EXHIBIT 10.81
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") is made as of May 8, 2002
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between INCARA PHARMACEUTICALS CORPORATION, a Delaware corporation (the
"Company"), and Xxxx X. Xxxxx ("Employee").
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Recitals
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A. Employee is employed by the Company as an officer, and as such, the Company
recognizes the valuable services performed by Employee for the Company and
wishes to encourage his/her continued employment.
B. Employee desires to be assured that he/she will be entitled to a certain
amount of compensation and benefits for some definite period of time upon
the occurrence of certain events.
C. The parties desire to enter into this Agreement to provide the terms and
conditions upon which the Company will pay severance benefits to Employee
upon the occurrence of certain events.
Statement of Agreement
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In consideration of the foregoing and the promises and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. Whenever used in this Agreement, the following terms shall
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have the meanings respectively assigned to them in this Section 1:
(a) "Cause" shall have the meaning as defined in the Employment Agreement
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(as defined below), and in addition, shall include conviction of a felony
and the violation of "xxxxxxx xxxxxxx laws", as determined by the
Securities and Exchange Commission.
(b) "Change in Control" means any of the following events or transactions:
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(i) A merger or consolidation of the Company with another corporation
(A) where the stockholders of the Company immediately prior to
the merger or consolidation do not beneficially own, immediately
after the merger or consolidation, shares of the corporation
issuing cash or securities in the merger or consolidation
entitling such stockholders to more than fifty percent (50%) of
all votes (without consideration of the rights of any class of
stock to elect directors by a separate class vote) to which all
stockholders of such surviving corporation would be entitled in
the election of directors, or (B) where the members of the Board
of Directors of the Company immediately prior to the merger or
consolidation do not, immediately after the merger or
consolidation,
constitute a majority of the Board of Directors of the
corporation issuing cash or securities in the merger or
consolidation;
(ii) The sale, transfer or other disposition of all or substantially
all of the assets of the Company; or
(iii) The acquisition, directly or indirectly, by any person or
related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders.
(c) "Employment Agreement" shall mean the Employment Agreement between the
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Employee and the Company dated May 8, 2002 (or any subsequent
employment agreement which supplements, supersedes or replaces such
agreement).
(d) "Good Reason" shall mean any reduction, without Employee's consent, in
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Employee's status, title, authority, duties, salary, benefits,
eligibility for bonuses or location of employment that is more than
thirty (30) miles from Employee's current location of employment.
(e) "Separation Event" shall mean the termination by the Company of
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Employee's employment without Cause or termination by Employee for
Good Reason, in either case within two and one-half years after the
earliest date of a Change in Control of the Company (the "Termination
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Period"). The death or disability of Employee shall not be a
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Separation Event.
Other terms used in this Agreement are defined in other provisions of this
Agreement and shall have the respective meanings given such terms in those
provisions.
2. Employment. Employee shall, so long as he/she remains in the active
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employment of the Company, devote such of his/her time and efforts as shall
be necessary to the proper discharge of his/her duties and responsibilities
as an officer of the Company.
3. Severance Benefits.
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(a) In consideration of Employee remaining an employee of the Company, if
there is a Separation Event, then Employee shall receive the following
in lieu of any other severance benefits due to Employee pursuant to
Company policies or the Employment Agreement, if any.
(i) Accrued and unpaid salary less all applicable and customary
withholding taxes and deductions;
(ii) A bonus in the amount of the average annual bonus earned by
Employee during the previous two years, prorated for the portion
of the current year worked through the date of termination, less
all applicable withholding taxes and deductions;
(iii) A lump sum severance payment equal to two and one-half times the
sum of his/her current annual base salary and average annual
bonus during the previous two years, less all applicable
withholding taxes and deductions; and
(iv) Medical and insurance benefits paid by the Company or its
successor-in-interest equal to those provided by the Company to
Employee immediately prior to the date of the Separation Event
for two and one-half years following the Separation Event.
(b) The amounts in Subsections 3(a)(i), (ii) and (iii) shall be paid
within thirty (30) days following the Separation Event.
(c) In addition to the foregoing, all restricted stock and all stock
options for the purchase of capital stock of the Company held by
Employee shall vest in full immediately upon the occurrence of a
Separation Event.
