Exhibit 10.1
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Colin Broom M.D.
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Vice President,
Chief Scientific Officer
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Thomas F. Doyle
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Vice President,
General Counsel and Secretary
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Vincent J. Milano
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President,
Chief Executive Officer
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Daniel Soland
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Vice President,
Chief Operating Officer
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Robert Pietrusko
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Vice President,
Global Regulatory Affairs and Quality
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Charles Rowland
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Vice President,
Chief Financial Officer
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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 June, 2009, 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 a previously executed Change of 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 its
entirety.
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 criminal conduct that
adversely affects the Company, committed intentionally by the
Employee in connection with the Employee’s employment by 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 share of its voting capital
stock, (ii) was approved by at least a majority of Directors
who were either members of the Board on June 11, 2009 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;
1.4.5. 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;
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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 a condition entitling the Employee to benefits under
the Company’s long term disability plan, policy or
arrangement; provided, however , that if no such plan,
policy or arrangement is then maintained by the Company and
applicable to the Employee, “Disability” will mean the
Employee’s inability, by reason of any physical or mental
impairment, to substantially perform Employee’s regular
duties to the Company, 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 material diminution in the
Employee’s authorities, duties, titles or
responsibilities;
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;
1.7.3. a reduction of the
Employee’s Base Salary or the amount of the Employee’s
Target Bonus of five percent (5%) or more;
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 beginning ninety
(90) days immediately preceding a Change of Control and ending
twenty-four (24) 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
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, 100% of the target amount
of the Employee’s annual bonus opportunity, expressed as a
percentage of Base Salary, 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.
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SECTION 2 Certain Terminations
Following a Change of Control .
2.1. Severance Events Following a
Change of Control . If the Employee’s employment with the
Company ceases within the twenty-four (24) 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 5, the
Employee will be entitled to the following:
2.1.1. (i) any Base Salary earned
through the effective date of termination that remains unpaid, with
any such amounts paid on the first regularly scheduled payroll date
following the effective date of termination; (ii) any bonus
payable with respect to any fiscal year which ended prior to the
effective date of the Employee’s termination of employment,
which remains unpaid, with such amount paid in the first regularly
scheduled payroll date following the effective date of termination
or, if later, at the same time the bonus would have otherwise been
payable to the Employee; and (iii) any reimbursement or
payment due to the Employee on or prior to the date of such
termination which remains unpaid to the Employee, with any such
payment being made promptly following the effective date of
termination (collectively, the “ Accrued Obligations
”);
2.1.2. a lump sum cash payment equal
to 200% 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);
2.1.3. a lump sum cash payment equal
to two (2) times his annual Target Bonus as in effect on such
date; and
2.1.4. for a period of eighteen
(18) 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) equal to
the amount paid by the Company towards its “group health
plans” during Employee’s term of employment with the
Company.
2.2. Severance Events Preceding a
Change of Control . If the Employee’s employment with the
Company ceases during the ninety (90) days immediately
preceding 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 5, the
Employee will be entitled to the following:
2.2.1. the Accrued
Obligations;
2.2.2. the Company will make a lump
sum cash payment to the Employee equal to 200% 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);
2.2.3. a lump sum cash payment equal
to two (2) times his annual Target Bonus as in effect on such
date; and
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2.2.4. for a period of eighteen
(18) 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) equal to
the amount paid by the Company towards its “group health
plans” during Employee’s term of employment with the
Company; provided that, if applicable, the Employee will be
reimbursed for COBRA premiums paid out-of-pocket for the period
following his or her termination of employment and preceding the
Change of Control equal to the amount paid by the Company towards
its “group health plans” during Employee’s term
of employment with the Company; and provided further that if
the Employee or Employee’s spouse or eligible dependents, as
applicable, have not elected (and is no longer eligible to elect)
COBRA continuation coverage, no waiver or reimbursement will be
made pursuant to this Section 2.2.3.
Notwithstanding the foregoing, if
the Company’s obligation to make the payments provided for in
Sections 2.1.2, 2.1.3 or Section 2.2.2 and 2.2.3 arises due to
the Employee’s death or Disability, the cash payments
described in Sections 2.1.2, 2.1.3, 2.2.2 and 2.2.3 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 solely by the Company
or by premium payments made by the Company and not including the
portion of such benefits paid for by the Employee). 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 Timing of Payments
Following Termination . Notwithstanding any provision of this
Agreement, the payments and benefits described in Section 2
(other than any Accrued Obligations) are conditioned on the
Employee’s execution and delivery to the Company of the
Release in a manner consistent with applicable law. The amounts
described in Sections 2.1.2, 2.1.3 or Section 2.2.2 and 2.2.3
(as applicable) will be paid in a lump sum, as soon as the Release
becomes irrevocable following the Employee’s execution and
delivery of the Release.
SECTION 4 Parachute Payments
.
4.1. The payments and benefits
provided under Section 2 shall be made without regard to
whether such payments and benefits, either alone or in conjunction
with any other payments or benefits made available to the Employee
by the Company and its affiliates, will result in the Employee
being subject to an excise tax under Section 4999 of the Code
(the “ Excise Tax ”) or whether the
deductibility of such payments and benefits would be limited or
precluded by Section 280G of the Code; provided,
however , that if the Total After-Tax Payments (as defined
below) would be increased by limitation or elimination of payments
or benefits provided under Section 2, then the amounts and
benefits payable under Section 2 will be reduced to the
minimum extent necessary to maximize the Total After-Tax Payments.
For purposes of this Section 4, “ Total After-Tax
Payments ” means the total of all “parachute
payments” (as that term is defined in Section 280G(b)(2)
of the Code) made to or for the benefit of the Employee (whether
made under this Agreement or otherwise), after reduction for all
applicable taxes (including, without limitation, the Excise Tax).
If a reduction to the payments or benefits
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provided under Section 2 is required
pursuant to this Section 4, such reduction shall occur to the
payments and benefits in the order that results in the greatest
economic present value of all payments and benefits actually made
to the Employee.
4.2. All determinations to be made
under this Section 4 shall be made by the Company’s
independent public accountant (the “ Accounting Firm
”) immediately prior to the Change of Control. In the event
that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control,
the Employee may appoint another nationally recognized public
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the Employee, except as
des