EXHIBIT 10.55
RE: SEVERANCE BENEFITS AGREEMENT
Dear :
This letter will memorialize our agreement as to benefits to which you will be
entitled upon termination of your employment by Cytel Corporation (the Company)
under the circumstances described in this Agreement.
We agree that you are employed by the Company as an at-will employee and that
either you or the Company has the right at any time to terminate your employment
with the Company, with or without cause or advance notice, for any reason or for
no reason.
For purposes of this Agreement, the following terms will have the meanings set
forth below:
"BASE SALARY" means your salary (excluding bonus, any other incentive or
other payments and stock option exercises) paid by the Company in
consideration for your service during the 12 months prior to the
termination of your employment which is includable in your gross income
for federal income tax purposes or which would have been includable in
gross income except for an election either under Section 125 or 402(e)(3)
of the Internal Revenue Code of 1986, as amended (the Code), or under the
terms of a nonqualified deferred compensation arrangement sponsored by
the Company.
"CAUSE" means (I) your material breach of any provision of this
Agreement; or (ii) your engaging or in any manner participating in any
activity which is directly competitive with or intentionally injurious to
the Company or which violates any provision of any confidential
information agreement or nonsolicitation agreement between you and the
Company; or (iii) your commission any fraud against the Company; or (iv)
your intentional improper use or appropriation for your personal use or
benefit of any funds or properties of the Company not authorized by the
Board of Directors of the Company or an authorized committee of such
Board of Directors to be so used or appropriated; or (v) your conviction
of any crime involving dishonesty or moral turpitude.
"BENEFIT" means any payment received or to be received by you pursuant to
this Agreement.
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"CHANGE IN CONTROL" of the Company will be deemed to have occurred if and
when (I) any person or entity (other than the Company) or group of
persons and/or entities acting in concert acquires, directly or
indirectly, beneficial ownership of more than 50% of the outstanding
shares of voting stock of the Company; or (ii) the Company is a
participant in a merger or consolidation in which it does not survive as
an independent company; or (iii) the business or businesses of the
Company for which your services are principally performed are disposed of
by the Company pursuant to a partial or complete liquidation of the
Company.
"COMPANY" for the purposes of this Agreement shall include the Company's
successor if a Change in Control occurs.
"EXCISE TAX" means the excise tax imposed by Section 4999 of the Code.
"GOOD REASON" means (I) reduction of your rate of compensation as in
effect immediately prior to the effective date of this Agreement; or (ii)
the Company's failure to provide to you a package of welfare benefit
plans which, taken as a whole, provide substantially similar benefits to
those in which you are entitled to participate immediately prior to the
occurrence of the termination of your employment (except that employee
contributions may be raised to the extent of any cost increases imposed
by third parties) or any action by the Company which would adversely
affect your participation or reduce your benefits under any of such
plans; or (iii) a change in your responsibilities, authority, title or
office resulting in diminution of your position, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith which is remedied by the Company promptly after written notice
thereof is given by you; or (iv) a request that you relocate to a
worksite that is more than 35 miles from your prior worksite, unless you
accept such relocation opportunity; or (v) a material reduction in your
duties; or (vi) a failure or refusal of a successor to the Company to
assume the Company's obligations under this Agreement; or (vii) a
material breach by the Company or any successor to the Company of any of
the material provisions of this Agreement.
If your employment is involuntarily terminated without Cause by the Company or
you voluntarily terminate your employment for Good Reason, then upon your
furnishing to the Company an executed waiver and release of claims (a form of
which is attached hereto as Exhibit A), you will be entitled to the following
Benefits:
If your employment is involuntarily terminated without Cause any time other than
described below, then (1) within 30 days of such termination you will receive a
lump-sum payment equal to six months of Base Salary
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subject to any applicable withholding of federal, state or local taxes and (2)
the vesting of any stock option for Company stock and the time during which such
option may be exercised immediately will be accelerated by six months.
