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Exhibit 10.20
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “ Agreement ”),
was originally made as of the 22 nd day of December, 2005 (the “
Effective Date ”), by and between CV THERAPEUTICS,
INC. (the “ Company ”) and LOUIS G. LANGE
(the “ Executive ”) and is hereby being amended
and restated in its entirety as of December 1, 2007 (the
“ New Effective Date ”).
WHEREAS, the Company and the
Executive have entered into that certain Amended and Restated
Executive Severance Benefits Agreement effective December 31,
2002 (the “ Severance Agreement ”);
WHEREAS, the Severance
Agreement and any other agreement relating to cash severance
benefits between the Executive and the Company are superseded in
their entirety by this Agreement;
WHEREAS, the Company
recognizes that the Executive can contribute to the growth and
success of the Company and desires to continue to employ the
Executive on the terms and conditions set forth in this
Agreement;
WHEREAS, the Executive has
been appointed by the Company’s Board of Directors (the
“ Board ”) to serve as the Chairman of the
Board, Chief Executive Officer and Chief Science Officer of the
Company, and has been approved by the stockholders of the Company
to serve as a director of the Company; and
WHEREAS, the Executive
desires to continue to be so employed by the Company.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and
promises contained herein, and intending to be bound hereby, the
parties agree as follows:
1. Employment .
1.1 Term . The Company
agrees to employ the Executive in accordance with the terms of this
Agreement and the Executive agrees to accept such terms of
employment, effective as of the Effective Date for a term of eight
years (the “ Term ”). Notwithstanding the
foregoing, the Executive’s employment with the Company shall
be “at will,” and either the Executive or the Company
may terminate the Executive’s employment at any time, for any
reason, with or without Good Reason (as defined below) or with or
without Cause (as defined below); provided, that such termination
is subject to the termination provisions of Section 3 of this
Agreement.
1.2 Positions . During
the Term, the Executive will continue to serve as Chairman of the
Board, Chief Executive Officer and Chief Science Officer of the
Company, reporting directly to the Board. At all times during the
Term, the Executive shall serve as a member of the Board if so
requested by the Executive.
1.3 Duties . The
Executive will continue to perform such duties and functions as are
customarily performed by the chairman, chief executive officer and
chief science officer, of an enterprise the size and nature of the
Company, including the duties and functions from time to time
assigned to him by the Board as are commensurate with such
positions. Without limiting the generality of the foregoing, the
Executive will continue to be responsible for all aspects of the
Company’s performance, including strategy, research and
development, business development, sales and marketing, operations,
manufacturing, technology development and licensing, corporate
development, information management, finance, legal, patent,
regulatory, human resources, investor relations and corporate
communications.
1.4 Place of
Performance . The Executive shall continue to perform his
services hereunder at the principal executive offices of the
Company, which are currently located in Palo Alto, California;
provided, however, that the Executive will be required to travel
from time to time for business purposes.
1.5 Time Devoted to
Employment . The Executive will devote his best efforts and
substantially all of his business time and services to the
performance of his duties under this Agreement. Notwithstanding the
foregoing, the Executive may engage in charitable, community
service and industry association activities and upon notice to the
Board, serve as a member of boards of directors of companies not
deemed to be engaged in competition with the Company and manage his
own finances so long as those activities do not interfere with the
performance of his duties under this Agreement as determined by the
Board.
2. Compensation, Benefits and Expense
Reimbursements .
2.1 Base Salary . The
Company shall continue compensating the Executive while he is
employed as the Chief Executive Officer of the Company in the same
manner that it has done during his past and current employment with
the Company. The Executive shall receive a minimum annual salary of
$624,000 (the “ Base Salary ”), paid
semi-monthly or otherwise in accordance with the Company’s
customary payroll practices, as in effect from time to time. As
stated in the Company’s compensation philosophy which is
described annually in the Company’s Proxy Statement as filed
with the Securities and Exchange Commission on Schedule 14A
(the “ Proxy ”), the Compensation Committee of
the Board (the “ Compensation Committee ”) shall
review the Executive’s Base Salary in relation to the
Company’s comparator group and the Executive’s peer
group, and in relation to the Executive’s performance. In
accordance with an evaluation of such factors, the Compensation
Committee may increase the Executive’s Base Salary from time
to time.
