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Exhibit
10.3
CV
THERAPEUTICS , INC .
CHANGE
IN CONTROL PLAN
WITH RESPECT TO
OPTIONS AND
SEVERANCE
( AND
SUMMARY PLAN
DESCRIPTION )
(Amended effective as of
December 31, 2007)
This Amended and Restated
Change in Control Plan with Respect to Options and Severance (the
“ Plan ”) sets forth the terms of severance
benefits for certain employees in the event of a Change in Control
of CV Therapeutics, Inc. (together with any successor to
substantially all of its business, stock or assets, the “
Company ”) or the termination of employment with the
Company under the circumstances described below after a Change in
Control.
The Plan is an employee
welfare benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended (“ ERISA ”).
This Plan document is also the summary plan description of the
Plan. References in the Plan to “You” or
“Your” are references to an employee of the
Company.
General Eligibility.
You shall only be eligible for benefits under this Plan if,
immediately prior to the effective date of a Change in Control, you
are a full-time employee of the Company; provided ,
however , that any employee who holds a title of Vice
President, Senior Vice President or Chief Executive Officer as of
such date shall not be eligible for benefits under this Plan, and
any employee who is a party to any individual severance agreement
approved by the board of directors of the Company as of such date
shall not be eligible for benefits under this Plan.
Treatment of Options upon
Change in Control. No later than five (5) business days
before the effective date of a Change in Control, your
then-outstanding Options shall, automatically and without further
action by the Company, become one hundred percent
(100%) vested and exercisable.
Enhanced Severance.
Upon a Triggering Event following a Change in Control, you shall
receive the severance benefits set forth in subsections
(a) through (c) below:
(a) Base Salary. You
will receive, as severance, your base salary for a period (the
“ Severance Period ”) equal to (i) three
(3) months, plus, but only if and to the extent applicable to
you, (ii) an additional two (2) weeks for each full year
of your service as an employee of the Company through the date of
the Triggering Event; provided , however , that in no
event shall such Severance Period exceed twelve (12) months.
Such severance amount shall be paid in cash in a lump sum within
thirty (30) days following the Triggering Event or upon your
timely providing the Company with an irrevocable release of claims
in accordance with Section 4, if later, and shall be subject
to all required tax withholding. For purposes of determining your
salary severance benefits, your base salary will be equal to your
base salary as in effect during the last regularly scheduled
payroll period immediately preceding the Triggering
Event.
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(b) Bonus. The Company
shall pay you an amount equal to one hundred and fifty percent
(150%) of the annual bonus paid to you in the year immediately
preceding the effective date of the Change in Control. Such
severance amount shall be paid in cash in a lump sum within thirty
(30) days following the Triggering Event and shall be subject
to all required tax withholding.
(c) Health Benefits.
Provided that you elect continued coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“
COBRA ”), the Company shall pay the premiums of your
group health insurance coverage, including coverage for your
eligible dependents, for the Severance Period; provided,
however, that the Company shall pay premiums for your eligible
dependents only for coverage for which those eligible dependents
were enrolled immediately prior to the Triggering Event. No premium
payments will be made following the effective date of your coverage
by a health insurance plan of a subsequent employer. For the
balance of the period that you are entitled to coverage under
federal COBRA law, if any, you will be entitled to maintain such
coverage at your own expense.
Release Prior To Payment Of
Benefits. Upon the occurrence of a Triggering Event, and prior to
the payment of any benefits under this Plan, you will be required
to execute a release (the “Release”) in the form
attached hereto and incorporated herein as Appendix A or Appendix
B, as applicable. Such Release shall specifically relate to all of
your rights and claims in existence at the time of such execution
and shall confirm your obligations under the Company’s
standard form of proprietary information and inventions agreement.
It is understood that, as specified in the applicable Release, you
will have a certain number of calendar days to consider whether to
execute such Release. In the event you do not provide the Company
with a signed irrevocable copy of the Release within 2-1/2 months
after a Triggering Event, no benefits shall be payable under this
Plan to you.
Parachute
Payments.
