EXECUTIVE
SEVERANCE BENEFITS AGREEMENT
This Executive Severance Benefits Agreement (the
"Agreement") is entered into this 15th day of October, 1999 (the
"Effective Date"), between Xxxxx XxXxxxx ("Executive") and CV
Therapeutics, Inc. (the "Company"). This Agreement is intended to
provide Executive with the compensation and benefits described
herein upon the occurrence of specific events. Certain
capitalized terms used in this Agreement are defined in Article
5.
The Company and Executive hereby agree as follows:
ARTICLE 1
Scope of and Consideration for this Agreement
1.1 Executive is currently employed by the Company.
1.2 The Company and Executive wish to set forth the
compensation and benefits which Executive shall be entitled to
receive in the event Executive's employment with the Company is
terminated under the circumstances described herein following a
Change in Control.
1.3 The duties and obligations of the Company to Executive
under this Agreement shall be in consideration for Executive's
past services to the Company, Executive's continued employment
with the Company, and Executive's execution of a release in
accordance with Section 3.1.
1.4 This Agreement shall supersede any other agreement
relating to cash severance benefits and health benefits in the
event of Executive's severance from employment with the Company
following a Change in Control.
ARTICLE 2
Severance Benefits
2.1 Severance Benefits. If Executive's employment
terminates due to an Involuntary Termination Without Cause or a
Constructive Termination within thirteen (13) months following
the effective date of a Change in Control, such termination of
employment will be deemed a Covered Termination. A Covered
Termination entitles Executive to receive the following benefits
set forth in Sections 2.2, 2.3, 2.4, and 2.5.
2.2 Salary Continuation. Executive shall continue to
receive Base Salary for eighteen (18) months following a Covered
Termination. Such amount shall be paid in regular installments
on the normal payroll dates of the Company and shall be subject
to all required tax withholding.
2.3 Bonus. The Company shall pay to Executive an amount
equal to one hundred and fifty percent (150%) of the annual bonus
paid to the Executive in the year immediately preceding the
effective date of the Change in Control. Such amount shall be
paid in regular installments on the normal payroll dates of the
Company and shall be subject to all required tax withholding.
2.4 Health Benefits. Provided that Executive elects
continued coverage under federal COBRA law, the Company shall pay
the premiums of Executive's group health insurance coverage,
including coverage for Executive's eligible dependents, for a
maximum period of eighteen (18) months following a Covered
Termination; provided, however, that the Company shall pay
premiums for Executive's eligible dependents only for coverage
for which those eligible dependents were enrolled immediately
prior to the Covered Termination. No premium payments will be
made following the effective date of Executive's coverage by a
health insurance plan of a subsequent employer. For the balance
of the period that Executive is entitled to coverage under
federal COBRA law, Executive shall be entitled to maintain such
coverage at Executive's own expense.
2.5 Option Acceleration. If Executive's employment with
the Company terminates due to a Covered Termination, then all
options of Executive to purchase the Company's common stock (or
the stock of a successor to the Company by reason of assumption
or substitution of options) shall become immediately fully vested
and exercisable as of the date of Executive's termination of
employment.
2.6 Mitigation. Except as otherwise specifically provided
herein, Executive shall not be required to mitigate damages or
the amount of any payment provided under this Agreement by
seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by
another employer or by any retirement benefits received by
Executive after the date of the Covered Termination.
ARTICLE 3
Limitations And Conditions On Benefits
3.1 Release Prior To Payment Of Benefits. Upon the
occurrence of a Covered Termination, and prior to the payment of
any benefits under this Agreement on account of such Covered
Termination, Executive shall execute a release (the "Release") in
the form attached hereto and incorporated herein as Exhibit A or
Exhibit B, as applicable. Such Release shall specifically relate
to all of Executive's rights and claims in existence at the time
of such execution and shall confirm Executive's obligations under
the Company's standard form of proprietary information and
inventions agreement. It is understood that, as specified in the
applicable Release, Executive has a certain number of calendar
days to consider whether to execute such Release, and Executive
may revoke such Release within seven (7) calendar days after
execution. In the event Executive does not execute such Release
within the applicable period, or if Executive revokes such
Release within the subsequent seven (7) day period, no benefits
shall be payable under this Agreement, and this Agreement shall
be null and void.
3.2 Termination of Benefits. Benefits under this
Agreement shall terminate immediately if the Executive, at any
time, violates any proprietary information or confidentiality
obligation to the Company.
3.3 Non-Duplication of Benefits. Executive is not eligible
to receive benefits under this Agreement more than one time.
