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Exhibit
10.35
THRESHOLD PHARMACEUTICALS,
INC.
CHANGE OF CONTROL
SEVERANCE AGREEMENT
The Change of Control
Severance Agreement (the “Agreement”) is made and
entered into effective as of October 19, 2007 (the
“Effective Date”), by and between John G. Curd, MD (the
“Employee”) and Threshold Pharmaceuticals, Inc., a
Delaware corporation (the “Company”). Certain
capitalized terms used in this Agreement are defined in
Section 1 below.
RECITALS
A. It is expected that the
Company from time to time will consider the possibility of a Change
of Control. The Board of Directors of the Company (the
“Board”) recognizes that such consideration can be a
distraction to the Employee and can cause the Employee to consider
alternative employment opportunities.
B. The Board believes that it
is in the best interests of the Company and its stockholders to
provide the Employee with an incentive to continue Employee’s
employment and to maximize the value of the Company upon a Change
of Control for the benefit of its stockholders.
C. In order to provide the
Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the
possibility of a Change of Control, 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 of Control.
AGREEMENT
In consideration of the
mutual covenants herein contained and the continued employment of
Employee by the Company, the parties agree as follows:
1. Definition of Terms
. The following terms referred to in this Agreement shall have the
following meanings:
(a) Cause .
“Cause” shall mean (i) Employee’s gross
negligence or willful failure substantially to perform his or her
duties and responsibilities to the Company or deliberate violation
of a Company policy; (ii) Employee’s commission of any
act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in
material injury to the Company; (iii) unauthorized use or
disclosure by Employee of any proprietary information or trade
secrets of the Company or any other party to whom the Employee owes
an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) Employee’s
willful breach of any of his or her obligations under any written
agreement or covenant with the Company. The determination as to
whether a Employee is being terminated for Cause shall be made in
good faith by the Company and shall be final and binding on the
Employee.
(b) Change of Control
. “Change of Control” shall mean the occurrence of any
of the following events:
(i) the approval by
stockholders of the Company of a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or
consolidation;
(ii) the approval by the
stockholders of the Company of a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets;
or
(iii) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becoming
the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities.
(c) Involuntary
Termination . “Involuntary Termination” shall mean
(i) without the Employee’s express written consent, a
significant reduction of the Employee’s duties, position or
responsibilities relative to the Employee’s duties, position
or responsibilities in effect immediately prior to such reduction,
or the removal of the Employee from such position, duties and
responsibilities, unless the Employee is provided with comparable
or greater duties, position and responsibilities; (ii) without
the Employee’s express written consent, a substantial
reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the
Employee immediately prior to such reduction; (iii) without
the Employee’s express written consent, a reduction by the
Company of the Employee’s base salary as in effect
immediately prior to such reduction; (iv) without the
Employee’s express written consent, a material reduction by
the Company in the kind or level of employee benefits to which the
Employee is entitled immediately prior to such reduction, with the
result that the Employee’s overall benefits package is
significantly reduced; (v) without the Employee’s
express written consent, the imposition of a requirement for the
relocation of the Employee to a facility or a location more than
fifty (50) miles from the Employee’s current work
location; (vi) any purported termination of the
Employee’s employment by the Company which is not effected
for Cause or for which the grounds relied upon are not valid; or
(vii) the failure of the Company to obtain the assumption of
this Agreement by any successors contemplated in Section 6
below.
(d) Termination Date .
“Termination Date” shall mean the effective date of any
notice of termination delivered by one party to the other
hereunder.
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2. Term of Agreement .
Other than Section 4(b) of this Agreement which shall survive
indefinitely until all obligations under such Section have been
satisfied, this Agreement shall terminate upon the earlier of
(i) two (2) years after a Change of Control, or
(ii) the date that all obligations of the parties hereto under
this Agreement have been satisfied.
3. At-Will Employment
. The Company and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as
defined under applicable law. If the Employee’s employment
terminates for any reason, the Employee shall not be entitled to
any payments, benefits, damages, awards or compensation other than
as provided by this Agreement, or as may otherwise be established
under the Company’s then existing employee benefit plans or
policies at the time of termination.
4. Severance Benefits
.
(a) Termination Following
a Change of Control . If the Employee’s employment with
the Company terminates as a result of an Involuntary Termination at
any time within eighteen (18) months after a Change of
Control, and the Employee signs the release of claims pursuant to
Section 7 hereto, Employee shall be entitled to the following
severance benefits:
(1) Twelve months of
Employee’s base salary and any applicable allowances as in
effect as of the date of the termination or, if greater, as in
effect in the year in which the Change of Control occurs, less
applicable withholding, payable in a lump sum within thirty
(30) days of the Involuntary Termination;
(2) all stock options granted
by the Company to the Employee prior to the Change of Control shall
accelerate and become vested under the applicable option agreements
to the extent such stock options are outstanding and unexercisable
at the time of such termination and all stock subject to a right of
repurchase by the Company (or its successor) that was purchased
prior to the Change of Control shall have such right of repurchase
lapse;
(3) the Employee shall be
permitted to exercise all vested (including shares that vest as a
result of this Agreement) stock options granted by the Company to
the Employee prior to the Change of Control for a period until the
earlier of (a) two (2) years following the Termination
Date or (b) the expiration date of such option; and
(4) the same level of
Company-paid health (i.e., medical, vision and dental) coverage and
benefits for such coverage as in effect for the Employee (and any
eligible dependents) on the day immediately preceding the
Employee’s Termination Date; provided , however
, that (i) the Employee constitutes a qualified beneficiary,
as defined in Section 4980B(g)(1) of the Internal Revenue Code
of 1986, as amended (the “Code”); and
(ii) Employee elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time period prescribed pursuant
to COBRA. The Company shall continue to provide Employee with such
Company-paid coverage until the earlier of (i) the date
Employee (and his/her eligible dependents) is no longer eligible to
receive continuation coverage pursuant to COBRA, or
(ii) twelve (12) months from the Termination
Date.
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(b) Termination Apart from
a Change of Control . If (but without duplication with the
provisions set fort
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