Exhibit 10.13
CHANGE OF CONTROL SEVERANCE
BENEFITS AGREEMENT
T HIS FORM OF C HANGE OF C ONTROL S EVERANCE B ENEFITS A GREEMENT MAY BE ENTERED INTO BETWEEN M EDIVATION , I NC . AND EACH OF ITS O FFICERS (“O FFICER ”), S ENIOR V ICE P RESIDENTS (“SVP”), V
ICE P RESIDENTS (“VP”) AND S ENIOR D IRECTORS (“SD”). T HIS AGREEMENT PROVIDES FOR DIFFERENT LEVELS OF BENEFITS FOR O FFICER AND SVP S VERSUS VP S AND SD S .
W HERE
THE BENEFIT LEVELS DIFFER AMONG CLASSIFICATIONS , THE BENEFIT LEVELS FOR EACH CLASSIFICATION ARE INDICATED IN THIS FORM OF AGREEMENT IN BRACKETED TEXT .
This C HANGE OF C ONTROL S EVERANCE B ENEFITS A GREEMENT (this “ Agreement ”) is made
as of the
th day of
, 2 by and
between Medivation, Inc., a Delaware Corporation, and
[Officer/SVP: (“ Executive ”)][VP/SD: (“
Employee ”)].
Background
WHEREAS, this Agreement provides the
terms and conditions for the severance benefits that the Company
will provide to [Executive/Employee] due to
[Executive’s/Employee’s] Qualifying Termination (as
defined below) with the Company following a Change of Control (as
defined below).
NOW, THEREFORE, in consideration of
the premises and the mutual agreements contained herein and
intended to be legally bound hereby, the parties hereto agree as
follows:
Agreement
1. Definitions . The following words and
phrases shall have the meanings set forth below for the purposes of
this Agreement (unless the context clearly indicates
otherwise):
(a) “Base Salary
” shall mean
[Executive’s/Employee’s] base salary or regular wage
rate in effect immediately prior to the Qualifying Termination (not
giving effect to any decrease in base salary providing Employee
with Good Reason for termination of his or her employment). Base
Salary does not include variable forms of compensation such as but
not limited to overtime, lead premiums, shift differentials,
bonuses, incentive compensation, commissions, expenses or expense
allowances.
(b) “Board
” shall mean the Board of
Directors of Company, or any successor thereto.
(c) “Cause
,” as determined by the Board
in good faith, shall mean Employee has:
(1) failed to perform his or her stated duties in
all material respects, which failure continues for fifteen
(15) days after [Executive’s/Employee’s] receipt
of written notice of the failure from the Company;
(2) intentionally and materially breached any
provision of this Agreement or any other written agreement with the
Company, and has not cured such breach within fifteen
(15) days after [Executive’s/Employee’s] receipt
of written notice of the breach from the Company (provided that,
the Company’s written notice is not required if
[Executive’s/Employee’s] breach is not reasonably
capable of cure);
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(3) demonstrated
[Executive’s/Employee’s] personal dishonesty in
connection with [Executive’s/Employee’s] employment
with the Company;
(4) engaged in willful misconduct in connection with
[Executive’s/Employee’s] employment with the
Company;
(5) engaged in a breach of fiduciary duty in
connection with [Executive’s/Employee’s] employment
with the Company; or
(6) willfully violated any material law, rule or
regulation, or final cease-and-desist order (other than minor
traffic violations or similar offenses), been convicted or pled
guilty (including a no contest plea) to any felony, or engaged in
other serious misconduct of such a nature that
[Executive’s/Employee’s] continued employment may
reasonably be expected to cause the Company substantial economic or
reputational injury.
(d) “ Change of Control ” shall
have the same definition as in the Company’s Amended and
Restated 2004 Equity Incentive Award Plan (the “ 2004
Equity Plan ”).
(e) “ Code ” shall mean the
Internal Revenue Code of 1986, as amended.
(f) “ Company ” shall mean
Medivation, Inc. or its successor, and any corporation, partnership
or other entity owned directly or indirectly, in whole or in part,
by Medivation, Inc.
(g) “ Disability ” shall have the
same definition as in the 2004 Equity Plan.
