EXHIBIT 99.7
SCIOS INC.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
January 11, 2000
Xx. Xxxxxxx X. Xxxxxx
President and
Chief Executive Officer
Scios Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Dick:
The Board of Directors of Scios Inc. (the "Company") has determined
that it is in the best interests of the Company and its stockholders to offer
you the following agreement (the "Agreement") which provides you with certain
severance payments and benefits if your employment terminates following a
"Change of Control" (as defined below).
This Agreement is intended to supplement your existing employment
agreement dated September 8, 1998 (the "Employment Agreement") in the event of
termination following a Change of Control, and is not intended to modify the
Employment Agreement except as set forth in Article III below.
ARTICLE I
DEFINITIONS
1.1 Definitions
Whenever used in this Agreement, the following capitalized terms shall
have the meanings set forth in this Section, certain other capitalized terms
being defined elsewhere in this Agreement:
(a) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 promulgated under the Exchange Act.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Cause" means a termination for any of the following reasons:
(i) engaging in intentional misconduct which would tend to discredit the
Company or your position as President and Chief Executive Officer; (ii) being
convicted of a felony; (iii) committing an act of fraud against the Company
or the willful material misappropriation of property belonging to the Company;
(iv) materially breaching the Employment Agreement or any proprietary
information agreement between you and the Company or (v) willfully disregarding
your duties despite adequate warnings from the Board.
(d) "Change of Control" of the Company means and includes any of the
following:
(i) Any Person or "group" (as that term is defined in Section
13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) is or becomes, on or prior to
December 31, 2001, the Beneficial Owner, directly or
indirectly, of securities of the Company representing fifty
percent (50%) or more of the voting power of then
outstanding securities of the Company.
(ii) Any Person or group is or becomes, on or prior to December
31, 2001, the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty percent (20%)
or more of the voting power of the then outstanding
securities of the Company, unless such acquisition was
approved in advance by the Company's Board of Directors.
(iii)The individuals who, as of the date hereof, are members of
the Company's Board of Directors (the "Existing Directors"),
cease, on or prior to December 31, 2001, for any reason, to
constitute more than fifty percent (50%) of the number of
authorized directors of the Company as determined in the
manner prescribed in the Company's Certificate of
Incorporation and Bylaws; provided, however, that if the
appointment, or the election, or nomination for election, by
the Company's stockholders of any new director, was approved
by a vote of at least fifty percent (50%) of the Existing
Directors, such new director shall be considered an Existing
Director; provided further, however, that no individual
shall be considered an Existing Director if such individual
initially assumed office as a result of either an actual or
threatened election contest (as described in Rule 14a-11 or,
effective January 24, 2000, Rule 14a-12(c) promulgated under
the Exchange Act) or other actual or threatened solicitation
of proxies by or on behalf of anyone other than the Board of
Directors (a "Proxy Contest"), including by reason of any
agreement intended to avoid or settle any election contest
or Proxy Contest.
(iv) The consummation, on or prior to December 31, 2001, of a
merger, consolidation or reorganization to which the Company
is a party, whether or not the Company is the Person
surviving or resulting therefrom, in one transaction or a
series of related transactions, to any Person(s) other than
a Subsidiary, provided, however, that no such transaction
shall constitute a "Change of Control" under this
subparagraph (iv) if the Persons who were the stockholders
of the Company immediately before the consummation of such
transaction are the Beneficial Owners, immediately following
the consummation of such transaction, of fifty percent (50%)
or more of the combined voting power of the then outstanding
voting securities of the Person surviving or resulting from
any merger, consolidation or reorganization.
(v) The consummation, on or prior to December 31, 2001, of a
sale, assignment, lease, conveyance or other disposition of
50% or more of the assets or assets representing 50% or more
of the earning power of the Company, in one or a series of
related transactions to any Person(s) other than a
Subsidiary.
(vi) A complete liquidation of the Company.
(e) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act
of 1985.
(f) "Company" means Scios Inc., a Delaware corporation, and any
successor or assignee as provided in Article IV.
