0001555280
false
0001555280
2024-05-20
2024-05-20
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
May 20, 2024
Zoetis Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-35797 46-0696167
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
10 Sylvan Way Parsippany New Jersey 07054
(Address of principal executive offices) (Zip Code)
(
973
)
822-7000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2 (b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share ZTS New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 20, 2024, in connection with Heidi C. Chen's previously announced
separation, Zoetis Inc. (the "Company") entered into a Letter Agreement (the
"Letter Agreement") with Ms. Chen. The Letter Agreement provides that Ms. Chen
will continue employment as a non-corporate officer employee of the Company
through July 16, 2024 (the "Termination Date"), and through the Termination
Date will continue receiving her current annual base salary and employment
benefits. After the Termination Date Ms. Chen will serve as a non-employee
consultant through December 31, 2024, and in exchange for such advisory
services, and subject to compliance with the terms of the Letter Agreement and
the execution of a release agreement, Ms. Chen will receive a consulting fee
of $350,000. Ms. Chen will also be eligible to receive severance payments and
benefits in accordance with the terms of the Zoetis Executive Severance Plan
and as set forth in the Letter Agreement.
The foregoing description of the Letter Agreement is qualified in its entirety
by reference to the full text of the Letter Agreement, which is attached as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
10 Letter Agreement
.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZOETIS INC.
Dated: May 24, 2024 By: /s/ Roxanne Lagano
Roxanne Lagano
Executive Vice President,
General Counsel & Secretary
Exhibit 10.1
10 Sylvan Way
Parsippany, NJ 07054
April 16, 2024 (revised as of May 20, 2024)
Ms. Heidi Chen
Re:
Separation from Service
Dear Heidi:
On behalf of Zoetis Inc. (the "
Company
") and its Board of Directors, I want to thank you for your years of service
to the Company, during which you have made many meaningful contributions. This
letter agreement (this "
Letter Agreement
") sets forth the terms of your separation from service with the Company.
1.
Termination Date, Transition and Advisory Periods
Effective as of April 16, 2024, your service as Executive Vice President,
General Counsel and Corporate Secretary; Business Lead of Human Health
Diagnostics of the Company and in any other positions you may hold with the
Company or any of its affiliates will cease;
provided
,
however
, that, during the period from April 16, 2024 until July 16, 2024 (the "
Termination Date
" and, such period, the "
Transition Period
"), the Company shall continue your employment as a non-corporate officer
employee of the Company reporting to the Company's Chief Executive Officer.
During the Transition Period, you shall continue to (a) receive your annual
base salary at the rate in effect as of the date hereof and (b) participate in
the health, welfare and retirement plans of the Company and its affiliates in
which you currently participate. You will also receive Company matching
contributions under the Zoetis U.S. Savings Plan and Zoetis Supplemental
Savings Plan in respect of the Transition Period. Effective as of the
Termination Date, your employment with the Company and its affiliates shall
terminate.
Further, during the period from July 17, 2024, through December 31, 2024 (the "
Advisory Period
"), you will provide advisory support as a non-employee consultant to the
Chief Executive Officer and the Zoetis Executive Team. In consideration for
your advisory services, you will receive a consulting fee of $350,000 (the "
Consulting Fee
"), payable in equal monthly installments. The Company and you agree that your
duties as a consultant will not exceed 20% of the average level of bona fide
services performed by you during your last three years as an employee. You
shall be permitted to engage in other advisory or consulting services and other
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employment during the Advisory Period so long as such service or employment
does not violate any other terms of this Agreement.
2.
Severance Benefits
In connection with your termination of employment, and in consideration for
your service to the Company and its affiliates through the Termination Date
(or, if earlier, the date of your death or Disability (which term shall mean
your "Total and Permanent Disability," as defined in your Zoetis equity award
agreements)) and your compliance in all material respects with the terms of
this Letter Agreement, specifically including your execution of a release
agreement substantially in the form attached as
Exhibit A
and your non-revocation of such release agreement prior to its becoming
effective and irrevocable within 30 days following the Termination Date (the "
Release Requirement
"), and your compliance in all material respects with the restrictive
covenants set forth or referenced herein, the Company shall provide to you (i)
the payments and benefits set forth on
Exhibit B
(the "
Severance Benefits
") and (ii) the Consulting Fee for services during the Advisory Period, as
noted above.
The Severance Benefits shall be in full satisfaction of the obligations of the
Company and its affiliates to you under this Letter Agreement and any other
plan, agreement, policy or arrangement of the Company and its affiliates upon
your termination of employment (other than any vested or other rights to which
you may be entitled under any other Company employee benefit or compensation
plan by reason of your employment with the Company that cannot legally be
waived and any right you may have to continued indemnification and coverage
under the Company's applicable directors' and officers' liability insurance
policy(ies)(recognizing that such indemnification and coverage is not
guaranteed by this Letter Agreement and shall be governed by the instrument,
if any, providing for such indemnification and coverage)), and in no event
shall you be entitled to severance pay or benefits beyond the Severance
Benefits.
