Exhibit 10.64
CHANGE OF CONTROL
AND SEVERANCE
AGREEMENT
This Change of Control and Severance Agreement
(the “Agreement”) is made and entered into effective as
of
2007, by and between
(the “Employee”) and VIVUS, Inc., a Delaware
corporation (the “Company”).
RECITALS
A.
It is expected that another company or other entity may from time
to time consider the possibility of acquiring the Company or that a
change in control may otherwise occur, with or without the approval
of the Company’s Board of Directors (the
“Board”). The Board recognizes that such
consideration can be a distraction to the Employee and may cause
the Employee to consider alternative employment
opportunities. The Board has determined that it is in the
best interests of the Company and its shareholders to assure that
the Company will have the continued dedication and objectivity of
the Employee, notwithstanding the possibility, threat or occurrence
of a Change of Control (as defined below) of the Company. The
Board also recognizes that circumstances may arise whereby the
Employee’s employment is terminated other than in connection
with a Change of Control.
B.
The Board believes that it is in the best interests of the Company
and its shareholders to provide the Employee with an incentive to
continue his or her employment with the Company.
C.
The Board believes that it is imperative to provide the Employee
with certain benefitsupon termination of the Employee’s
employment in connection with a Change of Control, which benefits
are intended to provide the Employee with financial security and
provide sufficient income and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change
of Control.
D.
To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by the
Employee, to agree to the terms provided in this
Agreement.
E.
Certain capitalized terms used in the Agreement are defined in
Section 3 below.
In
consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the
Company, the parties agree as follows:
1 .
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 severance payments or
benefits, other than as provided by this Agreement. The terms
of this Agreement shall terminate upon the earlier of (i) the
date that all obligations of the parties hereunder have been
satisfied, or (ii) twenty-
four (24)
months after a Change of Control. A termination of the terms
of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on
account of a termination of employment occurring prior to the
termination of the terms of this Agreement.
2 .
Severance Benefits.
(a)
Termination Following A Change of Control . Subject to
Sections 4 and 8 below, if the Employee’s employment with the
Company is terminated at any time within twenty-four (24) months
after a Change of Control, then the Employee shall be entitled to
receive severance benefits as follows:
(i)
Voluntary Resignation; Termination For Cause . If the
Employee voluntarily resigns from the Company (other than for Good
Reason (as defined below)) or if the Company terminates the
Employee’s employment for Cause (as defined below), then the
Employee shall not be entitled to receive severance payments.
The Employee’s benefits will be terminated under the
Company’s then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of
termination or as otherwise determined by the Board.
(ii)
Involuntary Termination. If the Employee’s
employment is terminated (A) by the Company other than
for Cause or (B) voluntarily by the Employee for Good Reason,
then Employee shall be entitled to receive the following
benefits: (i) monthly severance payments during the
period from the date of the Employee’s termination until the
date twenty-four (24) months after the effective date of the
termination (the “Severance Period”) equal to the
monthly salary which the Employee was receiving immediately prior
to the Change of Control; (ii) monthly severance payments
during the Severance Period equal to 1/12th of the Employee’s
“target bonus” (as defined herein) for the fiscal year
in which the termination occurs for each month in which severance
payments are made to the Employee pursuant to subsection
(i) above ; (iii) the pro-rated amount of the
Employee’s “target bonus” for the fiscal year in
which the termination occurs, calculated based on the number of
months during such fiscal year in which the Employee was employed
by the Company (or a successor corporation) with such payment being
made on the termination date; (iv) reimbursement for premiums
paid for continued health benefits for Employee (and any eligible
dependents) under the Company’s health plans until the
earlier of (a) twenty-four (24) months, payable when such
premiums are due (provided Employee validly elects to continue
coverage under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), or (b) the date upon which Employee
and Employee’s eligible dependents become covered under
similar plans; and (v) outplacement services with a total
value not to exceed Twenty Thousand Dollars ($20,000), to be
provided within the Severance Period. The severance payments
described in subsections (i) and (ii) above shall be paid
during the Severance Period in accordance with the Company’s
standard payroll practices.
(iii)
Disability; Death. If the Company terminates
Employee’s employment as a result of Employee’s
disability, or Executive’s employment terminates due to his
or her death, then Executive shall not be entitled to receive
severance or other benefits except for those that have been earned
but not yet paid under this agreement and those, if any, as may be
established under the Company’s then existing benefit plans
and practices or pursuant to other written agreements with the
Company.
(b)
Acceleration of Options. Upon the closing of a Change
of Control, the vesting and exercisability of each option granted
to the Employee by The Company (the Options) shall automatically
vest in full and become immediately exercisable.
(c)
Termination Apart from a Change of Control. Subject
to Sections 4 and 8 below, if the Employee’s employment with
the Company is terminated at any time other than as provided in
paragraph 2(a), then the Employee shall be entitled to receive
severance benefits as follows:
(i)
Voluntary Resignation; Termination For Cause. If the
Employee voluntarily resigns from the Company (other than for Good
Reason (as defined below)) or if the Company terminates the
Employee’s employment for Cause (as defined below), then the
Employee shall not be entitled to receive severance payments.
The Employee’s benefits will be terminated under the
Company’s then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of
termination or as otherwise determined by the Board of Directors of
the Company.
(ii)
Involuntary Termination . If the Employee’s
employment is terminated(A) by the Company other than for
Cause, or (B) voluntarily by the Employee for Good Reason,
then the Employee shall be entitled to receive the following
benefits: (i) monthly severance payments during the
period from the date of the Employee’s termination until the
date three (3) months after the effective date of the termination
(the “Severance Period”) equal to the monthly salary
which the Employee was receiving immediately prior to the
termination date; (ii) monthly severance payments during the
Severance Period equal to 1/12 th
of the
Employee’s “target bonus” (as defined herein) for
the fiscal year in which the termination occurs for each month in
which severance payments are made to the Employee pursuant to
subsection (i) above; (iii) the pro-rated amount of the
Employee’s “target bonus” for the fiscal year in
which the termination occurs, calculated based on the number of
months during such fiscal year in which the Employee was employed
by the Company (or a successor corporation) with such payment being
made on the termination date; (iv) reimbursement for premiums
paid for continued health benefits for Employee (and any eligible
dependents) under the Company’s health plans until the
earlier of (a) the end of the Severance Period, payable when
such premiums are due (provided Employee validly elects to continue
coverage under COBRA, or (b) the date upon which Employee and
Employee’s eligible dependents become covered under similar
plans; and (v) outplacement services with a total value not to
exceed Twenty Thousand Dollars ($20,000), to be provided within the
Severance Period. The severance payments described in
subsections (i) and (ii) above shall be paid during the
Severance Period in accordance with the Company’s standard
payroll practices.
(iii)
Disability; Death. If the Company terminates
Employee’s employment as a result of Employee’s
disability, or Executive’s employment terminates due to his
or her death, then Executive shall not be entitled to receive
severance or other benefits except for those that have been earned
but not yet paid under this agreement and for those, if any, as may
be established under the Company’s then existing benefit
plans and practices or pursuant to other written
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