ARTICLE 4
Parachute Payments
Parachute Payments. If any payment or benefit Executive
would receive under this Plan, when combined with any other
payment or benefit Executive receives pursuant to the termination
of Executive's employment with the Company ("Payment"), would (i)
constitute a "parachute payment" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) but for this sentence, be subject to the excise
tax imposed by Section 4999 of the Code (the "Excise Tax"), then
such Payment shall be either (x) the full amount of such Payment
or (y) such lesser amount (with cash payments being reduced
before stock option compensation) as would result in no portion
of the Payment being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal,
state and local employment taxes, income taxes, and the Excise
Tax results in Executive's receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some
portion of the Payment may be subject to the Excise Tax.
ARTICLE 5
Definitions
For purposes of the Agreement, the following terms are
defined as follows:
5.1 "Base Salary" means Executive's annual base salary as
in effect during the last regularly scheduled payroll period
immediately preceding the Covered Termination.
5.2 "Board" means the Board of Directors of the Company.
5.3 "Cause" means that, in the reasonable determination of
the Company or, in the case of the Chief Executive Officer, the
Board, Executive:
(a) has committed an act that materially injures the
business of the Company;
(b) has refused or failed to follow lawful and
reasonable directions of the Board or the appropriate individual
to whom Executive reports;
(c) has willfully or habitually neglected Executive's
duties for the Company; or
(d) has been convicted of a felony involving moral
turpitude that is likely to inflict or has inflicted material
injury on the business of the Company.
Notwithstanding the foregoing, Cause shall not exist based
on conduct described in clause (b) or clause (c) unless the
conduct described in such clause has not been cured within
fifteen (15) days following Executive's receipt of written notice
from the Company or the Board, as the case may be, specifying the
particulars of the conduct constituting Cause.
5.4 "Change in Control" means
(a) a sale of substantially all of the assets of the
Company;
(b) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or
consolidation in which shareholders immediately before the merger
or consolidation have, immediately after the merger or
consolidation, equal or greater stock voting power);
(c) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form
of securities, cash or otherwise (other than a reverse merger in
which shareholders immediately before the merger have,
immediately after the merger, greater stock voting power); or
(d) any transaction or series of related transactions
in which in excess of 50% of the Company's voting power is
transferred.
5.5 "Company" means CV Therapeutics, Inc. or, following a
Change in Control, the surviving entity resulting from such
transaction.
5.6 "Constructive Termination" means that Executive
voluntarily terminates employment within thirteen (13) months
following a Change in Control after any of the following are
undertaken without Executive's express written consent:
(a) the assignment to Executive of any duties or
responsibilities which results in a significant diminution in
Executive's function as in effect immediately prior to the
effective date of the Change in Control; provided, however, that
a mere change in Executive's title or reporting relationships
shall not constitute a Constructive Termination;
(b) a reduction by the Company in Executive's annual
base salary, as in effect on the effective date of the Change in
Control or as increased thereafter;
(c) any failure by the Company to continue in effect
any benefit plan or program, including fringe benefits, incentive
plans and plans with respect to the receipt of securities of the
Company, in which Executive is participating immediately prior to
the effective date of the Change in Control (hereinafter referred
to as "Benefit Plans"); or the taking of any action by the
Company that would adversely affect Executive's participation in
or reduce Executive's benefits under the Benefit Plans; provided,
however, that a "Constructive Termination" shall not exist under
this paragraph following a Change in Control if the Company
offers a range of benefit plans and programs which, taken as a
whole, are comparable to the Benefit Plans;
(d) a relocation of Executive's business office to a
location more than twenty (20) miles from the location at which
Executive performs duties as of the effective date of the Change
in Control, except for required travel by Executive on the
Company's business to an extent substantially consistent with
Executive's business travel obligations prior to the Change in
Control; provided, however, that if Executive performs sales
functions for the Company, a change of sales territory shall not
constitute a basis for Constructive Termination so long as the
Executive's business office is not relocated as provided above;
(e) a material breach by the Company of any provision
of this Agreement; or
(f) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the
Company.
5.7 "Covered Termination" means an Involuntary Termination
Without Cause or a Constructive Termination occurring within
thirteen (13) months following the effective date of a Change in
Control.
5.8 "Involuntary Termination Without Cause" means
Executive's dismissal or discharge other than for Cause. The
termination of Executive's employment as a result of Executive's
death or disability will not be deemed to be an Involuntary
Termination Without Cause.
