EMPLOYMENT AGREEMENT

Exhibit 10.13

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is 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”).

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 Company and the Executive now wish this Agreement to supersede the Severance Agreement and any other agreement relating to cash severance benefits between the Executive and the Company in their entirety;

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 $600,000 (to be increased to $624,000, effective January 1, 2006) (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. Restricted Stock Units. Subject to approval of the Board, the Company shall provide the Executive with a restricted stock unit (“RSU”) grant for 201,694 shares of the Company’s common stock. Ten percent of the shares of common stock under the RSU shall vest as of the date of the grant and 5.625% of the shares of common stock under the RSU shall vest at the end of each three month period commencing on the date of grant (each a “Vesting Date”), so as to be 100% vested on the fourth anniversary of the date of grant, subject to the Executive’s continuous employment by the Company through the respective Vesting Date. The vested shares of common stock subject to the RSU shall be distributed to the Executive on each 12 month anniversary of their relevant vesting date. Executive shall be permitted to satisfy the minimum tax withholding obligations arising upon the vesting or receipt of the RSU shares, as applicable, by having the Company withhold shares with a then fair market value equal to the minimum amount required to be withheld.

2.5. 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.

2.6. Automobile Allowance. During the Term, the Executive shall be entitled to a monthly allowance of $1,000 for the use of an automobile.

2.7. 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.

2.8. 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.

2.9. 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 Agreement, not to exceed $30,000.

 

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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.

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 (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) any “at-the-money” or “underwater” option grants as of the Effective Date will have a post-termination exercise period extending through the earliest of (A) 36 months following the Executive’s termination of employment, (B) their original expiration date, or (C) such shorter period as does not result in any adverse tax consequences to the Executive under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (iii) any of Executive’s stock options that, as of the Effective Date, have a per share exercise price that is less than the closing trading price of the Company’s common stock on the Effective Date shall have a post-termination exercise period extending through the later of (A) two and one-half months beyond, or (B) December 31 following, the three month anniversary of the Executive’s termination of employment (or their original expiration date, if earlier); and (iv) the

 

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Executive’s previously granted RSUs 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;

(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;

 

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(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;

(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, 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, then the Company will provide the Executive with the same payments and benefits as specified under Section 3.3.1 hereof, and additionally all stock options, restricted stock and other equity compensation granted to Executive on or after the Change in Control 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;

 

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(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.

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, 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.

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;

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:

 

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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, agent, representative, advisor, strategic partner, distributor or other person that the Company shall have identified and solicited at any time during the Executive’s employment by the Company for a purpose competitive with the Business;

4.2.2. influence or attempt to influence any employee, consultant, customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person to terminate or modify adversely to the Company any written or oral agreement, arrangement or course of dealing with the Company; or

4.2.3. solicit for employment any person who has been employed or retained by the Company within the 12 months preceding the termination of the Executive’s employment with the Company for any reason. Notwithstanding the foregoing, the Executive shall be permitted to solicit for employment his executive assistant free of the restrictions set forth in this Section 4.2.3.

4.3. Covenant Not To Make Disparaging Statements. For a period of one year following the date of termination, (i) the Executive agrees not to make or publish any disparaging statements about the Company or its directors, officers, agents, employees or representatives, and (ii) the Company agrees not to make or publish any disparaging statement