Exhibit 10.1
As Amended May 12,
2009
BIOMARIN PHARMACEUTICAL
INC.
Severance Plan
and
Summary Plan Description
BIOMARIN PHARMACEUTICAL
INC.
Severance Plan
and
Summary Plan Description
Attracting, retaining and motivating
employees of BioMarin Pharmaceutical Inc. (“
BioMarin ”) and its subsidiary entities
(together, the “ Company ”) are among the
driving forces of the Company’s success. The Company’s
management and Directors believe that the elements of its
compensation package are one of the more quantifiable means of
accomplishing these goals. We also believe that one area of
particular concern for the Company’s personnel is the effect
of a change of corporate control. Senior personnel are especially
at risk of termination or demotion were a third party to acquire
control of BioMarin.
Accordingly, BioMarin’s
management and Directors have evaluated the Company’s past
severance policies, and have consolidated them into this Severance
Plan (the “ Plan ”). For employees who
meet the eligibility criteria set forth in Section 1 below,
the Plan provides for the payment of severance benefits either
–
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(a)
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according to
the Change of Control Specifications attached as Exhibit A
for eligible employees whose termination of employment occurs on or
after a Change of Control, as defined in Section 1 below;
or
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(b)
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according to
the Severance Policy attached as Exhibit B for employees
whose termination of employment occurs before a Change in
Control.
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Throughout this Plan, the term
“ BioMarin ” is used when BioMarin
Pharmaceutical Inc. is acting, through its employees and Directors,
in its corporate interest as employer, Plan sponsor, or settlor
with respect to the Plan. This Plan uses the term “
Plan Administrator ” whenever the Company is
acting in the limited capacity of making determinations, decisions,
and interpretations associated with administering the
Plan.
This Plan supersedes and replaces
any and all prior severance policies, plans and programs with
respect to the Company’s employees. The Plan is an
“employee welfare benefit plan” as defined in
Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended (“ ERISA ”), is not
intended to be a “pension plan” as defined in
Section 3(2)(A) of ERISA, and shall be administered so as not
to be an ERISA pension plan.
1. Events That Trigger
Benefits
Benefits will become payable to you
under the Plan if your employment with the Company terminates
either –
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(a)
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both while you are eligible for the Plan based on the
conditions set forth in Section 2 and on or within 12
months after a Change of Control, as defined herein; or
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(b)
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if the Company
provides you with a written notice stating that the termination of
your employment will entitle you to collect Plan
benefits.
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“ Change of
Control ” shall mean either (i) a merger,
consolidation, share exchange, business combination, issuance of
securities, direct or indirect acquisition of securities, tender
offer, exchange offer or other similar transaction as a result of
which the persons that beneficially owned, directly or indirectly,
the shares of BioMarin’s voting stock immediately prior to
such transaction cease to beneficially own, directly or indirectly,
shares of voting stock representing more than fifty percent
(50%) of the total voting power of all outstanding classes of
voting stock of BioMarin or the continuing or surviving corporation
if BioMarin is not the continuing or surviving corporation in such
transaction, or (ii) a sale of all or substantially all of the
assets of BioMarin.
2. Plan
Eligibility
You will be eligible to participate
in the Plan if (i) BioMarin classifies you as a full-time
employee of the Company for payroll tax purposes, regardless of
whether or not that classification is correct;
(ii) Section 3 does not make you ineligible for benefits;
and (iii) at the time you are notified of your termination of
employment, you are classified by the Company as an active employee
and you are not classified by the Company as being in one or more
of the following ineligible categories:
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(a)
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Foreign
Employees , i.e. ,
persons who are not on a U.S. payroll of the Company.
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(b)
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Leased
Employees , i.e. ,
persons who are the Company’s leased employees, within the
meaning of Internal Revenue Code Section 414(n).
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(c)
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Ineligible
Bargaining Unit Employees , i.e. , persons who are working under a
collective bargaining agreement that does not provide for their
Plan participation.
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(d)
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Persons
Waiving Participation ,
i.e. , persons to whom the Company did not extend the
opportunity of participating in this Plan and who agreed orally or
in writing to such non-participant status.
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(e)
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Persons on
Indefinite Unpaid Leaves of Absence , i.e. , persons who are absent from work
on indefinite unpaid leaves of absence expected to exceed thirty
days, except leaves during which regular pay continues or to the
extent eligibility is required by applicable law.
