Exhibit 10.12
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT (this "Agreement"), made as of the 28th day of May
1996 (the "Effective Date"), by and between T CELL SCIENCES, INC., a
Massachusetts corporation with its main office in Needham, Massachusetts (the
"Company") and XXXXXX X. XXXXX (the "Executive").
WHEREAS the Company wishes to retain the services of the Executive as its
Chief Financial Officer subject to the terms of this Agreement; and
WHEREAS the Executive wishes to perform such services for the Company
subject to the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the Company and the Executive hereby agree as follows:
1. Termination by the Company Without Cause. Subject to the payment of
Termination Benefits pursuant to Section 4, the Executive's employment with
the Company may be terminated by the Company without cause upon written
notice to the Executive.
2. Change in Control. The Executive's employment may be terminated by the
Executive for Good Reason within one (1) year of a Change in Control by
written notice to the Board; provided, that the Executive shall provide the
Board with written notice of any such Good Reason at least thirty (30) days
in advance of a voluntary termination of employment and the Company shall
have the opportunity to remedy or cure the asserted basis for any such Good
Reason voluntary termination within such thirty-day period.
(i) "Change in Control" shall have the meaning set forth in Section 1.2 of
the T Cell Sciences, Inc. Amended and Restated 1991 Stock Compensation
Plan, without regard to the Board's right to revoke a resolution
declaring that a Change in Control has occurred.
(ii) "Good Reason" shall mean:
(A) the assignment to the Executive of any duties substantially
inconsistent with the Executive's position or status as an
officer immediately prior to
the Change in Control or any alteration in the nature or status
of the Executive's responsibilities to a significantly lesser
position;
(B) material reduction in the Executive's salary, incentive
compensation, or benefits or perquisites as in effect immediately
prior to the Change in Control;
(C) the relocation of the principal place of the Executive's
employment after the Change in Control to a location more than 50
miles from the principal place of the Executive's employment as
of the Effective Date without the Executive's written consent; or
(D) the failure by the Company to assign this Agreement to any
successor pursuant to Section 9.
3. Termination by the Executive. The Executive's employment may be terminated
by the Executive by written notice to the Board at least thirty (30) days
prior to such termination. Upon receipt of such notice, the Company may
elect to provide the Executive with pay in lieu of notice. For purposes of
this Section 3, the Company is only required to pay the Executive an amount
equal to his salary pro rated for the period of time for which the Company
waives notice. Upon termination of employment under this Section 3, the
Company shall not be required to provide the Executive with the benefits
set forth in Section 4.
4. Termination Benefits. Unless otherwise specifically provided in this
Agreement or otherwise required by law, all compensation and benefits
payable to the Executive shall terminate on the date of termination of the
Executive's employment with the Company. Notwithstanding the foregoing, in
the event of termination of the Executive's employment with the Company
pursuant to Section 1 or 2 above, the Company shall provide to the
Executive the following termination benefits ("Termination Benefits"):
a. continuation of the Executive's Salary at the rate in effect at the
date of termination;
b. continuation of group health plan benefits to the extent authorized by
and consistent with 29 U.S.C.ss.1161 et seq. (commonly known as
"COBRA"), with the cost of the regular premium for such benefits
shared in the same relative proportion by the Company and the
Executive as in effect on the date of termination, unless the
termination of employment pursuant to Section 1 or 2 occurs
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within one year of a Change in Control, in which case the
Company shall pay all premiums; and
c. outplacement counseling and other services to be provided by Drake,
Beam & Xxxxx or such other firm as the Company may reasonably
determine, for a period not to exceed six (6) months following the
date of termination of the Executive's employment with the Company, up
to a maximum amount of $7,500.
The Termination Benefits set forth in (a) and (b) above shall continue for
twelve (12) months after the date of termination; provided, that in the event
that the Executive is terminated pursuant to Section 1 at any time other than
within one (1) year after a Change in Control and the Executive thereafter
commences any employment or self-employment during the period during which the
Executive is entitled to receive Termination Benefits (the "Termination Benefits
Period"), the remaining amount of Salary due pursuant to Section 4(a) for the
period from the commencement of such employment or self-employment to the end of
the Termination Benefits Period shall be reduced by an amount equal to the
amount the Executive earns as a result of such employment or self-employment and
the payments provided under Section 4(b) shall cease effective as of the date
the Executive becomes eligible for health benefits pursuant to such other
employment or self-employment. The Company's liability for Salary continuation
pursuant to Section 4(a) shall be reduced by the amount of any severance pay due
or otherwise paid to the Executive pursuant to any severance pay plan or stay
bonus plan of the Company. Notwithstanding the foregoing, nothing in this
Section 4 shall be construed to affect the Executive's right to receive COBRA
continuation entirely at the Executive's own cost to the extent that the
Executive may continue to be entitled to COBRA continuation after the
Executive's right to cost sharing under Section 4(b) ceases. The Executive shall
be obligated to give prompt notice of the date of commencement of any employment
or self-employment during the Termination Benefits Period and shall respond
promptly to any reasonable inquiries concerning any employment or
self-employment in which the Executive engages during the Termination Benefits
Period.