ARTICLE 6
General Provisions
6.1 Employment Status. This Agreement does not constitute
a contract of employment or impose upon Executive any obligation
to remain as an employee, or impose on the Company any obligation
(i) to retain Executive as an employee, (ii) to change the status
of Executive as an at-will employee, or (iii) to change the
Company's policies regarding termination of employment.
6.2 Notices. Any notices provided hereunder must be in
writing, and such notices or any other written communication
shall be deemed effective upon the earlier of personal delivery
(including personal delivery by facsimile) or the third day after
mailing by first class mail, to the Company at its primary office
location and to Executive at Executive's address as listed in the
Company's payroll records. Any payments made by the Company to
Executive under the terms of this Agreement shall be delivered to
Executive either in person or at the address as listed in the
Company's payroll records.
6.3 Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provisions had never
been contained herein.
6.4 Waiver. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be
deemed to have waived any preceding or succeeding breach of the
same or any other provision of this Agreement.
6.5 Arbitration. Unless otherwise prohibited by law or
specified below, all disputes, claims and causes of action, in
law or equity, arising from or relating to this Agreement or its
enforcement, performance, breach, or interpretation shall be
resolved solely and exclusively by final and binding arbitration
held in San Francisco County, California through Judicial
Arbitration & Mediation Services/Endispute ("JAMS") under the
then existing JAMS arbitration rules. However, nothing in this
section is intended to prevent either party from obtaining
injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration. Each party in any such
arbitration shall be responsible for its own attorneys' fees,
costs and necessary disbursement; provided, however, that in the
event one party refuses to arbitrate and the other party seeks to
compel arbitration by court order, if such other party prevails,
it shall be entitled to recover reasonable attorneys' fees, costs
and necessary disbursements. Pursuant to California Civil Code
Section 1717, each party warrants that it was represented by
counsel in the negotiation and execution of this Agreement,
including the attorneys' fees provision herein.
6.6 Complete Agreement. This Agreement, including
Exhibit A and Exhibit B, constitutes the entire agreement between
Executive and the Company and is the complete, final, and
exclusive embodiment of their agreement with regard to this
subject matter, wholly superseding all written and oral
agreements with respect to cash severance benefits and health
benefits to Executive in the event of employment termination
other than any outstanding loans by the Company to Executive. It
is entered into without reliance on any promise or representation
other than those expressly contained herein.
6.7 Amendment Or Termination Of Agreement. This Agreement
may be changed or terminated only upon the mutual written consent
of the Company and Executive. The written consent of the Company
to a change or termination of this Agreement must be signed by an
executive officer of the Company after such change or termination
has been approved by the Board.
6.8 Counterparts. This Agreement may be executed in
separate counterparts, any one of which need not contain
signatures of more than one party, but all of which taken
together will constitute one and the same Agreement.
6.9 Headings. The headings of the Articles and Sections
hereof are inserted for convenience only and shall not be deemed
to constitute a part hereof nor to affect the meaning thereof.
6.10 Successors And Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive,
and the Company, and any surviving entity resulting from a Change
in Control and upon any other person who is a successor by
merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company, and their respective
successors, assigns, heirs, executors and administrators, without
regard to whether or not such person actively assumes any rights
or duties hereunder; provided, however, that
Executive may not assign any duties hereunder and may not
assign any rights hereunder without the written consent of the
Company, which consent shall not be withheld unreasonably.
6.11 Choice Of Law. All questions concerning the
construction, validity and interpretation of this Agreement will
be governed by the law of the State of California, without regard
to such state's conflict of laws rules.
6.12 Non-Publication. The parties mutually agree not to
disclose publicly the terms of this Agreement except to the
extent that disclosure is mandated by applicable law or to
respective advisors (e.g., attorneys, accountants).
6.13 Construction Of Agreement. In the event of a conflict
between the text of the Agreement and any summary, description or
other information regarding the Agreement, the text of the
Agreement shall control.
In Witness Whereof, the parties have executed this Agreement
on the Effective Date written above.
CV Therapeutics, Inc. Xxxxx XxXxxxx
By: /s/ XXXXX X. XXXXX, M.D., PH.D.
Name: Xxxxx X. Xxxxx, M.D., PH.D.
Title: Chairman & CEO
Exhibit A: Release (Individual Termination)
Exhibit B: Release (Group Termination)
Exhibit A
RELEASE
(Individual Termination)
Certain capitalized terms used in this Release are defined
in the Executive Severance Benefits Agreement (the "Agreement")
which I have executed and of which this Release is a part.
