Exhibit 10.2
SUPERGEN, INC.
SEVERANCE BENEFIT PLAN FOR
OFFICERS
(EFFECTIVE OCTOBER 28,
2008)
Section 1.
INTRODUCTION.
The SuperGen, Inc. Severance
Benefit Plan for Officers (the “Plan”) is amended and
restated effective October 28, 2008, to comply with the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”). The purpose of the
Plan is to provide for the payment of severance benefits to certain
eligible employees of SuperGen, Inc. (the
“Company”) or an affiliate of the Company whose
employment with the Company or an affiliate of the Company is
involuntarily terminated. With the exception of the
SuperGen, Inc. Severance Benefit Plan, this Plan shall
supersede any severance benefit plan, policy or practice previously
maintained by the Company or any affiliate of the Company;
provided, however , that an Eligible Employee under this
Plan shall not be entitled to receive any benefits under the
SuperGen, Inc. Severance Benefit Plan. This Plan
document also is the Summary Plan Description for the
Plan.
Section 2.
ELIGIBILITY FOR
BENEFITS.
(a)
General Rules.
Subject to the requirements
set forth in this Section, the Company will grant severance
benefits under the Plan to Eligible Employees.
(1)
Definition of “Eligible
Employee.” For purposes of this Plan, an Eligible
Employee is a full-time or a part-time regular hire employee of the
Company or any affiliate of the Company (i) who is based in
the United States, (ii) who is employed as an officer of the
Company or any affiliate of the Company, (iii) whose
employment is involuntarily terminated by the Company or an
affiliate of the Company as a result of the elimination of his or
her job position, and (iv) who is notified by the Company in
writing that he or she is eligible for participation in the
Plan. The determination of whether an employee is an Eligible
Employee shall be made by the Company, in its sole discretion, and
such determination shall be binding and conclusive on all
persons. For purposes of this Plan, part-time employees are
those regular hire employees who are regularly scheduled to work
more than twenty (20) hours per week but less than a full-time work
schedule. Regular hire employees working twenty (20) hours
per week or less and temporary employees are not eligible for
severance benefits under the Plan.
(2)
In order to be eligible to receive
benefits under the Plan, an Eligible Employee must remain on the
job until his or her date of termination as scheduled by the
Company.
(3)
In order to be eligible to receive
benefits under the Plan, an Eligible Employee also must execute a
general waiver and release in substantially the form attached
hereto as Exhibit A, Exhibit B or Exhibit C, as
appropriate, and such release must become effective in accordance
with its terms. The Company, in its sole discretion, may
modify the form of the required release to comply with applicable
law and shall determine the form of
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the required release, which may be incorporated
into a termination agreement or other agreement with the Eligible
Employee.
(b)
Exceptions to Benefit
Entitlement. An
employee, including an employee who otherwise is an Eligible
Employee, will not receive benefits under the Plan (or will receive
reduced benefits under the Plan) in the following circumstances, as
determined by the Company in its sole discretion:
(1)
The employee has executed an
individually negotiated employment contract or agreement with the
Company or an affiliate of the Company relating to severance
benefits that is in effect on his or her termination date, in which
case such employee’s severance benefit, if any, shall be
governed by the terms of such individually negotiated employment
contract or agreement and shall be governed by this Plan only to
the extent that the reduction pursuant to
Section 3(f) below does not entirely eliminate benefits
under this Plan.
(2)
The employee is involuntarily
terminated for any reason other than the elimination of the
employee’s job position.
(3)
The employee voluntarily terminates
employment with the Company or an affiliate of the Company.
Voluntary terminations include, but are not limited to,
resignation, retirement or failure to return from a leave of
absence on the scheduled date.
(4)
The employee voluntarily terminates
employment with the Company or an affiliate of the Company in order
to accept employment with another entity that is wholly or partly
owned (directly or indirectly) by the Company or an affiliate of
the Company.
(5)
The employee is involuntarily
terminated for reasons related to job performance or
misconduct.
(6)
The employee is offered immediate
reemployment by a successor to the Company or an affiliate of the
Company or by a purchaser of its assets, as the case may be,
following a change in ownership of the Company or an affiliate of
the Company or a sale of substantially all of the assets of a
division or business unit of the Company or an affiliate of the
Company. For purposes of the foregoing, “immediate
reemployment” means that the employee’s employment with
the successor to the Company or an affiliate of the Company or the
purchaser of its assets, as the case may be, results in
uninterrupted employment such that the employee does not incur a
lapse in pay as a result of the change in ownership of the Company
or an affiliate of the Company or the sale of its
assets.
(7)
The employee is rehired by the
Company or an affiliate of the Company prior to the date benefits
under the Plan are scheduled to commence.