(h) “Good Reason ” shall
mean:
(1) a material breach of this Agreement by the
Company;
(2) the Company fails to obtain the assumption of
this Agreement by any successor to Company; or
(3) the Company, without
[Executive’s/Employee’s] express written consent:
(i) materially reduces [Executive’s/Employee’s]
Base Salary or the aggregate fringe benefits provided to Employee
(except to the extent the decrease is pursuant to a general
compensation or benefits reduction applicable to all, or
substantially all, employees of the Company at the same position
level as Employee); (ii) materially diminishes
[Executive’s/Employee’s] authority, duties or
responsibilities; or (iii) requires Employee to be based more
than twenty-five (25) miles from
[Executive’s/Employee’s] office location as of the date
of this Agreement (except for required travel on Company business
to an extent substantially consistent with
[Executive’s/Employee’s] business travel obligations of
the date of this Agreement).
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(i) “ Retirement ” shall mean the
termination of [Executive’s/Employee’s] employment with
the Company in accordance with the retirement policies, including
early retirement policies, generally applicable to the
Company’s salaried employees.
(j) “ Qualifying Termination ”
shall mean the occurrence, on or within twelve (12) months
following the consummation of a Change of Control, of either
(y) a termination of [Executive’s/Employee’s]
employment by the Company without Cause (and for reasons other than
death or Disability), or (z) a termination of
[Executive’s/Employee’s] employment by Employee for
Good Reason, and in either case such termination is a
“separation from service” as defined in Treasury
Regulations Section 1.409A-1(h)(1)(ii). The following events
shall not constitute a Qualifying Termination: (i) Employee
resigns his or her employment with the Company for any reason that
does not qualify as Good Reason at any time, including but not
limited to [Executive’s/Employee’s] Retirement; or
(ii) [Executive’s/Employee’s] employment is
terminated for Cause, or due to death or Disability.
(k) “ Termination Notice ” shall
mean a dated notice which: (i) indicates the specific
termination provision in this Agreement relied upon (if any);
(ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination of
[Executive’s/Employee’s] employment under such
provision; and (iii) specifies the anticipated date that
termination of [Executive’s/Employee’s] employment
shall become effective; and (iv) is given in the manner
specified in Section 11(j).
2. Term and Termination of Agreement. The
term of this Agreement shall commence on the date hereof as first
written above and shall continue through December 31, 2009;
provided that commencing on January 1, 2010 and each
January 1st thereafter, the term of this Agreement shall
automatically be extended for one additional year unless not later
than December 31 of the preceding year, the Company shall have
given written notice to Employee that it does not wish to extend
this Agreement. In addition, this Agreement will terminate
immediately if [Executive’s/Employee’s] employment
terminates at any time (at the Company’s request or
[Executive’s/Employee’s] request) if such termination
is not a Qualifying Termination.
3. Termination of
Employment.
(a) At-Will Employment Relationship. During
the term of this Agreement, [Executive’s/Employee’s]
employment relationship is at-will and both the Company and
[Executive/Employee] can terminate employment at any time, with or
without advance notice, and with or without Cause.
(b) Termination By Company For Cause. During
the term of this Agreement, the Company shall have the right to
terminate [Executive’s/Employee’s] employment for Cause
by providing written notice to [Executive/Employee] specifying the
particulars of the conduct of [Executive/Employee] forming the
basis for Cause to terminate [Executive’s/Employee’s]
employment. The Company also must comply with any applicable
advance notice and cure period requirement as specified in the
definition of Cause hereunder.
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(c) Termination By
[Executive/Employee] For Good Reason. During the term of this Agreement,
[Executive/Employee] may terminate his or her employment for Good
Reason by written notice to the Company given within sixty
(60) days after the date of the occurrence of any event that
[Executive/Employee] knows or should reasonably have known
constitutes Good Reason for termination. Such notice must identify
[Executive/Employee] and set forth in reasonable detail the facts
and circumstances claimed by [Executive/Employee] to constitute
Good Reason and identify [Executive’s/Employee’s]
planned termination date (which must be at least thirty
(30) days from the date that the written notice is provided to
the Company). [Executive/Employee] may terminate his or her
employment for Good Reason thereafter only if the Company fails to
cure the circumstances identified in
[Executive’s/Employee’s] notice as giving rise to Good
Reason within thirty (30) days after its receipt of
[Executive’s/Employee’s] notice, and
[Executive’s/Employee’s] termination must become
effective no later than sixty (60) days after the date that
the Company received [Executive’s/Employee’s] notice
provided hereunder.
4. Severance
Benefits.