2.2 Bonus . The
Company shall continue compensating the Executive while he is
employed as the Chief Executive Officer of the Company in the same
manner that it has done during his past and current employment with
the Company. As stated in the Company’s compensation
philosophy which is described annually in the Proxy, the
Compensation Committee shall review the Executive’s annual
bonus compensation (“ Annual Bonus ”) in
relation to the Company’s comparator group and the
Executive’s peer group, and in relation to the
Company’s and the Executive’s performance. In
accordance with an evaluation of such factors, the Compensation
Committee will establish the Executive’s Annual Bonus;
provided, that the target Annual Bonus established by the Board
during the Term shall be no less favorable than the
Executive’s target Annual Bonus as of the Effective
Date.
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2.3 Long Term
Incentive . The Executive shall be eligible to be granted
long-term incentive and equity compensation awards in the
discretion of the Compensation Committee and the Board based on the
Compensation Committee’s evaluation of the Executive’s
performance and market and peer compensation.
2.4 Expenses . During
the Term, the Executive will be entitled to reimbursement by the
Company for all expenses reasonably incurred by him in connection
with the performance of his duties, including, without limitation,
travel and entertainment expenses reasonably related to the
business of the Company, in accordance with the policies and
procedures established from time to time by the Company.
2.5 Automobile
Allowance . During the Term, the Executive shall be entitled to
a monthly allowance of $1,000 for the use of an
automobile.
2.6 Financial/Legal/IT
Assistance . During the Term, the Executive shall be entitled
to reimbursement for financial, legal and IT support and assistance
expenses of up to $25,000 annually.
2.7 Other Benefits .
During the Term, the Executive shall be entitled to participate in
any benefit plans, policies or arrangements sponsored or maintained
by the Company from time to time for its executive employees. In
addition to the foregoing, the Company shall provide the Executive
supplemental long-term disability insurance providing no less than
$10,000 per month in additional coverage; provided, that the
Executive conforms to the insurance company underwriting
requirements. Notwithstanding the foregoing, the Executive’s
eligibility for and participation in any of the Company’s
employee benefit plans, policies or arrangements will be subject to
the terms and conditions of such plans, policies or arrangements as
they apply to other senior executives of the Company. Moreover,
subject to the terms and conditions of such plans, policies or
arrangements, the Company may amend, modify or terminate such
plans, policies or arrangements at any time for any or no
reason.
2.8 Attorney’s
Fees . The Company shall reimburse the Executive for reasonable
attorney’s fees incurred by the Executive in connection with
the negotiation of this amended and restated Agreement, not to
exceed $10,000.
3. Termination .
3.1 In General . The
Company may terminate the Executive’s employment at any time.
The Executive may terminate his employment at any time. Upon any
termination of the Executive’s employment with the Company
for any reason: (i) the Executive (unless otherwise requested
by the Board) concurrently will resign any officer positions he
holds with the Company, its subsidiaries or affiliates;
(ii) the Company will pay to the Executive all accrued but
unpaid Base Salary and all accrued and unused vacation days through
the date of termination; and (iii) except as explicitly
provided in this Section 3, in Section 6, or otherwise
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ( “COBRA ,”) or the California
Continuation Benefits Replacement Act, as amended (“
Cal-COBRA ”), all compensation and benefits will cease
and the Company will have no further liability or obligation to the
Executive.
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3.2 Termination without
Cause or for Good Reason .
3.2.1 If the
Executive’s employment by the Company ceases due to a
termination by the Company without Cause or a resignation by the
Executive for Good Reason and the Executive executes and does not
revoke a general release of claims against the Company in
substantially the form attached hereto as Exhibit A to the
Company within 2-1/2 months after such termination of employment (a
“ General Release ”), then, the Company will pay
to the Executive (i) all accrued but unpaid Base Salary and
all accrued and unused vacation days through the date of
termination; (ii) a cash amount equal to the sum of two times
the Executive’s Base Salary; (iii) a cash amount equal
to two times the Executive’s Average Annual Bonus, with such
Average Annual Bonus determined by adding the amounts payable to
Executive under the Company’s annual bonus programs for the
three full calendar years prior to the year in which such
termination of employment occurs and dividing the resulting amount
by three (“ Average Annual Bonus ”); (iv) a
cash payment equal to the Executive’s then target Annual
Bonus, multiplied by a fraction, the numerator of which is the
number of days in the Company’s fiscal year prior to such
termination of employment and the denominator of which is 365; and
(v) group health, dental and vision insurance coverage
benefits equivalent to those, and on the same tax-free basis as
those, to which the Executive would have been entitled if he had
continued working for the Company for an additional 18 month period
(or if less, until Executive becomes covered under comparable plans
of another employer), after which period COBRA and/or Cal-COBRA
shall become available to the Executive such that the end of the
first 18-month period will be the COBRA “qualifying
event” for Executive and his eligible dependents. In addition
to the foregoing, in the event of such termination of employment,
(i) any options to purchase the common stock of the Company
previously granted to the Executive and not otherwise vested shall
be fully vested as of the date of the Executive’s termination
of employment; (ii) all of Executive’s option grants
will have a post-termination exercise period extending through the
earlier of (A) 36 months following the Executive’s
termination of employment, or (B) their original expiration
date; and (iii) the Executive’s previously granted
restricted stock units shall become vested as to the amount of
additional shares the Executive would have been entitled if he had
continued working for the Company for an additional 12 month
period.