If, within 365 days following the occurrence of a Change in Control, your
employment is involuntarily terminated without Cause or you voluntarily
terminate your employment for Good Reason, then (1) within 30 days of such
termination you will receive a lump-sum payment equal to six months of base
salary subject to any applicable withholding of federal, state or local taxes
and (2) the vesting of any stock option for Company stock and the time during
which such option may be exercised immediately will be accelerated as to 50% of
the then unvested shares.
If any Benefit received or to be received by you pursuant to this Agreement
would constitute a parachute payment within the meaning of Section 280G of the
Code and but for this paragraph be subject to the Excise Tax, then such Benefit
shall be reduced to the extent necessary so that no portion of the Benefit would
be subject to the Excise Tax, as determined in good faith by the Company;
provided, however, that if, in the absence of any such reduction (or after such
reduction), you believe that the Benefit or any portion thereof (as reduced, if
applicable) would be subject to the Excise Tax, the Benefit shall be reduced (or
further reduced) to the extent determined by you in your discretion so that the
Excise Tax would not apply. If, notwithstanding any such reduction (or in the
absence of such reduction), the Internal Revenue Service determines that you are
liable for the Excise Tax as a result of the Benefit, then you shall be
obligated to return to the Company, within 30 days of such determination by the
Internal Revenue Service, a portion of the Benefit sufficient such that none of
the Benefit retained by you constitutes a parachute payment within the meaning
of Code Section 280G that is subject to the Excise Tax.
This Agreement may be changed or terminated only upon the mutual written consent
of the Company and you. Nothing in this Agreement will prevent or limit your
continuing or future participation in any benefit, bonus, incentive or other
plans, programs, policies or practices provided by the Company and for which you
may otherwise qualify, nor will anything herein limit or otherwise affect such
rights as you may have under any stock option or other agreements with the
Company.
If either party hereto brings any action to enforce such party's rights
hereunder, the prevailing party in any such action will be entitled to recover
such party's reasonable attorneys fees and costs incurred in connection with
such action.
This Agreement constitutes the entire agreement between you and the Company. It
is entered into without reliance on any promise or representation other than
those expressly contained herein. All questions concerning the construction,
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validity and interpretation of this Agreement will be governed by the law of the
State of California.
Very truly yours,
Cytel Corporation
Xxxxxx Xxxxxxxx
Chief Executive Officer
Agreed and Accepted:
_____________________________Dated:_______________, 1998
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EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In exchange for consideration provided to me in the Agreement to which this form
is attached, I hereby furnish Cytel Corporation (the Company) with the following
release and waiver.
I hereby release, and forever discharge the Company, its officers, directors,
agents, employees, stockholders, 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, arising at any time prior to and including my
employment termination date with respect to any claims relating to my employment
and the termination of my employment, including but not limited to, claims
pursuant to any federal, state or local law relating to employment, including,
but not limited to, discrimination claims, claims under the California Fair
Employment and Housing Act, and the Federal Age Discrimination in Employment Act
of 1967, as amended (ADEA), or claims for wrongful termination, breach of the
covenant of good faith, contract claims, tort claims, and wage or benefit
claims, including but not limited to, claims for salary, bonuses, commissions,
stock, stock options, vacation pay, fringe benefits, severance pay or any form
of compensation (other than the obligations under the Agreement.)
I also 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 any claims I may have against the Company.
I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this waiver and release is knowing and voluntary, and
that the consideration given for this waiver and release is in addition to
anything of value to which I was already entitled as an employee of the Company.
I further acknowledge that I have been advised, as required by the Older Workers
Benefit Protection Act, that: (a) the waiver and release granted herein does not
relate to claims which may arise after this agreement is executed; (b) I have
the right to consult with an attorney prior to executing this agreement
(although I may choose voluntarily not to do so);
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(c) I have twenty-one (21) days from the date I receive this agreement in which
to consider this agreement (although I may choose voluntarily to execute this
agreement earlier); (d) I have seven (7) days following the execution of this
agreement to revoke my consent to the agreement; and (e) this agreement shall
not be effective until the seven (7) day revocation period has expired.
Dated: By:
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