(g) "Compensation" means the highest level of your annual base
salary at any time during the 12 months preceding the date on which your
employment is terminated attributable to your employment with the Company
and/or any of its Subsidiaries (including, but not limited to, any amounts
excluded at your election from your gross income for federal income tax
purposes pursuant to Section 125 or Section 401(k) of the Internal Revenue Code
of 1986, as amended, or deferred pursuant to any Company or Subsidiary plan or
program), plus your target bonus for the calendar year during which your
employment is terminated.
(h) "Disability" means a physical or mental infirmity which
substantially impairs your ability to perform your material duties for a period
of at least one hundred eighty (180) consecutive calendar days and, as a
result of such Disability, you have not returned to your full-time regular
employment prior to termination.
(i) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Good Reason" means any of the following: (i) relocation of the
Company's executive offices more than forty miles from the current location,
without your concurrence; (ii) any material breach by the Company of any
provision of this Agreement or the Employment Agreement; (iii) a material change
in the principal line of business of the Company, without your concurrence; (iv)
the assignment to you by the Company of any duties inconsistent with your status
as President and Chief Executive Officer or a substantial adverse alteration in
the nature or status of your responsibilities from those in effect immediately
prior to the Change of Control; or (v) a reduction in the amount equal to the
sum of (x) your total annual cash salary and (y) your bonus opportunity, in each
case as in effect on the date hereof or as the same may be increased from time
to time.
(l) "Person" shall have the meaning ascribed to such term in Section
3 of the Exchange Act and the rules and regulations promulgated thereunder.
(m) "Severance Payment" means the payment of severance compensation
as provided in Article II.
(n) "Subsidiary" means any corporation or other Person, a majority
of the voting power, equity securities or equity interest of which is owned
directly or indirectly by the Company.
ARTICLE II
SEVERANCE PAYMENTS
2.1 Right to Severance Payment
You shall be entitled to receive a Severance Payment from the Company
in the amount provided in Section 2.2 if (a) there has been a Change of Control
of the Company, (b) you are an active employee at the time of the Change of
Control, and (c) within three hundred sixty five (365) calendar days from and
including the date of the Change of Control, your employment is involuntarily
terminated for any reason (other than for Cause or your death or Disability), or
you voluntarily terminate your employment for Good Reason. For purposes of
subclause (b) above, you will still be considered to be an active employee if
you are on sick leave, military leave or any other leave of absence approved by
the Company or any of its Subsidiaries.
2.2 Amount of Severance Payment
If you become entitled to a Severance Payment under this Agreement, you
shall receive a lump sum payment equal to 2.25 times your Compensation.
2.3 Excise Tax Limitation
(a) Notwithstanding anything contained in this Agreement to the
contrary, in the event that any payment or benefit (within the meaning of
Section 28OG(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), to you or for your benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, your employment with the Company or any
of its Subsidiaries or a Change of Control (a "Payment" or "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then the Payments shall be reduced (but not below zero) but only to the
extent necessary that no portion thereof shall be subject to the excise tax
imposed by Section 4999 of the Code (the "Section 4999 Limit").
(b) If a reduction in Payments is necessary to comply with the
provisions of the preceding paragraph, you shall be entitled to select which
Payments will be reduced and the manner and method of any such reduction of
such Payments. Within ten (10) calendar days after the amount of any required
reduction in Payments is finally determined in accordance with the provisions
of this Section 2.3, you shall notify the Company and the Accounting Firm (as
defined below) in writing regarding which Payments are to be reduced. If
you fail to give such notification, the Company will determine which
Payments to reduce.
(c) All determinations required to be made under this Section
2.3 (each, a "Determination") shall be made, at the Company's expense,
by a nationally recognized accounting firm designated by the Company (other
than the Company's accounting firm or the accounting firm that is regularly
engaged by any party who has effectuated the Change of
Control) and reasonably acceptable to you (the "Accounting Firm"). The
Accounting Firm shall provide its calculations, together with detailed
supporting documentation, both to the Company and to you within
ten (10) calendar days after the date on which your right to a Severance Payment
hereunder was triggered (if requested at that time by the Company or you) or
such other time as requested by the Company or you (in either case provided that
the Company or you believe in good faith that any of the Payments may be subject
to the Excise Tax); provided, however, that if the Accounting Firm determines
that no Excise Tax is payable by you with respect to a Payment or Payments, it
shall furnish you with written advice to the effect that no Excise Tax should be
imposed with respect to any such Payment or Payments. Within ten (10) calendar
days of the delivery of the Determination to you, you shall have the right to
dispute the Determination (the "Dispute") in accordance with the provisions of
Section 7.11 and Article VI of this Agreement. The existence of any Dispute
shall not in any way affect your right to receive the Payments in accordance
with the Determination. If there is no Dispute, the Determination by the
Accounting Firm shall be final, binding and conclusive upon the Company and you,
subject to the application of Section 2.3(d).
(d) As a result of the uncertainty in the application of Sections
4999 and 28OG of the Code, it is possible that the Payments either will have
been made (or are due) or will not have been made by the Company, in any
case in a manner inconsistent with the limitations provided in Section
2.3(a) (an "Excess Payment" or "Underpayment", respectively). If it is
established pursuant to (i) a final determination of a court for which all
appeals have been taken and finally resolved or the time for all appeals has
expired, or (ii) an Internal Revenue Service (the "IRS") proceeding which has
been finally and conclusively resolved, that an Excess Payment has been made,
any Payments remaining to be paid pursuant to Article II which constitute
all or any portion of the Excess Payment will be eliminated to the extent
necessary so that the Section 4999 Limit is (or would have been) satisfied and
then any remaining Excess Payment shall be deemed for all purposes to be
a loan to you made on the date you received such Excess Payment and you
shall repay such Excess Payment to the Company on demand, together with
interest on such Excess Payment at the applicable federal rate (as defined
in Section 1274(d) of the Code) from the date of your receipt of such Excess
Payment until the date of such repayment. If it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken by the
Company, together with its consolidated group, on its federal income tax return)
or the IRS, (ii) by a court, or (iii) by resolution to your satisfaction of
the Dispute, that an Underpayment has occurred, the Company shall pay an
amount equal to the Underpayment to you within ten (10) calendar days of such
determination or resolution, together with interest on such amount at the
applicable federal rate from the date such amount should have been paid to you
pursuant to the terms of this Agreement or otherwise, but for the operation
of this Section 2.3, until the date of payment.
2.4 No Duty of Mitigation
The Company acknowledges that it would be very difficult and generally
impracticable to determine your ability to, or the extent to which you may,
mitigate any damages or injuries you may incur by reason of the Change of
Control. The Company has taken this into account in entering into this Agreement
and, accordingly, the Company acknowledges and agrees that you shall have no
duty to mitigate any such damages and that you shall be entitled to receive your
entire Severance Payment regardless of any income which you may receive from
other sources following the termination of your employment after any Change of
Control.
2.5 Time of Severance Payment
The Severance Payment to which you are entitled shall be paid to you,
in cash and in full, not later than fifteen (15) calendar days after the
termination of your employment; provided however, that if the release described
in Section 7.13 does not become irrevocable until a later date, then payment
shall be made to you on the date the release becomes irrevocable. If you should
die before all amounts payable to you have been paid, such unpaid amounts shall
be paid to your beneficiary under this Agreement or, if you have not designated
such a beneficiary in writing to the Company, to the personal representative(s)
of your estate.
2.6 Health Care Benefits
If you are entitled to receive a Severance Payment under Section 2.1,
you will also be entitled to receive health care benefits (including any
medical, dental and vision coverage) for you and your dependents under the same
plan or plans under which you were covered immediately prior to the termination
of your employment or substantially similar plan(s) established by the Company
or any of its Subsidiaries thereafter. Such health benefits shall be paid for by
the Company only to the same extent as if you were still employed by the
Company, and you will be required to pay for such health benefits to the same
extent that you would be required to do so if you were still employed by the
Company. This coverage will continue under the Company's plan for a period of
six months following the termination of your employment, and the Company will
thereafter pay for up to an additional 18 months if you elect to continue
benefits under COBRA. Notwithstanding the foregoing, your medical coverage under
this Section 2.6 shall end as of the date you become covered under any other
group health plan not maintained by the Company or any of its Subsidiaries which
provides equal or greater benefits than such plan and which does not exclude any
pre-existing condition that you or your dependents may have at that time.
