Exhibit 10.6
, 1993
Dear :
The Board of Directors (the "Board") of T Cell Sciences, Inc. (the "Company")
has determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of members of the Company's management,
including yourself, to their responsibilities without distraction arising from
the possibility of a Change in Control (as defined in Section 2) of the Company,
although no such change is now contemplated.
In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the benefits set forth in this letter agreement
(the "Agreement") in the event your employment with the Company is terminated
subsequent to a "Change in Control" of the Company and under the circumstances
described in Section 3 below.
1. Term of Agreement. This agreement shall commence on January 1, 1993 and each
January 1 thereafter, the term of this Agreement shall automatically be extended
for one additional year unless, not later than the October 31 of the preceding
year, the Company shall have given notice that it does not wish to extend this
Agreement. This Agreement shall cease to be operative and shall be of no further
force and effect if your employment terminates for any reason prior to a Change
in Control. Further, nothing contained herein shall restrict the ability of the
Company to terminate your employment.
2. Change in Control. No benefits shall be payable hereunder if (i) there has
been a Change in Control of the Company and your employment is thereafter
terminated by you for other than Good Reason, or (ii) there has been a Change in
Control of the Company and your employment is thereafter terminated for Cause by
the Company, death, Disability, or Retirement.
(a) "Change in Control" of the Company shall have the meaning set forth
in the Company's Stock Incentive Plan, except that the Board agrees
not to override the occurrence of a Change in Control.
(b) "Disability" shall mean that as a result of your incapacity due to
physical or mental illness, you are absent from your duties with the
Company for a consecutive period of more than six (6) months, the
Company may terminate your employment on account of "Disability".
(c) "Retirement" shall mean your voluntary termination of employment at
age sixty-five (65) or any other early retirement arrangement
established with your consent with respect to you.
(d) "Cause" shall mean the willful and continued engaging by you in
gross misconduct materially and demonstrably injurious to the
Company. No termination for Cause shall be effective until you have
received a copy of a resolution duly adopted by the affirmative vote
of not less than 75% of the entire membership of the Board at a
meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with
your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set forth
in the Section 4(a) and specifying the particulars thereof in
detail.
(e) "Good Reason" shall mean:
(i) Change of Position. The assignment to you of any duties
inconsistent with your position or status as an officer prior
to the Change in Control or any alteration in the nature or
status of your responsibilities to a lesser position by you.
(ii) Compensation and Benefits. (1) A reduction in your base
salary, incentive compensation, or benefits or perquisites, as
in effect immediately prior to the Change in Control; or (2)
the failure by the Company to continue base salary increases,
incentive compensation grants, benefits and perquisites in
effect prior to the Change in Control.
(iii) Relocation. The relocation of the principal place of your
employment prior to the Change in Control without your written
consent.
(iv) Assumption of Agreement. If you elect to terminate your
employment because of the failure of the Company to obtain the
assumption of this Agreement as provided in Section 7.
3. Benefits Payable. If your employment is terminated following a Change in
Control of the Company by you for Good Reason or by the Company other than for
Cause, death, Disability or Retirement, then your benefits shall be those
described in this Section 3.
(a) Your base salary shall be continued for a period of 12 months. These
special severance payments shall be in lieu of any severance
payments payable under any severance plan or policy of the Company.
(b) During the continuation of your salary payments, the Company shall
continue health insurance benefits for you at its own expense.
Thereafter, you shall be afforded the right to continue such
insurance benefits as provided under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA).
(c) All stock incentive grants or options under the Company stock option
plan or stock incentive plan shall be 100% vested.
(d) Nothing contained herein shall adversely affect your rights, if any,
to receive payments under any other bonus, incentive compensation,
deferred compensation plan or group term life insurance plan, long
term disability plan or retirement plan of the Company.
6. No Mitigation. You shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Agreement be reduced by
any compensation earned by you as the result of employment by another employer
after the date of termination, or otherwise.
7. Successors; Binding Agreement.
(a) The Company shall require any successor entity (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume this Agreement.
(b) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
8. Notice. Notices and all other communications provided for herein shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed to the Company at its principal office or to you at your address set
forth on the first page of this Agreement, provided that all notices to the
Company shall be directed to the attention of the President of the Company with
a copy to the Secretary of the Company, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
9. Modification; Waiver. No provisions hereof may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by you and a duly authorized officer of the Company (other than you). No
waiver by either party hereto of any condition or provision hereof to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any other time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly herein.
10. Validity. This Agreement shall be governed by and construed in accordance
with the law of the State of Delaware. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
12. Arbitration. Any dispute or controversy arising in connection herewith shall
be settled exclusively by arbitration to be held in New York in accordance with
the rules of the American Arbitration Association then in effect.
Notwithstanding the pendency of any such dispute or controversy, the Company
shall continue to pay you your full compensation in effect when the notice
giving rise to the dispute was given (including, without limitation, base salary
and installments under any incentive plan) and continue you as a participant in
all the employee pension, welfare, incentive, compensation or other similar
plans, programs or policies of the Company in which you were participating when
the notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section. Amounts paid to you under this
paragraph are in addition to all other amounts due hereunder and shall not be
offset against or reduce any other amounts due hereunder. Each party shall bear
their own costs, including attorneys' fees of the arbitration; provided,
however, that if you prevail on the claim, the Company shall reimburse you for
all reasonable costs and attorneys' fees. Judgement may be entered on the
arbitrator's award in any court of competent jurisdiction.
Sincerely,
T CELL SCIENCES, INC.
by: ___________________________________
Agreed to this _____ day of _______________, 1993
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