 1 and ending December 31.

2.18 “Return Date” means the date by which an Eligible Management Employee must sign and return a Severance Agreement including a release of claims in order to obtain Severance Benefits. Except as otherwise determined by the Employer in its sole discretion, or otherwise required by law, the Return Date is the date twenty one (21) calendar days following the date the Participant is provided with a Notice of Job Elimination; provided however that:

(a) if the twenty-first calendar day is not a business day, the Return Date will be on the next business day;

(b) if the Eligible Management Employee is at least forty years old, and the Job Elimination and/or the Voluntary Separation Program affects two or more Eligible Management Employees, the Return Date will be on the forty-fifth (45) calendar day following the date the Eligible Management Employee is provided with a Notice of Job Elimination (or the next business day if the forty-fifth calendar day is not a business day);

(c) if the Eligible Management Employee is under forty years old and is otherwise entitled, under applicable state or local fair employment practice law, to more than twenty-one (21) calendar days in which to consider whether to execute a Severance Agreement, the Return Date will be a date determined by reference to applicable state or local fair employment practices law; and

(d) if the WARN Act applies, the Return Date will be on the sixtieth (60) calendar day following the date the Participant is provided with a Notice of Job Elimination (or the next business day if the sixtieth (60) calendar day is not a business day).

A Severance Agreement returned to the Employer that is signed and physically received by the Return Date, or, if mailed, is addressed properly for delivery, postmarked by the United States Postal Service no later than the Return Date, and actually received by the Employer no later than 10 calendar days from the Return Date, will be considered timely. Severance Agreements which are not timely signed and/or returned as provided herein will not be accepted by the Employer, unless the Employer decides to accept it on a case-by-case basis, in its sole discretion.

2.19 “Revocation Period” means the seven calendar day (or other longer legally required calendar day) period immediately following the date the Eligible Management Employee signs the Severance Agreement during which an Eligible Management Employee who is either: (i) at least forty (40) years old; or (ii) is under forty (40) years old and is employed in a state that requires a specific Revocation Period, may revoke his or her signed Severance Agreement. To be effective, a written request to revoke must be received by the Employer (as defined by applicable law) no later than 5:00 p.m. EST on the seventh calendar day (or other longer period required by law) from the date the Eligible Management Employee signed the Severance Agreement or, if mailed, be postmarked no later than the seventh calendar day (or other longer period required by law) from the date the Eligible Management Employee signed the Severance Agreement.

 

4


2.20 “Severance Agreement” means a written agreement in a form provided by the Employer, in its sole discretion, by which an Eligible Management Employee agrees to waive and release the Employer from all legal claims the Eligible Management Employee may have against the Employer in exchange for payment of Severance Benefits. To be effective, a Severance Agreement must be signed and returned to the Employer by the Return Date (and not be revoked during any applicable Revocation Period). Severance Agreements are not required to be identical among Eligible Management Employees.

2.21 “Severance Benefits” means benefits provided for in this Plan pursuant to Section 6.2. The Severance Benefits that a Participant may receive are net amounts from which applicable taxes, withholding and appropriate deductions have been taken, and including but not limited to deduction of any outstanding amount owed to the Employer by the Participant regardless of the reason for or source of the amount due.

2.22 “Severance Period” means the period of time commencing on the Payment Commencement Date during which a Participant receives Severance Benefits pursuant to Section 6.2.

2.23 “Termination Date” means the last day that the Eligible Management Employee is employed by the Employer which day is the last day of the Notice Period, except as otherwise provided in Section 5.2.

2.24 “Voluntary Separation Program” means a program of limited time duration under which an Eligible Management Employee is permitted to voluntarily separate from employment with the Employer, thereby receiving certain associated benefits, including eligibility to participate in this Plan. In the Employer’s sole and absolute discretion, Eligible Management Employees in certain job groups, job descriptions or job categories may not be considered eligible to request participation in the Voluntary Separation Program. Even for Eligible Management Employees eligible to participate in the Voluntary Separation Program, their actual participation is not guaranteed and the Employer may, in its sole and absolute discretion, deny an Eligible Management Employee’s request for participation.

