New York, NY 10022 T (212) 407-5748 F (212) 755-2947
Exhibit 4(c)(12)
|
000 Xxxxx Xxxxxx, 0xx Xxxxx | |
| Xxx Xxxx, XX 00000 | ||
| T (000) 000-0000 | ||
| F (000) 000-0000 |
July 18, 2007
CONFIDENTIAL
Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
000 Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
Re: Severance Agreement
Dear Lars:
This letter agreement (“Agreement”) confirms the arrangements agreed upon by you and Elan
Pharmaceuticals, Inc. (the “Company”) and sets forth the terms and conditions of your involuntary
termination of employment as EVP & President, Global Research & Development on December 31, 2007
(“Severance Date”). The Agreement supersedes and replaces any and all severance-related payments
or benefits under any documents as well as any oral or written agreements including but not limited
to your November 20, 2000 offer letter and the Elan U.S. Severance Plan. Upon your execution of
this Agreement (and you not later revoking the waiver and release (“Waiver”) that is part of this
Agreement), the Company shall provide you the payments and benefits set forth below.
Notwithstanding the foregoing, any benefits which become payable under this Agreement shall be paid
only after the seven (7) day revocation period for a signed Waiver has passed without revocation.
To accept the terms and conditions set forth below, you must sign and date this Agreement where
indicated and return it to me within 21 days from your Severance Date. Please return a signed copy
of this Agreement to me by facsimile, mail or hand delivery at the Company’s address.
1. Termination Benefits.
X. Xxxxxxxxx Pay and Accrued Vacation. You will be paid a lump-sum of $2,500,000,
less applicable federal, state and local tax withholding within five weeks of your Severance Date.
In addition, you will receive any accrued and unused vacation time due in accordance with the
Company’s vacation policy on your Severance Date.
B. Equity Grants. As of your Severance Date, all of your unvested equity grants (e.g.,
stock options and RSUs) will accelerate and become fully vested with the exception of the 2/1/2006
RSU grant (see footnote number 1 below). You will have 24 months after your
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Severance Date to exercise your equity grants. This modified exercise period includes those equity
grants that vested before your Severance Date. Notwithstanding the previous sentences, your rights
and obligations with respect to such equity grants will be determined in accordance with the terms
of the applicable plan. Specific unvested equity grants that shall become vested upon your
Severance Date include:
| • | Stock options: |
| • | 10,000 @ $16.27 (granted on 3/10/2004) | ||
| • | 30,000 @ $7.47 (granted on 3/10/2005) | ||
| • | 95,850 @ $15.90 (granted on 2/1/2006) | ||
| • | 106,371 @ $13.95 (granted on 2/21/2007) |
| • | RSUs: |
| • | 18,868 (granted on 2/1/2006) 1 | ||
| • | 16,487 (granted on 2/21/2007) |
A letter enclosing your Optionee Statement and stock option exercise forms will be sent to you
separately by the Company’s Stock Administrator upon your separation. This letter will also direct
you how to exercise your stock options should you choose to do so.
C. Health and Welfare Benefits. Upon your Severance Date, you will be eligible to
elect individual and dependent continuation group health coverage under Section 4980B(f) of the
Internal Revenue Code (“COBRA”) for the maximum COBRA coverage period available, subject to all
conditions and limitations of COBRA. If you or one or more of your covered dependents elect COBRA
coverage, the Company shall pay the cost of the COBRA coverage for the 18-month period beginning on
January 1, 2008 or, if shorter, until COBRA otherwise expires. You will also be eligible to
participate in the Company-sponsored life and supplemental life insurance programs for you and your
spouse at the coverage levels elected on the date immediately preceding your Severance Date. The
Company will pay the cost of such coverage for an 18-month period beginning on January 1, 2008. Further, you will receive a lump-sum
payment of $70,200 on or before March 15, 2008 to assist you with the purchase of health and life
insurance coverage for you and your dependents after the initial 18-month period of Company-paid
coverage for such programs has expired.
| 1 | As to the 2/1/2006 RSU grant referred to above, the plan does not permit accelerated vesting so, in lieu of the RSUs, you will receive a cash payment, less applicable federal, state and local tax, based on the closing NYSE value of the Company’s ADRs on the Severance Date. This will be paid within five weeks of your Severance Date. |
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D. German Pension Plan. In order to make up the accrued benefit that you would have
earned had you remained employed at Xxxxxxx until age 60, the Company shall continue to make an
annual $60,000 payment to Viktoria Life Insurance. The Company will do so by making a lump-sum
payment representing the remaining payments due in the fourth quarter of 2007.
