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AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

Change of Control Agreement

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT | Document Parties: VIROPHARMA INC | VIROPHARMA INCORPORATED You are currently viewing:
This Change of Control Agreement involves

VIROPHARMA INC | VIROPHARMA INCORPORATED

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Title: AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
Governing Law: Pennsylvania     Date: 6/17/2009
Industry: Biotechnology and Drugs     Sector: Healthcare

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT, Parties: viropharma inc , viropharma incorporated
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Exhibit 10.1

 

Name

  

Title

Colin Broom M.D.

  

Vice President, Chief Scientific Officer

Thomas F. Doyle

  

Vice President, General Counsel and Secretary

Vincent J. Milano

  

President, Chief Executive Officer

Daniel Soland

  

Vice President, Chief Operating Officer

Robert Pietrusko

  

Vice President, Global Regulatory Affairs and Quality

Charles Rowland

  

Vice President, Chief Financial Officer

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


 
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