2.25 “WARN” or “WARN Act” means the Worker Adjustment Retraining and Notification Act, as amended, and any applicable state plant or facility closing or mass layoff law.

ARTICLE III

Participation

An Eligible Management Employee becomes eligible to participate in the Plan as of the date the Eligible Management Employee is provided with a Notice of Job Elimination.

 

5


ARTICLE IV

Effect On Other Benefits

Eligibility for other employee benefits (e.g., health and life insurance) will cease in accordance with the terms of the respective plans.

ARTICLE V

Notice Period, Severance Period, and Acceleration of Termination Date

5.1 Notice Period. During the Notice Period, Eligible Management Employees are required to report to work unless notified otherwise. Also, during the Notice Period, all of the Employer’s policies and procedures that applied to Eligible Management Employees before receiving the Notice of Job Elimination continue in full force and effect and Eligible Management Employees remain subject to those policies and procedures. Eligible Management Employees will continue to receive Compensation, participate in certain employee benefits during the Notice Period as though working pursuant to their regular schedule, in accordance with the Employer’s policies and procedures and the terms of the applicable plans.

In the event WARN applies, the provisions in Article VII shall apply.

5.2 Acceleration of Termination Date. The Termination Date will be accelerated or otherwise changed if, prior to the end of the Notice Period, a Participant resigns or otherwise obtains an external position or acts as an employee, consultant or independent contractor or as a sole proprietor of a business or acts as an officer, director, or partner in another public or privately held company, the Eligible Management Employee is required to notify the Employer immediately. In such case, the Termination Date will be accelerated to coincide with the calendar day immediately following the day the Eligible Management Employee resigned or otherwise obtained the position.

If a Participant is permitted by the Employer to accept, and does accept, another regular full time position with the Employer or a Participating Employer before the end of the Notice Period, the Termination Date will be cancelled and the Participant is no longer eligible to receive any Severance Benefits.

5.3 Severance Period. For Eligible Management Employees who sign and return (and do not revoke, if a Revocation Period applies) the Severance Agreement as required, the Severance Period shall commence on the Payment Commencement Date. Participants receive Severance Benefits in accordance with Article VI during the Severance Period.

In addition, if a Participant accepts another regular full time position with the Employer or Participating Employer, including a successor, after the Severance Period begins and before the date it is scheduled to end, the Participant is no longer eligible to receive any further Severance Benefits.

 

6


ARTICLE VI

Benefits

6.1 Returning Severance Agreement. An Eligible Management Employee who receives a Notice of Job Elimination becomes entitled to receive Severance Benefits only if the Eligible Management Employee returns a signed Severance Agreement to the Employer no later than the Return Date and Section 6.3 is not applicable. If a Revocation Period applies, entitlement to Severance Benefits also is conditioned upon the Eligible Management Employee not revoking (or attempting to revoke) the Severance Agreement during the Revocation Period.

6.2 Severance Benefit. Subject to Section 6.4, Eligible Management Employees who experience an involuntary Job Elimination (not For Cause) will receive Severance Benefits determined by the Employer and paid through continuation of the Employer’s normal payroll process, in accordance with the following:

(a) for the President/CEO and other Eligible Management Employees reporting directly to the President/CEO, the Employer shall award a Severance Benefit equal to two (2) weeks of continuing Compensation for each complete year of service with the Employer, except that the Severance Benefit may not be calculated using less than 26 weeks (6 months).

(b) for all other Eligible Management Employees, the Employer shall award a Severance Benefit equal to two (2) weeks of continuing Compensation for each complete year of service with the Employer.

(c) In all management Job Eliminations above, the Severance Period for any Eligible Management Employee shall not be less than two (2) weeks or exceed one (1) year (52 weeks) regardless of the length of service with the Employer.

(d) only complete years of service shall be used to determine Severance Benefits.

(e) the Employer shall award continuation of any group health and life insurance that was in effect on the Termination Date through the Severance Period in accordance with the Employer’s policies and procedures and the terms of the applicable plans.