I hereby confirm my obligations under the Company's
proprietary information and inventions agreement.
I acknowledge that I have read and understand Section 1542
of the California Civil Code which reads as follows: "A general
release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law
of any jurisdiction of similar effect with respect to my release
of any claims I may have against the Company.
Except as otherwise set forth in this Release, I hereby
release, acquit and forever discharge the Company, its parents
and subsidiaries, and their officers, directors, agents,
servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands,
causes of action, costs, expenses, attorneys fees, damages,
indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action
against me based on my employment with the Company), arising out
of or in any way related to agreements, events, acts or conduct
at any time prior to the date I execute this Release, including,
but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my
employment with the Company or the termination of that
employment, including but not limited to, claims of intentional
and negligent infliction of emotional distress, any and all tort
claims for personal injury, claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other
form of disputed compensation; claims pursuant to any federal,
state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal
Age Discrimination in Employment Act of 1967, as amended
("ADEA"); the federal Employee Retirement Income Security Act of
1974, as amended; the federal Americans with Disabilities Act of
1990; the California Fair Employment and Housing Act, as amended;
tort law; contract law; statutory law; common law; wrongful
discharge; discrimination; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair
dealing; provided, however, that nothing in this paragraph shall
be construed in any way to release the Company from its
obligation to indemnify me pursuant to the Company's
indemnification obligation pursuant to agreement or applicable
law.
I acknowledge that I am knowingly and voluntarily waiving
and releasing any rights I may have under ADEA. I also
acknowledge that the consideration given under the Agreement for
the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (A) my waiver and release do not
apply to any rights or claims that may arise on or after the date
I execute this Release; (B) I have the right to consult with an
attorney prior to executing this Release; (C) I have twenty-one
(21) days to consider this Release (although I may choose to
voluntarily execute this Release earlier); (D) I have seven (7)
days following the execution of this Release by the parties to
revoke the Release; and (E) this Release shall not be effective
until the date upon which the revocation period has expired,
which shall be the eighth day after this Release is executed by
me.
Xxxxx XxXxxxx
Date:
Exhibit B
RELEASE
(Group Termination)
Certain capitalized terms used in this Release are defined
in the Executive Severance Benefits Agreement (the "Agreement")
which I have executed and of which this Release is a part.
I hereby confirm my obligations under the Company's
proprietary information and inventions agreement.
I acknowledge that I have read and understand Section 1542
of the California Civil Code which reads as follows: "A general
release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law
of any jurisdiction of similar effect with respect to my release
of any claims I may have against the Company.
Except as otherwise set forth in this Release, I hereby
release, acquit and forever discharge the Company, its parents
and subsidiaries, and their officers, directors, agents,
servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands,
causes of action, costs, expenses, attorneys fees, damages,
indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action
against me based on my employment with the Company), arising out
of or in any way related to agreements, events, acts or conduct
at any time prior to the date I execute this Release, including,
but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my
employment with the Company or the termination of that
employment, including but not limited to, claims of intentional
and negligent infliction of emotional distress, any and all tort
claims for personal injury, claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other
form of disputed compensation; claims pursuant to any federal,
state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal
Age Discrimination in Employment Act of 1967, as amended
("ADEA"); the federal Employee Retirement Income Security Act of
1974, as amended; the federal Americans with Disabilities Act of
1990; the California Fair Employment and Housing Act, as amended;
tort law; contract law; statutory law; common law; wrongful
discharge; discrimination; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair
dealing; provided, however, that nothing in this paragraph shall
be construed in any way to release the Company from its
obligation to indemnify me pursuant to the Company's
indemnification obligation pursuant to agreement or applicable
law.
I acknowledge that I am knowingly and voluntarily waiving
and releasing any rights I may have under ADEA. I also
acknowledge that the consideration given under the Agreement for
the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (A) my waiver and release do not
apply to any rights or claims that may arise on or after the date
I execute this Release; (B) I have the right to consult with an
attorney prior to executing this Release; (C) I have forty-five
(45) days to consider this Release (although I may choose to
voluntarily execute this Release earlier); (D) I have seven (7)
days following the execution of this Release by the parties to
revoke the Release; (E) this Release shall not be effective until
the date upon which the revocation period has expired, which
shall be the eighth day after this Release is executed by me; and
(F) I have received with this Release a detailed list of the job
titles and ages of all employees who were terminated in this
group termination and the ages of all employees of the Company in
the same job classification or organizational unit who were not
terminated.
Xxxxx XxXxxxx
Date:
