VARI » Topics » BETWEEN VARIAN S.P.A. AND SERGIO PIRAS

This excerpt taken from the VARI 10-Q filed Feb 5, 2008.

BETWEEN VARIAN S.P.A. AND SERGIO PIRAS

Sergio Piras, Senior Vice President, Vacuum Technologies, is employed by and serves as Managing Director of the Company’s wholly-owned subsidiary in Italy, Varian S.p.A., working from its facility in Torino, Italy. Due to his position with Varian S.p.A., Mr. Piras is classified as an “Industrial Dirigenti” (an industry executive) – as are certain other senior managers at Varian S.p.A. – and therefore subject to a national collective labor agreement for all industrial dirigenti in Italy (the “CCNL”). The CCNL mandates that certain compensatory arrangements and benefits be provided to dirigenti working for industrial companies in Italy, which arrangements and benefits may be different from what is provided to non-dirigenti employees. Following is a summary of the compensatory arrangements and benefits provided to Mr. Piras under the CCNL:

 

   

The CCNL mandates a supplementary defined contribution retirement plan for industrial dirigenti, referred to as the Previndai Plan. Attached to this Exhibit 10.28 is a summary translation from Italian of the Previndai Plan rules. Under the CCNL and Previndai Plan, Mr. Piras is required to contribute to the Plan an amount equal to approximately 4% of his base salary and variable compensation (up to a maximum of €6,000), most of which is on a tax-deferred basis, which contribution the Company is required to match. Mr. Piras may elect to contribute up to an additional 2% of his base salary and variable compensation (on an after-tax basis). The Plan is administered by third-parties (appointed by Previndai’s governing board), and Mr. Piras chooses from available investment options how to invest his and the Company’s contributions to his Plan account. Mr. Piras may receive distributions from his Plan account only after his employment with the Company terminates and he ceases any other employment (i.e., he fully “retires”).

Under Italian law, the Company is also required (under a government-mandated program, referred to as “TFR”, applicable to all Italy employees) to accrue and eventually pay to Mr. Piras a lump-sum amount when his employment terminates (regardless of the reason for that termination). The annual amount required to be accrued for Mr. Piras’ TFR is equal to his annual base salary plus annual cash bonus divided by 13.5. Under Italian law, Mr. Piras may elect to transfer all or a portion of his TFR entitlement to his Previndai Plan account.

 

   

The CCNL mandates that certain medical, life and disability insurance benefits be provided to industrial dirigenti. These benefits are (1) private group “dirigenti” medical coverage that reimburses Mr. Piras for approximately 60% of the costs of private medical care incurred by him or his dependants, subject to certain maximum reimbursements, with Mr. Piras paying a portion of the premium for this coverage; (2) supplemental group medical insurance that reimburses Mr. Piras for costs of private medical care incurred by him or his dependants to the extent not reimbursed under the basic private group medical insurance; (3) accidental death or disability insurance that would pay amounts equal to


 

five times annual base salary in the event of Mr. Piras’ death and six times annual base salary in the event of his total permanent disability; (4) basic life insurance that would pay approximately Euros 180,759 in the event of Mr. Piras’ death or total permanent disability; and (5) supplemental life insurance that would pay approximately Euros 16,240 in the event of Mr. Piras death or total permanent disability.

 

   

The CCNL mandates that industrial dirigenti be paid supplemental per diem compensation of Euros 75 for business travel to the extent exceeding 12 hours in a day.

 

   

The CCNL mandates that an industrial dirigenti be paid certain severance in the event of a voluntary termination of the dirigenti’s employment under certain circumstances. In the case of Mr. Piras, this amount is equal to 12 months of Mr. Piras’ base salary, which amount would be required to be paid to Mr. Piras in lieu of 12 months’ notice of termination of his employment by the Company. Mr. Piras may claim that a termination of his employment by the Company is “unjustified” and petition an Italian labor court or arbitration panel to therefore order the Company to pay him an additional amount ranging from 14 months to 22 months of his base salary plus monthly variable compensation.

 

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