Exhibit 10.4
ANESIVA, INC.
AMENDED AND RESTATED EXECUTIVE
CHANGE IN CONTROL AND
SEVERANCE BENEFIT
PLAN
SECTION 1. I
NTRODUCTION
.
This Anesiva, Inc. Amended and
Restated Executive Change in Control and Severance Benefit Plan
(the “ Plan ”) shall become effective
automatically upon (but only upon) the Effective Time of the Merger
(as such terms are defined in that certain Agreement and Plan of
Merger among the Company, Arcion Therapeutics, Inc. and the other
parties thereto, dated as of August 4, 2009 (the “
Merger Agreement ”)) and at the Effective Time
shall amend and restate in its entirety that certain Anesiva, Inc.
Change in Control and Severance Benefit Plan dated as of
July 29, 2005, as amended as of March 31, 2008 and
January 20, 2009. The purpose of the Plan is to provide for
the payment to certain eligible executive employees of Anesiva,
Inc. (the “ Company ”) of certain
severance benefits in the event that such employees are subject to
qualifying employment terminations in connection with a Change in
Control. This Plan shall supersede any change in control or
severance benefit plan, policy, or practice previously maintained
by the Company, other than an individually negotiated contract or
agreement with the Company relating to change in control or
severance benefits that is in effect on the effective date of a
Change in Control or an employee’s termination date which
provides benefits that the Plan Administrator (as such term is
defined below), in its sole discretion, determines to be of greater
value than the benefits provided for in this Plan, in which case
such employee’s change in control benefit or severance
benefit, if any, shall be governed by the terms of such
individually negotiated employment contract or agreement and shall
be governed by this Plan only to the extent that the reduction
pursuant to Section 5(b) below does not entirely eliminate
benefits under this Plan. This Plan shall not supersede any benefit
provided pursuant to an equity compensation plan or program
maintained by the Company. This document also constitutes the
Summary Plan Description for the Plan.
SECTION 2. D
EFINITIONS
.
For purposes of the Plan, the
following terms are defined as follows:
(a) “ Base Salary ” means
the Eligible Employee’s annual base pay (excluding incentive
pay, premium pay, commissions, overtime, bonuses and other forms of
variable compensation), at the rate in effect during the last
regularly scheduled payroll period immediately preceding the date
of the Eligible Employee’s Covered Termination.
(b) “ Board ” means the
Board of Directors of Anesiva, Inc.
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(c) “ Change in Control ”
means the occurrence of any one or more of the following
events:
(i) any transaction or series of related
transactions resulting in the sale or issuance of securities or any
rights to securities of the Company representing in the aggregate
more than fifty percent (50%) of the Company’s issued
and outstanding voting securities, on a fully diluted basis, or any
transaction or series of related transactions resulting in the
sale, transfer, assignment or other conveyance or disposition of
any securities or any rights to securities of the Company by any
holder or holders thereof representing in the aggregate more than
fifty percent (50%) of the issued and outstanding voting
securities of the Company;
(ii) a merger, consolidation, reorganization,
recapitalization or share exchange (whether or not the Company is
the surviving and continuing entity) in which the stockholders or
equityholders of the Company immediately prior to such transaction
receive, in exchange for securities of the Company owned by them
(whether alone or together with cash, property or other
securities), cash, property or securities of the resulting or
surviving entity and as a result thereof persons who were holders
of voting securities of the Company immediately prior to such
transaction hold less than fifty percent (50%) of the issued
and outstanding capital stock of the resulting or surviving entity
entitled to vote in the election of directors, managers or similar
governing body or otherwise; and
(iii) a sale, transfer, exclusive license, exclusive
partnering arrangement or other disposition in a single transaction
or series of related transactions of fifty percent (50%) or
more of the assets of the Company and its subsidiaries, on a
consolidated basis, other than sales of inventory in good faith to
customers for fair value in the ordinary course of business and
dispositions of obsolete equipment not used or useful in the
business of the Company and its subsidiaries; provided, however,
that a sale, transfer, exclusive license, exclusive partnering
arrangement or other disposition in a single transaction or series
of related transactions of the Company’s Adlea assets shall
not be deemed a Change in Control.
The term Change in Control shall not
include a sale of assets, merger or other transaction effected
exclusively for the purpose of changing the domicile of the
Company. Once a Change in Control has occurred, no future events
shall constitute a Change in Control for purposes of the Plan. For
purposes of the Plan, the Closing of the Merger (as such terms are
defined in the Merger Agreement) shall constitute a Change in
Control.
(d) “ COBRA ” means the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
(e) “ Code ” means the
Internal Revenue Code of 1986, as amended.