In the event that the Company terminates your employment prior to the
Termination Date for "Cause" (as defined in the Zoetis Executive Severance
Plan) or you voluntarily terminate your employment prior to the Termination
Date, you will cease receiving base salary payments and any other benefits
that you would have received had you continued your employment through the
Termination Date, but you will remain eligible for (i) the Accrued Obligations
(as defined in
Exhibit B
) and any other vested or other rights to which you may be entitled under any
other Company employee benefit or compensation plan by reason of your
employment with the Company that cannot legally be waived and are not
otherwise subject to forfeiture upon a termination for Cause or a voluntary
termination, and (ii) subject to your continued compliance in all material
respects with the terms of this Letter Agreement, including your satisfaction
of the Release Requirement and your compliance in all material respects with
the restrictive covenants set forth or referenced herein, the Severance
Benefits.
In the event that the Company terminates your employment prior to the
Termination Date without Cause, subject to your continued compliance in all
material respects with the terms of this Letter Agreement, including your
satisfaction of the Release Requirement and your compliance in all material
respects with the restrictive covenants set forth or referenced herein,
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the Company shall provide you with: (i) the Severance Benefits, and (ii) an
additional amount equal to the base salary payments you would have received
between the date of your earlier termination and July 16, 2024, had you
remained employed until July 16, 2024, and all references herein to
"Termination Date" shall be deemed to be the date on which your employment
terminates.
To the extent your employment terminates as a result of your death or
Disability prior to the scheduled Termination Date, you (or your estate) shall
remain entitled to the Severance Benefits, subject to your (or your estate's)
satisfaction of the Release Requirement.
In addition, if the Company terminates your employment without Cause before
the Advisory Period commences or the Company terminates your consulting
services during the Advisory Period for any reason that would not constitute
Cause for termination of employment if you were an employee at such time,
then, subject to your continued compliance in all material respects with the
terms of this Letter Agreement, including your satisfaction of the Release
Requirement (or, if the termination occurs after your satisfaction of the
Release Requirement, your execution of a second release agreement
substantially in the form attached as
Exhibit A
and your non-revocation of such release agreement prior to its becoming
effective and irrevocable within 30 days following the termination of your
consulting services), and your compliance in all material respects with the
restrictive covenants set forth or referenced herein, the unpaid portion of
the Consulting Fee shall be paid to you in a lump sum within 75 days following
the termination of your employment or consulting services. If your employment
or the consulting services are terminated for any other reason prior to the
expiration of the Advisory Period, you shall be entitled only to the accrued
but unpaid portion of the Consulting Fee, prorated for any partial month.
The Company shall provide you with written notice of any alleged failure by
you to comply with the Letter Agreement or the restrictive covenants and not
less than thirty (30) days to cure, if curable.
3.
Restrictive Covenants
a.
Nondisclosure of Confidential Information
During the course of your employment with the Company and its affiliates, you
have had and may continue to have access to, and have gained and may continue
to gain knowledge with respect to, "Confidential Information" (as defined
below). You agree that you shall not, without the prior written consent of the
Company, during the period of your employment with the Company and its
affiliates and thereafter for so long as it remains Confidential Information,
use or disclose, or knowingly permit any unauthorized "Person" (as defined in
Section 13(d) of the Securities Exchange Act of 1934) to use, disclose or gain
access to, any Confidential Information;
provided
,
however
, that you may disclose Confidential Information as required by law or as
ordered by a court, or as required in the course of the performance of your
duties to the Company and its affiliates, or as set forth in Section 3(h)
below;
provided
,
further
, that, in any event described in the preceding proviso, (x) to the extent
permitted by applicable law, you shall
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promptly notify the Company in writing, and consult with and assist the
Company in seeking a protective order or request for another appropriate
remedy (except with respect to disclosures permitted by Section 3(h)), (y) in
the event that such protective order or remedy is not obtained, or if the
Company waives compliance with the terms of the preceding clause (x), you
shall disclose only that portion of the Confidential Information that is
legally required to be disclosed and shall exercise reasonable best efforts to
assure that confidential treatment shall be accorded to such Confidential
Information by the receiving Person, and (z) to the extent permitted by
applicable law, the Company shall, except with respect to disclosures
permitted by Section 3(h),be given an opportunity to review the Confidential
Information prior to disclosure thereof. Without limiting the foregoing, you
agree to keep confidential the existence of, and any information concerning,
any dispute between you and the Company or any of its affiliates, except that
you may disclose information concerning such dispute to the Governmental
Authority (as defined in Section 3(h)) that is considering such dispute and to
your legal counsel;
provided
that such counsel agrees not to disclose any such information other than as
necessary to the prosecution or defense of such dispute.
For purposes of this Letter Agreement, "
Confidential Information
" means information, observations and data concerning the business and affairs
of the Company or any of its affiliates, including all business information
(whether or not in written form) that relates to the Company or any of its
affiliates, or their directors, officers, employees, customers, suppliers or
contractors or any other third parties with respect to which the Company or
any of its affiliates has a business relationship or owes a duty of
confidentiality, or their respective businesses or products, and that is not
known to the public generally other than as a result of your breach of this
Letter Agreement, including technical information or reports; trade secrets;
unwritten knowledge and "know-how"; operating instructions; training manuals;
customer lists; customer buying records and habits; product sales records and
documents; product development, marketing and sales strategies; market
surveys; marketing plans; profitability analyses; product cost; long-range
plans; information relating to pricing, competitive strategies and new product
development, including processes, formulas, designs, drawings, engineering and
technology; information relating to any forms of compensation or other
personnel-related information; contracts; and supplier lists. Confidential
Information shall not include such information known to you prior to your
involvement with the Company or any of its affiliates or information
rightfully obtained from a third party (other than pursuant to your breach of
this Letter Agreement or any other duty of confidentiality).