(a) If any payment or benefit
you would receive under this Plan, when combined with any other
payment or benefit you receive pursuant to the termination of your
employment with the Company (“ Payment ”), would
(i) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “ Code ”), and (ii) but for
this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “ Excise Tax
”), then such Payment shall be either (x) the full
amount of such Payment or (y) such lesser amount (with cash
payments being reduced before stock option compensation) as would
result in no portion of the Payment being subject to the Excise
Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local employment taxes, income taxes,
and the Excise Tax, results in your receipt, on an after-tax basis,
of the greater amount of the Payment notwithstanding that all or
some portion of the Payment may be subject to the Excise
Tax.
(b) All determinations
required to be made under this Section 5, including whether
and to what extent the Payments shall be reduced and the
assumptions to be utilized in arriving at such determination, shall
be made by the nationally recognized certified public accounting
firm used by the Company immediately prior to the effective date of
the Change in Control or, if such firm declines to serve, such
other nationally recognized certified public accounting firm as may
be designated by the Company (the “ Accounting Firm
”). The Accounting Firm shall provide detailed supporting
calculations both to you and the Company at such time as is
requested by the Company. All fees and expenses of the Accounting
Firm shall
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be borne solely by the
Company. Any determination by the Accounting Firm shall be binding
upon you and the Company. For purposes of making the calculations
required by this Section 5, the Accounting Firm may make
reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good-faith interpretations
concerning the application of Sections 280G and 4999 of the
Code.
Effective Date of
Plan/Amendment. This Plan shall be effective as of
December 31, 2002. The Board of Directors of the Company shall
have the power to amend or terminate this Plan from time to time in
its discretion and for any reason (or no reason) prior to the
occurrence of a Change in Control.
Claims
Procedures.
Normally, you do not need to
present a formal claim to receive benefits payable under this
Plan.
If any person (the “
Claimant ”) believes that benefits are being denied
improperly, that the Plan is not being operated properly, that
fiduciaries of the Plan have breached their duties, or that the
Claimant’s legal rights are being violated with respect to
the Plan, the Claimant must file a formal claim, in writing, with
the Plan Administrator. This requirement applies to all claims that
any Claimant has with respect to the Plan, including claims against
fiduciaries and former fiduciaries, except to the extent the Plan
Administrator determines, in its sole discretion, that it does not
have the power to grant all relief reasonably being sought by the
Claimant.
A formal claim must be filed
within ninety (90) days after the date the Claimant first knew
or should have known of the facts on which the claim is based,
unless the Plan Administrator in writing consents otherwise. The
Plan Administrator shall provide a Claimant, on request, with a
copy of the claims procedures established under subsection
(d).
The Plan Administrator has
adopted procedures for considering claims (which are set forth in
Appendix C ), which it may amend from time to time, as it
sees fit. These procedures shall comply with all applicable legal
requirements. These procedures may provide that final and binding
arbitration shall be the ultimate means of contesting a denied
claim (even if the Plan Administrator or its delegates have failed
to follow the prescribed procedures with respect to the claim). The
right to receive benefits under this Plan is contingent on a
Claimant using the prescribed claims procedures to resolve any
claim.
Plan
Administration.
The Plan shall be
administered by the Compensation Committee of the Company’s
Board of Directors and/or its delegate which shall be one or more
senior officers of the Company (the “Plan
Administrator” ). The Plan Administrator is responsible
for the general administration and management of the Plan and shall
have all powers and duties necessary to fulfill its
responsibilities, including, but not limited to, the discretion to
interpret and apply the Plan and to determine all questions
relating to eligibility for benefits. The Plan shall be interpreted
in accordance with its terms and their intended meanings. However,
the Plan Administrator and all Plan fiduciaries shall have the
discretion to interpret or construe
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ambiguous, unclear, or
implied (but omitted) terms in any fashion they deem to be
appropriate in their sole discretion, and to make any findings of
fact needed in the administration of the Plan. The validity of any
such interpretation, construction, decision, or finding of fact
shall not be given de novo review if challenged in court, by
arbitration, or in any other forum, and shall be upheld unless
clearly arbitrary or capricious.