(f) “ Company ” means
Anesiva, Inc. or, following a Change in Control, the surviving
entity resulting from such transaction.
(g) “ Constructive Termination
” means a voluntary termination of employment by an Eligible
Employee after one of the following is undertaken without the
Eligible Employee’s express written consent:
(i) the assignment to the Eligible Employee of any
duties or responsibilities which results in a significant
diminution in the Eligible Employee’s function as in effect
immediately prior to the effective date of the Change in Control;
provided , however , that a mere change in the
Eligible Employee’s title shall not constitute a Constructive
Termination;
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(ii) a five percent (5%) or greater reduction by
the Company in an Eligible Employee’s annual base salary, as
in effect on the effective date of the Change in
Control;
(iii) any failure by the Company to continue in effect
any benefit plan or program, including fringe benefits, incentive
plans and plans with respect to the receipt of securities of the
Company, in which an Eligible Employee is participating immediately
prior to the effective date of the Change in Control (hereinafter
referred to as “ Benefit Plans ”); or the
taking of any action by the Company that would adversely affect an
Eligible Employee’s participation in or reduce the Eligible
Employee’s benefits under the Benefit Plans; provided,
however, that a “Constructive Termination” shall
not exist under this paragraph following a Change in Control if the
Company offers a range of benefit plans and programs which, taken
as a whole, are comparable to the Benefit Plans; or
(iv) a relocation of an Eligible Employee’s
business office to a location more than thirty-five (35) miles
from the location at which the Eligible Employee performs duties as
of the effective date of the Change in Control, except for required
travel by the Eligible Employee on the Company’s business to
an extent substantially consistent with the Eligible
Employee’s business travel obligations prior to the Change in
Control.
(h) “ Covered Termination
” means either (A) an Involuntary Termination Without
Cause which occurs within three (3) months prior to or twelve
(12) months following the effective date of a Change in
Control, or (B) a Constructive Termination which occurs within
twelve (12) months following the effective date of a Change in
Control. Termination of employment of an Eligible Employee due to
death or disability shall not constitute a Covered Termination
unless a voluntary termination of employment by the Eligible
Employee immediately prior to the Eligible Employee’s death
or disability would have qualified as a Constructive
Termination.
(i) “ Eligible Employee ”
means an individual (A) who is employed by the Company as an
officer; and (B) who is designated by the Board as an Eligible
Employee.
(j) “ Entity ” means a
corporation, partnership or other entity.
(k) “ ERISA ” means the
Employee Retirement Income Security Act of 1974, as
amended.
(l) “ Involuntary Termination Without
Cause ” means an involuntary termination by the
Company of an Eligible Employee’s employment relationship
with the Company for any reason other than the
following:
(i) the Eligible Employee has committed an act that
materially injures the business of the Company;
(ii) the Eligible Employee has refused or failed to
follow lawful and reasonable directions of the Board or the
appropriate individual to whom the Eligible
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Employee reports, without cure within fifteen
(15) days following receipt by the Eligible Employee of
written notice from the Company or the Board specifying the
particulars of the Eligible Employee’s conduct;
(iii) the Eligible Employee has willfully or
habitually neglected the Eligible Employee’s duties with the
Company, without cure within fifteen (15) days following
receipt by the Eligible Employee of written notice from the Company
or the Board specifying the particulars of the Eligible
Employee’s conduct;
(iv) the Eligible Employee has been convicted of a
felony; or
(v) the Eligible Employee has committed a fraud,
misappropriation, embezzlement or other act of gross dishonesty
that resulted in loss, damage or injury to the Company.
(m) “ Own, ” “
Owned, ” “ Owner, ”
“ Ownership ” A person or Entity shall be
deemed to “Own,” to have “Owned,” to be the
“Owner” of, or to have acquired “Ownership”
of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to
vote or to direct the voting, with respect to such
securities.
(n) “ Plan Administrator ”
means the Board or any committee duly authorized by the Board to
administer the Plan. The Plan Administrator may, but is not
required to be, the Compensation Committee of the Board. The Board
may at any time administer the Plan, in whole or in part,
notwithstanding that the Board has previously appointed a committee
to act as the Plan Administrator.
(o) “ Subsidiary ” means,
with respect to the Company, (A) any corporation of which more
than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the
Company, and (B) any partnership in which the Company has a
direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than
fifty percent (50%).
SECTION 3. E
LIGIBILITY
F OR B ENEFITS .
(a) General Rules.
Subject to the limitations set forth
in this Section 3 and Section 5, in the event of a
Covered Termination, the Company shall provide the severance
benefits described in Section 4 to each effected Eligible
Employee.
