2- 1.2 Board of Directors. Executive shall become a member of the Board of Directors of the Company on the Start Date. The Board of Directors of the Company shall take whatever steps are necessary to continue to nominate Executive for election to the...
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. Exhibit 10.41 EXECUTION VERSION EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of November 8, 2022 by and between SEAGEN INC., a Delaware corporation (the “Company”) and Xxxxx Xxxxxxx (“Executive”). RECITALS: WHEREAS, the Company desires that Executive perform services as Chief Executive Officer of the Company, having been duly appointed to such position; WHEREAS, Executive desires to perform such services; and WHEREAS, this Agreement contains provisions applicable to the employment of Executive by the Company. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the sufficiency of which is hereby acknowledged, the parties agree as follows: I. DUTIES 1.1 Title and Responsibilities. Commencing on November 9, 2022 (the “Start Date”), Executive shall serve as Chief Executive Officer of the Company. Executive’s responsibilities and duties shall include those inherent in Executive’s position with the Company and shall further include such other managerial responsibilities and executive duties consistent with such position as may be assigned to Executive from time to time by the Chairman of the Board or the Board of Directors of the Company. Except as otherwise expressly provided herein, Executive shall devote Executive’s best efforts and full business time to the business and interests of the Company. During the term of Executive’s employment with the Company, Executive may serve on the board of directors of other companies, manage personal investments, and engage in civic and charitable activities, provided that such activities shall not represent a conflict of interest with the Company and do not materially detract from fulfilling Executive’s responsibilities and duties to the Company. Notwithstanding the immediately preceding sentence, while Executive will in good faith use commercially reasonable efforts to end such obligations as soon as practicable, Executive may continue to fulfill current advisory commitments and to serve on those boards on which he currently serves, but Executive shall take such actions as shall be necessary or appropriate such that, by July 1, 2023, he shall serve on no more than one (1) public company board (in addition to the Board of Directors of the Company) and one (1) private company board. Executive’s primary and full-time place of employment will be at the Company’s headquarters in the greater Seattle area and Executive agrees to make the Seattle area his primary and permanent residence no later than September 1, 2023 and thereafter maintain his primary and permanent residence in the greater Seattle area throughout the term of his employment hereunder.
-2- 1.2 Board of Directors. Executive shall become a member of the Board of Directors of the Company on the Start Date. The Board of Directors of the Company shall take whatever steps are necessary to continue to nominate Executive for election to the Board of Directors of the Company in every election of Executive’s class of directors presented to stockholders following execution of this Agreement. II. COMPENSATION 2.1 Base Salary. Executive shal1 be paid a base salary (“Base Salary”) by the Company during the term of Executive’s employment at the rate determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”), which shall initially be at a rate of $1,500,000 per year. Executive’s Base Salary shall be reviewed annually by the Compensation Committee and evaluated based on performance and any other factors determined appropriate by the Compensation Committee in its sole discretion. Based upon such evaluation and review, Executive’s Base Salary may be adjusted from time to time as determined by the Compensation Committee in its sole discretion; provided that it may not be reduced except in the case of a reduction that applies proportionately to all members of senior management. 2.2 Bonus. In addition to Base Salary, Executive may be eligible to receive an annual bonus (“Annual Bonus”) based on a target percentage of 150% of Executive’s Base Salary. The amount of the annual bonus shall be based upon performance criteria as determined by the Compensation Committee consistent with its generally applicable policies and practices for the Company’s senior officers which would currently allow for a maximum annual bonus of 200% of Executive’s target bonus. 2.3 Equity Awards. Executive may be eligible to receive grants of stock options or other equity awards annually and from time to time in the future, consistent with its generally applicable policies and practices for the Company’s senior officers, on such terms and subject to such conditions as the Compensation Committee shall determine as of the date of any such grant and pursuant to the existing equity plan(s) of the Company. The August 2023 grants shall not be pro-rated. It is generally expected that at least 50% of the future awards will be performance-based from a value perspective using ISS methodology for value. 