Exhibit 10.7
FORM OF
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This Amended and Restated Employment
Agreement (“Agreement”), effective as of this 30th day
of December, 2008, by and between XOMA (US) LLC (“XOMA”
or the “Company”), a Delaware limited liability company
with its principal office at 2910 Seventh Street, Berkeley,
California, and
(“Employee”), an individual residing at
.
WHEREAS, the Company and Employee
entered into an Employment Agreement effective as of
, 200 (the “Original Agreement”) to
assure the Company of the continued services of
Employee;
WHEREAS, the Company wishes to enter
into this Agreement to amend and restate the Original Agreement;
and
WHEREAS, Employee is willing to
enter into this Agreement and to continue to serve in the employ of
the Company upon the terms and conditions hereinafter
provided;
NOW, THEREFORE, in consideration of
the mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. Employment. The Company
agrees to continue to employ Employee, and Employee agrees to
continue to be employed by the Company, for the period referred to
in Section 3 hereof and upon the other terms and conditions
herein provided.
2. Position and
Responsibilities. The Company agrees to employ Employee in the
position of
, and Employee agrees to serve as
, for the term and on the conditions hereinafter set forth.
Employee agrees to perform such services not inconsistent with
her/his position as shall from time to time be assigned to her/him
by the Chairman of the Board, President and Chief Executive Officer
of the Company (the “Chairman”).
3. Term and Duties
.
(a) Term of Employment. This
Agreement shall become effective and the term of employment
pursuant to this Agreement shall commence on
, 2006 and will continue until
,
, and will be automatically extended (without further action by the
parties) for one year thereafter and again on each subsequent
anniversary thereof unless notice of nonextension of the term is
given by either the Employee or the Company more than 90 days prior
to the next scheduled expiration date or unless Employee’s
employment is terminated by the Company or he/she resigns from the
Company’s employ as described herein.
(b) Duties. During the period
of her/his employment hereunder Employee shall serve the Company as
its
, and except for illnesses, vacation periods and reasonable leaves
of absence, Employee shall devote all of her/his business time,
attention, skill and efforts to the faithful performance of her/his
duties hereunder. So long as Employee is
of the Company, he/she will discharge all duties incidental to such
office and such further duties as may be reasonably assigned to
her/him from time to time by the Chairman.
4. Compensation and Reimbursement
of Expenses .
(a) Compensation. For all
services rendered by Employee as
during her/his employment under this Agreement, the Company shall
pay Employee as compensation a base salary at a rate of not less
than $
per annum. All taxes and governmentally required withholding shall
be deducted in conformity with applicable laws.
(b) Reimbursement of
Expenses. The Company shall pay or reimburse Employee for all
reasonable travel and other expenses incurred by Employee in
performing her/his obligations under this Agreement in a manner
consistent with past Company practice. The Company further agrees
to furnish Employee with such assistance and accommodations as
shall be suitable to the character of Employee’s position
with the Company, adequate for the performance of her/his duties
and consistent with past Company practice.
5. Participation in Benefit
Plans. The payments provided in Section 4 hereof are in
addition to benefits Employee is entitled to under any group
hospitalization, health, dental care, disability insurance, surety
bond, death benefit plan, travel and/or accident insurance, other
allowance and/or executive compensation plan, including, without
limitation, any senior staff incentive plan, capital accumulation
programs, restricted or non-restricted share purchase plan, share
option plan, retirement income or pension plan or other present or
future group employee benefit plan or program of the Company for
which key executives are or shall become eligible, and Employee
shall be eligible to receive during the period of her/his
employment under this Agreement, all benefits and emoluments for
which key executives are eligible under every such plan or program
to the extent permissible under the general terms and provisions of
such plans or programs and in accordance with the provisions
thereof.
6. Payments to Employee Upon
Termination of Employment .