E. Eligibility for Special Milestone Payments. Provided you agree to become a
non-executive director of the Elan Corp. plc Board of Directors, you will be eligible to receive
the lump-sum payments described below if the Company achieves the related milestones.
| • | $250,000 if Elan/Wyeth file an NDA for AAB-001 |
| • | $750,000 if AAB-001 is approved for commercialization by the U.S. Food and Drug Administration. |
You will be paid a lump-sum cash payment of such amounts less applicable federal, state and local
tax withholding within two weeks of the Company attaining such milestones, provided that you are
still a member of the Board of Directors at the time of each event. If you are not a member of the
Board of Directors and your service as a member of the Board of Directors ceased involuntarily (so
long as involuntarily is not for “cause”) you will still receive the milestone payments if the
milestones occur within a 24-month period of your termination from the Board.
F. Career Transition Services. The Company shall provide you with career transition
assistance services through Drake Beam and Xxxxx for two years following your Severance Date. You
will receive separate, detailed information about the career transition services, including the
types of available services, how to enroll and the locations of available programs.
G. Other Employee Benefits. Unless otherwise provided in the Agreement, all other
employee benefits to which you are entitled shall cease as of your Severance Date. Any payment or
benefit to which you are entitled under the Elan 401(k) Savings Plan or the Elan Deferred
Compensation Plan shall be payable in accordance with the terms of such plan. If you have any
questions concerning your account in the Elan 401(k) Savings Plan or the Elan Deferred Compensation
Plan, please contact Xxxxxx Xxxxx at (000) 000-0000.
H. Section 409A Compliance. For purposes of this Agreement, each of the payments of
severance (except the second payment in Paragraph (A) above) and continued welfare benefits under
xxx-xxxxxxxxxx 0X, 0X, and 1E above are designated as separate payments for purposes of the
short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F). As a result,
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payments that are made on or before the 15th day of the third month of the calendar year
following the applicable year of termination are exempt from the requirements of Code Section 409A.
2. Nonadmission of Liability. You acknowledge that this Agreement, compliance with this
Agreement and the provision of consideration hereunder are not and shall not be construed in any
way as an admission of wrongdoing or liability on the part of Elan, any of the Releasees hereunder
(as defined in Paragraph 6), or any other person or business entity. You further acknowledge that
Elan denies all allegations of wrongdoing and specifically disclaims any liability for any alleged
violation of my rights, or for any alleged violation of any order, law, statute, duty, or contract
on the part of Elan or any of the Releasees hereunder (as defined in Paragraph 6).
3. Ownership of Claims. You represent that you have not transferred or assigned, or
purported to transfer or assign, to any person or entity, any claim described in this Agreement.
You further agree to indemnify and hold harmless each and all of the Releasees identified in
Paragraph 6 below against any and all claims based upon, arising out of, or in any way connected
with any such actual or purported transfer or assignment.
4. No Filings. You represent that you have not filed any action, claim, charge, or
complaint against Elan or any other Releasee identified in Paragraph 6 below, with any local,
state, or federal agency or court. In the event that any agency or court assumes jurisdiction of
any lawsuit, claim, charge or complaint, or purports to bring any legal proceedings against any
Releasee on your behalf, you promptly will request that the agency or court withdraw from or
dismiss the lawsuit, claim, charge, or complaint with prejudice.