2.4 Sign-on Awards. Executive shall receive the following awards on the Start Date: (a) Time-Based Equity. The Company shall grant to Executive (i) an award of options to purchase Company common stock with a grant date fair value of $14,000,000 (the “Time-Based Options”) and a ten (10) year option term and (ii) an award of restricted stock units with a grant date fair value of $14,000,000 (the “RSUs”). The grant date value of such awards shall be determined as of the Start Date and in accordance with the Company’s generally applicable practices for establishing such grant date values. The Time-Based Options will vest 25% on the first anniversary of the Start Date and ratably on a monthly basis over three years thereafter (such that they are fully vested after four (4) years) and the RSUs will vest ratably on the first four (4) anniversaries of the Start Date, each subject to Executive’s continued employment with the Company and the terms of the Company’s Amended and Restated 2007 Equity Incentive Plan (the “2007 Plan”), as modified or supplemented by this Agreement. Except as otherwise specifically set forth herein, the terms and conditions of the Time-Based Options and the RSUs
-3- will be consistent with the terms and conditions of time vesting options and time vesting restricted stock units granted to senior officers of the Company in August 2022. (b) Performance-Based Equity. The Company shall grant to Executive 400,000 options to purchase Company common stock with a ten (10) year option term under the 2007 Plan that are subject to both performance- and time-based vesting conditions (the “Performance Options”). The Performance Options will performance vest when (x) the closing price of the Company’s common stock, as quoted on Nasdaq, for (1) at least fifty (50) trading days in any period of sixty (60) consecutive trading days (the “50 Trading Day Condition”) and (2) at least fifteen (15) trading days within a single open trading window as applicable for directors and executive leadership team members (the “Open Window Condition”) or (y) the price paid for a share of the Company’s common stock in any transaction constituting a Change of Control (a “Change of Control Transaction”) is equal to or greater than the following amounts: (i) 80,000 at $[*] per share, (ii) 80,000 at $[*] per share, (iii) 80,000 at $[*] per share, (iv) 80,000 at $[*] per share, and (v) 80,000 at $[*] per share. The 50 Trading Day Condition and the Open Window Condition with respect to any stock price hurdle may be satisfied separately, within different periods of trading days (i.e., the Open Window Condition need not be met in the 60 consecutive trading days in which the 50 Trading Day Condition is satisfied). In addition, to the extent that the price payable for a share of the Company’s common stock in a Change of Control Transaction is less than $[*] per share, the performance vesting condition shall also be deemed satisfied as to that number of additional Performance Options determined by mathematical interpolation between (x) the highest stock price hurdle actually achieved and (y) the next highest stock price hurdle, based on the actual per share price paid in such Change of Control Transaction. The Performance Options will time vest (A) one-third (1/3) upon performance vesting, (B) one-third (1/3) on the nine (9) month anniversary of performance vesting and (C) one-third (1/3) on the eighteen (18) month anniversary of performance vesting, in each case subject to continued employment with the Company through the time vesting date, provided, however, that to the extent that any stock price hurdle performance vesting condition is satisfied after the signing of a transaction that will constitute a Change of Control, the time vesting condition will apply as follows: (1) if such Change of Control does occur, then upon the closing of such Change of Control Transaction the time vesting will be deemed to have occurred and (2) if such Change of Control does not occur, then on the date of the termination of the definitive agreement evidencing such transaction (a) one-third (1/3) upon such date, (b) one-third (1/3) upon the nine (9) month anniversary of such date and (c) one-third (1/3) upon the eighteen (18) month anniversary of such date. In the event that the performance vesting condition is not met with respect to any portion of the Performance Options on or prior to the earlier of (1) December 31, 2028 and (2) a Change of Control, such portion of the Performance Options will be forfeited; provided, that if a hurdle price has been hit for at least one (1) trading day prior to December 31, 2028, then the period for achievement of such performance vesting condition hurdle price shall remain open for an additional fifty-nine (59) trading days after December 31, 2028. Except as otherwise specifically set forth herein, the time vesting conditions on death or disability of the Performance Options will be not less favorable to the Executive than the terms and conditions of time vesting options granted to senior officers of the Company in August 2022. (c) Relocation Payment. Executive shall receive a one-time payment of $6,000,000 to assist with relocation to the Seattle area (the “Relocation Payment”) at the time Executive and his family establish primary residence in the Seattle area, as required in Section 1