3.2.2 For purposes of this
Agreement, “ Cause ” means, unless the Executive
fully corrects the circumstances constituting Cause (provided such
circumstances are capable of correction) prior to the date of
termination, the Executive:
(a) has willfully committed
an improper act that materially injures the business of the
Company;
(b) has willfully and
repeatedly refused or failed to follow specific, lawful and
reasonable directions of the Board (other than any such refusal or
failure resulting from the Executive’s incapacity due to
physical or mental illness or any such actual or anticipated
failure after his issuance of a notice of termination for Good
Reason, as defined below), after a written demand for substantial
performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board
believes that the Executive has willfully and repeatedly refused or
failed to follow specific, lawful and reasonable directions of the
Board;
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(c) has willfully,
substantially and habitually neglected the Executive’s duties
for the Company (other than any such neglect resulting from the
Executive’s incapacity due to physical or mental illness or
any such actual or anticipated neglect after his issuance of a
notice of termination for Good Reason, as defined below), after a
written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has
willfully, substantially and habitually neglected his duties or
services to the Company; or
(d) has been convicted of a
felony or a crime involving moral turpitude; provided, that for
purposes of this agreement a traffic related offense (including
without limitation the offense of driving under the influence of
drugs or alcohol) shall not constitute a crime of moral
turpitude.
For purposes of this Section 3.2.2,
no act, or failure to act, on the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by
him not in good faith.
3.2.3 For purposes of this
Agreement, “ Good Reason ” means any of the
following are undertaken without the Executive’s express
written consent:
(a) the assignment to the
Executive of any duties, authority or responsibilities which
results in a significant diminution in the Executive’s
duties, authority or responsibilities;
(b) any change in the
Executive’s title from Chief Executive Officer;
(c) the Executive ceasing to
report to the Board;
(d) a reduction by the
Company of the Executive’s Base Salary or target Annual Bonus
as of the Effective Date or as increased thereafter;
(e) a material reduction of
the facilities and perquisites available to the Executive
immediately prior to such reduction, other than a reduction
generally applicable to all senior management of the
Company;
(f) a material reduction by
the Company in the aggregate level of employee benefits, to which
the Executive was entitled immediately prior to such reduction with
the result that the Executive’s aggregate benefits package is
materially reduced (other than a reduction that generally applies
to Company executive officers);
(g) a relocation of the
Executive’s business office to a location more than 25 miles
from the location at which the Executive performs duties as of the
Effective Date, except for required travel by the Executive on the
Company’s business;
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(h) a material breach by the
Company of any provision of this Agreement; or
(i) any failure by the
Company to obtain the assumption of this Agreement by any successor
or assign of the Company.
3.3 Certain Terminations
On or After a Change in Control .
3.3.1 Within 18 Months on
or After a Change in Control . If the Executive’s
employment with the Company ceases within the 18 month period
commencing on a Change in Control (as defined below) as a result of
a termination by the Company without Cause or a resignation by the
Executive for Good Reason and the Executive executes and does not
revoke a General Release within 2-1/2 months after such termination
of employment, then the Company will provide the Executive with the
same payments and benefits as specified under Section 3.2.1
hereof, except that the period of group health, dental and vision
coverage shall be extended from 18 to 24 months (or if less, until
Executive becomes covered under comparable plans of another
employer), after which period COBRA and/or Cal-COBRA shall become
available to the Executive such that the end of the first 24-month
period will be the COBRA “qualifying event” for
Executive and his eligible dependents.
