XOMA LTD. CHANGE OF CONTROL SEVERANCE AGREEMENT
Ex.
10.2
XOMA
LTD.
This
Change of Control Severance Agreement (the “Agreement”) is made and
entered into effective as of August 3, 2007 (the “Effective Date”), by and
between Xxxxxx X. Xxxxx (the “Employee”) and XOMA Ltd., a Bermuda company
(the “Company”).
R
E C
I T A L S
A. It
is expected that the Company may from time to time consider the possibility
of a
Change of Control (as hereinafter defined). The Board of Directors of
the Company (the “Board”) recognizes that such consideration could be a
distraction to the Employee and could cause the Employee to consider alternative
employment opportunities.
B. The
Board believes that it is in the best interest of the Company and its
shareholders to provide the Employee with an incentive to continue the
Employee’s employment and to maximize the value of the Company upon a Change of
Control for the benefit of its shareholders.
C. In
order to provide the Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the possibility of
a
Change of Control, the Board believes that it is imperative to provide the
Employee with certain severance benefits upon the Employee’s termination of
employment following a Change of Control.
D. XOMA
(US) LLC, a wholly-owned subsidiary of the Company, and the Employee have
previously entered into an employment agreement effective as of August 3, 2007
(the “Existing Agreement”), which provides the Employee with certain
severance benefits upon the Employee’s termination of employment.
E. The
parties intend that this Agreement shall operate in addition to, and not in
replacement of, the Existing Agreement.
AGREEMENT
In
consideration of the mutual covenants herein contained and the continued
employment of the Employee by the Company, the parties agree as
follows:
1. Definition
of Terms. The following terms referred to in this Agreement shall
have the following meanings:
(a) “Cause”
shall mean (i) the Employee has been convicted of any crime or offense
constituting a felony under applicable law, including, without limitation,
any
act of dishonesty such as embezzlement, theft or larceny, (ii) the Employee
has
acted or refrained from acting in respect of any of the duties and
responsibilities which have been assigned to her/him in accordance with this
Agreement or the Existing Agreement and shall fail to desist from such action
or
inaction within thirty (30) days after the Employee’s receipt of notice from the
Company of such action or inaction and the Board determines that such action
or
inaction constituted gross negligence or a willful act of malfeasance or
misfeasance of the Employee in respect of such duties, or (iii) the Employee
has
breached any material term of this Agreement or the Existing Agreement and
shall
fail to correct such breach within thirty (30) days after the Employee’s receipt
of notice from the Company of such breach.
(b) “Change
of Control” shall mean the occurrence of any of the following
events:
(i) a
merger,
amalgamation or acquisition in which the Company is not the surviving or
continuing entity, except for a transaction the principal purpose of which
is to
change the jurisdiction of the Company’s organization;
(ii) the
sale,
transfer or other disposition of all or substantially all of the assets of
the
Company;
(iii) any
other
reorganization or business combination in which fifty percent (50%) or more
of
the Company’s outstanding voting securities are transferred to different holders
in a single transaction or series of related transactions;
(iv) any
approval by the shareholders of the Company of a plan of complete liquidation
of
the Company;
(v) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total voting power represented
by the Company’s then outstanding voting securities; or
(vi) a
change
in the composition of the Board, as a result of which fewer than a majority
of
the directors are Incumbent Directors. “Incumbent Directors”
shall mean directors who (A) are directors of the Company as of the
date hereof,
(B) are elected, or nominated for election, to the Board with the affirmative
votes of the directors of the Company as of the date hereof, or (C)
are elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of those directors whose election or nomination was
not
in connection with any transaction described in subsections (i) through (v)
or
in connection with an actual or threatened proxy contest relating to the
election of directors of the Company.
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(c) “Change
of Control Protection Period” shall mean the period commencing one (1) month
prior to the execution of the definitive agreement for a Change of Control
and
eighteen (18) months following the closing of a Change of Control.