-4- hereof, subject to Executive’s continued employment through such date and provided such relocation occurs on or prior to September 1, 2023. Notwithstanding the immediately preceding sentence, the Company shall advance Executive up to $2,500,000 of such $6,000,000 relocation payment at an earlier date in 2023 upon Executive’s request to fund the purchase down payment or long term lease commitment of a residence in the Seattle area in fulfillment of his commitment set forth in Section 1.1 In the event that (i) Executive ceases to be employed by the Company for any reason other than due to (x) his death, (y) his termination of employment due to Disability or (z) an Involuntary Termination that occurs within three (3) months prior to or eighteen (18) months after a Change of Control or (ii) after such establishment of primary residence and prior to his termination of employment, Executive ceases to have his primary residence in the Seattle area, in either case, within six (6) years following full payment of the Relocation Payment, Executive shall promptly repay a proportionate amount of the full Relocation Payment to the Company in an amount equal to (1) $6,000,000 multiplied by (2) a fraction, the numerator of which is the remainder of (i) six (6) minus (ii) the number of fully completed years since the date payment of the full Relocation Payment was made and the denominator of which is six (6). 2.5 Other Benefits. (a) Benefits. Executive shall be entitled to such employee benefits generally available to full-time salaried employees of the Company including without limitation, health insurance, paid vacation of not less than four (4)weeks per year, retirement plans and other similar benefits; provided, that the Company reserves the right to amend, modify, terminate or make any other changes in such benefits generally available to full-time salaried employees of the Company at any time in its sole discretion. (b) Expense Reimbursement. The Company shall pay or reimburse Executive for all travel and entertainment expenses reasonably incurred by Executive in connection with the good faith performance of Executive’s duties on behalf of the Company in accordance with standard Company policies. Executive shall only be entitled to reimbursement to the extent that Executive follows the procedures set forth in the Company’s travel and expense policy, as then in effect, which will include, but will not be limited to, providing satisfactory evidence of such expenditures. (c) Relocation. In addition to the Relocation Payment the Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with (i) Executive’s relocation to the Seattle area, including moving costs related to his home furnishings and other personal property, brokers fees payable upon the sale of one property in the United States and purchase of one property in the greater Seattle area, and (ii) Executive’s reasonable lodging in the Seattle area until the earlier of Executive’s establishing his primary residence in the Seattle area, as required by Section 1, and September 1, 2023, in each case as soon as reasonably practicable following the presentation of satisfactory evidence of such expenses in accordance with the Company’s policies and procedures. III. TERMINATION OF EMPLOYMENT 3.1 Termination of Employment and Severance Benefits.
-5- (a) Termination of Employment. This Agreement may be terminated upon the occurrence of any of the following events: (i) The Company’s determination in good faith that it is terminating Executive for Cause (as defined in Section 3.3 below) (“Termination for Cause”); (ii) The Company’s determination that it is terminating Executive without Cause, which determination may be made by the Company at any time at the Company’s sole discretion, for any or no reason (“Termination Without Cause”); (iii) The effective date of a written notice sent to the Company from Executive stating that Executive is electing to terminate Executive’s employment with the Company (“Voluntary Termination”); (iv) A change in Executive’s status such that a Constructive Termination (as defined in Section 3.2(d) below) has occurred; or (v) Following Executive’s death or Disability (as defined in Section 3.4 below). 3.2 Severance Benefits. Executive shall be entitled to receive severance benefits upon termination of employment only as set forth in this Section 3.2 contingent upon resignation from all positions held by Executive and only if Executive executes a full release and waiver of claims within thirty (30) days of Executive’s termination (and allows it to become effective in accordance with its terms): (a) Voluntary Termination. If Executive’s employment terminates by Voluntary Termination, then Executive shall not be entitled to receive payment of any severance benefits. Executive will receive payment(s) for all salary and unpaid vacation accrued as of the date of Executive’s termination of employment and Executive’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law. (b) Involuntary Termination. If Executive’s employment is terminated under Section 3.1(a)(ii) (Termination Without Cause) or 3.1(a)(iv) (Constructive Termination) above (such termination, an “Involuntary Termination”), Executive will be entitled to receive payment of severance benefits equal to Executive’s regular monthly salary (the “Salary Payment Amount”) for a number of months equal to twelve (12) months multiplied by the Severance Multiplier (as defined below); provided that if such Involuntary Termination occurs within three (3) months prior to or eighteen (18) months after a Change of Control (as defined below), such Severance Multiplier shall be three (3) and such payment shall not be less than the amount that would result from using Executive’s regular monthly salary in effect immediately prior to the Change of Control. In addition, Executive will be entitled to receive a payment equal to the Annual Bonus as determined based on the target bonus percentage established for executive for the year in which the Involuntary Termination occurs (the “Bonus Payment Amount”) multiplied by the Severance Multiplier; provided that if such Involuntary Termination occurs within three (3) months prior to or eighteen (18) months after a Change of Control, then Executive shall be entitled to receive a payment equal to three (3) times the Bonus Payment Amount and such payment shall not be less
