Exhibit 10.59
AMENDED AND RESTATED
EXECUTIVE SEVERANCE BENEFITS AGREEMENT
This Amended and Restated Executive Severance Benefits Agreement (the
"Agreement") is entered into this 31/st/ day of December, 2002 (the "Effective
Date"), between Xxxxxx Xxxxx Suvari ("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
6.
The Company and Executive hereby agree as follows:
ARTICLE 1
Scope of and Consideration for this Agreement
1.1 Current Employee. Executive is currently employed by the
Company.
1.2 Benefits Upon Change In Control. The Company and Executive wish
to set forth the compensation and benefits which Executive shall be entitled to
receive in the event of a Change in Control or if Executive's employment with
the Company is terminated under the circumstances described herein following a
Change in Control.
1.3 Consideration. 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 4.1.
1.4 Prior Agreement. 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, including that certain Executive Severance Benefits Agreement between
the Company and Executive dated as of August 31, 2000 (the "Prior Agreement").
By executing this Agreement you hereby waive (within the meaning of Section 6.4
of the Prior Agreement) any rights you may currently have or have in the future
to any benefits of any sort under the Prior Agreement.
ARTICLE 2
Option Acceleration Upon Change in Control
In the event of a Change in Control, 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) then outstanding shall,
automatically and without further action of the Company, become one hundred
percent (100%) vested and exercisable, and any restrictions with respect to
restricted shares of the Company's capital stock (or the stock of a successor to
the Company by reason of assumption or substitution of such shares) that
Executive then holds shall,
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automatically and without further action of the Company, lapse, in the case of
all such options and/or restrictions no later than five (5) business days before
the effective date of such Change in Control.
ARTICLE 3
Severance Benefits
3.1 Severance Benefits. If Executive's employment terminates due to
an Involuntary Termination Without Cause or a Constructive Termination, in any
such case occurring 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 3.2, 3.3 and 3.4.
3.2 Base Salary. The Company shall pay to Executive an amount equal
to eighteen (18) months' Base Salary. Such severance amount shall be paid in
cash in a lump sum within thirty (30) days following the Covered Termination and
shall be subject to all required tax withholding.
3.3 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
severance amount shall be paid in cash in a lump sum within thirty (30) days
following the Covered Termination and shall be subject to all required tax
withholding.
3.4 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, if
any, Executive shall be entitled to maintain such coverage at Executive's own
expense.
3.5 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.
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ARTICLE 4
Limitations and Conditions On Benefits
4.1 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.
4.2 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.
4.3 Non-Duplication of Benefits. Executive is not eligible to
receive benefits under this Agreement more than one time.
ARTICLE 5
Parachute Payments
5.1 Best Pay Provision. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any Payment under this
Agreement would, when combined with all other Payments Executive receives from
the Company, but for this Article 5, be subject to the Excise Tax, then such
Payments shall be either (a) the full amount of such Payments or (b) such lesser
amount (with cash payments being reduced before stock option compensation) as
would result in no portion of the Payments 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
Payments notwithstanding that all or some portion of the Payments may be subject
to the Excise Tax.
5.2 Determinations. All determinations required to be made under
this Article 5, including whether and to what extent the Payments shall be
reduced and the assumptions to be utilized in arriving at such determination,
shall be made by the nationally recognized certified public accounting firm used
by the Company immediately prior to the Change in Control or, if such firm
declines to serve, such other nationally recognized certified public accounting
firm as may be designated by the Executive (the "Accounting Firm"). The
Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive at such time as is requested by the Company. All fees
and expenses of the Accounting Firm shall be borne
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solely by the Company. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. For purposes of making the calculations
required by this Article 5, the Accounting Firm may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable,
good-faith interpretations concerning the application of Sections 280G and 4999
of the Code.
ARTICLE 6
Definitions
For purposes of the Agreement, the following terms are defined as
follows:
6.1 "Base Salary" means Executive's annual base salary as in effect
during the last regularly scheduled payroll period immediately preceding the
Covered Termination.
6.2 "Board" means the Board of Directors of the Company.
6.3 "Cause" means that, in the reasonable determination of the
Company, 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.
6.4 "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
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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.
6.5 "Code" means the Internal Revenue Code of 1986, as amended.
6.6 "Company" means CV Therapeutics, Inc. or, following a Change in
Control, the surviving entity resulting from such transaction.
6.7 "Constructive Termination" means that Executive voluntarily
terminates employment within thirteen (13) months following the effective date
of 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.
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The termination of Executive's employment as a result of Executive's death or
disability will not be deemed to be a Constructive Termination.
6.8 "Covered Termination" means an Involuntary Termination Without
Cause or a Constructive Termination, in any such case occurring within thirteen
(13) months following the effective date of a Change in Control.
6.9 "Excise Tax" shall mean the excise tax imposed by Section 4999
of the Code, together with any interest or penalties imposed with respect to
such excise tax.
6.10 "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.
6.11 A "Payment" shall mean any payment or distribution in the nature
of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of the Executive, whether paid or payable pursuant to this Agreement
or otherwise.
ARTICLE 7
General Provisions
7.1 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.
7.2 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.
7.3 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.
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7.4 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.
7.5 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. The Company will pay the
direct costs and expenses of any such arbitration, including the fees and costs
of the arbitrator. Each party in any such arbitration shall be responsible for
its own attorneys' fees and related costs and necessary disbursements; 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, except
as may be prohibited by law, it shall be entitled to recover reasonable
attorneys' fees and related 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.
7.6 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 (including the Prior Agreement)
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.
7.7 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.
7.8 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.
7.9 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.
7.10 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
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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.
7.11 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.
7.12 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 regulation or to respective advisors (e.g.,
attorneys, accountants).
7.13 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.
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In Witness Whereof, the parties have executed this Agreement on the
Effective Date written above.
CV Therapeutics, Inc. Xxxxxx Xxxxx Suvari
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxx Xxxxx Suvari
---------------------------------------- --------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------------
Title: Chairman & Chief Executive Officer
--------------------------------------
Exhibit A: Release (Individual Termination)
Exhibit B: Release (Group Termination)
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Exhibit A
RELEASE
(Individual Termination)
Certain capitalized terms used in this Release are defined in the
Amended and Restated 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.
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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 Xxxxx Suvari
______________________________________
Date: _______________________________
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Exhibit B
Release
(Group Termination)
Certain capitalized terms used in this Release are defined in the
Amended and Restated 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.
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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 Xxxxx Suvari
______________________________________
Date: _______________________________
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