(d) “Compensation
Continuation Period” shall mean the period of time commencing with
termination of the Employee’s employment as a result of Involuntary Termination
at any time within a Change of Control Protection Period and ending with the
date twenty-four (24) months following the date of the Employee’s Involuntary
Termination.
(e) “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(f) “Involuntary
Termination” shall mean (i) the failure of a successor or an acquiring
company to offer the Employee the position held by Employee on the date of
this
Agreement (or, if higher, a subsequent position of the Employee) with the
successor or acquiring company following a Change of Control; (ii) without
the
Employee’s express written consent, a substantial reduction, without good
business reasons, of the rights, privileges and perquisites available to the
Employee immediately prior to such reduction; (iii) without the Employee’s
express written consent, a material diminution in the authority,
responsibilities, duties or reporting lines held or possessed by the Employee
prior to the Change of Control; (iv) without the Employee’s express written
consent, a reduction by the Company of the Employee’s base salary or target
bonus as in effect immediately prior to such reduction; (v) without the
Employee’s express written consent, a material reduction by the Company in the
kind or level of employee benefits to which the Employee is entitled immediately
prior to such reduction with the result that the Employee’s overall benefits
package is significantly reduced; (vi) without the Employee’s express written
consent, the relocation of the regular offices of the Employee to a facility
or
a location more than thirty (30) miles further from the Employee’s current
location (unless such new facility or location is closer to the Employee’s
residence); (vii) any purported termination of the Employee by the Company
which
is not effected for Cause or for which the grounds relied upon are not valid;
or
(viii) the failure of the Company to obtain the assumption of this Agreement
by
any successors contemplated in Section 7 below.
2. Term
of Agreement. This Agreement shall terminate upon the date that
all obligations of the parties hereto under this Agreement have been satisfied
or, if earlier, on the date, prior to a Change of Control Protection Period,
the
Employee is no longer employed by the Company.
3. At-Will
Employment. The Company and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined under
applicable law. If the Employee’s employment terminates for any
reason, the Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement or the Existing
Agreement or as may otherwise be established under the Company’s then existing
employee benefit plans or policies at the time of termination.
4. Change
of Control and Severance Benefits.
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(a) Option
Acceleration and Extended Exercise Period. If the Employee’s
employment with the Company terminates as a result of an Involuntary Termination
at any time within a Change of Control Protection Period, then the
exercisability of all options granted to the Employee by the Company (including
any such options granted or assumed by the surviving or continuing entity of
the
Change of Control) and still outstanding (the “Options”) shall
automatically be accelerated so that all the Options may be exercised
immediately upon such Involuntary Termination for any or all of the shares
subject thereto and the post-termination exercise period of each Option shall
be
extended to sixty (60) months (but in no event beyond the remainder of the
maximum term of the Option). The Options shall continue to be subject
to all other terms and conditions of the Company’s share option plans and the
applicable option agreements between the Employee and the Company.
(b) Outplacement
Program. If the Employee’s employment with the Company terminates
as a result of an Involuntary Termination at any time within a Change of Control
Protection Period, the Employee will immediately become entitled to participate
in a twelve (12) month executive outplacement program provided by an executive
outplacement service, at the Company’s expense not to exceed fifteen thousand
dollars ($15,000).
(c) Termination
Following a Change of Control.
(i) Cash
Severance Payment Upon Involuntary Termination. If the Employee’s
employment with the Company terminates as a result of an Involuntary Termination
at any time within a Change of Control Protection Period, then the Employee
shall be entitled to receive a severance payment equal to the sum of (A) an
amount equal to 2.0 times the Employee’s annual base salary as in effect
immediately prior to the Involuntary Termination, plus (B) an amount equal
to
2.0 times Employee’s target bonus as in effect for the fiscal year in which the
Involuntary Termination occurs. Such severance payments shall be in
lieu of any other severance payment to which the Employee shall be entitled
as a
result of such termination pursuant to this Agreement, any employment agreement
with or offer letter from the Company or any of its affiliates or the Company’s
or any of its affiliate’s then existing severance plans and
policies. The severance payment described in Section 4(c)(i)(A) shall
be paid in monthly installments over twenty-four (24) months, beginning within
thirty (30) days of the termination, and the severance payment described in
Section 4(c)(i)(B) shall be paid in a lump sum within thirty (30) days of the
termination, in each case subject to the requirements of Section 4(c)(iii)
below.