For the avoidance of doubt, you shall be permitted to disclose the restrictive
covenants contained in this Letter Agreement (and any other agreement between
you and the Company or an affiliate) to any potential subsequent employer or
business partner.
b.
Noncompetition
. During your employment with the Company and its affiliates and thereafter
until the first anniversary of the Termination Date, without regard to the
reason for your termination, you shall not, anywhere in the world, without the
prior written consent of the Company: (i) directly or indirectly, alone or in
association with any other Person, engage in or invest as an owner, partner,
stockholder, licensor, director, officer, agent or consultant for any of the
following: Elanco, Merck AH, Ceva, Boehringer Ingelheim, Dechra, Virbac,
Idexx, and/or
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Mars Petcare (each, a "Competitive Entity"), or any respective affiliate
thereof; or (ii) accept employment or an engagement for the provision of
services in any capacity, including as an employee, director, consultant or
advisor, directly or indirectly, with any Competitive Entity or any respective
affiliate thereof. Notwithstanding the foregoing, nothing in this provision
shall prevent you from passively investing as a less than two percent
stockholder in the securities of any company listed on a national securities
exchange or quoted on an automated quotation system, or, for the avoidance of
doubt, limit your right to practice law in accordance with applicable rules of
professional conduct.
c.
Non-interference with Business Relations
. During your employment with the Company and its affiliates and thereafter
until the second anniversary of the Termination Date, you shall not, directly
or indirectly, alone or in association with any other Person, without the
prior written consent of the Company, (i) induce or attempt to induce any
client, customer (whether former or current), supplier, licensee, franchisee,
joint venture partner or other business relation of the Company or any of its
affiliates (collectively, "
Business Relations
") to cease doing business with the Company or any such affiliate, (ii) divert
all or any portion of a Business Relation's business with the Company or any
of its affiliates to any competitor of the Company or any such affiliate, or
(iii) in any way interfere with the relationship between any Business
Relation, on the one hand, and the Company or any such affiliate, on the other
hand.
d.
Nonsolicitation of Service Providers
. During your employment with the Company and its affiliates and thereafter
until the second anniversary of the Termination Date, you shall not, directly
or indirectly, alone or in association with any other Person, without the
prior written consent of the Company, (i) actively solicit, recruit or hire
any Person who is at such time, or who at any time during the 12-month period
prior to such solicitation or hiring had been, an employee, individual
contractor or exclusive consultant of the Company or any of its affiliates,
(ii) solicit or encourage any employee of the Company or any of its affiliates
to leave the employment of the Company or any of its affiliates, or (iii)
interfere with the relationship of the Company or any of its affiliates with
any employee, individual contractor or exclusive consultant who is or was
employed by or otherwise engaged to perform services for the Company or any of
its affiliates. Nothing in this provision shall prohibit you from placing
general advertisements not targeted at employees of the Company or any of its
affiliates, or from providing a personal reference to any person upon request.
e.
Nondisparagement
. Except with respect to disclosures permitted by Section 3(h), you shall not
make, directly or indirectly, alone or in association with any other Person,
any defamatory or maliciously disparaging oral or written statements about the
Company or its affiliates or their respective products, personnel, directors,
services, reputation or financial status
The Company shall instruct its directors and executive officers not to make
any defamatory or maliciously disparaging oral or written statements about
you, and the Company and its subsidiaries shall not make or release any
official statement that is defamatory or maliciously disparaging towards you.
f.
Return of Property
. You acknowledge that all documents, records, files, lists, equipment,
computer, software or other property (including intellectual property)
relating to the
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businesses of the Company or any of its affiliates, in whatever form
(including electronic), and all copies thereof, that have been or are received
or created by you while an employee of the Company or any of its affiliates
(including Confidential Information) are and shall remain the property of the
Company and its affiliates, and you shall immediately return such property to
the Company upon the Termination Date and, in any event, at the Company's
request. You further agree that any property situated on the premises of, and
owned by, the Company or any of its affiliates, including disks and other
storage media, filing cabinets or other work areas, is subject to inspection
by the Company's personnel at any time with or without notice. Notwithstanding
the foregoing, you shall be permitted to retain your personal correspondence
and any of your personal compensation information or documentation, and the
Company agrees that, to the extent you have not done so prior to signing this
Letter Agreement, you may work with the Company's Chief Information and
Security Officer or his designee to identify and retain any of your personal
contacts and/or personal calendar appointments.
g.
Cooperation
. You agree that upon the reasonable request of the Company or any of its
affiliates following your termination of employment, you shall use reasonable
efforts to assist and cooperate with the Company or any of its affiliates in
connection with the defense or prosecution of any claim that may be made
against or by the Company or any of its affiliates, or in connection with any
ongoing or future investigation or dispute or claim of any kind involving the
Company or any of its affiliates, including testifying in any proceedings
before any arbitral, administrative, regulatory, judicial, legislative or
other body or agency. Such cooperation shall be on reasonable notice and, to
the extent practicable, take into account your business and personal
commitments, and shall not require you to provide legal services on behalf of
the Company. The Company shall reimburse you for reasonable out of pocket
expenses incurred in connection with your cooperation requested pursuant to
this paragraph, including reasonable travel expenses. Further, the Company
shall reimburse you in an amount up to $5,000 of legal fees incurred by you if
you reasonably and in good faith determine that you need to consult
independent legal counsel in connection with such cooperation.
h.
Trade Secrets; Whistleblower Rights
. The Company hereby informs you that, notwithstanding any provision of this
Letter Agreement to the contrary, an individual may not be held criminally or
civilly liable under any federal or state trade secret law for the disclosure
of a trade secret that (i) is made in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney, and
solely for the purpose of reporting or investigating a suspected violation of
law, or (ii) is made in a complaint or other document that is filed under seal
in a lawsuit or other proceeding. Further, an individual who files a lawsuit
for retaliation by an employer for reporting a suspected violation of law may
disclose the employer's trade secrets to the attorney and use the trade secret
information in the court proceeding if the individual files any document
containing the trade secret under seal and does not disclose the trade secret,
except pursuant to court order. In addition, notwithstanding anything in this
Letter Agreement to the contrary, nothing in this Letter Agreement shall
impair your ability to comply with a court order or subpoena or to communicate
with any federal, state or local governmental or law enforcement branch,
agency or entity (each, a "
Governmental Authority
"), voluntarily provide to a Governmental Authority information you believe
indicates possible or actual violations of the law, or participate in or fully
cooperate with any investigation or proceeding that may be
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conducted by any Governmental Authority, including providing documents or
other information, without notice to or approval from the Company, without
risk of being held liable by the Company for financial penalties, or any other
of your rights under the whistleblower provisions of any applicable federal
law or regulation or, for the avoidance of doubt, limit your right to receive
an award for information provided to any Governmental Authority.
i.
Remedies and Injunctive Relief
. You acknowledge that your violation of any of the covenants contained in
this Section 3 would cause irreparable damage to the Company and its
affiliates in an amount that would be material but not readily ascertainable,
and that any remedy at law (including the payment of damages) would be
inadequate. Accordingly, you agree that, notwithstanding any provision of this
Letter Agreement to the contrary, in addition to any other damages it is able
to show, in the event of your violation in any material respect of any of the
covenants contained in this Section 3, the Company and its affiliates shall be
entitled (without the necessity of showing economic loss or other actual
damage) to (i) cease payment or provision of the Severance Benefits to the
extent not previously paid or provided (including ceasing vesting of
outstanding equity incentive awards), (ii) the prompt return by you of any
portion of, or the value of, Severance Benefits previously paid or provided
(including forfeiture of any equity awards that vested or are scheduled to
vest pursuant to Section 2 (including
Exhibit B
) or the repayment of the value of any equity awards that vested pursuant to
Section 2 (including
Exhibit B
) that have been exercised or settled, as applicable), and (iii) injunctive
relief (including temporary restraining orders, preliminary injunctions and
permanent injunctions), without posting a bond, in any court of competent
jurisdiction for any actual or threatened breach of any of the covenants set
forth in this Section 3 in addition to any other legal or equitable remedies
it may have. The preceding sentence shall not be construed as a waiver of the
rights that the Company and its affiliates may have for damages under this
Letter Agreement or otherwise, and all such rights shall be unrestricted. The
restricted period contemplated by Section 3(b), (c) or (d), as applicable,
shall be tolled during (and shall be deemed automatically extended by) any
period during which you are in violation of the provisions of such section, as
applicable.
In the event that a court of competent jurisdiction determines that any
provision of this Section 3 is invalid or more restrictive than permitted
under the governing law of such jurisdiction, then, only as to enforcement of
this Section 3 within the jurisdiction of such court, such provision shall be
interpreted and enforced as if it provided for the maximum restriction
permitted under such governing law.
j.
Acknowledgments
.
You acknowledge that the Company and its affiliates (i) have expended and will
continue to expend substantial amounts of time, money and effort to develop
business strategies, employee, customer and other relationships and goodwill to
build
an effective
organization, (ii)
have a legitimate business interest in and right to protect their Confidential
Information, goodwill and employee, customer and other relationships, and that
the Company
and its affiliates
would be seriously damaged by the disclosure of
Confidential
Information and the loss or deterioration of its employee, customer and other
relationships, and (iii) are entitled to protect and preserve the going
concern value of the Company
and its affiliates
to the extent permitted by law. You further acknowledge that, although your
compliance with the covenants contained in this Letter Agreement may prevent
you from earning a livelihood in a business similar to the business of the
Company
and its affiliates
, your experience and
7
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capabilities are such that you have other opportunities to earn a livelihood
and adequate means of support for you and your dependents. In light of the
foregoing acknowledgments, you agree (x) that the covenants contained in this
Letter Agreement are
reasonable
and properly required for the adequate protection of the businesses and
goodwill of the Company and its affiliates and (y) not to challenge or contest
the
reasonableness
, validity or enforceability of any limitations on, and obligations of, you
contained in this Letter Agreement.