2.7 Outplacement Services
If you are entitled to receive a Severance Payment under Section 2.1,
you will also be entitled to receive a range of outplacement services by an
organization selected by the Company. These outplacement services will be paid
for by the Company up to a maximum of $10,000.
2.8 Withholding of Taxes
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes required by applicable law to be
withheld by the Company.
2.9 No Setoff
The Company's obligation to make Severance Payments to you pursuant to
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any
circumstances, including, but not limited to, any setoff, counterclaim,
recoupment, defense or other right which the Company or any of its Subsidiaries
may have against you or others.
ARTICLE III
OTHER RIGHTS AND BENEFITS; EMPLOYMENT AGREEMENT
3.1 Other Rights and Benefits
(a) This Agreement does not provide a pension for you nor shall any
payment hereunder be characterized as deferred compensation.
(b) The benefits that you may be entitled to receive pursuant to the
provisions of Article II are intended to be provided in lieu of and to replace
any similar or duplicative benefits to which you may be entitled from the
Company or any of its Subsidiaries in connection with the termination of your
employment after a Change of Control under any other severance plan, agreement,
policy or program maintained by the Company or any of its Subsidiaries.
Accordingly, if you are entitled to receive a Severance Payment under this
Agreement, you agree to relinquish all other benefits you may be entitled
to receive under any such other severance plan, agreement, policy or
program, except as specifically provided below in Section 3.2.
(c) Notwithstanding the provisions of paragraph (b) above, this
Agreement shall not act to reduce any amounts otherwise payable, or in any way
diminish your rights, whether existing now or hereafter, under any incentive,
retirement, pension, profit sharing, stock purchase or benefit plan or other
arrangement not related to severance following a Change of Control, and
shall not affect, enlarge or reduce your rights with respect to any stock
options, restricted stock or other equity interests that have been granted or
issued to you by the Company prior to the date hereof or in the future.
3.2 Employment Agreement
This Agreement is intended to supplement your Employment Agreement only
with respect to Severance Payments in the event of the termination of your
employment following a Change of Control. In the event you become entitled to a
Severance Payment pursuant to Section 2.1 of this Agreement, the provisions of
this Agreement will govern and replace the benefits you may otherwise be
entitled to receive pursuant to Section 8 of the Employment Agreement, except
with respect to the vesting of your stock options and restricted stock, and the
time of exercise of vested stock options which shall be treated as provided in
such Section 8 (and nothing in this Agreement is intended to affect the
definition of "Good Reason" in Section 8 for purposes of such vesting). In
addition, nothing in this Agreement, including your entitlement to a Severance
Payment, shall affect the provisions of Section 7 (including the definition of
"Change in Control" included therein) of the Employment Agreement. This
Agreement does not constitute an employment agreement, and other than as
specifically provided in this Section 3.2, this Agreement does not amend the
Employment Agreement and the Employment Agreement will remain in full force and
effect with respect to the terms and conditions of your employment.
ARTICLE IV
SUCCESSOR TO COMPANY
The Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Agreement, in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place. In
such event, the term "Company," as used in this Agreement, shall mean (from and
after, but not before, the occurrence of such event) the Company as herein
before defined and any successor or assignee to the business or assets which by
reason hereof becomes bound by the terms and provisions of this Agreement.
ARTICLE V
LEGAL FEES AND EXPENSES
The Company shall pay as they become due all legal fees, costs of
litigation and other expenses incurred in good faith by you as a result of the
Company's refusal or failure to make the Severance Payment to which you become
entitled under this Agreement, as a result of the Company's contesting the
validity, enforceability or interpretation of this Agreement or of your right to
benefits hereunder, or with regard to any Dispute (as provided in Section
2.3(c)). You shall be conclusively presumed to have acted in good faith unless a
court makes a final determination not otherwise subject to appeal to the
contrary.