-6- than the amount that would result from using Executive’s regular monthly salary and target bonus percentage in effect immediately prior to the Change of Control. The “Severance Multiplier” shall equal (i) if Executive is employed with the Company for up to eighteen (18) months prior to the Involuntary Termination, one and one-half (1.5), (ii) if Executive is employed with the Company for twenty-four (24) months or more prior to the Involuntary Termination, two (2), and (iii) if Executive is employed for more than eighteen (18) months and less than twenty-four (24) months prior to the Involuntary Termination, a number between one and one-half (1.5) and two (2) interpolated on a straight line basis based on the number of whole months employed between eighteen (18) and twenty-four (24) months. Such Salary Payment Amount and Bonus Payment Amount shall be paid, at the Company’s option, in a lump sum within sixty (60) days after the date of Executive’s Involuntary Termination or periodically over the Severance Period according to the Company’s standard payroll schedule, provided that such payments may not extend beyond two and one-half (2½) months following the end of the calendar year in which the date of Involuntary Termination occurs; provided that if such Involuntary Termination occurs within three (3) months prior to or eighteen (18) months after a Change of Control then such payment will be made in a lump sum within forty (40) days after such termination. Executive will receive payment(s) for all salary and unpaid vacation accrued as of the date of Executive’s termination of employment and health insurance benefits will be continued through payment of Executive’s COBRA health insurance premiums by the Company for eighteen (18) months following such Involuntary Termination, so long as Executive timely elects to continue Executive’s health insurance coverage under COBRA and subject to COBRA’s terms, conditions and requirements. (c) Termination for Cause. If Executive’s employment is Terminated for Cause as set forth in Section 3.3 below, then Executive shall not be entitled to receive payment of any severance benefits. Executive will receive payment(s) for all salary and unpaid vacation accrued as of the date of Executive’s termination of employment and Executive’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law. (d) Constructive Termination. “Constructive Termination” shall be deemed to occur if (A) there is a material reduction or change in job duties, responsibilities and requirements inconsistent with Executive’s position with the Company and prior duties, responsibilities and requirements, provided, that if, in connection with a Change of Control, Executive would not serve as the Chief Executive Officer of the ultimate parent company resulting from such Change of Control, such change shall constitute a material reduction in job responsibilities; or (B) there is a reduction in Executive’s then-current base salary (other than as is otherwise permitted under Section 2.1 hereof) or in Executive’s Target Annual Bonus opportunity; provided, that, following a Change of Control, a Constructive Termination will be deemed to have occurred if the value of Executive’s annual long-term incentive awards are less the average value of such awards received from the Company in the 24-month period immediately prior to the Change of Control; or (C) Executive refuses to relocate to a facility or location more than 50 miles from the Company’s current location; provided, however, that in each case above, Executive must first provide notice of the existence of the circumstances giving rise to a Constructive Termination within ninety (90) days of the initial existence of such circumstances and the Company must be provided with a period of thirty (30) days from the date of receipt of such notice to cure the circumstances giving rise to a Constructive Termination; provided further that the Company may notify Executive at any
-7- time prior to expiration of the cure period that it will not cure the circumstances, in which case the cure period shall end immediately upon such notification. (e) Termination by Reason of Death or Disability. In the event that Executive’s employment with the Company terminates as a result of Executive’s death or Disability (as defined in Section 3.4 below), Executive or Executive’s estate or representative will receive all salary and unpaid vacation accrued as of the date of Executive’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, (i) Executive will be relieved of any obligation in respect of the clawback referenced in Section 2.4(c); and (ii) Executive’s estate or representative will receive the amount of Executive’s target Annual Bonus for the fiscal year in which the death or Disability occurs, as determined by the Board of Directors or its Compensation Committee, which will be paid prior to two and one-half (2½) months following the year of Executive’s death or Disability (subject to Executive’s termination as a result of such Disability). 