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Exhibit 10.6
[date]
__________________
__________________
__________________
Dear ________:
You (“ Executive
”) and Cell Therapeutics, Inc., a Washington corporation
(“ CTI ” or the “ Company ”),
previously entered into a Severance Agreement dated ___________
(the “ Severance Agreement ”). This letter
agreement amends the Severance Agreement to the extent necessary to
provide that the severance benefits set forth therein comply with
the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended. Except as otherwise amended pursuant to this
letter agreement, the Severance Agreement remains in full force and
effect. Any terms used but not otherwise defined herein shall have
the meaning set forth in the Severance Agreement.
Sections 1 and 2 of the Severance
Agreement are hereby amended and restated in their entirety as
follows:
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“1.
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Termination
of Employment . Subject
to the Executive’s continuing obligations under the
parties’ Employment Agreement (attached):
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(a)
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Termination
for Cause; Death; Disability; Resignation Without Good
Reason . If the
Executive’s employment is terminated by CTI for Cause (as
defined herein), or if the Executive resigns from employment
hereunder, other than for Good Reason (as defined herein) or as a
result of such Executive’s death or disability (as defined in
CTI’s disability plan applicable to the Executive), the
Executive shall be entitled only to receive: i) Severance Pay
through and including the Severance Date; and ii) pay for all
vacation time accrued as of the Severance Date.
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(b)
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Termination Without Cause;
Resignation for Good Reason . If the Executive’s employment is
terminated by CTI without Cause, or if the Executive resigns from
Executive’s employment for Good Reason and provided that such
termination constitutes a “separation from service” as
defined in Treasury Regulation Section 1.409A-1(h) (“
Separation ”) and Executive executes and does not
revoke a general release of all claims in the form prescribed by
the Company and such release becomes effective within sixty
(60) days of Executive’s Separation (the “
Deadline ”), the Executive shall be entitled to
receive: (i) eighteen (18) months of Severance Pay;
(ii) bonus pay equal to the greater of the average of the
three prior years bonuses or 30% of base salary in effect upon
Executive’s Severance Date; and (iii) pay for all
vacation time accrued as of the Severance Date. The parties agree
that the foregoing shall be paid as follows: (x) the Severance
Pay provided in (i) above shall be paid in eighteen
(18) equal installments pursuant to CTIs regular payroll
procedures commencing on the Company’s first normal payroll
date that occurs on or after the Deadline, (y) the bonus pay
shall be paid on the first normal payroll date on or after the
Deadline, and (z) the accrued but unused vacation shall be
paid on the Severance Date. CTI shall continue to pay premiums to
maintain any life insurance for Executive, existing
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and paid for by CTI as of the
Severance Date, for eighteen (18) months following the
Severance Date, with premium payments made on each regularly
scheduled due date for such payments beginning with the first
regularly scheduled due date that occurs on or after the Deadline
Date (with any payments due prior to such time being made on such
date). In addition, CTI shall reimburse the Executive for any costs
incurred by the Executive in electing COBRA continuation coverage
for the Executive and Executive’s covered dependents under
CTI’s medical plan only for the period from the Severance
Date until the earlier of: (1) a date eighteen
(18) months after the Severance Date; or (2) a date on
which the Executive is covered under the medical plan of another
employer, which does not exclude pre-existing conditions. At
Executive’s sole cost and expense, Executive may elect to
exercise any disability insurance conversion originally available
to Executive under the then existing group or individual disability
insurance policies. In the event of a breach of the Inventions and
Proprietary Information Agreement, in addition to any other remedy
available to CTI, CTI’s obligation under this
Section 1(b) shall terminate immediately.
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For purposes of Section 409A of
the Internal Revenue Code of 1986, as amended (the “
Code ”), each payment that is paid under the preceding
paragraph (other than payments referenced in Section 1(b)(iii)
above and COBRA reimbursements) is hereby designated as a separate
payment. Notwithst
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