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(f)
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Persons
Discharged for Cause ,
i.e. , persons whose employment is terminated for
Cause , as determined by the Plan Administrator in
its sole discretion based on the following types of
misconduct:
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(i)
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willful and
repeated failure to comply with the Company’s written
policies or lawful directives on material business
matters;
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(ii)
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willful
statements or conduct reflecting adversely on the Company and
causing (or reasonably likely to cause) injury to the reputation,
business or business relationships of the Company; or
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(iii)
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illegal
conduct, gross misconduct or, dishonesty, in each case which is
willful and results (or is reasonably likely to result) in material
damage to the Company.
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3. Benefit
Ineligibility
(a) Voluntary
Termination
Even if you are on notice of your
impending termination of employment, you will not be eligible for
benefits under this Plan if the Plan Administrator determines, in
its sole discretion, that your employment terminated due to Cause,
your retirement, your death, your disability, or your resignation
(even if you felt compelled to resign) other than under the
circumstances set forth in Section 4(a) below.
(b) Changed
Decisions
The Company has the right to cancel
a pending termination of your employment at any time before you
terminate employment. You will not be eligible for severance
benefits under this Plan if your termination is
canceled.
(c) Successor Employment, and
Comparable Employment
Except as otherwise specifically
provided in Section 4(a), you will not be entitled to
severance benefits under this Plan, if the Plan Administrator
determines, in its sole discretion, that a Successor Employer has
offered you an Equivalent or Better Position to commence promptly
following your termination of employment with the Company, whether
you accept the position or not. A “ Successor
Employer ” is:
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(1)
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any entity that
assumes operations or functions formerly carried out by the Company
(such as the buyer of a facility or any entity to which a Company
operation or function has been outsourced);
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(2)
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any affiliate
of the Company; or
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(3)
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any entity
making the job offer at the request of the Company (such as a joint
venture of which the Company or an affiliate is a
member).
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“ Equivalent or Better
Position ” means employment that does not involve
either (i) a material reduction in your compensation or
benefits, (ii) a relocation, without your written consent, of
your principal worksite to a place more than thirty miles from its
location immediately before the relocation, or (iii) a
material reduction in responsibilities or support.
(d) Transition
Assistance
You will not be entitled to benefits
under this Plan unless you satisfy all transition assistance
requests of the Company to the Company’s satisfaction, such
as aiding in the location of files, preparing accounting records,
returning all Company property in your possession, or repaying any
amounts you owe the Company.
4. Severance
Benefits
(a) Change of Control
Severance Benefit
(1) Eligibility . You are
entitled to receive severance benefits under this Section 4(a)
if the Plan Administrator determines that –
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(i)
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your employment
with the Company terminated without Cause both while you are
eligible for the Plan based on the conditions set forth in Sections
2 and 3 above, and on or within 12 months after a Change of
Control, and
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(ii)
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you have
irrevocably and properly executed the Release form prescribed by
the Plan Administrator, you have filed the Release with the Plan
Administrator within the time period the Plan Administrator
prescribes, and the Release is enforceable in all
respects.
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(2) Nature of Severance
Benefits . Attached as Exhibit A is a schedule entitled
Change of Control Specifications (“
Specifications ”) that provides guidelines
according to which the Plan Administrator shall determine the
severance benefits that the Company will pay under this
Section 4(a) of the Plan. The Plan Administrator will apply
the Specifications to you (either individually or as a member of a
class of eligible employees) with attention to three primary
factors: the impact of the Change of Control on your future
employment, your position with the Company prior to the Change of
Control and your rights under any separate written agreement with
the Company. Furthermore, the Plan Administrator shall apply the
Specifications and the foregoing factors according to the following
three scenarios relating to your future employment with a Successor
Employer (as determined by BioMarin):
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CASE 1: You are Offered An
Equivalent Or Better Position
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CASE 2: You are Offered A
Position That Is Not An Equivalent Or Better Position
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CASE 3: You Are Not Offered A
Position.
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In accordance with the
Specifications, the Plan Administrator shall determine your Plan
benefits depending in part on your classification between the
following five classes of employees (as determined by
BioMarin):
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Chief Executive Officer and
Senior Vice Presidents
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Directors (including Senior and
Associate Directors)
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Managers and Senior
Managers
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Nevertheless, the Company’s
use of title designations to determine benefit levels is not an
absolute system. BioMarin, acting through its CEO, may accordingly
elect in its settlor capacity to place certain personnel in a
different classification based on the vulnerability of each
person’s position to elimination in the event of a Change of
Control. The CEO will make such determinations, on a case-by-case
basis, and will advise any affected employee of any adjustment to
their classification for the purposes of the Plan.
In the case where you are not
offered any position by the Successor Employer, or you decline an
offer for a position that is not an Equivalent or Better Position,
you are entitled to receive the most favorable benefits that the
Specifications set forth for Participants. (This also applies if
you are not offered an Equivalent or Better Position, accept the
position offered, and are involuntarily terminated during the
following twelve months for reasons other than Cause.)
If you become entitled to collect
severance benefits under this Section 4(a), you will receive
the following severance benefits (subject to any reduction required
under subsection (4) hereof):
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(i)
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a lump sum cash
severance payment based on the Specifications and your most recent
annual salary and position within the Company; and
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(ii)
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100% vesting in
your right to exercise any outstanding stock options.
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Additionally: if BioMarin classifies
you as a Manager or above, you will receive employer-paid
continuation of group medical insurance coverage per the
Specifications; if BioMarin classifies you as a Vice President or
above, you will also receive a bonus payment computed per the
Specifications.
Notwithstanding any other provision
above, if you are entitled to collect severance-related benefits
under any separate written agreement with the Company, the Plan
Administrator shall have the discretion to reduce your benefits
under this Plan, on a category-by-category basis, to the extent
necessary to avoid your receipt of duplicate benefits. Any such
comparisons and reductions shall not occur on an aggregate basis
and shall instead be determined by separately comparing the cash
severance amounts, the terms under which the vesting of stock
options accelerates, and the terms under which the Participant is
entitled to continue to receive employer-paid group medical
insurance coverage as provided in this Plan to the respective
benefits provided under the separate written agreement. For the
avoidance of doubt, in no event will this Plan limit or reduce the
benefits to be received by you pursuant to any separate written
agreement with the Company.
(3) Accelerated Vesting of Stock
Options . Even if the Plan Administrator determines that you
are not entitled to collect severance benefits under this
Section 4(a), you will become 100% vested in your right to
exercise any outstanding stock options provided the Plan
Administrator determines that –
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(i)
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you are
eligible for the Plan based on the conditions set forth in
Section 2 (applied as if your employment terminates on the
date of the Change of Control), and
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(ii)
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you have
elected to accept a position with a Successor Employer, whether or
not it is for an Equivalent or Better Position than the one you
held prior to the Change of Control.
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(4) Golden Parachute Limit on
Benefits . Notwithstanding any other provision of this Section,
the Specifications, or the Plan, the Plan Administrator shall
reduce your Plan benefits in any manner necessary to avoid your
receipt of any benefits that would, in the Plan
Administrator’s sole and absolute discretion, either
constitute “excess parachute payments” within the
meaning of Internal Revenue Code Section 280G (and the most
recent regulations issued thereunder), or cause any other amounts
or benefits to be excess parachute payments. If you receive an
amount in excess of the limitations set forth in Section 280G,
you agree to repay the excess amount to the Company upon demand,
with interest at the rate provided for in Internal Revenue Code
Section 124(b)(2)(B). You further agree to cooperate with the
Company in connection with any administrative or judicial
proceeding concerning the existence or amount of any excess
parachute payments.
(b) Discretionary Severance
Benefit
Benefits will become payable to you
in accordance with the policy attached as Exhibit B
if (i) your employment with the Company terminates before a
Change of Control, (ii) the Company provides you with a
written notice stating that the termination of your employment will
entitle you to collect Plan benefits, and (iii) you
irrevocably execute the Release form prescribed by the Plan
Administrator, you file the Release with the Plan Administrator
within the time period that the Plan Administrator prescribes, and
the Release is enforceable in all respects.
5.
Reemployment
If you are re-employed by the
Company or a Successor Employer while benefits are still payable
under the Plan, all such benefits will cease, except as otherwise
specified by BioMarin or the Successor Employer, as the case may
be. If you receive benefits after your eligibility ceases under the
Plan due to reemployment, you must promptly repay any such
benefits. By accepting benefits under the Plan, you agree to
furnish all information, such as copies of your federal income tax
returns with attachments, that the Plan Administrator requests for
purposes of confirming your employment status.
6. Taxes
Taxes will be withheld from benefits
under the Plan to the extent required by law.
7. Relation to Other
Plans
Any prior severance or similar plan
of the Company that might apply to you is hereby revoked as to you
while you are eligible for Plan benefits. Benefits under this Plan
will not be counted as “compensation” for purposes of
determining benefits under any other benefit plan, pension plan, or
similar arrangement. All such plans or similar arrangements, to the
extent inconsistent with this Plan, are hereby so
amended.
8. Amendment or
Termination
BioMarin, acting through its Board
of Directors and chief executive officer, has the right, in its
nonfiduciary settlor capacity, to amend the Plan or to terminate it
at any time, prospectively or retroactively, for any reason,
without notice, including to discontinue or eliminate benefits. The
Plan Administrator also has the right to amend the Plan, as
elsewhere provided in the Plan. No person has any vested right to
benefits under this Plan prior to actually collecting them. The
Company may amend the Plan to provide greater or les
