EXHIBIT 10.60
SCICLONE PHARMACEUTICALS,
INC.
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement
(the “Agreement” ) is effective as of
December 8, 2008, by and between Gary Titus (the
“Employee” ) and SciClone Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”
).
RECITALS
A. The Employee presently serves as
Chief Financial Officer of the Company and performs significant
strategic and management responsibilities necessary to the
continued conduct of the Company’s business and
operations.
B. The Board of Directors of the
Company (the “Board” ) has determined that it is
in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication and objectivity
of the Employee, notwithstanding the possibility or occurrence of a
Change in Control (as defined below) of the Company.
C. The Board believes that it is
imperative to provide the Employee with certain severance benefits
upon the Employee’s termination of employment following a
Change in Control that will provide the Employee with enhanced
financial security and provide sufficient incentive and
encouragement to the Employee to remain with the Company following
a Change in Control.
AGREEMENT
The Employee and the Company agree
as set forth below:
1. Terms of Employment . The
Company and the Employee agree that the Employee’s employment
is “at will” and that their employment relationship may
be terminated by either party at any time, with or without cause,
and, if applicable, in accordance with Section 2 below. If the
Employee’s employment with the Company terminates for any
reason following a Change in Control, but on or before the first
anniversary of the Change in Control, the Employee shall not be
entitled to any payments, benefits, damages, awards or compensation
other than as provided by this Agreement. During his or her
employment with the Company, the Employee agrees to devote his or
her full business time, energy and skill to his or her duties with
the Company. These duties shall include, but not be limited to, any
duties consistent with the Employee’s position that may be
assigned to the Employee from time to time by the Company or the
Board.
2. Severance Benefits Upon
Termination following a Change in Control . Subject to the
limitations set forth in Sections 3 and 4 below, if the
Employee’s employment with the Company terminates following a
Change in Control but on or before the first anniversary of such
Change in Control, then the Employee shall be entitled to receive,
in addition to the compensation and benefits earned by the Employee
through the date of his or her termination, severance benefits as
follows:
(a) Involuntary Termination .
If the Employee’s employment with the Company is terminated
as a result of Involuntary Termination, then the Employee shall be
entitled to receive the following severance benefits:
(i) The Employee shall be entitled
to receive severance pay in an amount equal to one hundred percent
(100%) of his annual base salary as in effect at the time of
such termination. Any severance to which the Employee is entitled
pursuant to this section shall be paid in a lump sum, less
applicable withholding, within thirty (30) days following the
Employee’s termination.
1
(ii) With respect to any unvested
options to purchase shares of the stock of the Company held by the
Employee, the Employee shall immediately become vested in full in
such options at the time of such termination.
(iii) The Company shall, if
permitted under the Company’s existing health insurance
plans, continue the Employee’s existing group health
insurance coverage. If not so permitted, the Company shall
reimburse the Employee for any COBRA premiums paid by the Employee
for continued group health insurance coverage. Such health
insurance coverage or reimbursement of COBRA premiums shall
continue until the earlier of (1) twelve (12) months
after the date of the Employee’s Involuntary Termination or
(2) the date on which the Employee commences New
Employment.
(b) Voluntary Resignation;
Termination For Cause . If the Employee’s employment
terminates by reason of the Employee’s voluntary resignation
(but not as a result of an Involuntary Termination) or as a result
of the Employee’s termination for Cause, then the Employee
shall not be entitled to receive any severance pay or benefits
under this Agreement.
(c) Disability; Death . If
the Company terminates the Employee’s employment as a result
of the Employee’s Disability, or death, then the Employee
shall not be entitled to receive any severance pay or benefits
under this Agreement.
3. Release of Claims;
Resignation . The Employee’s entitlement to any severance
pay or benefits under Section 2(a) is conditioned upon the
Employee’s execution and delivery to the Company of
(a) a general release of known and unknown claims in the form
attached hereto as Exhibit A and (b) a resignation from all of
the Employee’s positions with the Company, including from the
Board of Directors and any committees thereof on which the Employee
serves, in a form satisfactory to the Company.
4. Parachute Payments . In
the event that any payment or benefit received or to be received by
the Employee pursuant to this Agreement or otherwise (collectively,
the “Payments” ) would result in a
“parachute payment” as described in section 280G
of the Internal Revenue Code of 1986, as amended, notwithstanding
the other provisions of this Agreement, the amount of such Payments
will not exceed the amount which produces the greatest
after-tax
2
benefit to the Employee. For purposes of the
foregoing, the greatest after-tax benefit will be determined within
thirty (30) days of the occurrence of such payment to the
Employee, in the Employee’s sole and absolute discretion. If
no such determination is made by the Employee within thirty
(30) days of the occurrence of such payment, the Company will
promptly make such determination in a fair and equitable
manner.
5. Consulting Services .
During the twenty-four (24) months following any Involuntary
Termination for which the Employee receives the severance pay and
benefits described in Section 2(a), the Employee shall be
retained by the Company as an independent contractor to provide
consulting services to the Company at its request for up to eight
(8) hours per week. These services shall include any
reasonable requests for information or assistance by the Company,
including, but not limited to, the transition of the
Employee’s duties. Such services shall be provided at
mutually convenient times. For the actual provision of such
services, the Company shall pay to the Employee a consulting fee of
$1,000 per day, plus reasonable out-of-pocket expenses (for
example, travel and lodging).
6. Definition of Terms . The
following terms referred to in this Agreement shall have the
following meanings:
(a) “ Cause
” shall mean any of the following:
(i) the Employee’s theft,
dishonesty, misconduct or falsification of any records of the
Company, its successor, or any subsidiary of the Company or its
successor (collectively, the “Company Group”
);
(ii) the Employee’s
misappropriation or improper disclosure of confidential or
proprietary information of the Company Group;
(iii) any intentional action by the
Employee which has a material detrimental effect on the reputation
or business of the Company Group;
(iv) the Employee’s failure or
inability to perform any reasonable assigned duties after written
notice from the Company Group of, and a reasonable opportunity to
cure, such failure or inability;
(v) any material breach by the
Employee of any employment agreement between the Employee and the
Company Group, which breach is not cured pursuant to the terms of
such agreement; or
(vi) the Employee’s conviction
of any criminal act which impairs the Employee’s ability to
perform his or her duties for the Company Group.
(b) “ Change in
Control ” shall mean: (i) a merger or other
transaction in which the Company or substantially all of its assets
is sold or merged and as a result of such transaction, the holders
of the Company’s common stock prior to such transaction do
not own or control a majority of the outstanding shares of the
successor corporation, (ii) the election of nominees
constituting a majority of the Board which nominees were not
approved by a majority of the Board prior to such election, or
(iii) the acquisition by a third party of twenty percent
(20%) or more of the Company’s outstanding shares which
acquisition was without the approval of a majority of the Board in
office prior to such acquisition.
3
(c) “ Constructive
Termination ” shall mean any one or more of the
following:
(i) without the Employee’s
express written consent, the assignment to the Employee, following
the Change in Control, of any title or duties, or any limitation of
the Employee’s responsibilities, that are substantially
inconsistent with the Employee’s title(s), duties, or
responsibilities with the Company Group immediately prior to the
date of the Change in Control;
(ii) without the Employee’s
express written consent, the relocation of the principal place of
the Employee’s employment, following the Change in Control,
to a location that is