4.
Miscellaneous
a.
Notices
. All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party, by registered or certified mail,
return receipt requested, postage prepaid, or by email, addressed as follows:
If to you: At the most recent address
on file at the Company.
If to the Company: Zoetis Inc.
10 Sylvan Way
Parsippany, NJ 07054
Attn: Interim Chief Human Resources Officer
james.matthews@zoetis.com
CC: legalnotices@zoetis.com
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when received by the addressee.
b.
Governing Law; Dispute Resolution
. This Letter Agreement shall be governed by the laws of the State of New
York, without reference to the choice of law rules that would cause the
application of the law of any other jurisdiction. You and the Company
irrevocably submit to the jurisdiction of any state or federal court sitting
in or for the State of New York with respect to any dispute arising out of or
relating to this Letter Agreement, and you and the Company irrevocably agree
that all claims in respect of such dispute or proceeding shall be heard and
determined in such courts. You and the Company hereby irrevocably waive, to
the fullest extent permitted by law, any objection that you or the Company may
now or hereafter have to the venue of any dispute arising out of or relating
to this Letter Agreement or the transactions contemplated hereby brought in
such court or any defense of inconvenient forum for the maintenance of such
dispute or proceeding. You and the Company agree that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. You and the Company hereby irrevocably and
unconditionally waive, to the fullest extent permitted by law, any right you
or the Company may have to a trial by jury in respect of any litigation as
between you and the Company directly or indirectly arising out of, under or in
connection with this Letter Agreement or the transactions contemplated hereby
or disputes relating hereto. Each of you and the Company certify that no
representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waivers.
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c.
Entire Agreement
. This Letter Agreement contains the entire agreement between you and the
Company with respect to the termination of your employment and supersedes any
and all prior understandings or agreements, whether written or oral, with
respect to such service. For the avoidance of doubt, the covenants set forth
in Section 3 of this Letter Agreement shall be in addition to, and shall not
replace, any covenants concerning the protection of confidential or
proprietary information, assignment of inventions and patent rights,
protection of Company property, noncompetition, nonsolicitation of or
non-interference with business relations or service providers, nondisparagement
or other restrictive covenants set forth in any other agreement between you
and the Company or its affiliates.
d.
Amendments
. No provision of this Letter Agreement shall be modified or amended except by
an instrument in writing duly executed by the parties hereto. No custom, act,
payment, favor or indulgence shall grant any additional right to you or be
deemed a waiver by the Company of any of your obligations hereunder or release
you therefrom or impose any additional obligation upon the Company. No waiver
by any party of any breach by the other party of any term or provision hereof
shall be deemed to be an assent or waiver by any party to or of any succeeding
breach of the same or any other term or provision.
e.
Successors
. This Letter Agreement is personal to you and without the prior written
consent of the Company shall not be assignable by you otherwise than by will
or the laws of descent and distribution. This Letter Agreement shall inure to
the benefit of and be enforceable by your legal representatives. This Letter
Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns. As used in this Letter Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid that assumes and agrees to perform this Letter
Agreement by operation of law, or otherwise.
f.
Invalidity
. If any term or provision of this Letter Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Letter Agreement or the application of such term or
provision to persons or circumstances other than those to which it is invalid
or unenforceable shall not be affected thereby, and each term and provision of
this Letter Agreement shall be valid and be enforced to the fullest extent
permitted by law.
g.
Survivability
. The provisions of this Letter Agreement that by their terms call for
performance subsequent to the termination of either your employment or this
Letter Agreement (including the terms of Sections 2 and 3) shall so survive
such termination.
h.
Section Headings; Construction
. The section headings used in this Letter Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation hereof. For purposes of this Letter Agreement, the term
"including" shall mean "including, without limitation" and the term
"affiliate" shall mean, with respect to any Person, an entity controlled by,
controlling or under common control with such Person.
9
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i.
Taxes
. The Company and its affiliates may withhold from any amounts payable under
this Letter Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation. The
Severance Benefits shall be paid or provided in accordance with the provisions
related to Section 409A of the Internal Revenue Code set forth in the
applicable benefit plan or award agreement.
j.
Counterparts
. This Letter Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together shall constitute
one and the same instrument.
[
Signature Page Follows
]
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To confirm the foregoing terms are acceptable to you, please execute and
return the copy of this Letter Agreement, which is enclosed for your
convenience.
Very truly yours,
Zoetis Inc.
By:
/s/ Wetteny Joseph
Name: Wetteny Joseph
Title: Executive Vice President and
Chief Financial Officer
Acknowledged and agreed:
/s/ Heidi Chen
Heidi Chen
[
Signature Page to Letter Agreement
]
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Exhibit A
WAIVER AND RELEASE OF CLAIMS
This Waiver and Release Agreement (this "
Release
") is executed by Heidi Chen ("
Executive
") on __________________. Reference is made herein to the Letter Agreement
(the "
Letter Agreement
"), dated as of April 16, 2024 (revised as of May 20, 2024), between Executive
and Zoetis Inc., a Delaware corporation (the "
Company
").