(a) Severance Benefits For
Qualifying Terminations. Subject to the terms and conditions of this
Agreement (including but not limited to the execution of an
effective release agreement as described in Section 6 below),
if [Executive/Employee] suffers a Qualifying Termination, the
Company will provide the following as
[Executive’s/Employee’s] sole severance benefits (the
“ Severance Benefits ”):
(i) Cash Severance Benefit. The Company shall
pay in a lump sum an amount equal to [Officer/SVP: eighteen
(18) months of Executive’s][VP/SD: twelve
(12) months of Employee’s] Base Salary, to be paid
within ten (10) business days following the Release Effective
Date (as defined in Section 6).
(ii) COBRA Premium Benefit. If
[Executive/Employee] was enrolled in a group health plan (
i.e. , medical, dental, or vision plan) sponsored by the
Company immediately prior to termination, [Executive/Employee] may
be eligible to continue coverage under such group health plan (or
to convert to an individual policy) following his or her last day
of employment under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (together with any state law of similar effect, “
COBRA ”). If [Executive/Employee] is eligible for
continued coverage under COBRA and timely elects such continued
coverage, the Company shall pay the full amount of the COBRA
premiums for [Executive/Employee] and his or her eligible
dependents for the first [Officer/SVP: eighteen (18)][VP/SD: twelve
(12)] months of such coverage or until such earlier date as either
(A) [Executive/Employee] and/or his or her eligible dependents
cease to be eligible for COBRA coverage or
(B) [Executive/Employee] becomes eligible for the group health
plan coverage of a subsequent employer. Following such period of
Company-paid COBRA coverage, [Executive/Employee] will be
responsible for the timely payment of the full amount of premiums
required under COBRA for the duration of the COBRA period (if any).
[Executive/Employee] must notify the Company immediately if he or
she becomes eligible for coverage by a group health plan of a
subsequent employer.
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(b) Other Terminations
. In the event
[Executive’s/Employee’s] employment terminates other
than a Qualifying Termination, [Executive’s/Employee’s]
rights upon termination shall be governed by applicable law and by
the Company’s standard employment termination policy
applicable to [Executive/Employee] in effect at the time of
termination or, if applicable, any written employment agreement
between the Company and [Executive/Employee] other than this
Agreement in effect at the time of termination.
(c) Certain Reductions. The Company shall
reduce the Severance Benefits by any other severance benefits, pay
in lieu of notice, or other similar benefits payable to
[Executive/Employee] by the Company that become payable in
connection with the Qualifying Termination or termination of
employment pursuant to (i) any applicable legal requirement,
including, without limitation, the Worker Adjustment and Retraining
Notification Act, the California Plant Closing Act, or any other
similar state law (collectively, “ WARN ”),
(ii) a written employment or severance agreement with the
Company, or (iii) any Company policy or practice providing for
severance, termination pay, or otherwise allowing
[Executive/Employee] to remain on the payroll for a limited period
of time after being given notice of the termination of employment.
In the Company’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.
5. Deductions and Withholdings . All
payments under this Agreement will be subject to applicable
withholding for federal, state and local taxes. If
[Executive/Employee] is indebted to the Company as of his or her
last day of employment, the Company reserves the right to offset
the Severance Benefits by the amount of such indebtedness.
Additionally, if [Executive/Employee] is subject to withholding for
taxes related to any payments or benefits, including but not
limited to any imputed income related to perquisites or withholding
taxes due in connection with the vesting or exercise of equity
awards, the Company may offset against the Severance Benefits the
amount of such withholding taxes. However, Severance Benefits
payments will not be subject to any deductions for other benefit
plan purposes such as 401(k) plan contributions and/or 401(k) loan
repayments or other employee benefit plan contributions.
6. Release of Claims . In order to be
eligible to receive the Severance Benefits, [Executive/Employee]
must execute and allow to become effective a general waiver and
release in substantially the form attached hereto as Exhibits
A , B or C (as applicable)
within the time frame set forth therein, but in no event may such
release be effective later than sixty (60) days following the
date of [Executive’s/Employee’s] Qualifying
Termination. The date [Executive’s/Employee’s] release
agreement becomes effective, as further described in the applicable
release form, is referred to herein as the “ Release
Effective Date ”. The Company, 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 [Executive/Employee].
7. Additional Eligibility and
Transition Matters.
(a) Return of Company Property.