3.3 Definition of Cause. For purposes of this Agreement, “Cause” for Executive’s termination will exist at any time after the happening of one or more of the following events: (a) An action or omission of Executive which constitutes a willful and intentional material breach of this Agreement or the Confidentiality Agreement (defined below), including without limitation Executive’s theft or other misappropriation of the Company’s proprietary information; (b) Executive’s commitment of fraud, embezzlement, misappropriation of funds or breach of trust in connection with Executive’s employment; or (c) Executive’s conviction of any crime which involves dishonesty or a breach of trust or gross negligence in connection with the performance of Executive’s duties. 3.4 Definition of Disability. For purposes of this Agreement “Disability” shall mean any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months and renders Executive unable to perform the duties of Chief Executive Officer. IV. STOCK ACCELERATION 4.1 Accelerated Vesting. Unless specifically provided otherwise in the applicable equity award agreement, in addition to any other right of acceleration that may be provided pursuant to any equity award plan or agreement pursuant to which Executive has been granted an equity award by the Company, if Executive’s employment is terminated due to an Involuntary Termination, (a) the vesting of any equity awards granted by the Company to Executive shall accelerate such that such equity awards shall become vested as to an additional number of months equal to twelve (12) multiplied by the applicable Severance Multiplier, effective as of the date of such Involuntary Termination, to the extent that such equity awards are outstanding and unvested as of the date of such Involuntary Termination; provided that if such Involuntary Termination occurs within three (3) months prior to or eighteen (18) months after a Change of Control (as defined below), then the vesting of all such equity awards shall be accelerated completely so that
-8- such equity awards shall become fully vested, effective as of the date of such Involuntary Termination, to the extent that such equity awards are outstanding and unvested as of the date of such Involuntary Termination (but the Performance Options shall be performance earned or forfeited on a Change in Control, and the vesting in this Section 4.1 shall not apply to any forfeited amounts) and (b) and the exercisability of any outstanding, vested option awards (after taking into account clause (a)) granted by the Company to Executive shall extend until the earlier of (i) a number of months following such Involuntary Termination equal to twelve (12) multiplied by the applicable Severance Multiplier (but capped at two (2)) and (ii) the expiration date of such option award. For the avoidance of any doubt, this Section shall prevail over any provision in an equity award agreement providing that unvested equity awards shall terminate or be forfeited as of the date of such termination, and any such provision shall be inoperative to the extent it is in conflict with this Section. 4.2 Definition of Change of Control. For purposes of this Agreement, “Change of Control” means the occurrence of any of the following events: (a) during any period of not more than 36 months, individuals who constitute the Board of Directors as of the beginning of the period (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the beginning of such period, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board of Directors (either by a specific vote or by approval of the proxy statement in which such person is named as a nominee for director, without written objection to such nomination) will be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or publicly threatened election contest with respect to directors or as a result of any other actual or publicly threatened solicitation of proxies by or on behalf of any person other than the Board of Directors will be deemed to be an Incumbent Director; (b) any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), is or becomes a “beneficial owner” (as defined in Rule 13d 3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding securities eligible to vote for the election of the Board of Directors (“Company Voting Securities”); provided, however, that the event described in this paragraph (b) will not be deemed to be a Change of Control by virtue of the ownership, or acquisition, of Company Voting Securities: (i) by the Company, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company, (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction (as defined in paragraph (c) of this definition); (c) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the “Surviving Entity”), or (B) if applicable, the ultimate parent