(8)
The employee engages in misconduct,
violates a Company policy, or acts in a manner deemed harmful to
the Company or an affiliate of the Company prior to his or her
scheduled date of termination.
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Section 3.
AMOUNT OF BENEFIT.
(a)
Cash Severance
Benefit. Each
Eligible Employee shall receive a cash severance benefit in an
amount equal to the sum of the following:
(i)
Two (2) weeks of such Eligible
Employee’s Base Salary, which shall be paid in lieu of notice
of termination of employment;
(ii)
An additional thirty-nine (39) weeks
of such Eligible Employee’s Base Salary;
(iii)
An additional two (2) weeks of
such Eligible Employee’s Base Salary for each full year of
service such Eligible Employee has completed with the Company or an
affiliate of the Company; and
(iv)
An additional one (1) week of
such Eligible Employee’s Base Salary for any partial year of
service such Eligible Employee has completed with the Company or an
affiliate of the Company, provided that such partial year of
service is greater than six (6) months in length.
(b)
Definition of “Base
Salary.” For
purposes of calculating Plan benefits, “Base Salary”
shall mean the Eligible Employee’s base pay (excluding
incentive pay, premium pay, commissions, overtime, bonuses and
other forms of variable compensation), at the rate in effect during
the last regularly scheduled payroll period immediately preceding
the Eligible Employee’s termination date.
(c)
Career Transition
Assistance. Following an Eligible Employee’s
termination of employment by the Company or an affiliate of the
Company, the Company or its affiliate shall provide the Eligible
Employee with career transition services through an outplacement
service provider for a duration of nine (9) months or such
longer period as determined by the Board of Directors of the
Company or its delegate (the “Board”) in its sole
discretion, up to a maximum of twenty-four (24) months.
(d)
COBRA Continuation
Coverage. Each
Eligible Employee who is enrolled in a health, dental, or vision
plan sponsored by the Company or an affiliate of the Company may be
eligible to continue coverage under such health, dental, or vision
plan (or to convert to an individual policy), at the time of the
Eligible Employee’s termination of employment, under the
Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA” and, for purposes of this Plan, the term
“COBRA” shall also include any state law providing for
similar continuation coverage in addition to COBRA). The
Company will notify the Eligible Employee of any such right to
continue such coverage at the time of termination pursuant to
COBRA. No provision of this Plan will affect the continuation
coverage rules under COBRA, except that the Company’s
payment, if any, of applicable insurance premiums will be credited
as payment by the Eligible Employee for purposes of the Eligible
Employee’s payment required under COBRA. Therefore, the
period during which an Eligible Employee may elect to continue the
Company’s or its affiliate’s health, dental, or vision
plan coverage at his or her own expense under COBRA, the length of
time during which COBRA coverage will be made available to the
Eligible Employee, and all other rights and obligations of the
Eligible Employee under COBRA
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(except the obligation to pay insurance premiums
that the Company pays, if any) will be applied in the same manner
that such rules would apply in the absence of this
Plan.
If COBRA is elected by an Eligible
Employee, the Company shall pay COBRA premiums on behalf of the
Eligible Employee during the number of weeks of Base Salary in
respect of which the amount paid to the Eligible Employee under
Section 3(a) was calculated or for such longer period as
determined by the Board in its sole discretion; however, in no
event will the Company pay COBRA premiums for longer than the
maximum coverage continuation period under COBRA. Upon the
conclusion of such period of insurance premium payments made by the
Company, the Eligible Employee will be responsible for the entire
payment of premiums required under COBRA for the duration of the
COBRA period. For purposes of this Section 3(d),
(i) references to COBRA shall be deemed to refer also to
analogous provisions of state law and (ii) any applicable
insurance premiums that are paid by the Company shall not include
any amounts payable by the Eligible Employee under an Internal
Revenue Code Section 125 health care reimbursement plan, which
amounts, if any, are the sole responsibility of the Eligible
Employee.
(e)
Additional
Benefits. Notwithstanding the foregoing, the Company may,
in its sole discretion, provide benefits in addition to those
pursuant to Sections 3(a), 3(c) and 3(d) to Eligible
Employees or employees who are not Eligible Employees
(“Non-Eligible Employees”) chosen by the Company, in
its sole discretion, and the provision of any such benefits to an
Eligible Employee or a Non-Eligible Employee shall in no way
obligate the Company to provide such benefits to any other Eligible
Employee or to any other Non-Eligible Employee, even if similarly
situated. If benefits under the Plan are provided to a
Non-Eligible Employee, references in the Plan to “Eligible
Employee” (with the exception of Sections 3(a), 3(c) and
3(d)) shall be deemed to refer to such Non-Eligible
Employee.