3.3.2 At Any Time
Following a Change in Control . If the Executive’s
employment with the Company ceases at any time following a Change
in Control as a result of a termination by the Company without
Cause or a resignation by the Executive for Good Reason, and the
Executive executes and does not revoke a General Release within
2-1/2 months after such termination of employment, then the Company
will provide the Executive with the same payments and benefits as
specified under Section 3.3.1 hereof, and additionally all of
Executive’s unvested stock options, restricted stock,
restricted stock units and other equity compensation shall
immediately accelerate vesting as to 100% of the covered
shares.
3.3.3 Definition of Change
in Control . For purposes of this Agreement, “ Change
in Control ” means a change in ownership or control of
the Company effected through any of the following transactions, in
one or a series of related transactions:
(a) a sale of substantially
all of the assets of the Company;
(b) a merger or consolidation
in which the Company is not the surviving corporation (other than a
merger or consolidation in which shareholders immediately before
the merger or consolidation have, immediately after the merger or
consolidation, equal or greater stock voting power);
(c) a reverse merger in which
the Company is the surviving corporation but the shares of the
Company’s common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise (other than a
reverse merger in which shareholders immediately before the merger
have, immediately after the merger, greater stock voting power);
or
(d) any transaction or series
of related transactions in which in excess of 50% of the
Company’s voting power is transferred.
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3.4 Termination for Death
or Disability . If the Executive’s employment by the
Company ceases due to a termination by reason of death or
disability as determined by the Board in its sole discretion and
the Executive (or the Executive’s beneficiaries as the case
may be) executes and does not revoke a General Release within 2-1/2
months after such termination of employment, then the Company will
provide to the Executive or his beneficiaries the same payments and
benefits as set forth in Section 3.2.1 hereof.
3.5 Section 409A
. Notwithstanding any provision to the contrary in this Agreement,
if the Executive is deemed at the time of his separation from
service to be a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code, to the extent delayed
commencement of any portion of the benefits to which Executive is
entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the
Code, such portion of Executive’s benefits shall not be
provided to Executive prior to the earlier of (a) the
expiration of the six (6) month period measured from the date
of the Executive’s “separation from service” with
the Company (as such term is defined in the regulations issued
under Section 409A of the Code) or (b) the date of
Executive’s death. Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) period, all payments deferred
pursuant to this Section 3.5 shall be paid in a lump sum to
the Executive and any remaining payments due under the Agreement
shall be paid as otherwise provided herein.
4. Restrictive Covenants . As
consideration for all of the payments to be made to the Executive
pursuant to Sections 2, 3, 5, and 6 of this Agreement, as well
as for any equity incentive awards that the Executive may receive
from the Company, the Executive agrees to be bound by the
provisions of this Section 4 (the “ Restrictive
Covenants ”). These Restrictive Covenants will apply
without regard to whether any termination of the Executive’s
employment is initiated by the Company or the Executive, and
without regard to the reason for such termination.
4.1 Covenant Not To
Compete . The Executive covenants that, during the period
beginning on the Effective Date and ending on the date of the
termination of the Executive’s employment with the Company
(the “Restricted Period”), he will not (except in his
capacity as an employee or director of the Company) do any of the
following, directly or indirectly, anywhere in the
world:
4.1.1 engage or participate
in any business competitive with the Business (as defined
below);
4.1.2 become interested in
(as owner, stockholder, lender, partner, co-venturer, director,
officer, employee, agent or consultant) any person, firm,
corporation, association or other entity engaged in any business
competitive with the Business; provided, however, that unless such
holdings materially interfere with the Executive’s
performance of his duties hereunder, Executive or his affiliates
may hold up to 4.9% of the outstanding securities of any class of
any publicly traded securities of any company and up to 10% of the
outstanding securities of any class of any non-publicly traded
company and such ownership shall not constitute a breach of this
section 4.1.2;
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4.2 Covenant Not To
Solicit . The Executive covenants that, during the Restricted
Period and for one year thereafter, he will not (except in his
capacity as an employee or director of the Company) do any of the
following, directly or indirectly, anywhere in the
world:
4.2.1 engage in any business,
or solicit or call on any customer, supplier, licensor, licensee,
contractor, agent, representative, advisor, strategic partner,
distributor or other person with whom the Company shall have dealt
or any prospective customer, supplier, licensor, licensee,
contractor, age
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