[Executive/Employee] will not be entitled to the Severance Benefits
unless and until [Executive/Employee] returns all Company Property
upon his or her termination (or earlier if so requested by the
Company). For this purpose, “ Company Property ”
means all paper and electronic Company documents (and all copies
thereof) created and/or received by [Executive/Employee] during his
or her period of
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employment with the Company and
other Company property which [Executive/Employee] had in his or her
possession or control including, but not limited to, Company files,
notes, lab notebooks, drawings, records, plans, forecasts, reports,
studies, analyses, proposals, agreements, financial information,
research and development information, sales and marketing
information, operational and personnel information, specifications,
code, software, databases, computer-recorded information, tangible
property and equipment (including, but not limited to, leased
vehicles, computers, computer equipment, software programs,
facsimile machines, mobile telephones, servers), credit and calling
cards, entry cards, identification badges and keys; and any
materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions
thereof in whole or in part). As a condition to receiving the
Severance Benefits, [Executive/Employee] must not make or retain
copies, reproductions or summaries of any such Company Property.
However, [Executive/Employee] is not required to return his or her
personal copies of documents evidencing
[Executive’s/Employee’s] hire, termination,
compensation, benefits and stock options and any other
documentation received as a shareholder of the Company.
(b) Prepayment of Advanced Amounts.
[Executive/Employee] will not be entitled to the Severance Benefits
if he or she previously received an advance(s) for business travel
and entertainment expenses unless and until [Executive/Employee]
(i) properly completes and submits an expense reimbursement
form(s) and supporting receipts to his or her manager no later than
the effective date of the Qualifying Termination and
(ii) repays any amounts advanced but not used and approved for
reimbursement.
(c) Transition of
Work. [Executive/Employee] will not be entitled to any
Severance Benefits unless and until he or she (i) has
satisfactorily transitioned his or her work and information
concerning his or her work to the Company to the extent requested
by the Company (including but not limited to completion of exit
checklists and properly signed and witnessed lab notebooks), and
(ii) has provided the Company with all logins, passwords,
passcodes and similar information created by [Executive/Employee]
for documents, email and electronic files that [Executive/Employee]
created or used on Company systems.
(d) Proprietary Information
Obligations. [Executive/Employee] is not eligible for the
Severance Benefits if he or she has not signed the Company’s
standard form of confidential information and inventions assignment
agreement (“ Proprietary Agreement ”) covering
[Executive’s/Employee’s] entire period of employment
with the Company (and with any predecessor) and/or if
[Executive/Employee] does not confirm in writing that he or she is
and shall remain subject to the terms of the Proprietary
Agreement.
(e) Resignation From
Board. If
[Executive/Employee] is a member of the Board as of the Qualifying
Termination, [Executive/Employee] will not be eligible for the
Severance Benefits unless he or she promptly resigns from the Board
if requested to do so by a majority of the Board.
8. Death of [Executive/Employee] . Any
amounts due [Executive/Employee] under this Agreement (not
including any Base Salary not yet earned by [Executive/Employee])
unpaid as of the date of [Executive’s/Employee’s] death
shall be paid in a single sum as soon as practicable after
[Executive’s/Employee’s] death to
[Executive’s/Employee’s] surviving spouse, or if none,
to the duly appointed personal representative of
[Executive’s/Employee’s] estate, provided that all
conditions for receipt of such amounts have been
satisfied.
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9. Treatment of Parachute
Payments.
(a) In the event that it shall be determined (as
hereafter provided) that any payment by the Company to or for the
benefit of [Executive/Employee], whether paid or payable pursuant
to the terms of this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, or the
lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (collectively, a “
Payment ”), would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision
thereto) by reason of being considered “contingent on a
change in ownership or control” of the Company, within the
meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such tax (such
tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the “ Excise Tax
”), then the amount of the cash Severance Benefits payable to
[Executive/Employee] hereunder shall be reduced and then the
noncash payments and benefits hereunder shall be reduced, to the
extent necessary so that no portion of the Payments is subject to
the Excise Tax; provided, however, that [Executive/Employee] may
elect (at any time prior to the payment of any Payments under this
Agreement) to have the noncash payments and benefits reduced (or
eliminated) prior to any reduction of the cash payments under this
Agreement. Notwithstanding the foregoing, payments or benefits
under this Agreement will not be reduced unless: (i) the net
amount of the Payments, as so reduced (and after subtracting the
net amount of federal, state and local income taxes on such reduced
Payments) is greater than (ii) (A) the