(f) in accordance with Department of Labor Regulation 2510.3-2(b), Severance Benefits may not:

(i) be contingent on the Eligible Management Employee’s retirement;

(ii) exceed twice the Eligible Management Employee’s annual pay during the year immediately preceding the Eligible Management Employee’s Termination Date; and

(iii) be completed more than 24 months following the Eligible Management Employee’s Termination Date.

In order to receive Severance Benefits, an Eligible Management Employee must timely sign and return the Severance Agreement provided by the Employer and not revoke that Severance Agreement at any time.

 

7


6.3 Additional Provisions Related to Severance Benefits

(a) Notwithstanding anything to the contrary contained herein, the following Eligible Management Employees are not eligible to receive Severance Benefits when:

(i) the Employer becomes aware anytime after the Notice Period Date and before the end of the Severance Period, of circumstances that would have caused the Eligible Management Employee’s termination of employment For Cause,

(ii) an Eligible Management Employee has previously entered into an employment agreement with the Employer which contains a provision for the payment (or nonpayment) of Severance Benefits or payments upon termination of employment, and/or

(iii) an Eligible Management Employee whose Termination Date is accelerated pursuant to Section 5.2.

(b) Notwithstanding anything to the contrary contained or implied herein, the Employer may revoke a Participant’s Severance Agreement during any applicable Revocation Period.

6.4 Payments subject to Section 409A. Subject to the provisions in this Section 6.4, any severance payments or benefits under the offer letter shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the date of termination of your employment. The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to you under the offer letter:

(a) It is intended that each installment of the severance payments and benefits provided under the offer letter shall be treated as a separate “payment” for purposes of Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”). Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(b) If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments and benefits shall be made on the dates and terms set forth in the offer letter.

(c) If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:

(i) Each installment of the severance payments and benefits due under the offer letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A; and

(ii) Each installment of the severance payments and benefits due under the offer letter that is not described in paragraph (i) above and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the

 

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six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of severance payments and benefits if and to the maximum extent that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following your taxable year in which the separation from service occurs.

(d) The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this paragraph 4, “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-1(h)(3).

(e) All reimbursements and in-kind benefits provided under the offer letter shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Plan), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

(f) The Company may withhold (or cause to be withheld) from any payments made under this Plan, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling.

ARTICLE VII

WARN

Notwithstanding anything to the contrary contained or implied herein, in the event WARN is applicable to a Participant: (i) any Notice Period and/or Severance Benefits paid or payable to the Participant will be deemed to constitute and shall be attributed to WARN notice and/or WARN benefits; (ii) all Severance Benefits under this Plan will be reduced and/or offset by any notice, payments or benefits to which the Participant may be entitled under WARN; and (iii) all Severance Benefits under this Plan will be reduced and/or offset by any amount of paid days and/or paid benefits in lieu of notice the Participant is given or is required to be given by the Employer to satisfy its obligations under WARN. A Severance Agreement is not required for receipt of WARN benefits.

ARTICLE VIII

Funding

The benefits provided hereunder will be paid solely from the general assets of the Employer. Nothing contained or implied herein will be construed to require the Employer or the Plan Administrator to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim against, right to, or security or other interest in any fund, account or asset of the Employer from which any payment under the Plan may be made.

 

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ARTICLE IX

Plan Administrator

9.1 Named Fiduciary. The Plan Administrator is defined in the Welfare Benefit Plan

9.2 Plan Administration. Except as otherwise provided in the Welfare Benefit Plan or this Plan:

(a) The Plan Administrator shall have sole discretion and authority to control and manage the operation and administration of the Plan.

(b) The Plan Administrator shall have complete discretion to interpret the provisions of the Plan, make findings of fact, correct errors, and supply omissions. All decisions and interpretations of the Plan Administrator made in good faith pursuant to the Plan shall be final, conclusive and binding on all persons, subject only to the claims procedure, and may not be overturned unless found by a court to be arbitrary and capricious.