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(ii) Provision
of Group Health and Certain Other Benefits. In addition, during a
period of twenty-four (24) months following the termination of Employee’s
employment as a result of an Involuntary Termination at any time within a Change
of Control Protection Period, (A) the Company shall make available and pay
for
the full cost of the coverage (plus an additional amount to pay for the taxes
on
such payments, if any, plus any taxes on such additional amount, such amount
to
be paid no later than ten (10) days prior to the date such taxes are due) of
the
Employee and Employee’s spouse and eligible dependents under any group health
plans of the Company on the date of such termination of employment at the same
level of health (i.e., medical, vision and dental) coverage and benefits as
in
effect for the Employee or such covered dependents on the date immediately
preceding the date of the Employee’s termination; provided,
however, that (1) the Employee and Employee’s spouse and eligible
dependents each constitutes a qualified beneficiary, as defined in Section
4980B(g)(1) of the Internal Revenue Code of 1986, as amended; and (2) the
Employee elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period
prescribed pursuant to COBRA; and (B) if Employee is, at the time of such
termination, an eligible participant in the Company’s mortgage differential
program, the Company shall continue to make mortgage assistance payments to
Employee pursuant to such program as in effect at the time of such
termination. Notwithstanding the foregoing, the payments by the
Company for such group health coverage and/or mortgage assistance, as
applicable, shall cease prior to the expiration of the twenty-four (24) month
period in this Section 4(c)(ii) upon the employment of the Employment by another
employer. Furthermore, if, at the time of the termination of
Employee’s employment as a result of an Involuntary Termination at any time
within a Change of Control Protection Period, Employee is the obligor of a
“forgivable” loan (i.e., a loan which by its terms is to be considered forgiven
by the Company and paid by the obligor in circumstances other than actual
repayment) from the Company, then, notwithstanding any provisions of such loan
to the contrary, such loan shall remain outstanding, and the forgiveness thereof
shall continue, for a period of twenty-four (24) months following such
termination in accordance with the terms of such loan in effect at the time
of
such termination; provided, however, that at the end of such period of
twenty-four (24) months, the outstanding balance of such loan shall be
immediately due and payable, together with any accrued and unpaid interest
thereon.
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(iii) Section
409A of the Code. Notwithstanding the foregoing clauses (i) and
(ii), to the extent any of the severance payments, mortgage assistance payments
or loan forgiveness referred to therein, or any taxes payable on the health
benefits referred to therein, would be deemed made in connection with a
“separation from service” within the meaning of the term in Section
409A(a)(2)(A)(i) of the Code to a “specified employee” within the meaning of the
term in Section 409A(a)(2)(B)(i) of the Code, and not exempt from the
requirements of Section 409A of the Code, then such payments or forgiveness,
as
the case may be, shall be postponed until six (6) months following the
Employee’s termination from employment as required by Section 409A of the Code,
provided, however, if prior to the expiration of such six-month
period, the Employee dies, then such payments or forgiveness, as the case may
be, shall commence prior to expiration of the six month period according to
the
original payment schedule for such payments to the extent permitted by Section
409A of the Code. Thus, for example, if the provision in the
preceding sentence applies, the first six (6) monthly installments of the
severance payments provided for in clause (i) above shall be paid immediately
following the six (6) month period in a lump sum and the seventh (7th) through
twenty-fourth (24th) installments
shall be paid according to their original schedule provided that the Employee
does not die during such six-month period.