ARTICLE VI
ARBITRATION
Except as otherwise provided in Section 2.3, and without prejudice to
your rights under Section 7.11 and 7.12, you shall have the right and option
(but not the obligation) to elect (in lieu of litigation) to have any dispute or
controversy arising under or in connection with this Agreement not otherwise
resolved through the claims procedure set forth in Section 7.11, including any
Dispute under Section 2.3, settled by arbitration, conducted by one arbitrator
sitting in a location selected by you within fifty (50) miles from the location
of your job with the Company or any of its Subsidiaries, in accordance with the
rules of the American Arbitration Association then in effect. Judgement may be
entered on the award of the arbitrator in any court having jurisdiction. All
expenses of such arbitration, including the fees and expenses of your counsel,
shall be borne, and paid as incurred, by the Company; provided that the Company
shall only be required to pay your fees and expenses if they are incurred in
good faith. You shall be conclusively presumed to have acted in good faith
unless and until the arbitrator makes a final determination to the contrary.
ARTICLE VII
MISCELLANEOUS
7.1 Applicable Law
To the extent not preempted by the laws of the United States and in the
interest of interpreting this Agreement in a uniform manner with other similar
agreements being entered into by the Company with other of its and its
Subsidiaries' employees regardless of the jurisdiction in which you are employed
or any other factor, the laws of the State of California shall be the
controlling law in all matters relating to this Agreement, regardless of the
choice-of-law rules of the State of California or any other jurisdiction.
7.2 Construction
No term or provision of this Agreement shall be construed so as to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any present or future
statute, law, ordinance, or regulation contrary to which the parties have no
legal right to contract, the latter shall prevail, but in such event the
affected provision of this Agreement affected shall be curtailed and limited
only to the extent necessary to bring such provision within the requirements of
the law.
7.3 Severability
If a provision of this Agreement shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of this Agreement
and this Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included.
7.4 Headings
The Section headings in this Agreement are inserted only as a matter of
convenience, and in no way define, limit, or extend or interpret the scope of
this Agreement or of any particular Section.
7.5 Notice of Termination
Following a Change of Control, any purported termination of your
employment by the Company or any of its Subsidiaries shall be communicated by a
written notice of termination, which notice shall indicate, if it purports to be
based on Cause, the specific reasons, if any, relied upon and which sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment. The failure to provide such notice shall create
a rebuttable presumption that you are entitled to a Severance Payment and the
other benefits provided by this Agreement.
7.6 Assignability
Neither this Agreement nor any right or interest therein shall be
assignable or transferable (whether by pledge, grant of a security interest, or
otherwise) by you, your beneficiaries or legal representatives, except by will
or by the laws of descent and distribution. This Agreement shall
be binding upon and shall inure to the benefit of the Company, its successors
and assigns, and you and shall be enforceable by them and your legal personal
representatives.
7.7 Entire Agreement
Except as otherwise expressly provided in Article III, this Agreement
constitutes the entire agreement between the Company and you regarding the
subject matter hereof and supersedes all prior agreements, if any,
understandings and arrangements, written or oral, between the Company and you
with respect to the subject matter hereof.
7.8 Term
If a Change of Control has not theretofore occurred, this Agreement
shall expire and be of no further force and effect on December 31, 2001;
provided that the Board of Directors of the Company may, at any time prior to
the expiration thereof, extend the term of this Agreement for a term of up to
two years, including changing the dates set forth in the definition of "Change
of Control", without any further action on your part.
If a Change of Control occurs, this Agreement shall continue in full
force and effect, and shall not terminate or expire until the expiration of
three hundred sixty six (366) calendar days from and including the date of the
Change of Control, at which time this Agreement shall terminate except if you
become entitled to Severance Payments hereunder prior to such time. If you
become so entitled to Severance Payments hereunder, this Agreement shall
continue and be effective until you (or the person(s) specified in Section 2.5)
shall have received in full all Severance Payments and other benefits to which
you are entitled under this Agreement, at which time this Agreement shall
terminate for all purposes.
7.9 Amendment
Except as set forth in Section 7.8, no provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by you and the Company. No waiver by the
Company or you at any time or any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or any prior or subsequent time. No agreement or representations,
written or oral, express or implied, with respect to the subject matter hereof,
have been made by either party which are not expressly set forth in this
Agreement.
7.10 Notices
For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the Company shall be
directed to the attention of the Chairman of the Board of Directors with a copy
to the General Counsel. All notices and communications shall be deemed to have
been received on the date of delivery thereof or on the third business day after
the mailing thereof, except that notice of
change of address shall be effective only upon actual receipt. No objection to
the method of delivery may be made if the written notice or other communication
is actually received.
7.11 Claims
(a) If you believe you are entitled to a benefit under this
Agreement, you may make a claim for such benefit by filing with the Company
a written statement setting forth the amount and type of benefit so claimed.
The statement shall also set forth the facts supporting the claim. The claim
may be filed by mailing or delivering it to the Secretary of the Company.
(b) Within fifteen (15) calendar days after receipt of such a claim,
the Company shall notify you in writing of its action on such claim and if such
claim is not allowed in full, shall state the following in a manner
calculated to be understood by you:
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent provisions of this Agreement
on which the denial is based;
(iii)A description of any additional material or information
necessary for you to be entitled to the benefits that have
been denied and an explanation of why such material or
information is necessary; and
(iv) An explanation of this Agreement's claim review procedure.
(c) Without prejudice to your rights under Article VI, if you
disagree with the action taken by the Company, you or your duly authorized
representative may apply to the Company for a review of such action. Such
application shall be made within ninety (90) calendar days after receipt
by you of the notice of the Company's action on your claim. The application for
review shall be filed in the same manner as the claim for benefits. In
connection with such review, you may inspect any documents or records pertinent
to the matter and may submit issues and comments in writing to the Company. A
decision by the Company shall be communicated to you within thirty (30)
calendar days after receipt of the application. The decision on review
shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by you, and specific
references to the pertinent provisions of this Agreement on which the decision
is based.
7.12 Escrow.
(a) In the event that the Company denies, in whole or in part, a
claim for a benefit made by you under Section 7.11 hereof, or contests, in whole
or in part, your right to receive benefits under this Agreement, or otherwise
fails to make any cash payments or provide other benefits due under this
Agreement within ten (10) calendar days of the date such payments or
benefits are due, the Company shall within ten (10) calendar days of receipt of
your written demand, deposit the full amount of the benefit which is claimed
but not paid, or the amount contested by the Company, or the amount due, with
an escrow agent reasonably acceptable to
you. The escrow agent shall be a commercial bank or trust company having an
aggregate capital and surplus in excess of $50,000,000.
(b) Any amounts deposited in escrow shall be held by the escrow
agent in an interest bearing account until the issuance of a final,
nonappealable order or decision by a court of competent jurisdiction or an
arbitral award under Article VI with respect to the claim, or amount contested
or not paid. At that time, to the extent that the order or decision is in your
favor, the amount in escrow or any portion thereof owing to you, including all
interest accrued on such amount,
shall be paid to you.
(c) The parties agree that if the Company fails to deposit the
required funds in escrow pursuant to the provisions of paragraph (a) above,
then, in addition to all other remedies provided at law or in equity, you shall
be entitled, without the necessity of posting a bond, to seek equitable
relief to enforce the provisions of this Section 7.12. You shall be entitled
to seek any relief in any court of competent jurisdiction even if you have
elected to pursue arbitration of the dispute under Article VI of this Agreement.
