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EXHIBIT 10.19
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CHANGE IN CONTROL
EXECUTIVE COMPENSATION PACKAGE
DATED SEPTEMBER 18, 1998
BETWEEN
XXXXX X. XXXX AND NABI
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NABI
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0000 XXXX XX XXXXXXXX XXXXXXXXX, X.X.
XXXX XXXXX, XX 00000
EFFECTIVE AS OF SEPTEMBER 18, 1998
Xxxxx X. Xxxx
0000 X. X. 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
Dear Xxxxx:
The Compensation Committee (the "Committee") of the Board of Directors
of Nabi (the "Board") has determined that it is in the best interests of the
Corporation and its shareholders for the Corporation to agree, as provided
herein, to pay you termination compensation in the event you should leave the
employ of the Corporation under the circumstances described below.
The Committee recognizes that the continuing possibility of a sale or
change of control of the Corporation is unsettling to you. Therefore, these
arrangements are being made to help assure a continuing dedication by you to
your duties to the Corporation by diminishing the inevitable distraction to you
from the personal uncertainties and risks created by a pending sale or change of
control of the Corporation. In particular, the Committee believes it important,
should the Corporation receive proposals from third parties with respect to its
future, to enable you, without being influenced by the uncertainties of your own
situation, to assess and advise the Board whether such proposals would be in the
best interests of the Corporation and its shareholders and to take such other
action regarding such proposals as the Board might determine to be appropriate.
The Committee also wishes to demonstrate to executives of the Corporation that
the Corporation is concerned with the welfare of its executives and intends to
see that loyal executives are treated fairly.
1. In view of the foregoing and in further consideration of your
continued employment with the Corporation, the Corporation will pay to you as
termination compensation a lump sum amount, determined as provided below, in the
event that (a) within six months after a Change of Control of the Corporation
you die, become disabled or terminate your employment with the Corporation for
Good Reason, (b) within twelve months after a Change of Control of the
Corporation your employment with the Corporation is terminated by the
Corporation for any reason other than Cause, or (c) within the period beginning
on the sixth monthly anniversary of a Change of Control of the Corporation and
ending on the twelfth monthly anniversary thereof, you terminate your employment
with the Corporation for any reason (including, without limitation, death or
disability). The lump sum compensation so payable (hereinafter referred to as
the "Lump Sum Amount") shall be an amount equal to three (3) times the sum of
(a) the higher of (i) your current annual base salary and (ii) your annual base
salary immediately prior to the Change or Control plus (b) the average amount of
any and all bonuses payable to or received by you with respect to the three full
calendar years prior to the Change of Control. The Lump Sum Amount shall be paid
to you within five days after the date of termination of your employment
(hereinafter referred to as the "Termination Date").
2. In addition, in the event your employment with the Corporation
terminates under circumstances entitling you to receive the Lump Sum Amount:
(a) Any compensation and other amounts previously deferred by
you, together with accrued interest thereon, if any, to which you are
entitled, and any accrued vacation pay not yet paid by the Corporation,
shall be paid to you within five days of the Termination Date.
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(b) All other amounts accrued or earned by you through the
date of such termination and amounts otherwise owing under the
Corporation's plans and policies shall be paid to you within five days
of the Termination Date.
(c) The Corporation shall maintain in full force and effect,
for the continued benefit of you and/or your family for three years
after the Termination Date, all employee welfare benefit plans and any
other employee benefit programs or arrangements (including, without
limitation, medical and dental insurance plans, disability and life
insurance plans and car allowance programs) in which you were entitled
to participate immediately prior to the Change of Control, provided
that your continued participation is possible under the general terms
and provisions of such plans and programs. In the event that your
participation in any such plan or program is barred, the Corporation
shall arrange to provide you with benefits substantially similar to
those which you are entitled to receive under such plans and programs.
At the end of the period of coverage, you shall have the option to have
assigned to you at no cost and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Corporation and
relating specifically to you.
(d) Seventy-five percent (75%) of all outstanding stock
options which you hold and which are not then vested and exercisable
shall vest and become exercisable immediately upon a Change of Control
and, together with all other vested stock options which you hold, will
remain exercisable for the full term of such options. Notwithstanding
the foregoing, in the event of a Change of Control caused by a business
combination involving the Corporation which is intended to be accounted
for as a "pooling of interests", and with respect to which the
independent auditors for the Corporation issue an opinion to the
Corporation and to you that, but or the acceleration of vesting of the
foregoing options or other benefits in anticipation of the business
combination transaction, the transaction will qualify for pooling of
interests accounting treatment (the acceleration provision contained in
this Agreement being the sole impediment to pooling of interest
accounting treatment), then the Corporation and the acquiring or
surviving entity may convert the unvested stock options which are the
subject of the opinion into an option to purchase shares of stock in
the acquiring or surviving entity (as the case may be) on a fair and
equitable basis and, in such case, the vesting of such unvested options
which are the subject of the opinion will not accelerate as provided
hereunder (but shall continue to vest over the original vesting period,
without the requirement of continued employment).