(iv) Voluntary
Resignation or Termination for Cause. If the Employee’s
employment with the Company terminates as a result of the Employee’s voluntary
resignation which is not an Involuntary Termination or if the Employee is
terminated for Cause at any time after a Change of Control, then the Employee
shall not be entitled to receive severance or other benefits hereunder, but
may
be eligible for those benefits (if any) as may then be established under the
Company’s then existing severance and benefits plans and policies at the time of
such termination.
(d) Disability
or Death. If the Employee’s employment with the Company
terminates due to the Employee’s death or disability following a Change of
Control, then the Employee shall not be entitled to receive severance or other
benefits hereunder, except for those (if any) as may be then established under
the Company’s then existing severance and benefits plans and policies at the
time of such disability or death. In the event of the Employee’s
death or disability after the termination of the Employee’s employment with the
Company as a result of an Involuntary Termination within a Change of Control
Protection Period, the Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees shall
be
entitled to receive severance or other benefits hereunder.
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(e) Accrued
Wages and Vacation; Expenses. Without regard to the reason for,
or the timing of, the Employee’s termination of employment (and without
duplication of any similar benefits under any employment agreement with the
Company or any of its affiliates): (i) the Company shall pay the
Employee any unpaid base salary due for periods prior to the date of
termination; (ii) the Company shall pay the Employee all of the Employee’s
accrued and unused vacation through the date of termination; and (iii) following
submission of proper expense reports by the Employee, the Company shall
reimburse the Employee for all expenses reasonably and necessarily incurred
by
the Employee in connection with the business of the Company prior to the date
of
termination. These payments shall be made promptly upon termination,
within the period of time mandated by law, and in no event later than ten (10)
days after the date of termination.
5. Conditional
Nature of Severance Payments.
(a) Non-Compete. The
Employee shall not, to the detriment of the Company or any of its affiliates,
disclose or reveal to any unauthorized person any trade secret or other
confidential information relating to the Company or its affiliates or to any
businesses operated by them, and the Employee confirms that such information
constitutes the exclusive property of the Company. The Employee shall not
otherwise act or conduct her/himself to the material detriment of the Company
or
its affiliates, or in a manner which is inimical or contrary to the interests
thereof, and, for a period of twenty-four (24) months following the termination
of Employee’s employment as a result of an Involuntary Termination at any time
within a Change of Control Protection Period, shall not, directly or indirectly,
engage in or render any service (whether to a person, firm or business) in
direct competition with the Company; provided, however, that the
Employee’s ownership of less than five percent (5%) of the outstanding stock of
a corporation shall not itself be deemed to constitute such competition. The
Employee recognizes that the possible restrictions on her/his activities which
may occur as a result of her/his performance of her/his obligations under this
Section 5(a) are required for the reasonable protection of the Company and
its
investments. For purposes hereof, “in direct competition” means
engaged in the research, development and/or production of biological materials
intended for use as therapeutic, prophylactic or diagnostic products in one
or
more of the same indications, and that utilize one or more of the same
scientific bases (e.g., in the case of a therapeutic antibody, targets the
same
signal initiating pathway), as a product or product candidate the research,
development and/or production of which is an active part of the Company’s
business plan at the time of Employee’s termination.
(b) Non-Disparagement. The
Employee and the Company agree to refrain from any defamation, libel or slander
of the other and its respective officers, directors, employees, representatives,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations and assigns or tortious interference
with
the contracts and relationships of the other and its respective officers,
directors, employees, representatives, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessor and successor corporations
and
assigns.
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(c) Understanding
of Covenants. The Employee represents that the Employee (i) is
familiar with the foregoing covenants not to compete and not to disparage,
and
(ii) is fully aware of the Employee’s obligations hereunder, including, without
limitation, the reasonableness of the length of time, scope and geographic
coverage of the covenant not to compete.
6. Golden
Parachute Excise Tax. In the event that the benefits provided for
in this Agreement or otherwise payable to the Employee constitute “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”) that are subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then the Employee shall
receive (i) a one-time payment from the Company sufficient to pay such excise
tax (the “Excise Tax Gross-Up”), and (ii) an additional one-time payment
from the Company sufficient to pay the additional excise tax and federal, state
and local income and employment taxes arising from the Excise Tax Gross-Up
made
by the Company to the Employee pursuant to this Section 6 (the “Additional
Gross-Up”). Unless the Company and the Employee otherwise agree
in writing, the determination of the Employee’s excise tax liability and the
amount required to be paid under this Section 6 shall be made in writing in
good
faith by the accounting firm serving as the Company’s independent public
accountants immediately prior to the Change of Control (the
“Accountants”). The initial Excise Tax Gross-Up and Additional
Gross-Up payments hereunder, if any, shall either be (x) paid to the Employee
no
later than ten (10) days prior to the due date for the payment of any excise
tax, or (y) paid to the Internal Revenue Service on behalf of the Employee
no
later than the due date for the payment of any excise tax. In the
event that the Excise Tax incurred by the Employee is determined by the Internal
Revenue Service to be greater or lesser than the amount so determined by the
Accountants, the Company and the Employee agree to promptly (but in no event
later than the end of the calendar year in which the applicable taxes are paid
to (or received from) the Internal Revenue Service) make such additional
payment, including interest and any tax penalties, to the other party as the
Accountants reasonably determine is appropriate. For purposes of
making the calculations required by this Section 6, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on interpretations concerning the application of the Code for which there
is a “substantial authority” tax reporting position. The Company and
the Employee shall furnish to the Accountants such information and documents
as
the Accountants may reasonably request in order to make a determination under
this Section 6. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section 6.
7. Successors.
8
(a) Company’s
Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, amalgamation, consolidation,
liquidation or otherwise) to all or substantially all of the Company’s business
and/or assets shall assume the Company’s obligations under this Agreement and
agree expressly to perform the Company’s obligations under this Agreement in the
same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes
under this Agreement, the term “Company” shall include any successor to the
Company’s business and/or assets which executes and delivers the assumption
agreement described in this subsection (a) or which becomes bound by the terms
of this Agreement by operation of law.
(b) Employee’s
Successors. Without the written consent of the Company, the
Employee shall not assign or transfer this Agreement or any right or obligation
under this Agreement to any other person or entity. Notwithstanding
the foregoing, the terms of this Agreement and all rights of the Employee
hereunder shall inure to the benefit of, and be enforceable by, the Employee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
8. Notices.
(a) General. Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of the Employee, mailed notices shall be
addressed to the Employee at the home address that the Employee most recently
communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Notice
of Termination. Any termination by the Company for Cause or by
the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section 8. Such notice shall
indicate the specific termination provision in this Agreement relied upon,
shall
set forth in reasonable detail the facts and circumstances claimed to provide
a
basis for termination under the provision so indicated. The failure
by the Employee to include in the notice any fact or circumstance which
contributes to a showing of Involuntary Termination shall not waive any right
of
the Employee hereunder or preclude the Employee from asserting such fact or
circumstance in enforcing the Employee’s rights hereunder.
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9. Execution
of Release Agreement Upon Termination. As a condition of entering
into this Agreement and receiving the benefits under Section 4, the Employee
agrees to execute and not revoke a release of claims agreement substantially
in
the form attached hereto as Exhibit A upon the termination of the
Employee’s employment with the Company. Such release shall not,
however, apply to the rights and claims of the Employee under this Agreement,
any indemnification agreement between the Employee and the Company (or its
successor or acquirer), the bye-laws of the Company (or its successor or
acquirer), the share award agreements between the Employee and the Company
(or
its successor or acquirer), or any employee benefit plan of which the Employee
is a participant and under which all benefits due under such plan have not
yet
been paid or provided.