(c) The Plan Administrator shall have all other powers necessary or desirable to administer the Plan, including, but not limited to, the following:

(i) To prescribe procedures to be followed by Participants in filing claims under the Plan;

(ii) To prepare and distribute information explaining the Plan to Eligible Management Employees and Participants;

(iii) To receive from the Employer, Eligible Management Employees and Participants such information as shall be necessary for the proper administration of the Plan;

(iv) To keep records of elections, claims, disbursements under the Plan, and any other information required by ERISA or the Code;

(v) To appoint individuals or committees to assist in the administration of the Plan and to engage any other agents it deems advisable;

(vi) To accept, modify or reject Participant elections under the Plan;

(vii) To promulgate any such forms to be used by Eligible Management Employees and Participants;

(viii) To prepare and file any reports or returns with respect to the Plan required by the Code, ERISA or any other laws;

(ix) To determine and enforce any limits on benefits elected hereunder; and

 

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(x) To correct errors and make equitable adjustments for mistakes made in the administration of the Plan; specifically, and without limitation, to recover erroneous overpayments made from the Plan to a Participant, in whatever manner the Plan Administrator determines is appropriate, including suspensions or recoupment of, or offsets against, future payments due that Participant.

9.3 Delegation of Duties. The Plan Administrator may delegate responsibilities for the operation and administration of the Plan, may designate fiduciaries other than those named in the Plan, and may allocate or reallocate fiduciary responsibilities under the Plan.

9.4 Indemnification. The Plan Administrator (i.e., the Plan Administrator is not the Employer) and any delegate or agent of the Employer who is an Employee shall be fully indemnified by the Employer against all liabilities, costs, and expenses (including defense costs, but excluding any amount representing a settlement unless such settlement is approved by the Employer) imposed upon it in connection with any action, suit, or proceeding to which it may be a party by reason of being the Plan Administrator or having been assigned or delegated any of the powers or duties of the Plan Administrator, and arising out of any act, or failure to act, that constitutes or is alleged to constitute a breach of such person’s responsibilities in connection with the Plan, unless such act or failure to act is determined to be due to gross negligence or willful misconduct.

9.5 Fiduciary Duties and Responsibilities. Each Plan fiduciary shall discharge his duties with respect to the Plan solely in the interest of each Participant; for the exclusive purpose of providing benefits to such individuals and defraying reasonable expenses of administering the Plan; and in accordance with the terms of the Plan. Each fiduciary, in carrying out such duties, shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in exercising such authority. A fiduciary may serve in more than one fiduciary capacity. Unless liability is otherwise provided under Section 405 of ERISA, a named fiduciary shall not be liable for any act or omission of any other party to the extent that (a) such responsibility was properly allocated to such other party as a named fiduciary, or (b) such other party has been properly designated to carry out such responsibility pursuant to the procedures set forth above.

ARTICLE X

Claims Procedure

10.1 Claims Procedure. If a Participant or former Participant asserts a right to any benefit under the Plan that he has not received, he or his authorized representative shall file a written claim for such benefit with the Plan Administrator. If the Plan Administrator wholly or partially denies such claim, it shall provide written or electronic notice to the claimant within a reasonable period of time, but not later than 90 days after receipt by the Plan Administrator of the claim, unless the Plan Administrator determines that special circumstances require an extension of time, not to exceed 90 days, for processing the claim. If the Plan Administrator determines that an extension of time is required, it shall provide the claimant with written notice of the extension before the end of the initial 90-day period. Such notice shall describe the special circumstances requiring the extension of time and specify the date by which the Plan Administrator expects to render a benefit determination. If the Plan Administrator wholly or partially denies a claim, it shall set forth in its benefit determination, which shall be written in a manner calculated to be understood by the claimant:

(a) the specific reasons for the denial of the claim;

 

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(b) specific reference(s) to pertinent provisions of the Plan on which the adverse benefit determination is based;

(c) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary;

(d) an explanation of the Plan’s claims review procedure, including the time limits applicable under such procedure; and

(e) a statement that the claimant has the right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

10.2 Review of Denied Claim. A Participant or former Participant whose claim for benefits is denied may request a full and fair review of the adverse benefit determination within 60 days after notification of the adverse benefit determination by the Plan Administrator. The Participant or former Participant:

(a) shall be provided a review that takes into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination;

(b) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim; and

(c) may submit written comments, documents, records and other information relating to the claim to the Plan Administrator for review.

10.3 Decision on Review. Subject to Section 2560.503-1(i)(1)(ii) of the Department of Labor regulations, a decision on review by the Plan Administrator shall be made within a reasonable period of time, but not later than 60 days after receipt by the Plan Administrator of a request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing, in which case the claimant shall be provided with written notice of the extension before the end of the initial 60-day period. Such notice shall describe the special circumstances requiring the extension and specify the date by which the Plan Administrator expects to render its decision. In no event shall the decision be rendered later than 120 days after receipt of the request for review.

10.4 Notification of Decision on Review. The Plan Administrator shall provide written or electronic notice of its decision with respect to the claimant’s appeal which shall be written in a manner calculated to be understood by the claimant. If there is an adverse benefit determination on review, the Plan Administrator’s decision shall include:

(a) the specific reasons for the adverse benefit determination;

 

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(b) specific reference(s) to pertinent provisions of the Plan on which the adverse benefit determination is based;

(c) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim;

(d) a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to receive information about any such procedures; and

(e) a statement that the claimant has the right to bring a civil action under Section 502(a) of ERISA following the adverse benefit determination on review.

ARTICLE XI

Amendment and Termination

11.1 Amendment. The Employer has the right to amend the Plan at any time. Any amendment shall be by the direction of an authorized officer of the Employer or his authorized designee.

11.2 Termination. The Employer has established the Plan with the bona fide intention and expectation that it will be continued indefinitely, but the Employer is not and shall not be under any obligation or liability whatsoever to maintain the Plan for any given length of time and may, in its sole and absolute discretion, discontinue or terminate the Plan, in whole or in part, at any time by direction of an authorized officer of the Employer or his authorized designee. Participants receiving benefits upon Plan termination shall continue to be eligible for such benefits.

ARTICLE XII

Miscellaneous

12.1 Exclusive Benefit. This Plan has been established for the exclusive benefit of Eligible Management Employees.

12.2 Non-Alienation of Benefits. No benefit, right or interest of any Participant under the Plan shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, seizure, attachment or legal, equitable or other process, or be liable for, or subject to, the debts, liabilities or other obligations of such person, except as otherwise required by law.

 

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12.3 Limitation of Rights. Neither the establishment nor the existence of the Plan, nor any modification thereof, shall operate or be construed as to:

(a) give any person any legal or equitable right against the Employer except as expressly provided herein or required by law, or

(b) create a contract of employment with any Eligible Management Employee, obligate the Employer to continue the service of any Eligible Management Employee, or affect or modify the terms of an Eligible Management Employee’s employment in any way.

12.4 Governing Laws and Jurisdiction and Venue. The Plan shall be construed and enforced according to the laws of the Commonwealth of Massachusetts, to the extent not preempted by Federal law which shall otherwise control. Exclusive jurisdiction and venue of all disputes arising out of or relating to this Plan shall be in any court of appropriate jurisdiction in the Commonwealth of Massachusetts.

12.5 Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed and enforced as if such invalid or unenforceable provision had not been included herein.

12.6 Construction. The captions contained herein are inserted only as a matter of convenience and reference, and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way shall affect the Plan or the construction of any provision thereof. Any terms expressed in the singular form shall be construed as though they also include the plural, where applicable, and references to the masculine, feminine, and the neuter are interchangeable.

12.7 Titles. The titles of the Articles and Sections hereof are included for convenience only and shall not be construed as part of the Plan or in any respect affecting or modifying its provisions. Such words in this Plan as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this instrument as a whole and not merely to the subdivision in which said words appear.

12.8 Expenses. Any expenses incurred in the administration of the Plan shall be paid by the Employer.

ARTICLE XIII

Effective Date

The effective date of the Plan as set forth herein shall be January 1, 2006.

*        *        *        *

 

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IN WITNESS WHEREOF, the Employer has caused this instrument to be duly executed in its name and on its behalf this 31st day of December 2008.

 

ANALOGIC CORPORATION

By:

 

/s/ John J. Millerick

 

John J. Millerick

 

Senior Vice President, Chief Financial Officer and Treasurer

 

ATTEST:

/s/ Douglas Rosenfeld

Douglas Rosenfeld

Vice President – Human Resources

 

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