-9- corporation that directly or indirectly has beneficial ownership of at least 95% of the voting power, is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the parent), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the parent (or, if there is no parent, the Surviving Entity) and (iii) at least a majority of the members of the board of directors of the parent (or, if there is no parent, the Surviving Entity) following the consummation of the Business Combination were Incumbent Directors at the time of the Board of Directors’ approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) of this paragraph (c) will be deemed to be a “Non-Qualifying Transaction”); (d) the consummation of a sale of all or substantially all of the Company’s assets (other than to an affiliate of the Company); or (e) the Company’s stockholders approve a plan of complete liquidation or dissolution of the Company. Notwithstanding the foregoing, a Change of Control will not be deemed to occur solely because any person acquires beneficial ownership of more than 50% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change of Control will then occur. V. RESTRICTIVE COVENANTS 5.1 Confidentiality Agreement. Executive shall sign, or has signed the Company’s form of Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”). Executive hereby represents and warrants to the Company that Executive has complied with all obligations under the Confidentiality Agreement and agrees to continue to abide by the terms of the Confidentiality Agreement and further agrees that the provisions of the Confidentiality Agreement shall survive any termination of this Agreement or of Executive’s employment relationship with the Company, including the noncompetition provisions of the Confidentiality Agreement. VI. OTHER PROVISIONS 6.1 Limitation on Change of Control Payments and Benefits. In the event that any payment or benefit that Executive would receive from the Company or otherwise in connection with a Change of Control or other similar transaction (a “280G Payment”) (i) would constitute a
-10- “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this Section 6.l, would be subject to the excise tax imposed by Section 4999 of the Code, then any such 280G Payment shall be payable either: (a) in full, or (b) as to such lesser amount which would result in no portion of such payments and benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of payments and benefits notwithstanding that all or some portion of such payments and benefits may be taxable under Section 4999 of the Code. Any determination required under this Section 6.1 shall be made in writing by nationally-recognized independent public accountants appointed by Executive and reasonably acceptable to the Company (the “Accountants”), whose determination shall be final, conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6.1, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 6.1. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.1. If a reduced amount is to be paid under this Section 6.1, reductions in payments and/or benefits shall occur in the following order: (1) if none of the payments is nonqualified deferred compensation under Section 409A of the Code, then the reduction shall occur in the manner Executive elects in writing prior to the date of payment and (2) if any payment constitutes nonqualified deferred compensation under Section 409A of the Code or if Executive fails to elect an order, then the payments to be reduced shall be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, shall be reduced in the inverse order of when payment would have been made to Executive, until the reduction is achieved. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision. 6.2 Code Section 409A. This Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code and the final regulations and any guidance promulgated thereunder (“Section 409A”). If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon a termination of employment under this Agreement may be made only upon a “separation of service” under Section 409A. Notwithstanding anything to the contrary in this Agreement, if at the time of Executive’s termination of employment, Executive is a “specified employee” within the meaning of Section 409A, and the deferral of the commencement of any severance payments or benefits otherwise payable pursuant to this Agreement as a result of such termination of employment is necessary in order to prevent any accelerated income recognition or additional tax under Section 409A(a)(1), then the Company will not commence any payment of any such severance payments or benefits otherwise required hereunder (but without any reduction in such payments or benefits ultimately paid or provided to Executive) that (a) will not and may
-11- not under any circumstances, regardless of when such termination occurs, be paid in full by March 15 of the year following Executive’s termination (or two and one half (2½) months after the close of the Company’s fiscal year, if later), and (b) are in excess of the lesser of (i) two (2) times Executive’s then annual compensation or (ii) two (2) times the limit on compensation set forth in Section 40l(a)(17) of the Code for the year in which Executive’s employment is terminated and will not be paid by the end of the second calendar year following the year in which the termination occurs, until the first payroll date that occurs after the date that is six (6) months following Executive’s “separation of service” with the Company (as defined under Code Section 409A). If any payments are delayed due to such requirements, such amounts will be paid in a lump sum to Executive on the earliest of (x) Executive’s death following the date of Executive’s termination of employment with the Company or (y) the first payroll date that occurs after the date that is six (6) months following Executive’s “separation of service” with the Company. For these purposes, each severance payment or benefit is designated as a separate payment or benefit and will not collectively be treated as a single payment or benefit. This provision is intended to comply with the requirements of Code Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A. Notwithstanding anything to the contrary set forth in this Agreement, to the extent that any amendment to this Agreement with respect to the payment of any severance payments or benefits would constitute under Section 409A a delay or acceleration in a payment or a change in the form of payment, then such amendment must be done in a manner that complies with Section 409A(a)(4)(C). 