10. Arbitration.
(a) Any
dispute or controversy arising out of, relating to, or in connection with this
Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, shall be settled by binding arbitration to be held
in
San Francisco or Alameda County, California, in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American
Arbitration Association (the “Rules”). The cost of the
arbitration shall be borne in full by the Company (or its successor or acquirer)
but each of the Employee and the Company (or its successor or acquirer) shall
bear his, her or its own legal fees and other cost in such arbitration subject
to a possible award of attorneys fees and costs by the arbitrator as provided
in
the arbitration ruling. The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator’s decision in
any court having jurisdiction.
(b) The
arbitrator(s) shall apply California law to the merits of any dispute or claim,
without reference to conflicts of law rules. The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to state arbitration law. The Employee hereby
consents to the personal jurisdiction of the state and federal courts located
in
California for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are
participants.
(c) The
Employee understands that nothing in this Section 10 modifies the Employee’s
at-will employment status. Either the Employee or the Company can
terminate the employment relationship at any time, with or without
cause.
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(d) THE
EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. THE EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS
ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THE EMPLOYEE’S RIGHT TO A JURY TRIAL
AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:
(i) ANY
AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION.
(ii) ANY
AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE
CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et
seq;
(iii) ANY
AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
11. Miscellaneous
Provisions.
(a) Mitigation. The
Employee shall not be required to mitigate the amount of any payment
contemplated by this Agreement, nor shall any such payment be reduced by any
earnings that the Employee may receive from any other
source. However, the Employee shall not be entitled to receive the
health coverage and benefits contemplated by this Agreement in the event that
the Employee receives similar health coverage and benefits as a result of new
employment during the Compensation Continuation Period.
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(b) Waiver. No
provision of this Agreement may be modified, waived or discharged unless the
modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the
Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other
party
shall be considered a waiver of any other condition or provision or of the
same
condition or provision at another time.
(c) Integration. This
Agreement represents the entire agreement and understanding between the parties
with respect to the subject matter herein but shall not supersede any employment
agreement between the Company or any of its affiliates and the Employee, any
indemnification agreement between the Employee and the Company (or its successor
or acquirer), the share award agreements between the Employee and the Company
(or its successor or acquirer), or any employee benefit plan of which the
Employee is a participant and under which all benefits due under such plan
have
not yet been paid or provided.
(d) Choice
of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of
California.
(e) Severability. The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(f) Tax
Withholdings. All payments made pursuant to this Agreement shall
be subject to withholding of applicable income and employment
taxes.
(g) Compliance
with Section 409A of the Code. It is intended that this Agreement
will comply with Section 409A of the Code (and any regulations and guidelines
issued thereunder) to the extent the Agreement is subject thereto, and the
Agreement shall be interpreted on the basis consistent with such
intent.
(h) Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of
the Company by its duly authorized officer, as of the day and year first above
written.
COMPANY: XOMA
LTD.
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By:
____________________________
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Xxxxxxxxxxx
X. Xxxxxxxx
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Vice
President, General Counsel
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and
Secretary
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EMPLOYEE:
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_______________________________
Xxxxxx
X. Xxxxx
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12
EXHIBIT
A
FORM
RELEASE OF CLAIMS AGREEMENT
This
Release of Claims Agreement (this “Agreement”) is made and entered into
by and between XOMA Ltd. (the “Company”) and Xxxxxx X. Xxxxx (the
“Employee”).
WHEREAS,
the Employee was employed by the Company; and
WHEREAS,
the Company and the Employee have entered into a Change of Control Severance
Agreement effective as of August 3, 2007 (the “Severance
Agreement”).
NOW
THEREFORE, in consideration of the mutual promises made herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee (collectively referred to as the
“Parties”) desiring to be legally bound do hereby agree as
follows:
1. Termination. The
Employee’s employment with the Company terminated on ___________,
20__.