(f)
Certain
Reductions. The
Company, in its sole discretion, shall have the authority to reduce
an Eligible Employee’s severance benefits, in whole or in
part, by any other severance benefits, pay in lieu of notice, or
other similar benefits payable to the Eligible Employee by the
Company or an affiliate of the Company that become payable in
connection with the Eligible Employee’s termination of
employment pursuant to (i) any applicable legal requirement,
including, without limitation, the Worker Adjustment and Retraining
Notification Act (the “WARN Act”), (ii) a written
employment or severance agreement with the Company, or
(iii) any Company policy or practice providing for the
Eligible Employee to remain on the payroll for a limited period of
time after being given notice of the termination of the Eligible
Employee’s employment. The benefits provided under this
Plan are intended to satisfy, in whole or in part, any and all
statutory obligations that may arise out of an Eligible
Employee’s termination of employment, and the Plan
Administrator shall so construe and implement the terms of the
Plan. The Company’s decision to apply such reductions
to the severance benefits of one Eligible Employee and the amount
of such reductions shall in no way obligate the Company to apply
the same reductions in the same amounts to the severance benefits
of any other Eligible Employee, even if similarly situated.
In the Company’s sole discretion, such reductions may be
applied on a retroactive basis, with severance benefits previously
paid being recharacterized as payments pursuant to the
Company’s statutory obligation.
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(g)
Other Employee
Benefits. All other
benefits (such as life insurance, disability coverage, and
401(k) plan coverage) terminate as of the Eligible
Employee’s termination date (except to the extent that a
conversion privilege may be available thereunder).
Section 4.
TIME OF PAYMENT AND FORM OF
BENEFIT.
The severance benefits set forth
under Section 3(a) above, if any, shall be paid in a
single sum as soon as administratively practical following an
Eligible Employee’s “separation from service” (as
such term is defined for purposes of Code Section 409A and any
regulations or other guidance promulgated thereunder
(“Section 409A”)) The benefits described
in Sections 3(b) and (c) above, if any,
will be paid directly by the Company in accordance with the
Company’s policies and procedures. All such payments
under the Plan will be subject to applicable withholding for
federal, state and local taxes. If an Eligible Employee is
indebted to the Company at his or her termination date, the Company
reserves the right to offset any severance payments under the Plan
by the amount of such indebtedness. In no event shall payment
of any Plan benefit be made prior to the Eligible Employee’s
termination date or prior to the effective date of the release
described in Section 2(a)(3).
Section 5.
REEMPLOYMENT.
In the event of an Eligible
Employee’s reemployment by the Company or an affiliate of the
Company during the period of time in respect of which a cash
severance benefit pursuant to Section 3(a) or
3(e) has been paid, the Company, in its sole and absolute
discretion, may require such Eligible Employee to repay to the
Company all or a portion of such severance benefits as a condition
of reemployment.
Section 6.
SECTION 409A
(a)
Notwithstanding anything to the
contrary in the Plan, if an Eligible Employee is a “specified
employee” within the meaning of Section 409A at the time
of the Eligible Employee’s termination of employment (other
than due to death), and the severance payable to the Eligible
Employee, if any, pursuant to the Plan, when considered together
with any other severance payments or separation benefits that are
considered deferred compensation under Section 409A (together,
the “Deferred Compensation Separation Benefits”) that
are payable within the first six (6) months following the
Eligible Employee’s termination of employment, then such
severance will become payable on the first payroll date that occurs
on or after the date six (6) months and one (1) day
following the date of the Eligible Employee’s termination of
employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit.
Notwithstanding anything herein to the contrary, if the Eligible
Employee dies following the Eligible Employee’s termination
of employment but prior to the six (6) month anniversary of
the Eligible Employee’s termination of employment, then any
payments delayed in accordance with this paragraph will be payable
in a lump sum as soon as administratively practicable after the
date of the Eligible Employee’s death and all other Deferred
Compensation Separation Benefits will be payable in accordance with
the payment schedule applicable to each payment or benefit.
Each payment and benefit payable under this Agreement is intended
to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury
Regulations.
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(b)
Any amount paid under the Agreement
that satisfies the requirements of the “short-term
deferral” rule set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations will
not constitute Deferred Compensation Separation Benefits for
purposes of this Agreement. Any amount paid under the
Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations
that does not exceed the Section 409A Limit will not
constitute Deferred Compensation Separation Benefits for purposes
of this Agreement. For this purpose, “Section 409A
Limit” means the lesser of two (2) times: (A) the
Eligible Employee’s annualized compensation based upon the
annual rate of pay paid to the Eligible Employee during the
Company’s taxable year preceding the Company’s taxable
year of the Eligible Employee’s termination of employment as
determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service
guidance issued with respect thereto; or (B) the maximum
amount that may be taken in