(e) The Corporation at its expense shall provide you with
professional outplacement services of your choosing and shall reimburse
you for incidental outplacement expenses (such as resume mailing and
clerical support but not interview traveling), all such outplacement
benefits not to exceed an out-of-pocket cost to the Corporation of
$50,000, and shall further provide you at the Corporation's expense for
a period of twelve months following termination of employment or the
date you secure other employment, whichever first occurs, with suitable
office accommodations and full-time secretarial and clerical support
and assistance.
(f) You shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by you as the result of
employment by another employer after the Termination Date, or
otherwise. The Corporation's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which it may have
against you or others.
3. For purposes of this Agreement:
(a) "Change of Control" shall mean (i) the acquisition by any
person 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"),
except for an employee benefit plan sponsored by the Corporation, of
beneficial ownership (within the meaning of Section Rule 13d-3
promulgated under the Exchange Act) of 15% or more of (A) the
outstanding shares of common stock of the Corporation or (B) the
combined voting power of the then outstanding voting securities of the
Corporation which are entitled to vote generally in the election of
directors, (ii) individuals who, as of January 1, 1998,
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are members of the Corporation's Board (or directors whose subsequent
nomination or election was approved by a vote of at least a majority of
such incumbents, but excluding any individual whose initial assumption
of office occurs as a result of an actual or threatened solicitation to
which Rule 14a-11 or Regulation 14A promulgated under the Exchange Act
applies, or other actual or threatened solicitation of proxies or
consents) cease for any reason to constitute a majority of the Board or
(iii) approval by the Corporation's shareholders of a reorganization,
merger, consolidation, or share exchange, unless the holders of the
Corporation's common stock immediately prior to the transaction own a
majority of the votes entitled to be cast for the election of Directors
immediately following such transaction or (iv) approval by the
Corporation's shareholders of a liquidation or dissolution, or a sale,
lease, exchange or other disposition (in one transaction or a series of
transactions) of all, or substantially all, of the assets of the
Corporation, provided, however, that a sale, in a single transaction or
series of related transactions, of all or substantially all of the
assets of the Corporation's plasma collection operations shall not
constitute a Change of Control.
(b) "Good Reason" shall be deemed to exist under any of the
following circumstances:
(i) failure by the Corporation to fully perform the
terms of this Agreement or your then existing employment
agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and remedied by
the Corporation promptly (but not later than five days) after
receiving notice thereof from you;
(ii) the Corporation's requiring you to be based or
to perform services at a site or location more than 25 miles
from the site or location where you are based at the time of
the Change of Control (but in all events such site or location
shall be the headquarters of the Corporation), except for
travel reasonably required in the performance of your
responsibilities (which does not materially exceed the level
of travel required of you in the six-month period immediately
preceding the Change of Control);
(iii) any failure by the Corporation to obtain an
assumption and agreement to perform this Agreement by a
successor;
(iv) the assignment to you of any duties inconsistent
in any respect with your position as Chairman, President (if
you are President of the Corporation at the time of the Change
of Control) and Chief Executive Officer of the Corporation or
your authority, duties or responsibilities as contemplated by
your then existing employment agreement (including status,
offices, title and reporting relationships), or any other
action by the Corporation which results in a diminution in
such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is
remedied by the Corporation promptly (but not more than five
days) after receipt of notice thereof given by you; or
(v) failure by the Corporation to continue in effect
any benefit, retirement or compensation plan (including all
plans of any nature described in this Agreement) in which you
are participating at the time of a Change of Control (or plans
providing substantially similar or greater benefits), or the
Corporation has taken action which would adversely affect your
participation in or reduce your benefits under any of such
plans or deprive you of any fringe benefit or perquisite
enjoyed by you at the time of the Change of Control.
(c) "Cause" means cause as defined in your Employment
Agreement effective as of January 1, 1993 (the "Employment Agreement")
For purposes of this Agreement, any good faith determination of "Good
Reason" made by you shall be conclusive.
4. (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the
Corporation to you or for your benefit, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"),
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would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
you shall be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by you of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by Xxxxxx
Xxxxxxxx LLP (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Corporation and you within 15 business days of the date
your employment with the Corporation terminates, or such earlier time as is
requested by the Corporation. If the Accounting Firm determines that no Excise
Tax is payable by you, it shall furnish you with an opinion that you have
substantial authority not to report any excise tax on your federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Corporation and you except as provided elsewhere in this Section 4. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Corporation should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
Section 4(c) and you thereafter are required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Corporation to
you or for your benefit.