(b) Exceptions to Benefit
Entitlement. An employee,
including an employee who otherwise is an Eligible Employee, will
not receive benefits under the Plan (or will receive reduced
benefits under the Plan) in the following circumstances, as
determined by the Plan Administrator in its sole
discretion:
(i) with respect to the benefits provided pursuant
to Section 4(a)(i):
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(1) The employee has executed an individually
negotiated employment contract or agreement with the Company
relating to severance or change in control benefits (except those
provided pursuant to an equity compensation plan or program
maintained by the Company) that is in effect on his or her
termination date and which provides benefits that the Plan
Administrator, in its sole discretion, determines to be of greater
value than the benefits provided for in this Plan, in which case
such employee’s severance or change in control benefit, if
any, shall be governed by the terms of such individually negotiated
employment contract or agreement and shall be governed by this Plan
only to the extent that the reduction pursuant to Section 5(b)
below does not entirely eliminate benefits under this
Plan.
(2) The employee is entitled to receive benefits
under another severance benefit plan maintained by the Company (
e.g. , the Anesiva, Inc. Severance Benefit Plan).
(3) The employee’s employment terminates or is
terminated for any reason other than a Covered
Termination.
(4) The employee voluntarily terminates employment
with the Company in order to accept employment with another entity
that is controlled (directly or indirectly) by the Company or is
otherwise an affiliate of the Company.
(5) The employee does not confirm in writing that he
or she shall be subject to the Company’s proprietary
information or confidentiality agreement with the
Company.
(6) The employee is rehired by the Company prior to
the date benefits under the Plan are scheduled to
commence.
(7) The employee is offered an identical or
substantially equivalent or comparable position with the Company or
a successor pursuant to a Change in Control. For purposes of the
foregoing, a “substantially equivalent or comparable
position” is one that offers the employee substantially the
same level of responsibility and compensation; provided,
however , that an employee shall not be considered to be
offered a “substantially equivalent or comparable
position” if a voluntary termination by the employee would
constitute Constructive Termination.
(c) Termination of
Benefits. An Eligible
Employee’s right to receive benefits pursuant to
Section 4(a)(i) under this Plan shall terminate immediately
if, at any time prior to or during the period for which the
Eligible Employee is receiving benefits hereunder, the Eligible
Employee, without the prior written approval of the Plan
Administrator:
(i) willfully breaches a material provision of the
Eligible Employee’s proprietary information or
confidentiality agreement with the Company, as referenced in
Section 3(b)(v);
(ii) encourages or solicits any of the
Company’s then current employees to leave the Company’s
employ for any reason or interferes in any other manner with
employment relationships at the time existing between the Company
and its then current employees; or
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(iii) induces any of the Company’s then current
clients, customers, suppliers, vendors, distributors, licensors,
licensees or other third party to terminate their existing business
relationship with the Company or interferes in any other manner
with any existing business relationship between the Company and any
then current client, customer, supplier, vendor, distributor,
licensor, licensee or other third party.
SECTION 4. A
MOUNT OF B ENEFITS .
(a) Benefits.
The Company shall provide benefits
to each Eligible Employee in an amount equal to the amounts in
Section 4(a)(i) set forth below, as applicable.
(i) Benefits in Connection with a
Covered Termination. In
the event an Eligible Employee’s employment with the Company
terminates due to a Covered Termination, the Company shall provide
the benefits in this Section 4(a)(i).
(1) Cash Severance
Benefits. The Company
shall make cash severance payments to each Eligible Employee in an
amount equal to the following:
a. For the CEO (i) two times the Eligible
Employee’s Base Salary, as in effect on the date of a Covered
Termination, or, if higher, as in effect immediately prior to the
Change in Control, plus (ii) the Eligible Employee’s
maximum annual target cash bonus, as in effect on the date of a
Covered Termination, or, if higher, as in effect immediately prior
to the Change in Control (the “Target
Bonus”).
b. For officers other than the CEO (i) one
times the Eligible Employee’s Base Salary, as in effect on
the date of a Covered Termination, or, if higher, as in effect
immediately prior to the Change in Control, plus (ii) the
Eligible Employee’s Target Bonus, as defined above
(2) Health Continuation
Coverage.
a. Provided that the Eligible Employee is eligible
for, and has made an election at the time of the Covered
Termination pursuant to COBRA under a health, dental, or vision
plan sponsored by the Company, each such Eligible Employee shall be
entitled to payment by the Company of all of the applicable
premiums (inclusive of premiums for the Eligible Employee’s
dependents for such health, dental, or vision plan coverage as in
effect immediately prior to the date of the Covered Termination)
for such health, dental, or vision plan coverage for a period of
six (6) months following the date of the Covered Termination,
with such coverage counted as coverage pursuant to
COBRA.