It is the intention of the Executive and of the Company that no payments by the
Company to or for the benefit of the Executive under this Agreement or any other
agreement or plan, if any, pursuant to which the Executive is entitled to
receive payments or benefits shall be nondeductible to the Company by reason of
the operation of Section 280G of the Internal Revenue Code ("Code") relating to
parachute payments or any like statutory or regulatory provision. Accordingly,
and notwithstanding any other provision of this Agreement or any such agreement
or plan, if by reason of the operation of said Section 280G or any like
statutory or regulatory provision, any such payments exceed the amount which can
be deducted by the Company, such payments shall be reduced to the maximum amount
which can be deducted by the Company. To the extent that payments exceeding such
maximum deductible amount have been made to or for the benefit of the Executive,
such excess
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payments shall be refunded to the Company with interest thereon at the
applicable Federal rate determined under Section 1274(d) of the Internal Revenue
Code, compounded annually, or at such other rate as may be required in order
that no such payments shall be nondeductible to the Company by reason of the
operation of said Section 280G or any like statutory or regulatory provision. To
the extent that there is more than one method of reducing the payments to bring
them within the limitations of said Section 280G or any like statutory or
regulatory provision, the Executive shall determine which method shall be
followed, provided that if the Executive fails to make such determination within
forty-five (45) days after the Company has given notice of the need for such
reduction, the Company may determine the method of such reduction in its sole
discretion.
5. Litigation and Regulatory Cooperation. After the Executive's employment,
the Executive shall cooperate fully with the Company in the defense or
prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company which relate to
events or occurrences that transpired while the Executive was employed by
the Company. The Executive's full cooperation in connection with such
claims or actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a witness
on behalf of the Company at mutually convenient times. After the
Executive's employment, the Executive also shall cooperate fully with the
Company in connection with any investigation or review of any federal,
state or local regulatory authority as any such investigation or review
relates to events or occurrences that transpired while the Executive was
employed by the Company. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in connection with the
Executive's performance of obligations pursuant to this Section 5.
6. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof or otherwise arising out
of the termination of the Executive's employment (including, without
limitation, any claims of unlawful employment discrimination whether based
on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or,
in the absence of such an agreement, under the auspices of the American
Arbitration Association ("AAA") in Boston, Massachusetts in accordance with
the Employment Dispute Resolution Rules of the AAA, including, but not
limited to, the rules and procedures applicable to the selection of
arbitrators, except that the arbitrator shall apply the law as established
by decisions of the U.S. Supreme Court, the Court of Appeals for the First
Circuit and the U.S. District Court for the District of Massachusetts in
deciding the merits of claims and defenses under federal law or any state
or federal anti-discrimination law, and any awards to the Executive for
violation of
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any anti-discrimination law shall not exceed the maximum award to which the
Executive could be entitled under the applicable (or most analogous)
federal anti-discrimination or civil rights laws. In the event that any
person or entity other than the Executive or the Company may be a party
with regard to any such controversy or claim, such controversy or claim
shall be submitted to arbitration subject to such other person or entity's
agreement. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. This Section 6 shall be
specifically enforceable. Notwithstanding the foregoing, this Section 6
shall not preclude either party from pursuing a court action for the sole
purpose of obtaining a temporary restraining order or other preliminary
equitable relief in circumstances in which such relief is appropriate;
provided, that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 6.
7. Consent to Jurisdiction. To the extent that any court action is permitted
consistent with or requested to enforce Section 6 of this Agreement, the
parties hereby consent to the jurisdiction of the Superior Court of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts. Accordingly, with respect to any such court
action, the Executive (a) submits to the personal jurisdiction of such
courts; (b) consents to service of process; and (c) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
8. Integration. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter.
9. Assignment; Successors and Assigns, Etc. Neither the Company nor the
Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the
other party; provided, that the Company may assign its rights under this
Agreement without the consent of the Executive in the event that the
Company shall effect a reorganization, consolidate with or merge into any
other corporation, partnership, organization or other entity, or transfer
all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity. This Agreement
shall inure to the benefit of and be binding upon the Company and the
Executive, their respective successors, executors, administrators, heirs
and permitted assigns.
10. Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this
Agreement) shall to
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any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of
such portion or provision in circumstances other than those as to which it
is so declared illegal or unenforceable, shall not be affected thereby, and
each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
11. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
12. Notices. Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in
person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to
the Executive at the last address the Executive has filed in writing with
the Company or, in the case of the Company, at its main offices, attention
of the Chief Executive Officer, and shall be effective on the date of
delivery in person or by courier or three (3) days after the date mailed.
13. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative
of the Company.
14. Governing Law. This is a Massachusetts contract and shall be construed
under and be governed in all respects by the laws of The Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of
such Commonwealth.
15. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an
original; but such counterparts shall together constitute one and the same
document.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Company, by its duly authorized officer, and by the Executive, as of the
Effective Date.
T CELL SCIENCES, INC.
By:
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Date Una X. Xxxx, President
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Date Executive
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