1.
In consideration for the Severance Benefits (as defined in the Letter
Agreement) and for other good and valuable consideration, the sufficiency of
which Executive hereby acknowledges and agrees to, by signing this Release, on
behalf of Executive, Executive's heirs, administrators, executors,
representatives, agents, successors and assigns, Executive hereby waives and
releases and forever discharges to the maximum extent permitted by applicable
law any and all claims or causes of action, whether or not now known and
whether present or future, against the Company or any of its predecessors,
successors, or past or present subsidiaries, affiliates, parents, branches or
related entities (collectively, including the Company, the "
Released Parties
") or, in their respective capacities as such, the Released Parties' former,
current or future employees, consultants, agents, representatives,
stockholders, managers, members, equity holders, officers, directors,
attorneys, employee benefit plans or assigns, with respect to any matter
through and including the date on which this Release is executed, including,
without limitation, any matter related to Executive's employment with the
Company or the termination of that employment relationship.
Executive understands and agrees that Executive is releasing the Released
Parties from any and all claims that may legally be waived by private
agreement, including, but not limited to, any and all claims for breach of
contract, breach of the covenant of good faith and fair dealing, personal
injury, wages, benefits, defamation, wrongful discharge, discrimination,
harassment, retaliation, impairment of economic opportunity, emotional
distress, invasion of privacy, negligence or other tort; claims for attorneys'
fees or costs; and any and all other claims, whether arising under statute
(including, but not limited to, claims arising under the Civil Rights Act of
1866, the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal
Pay Act, the Family and Medical Leave Act, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the
Americans With Disabilities Act of 1990, the Worker Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act, the National
Labor Relations Act, the New Jersey Conscientious Employee Protection Act, the
District of Columbia Human Rights Act, the Massachusetts Fair Employment
Practices Act - M.G.L. c. 151 B, the Massachusetts Wage Payment Statute, G.L.
c. 149, (s)(s) 148, 148A, 148B, 149, 150, 150A-150C, 151, 152, 152A,
et
seq
., the Massachusetts Wage and Hour laws, G.L. c. 151 (s) 1A
et
seq
., the Minnesota Human Rights Act, the West Virginia Human Rights Act,
1
and/or any and all other federal, state, local or foreign statutes, executive
orders or regulations), contract (express or implied), constitutional
provision, common law, public policy or otherwise, from the beginning of time
through the date Executive has executed this Release. Further, if any claim is
1
Executive acknowledges that Executive has been provided the toll-free number
of the West Virginia State Bar Association 1-800-944-9822.
A-1
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not subject to release, to the extent permitted by applicable law: (a)
Executive promises not to consent to become a member of any class or
collective in a class, collective or multiparty action or proceeding in which
claims are asserted against any Released Party that are related in any way to
Executive's employment or the termination of Executive's employment with the
Company; (b) if, without Executive's prior knowledge and consent, Executive is
made a member of a class in any such proceeding, Executive agrees to opt out
of the class at the first opportunity; and (c) Executive waives any right or
ability to be a class or collective action representative in such a proceeding.
Further, Executive expressly waives and releases any and all rights and
benefits that Executive may have under any state or local statute, executive
order, regulation, common law and/or public policy relating to unknown claims,
including, but not limited to, South Dakota Codified Laws Section 20-7-11,
North Dakota Century Code Section 9-13-02, and California Civil Code Section
1542 (or any analogous law of any other state), the latter of which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Executive understands and agrees that claims or facts in addition to or
different from those that are now known or believed by Executive to exist may
hereafter be discovered, but it is Executive's intention to release all claims
Executive has or may have against the parties set forth in this Release,
whether known or unknown, suspected or unsuspected.
2.
Executive understands that nothing in this Release shall be construed to (a)
prohibit Executive from filing a charge with, or participating in any
investigation or proceeding conducted by, the Equal Employment Opportunity
Commission, National Labor Relations Board and/or any similar federal, state
or local agency, (b) extend to any rights Executive may have to file claims
for workers' compensation and/or unemployment insurance benefits under any
applicable state laws, (c) waive, release or impair Executive's rights or
claims to enforce the terms of the Letter Agreement (including with respect to
the Severance Benefits), or (d) limit any obligation of the Company or its
affiliates (or their respective successors in interest) to indemnify or hold
harmless Executive or to advance expenses to Executive in connection therewith
or any benefit or right of the Executive under any insurance policy to which
the Company is a party. Executive also understands that nothing in this
Release limits Executive's ability to communicate with any federal, state or
local governmental or law enforcement branch, agency or entity (each, a "
Governmental Authority
"), voluntarily provide to a Governmental Authority information Executive
believes indicates possible or actual violations of the law, or participate in
or fully cooperate with any investigation or proceeding that may be conducted
by any Governmental Authority, including providing documents or other
information, without notice to or approval from the Company, without risk of
being held liable by the Company for financial penalties. This Release also
does not limit Executive's right to receive an award for information provided
to any Governmental Authority.
A-2
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3.
