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EXHIBIT
10.9
NEKTAR
THERAPEUTICS
AMENDED AND RESTATED
CHANGE OF CONTROL
SEVERANCE BENEFIT
PLAN
PLAN DOCUMENT AND SUMMARY
PLAN DESCRIPTION
T ABLE O
F C ONTENTS
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P AGE |
| Section 1. |
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Introduction |
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1 |
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| Section 2. |
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Eligibility For Participation in the Plan |
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1 |
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| Section 3. |
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Eligibility For Separation Benefits |
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1 |
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| Section 4. |
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Separation Benefits |
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5 |
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| Section 5. |
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Notices |
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7 |
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| Section 6. |
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Claims |
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7 |
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| Section 7. |
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Plan
Amendment and Termination |
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9 |
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| Section 8. |
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Legal
Rights Under ERISA |
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9 |
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| Section 9. |
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Other
Important Information |
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10 |
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| Section 10. |
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Important
Plan Information |
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12 |
i
NEKTAR
THERAPEUTICS
AMENDED AND
RESTATED
CHANGE OF CONTROL
SEVERANCE BENEFIT PLAN
PLAN DOCUMENT AND SUMMARY
PLAN DESCRIPTION
Section 1.
Introduction
The Nektar Therapeutics Amended and
Restated Change of Control Severance Benefit Plan (the
“Plan”) is designed to provide severance benefits to
eligible employees of Nektar Therapeutics (the
“Company” or “Nektar”) whose employment is
involuntarily terminated by the Company following a Change of
Control (as defined below). The Plan was initially approved by the
Board of Directors on December 6, 2006 and subsequently
amended and restated and approved by the Board of Directors on
February 14, 2007. The Plan supersedes any prior plan, policy
or practice involving the payment of severance benefits by Nektar
in the event of an involuntary termination that occurs following a
Change of Control. While the Plan is in effect, any severance
benefits provided to an employee by the Company with respect to an
employee’s involuntary termination following a Change of
Control must be paid pursuant to the Plan or pursuant to an express
written agreement between Nektar and the individual
employee.
The Plan is designed to be an
“employee welfare benefit plan,” as defined in
Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”) and, accordingly, this Plan
is governed by ERISA. This document constitutes both the official
plan document and the required summary plan description under
ERISA.
Section 2. Eligibility For
Participation in the Plan
Each employee of the Company is eligible
to participate in the Plan; provided, however, that an employee who
has an individual agreement with the Company providing for
severance benefits with respect to termination of employment with
the Company in connection with or following a Change of Control
that would otherwise be covered by this Plan shall not be eligible
to participate in this Plan (i.e. an eligible employee cannot
receive severance benefits both under their individual agreement
and this Plan), and an individual who is not treated as an employee
of the Company for payroll and income tax withholding purposes or
who is treated as a consultant or independent contractor,
regardless of a court or agency’s determination of employee
status of such person during any period for any purpose, shall not
be eligible to participate in this Plan.
Section 3. Eligibility For
Severance Benefits
3.1 Conditions for Eligibility .
To be eligible to receive severance benefits under the Plan, in
addition to meeting the requirements for eligibility to participate
in the Plan, the participant must terminate employment with the
Company under circumstances that the Plan Administrator determines
constitute a Covered Termination, and the participant must meet the
following conditions:
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The
participant must execute a Separation and General Release Agreement
satisfactory to the Plan Administrator and within the time period
established by the Plan Administrator, which includes any or all of
the following provisions: (i) the participant’s
agreement to cooperate with the orderly transfer of his or her
duties as requested by the Company or a Successor Company;
(ii) the participant’s agreement to return all Company
and Successor Company property by a date specified by the Plan
Administrator; (iii) the participant’s agreement to
continue to maintain the confidentiality of Company and Successor
Company proprietary and confidential information; (iv) the
participant’s agreement to adhere to a non-solicitation
restriction; and (v) the participant’s waiver and
general release of all claims with respect to the Company and
Successor Company and related parties, including the right to
pursue any type of legal, equitable, or administrative claim,
except for claims that by law are unwaivable. All separation
benefits payable under the Plan are conditioned on any waiver of
claims included in the Separation and General Release Agreement
becoming effective and irrevocable and the participant’s
satisfaction of his or her obligations under such
agreement.
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If the
participant is notified by the Company or Successor Company that
his or her employment will be terminated following a Change of
Control in advance of his or her termination date, the participant
must not voluntarily terminate his or her employment or fail to
perform his or her assigned duties prior to the termination date
established by the Company or Successor Company.
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The
participant must not at any time have engaged in conduct that would
be Cause for termination, as defined in Section 3.3 below, as
determined by the Plan Administrator in its sole discretion. The
Plan Administrator shall have the discretion to terminate any and
all severance benefits provided under this Plan to a participant
who is discovered to have engaged in such conduct, regardless of
when such discovery occurs.
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3.2 Covered Termination . For
purposes of this Plan, a Covered Termination is an involuntary
termination of the participant’s employment with the Company
or Successor Company in conjunction with a Change of Control under
the circumstances described below applicable to the participant, as
follows:
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For a
participant who is an officer holding a position of Executive
Chairman, Chief Executive Officer, President, Chief Operating
Officer, Business Unit Head, Chief Scientific Officer, Chief
Technical Officer, Chief Financial Officer, Senior Vice President,
Vice President or Principal Fellow (an “Officer
Participant”), a Covered Termination is the involuntary
termination of the participant’s employment by the Company or
Successor Company without Cause, other than on account of the
participant’s death or disability, or the participant’s
Good Reason Resignation, which (i) termination occurs at the
request of a third party in the context of discussions regarding a
Change of Control or (ii) termination or resignation occurs
within the period beginning with the execution of an agreement
providing for a Change of Control (and such Change of Control is
consummated) and ending 12 months following the Change of
Control.