b. No such premium payments (or any other payments
for health, dental, or vision coverage by the Company) shall be
made following the effective date of the Eligible Employee’s
coverage by a health, dental, or vision insurance plan of a
subsequent employer. Each Eligible Employee shall be required to
notify the Plan Administrator immediately if the Eligible Employee
becomes covered by a health, dental, or vision insurance
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plan of a subsequent employer. Upon the
conclusion of such period of insurance premium payments made by the
Company, the Eligible Employee will be responsible for the entire
payment of premiums required under COBRA for the duration of the
COBRA period.
c. For purposes of this Section 4(a)(i)(2),
(A) references to COBRA shall be deemed to refer also to
analogous provisions of state law, and (B) any applicable
insurance premiums that are paid by the Company shall not include
any amounts payable by the Eligible Employee under an Internal
Revenue Code Section 125 health care reimbursement plan, which
amounts, if any, are the sole responsibility of the Eligible
Employee.
(3) Outplacement
Assistance . Each
Eligible Employee shall receive outplacement services for a period
of three months to assist the Eligible Employee in finding new
employment. Such services shall commence not later than three
months after the Eligible Employee’s termination
date.
(4) Other Employee
Benefits. All other
benefits (such as life insurance, disability coverage, and 401(k)
plan coverage) shall terminate as of the Eligible Employee’s
termination date (except to the extent that a conversion privilege
may be available thereunder).
(5) Additional
Benefits. Notwithstanding
the foregoing, the Plan Administrator may, in its sole discretion,
provide benefits in addition to those pursuant to Sections
4(a)(i)(1), 4(a)(i)(2), and 4(a)(i)(3) to Eligible Employees or
employees who are not Eligible Employees (“
Non-Eligible Employees ”) chosen by the Plan
Administrator, in its sole discretion, and the provision of any
such benefits to an Eligible Employee or a Non-Eligible Employee
shall in no way obligate the Company to provide such benefits to
any other Eligible Employee or to any other Non-Eligible Employee,
even if similarly situated. If benefits under the Plan are provided
to a Non-Eligible Employee, references in the Plan to
“Eligible Employee” (with the exception of Sections
4(a)(i)(1), 4(a)(i)(2), and 4(a)(i)(3)) shall be deemed to refer to
such Non-Eligible Employee.
SECTION 5. L
IMITATIONS
ON B ENEFITS .
(a) Release.
In order to be eligible to receive
benefits under Section 4 of the Plan, an Eligible Employee
must execute a general waiver and release in substantially the form
attached hereto as Exhibit A , Exhibit B , or
Exhibit C , as appropriate, and such release must become
effective in accordance with its terms. Unless a Change in Control
has occurred, the Plan Administrator, in its discretion, may modify
the form of the required release to comply with applicable law and
shall determine the form of the required release, which may be
incorporated into a termination agreement or other agreement with
the Eligible Employee.
(b) Certain
Reductions. The Plan
Administrator, in its sole discretion, shall have the authority to
reduce an Eligible Employee’s benefits, in whole or in part,
by any other benefits, pay in lieu of notice, or other similar
benefits payable to the Eligible Employee by the Company that
become payable in connection with the Eligible Employee’s
termination of employment pursuant to (i) any applicable legal
requirement, including, without limitation, the Worker Adjustment
and Retraining Notification Act (the “ WARN Act
”), (ii) a written
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employment or severance agreement with the
Company, or (iii) any Company policy or practice providing for
the Eligible Employee to remain on the payroll for a limited period
of time after being given notice of the termination of the Eligible
Employee’s employment. The benefits provided in
Section 4(a)(i) under this Plan are intended to satisfy, in
whole or in part, any and all statutory obligations that may arise
out of an Eligible Employee’s termination of employment, and
the Plan Administrator shall so construe and implement the terms of
the Plan. The Plan Administrator’s decision to apply such
reductions to the severance benefits of one Eligible Employee and
the amount of such reductions shall in no way obligate the Plan
Administrator to apply the same reductions in the same amounts to
the severance benefits of any other Eligible Employee, even if
similarly situated. In the Plan Administrator’s sole
discretion, such reductions may be applied on a retroactive basis,
with severance benefits previously paid being re-characterized as
payments pursuant to the Company’s statutory
obligation.
(c) Parachute
Payments. Except as
otherwise provided in an agreement between an Eligible Employee and
the Company, if any payment or benefit the Eligible Employee would
receive in connection with a Change in Control from the Company or
otherwise (“ Payment ”) would
(i) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (ii) but for
this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “ Excise Tax
”), then such Payment shall be equal to the Reduced Amount.
The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of
the Payment being subject to the Excise Tax, or (y) the
largest portion, up to and including the total, of the Payment,
whichever amoun