All actions taken and all
determinations made in good faith by the Plan Administrator or by
Plan fiduciaries will be final and binding on all persons claiming
any interest in or under the Plan. To the extent the Plan
Administrator or any Plan fiduciary has been granted discretionary
authority under the Plan, the Plan Administrator’s or Plan
fiduciary’s prior exercise of such authority shall not
obligate it to exercise its authority in a like fashion
thereafter.
If, due to errors in
drafting, any Plan provision does not accurately reflect its
intended meaning, as demonstrated by consistent interpretations or
other evidence of intent, or as determined by the Plan
Administrator in its sole discretion, the provision shall be
considered ambiguous and shall be interpreted by the Plan
Administrator and all Plan fiduciaries in a fashion consistent with
its intent, as determined in the sole discretion of the Plan
Administrator. The Plan Administrator shall amend the Plan
retroactively to cure any such ambiguity.
No Plan fiduciary shall have
the authority to answer questions about any pending or final
business decision of the Company or any affiliate that has not been
officially announced, to make disclosures about such matters, or
even to discuss them, and no person shall rely on any unauthorized,
unofficial disclosure. Thus, before a decision is officially
announced, no fiduciary is authorized to tell any person, for
example, that he or she will or will not be laid off or that the
Company will or will not offer exit incentives in the future.
Nothing in this subsection shall preclude any fiduciary from fully
participating in the consideration, making, or official
announcement of any business decision.
This Section may not be
invoked by any person to require the Plan to be interpreted in a
manner inconsistent with its interpretation by the Plan
Administrator or other Plan fiduciaries.
Superseding Plan. This
Plan (i) shall be the only plan with respect to which benefits
may be provided to you as a result of any Triggering Event and
(ii) shall supersede any other plan previously adopted by the
Company with respect to severance benefits payable to you or the
acceleration of your Options as a result of a Change in Control.
Any of your rights hereunder shall be in addition to any rights you
may otherwise have under benefit plans or agreements of the Company
(other than severance plans or agreements) to which you are a party
or in which you are a participant, including, but not limited to,
any Company-sponsored employee benefit plans and stock options
plans.
Limitation On Employee
Rights. This Plan shall not give any employee the right to be
retained in the service of the Company, nor shall it interfere with
or restrict the right of the Company to discharge or retire the
employee.
No Third-Party
Beneficiaries. This Plan shall not give any rights or remedies
to any person other than covered employees and the
Company.
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Governing Law. This
Plan is a welfare plan subject to ERISA and it shall be
interpreted, administered, and enforced in accordance with that
law. To the extent that state law is applicable, the statutes and
common law of the State of California, excluding any that mandate
the use of another jurisdiction’s laws, shall
apply.
Miscellaneous. Where
the context so indicates, the singular will include the plural and
vice versa. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of the
Plan. Unless the context clearly indicates to the contrary, a
reference to a statute or document shall be construed as referring
to any subsequently enacted, adopted, or executed
counterpart.
Notice. For purposes
of this Plan, notices and all other communications provided for in
this Plan shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed to the Company at its primary office location and to an
employee at such employee’s last known address as listed on
the Company’s records, provided that all notices to the
Company shall be directed to the attention of its Secretary, or to
such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Additional
Information. As a participant in the Plan, you are entitled to
certain rights and protections under ERISA, as described in
Appendix D .
Definitions. For
purposes of this Plan, the following terms shall have the following
meanings:
(a) “ Cause
” means that, in the reasonable determination of the Company,
you:
(i) have committed an act
that materially injures the business of the Company;
(ii) have refused or failed
to follow lawful and reasonable directions of the Board of
Directors of the Company or the appropriate individual to whom you
report;
(iii) have willfully or
habitually neglected your duties for the Company; or
(iv) have been convicted of a
felony involving moral turpitude that is likely to inflict or has
inflicted material injury on the business of the
Company.
Notwithstanding the
foregoing, Cause shall not exist based on conduct described in
clause (ii) or clause (iii) unless the conduct described
in such clause has not been cured within fifteen (15) days
following your receipt of written notice from the Company
specifying the particulars of the conduct constituting
Cause.
(b) “ Change in
Control ” means:
(i) a sale of substantially
all of the assets of the Company;
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(ii) a merger or
consolidation in which the Company is not the surviving
corporation
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