(a) Termination. Upon the
occurrence of an event of termination (as hereinafter defined)
during the period of Employee’s employment under this
Agreement, the provisions of this paragraph 6(a) and paragraph 6(b)
shall apply. As used in this Agreement, an “event of
termination” shall mean and include any one or more of the
following:
(i) The termination by the Company
of Employee’s employment hereunder for any reason other than
pursuant to paragraph 6(c) and shall include any termination of the
Employee’s employment upon expiration of the term of this
Agreement due to the Company giving written notice of its intention
not to extend the term of this Agreement as provided in paragraph
3(a); or
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(ii) Employee’s resignation
from the Company’s employ for Good Reason in accordance with
the terms hereof. “Good Reason” shall mean, unless
remedied by the Company within thirty (30) days after the
receipt of written notice from the Employee as provided below or
consented to in writing by the Employee, (A) the material
diminution of any material duties or responsibilities of the
Employee; or (B) a material reduction in the Employee’s
base salary; provided , however , that the Employee
must have given written notice to the Company of the existence of
any such condition within ninety (90) days after the initial
existence thereof (and the failure to provide such timely notice
will constitute a waiver of the Employee’s ability to
terminate employment for Good Reason as a result of such
condition), and the Company will have a period of thirty
(30) days from receipt of such written notice during which it
may remedy the condition; provided further ,
however , that any termination of employment by the Employee
for Good Reason must occur not later than one hundred eighty
(180) days following the initial existence of the condition
giving rise to such Good Reason.
(b) Severance Pay and Other
Benefits. The following provisions of this Section 6(b)
shall apply upon the occurrence of an event of termination under
paragraph 6(a).
(i) Cash Severance Pay . Upon
the occurrence of an event of termination under paragraph 6(a), the
Company shall, subject to the provisions of Section 7 below,
pay Employee, or in the event of her/his subsequent death, her/his
beneficiary or beneficiaries of her/his estate, as the case may be,
as severance pay or liquidated damages, or both, (A) a
severance payment in an amount equal to
times the
Employee’s annual base salary as in effect immediately prior
to the termination, and (B) a severance payment equal to the
sum of (1)
times the
Employee’s annual target bonus as in effect for the fiscal
year in which the termination occurs, and (2) an amount equal
to a pro-rated portion of the Employee’s annual target bonus
as in effect for the fiscal year in which the termination occurs
calculated by multiplying the annual target bonus by a fraction,
the numerator of which shall be the number of calendar months
(including a portion of any such month) that the Employee was
employed with the Company prior to the occurrence of the
termination during such fiscal year, and the denominator of which
shall be 12. Such severance payments shall be in lieu of any other
severance payment to which the Employee shall be entitled as a
result of such termination pursuant to this Agreement, any other
employment agreement with or offer letter from the Company or any
of its affiliates or the Company’s or any of its
affiliate’s then existing severance plans and policies,
except in those circumstances where the provisions of the Amended
and Restated Change of Control Severance Agreement, effective as of
, 200 , between Employee and XOMA Ltd., by such
agreement’s express terms, apply, in which case the
provisions of such agreement providing for severance payment(s) to
Employee as a result of such termination shall apply in lieu of the
provisions of this Agreement relating thereto. The severance
payment described in Section 6(b)(i)(A) shall be paid
in
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monthly installments over
[ ] months (the “Severance Payment
Period”), with the first two (2) of such monthly
installments being paid sixty (60) days after the date of
termination and the remaining monthly installments being paid
monthly thereafter until fully paid, and the severance payments
described in Section 6(b)(i)(B) shall be paid in a lump sum
sixty (60) days after the date of termination; provided,
however , that all of such severance payments shall be subject
to the requirements of Section 6(b)(iii) and
Section 6(b)(v) below.