(c) You shall notify the Corporation in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Corporation of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after you know of such
claim and shall apprise the Corporation of the nature of such claim and the date
on which such claim is requested to be paid. You shall not pay such claim prior
to the expiration of the thirty-day period following the date on which you give
such notice to the Corporation (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Corporation
notifies you in writing prior to the expiration of such period that it desires
to contest such claim, you shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim,
(ii) take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with regard to such claim by an attorney reasonably
selected by the Corporation.
(iii) cooperate with the Corporation in good faith in
order effectively to contest such claim, and
(iv) permit the Corporation to participate in any
proceedings relating such claim;
provided, however, that the Corporation shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
you harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a
result of such representation and payments of costs and expenses.
Without limitation on the foregoing provisions of this Section 4(c),
the Corporation shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option,
either direct you to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and you agree to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as
the Corporation shall determine; provided, however, that (i) if the
Corporation directs you to pay such claim and xxx for a refund, the
Corporation shall advance the amount of such payment to you, on an
interest-free basis and shall indemnify and hold you harmless, on an
after-tax basis, from
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any Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and (ii) any
request by the Corporation that you extend the statute of limitations
relating to payment of taxes for your taxable year with respect to
which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Corporation's control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and you shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by you of an amount advanced by the
Corporation pursuant to Section 4(c), you become entitled to receive any refund
with respect to such claim, you shall (subject to the Corporation's complying
with the requirements of Section 4(c) promptly pay to the Corporation the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by you of an amount advanced by the
Corporation pursuant to Section 4(c), a determination is made that you shall not
be entitled to any refund with respect to such claim and the Corporation does
not notify you in writing of its intent to contest such denial of refund prior
to the expiration of thirty days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
5. Anything in this Agreement to the contrary notwithstanding, if your
employment with the Corporation is terminated prior to the date on which a
Change of Control occurs, and it is reasonably demonstrated by you that such
termination (a) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (b) otherwise arose in
connection with or in anticipation of a Change of Control, then for all purposes
of this Agreement, a Change of Control shall be deemed to have occurred the date
immediately prior to the date of such termination.
6. This Agreement shall be binding upon and inure to the benefit of you,
your estate and the Corporation and any successor or assign of the Corporation,
but neither this Agreement nor any rights arising hereunder may be assigned or
pledged by you. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee, or other designee or, if there be no such designee, to
your estate.
7. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement (all notices to the Corporation to
be directed to the attention of the President of the Corporation with a copy to
the Secretary of the Corporation) or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. The failure
by you to set forth in any notice of termination of employment any fact or
circumstances which contributes to a showing of Good Reason shall not waive any
of your rights hereunder or preclude you from asserting such fact or
circumstance in enforcing your rights hereunder.
8. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the other party hereto 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 time or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida without regard to principles of conflicts of laws.
9. The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation (other than
any successor solely to all or substantially all of the assets of the
Corporation's plasma collection operations) to expressly assume and agree to
perform this Agreement in the same manner and
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to the same extent that the Corporation would be required to perform it if no
such succession had taken place. As used in this Agreement, "Corporation" shall
mean the Corporation as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
10. Nothing in this Agreement shall prevent or limit your continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Corporation and for which you may qualify. Amounts which are
vested benefits or which you are otherwise entitled to receive under any plan or
program of the Corporation at or subsequent to any Change of Control shall be
payable in accordance with such plan or program unless required to be paid
earlier in accordance with this Agreement.
11. If you assert any claim in any contest (whether initiated by you or
by the Corporation) as to the validity, enforceability or interpretation of any
provision of this Agreement, the Corporation shall pay your legal expenses (or
cause such expenses to be paid) including, without limitation, your reasonable
attorney's fees, on a quarterly basis, upon presentation of proof of such
expenses in a form acceptable to the Corporation, provided that you shall
reimburse the Corporation for such amounts, plus simple interest thereon at the
90-day United States Treasury Xxxx rate as in effect from time to time,
compounded annually, if a court of competent jurisdiction shall find that you
did not have a good faith and reasonable basis to believe that you would prevail
as to at least one material issue presented to such court.
12. This Agreement shall supersede the provisions of the Employment
Agreement to the extent this Agreement and the Employment Agreement are
inconsistent, and in the event of any inconsistency between this Agreement and
the Employment Agreement, this Agreement shall control. In all other respects,
the Employment Agreement shall continue in full force and effect in accordance
with its terms.
13. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
If you are in agreement with the foregoing, please so indicate by
signing and returning to the Corporation the enclosed copy of this letter,
whereupon this letter shall constitute a binding agreement under seal between
you and the Corporation.
NABI
0000 Xxxx xx Xxxxxxxx Xxxxxxxxx, X.X.
Xxxx Xxxxx, Xxxxxxx 00000
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Chief Operating Officer and
Executive Vice President
Accepted and agreed:
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Chairman of the Board,
Chief Executive Officer and President
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