6.3 Indemnification. The Company hereby agrees to indemnify and hold Executive harmless, to the fullest extent permitted by law and as set forth in the Amended and Restated Certificate of Incorporation of the Company, from and against any expenses, including legal fees, and all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings to which Executive is made, or threatened to be made, a party by reason of the fact Executive is or was a director or officer of the Company. 6.4 Entire Agreement. This Agreement, the Confidentiality Agreement, the indemnification agreement between Executive and the Company and any agreement pertaining to Executive’s equity awards contain the entire agreement and understanding of the patties with respect to Executive’s employment by the Company and compensation payable to Executive by the Company and supersede all prior understandings, agreements and discussions, including the Prior Agreement. This Agreement may only be amended or modified by a written instrument executed by Executive and the Company pursuant to authorization by the Board of Directors or the Compensation Committee thereof. 6.5 Notices. Any and all notices permitted or required to be given under this Agreement must be in writing, with a copy sent by email when email addresses are provided. Notices will be deemed given (i) on the first business day after having been sent by commercial overnight courier with written verification of receipt, or (ii) on the third business day after having been sent by registered or certified mail from a location on the United States mainland, return
-12- receipt requested, postage prepaid, whichever occurs first, at the address set forth below or at any new address, notice of which will have been given in accordance with this Section 6.5: If to the Company: Seagen Inc. 00000 00xx Xxxxx XX Xxxxxxx, XX 00000 Attn: General Counsel If to Executive: Xxxxx Xxxxxxx c/o Seagen Inc. 00000 00xx Xxxxx XX Xxxxxxx, XX 00000 email: xxxxxxxx@xxxxx.xxx 6.6 Non-Waiver. Failure to enforce at any time any of the provisions of this Agreement shall not be interpreted to be a waiver of such provisions or to affect either the validity of this Agreement or the right of either party thereafter to enforce each and every provision of this Agreement. 6.7 Separability. If one or more provisions of this Agreement is finally determined to be invalid or unenforceable, such provision will not affect or impair the other provisions of this Agreement, all of which will continue to be in effect and will be enforceable, provided, however, that any such invalid provisions shall, to the extent possible, be reformed so as to implement insofar as practicable the intentions of the parties. 6.8 Term. The employment of Executive under this Agreement shall be for an unspecified term. The Company and Executive acknowledge and agree that Executive’s employment is and shall continue to be at-will, as defined under applicable law, and that Executive’s employment with the Company may be terminated by either party at any time for any or no reason, and with or without notice. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages award or compensation other than as provided in this Agreement. 6.9 Law. This Agreement shall be interpreted in accordance with the laws of the State of Washington. 6.10 No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor, except as otherwise provided in this Agreement, shall any such payment be reduced by any earnings that Executive may receive from any other source. 6.11 Legal Fees. In the event either party breaches this Agreement, the nonbreaching party shall be entitled to recover from the breaching party any and all damages, costs and expenses, including without limitation, attorneys’ fees and court costs, incurred by the nonbreaching party as a result of the breach; provided, that in the event such contest or dispute arises within eighteen (18) months following a Change of Control, the Company shall advance Executive all attorneys’ fees and court costs reasonably incurred by Executive in connection with such contest or dispute; provided that Executive shall be required to repay any such fees or costs advanced in the event of a
-13- final determination that Executive’s actions were not taken in good faith. In addition, the Company shall pay or reimburse Executive for the professional fees incurred by the executive in connection with the negotiation of this Agreement up to an amount not to exceed $50,000. 6.12 Counterparts. This Agreement may be executed in counterparts which when taken together will constitute one instrument. Any copy of this Agreement with the original signatures of all parties appended will constitute an original.
-14- WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. COMPANY: SEAGEN INC. By: /s/ Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx Title: Chairman of the Board EXECUTIVE /s/ Xxxxx Xxxxxxx Xxxxx Xxxxxxx