(ii) Group Health Coverage and
Certain Other Benefits . In addition, during a period of
months following an event of termination under paragraph 6(a),
(A) the Company shall pay for the full cost of the coverage
(plus an additional amount to pay for the taxes on such payments,
if any, plus any taxes on such additional amount, such amount to be
paid no later than ten (10) days prior to the date such taxes
are due) of the Employee and Employee’s spouse and eligible
dependents under any group health plans of the Company on the date
of such termination of employment at the same level of health
(i.e., medical, vision and dental) coverage and benefits as in
effect for the Employee or such covered dependents on the date
immediately preceding the date of the Employee’s termination;
provided , however , that (1) the Employee and
Employee’s spouse and eligible dependents each constitutes a
qualified beneficiary, as defined in Section 4980B(g)(1) of
the Internal Revenue Code of 1986, as amended (the
“Code”); and (2) the 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; and (B) if Employee is,
at the time of such termination, an eligible participant in the
Company’s mortgage differential program, the Company shall
continue to make mortgage assistance payments to Employee pursuant
to such program as in effect at the time of such termination.
Notwithstanding the foregoing, the payments by the Company for such
group health coverage and/or mortgage assistance, as applicable,
shall cease prior to the expiration of the
month period in this Section 6(b)(ii) upon the employment of
the Employment by another employer. Furthermore, if, at the time of
the termination of Employee’s employment under paragraph
6(a), Employee is the obligor of a “forgivable” loan
(i.e., a loan which by its terms is to be considered forgiven by
the Company and paid by the obligor in circumstances other than
actual repayment) from the Company, then, notwithstanding any
provisions of such loan to the contrary, such loan shall remain
outstanding, and the forgiveness thereof shall continue, for a
period of
months following such termination in accordance with the terms of
such loan in effect at the time of such termination; provided,
however, that at the end of such period of
months, the outstanding balance of such loan shall be immediately
due and payable, together with any accrued and unpaid interest
thereon.
(iii) Section 409A of the
Code . Notwithstanding any provision to the contrary in this
Agreement, if the Employee is deemed on the date of his or her
“separation from service” (within the meaning of Treas.
Reg. Section 1.409A-1(h)) with the Company to be a
“specified employee” (within the meaning of Treas. Reg.
Section 1.409A-1(i)), then with regard to any payment or
benefit (including,
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without limitation, any mortgage
assistance payment or loan forgiveness referred to above) that is
considered deferred compensation under Section 409A payable on
account of a “separation from service” that is required
to be delayed pursuant to Section 409A(a)(2)(B) of the Code
(after taking into account any applicable exceptions to such
requirement), such payment or benefit shall be made or provided on
the date that is the earlier of (i) the expiration of the six
(6)-month period measured from the date of the Employee’s
“separation from service,” or (ii) the date of the
Employee’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed
pursuant to this Section 9(c) (whether they would have
otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Employee
in a lump sum and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the
normal payment dates specified for them herein. Notwithstanding any
provision of this Agreement to the contrary, for purposes of any
provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment,
references to the Employee’s “termination of
employment” (and corollary terms) with the Company shall be
construed to refer to Employee’s “separation from
service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) with the Company.
(iv) Outplacement Program .
Upon the occurrence of an event of termination under paragraph
6(a), the Employee will immediately become entitled to participate
in a
month executive outplacement program provided by an executive
outplacement service, at the Company’s expense not to exceed
.
(v) Release of Claims . As a
condition of entering into this Agreement and receiving the
severance benefits under this Section 6(b), the Employee
agrees to execute, on or before the date that is fifty
(50) days following the date of termination, and not revoke a
release of claims agreement substantially in the form attached
hereto as Exhibit A upon the termination of the
Employee’s employment with the Company. Such release shall
not, however, apply to the rights and claims of the Employee under
this Agreement, any indemnification agreement between the Employee
and XOMA Ltd. (or its successor or acquirer), the bye-laws of XOMA
Ltd. (or its successor or acquirer), the share award agreements
between the Employee and XOMA Ltd. (or its successor or acquirer),
or any employee benefit plan of which the Employee is a participant
and under which all benefits due under such plan have not yet been
paid or provided.
(c) Other Termination of
Employment. Notwithstanding paragraphs 6(a) and (b) or any
other provision of this Agreement to the contrary, if on or after
the date of this Agreement and prior to the end of the term
hereof:
(i) Employee has been convicted of
any crime or offense constituting a felony under applicable law,
including, without limitation, any act of
