Exhibit 10.9
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Title
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Percentage of
Base Salary
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Number of Months
for COBRA
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Colin Broom M.D.
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Vice President,
Chief Scientific Officer
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100%
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12 months
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Thomas F. Doyle
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Vice President,
General Counsel and Secretary
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150%
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18 months
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Vincent J. Milano
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President,
Chief Executive Officer
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150%
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18 months
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Daniel Soland
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Vice President,
Chief Operating Officer
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100%
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12 months
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Robert Pietrusko
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Vice President,
Global Regulatory Affairs and Quality
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100%
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12 months
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Charles Rowland
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Vice President,
Chief Financial Officer
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100%
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12 months
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AMENDED AND
RESTATED
CHANGE OF CONTROL
AGREEMENT
THIS AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT (this “ Agreement ”), is made
on this 12th day of December, 2008, by and between VIROPHARMA
INCORPORATED (the “ Company ”) and
(the
“ Employee ”).
WHEREAS, the Employee serves as an
employee of the Company; and
WHEREAS, the Company and the
Employee are parties to that certain Change in Control Agreement
(the “Prior Agreement”), pursuant to which the Company
and the Employee established certain protections for the Employee
in the event of Employee’s termination of employment under
the circumstances described herein; and
WHEREAS, the Company and Employee
now desire to amend and restate the Prior Agreement in order to
ensure that no excise tax will apply to the payments and benefits
provided to the Employee pursuant to this Agreement by application
of Section 409A of the Internal Revenue Code of 1986, as
amended, and its implementing regulations and guidance
(“Section 409A”).
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and promises contained
herein, and intending to be bound hereby, the parties agree as
follows:
SECTION 1 Definitions . As
used herein:
1.1. “ Base Salary
” means, as of any given date, the annual base rate of salary
payable to the Employee by the Company, as then in effect;
provided, however, that in the case of a resignation by the
Employee for the Good Reason described in Section 1.7.3,
“Base Salary”
will mean the annual base rate of salary payable
to the Employee by the Company, as in effect immediately prior to
the reduction giving rise to the Good Reason.
1.2. “ Board ”
means the Board of Directors of the Company.
1.3. “ Cause ”
means fraud, embezzlement, or any other serious criminal conduct
that adversely affects the Company committed intentionally by the
Employee in connection with Employee’s employment or the
performance of Employee’s duties as an officer or director of
the Company or the Employee’s conviction of, or plea of
guilty or nolo contendere to, any felony.
1.4. “ Change of
Control ” means the happening of an event, which shall be
deemed to have occurred upon the earliest to occur of the following
events:
1.4.1. the date the stockholders of
the Company (or the Board, if stockholder action is not required)
approve a plan or other arrangement pursuant to which the Company
will be dissolved or liquidated;
1.4.2. the date the stockholders of
the Company (or the Board, if stockholder action is not required)
approve a definitive agreement to sell or otherwise dispose of all
or substantially all of the assets of the Company;
1.4.3. the date the stockholders of
the Company (or the Board, if stockholder action is not required)
and the stockholders of the other constituent corporations (or
their respective boards of directors, if and to the extent that
stockholder action is not required) have approved a definitive
agreement to merge or consolidate the Company with or into another
corporation, other than, in either case, a merger or consolidation
of the Company in which holders of shares of the Company’s
voting capital stock immediately prior to the merger or
consolidation will have more than 50% of the ownership of voting
capital stock of the surviving corporation immediately after the
merger or consolidation (on a fully diluted basis), which voting
capital stock is to be held in the same proportion (on a fully
diluted basis) as such holders’ ownership of voting capital
stock of the Company immediately before the merger or
consolidation;
1.4.4. the date any entity, person
or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act), other than (i) the
Company, or (ii) any of its subsidiaries, or (iii) any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any of its subsidiaries, or (iv) any affiliate
(as such term is defined in Rule 405 promulgated under the
Securities Act) of any of the foregoing, shall have acquired
beneficial ownership of, or shall have acquired voting control
over, 50% or more of the outstanding shares of the Company’s
voting capital stock (on a fully diluted basis), unless the
transaction pursuant to which such person, entity or group acquired
such beneficial ownership or control (i) resulted from the
original issuance by the Company of shares of its voting capital
stock, (ii) was approved by at least a majority of Directors
who were either members of the Board on the date that this
Agreement was originally adopted by the Board or members of the
Board for at least twelve (12) months before the date of such
approval and (iii) does not otherwise constitute a Change of
Control pursuant to Section 1.4.3 of this
Agreement;
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1.4.5. the date the Board determines
(in its sole discretion) that based on then-currently available
information, the events described in Section 1.4.4 are
reasonably likely to occur; or
1.4.6. the first day after the date
of this Agreement when members of the Board (each a
“Director”) are elected such that there is a change in
the composition of the Board such that a majority of Directors have
been members of the Board for less than twelve (12) months,
unless the nomination for election of each new Director who was not
a Director at the beginning of such twelve (12) month period
was approved by a vote of at least sixty percent (60%) of the
Directors then still in office who were Directors at the beginning
of such period;
provided, however,
for purposes of determining the
precise date of any Change of Control, an event described above
will be deemed to have occurred on the date on which the last
condition required for the consummation of that event is fulfilled
or otherwise completed.