2. Consideration. Subject
to and in consideration of the Employee’s release of claims as provided herein,
the Company has agreed to pay the Employee certain benefits and the Employee
has
agreed to provide certain benefits to the Company, both as set forth in the
Severance Agreement.
3. Release
of Claims. The Employee agrees that the foregoing consideration
represents settlement in full of all currently outstanding obligations owed
to
the Employee by the Company. The Employee, on the Employee’s own
behalf and the Employee’s respective heirs, family members, executors and
assigns, hereby fully and forever releases the Company and its past, present
and
future officers, agents, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, parents, predecessor and
successor corporations, and assigns, from, and agrees not to xxx or otherwise
institute or cause to be instituted any legal or administrative proceedings
concerning any claim, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that the Employee may possess arising from any omissions, acts
or
facts that have occurred up until and including the Effective Date (as defined
below) of this Agreement including, without limitation:
(a) any
and
all claims relating to or arising from the Employee’s employment relationship
with the Company and the termination of that relationship;
(b) any
and
all claims relating to, or arising from, the Employee’s right to purchase, or
actual purchase of shares of the Company, including, without limitation, any
claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law and securities fraud under any state or
federal law;
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(c) any
and
all claims for wrongful discharge of employment, termination in violation of
public policy, discrimination, breach of contract (both express and implied),
breach of a covenant of good faith and fair dealing (both express and implied),
promissory estoppel, negligent or intentional infliction of emotional distress,
negligent or intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage, unfair business
practices, defamation, libel, slander, negligence, personal injury, assault,
battery, invasion of privacy, false imprisonment and conversion;
(d) any
and
all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, The Worker Adjustment and Retraining
Notification Act, the California Fair Employment and Housing Act, and Labor
Code
Section 201, et seq. and Section 970, et seq. and all
amendments to each such Act as well as the regulations issued
thereunder;
(e) any
and
all claims for violation of the federal or any state constitution;
(f) any
and
all claims arising out of any other laws and regulations relating to employment
or employment discrimination; and
(g) any
and
all claims for attorneys’ fees and costs.
The
Employee agrees that the release set forth in this Section 4 shall be and remain
in effect in all respects as a complete general release as to the matters
released. Notwithstanding the foregoing, this release does not extend
to any obligations now or subsequently incurred under this Agreement, the
Severance Agreement, the Indemnification Agreement between the Employee and
the
Company (or its successor or acquirer), the outstanding share award agreements
between the Employee and the Company (or its successor or acquirer), or any
employee benefit plan of which the Employee is a participant and under which
all
benefits due under such plan have not yet been paid or provided.
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4. Acknowledgment
of Waiver of Claims under ADEA. The Employee acknowledges that
the Employee is waiving and releasing any rights the Employee may have under
the
Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing and voluntary. The Employee and the Company agree
that this waiver and release does not apply to any rights or claims that may
arise under the ADEA after the Effective Date of this Agreement. The
Employee acknowledges that the consideration given for this waiver and release
agreement is in addition to anything of value to which the Employee was already
entitled. The Employee further acknowledges that the Employee has
been advised by this writing that (a) the Employee should consult with an
attorney prior to executing this Agreement; (b) the Employee has at least
twenty-one (21) days within which to consider this Agreement; (c) the Employee
has seven (7) days following the execution of this Agreement by the Parties
to
revoke the Agreement; and (d) this Agreement shall not be effective until the
revocation period has expired. Any revocation should be in writing
and delivered to the Company by the close of business on the seventh (7th) day from
the date
that the Employee signs this Agreement.
5. Civil
Code Section 1542. The Employee represents that the Employee is
not aware of any claims against the Company other than the claims that are
released by this Agreement. The Employee acknowledges that the
Employee has been advised by legal counsel and is familiar with the provisions
of California Civil Code Section 1542, which provides as follows:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HER OR HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH
IF KNOWN BY HER OR HIM MUST HAVE MATERIALLY AFFECTED HER OR HIS SETTLEMENT
WITH
THE DEBTOR.