5. Covenant Not to Xxx. In consideration for the promises set forth in this Agreement, you
agree on behalf of yourself and your heirs that you will not file, participate in, or instigate the
filing of any lawsuits, complaints or charges by you or by any other person or party in any state
or federal court or any proceedings before any local, state or federal agency, except as required
by law, claiming that Releasees identified in Paragraph 6 below, or any of them have violated any
law or obligation, including, but not limited to, any claims that have been made or that could
have been made, based upon events or omissions occurring prior to the effective date of this
Agreement. You agree to withdraw and dismiss all claims, charges, or actions currently on file
against Releasees. You also agree that in the event you receive notice of your right to
participate in any type of class action against Releasees that you will take all appropriate steps
to “opt out”
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of the class action litigation. In the event of a breach of the covenant contained in
this Paragraph, you agree that you will indemnify the Releasees and each of them for all damages
and expenses, including attorneys’ fees and costs, incurred by any Releasee in defending,
participating in, or investigating any matter or proceeding covered by this Paragraph. In
addition, should you breach any of the covenants undertaken pursuant to this Paragraph, Elan will
be entitled to recover from you all payments made and shall also be entitled to withhold any future
payments due under this Agreement.
6. Release. You hereby, for yourself and your heirs, representatives, attorneys,
executors, administrators, successors, and assigns, release, acquit, and forever discharge: Elan
and all of Elan’s past and present affiliates, and each of their respective subsidiaries,
divisions, joint venturers, predecessors, successors, assigns, consultants, subcontractors,
employee benefit plans and the trustees, fiduciaries, and administrators of those plans, and
stockholders, officers, directors, partners, servants, agents, employees, independent contractors,
representatives, attorneys, and all persons acting under, by, through, or in concert with any of
them, and each of them (all of whom are referred to herein as “Releasees”), from any and all
actions, causes of action, grievances, obligations, attorneys’ fees, costs, expenses, damages,
losses, claims, liabilities, suits, debts, demands, and benefits, of whatever character, in law or
in equity, known or unknown, suspected or unsuspected, matured or unmatured, of any kind or nature
whatsoever, based on any act, omission, event, occurrence, or nonoccurrence from the beginning of
time to the effective date of this Agreement, including but not limited to any claims or causes of
action arising out of or in any way relating to your employment with Elan or the ending of your
employment with Elan.
You agree that this release of claims includes, but is not limited to, claims for breach of
any implied or express contract or covenant, claims for promissory estoppel; claims of entitlement
to any pay (other than the compensation promised in Paragraph 2); claims of wrongful denial of
insurance and employee benefits, including but not limited to claims for benefits or monies under
Elan’s benefit plans, Elan’s severance plan, or any other plan; claims for wrongful termination,
public policy violations, defamation, invasion of privacy, fraud, misrepresentation, emotional
distress or other common law or tort causes of action; claims of harassment, retaliation or
discrimination under federal, state, or local law; claims based on any federal, state or other
governmental statute, regulation or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, the Civil
Rights Act of 1871, the Civil Rights Act of 1991, the National Labor Relations Act, the Older
Workers’ Benefit Protection Act, the Employee Retirement Income Security Act, the California Family
Rights Act, the California Constitution, and/or the California Labor Code, including
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Labor Code
Section 132a, or under Elan’s personnel policies. You understand by signing this Release you are
not releasing any claim for vested stock options under the applicable option agreement(s). Nor are
you waiving any other claims or rights which cannot be waived by law, including the right to file
an administrative charge of discrimination or to file for unemployment insurance benefits; you are,
however, waiving the right to monetary recovery in connection with any such charge.
7. Release of Unknown Claims. For the purpose of implementing full and complete releases,
you expressly acknowledge that the release given in this Agreement is intended to include, without
limitation, claims you did not know or suspect to exist in your favor at the time of the effective
date of this Agreement, regardless of whether the knowledge of such claims, or the facts upon which
they might be based would materially have affected the settlement of this matter; and that the
consideration given under the Agreement was also for the release of those claims and contemplates
the extinguishment of any such unknown claims, despite the fact that California Civil Code Section
1542 may provide otherwise. You expressly waive any right or benefit available to you in any
capacity under the provisions of Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO ALL CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
8. Notice and Revocation. You understand and agree that you:
| (a) | Have had a full twenty-one (21) days within which to consider this Agreement before executing it. | ||
| (b) | Have carefully read and fully understand all of the provisions of this Agreement. | ||
| (c) | Are, through this Agreement, releasing Elan and Releasees from any and all claims you may have against Elan and/or Releasees. | ||
| (d) | Knowingly and voluntarily agree to all of the terms set forth in this Agreement. |
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| (e) | Knowingly and voluntarily intend to be legally bound by the same. | ||
| (f) | Were advised and hereby are advised in writing to consider the terms of this Agreement and consult with an attorney of your choice prior to executing this Agreement. | ||
| (g) | Have a full seven (7) days following execution of this Agreement to revoke this Agreement and have been and hereby am advised in writing that this Agreement shall not become effective or enforceable until the revocation period has expired. |
Any revocation by you must be made in writing and must be received by General Counsel, Legal
Department, Elan Pharmaceuticals, Inc., 000 Xxxxxxx Xxxx., Xxxxx Xxx Xxxxxxxxx, XX 00000, within
such seven (7) day period. If you timely revoke this Agreement, you shall not be eligible to
receive the consideration set forth in Paragraph 1 of this Agreement. If you timely submit the
signed Agreement and do not timely exercise your right to revoke the Agreement, you shall be
eligible to receive all of the consideration set forth in this Agreement.