1.5. “ Code ”
means Internal Revenue Code of 1986, as amended.
1.6. “ Disability
” means the Employee’s inability, by reason of any
physical or mental impairment, to substantially perform
Employee’s regular duties as contemplated by this Agreement,
as determined by the Board in its sole discretion (after affording
the Employee the opportunity to present Employee’s case),
which inability is reasonably contemplated to continue for at least
one year from its commencement and at least 90 days from the date
of such determination.
1.7. “ Good Reason
” means, without the Employee’s prior written consent,
any of the following:
1.7.1. a change in the
Employee’s role such that his or her authority, duties or
responsibilities are not substantially equivalent to the
Employee’s authority, duties or responsibilities in effect
immediately prior to such change;
1.7.2. the location of the facility
at which Employee is required to perform his or her duties is more
than 50 miles from Exton, Pennsylvania, unless such new location
does not increase the Employee’s commuting time;
1.7.3. a reduction of five percent
(5%) or more in either of the Employee’s Base Salary or
the amount of the Employee’s Target Bonus;
1.7.4. the Company’s failure
to pay or make available any material payment or benefit due under
this Agreement or any other material breach by the Company of this
Agreement.
However, the foregoing events or
conditions will constitute Good Reason only if (A) such event
or condition occurs during the period commencing on the date of a
Change of Control and continuing for twelve (12) consecutive
months thereafter and (B) the Employee provides the Company
with written objection to the event or condition within 60 days
following the occurrence thereof, the Company does not reverse or
otherwise cure the event or condition
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within 30 days of receiving that written
objection and the Employee resigns Employee’s employment
within 90 days following the expiration of that cure
period.
1.8. “ Release ”
means a release substantially identical to the one attached hereto
as Exhibit A.
1.9. “ Target Bonus
” means, with respect to any year, the target amount of the
annual bonus that would be payable to the Employee with respect to
that year, whether under an employment or incentive agreement,
under any bonus plan or policy of the Company or otherwise,
assuming that all applicable performance goals are met and
conditions to the payment of such bonus are satisfied.
SECTION 2 Certain Terminations
Following a Change of Control . If the Employee’s
employment with the Company ceases within the twelve
(12) month period following the date of a Change of Control as
a result of a termination by the Company without Cause, a
resignation by the Employee for Good Reason or due to
Employee’s death or Disability, then subject to
Section 3 and Section 4:
2.1 the Company will make a lump sum
cash payment to the Employee of all accrued but unpaid compensation
through the date of such termination;
2.2 the Company will make a lump sum
cash payment to the Employee equal to
%
of the Employee’s Base Salary as in effect on such date
(without taking into effect any reduction described in
Section 1.7.3 above); and
2.3 for a period of
months commencing from the date of the Employee’s termination
of employment, the Company will waive all applicable premiums
otherwise due for any group health continuation coverage elected by
the Employee or Employee’s spouse or eligible dependents
under COBRA (29 U.S.C. §§ 1161-1169) to the extent the
Company would have paid such premiums for Employee during
Employee’s term of employment with the Company;
provided , however , that if the Company’s
obligation to make the payments provided for in clause 2.2 above
arises due to the Employee’s death or Disability, the cash
payments described in clause 2.2 will be reduced by the amount of
benefits paid or payable to the Employee (or Employee’s
representative(s), heirs, estate or beneficiaries) pursuant to the
life insurance or disability plans, policies or arrangements of the
Company by virtue of Employee’s death or Disability
(including, for this purpose, only that portion of such life
insurance or disability benefits funded by the Company or by
premium payments made by the Company). The payments and benefits
described in this section are in lieu of (and not in addition to)
any other severance plan, fund, agreement or other arrangement
maintained by the Company.
SECTION 3 Parachute Payments
. Payments under Section 2 shall be made without regard to
whether the deductibility of such payments (or any other payments)
would be limited or precluded by Section 280G of the Code and
without regard to whether such payments would subject Employee to
the federal excise tax levied on certain “excess parachute
payments” under Section 4999 of the Code; provided,
however, that if the Total After-Tax Payments (as
defined
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below) would be increased by limitation or
elimination of any amount payable under Section 2, then the
amount payable under such section will be reduced to the extent
necessary to maximize the Total After-Tax Payments. The
determination of whether and to what extent such payments are
required to be reduced in accordance with the preceding sentence
will be made at the Company’s expense by an independent,
certified public accounting firm selected by the Board. In the
event of any underpayment or overpayment