Exhibit 10.2
MAXYGEN, INC.
A MENDED AND R ESTATED C HANGE OF C ONTROL A GREEMENT
This C HANGE OF C ONTROL A GREEMENT (the “Agreement”), originally made
by and between M AXYGEN , I NC . , a
Delaware corporation (the “Company”), and
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(the “Executive”) on
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as amended and restated on May 7, 2008 (the “Prior
Agreement”), is hereby amended and restated in its entirety
effective as of the last date signed below in order to comply with
Internal Revenue Code Section 409A.
W HEREAS , the Company considers it essential to the best
interests of its stockholders to foster the continuous employment
of key management personnel;
W HEREAS , the Board of Directors of the Company
recognizes that, as is the case with many publicly-held
corporations, the possibility of a Change of Control (as defined
herein) exists and that such possibility, and the uncertainty and
questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment
of the Company and its stockholders; and
W HEREAS , the Board has determined that appropriate
steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s
management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change of
Control.
N OW ,
T HEREFORE
, in consideration of the premises
and the mutual covenants herein contained, the Company and the
Executive agree as follows:
1. Introduction; Purposes
.
(a) The purpose of this Agreement is
to provide the Executive with protection of certain benefits in
case of a termination of his or her employment with the Company in
connection with a Change of Control of the Company.
(b) The Company, by means of the
Agreement, seeks to (i) secure and/or retain the services of
the Executive and (ii) provide incentives for the Executive to
exert maximum efforts for the success of the Company even in the
face of a potential Change of Control of the Company.
2. Definitions .
(a) “Accountants” has
the meaning given thereto in Section 4.
(b) “ADEA” has the
meaning given thereto in Section 5(c).
(c) “Agreement” means
this Change of Control Agreement.
(d) “Board” means the
Board of Directors of the Company.
(e) “Cause” means the
Executive’s: (i) willful and continued failure to
substantially perform the Executive’s duties with the Company
(other than as a result of physical or mental disability) after a
written demand for substantial performance is deliver to the
Executive by the Company, which demand specifically identifies the
manner in which the Company believes that the Executive has not
substantially performed the Executive’s duties and that has
not been cured within fifteen (15) days following receipt by
the Executive of the written demand; (ii) commission of a
felony (other than a traffic-related offense) that in the written
determination of the Company is likely to cause or has caused
material injury to the Company’s business;
(iii) dishonesty with respect to a
significant matter relating to the
Company’s business; or (iv) material breach of any
agreement by and between the Executive and the Company, which
material breach has not been cured within fifteen (15) days
following receipt by the Executive of written notice from the
Company identifying such material breach.
(f) “Change of Control”
means: (i) a dissolution or liquidation of the Company;
(ii) a sale of all or substantially all the assets of the
Company; (iii) a merger, recapitalization, reorganization,
consolidation or other similar transaction (a “Business
Combination”) in which beneficial ownership of securities of
the Company representing at least thirty-five percent (35%) of
the combined voting power entitled to vote in the election of
directors has changed; (iv) a reverse merger in which the
Company is the surviving corporation but the shares of the common
stock of the Company outstanding immediately before the merger are
converted by virtue of the merger into other property, whether in
the form of securities, cash or otherwise, and in which beneficial
ownership of securities of the Company representing at least
thirty-five percent (35%) of the combined voting power
entitled to vote in the election of directors has changed;
(v) an acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any
comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or
subsidiary of the Company or other entity controlled by the
Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least
thirty-five percent (35%) of the combined voting power
entitled to vote in the election of directors; (vi) in the
event that the individuals who are members of the Incumbent Board
cease for any reason to constitute at least fifty percent
(50%) of the Board; (vii) a sale of substantially all the
assets of the Company’s protein pharmaceutical business; or
(viii) the consummation by the Company of a Business
Combination with respect to which all or substantially all of the
individuals and entities who were the beneficial owners of the
combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors
immediately prior to such Business Combination do not, following
consummation of all transactions intended to constitute part of
such Business Combination, beneficially own, directly or
indirectly, at least sixty-five percent (65%) of the voting
securities of the Company (or the corporation, business trust or
other entity resulting from or being the surviving entity in such
Business Combination).
(g) “Code” means the
Internal Revenue Code of 1986, as amended.
(h) “Committee” means
the Finance Committee of the Board or such other committee as
appointed by the Board to administer this Agreement.
(i) “Company” means
Maxygen, Inc., a Delaware corporation.
(j) “Company-Paid
Coverage” has the meaning given thereto in
Section 3(a).
(k) “Confidential Information,
Secrecy and Invention Agreement” has the meaning given
thereto in Section 5(b).
(l) “Disability” means
Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to
last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and
health plan covering Company employees.
(m) “Effective Date”
means the date first above written.
(n) “Employee Agreement and
Release” has the meaning given thereto in
Section 5(c).
(o) “Exchange Act” means
the Securities Exchange Act of 1934, as amended.
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(p) “Excise Tax” has the
meaning given thereto in Section 4.
(q) “Executive” means
the person identified in the introductory paragraph of this
Agreement.
(r) “Good Reason” means:
(i) any material reduction of the Executive’s duties,
authority or responsibilities relative to the Executive’s
duties, authority, or responsibilities as in effect immediately
before such reduction, except if agreed to in writing by the
Executive; (ii) a reduction by the Company in the base salary
of the Executive, or of twenty-five percent (25%) or more in
the Target Bonus opportunity of such Executive, as in effect
immediately before such reduction, except if agreed to in writing
by the Executive; (iii) the relocation of the Executive to a
facility or a location more than thirty (30) miles from the
Executive’s then present business location, except if agreed
to in writing by the Executive; (iv) a material breach by the
Company of any provision of this Agreement or (v) any failure
of the Company to obtain the assumption of this Agreement by any
successor or assign of the Company; provided, however, that such
events shall not constitute grounds for a Good Reason termination
unless the Executive has provided notice to the Company of the
existence of the one or more of the above conditions within ninety
(90) days of its initial existence and the Company has been
provided at least thirty (30) days to remedy the
condition.
(s) “Incumbent Board”
means the individuals who, as of the Effective Date, are members of
the Board. If the election, or nomination for election by the
Company’s stockholders, of any new director is approved by a
vote of at least fifty percent (50%) of the Incumbent Board,
such new director shall be considered as a member of the Incumbent
Board.
(t) “Section 16 Officer”
means an “officer” of the Company, as defined in Rule
16a-1(f) promulgated under the Exchange Act, designated as such by
action of the Board.
(u) “Target Bonus” means
the Executive’s target bonus for the then current fiscal
year, as set by the Board or the appropriate committee
thereof.
3. Severance Benefits in the
Event of a Change of Control .
(a) If within
eighteen (18) months following the date of a Change of Control
of the Company either (A) the Company terminates the
Executive’s employment other than for Cause, death or
Disability or (B) the Executive terminates his or her
employment with the Company voluntarily with Good Reason, then in
each case, subject to Section 4 and Section 5:
(i) the Executive shall be entitled to receive, on the
61 st day following the employment
termination date or such later date as is required under
Section 11, a lump sum payment equal to three times the
Executive’s yearly base salary in effect on the date of
termination (without giving effect to any reduction in base salary
subsequent to a Change of Control that constitutes Good Reason),
(ii) each of the Executive’s outstanding stock options,
all stock subject to repurchase or forfeiture, including without
limitation, restricted stock, restricted stock units and
performance shares awards, and any options, stock subject to
repurchase or forfeiture, awards or purchases held in the name of
an estate planning vehicle for the benefit of the Executive or his
or her immediate family, shall have their vesting and
exercisability schedule accelerate in full (or, as applicable, the
corresponding repurchase or forfeiture right shall lapse in full)
as of the date of termination; (iii) if on the date of
termination the Executive is covered by any Company-paid health,
disability, accident and/or life insurance plans or programs, the
Company shall provide to the Executive benefits substantially
similar to those that the Executive was receiving immediately prior
to the date of termination (the “Company-Paid
Coverage”), with any premiums related to such coverage paid
by the Company no later than thirty (30) days following the
premium due date; and (iv) the post-termination exercise
period of Executive’s outstanding stock option and stock
appreciation right awards shall automatically be extended to the
later of (A) the fifteenth day of the third month following
the date at which the stock option or stock appreciation right
would otherwise have expired but for this extension, based on the
terms of the stock option or stock appreciation right on its grant
date, or (B) December 31 of the calendar year in which
the stock option or stock appreciation right would otherwise have
expired but for this extension, based on the terms of the stock
option or stock appreciation right on its grant date;
provided,
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however, that in the event final Treasury
Regulations under Code Section 409A permit a longer extension
without resulting in the imposition of an additional tax under Code
Section 409A, the stock option or stock appreciation right
shall provide for such greater post-termination exercise period;
provided, further, that in no event shall the term of the stock
option or stock appreciation right be extended longer than its
original maximum term. If such coverage included the
Executive’s spouse and/or dependents immediately prior to the
date of termination, such spouse and/or dependents shall also be
covered at Company expense. Company-Paid Coverage shall continue
until the earlier of (x) three (3) years from the date of
termination, or (y) the date that the Executive and his or her
spouse and/or dependents become covered under another
employer’s health, disability, accident and/or life insurance
plans or programs that provides the Executive and his or her spouse
and/or dependents with comparable benefits and levels of coverage;
provided, however that such coverage, premium payments, or
reimbursements (to the extent Executive pays the premiums in the
interim) shall be delayed six months and one day from
Employee’s termination date (and then paid in full in
arrears) to the extent required to avoid the imposition of
additional tax under Code Section 409A.
(b) If within eighteen
(18) months following the date of a Change of Control of the
Company the Executive’s employment with the Company is
terminated as a result of death or Disability, then in each case,
subject to Section 4 and Section 5: (i) each of the
Executive’s outstanding stock options, all stock subject to
repurchase or forfeiture, including without limitation restricted
stock, restricted stock units, performance shares awards, and any
options, stock subject to repurchase or forfeiture, awards or
purchases held in the name of an estate planning vehicle for the
benefit of the Executive or his or her immediate family, shall have
their vesting and exercisability schedule accelerated such that
vesting (or, as applicable, the corresponding repurchase or
forfeiture right lapsing) shall occur as if the vesting (or
lapsing) had occurred on a monthly basis from the last date of
vesting (or lapse) to the date of termination; and (ii) the
Company will provide the Executive with health, disability,
accident and/or life insurance benefits as described in
Section 3(a)(iii).
(c) In no event shall the Executive
be obligated to seek other employment or take any other action to
mitigate the amounts payable or benefits provided to the Executive
under this Agreement, nor shall any such payments or benefits be
reduced by any earnings or benefits that the Exe