Except as otherwise stated herein, Executive's release of claims as contained
in this Release extends to any claims that Executive may have with respect to
any separation plans or programs that have been offered by the Company
currently and/or in the past, including, without limitation, the Zoetis
Executive Severance Plan, but Executive's release of claims as contained in
this Release does not extend to any vested or other rights to which Executive
may be entitled under any other Company employee benefit or compensation plan
by reason of Executive's employment with the Company that cannot legally be
waived.
4.
Executive agrees and acknowledges that this Release may be introduced as
evidence in a subsequent proceeding in which either the Company or Executive
alleges a breach of this Release, or by the Company in the event that
Executive asserts any claim or commences any legal proceeding against the
Company.
5.
Executive understands that in response to third-party requests, the Company
will comply with its existing policy on employee information by verifying
dates of employment, last position held and, if authorized, salary
information. Executive further understands that the Company is obligated to
produce information and records in response to lawful requests from
Governmental Authorities and in connection with litigation and regulatory
proceedings.
6.
It is understood and agreed that this Release is not to be construed as an
admission by the Company or Executive of any wrongdoing, liability or
violation of law.
7.
Executive understands that Executive will have a period of seven (7) days
following the execution of this Release in which to revoke this Release. To
revoke this Release, Executive must submit written notice, such that it is
received no later than the eighth day after Executive originally signs this
Release, to:
Zoetis Inc.
10 Sylvan Way
Parsippany, NJ 07054
Attn: Interim Chief Human Resources Officer
james.matthews@zoetis.com
CC: legalnotices@zoetis.com
Executive also understands that Executive must return the signed Release to
the Company, according to the directions and instructions provided by the
Company and on the date designated by the Company.
This Release will not become effective and enforceable until the seven (7)-day
revocation period has expired. Executive understands that the Company will not
be required to provide the Severance Benefits unless this Release becomes
effective.
8.
This Release will be governed by and construed and enforced in accordance with
the laws of the State of New York.
A-3
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9.
Executive further acknowledges and agrees that if Executive breaches the
provisions of this Release, then, to the fullest extent permitted by law, (a)
the Company shall be entitled to apply for and receive an injunction to
restrain any violation of the Release, (b) the Company shall not be obligated
to pay or provide any additional Severance Benefits to Executive, (c)
Executive shall be obligated to pay to the Company its costs and expenses in
enforcing this Release and the Letter Agreement and defending against such
lawsuit (including court costs, expenses and reasonable legal fees), and (d)
Executive shall be obligated upon demand to repay to the Company all of the
Severance Benefits.
10.
This Release and the Letter Agreement contain the entire agreement between
Executive and the Company and replace any prior or contemporaneous agreements
or understandings between Executive and the Company regarding the subject
matter of this Release, whether written or oral, except for any agreements
Executive may have signed in connection with or during Executive's employment
governing the protection of confidential or proprietary information,
assignment of inventions and patent rights, protection of Company property,
noncompetition, nonsolicitation of or non-interference with business relations
or service providers, nondisparagement or other restrictive covenants, all of
which shall remain in full force and effect.
11.
This Release may not be changed unless the changes are in writing and signed
by Executive and an authorized representative of the Company.
12.
The provisions of this Release are severable. If any provision of this Release
is held invalid or unenforceable, such provision shall be deemed to be removed
from this Release and such invalidity or unenforceability shall not affect any
other provision of this Release, the balance of which will remain in and have
its intended full force and effect and binding upon both parties;
provided
,
however
, that, if such invalid or unenforceable provision may be modified so as to be
valid and enforceable as a matter of law, such provision shall be deemed to
have been modified so as to be valid and enforceable to the maximum extent
permitted by law.
13.
Executive's signature below indicates that Executive:
a.
has carefully read and reviewed this Release;
b.
fully understands all of its terms and conditions;
c.
fully understands that this Release is legally binding and that by signing it
Executive is giving up certain rights;
d.
has not relied on any other representations by the Company or its employees or
agents, whether written or oral, concerning the terms of this Release;
e.
has been provided at least 21 days to consider this Release, and agrees that
changes to this Release (or to the Letter Agreement), whether material or
immaterial, do not restart the running of the 21-day consideration period;
A-4
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f.
will have seven (7) days to revoke Executive's acceptance after signing it;
g.
is waiving any rights or claims Executive may have under the Age Discrimination
in Employment Act of 1967;
h.
has been advised, and has had the opportunity, to consult with an attorney
prior to executing this Release; and
i.
executes and delivers this Release freely and voluntarily.
[
Signature Page Follows
]
A-5
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EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS RELEASE AND THAT EXECUTIVE
FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT EXECUTIVE
HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND THE RELEASE PROVIDED FOR
HEREIN VOLUNTARILY AND OF EXECUTIVE'S OWN FREE WILL.
EXECUTED this ______ day of __________________, 20__.
Heidi Chen
A-6
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Exhibit B
SEVERANCE BENEFITS
1.
Accrued Obligations
. You shall be entitled to (a) any base salary that is accrued but unpaid, and
any vacation that is accrued but unused, as of the Termination Date, which to
the extent unpaid shall be paid on the first payroll date following the
Termination Date, (b) any unreimbursed business expenses, which shall be paid
pursuant to the Company's expense reimbursement policy, and (c) your vested
account balance under the Zoetis Savings Plan and Zoetis Supplemental Savings
Plan, which shall be paid in accordance with the terms of the applicable plan
(collectively, the "
Accrued Obligations
"). The Accrued Obligations (but not any other compensation or benefits set
forth on this
Exhibit B
) shall be due without regard to whether you have satisfied the Release
Requirement.