4. Other Termination of Employment. If the Company or the Employee terminates
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Employee's employment with the Company for any reason other than a
Separation Event, then
(i) No benefits shall become due and payable under Section 3, above;
(ii) This Agreement shall be considered terminated with respect to
Employee; and
(iii) Company policy and the Employment Agreement shall determine the
severance benefits, if any, due to Employee or his/her
descendents.
5. Corporate Assets. No provision in this Agreement, or any action taken
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pursuant to its provisions by either party, shall create, or be construed
to create, a trust of any kind, or a fiduciary relationship between the
Company and the Employee, his/her designated beneficiary, other
beneficiaries of Employee, or any other person. The payments to Employee,
his/her designated beneficiary, or any other beneficiary shall be made from
assets which shall continue to be a part of the general assets of the
Company. No person shall have, by virtue of the provisions of this
Agreement, any interest in the Company's assets. To the extent that any
person acquires a right to receive payments or benefits from the Company
under this Agreement, the right shall be no greater than the right of any
unsecured general creditor of the Company.
6. No Employment Contract. Nothing contained in this Agreement shall be
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construed as a contract of employment for any term of years, nor as
conferring upon Employee the right to continue as an employee of the
Company in any capacity. It is understood by the parties that this
Agreement relates exclusively to severance benefits payable after
termination of Employee's employment with the Company during the
Termination Period, and is not intended to be an employment contract.
7. Employee's Capacity. Employee represents and warrants to the Company that
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he/she has the capacity and right to enter into this Agreement without any
restriction whatsoever by any other agreement, other document or otherwise.
8. Complete Agreement. This document contains the entire agreement between the
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parties regarding severance arrangements resulting from certain
terminations of Employee's employment during the Termination Period and
supersedes any prior discussions, negotiations, representations, or
agreements between them relating to such severance arrangements for
Employee. No additions or other changes to this Agreement shall be made or
be binding on either party unless made in writing and signed by each party
to this Agreement.
9. Notices. All notices and other communications under this Agreement to any
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party shall be in writing and shall be deemed given when delivered
personally, via facsimile (which is confirmed) to that party at the
telecopy number for that party set forth below, mailed by certified mail
(return receipt requested) to that party at the address for that party set
forth below (or at such other address for such party as such party shall
have specified in notice to the other party), or delivered to Federal
Express, UPS or any similar express delivery service for delivery to that
party at that address:
(a) If to the Company:
Incara Pharmaceuticals Corporation
X.X. Xxx 00000
79 X.X. Xxxxxxxxx Drive
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
(b) If to the Employee:
The Employee's current address in the Company's personnel files
10. Governing Law. All questions concerning the validity, intention, or meaning
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of this Agreement or relating to the rights or obligations of the parties
with respect to performance hereunder shall be construed and resolved under
the laws of North Carolina.
11. Severability. The intention of the parties to this Agreement is to comply
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fully with all laws and public policies, and this Agreement shall be
construed consistently with all laws and public policies to the extent
possible. If and to the extent that any court of competent jurisdiction
determines that it is impossible or violative of any legal prohibition to
construe any provision of this Agreement consistently with any law, legal
prohibition, or public policy and consequently holds that provision to be
invalid or prohibited, that shall in no way affect the validity of the
other provisions of this Agreement which shall remain in full force and
effect.
12. Nonwaiver. No failure by any party to insist upon strict compliance with
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any term of this Agreement, to exercise any option, enforce any right, or
seek any remedy upon any default of any other party shall affect, or
constitute a waiver of, the first party's right to insist upon such strict
compliance, exercise that option, enforce that right, or seek that remedy
with respect to that default or any prior, contemporaneous, or subsequent
default; nor shall any custom or practice of the parties at variance with
any provision of this Agreement affect or constitute a waiver of, any
party's right to demand strict compliance with all provisions of this
Agreement.
13. Captions. The captions of the various sections of this Agreement are not
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part of the context of this Agreement, but are only labels to assist in
locating those sections, and shall be ignored in construing this Agreement.
14. Successors. This Agreement shall be personal to Employee and no rights or
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obligations of Employee under this Agreement may be assigned by him/her.
Except as described in the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by and against
the respective heirs, legal representatives, successors, and assigns of
each party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Severance
Agreement as of the date and year first above written.
INCARA PHARMACEUTICALS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Chairman and CEO
EMPLOYEE:
/s/ Xxxx X. Xxxxx (SEAL)
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Xxxx X. Xxxxx