7.13 General Release.
(a) A condition to your receipt of the Severance Payments under
Article II shall be your execution and delivery (and the expiration of
any applicable revocability period afforded by law) of a full and complete
release by you of any and all claims you may have against the Company, any of
its past, present or future stockholders or any of their respective officers,
directors, employees and affiliates (past, present or future), including,
but not limited to, claims you might have relating to your employment and/or
cessation of employment with the Company, including without limitation, tort,
contract and common law claims and claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, or any other similar federal, state or
local statute, rule or regulation; provided that, there shall be excluded from
the scope of such general release the following:
(i) claims that you may have against the Company for
reimbursement of reasonable and necessary business expenses
incurred by you during the course of your employment;
(ii) claims that may be made by you for payment of accrued
salary, stock options, pension benefits or other continuing
benefits as specifically provided in Articles II and III of
this Agreement; and
(iii)claims respecting matters for which you are entitled to be
indemnified under the Company's Certificate of Incorporation
or Bylaws or indemnification agreements, respecting third
party claims asserted or third party litigation pending or
threatened against you.
(b) The release shall be in a form reasonably satisfactory to the
Company and shall also include (i) appropriate provisions as necessary to insure
the release is valid and enforceable under applicable laws, including the
Older Workers Benefit Protection Act, and (ii) a waiver of
California Civil Code Section 1542 (which provides that unless you specifically
agree to release claims you do not know about, they are not released by a
general release). Such payment shall be considered independent consideration
made in exchange for such release.
If this Agreement is acceptable to you, please sign the enclosed copy
of this Agreement in the space provided below and return it to me.
Sincerely,
/s/
Xxxxxx X. Xxxx, Ph.D.
Chairman of the Board
ACCEPTED AND AGREED TO:
/s/
_______________________________
Xxxxxxx X. Xxxxxx
Dated: January 13, 2000
Supplemental Information Regarding
Scios Inc. CEO Change of Control Severance Plan
The Agreement constitutes a single employee welfare benefit plan within
the meaning of Section 3(1) of ERISA. The name of the plan is the Scios Inc. CEO
Change of Control Severance Plan (the "Plan"). The Administrator of the Plan,
within the meaning of Section 3(16) of ERISA, and the Named Fiduciary thereof,
within the meaning of Section 402 of ERISA, is the Company. A statement of Plan
information and the rules applicable under ERISA are set forth below:
Claims Procedure. Set forth in Section 7.11 of the Agreement
Information provided under ERISA. This Plan is an unfunded severance
plan, maintained on a calendar year basis. In addition to constituting the Plan,
the Agreement, together with this supplemental information, also constitutes the
summary plan description required by ERISA. The Plan sponsor is Scios Inc. which
bears the costs of all the benefits under the Plan. The Employer Identification
number of Scios is 00-0000000; and the Plan number assigned by Scios is 506. The
Plan Administrator's name, business address, and telephone number are: Scios
Inc., 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, (000) 000-0000. The
Plan Administrator is the agent for service of legal process.
Statement of ERISA Rights. A participant in this Plan is entitled to
certain rights and protections under a federal law known as "ERISA." ERISA
provides that all Plan participants shall be entitled to examine, without
charge, at the Plan Administrator's office, all Plan documents and the Plan's
annual report. Copies of these documents and other Plan information may also be
obtained upon written request to the Plan Administrator. A reasonable charge may
be made for copies.
In addition to creating rights for the Plan participants, ERISA imposes
duties upon the people who are responsible for the operation of this Plan. The
people who operate this Plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan participants. No one,
including your employer, or any other person, may fire you or otherwise
discriminate against you in any way to prevent you from obtaining benefits or
exercising your rights under ERISA. If your claim benefits is denied in whole or
in part, you must receive a written explanation of the reason for this denial.
You have the right to have the Plan Administrator review and reconsider your
claim, as described elsewhere in this summary plan description.
Under ERISA, there are steps you can take to enforce the above rights,
For instance, if you request materials from the Plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Plan Administrator. If you have a
claim for benefits which is denied or ignored, in whole or in part, you may file
a suit in a state or federal court. If you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who
should pay court costs and legal fees. If you are successful the court may
order the person you have sued to pay these costs and fees. If you lose, the
court may order you to pay these costs and fees, for example, if it finds
your claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
