Exhibit 10.35
[LOGO]
Cambridge
HEART
November 18, 1999
Xxxxx Xxxxxx
VP Clinical Affairs
Cambridge Heart, Inc.
Xxx Xxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Re: Severance Agreement
Dear Xxxxxx:
Cambridge Heart, Inc. (the "Company's recognizes that, as is the case with
many publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions it
may raise among key personnel, may result in the departure or distraction of key
personnel to the detriment of the Company and its stockholders. The Board of
Directors has determined that, while there are no current plans for the Company
to engage in a change of control transaction, appropriate steps be taken to
reinforce and encourage the continued employment and dedication of the
Company's key personnel without distraction from the possibility of a change of
control and related events and circumstances.
Accordingly, the Company agrees as follows:
1. In the event that the Company terminates your employment without Cause,
then the following shall apply:
. You will continue to be paid your salary for six (6) months after
termination at the rate in effect on the termination date.
. You will continue for six (6) months to be enrolled in the health
insurance program you were enrolled in as of the termination date.
. The vesting of all stock options you hold as of the termination date
will be accelerated as follows: the number of shares under all such
options that would have become vested (i.e., exercisable during
the twelve (12) month period following the termination date shall
become exercisable; you must exercise all options (including the
accelerated portion) within the time periods set farms in your
option agreement(s)) and the applicable option plan.
CAMBRIDGE HEART, Inc. * 0 Xxx Xxxx Xxxxx * Xxxxxxx, XX 00000 *
Phone: 000-000-0000 * Fax: 000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
2. In the event that a Change in Control occurs, the following shall apply:
. The vesting of all stock options you hold as of the Change in
Control Date will be accelerated as follows: fifty percent (50%) of
the number of shares under all such options that were not vested
(ie., exercisable) as of the Change in Control Date shall become
exercisable as of the Change in Control Date; you must exercise all
options (including the accelerated portion) within the time periods
set forth in your options agreement(s) and the applicable option
plan.
3. In the event that a Change in Control occurs and, within twelve (12)
months after the Change in Control Date, your employment (either with the
Company or the successor/acquiror) is terminated without Cause or you terminate
your employment for Good Reason, then the following shall apply:
. You will continue to be paid your salary for twelve (12) months
after termination at the rate in effect on the termination date.
. You will continue for twelve (12) months to be enrolled in the
health insurance program you were enrolled in as of the termination
date.
. The vesting of all stock options you hold as of the Change in
Control Date will be accelerated as follows: one hundred percent
(100%) of the number of shares under all such options that were not
vested (ie., exercisable) as of the termination date shall become
exercisable as of the termination date; you must exercise all
options (including the accelerated portion) within the time periods
set forth in your options agreement(s) and the applicable option
plan.
All capitalized terms used in this letter agreement have the meanings set
forth in Exhibit A
This agreement supersedes all other agreements concerning severance.
Sincerely yours,
CAMBRIDGE HEART, INC.
By /s/ Xxxxxxx Xxxxxx
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Title: President
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AGREED:
/s/ Xxxxx X. Xxxxxx
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Employee
CAMBRIDGE HEART, Inc. * 0 Xxx Xxxx Xxxxx * Xxxxxxx, XX 00000 *
Phone: 000-000-0000 * Fax: 000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
EXHIBIT A
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1. "Change in Control" means an event or occurrence set forth in any one or
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more of subsections (a) through (c) below (including an event or occurrence that
constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group (within, the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (i) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided however, that for purposes of this subsection (a), the
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following acquisitions shall not constitute a Change in Control, (i) any
acquisition directly from the Company, (ii) any acquisition by the Company or
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the Board of Directors
of a successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (a) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), unless, immediately following such Business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring Company in such Business Combination
in substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively.
2. "Change in Control Date" means the first date on which a Change in
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Control occurs.
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CAMBRIDGE HEART, Inc. * 0 Xxx Xxxx Xxxxx * Xxxxxxx, XX 00000 *
Phone: 000-000-0000 * Fax: 000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
3. "Cause" means;
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(a) the Employee's willful and continued failure to substantially
perform [his/her] reasonable assigned duties (other than any such failure
resulting from incapacity due to physical or mental illness or any failure
after the Employee gives notice of termination for Good Reason), which failure
is not cured within 30 days after a written demand for substantial performance
is received by the Employee from the Board of Directors of the Company which
specifically identifies the manner in which the Board of Directors believes the
Employee has not substantially performed the Employee's duties; or
(b) the Employee's willful engagement in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.
For purposes of this Section 3, no act or failure to act by the Employee
shall be considered "willful" unless it is done, or omitted to be done, in bad
faith and without reasonable belief that the Employee's action or omission was
in the best interests of the Company.
4. "Good Reason" means the occurrence, without the Employee's written
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consent, of any of the events or circumstances set forth in clauses (a) through
(d) below. Notwithstanding the occurences of any such event or circumstance,
such occurrence shall not be deemed to constitute Good Reason if, prior to the
notice of termination given by the Employee in respect thereof, such event or
circumstance has been fully corrected and the Employee has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first notice of
termination for Good Reason given by the Employee).
(a) the assignment to the Employee of duties inconsistent in any
material respect with the Employee's position (including statue, offices, titles
and reporting requirements), authority or responsibilities in effect
immediately prior to the earliest to occur of (i) the Change is Control Date,
(ii) the date of the execution by the Company of the initial written agreement
or instrument provided for the Change in Control or (iii) the date of the
adoption by the Board of Directors of a resolution providing for the Change in
Control (with the earliest to occur of such dates returned to herein as the
"Measurement Date"), or any other action or omission by the Company which
results is a diminution in such position, authority or responsibilities;
(b) a reduction is the Employee's annual base salary as in effect on the
Measurement Date or as the same was or may be increased from time to time;
(c) the failure by the Company to (i) continue in effect any material
compensation or benefit plan or program (including without limitation any life
insurance, medical, health and accident or disability play and any vacation
program or policy) (a "Benefit Plan") in which the Employee participates or
which is applicable to the Employee immediately prior to the Measurement Date,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan or program, (ii)
continue the Employee's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefit provided and the level of the Employee's participation
relative to other participants, than the basis existing immediately prior to the
Measurement Date or (iii) award cash bonuses to the Employee in amounts and in a
manner substantially consistent with past practice in light of the Company's
financial performance;
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CAMBRIDGE HEART, INC * 0 Xxx Xxxx Xxxxx * Xxxxxxx, XX 00000 *
Phone: 000-000-0000 * Fax: 000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
(D) any failure of the Company to pay or provide to the Employee any
portion of the Employee's compensation or benefits due under any Benefit Plan
within seven days of the date such compensation or benefits are due, or any
material breach by the Company of any employment agreement with the Employee.
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Cambridge Heart, Inc. * 0 Xxx Xxxx Xxxxx * Xxxxxxx, XX 00000 *
Phone: 000-000-0000 * Fax: 000-000-0000
xxx.xxxxxxxxxxxxxx.xxx