| (h) | Understand that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.) that may arise after the date of this Agreement is executed are not waived. You also understand that nothing in this Agreement shall be construed to prohibit you from filing a charge or complaint, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission. |
9. Counsel. You acknowledge you are encouraged to contact your personal attorney at your
own expense to review the Waiver and Release Agreement if you so desire.
10. Successors. This Agreement shall be binding upon the parties, and their heirs,
representatives, executors, administrators, successors, insurers, and assigns, and shall inure to
the benefit of each and all of the Releasees, and to their heirs, representatives, executors,
administrators, successors, and assignees.
11. Confidentiality. You recognize and acknowledge and agree that during your employment
with Elan you have had access to highly confidential and proprietary information relating to Elan
and trade secrets (“Proprietary Information,” as described herein) and the use, misappropriation or
disclosure of Proprietary Information would cause irreparable injury to Elan;
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and it is essential
to the protection of Elan’s good will and to the maintenance of Elan’s competitive position that
Proprietary Information be kept secret and that you not disclose Proprietary Information to others,
or use any Proprietary Information to your own advantage or the advantage of any third parties.
For purposes of this Agreement, the term “Proprietary Information” shall include any and all
information, in any form whatsoever, including but not limited to, hard copy, computer floppy
diskette, CD, CD-ROM drive, information retained in electronic storage, or other information
storage means, relating to the Company’s technology; techniques; processes; tools; research and
development; market research, data and strategy; and, information relating to sales, pricing and
customers, including customer-specific sales information, pricing policies and strategies. You
acknowledge and agree that your obligations under this Paragraph shall survive the Severance Date.
12. Confidentiality/Non-Disclosure of this Agreement. You agree that you have not
disclosed the terms of this Agreement, or the negotiations leading thereto, to anyone other than
your attorney or immediate family members. Except to the extent required by law, you represent and
agree that you will keep the terms of this Agreement completely confidential and that
confidentiality is of the essence of this Agreement. Accordingly, you shall keep confidential and
not publicize or disclose any of the terms of this Agreement in any manner whatsoever, whether in
writing or orally, to any person, directly or indirectly, or by or through any agent or
representative, except as necessary to effectuate the terms of the Agreement, other than to the
following: (1) immediate family members; (2) attorneys and legal support personnel; (3)
accountants; (4) tax consultants; (5) psychiatrists and psychologists; and (6) such other
representatives or entities required by law and/or court order. With respect to any individuals
referred to in subparts (1) through (6) to whom you disclose any information regarding this
Agreement and its terms, you agree that you will inform such individual prior to your disclosure
that the information is strictly confidential and may not be reviewed, discussed or disclosed,
orally or in writing with any other person, organization or entity, and you shall not disclose any
confidential information if you have reason to believe such person(s) will not guard the
confidential nature of the information. Upon inquiry regarding this Agreement and/or the
circumstances surrounding the termination of your employment with Elan, you agree that you shall
state (and shall inform any individuals referred to in subparts (1) through (6) to whom you
disclose any information regarding this Agreement and its terms to state) only that your employment
with Elan ended and you shall give no other indication, verbal or otherwise, regarding the amount
or fact of payment to you hereunder or the other terms set forth in this Agreement.
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In the event that you are required by law or court order to disclose, publicize, or to permit,
authorize or instigate the disclosure of this Agreement, in whole or in part, you must notify Elan
in writing at least seven (7) business days prior to the disclosure in order to provide Elan with
the opportunity to object to such disclosure. Such written notification shall be sent to: General
Counsel, Legal Department, Elan Pharmaceuticals, Inc., 000 Xxxxxxx Xxxx., Xxxxx Xxx Xxxxxxxxx, XX
00000. You agree to cooperate fully with Elan if Elan decides to object to such disclosure. This
confidentiality agreement specifically includes, but is not limited to, an obligation, on the part
of you and your attorneys and other representatives and your family members, not to disclose, or
cause to be disclosed, the terms of the Agreement to any current or former employee or independent
contractor of Elan or any affiliate of Elan, or to any individual associated with the press or
media. You agree that you shall be responsible and liable for any disclosure prohibited by this
Paragraph 12, including disclosures made by you, your representatives, your consultants and/or
family members.
13. Full and Independent Knowledge. The Parties represent that they fully understand all
of the provisions of the Agreement, and are voluntarily entering into this Agreement.
14. No Representations. The Parties acknowledge that, except as expressly set forth
herein, no representation of any kind or character has been made to induce the execution of this
Agreement.
15. Breach; Arbitration. Any dispute regarding any aspect of this Agreement or any act
that allegedly has or would violate any provision of this Agreement will be submitted to binding
arbitration, only after mutual exhaustion of a reasonable meet and confer effort to resolve such
dispute, according to then current rules of JAMS/Endispute. The decision of the arbitrator shall
be final and conclusive, and the parties waive the right to trial de novo or appeal excepting only
for the purpose of confirming the arbitrator’s decision, for which purpose the Parties agree that
the San Diego County Superior Court shall have jurisdiction. The prevailing Party or Parties will
be entitled to recover reasonable attorneys’ fees and costs of bringing or defending the
arbitration and any action for enforcement, the amount of the awards to be determined by the
arbitrator and the Court, respectively.
16. Waiver. The failure of Elan or you to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver thereof, or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
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17. No Re-Hire. You understand and acknowledge that neither Elan, nor any of its current
subsidiaries, divisions, or affiliates shall be under any obligation to re-hire or retain you as
either an employee or independent contractor, and that any refusal by Elan or its current
subsidiaries, divisions, or affiliates to re-hire or retain you will not subject them to liability
on any grounds. You agree that you shall not apply for work as an employee or independent
contractor with Elan or any of its current subsidiaries, divisions, parent, successor, or
affiliated companies, and that any application to be an employee or independent contractor that you
make to such company may be rejected without cause and without any liability whatsoever by the
company to which application is made.
18. Miscellaneous.
| (a) | The language of all parts in this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against either party. | ||
| (b) | Should any provision in this Agreement be declared or determined to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby, and the illegal or invalid part, term, or provision shall be deemed not to be part of this Agreement, and all remaining provisions shall remain valid and enforceable. | ||
| (c) | This Agreement, in addition to the Employee Proprietary Information and Inventions Agreement that you previously signed (the terms of which are incorporated herein by reference), constitutes a single, integrated contract setting forth the entire agreement between the parties and fully supersedes any and all prior agreements and understandings between the parties pertaining to the subject matter of this Agreement. | ||
| (d) | The headings used herein are for reference only and shall not affect the construction of this Agreement. | ||
| (e) | This Agreement is made and entered into in the State of California and shall in all respects be interpreted and governed under the law of that State. |
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19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
20. Good Faith Compliance. Each party hereto agrees to cooperate in good faith and to do
all things necessary to effectuate this Agreement.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES THE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
| DATED: 7/20, 2007 | /s/ Xxxx Xxxxx | |||
| XXXX XXXXX | ||||
| DATED: 7/25, 0000 | XXXX XXXXXXXXXXXXXXX, INC. |
|||
| By | /s/ Xxxxxxxx Xxxxxxxxx | |||
| Its EVP, Human Resources | ||||
* * * *
We appreciate your dedication and service with Elan and we wish you all the best with your future
endeavours. Please do not hesitate to contact me with any questions.
Sincerely,
Xxxxxxxx Xxxxxxxxx
Executive Vice President, Strategic Human Resource
Executive Vice President, Strategic Human Resource
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