EXECUTIVE
SEVERANCE BENEFITS AGREEMENT
This EXECUTIVE SEVERANCE BENEFITS AGREEMENT (the "AGREEMENT")
is entered into this 2nd day of February, 1999 (the "Effective
Date"), between XXXXXX X. XXXXX ("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. XXXXXX X. XXXXX
By: /s/ XXXXX X. XXXXX, M.D., PH.D. /s/ XXXXXX X. XXXXX
Name: Xxxxx X. Xxxxx, M.D., Ph.D.
Title: Chairman of the Board & Chief Executive Officer
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.
XXXXXX X. XXXXX
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.
XXXXXX X. XXXXX
Date:
