Exhibit 10.19
G. ALLAN CIC
AGREEMENT
This Agreement dated as of
March 14, 2007, is entered into by and between
(“Employee”) and Insmed Incorporated, a Virginia
corporation (“Insmed”).
Employee and Insmed hereby agree to
the following terms and conditions:
1. Purpose of Agreement. The
purpose of this Agreement is to provide that, in the event of a
“Change in Control,” Employee may become entitled to
receive additional benefits in the event of his termination. It is
believed that the existence of these potential benefits will
benefit Insmed by discouraging turnover and causing Employee to be
more able to respond to the possibility of a Change in Control
without being influenced by the potential effect of a Change in
Control on his job security.
2. Change in Control. As used
in this Agreement, “Change in Control” means an event
or occurrence set forth in any one or more of subsections
(a) through (d) below (including an event or occurrence
that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such
subsection):
(a) the acquisition by an
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership of any capital stock
of Insmed if, after such acquisition, such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) 40% or more of either (x) the then-outstanding shares of
common stock of Insmed (the “Outstanding Company Common
Stock”) or (y) the combined voting power of the
then-outstanding securities of Insmed entitled to vote generally in
the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from Insmed
(excluding an acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible into or
exchangeable for common stock or voting securities of Insmed,
unless the Person exercising, converting or exchanging such
security acquired such security directly from Insmed or an
underwriter or agent of Insmed), (ii) any acquisition by
Insmed, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Insmed or any corporation
controlled by Insmed, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i) and (ii) of subsection (c) of this
Section 2; or
(b) such time as the Continuing
Directors (as defined below) do not constitute a majority of the
Board of Directors of Insmed (the “Board”) (or, if
applicable, the Board of Directors of a successor corporation to
Insmed), where the term “Continuing Director” means at
any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or
(ii) who was nominated or elected subsequent to such date by
at least a majority of the directors who were Continuing Directors
at the time of such nomination or election or whose election to the
Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be
excluded from this clause (ii) any individual whose
initial
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assumption of office occurred as a result of an
actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation
of proxies or consents, by or on behalf of a person other than the
Board; or
(c) the consummation of a merger,
consolidation, reorganization, recapitalization or statutory share
exchange involving Insmed or a sale or other disposition of all or
substantially all of the assets of Insmed in one or a series of
transactions (a “Business Combination”), unless,
immediately following such Business Combination, each of the
following two conditions is satisfied: (i) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of
the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a
result of such transaction owns Insmed or substantially all of the
Insmed’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities,
respectively; and (ii) no Person (excluding the Acquiring
Corporation or any employee benefit plan (or related trust)
maintained or sponsored by Insmed or by the Acquiring Corporation)
beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or
of the combined voting power of the then-outstanding securities of
such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior
to the Business Combination); or
(d) approval by the stockholders of
Insmed of a complete liquidation or dissolution of
Insmed.
3. Rights and Obligations Prior
to a Change in Control . Prior to a Change in Control, the
rights and obligations of Employee with respect to his employment
by Insmed shall be whatever rights and obligations are negotiated
between Insmed and Employee from time to time. The existence of
this Agreement, which deals with such rights and obligations
subsequent to a Change in Control, shall not be treated as raising
any inference with respect to what rights and obligations exist
prior to a Change in Control unless specifically stated elsewhere
in this Agreement.
4. Effect of a Change in
Control . In the event of a Change in Control and
Employee’s employment is terminated pursuant to a
“Qualifying Termination” (as set forth below) on or
prior to the date that is within twelve (12) months of the
effective date of the Change in Control (the “Change in
Control Date”), Employee shall be entitled to the severance
payments and other benefits set forth in this Agreement.
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5. Qualifying Termination .
If, subsequent to a Change in Control, Employee’s employment
terminates within one year of the Change in Control Date, such
termination shall be considered a Qualifying Termination
unless:
(a) Employee voluntarily terminates
employment. However, it shall not be considered a voluntary
termination of employment if, following the Change in Control,
Employee’s compensation or duties are changed in any material
respect from what they were immediately prior to a Change in
Control, and subsequent to such change Employee elects to terminate
employment. A “change in any material respect” shall
encompass (i) any significant diminution in Employee’s
position, authority, duties, responsibilities, or reporting
relationship, (ii) any material reduction in Employee’s
then compensation and/or benefits, unless such reduction is an
across-the-board reduction of the compensation and/or benefits of
all similarly situated executives , (iii) any change in
Employee’s job location to a site more than 50 miles away
from his place of employment prior to the Change in Control or
(iv) the failure of Insmed to obtain the agreement of any
successor to Insmed to assure and agree to perform this
Agreement.
(b) The termination is on account of
Employee’s death or disability. As used herein,
“disability” refers to an illness or accident that
causes Employee to be unable to perform the duties of his job for
at least six consecutive months, as determined by a physician
mutually acceptable to Insmed and Employee.
(c) Employee is involuntarily
terminated for “Cause”, or it is determined that the
facts conclusively demonstrate that Employee would have been
terminated had any of the events set forth in clauses
(i) through (iii) below had been known at the date of
termination. For this purpose “Cause” means:
(i) Employee’s willful and
continued failure to substantially perform his reasonable assigned
duties (other than any such failure resulting from incapacity due
to physical or mental illness or any failure after Employee gives
notice of termination for any of the reasons set forth in
Section 5(a)), which failure is not cured within 60 days after
a written demand for substantial performance is received by
Employee from the Chief Executive Officer which specifically
identifies the manner in which the Chief Executive Officer believes
Employee has not substantially performed his duties;
(ii) Employee’s willful
engagement in illegal conduct or gross misconduct that is
materially and demonstrably injurious to Insmed; or
(iii) Employee’s conviction of
a felony involving a crime of moral turpitude.
For purposes of this
Section 5(c), no act or failure to act by Employee shall be
considered “willful” unless it is done, or omitted to
be done, in bad faith and without reasonable belief that
Employee’s action or omission was in the best interests of
Insmed.
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6. Constructive Qualifying
Termination . If Employee’s employment terminates as a
result of any change described in Section 5(a) of this
Agreement or as a result of a termination by Insmed without Cause
and a Change in Control occurs within six (6) months
thereafter, subject to the execution of a release of employment
claims in a form acceptable to Insmed and the expiration of the
statutory revocation period, Employee shall be entitled to the
compensation, payments and other benefits that Employee would have
received if such termination had occurred after a Change in
Control; provided, however, that Employee’s option exercise
period would not be extended to the extent such options had expired
prior to a Change in Control.
7. Date and Notice of
Termination . Any termination of Employee’s employment by
Insmed or by Employee shall be communicated by a written notice of
termination to the other party (the “Notice of
Termination”). Where applicable, the Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed.
8. Severance Payments
.
(a) If Employee is terminated as a
result of a Qualifying Termination, subject to the execution of a
release of employment claims in a form acceptable to Insmed and the
expiration of the statutory revocation period, Insmed shall pay
Employee within 30 days of said Qualifying Termination a cash lump
sum equal 1.5 times Employee’s “Compensation” as
a severance payment (“Severance Payment”). For this
purpose, “Compensation” means the sum of
Employee’s highest annual salary rate (i.e. Employee’s
highest rate of annual salary while an employee of Insmed) plus a
bonus calculated by multiplying Employee’s annua