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2
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For any other
participant (a “Non-Officer Participant”), a Covered
Termination is the involuntary termination of the
participant’s employment by the Company or Successor Company
without Cause, other than on account of the participant’s
death or disability, which termination or resignation occurs within
the period beginning on the date of the Change of Control and
ending 12 months following the Change of Control.
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Notwithstanding the foregoing, a
termination of the participant’s employment shall not be
considered a Covered Termination in the event the participant is
offered and declines a Comparable Position (as defined below) with
the Company or Successor Company unless the failure to provide such
participant at the Successor Company with the officer or director
position he or she held in the Company prior to the Change of
Control constitutes a Good Reason Resignation pursuant to the terms
hereof. A participant who is offered a Comparable Position who does
not accept such position within 30 days (or such greater time for
acceptance specified in a written offer) will be deemed to have
declined such Comparable Position. For purposes of this
Section 3.2, a “Comparable Position” means a
position with the following attributes: (i) monthly base
salary equal to the employee’s monthly base salary
immediately prior to termination, or combination of monthly base
salary plus annual target incentive pay equal to the
employee’s monthly base salary plus annual target incentive
pay for the employee’s immediately previous position provided
that the monthly base salary is not lower than 10% of that received
by the employee in his or her immediately previous position;
(ii) assignment to a work location no more than 50 miles from
the participant’s immediately previous work location; and
(iii) assignment of duties or responsibilities that do not
constitute a material diminution in the participant’s
immediately previous function with respect to the business of the
Company.
3.3 Cause . For purposes of this
Plan, Cause shall mean, as determined by the Plan
Administrator:
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An
employee’s conviction of any felony or any crime involving
fraud, dishonesty or moral turpitude;
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An
employee’s commission of, or participation in, a fraud or act
of dishonesty against the Company or Successor Company that
materially benefits the employee;
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An
employee’s intentional, material violation of any contract or
agreement between the employee and the Company or Successor Company
or of any statutory or fiduciary duty owed to the Company or
Successor Company;
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An
employee’s intentional unauthorized use of Company or
Successor Company property that materially benefits the employee or
intentional unauthorized use or disclosure of Company or Successor
Company confidential information or trade secrets;
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An
employee’s intentional gross misconduct or intentional
material failure to comply with the Company’s or Successor
Company’s written policies; or
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An
employee’s intentional material failure or refusal to perform
his or her position responsibilities, other than on account of a
mental or physical disability.
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No act or failure to act on the part of
an individual shall be considered “intentional” unless
done, or omitted to be done, by that individual not in good faith
and without reasonable belief that such individual’s action
or omission was in the best interest of the Company. In no event
shall mere failure to achieve desired strategic, operational,
financial or other results constitute Cause.
3.4 Good Reason Resignation . For
purposes of this Plan, an Officer Participant’s Good Reason
Resignation shall mean a voluntary resignation by the Officer
Participant within 60 days following one or more of the following
events with respect to the Officer Participant:
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Assignment of
any duties or responsibilities that results in a material
diminution in the participant’s function as in effect
immediately prior to the Change of Control.
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Assignment to
a work location more than 50 miles from the participant’s
immediately previous work location, unless such reassignment of
work location decreases the participant’s commuting distance
from his or her residence to his or her assigned work
location.
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More than a
10% decrease in the participant’s monthly base salary as in
effect on the date of the Change of Control or as increased
thereafter.
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Notice to the
participant by the Company or Successor Company that the
participant’s employment will be terminated under
circumstances that would be a Covered Termination but for the
designation of a date for termination that is greater than 12
months following the Change of Control.
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In the case
of the Chief Executive Officer and President, such individual does
not serve in that position in the Successor Company (as defined
below) and/or is not appointed to the board of directors of the
Successor Company.
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3.5 Change of Control . A Change
of Control with respect to the Company shall mean any of the
following events or circumstances:
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The sale,
lease or other disposition of all or substantially all of the
Company’s assets;
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The
acquisition of securities of the Company representing more than 50%
of the combined voting power of the Company’s then
outstanding securities, other than by virtue of a merger,
consolidation or similar transaction;
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The merger,
consolidation or similar transaction involving the Company,
immediately after which the stockholders of the Company immediately
prior thereto do not own either (i) outstanding voting
securities representing more than 50% of the combined outstanding
voting power of the surviving entity in such merger, consolidation
or similar transaction or (ii) more than 50% of the combined
outstanding voting power of the parent of the surviving entity in
such merger, consolidation or similar transaction, in each case in
substantially the same proportions as their ownership of the
outstanding voting securities of the Company immediately prior to
such transaction; or
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4
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Individuals
who, on the date the Plan is adopted by the Board, are members of
the Board (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the members of the Board,
provided, however, that if the appointment or election of any new
Board member was approved or recommended by a majority vote of the
members of the Incumbent Board then still in office, such new
member will, for purposes of the Plan, be considered as a member of
the Incumbent Board.
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In the event of a Change of Control
following which Nektar is not the surviving entity, the surviving
entity for purposes of this Plan is the “Successor
Company.”
Section 4. Severance
Benefits
4.1 Cash Severance Pay; Amount .
The amount of a participant’s Cash Severance Pay benefit
under this Plan shall be determined
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