The
Employee, being aware of said code section, agrees to expressly waive any rights
the Employee may have thereunder, as well as under any other statute or common
law principles of similar effect.
6. No
Pending or Future Lawsuits. The Employee represents that the
Employee has no lawsuits, claims or actions pending in the Employee’s name, or
on behalf of any other person or entity, against the Company or any other person
or entity referred to herein. The Employee also represents that the
Employee does not intend to bring any claims on the Employee’s own behalf or on
behalf of any other person or entity against the Company or any other person
or
entity referred to herein except, if necessary, with respect to the agreements
listed in the last sentence of Section 4 of this Agreement.
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7. Confidentiality. The
Employee agrees to use the Employee’s best efforts to maintain in confidence the
existence of this Agreement, the contents and terms of this Agreement, and
the
consideration for this Agreement (hereinafter collectively referred to as
“Release Information”). The Employee agrees to take every reasonable
precaution to prevent disclosure of any Release Information to third parties
and
agrees that there will be no publicity, directly or indirectly, concerning
any
Release Information. The Employee agrees to take every precaution to
disclose Release Information only to those attorneys, accountants, governmental
entities and family members who have a reasonable need to know of such Release
Information.
8. No
Adverse Cooperation. The Employee agrees the Employee will not
act in any manner that might damage the business of the Company. The
Employee agrees that the Employee will not counsel or assist any attorneys
or
their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges or complaints by any third party against the Company
and/or any officer, director, employee, agent, representative, shareholder
or
attorney of the Company, unless compelled under a subpoena or other court order
to do so.
9. Costs. The
Parties shall each bear their own costs, expert fees, attorneys’ fees and other
fees incurred in connection with this Agreement.
10. Authority. The
Company represents and warrants that the undersigned has the authority to act
on
behalf of the Company and to bind the Company and all who may claim through
it
to the terms and conditions of this Agreement. The Employee
represents and warrants that the Employee has the capacity to act on the
Employee’s own behalf and on behalf of all who might claim through the Employee
to bind them to the terms and conditions of this Agreement.
11. No
Representations. The Employee represents that the Employee has
had the opportunity to consult with an attorney, and has carefully read and
understands the scope and effect of the provisions of this
Agreement. Neither party has relied upon any representations or
statements made by the other party hereto which are not specifically set forth
in this Agreement.
12. Severability. In
the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.
13. Entire
Agreement. This Agreement and the Severance Agreement and the
agreements and plans referenced therein represent the entire agreement and
understanding between the Company and the Employee concerning the Employee’s
separation from the Company, and supersede and replace any and all prior
agreements and understandings concerning the Employee’s relationship with the
Company and the Employee’s compensation by the Company. This
Agreement may only be amended in writing signed by the Employee and an executive
officer of the Company.
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14. Governing
Law. This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of the State of California.
15. Effective
Date. This Agreement is effective eight (8)
days after it has been signed by the Parties (the “Effective Date”) unless it is
revoked by the Employee within seven (7) days of the execution of this Agreement
by the Employee.
16. Counterparts. This
Agreement may be executed in counterparts, and each counterpart shall have
the
same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.
17. Voluntary
Execution of Agreement. This Agreement is executed voluntarily
and without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) they
have
read this Agreement;
(b) they
have
been represented in the preparation, negotiation and execution of this Agreement
by legal counsel of their own choice or that they have voluntarily declined
to
seek such counsel;
(c) they
understand the terms and consequences of this Agreement and of the releases
it
contains; and
(d) they
are
fully aware of the legal and binding effect of this Agreement.
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
XOMA
LTD.
By: __________________________
Title: __________________________
Date: __________________________
EMPLOYEE
___________________________
Name
Date:
__________________________
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