2.
Annual Bonus.
You shall be eligible for a bonus under the terms of the Annual Incentive Plan
(AIP) in respect of 2024, based on your target opportunity as in effect in
2024 and pro-rated for the length of service in 2024 up to the Termination
Date. Of the bonus, 70% of the total amount shall be dependent on Company
performance (the "Performance Component") and 30% of the total amount (i.e.,
the portion representing individual performance) shall be payable at target.
The final amount of the Performance Component shall be subject to the
discretion and approval by the Human Resources Committee of the Zoetis Board
of Directors; provided, that the amount payable to you in respect of the
Company Performance Component shall be determined and paid on the same basis
as such amounts payable to active members of the Company's Executive Team. The
bonus shall be paid on or before March 15, 2025.
3.
Executive Severance Plan
. For purposes of the Zoetis Executive Severance Plan (the "
Severance Plan
"), the termination of your employment on the Termination Date shall be
considered an "Involuntary Separation" (as defined in the Severance Plan),
entitling you to the following compensation and benefits, subject to the terms
of the Severance Plan:
a.
Base Salary Severance
. In respect of the benefits contemplated by Section 3.1(a) of the Severance
Plan, a cash payment of $635,000 which shall be paid in installments over the
12-month period following the Termination Date in accordance with the timing
set forth in the Severance Plan.
b.
Health Insurance
. In respect of the benefits contemplated by Section 3.1(b)(i) of the
Severance Plan, if you elect to continue health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act ("
COBRA
") following the Termination Date for you or your spouse and dependents, the
Company shall pay the portion of the monthly COBRA premiums due for such
coverage above the active employee rate for such coverage from the first date
on which you lose health coverage as an employee of the Company until the
earliest of (i) the date the Company has paid such COBRA premiums for 12
months, (ii) the expiration of your continuation coverage under COBRA, and
(iii) the date when you become eligible for health insurance coverage in
connection with new employment or self-employment (even if such coverage is
declined).
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c.
Life Insurance
. In respect of the benefits contemplated by Section 3.1(b)(ii) of the
Severance Plan, your coverage under the Company-sponsored basic group term
life insurance plan shall continue at no cost to you until the earlier of (i)
12 months following the Termination Date and (ii) the date when you become
eligible for group life insurance coverage under another employer's plan (even
if such coverage is declined).
d.
Target Bonus Severance
. In respect of the benefits contemplated by Section 3.1(c) of the Severance
Plan, a cash payment of $444,500 which shall be paid in a lump sum within 60
days following the Termination Date.
e.
Outplacement
. In respect of the benefits contemplated by Section 3.1(d) of the Severance
Plan, the Company shall make available to you, at its expense, senior
executive level outplacement services with a leading national outplacement
firm chosen by the Company, with such outplacement services to be provided for
a period of up to twelve (12) months following the Termination Date. The
Company shall pay all expenses related to the provision of outplacement
services directly to the outplacement firm by the end of the calendar year
following the calendar year in which the outplacement services are provided.
In no case shall the Company provide a payment to you in lieu of these
services.
4.
Equity Awards
. Any equity awards granted to you that are outstanding and unvested as of the
Termination Date shall be subject to the treatment contemplated by the
applicable award agreement for a termination of employment as a result of a
"Restructuring Event" (within the meaning of the applicable award agreement)
and recognizing your status as retirement-eligible. Without limiting the
generality of the foregoing, the Company and you acknowledge and agree that
the vesting of such equity awards will be as follows:
Award Treatment
Stock Options Granted in 2022 and 2023 Continued full vesting. Full term to exercise (10 years from grant date)
Stock Options Granted in 2024 Immediate pro-rata vesting. Options expire 3 months after the Termination Date
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RSUs Granted in 2022, 2023 and 2024 Prorated vesting* with payment of shares
to occur as soon as reasonably practicable
following your Termination Date, provided
that the portion of the 2022 grant that is
nonqualified deferred compensation for
purposes of Section 409A of the Code shall
be subject to a six-month delay to the
extent required by Section 409A of the Code.
Performance RSUs Granted in 2022, 2023 and 2024 Prorated vesting* as of your Termination Date. 0%-200% of the
vested amount will be paid in shares on the Settlement Date (as
such term is defined in your Award
Agreements), subject to achievement
of performance goals as defined in your Award Agreements.
*
The pro-rata portion of your award that vests will be determined based on the
number of days that you were an active employee from the grant date through
your Termination Date, as compared to the total number of days from the grant
date to the third anniversary of the grant date. Stock Options and RSUs
granted in 2023 and 2024 have a graded vesting schedule whereby one-third of
the award vests on the 1st, 2nd and 3rd anniversary of the grant date. After
the first anniversary of the grant date, the number of awards paid will be
calculated as the pro-rata vested portion of the award (per above) less, the
number of awards previously paid per the graded vesting schedule.
B-2
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