Exhibit 10.1
VAXGEN, INC.
SEVERANCE BENEFIT PLAN
Section 1. INTRODUCTION.
The VaxGen, Inc. Severance Benefit Plan (the "Plan") is established
effective August 1, 2007. The purpose of the Plan is to provide for the payment
of severance benefits to certain eligible employees of VaxGen, Inc. (the
"Company") and Company affiliates, if any, that have been designated by the
Company on the attached Appendix A as eligible to participate in the Plan (each
such affiliate, an "Employer" and all such affiliates collectively, the
"Employers") who meets the eligibility criteria set forth in Section 2(a) below.
This Plan supersedes any severance benefit plan, policy or practice, whether
formal or informal, written or unwritten, previously announced or maintained by
the Company or any Employer; provided, however, that this Plan does not
supersede or replace any severance benefits to which an Eligible Employee is
contractually entitled pursuant to the terms of an individually negotiated
written employment agreement between the Eligible Employee and the Company. 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 regular U.S. employee of the Company
or any Employer who is notified by the Company in writing that he or she is
eligible for participation in the Plan and whose employment is involuntarily
terminated by the Company or an Employer without Cause (as defined in Section
2(c) below), whose employment is terminated as a result of a reduction-in-force,
reorganization or job elimination by the Company, or who is otherwise selected
by the Plan Administrator in its sole discretion to receive the benefits set
forth herein (a "Qualifying Termination"). 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, full-time employees are those regular hire
employees who are regularly scheduled to work at least thirty-two (32) hours per
week. Neither temporary, leased or seasonal employees nor intern, agency
temporary employees, independent contractors, consultants or agents under a
written contract or purchase order, and persons so classified as such by the
Company (whether or not such classification is upheld on governmental, judicial
or other review) are eligible for severance benefits under the Plan.
(2) In order to be eligible to receive any benefits under the
Plan, an Eligible Employee must remain on the job and satisfactorily provide
services to the Company until his or her date of termination as scheduled by the
Company.
1.
(3) In order to be eligible to receive any 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
applicable, within the time frame set forth therein and such release must become
effective in accordance with its terms. The Company, in its discretion, may
modify the form of the required release to comply with applicable law and shall
determine the form of 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 is involuntarily terminated prior to the
effective date of his or her Qualifying Termination, for a reason other than
those reasons underlying a Qualifying Termination (including, but not limited
to, any reason such as unsatisfactory performance, violation of applicable
company policy or procedures, insubordination, misconduct or the unauthorized
use or disclosure of confidential/proprietary/trade secret information of the
Company) regardless of whether the employee had already been notified that the
employee's Qualifying Termination would have made the employee eligible for
benefits under the Plan.
(2) The employee is covered by any other severance or
separation pay plan, policy or practice of the Company or an Employer, in which
case such employee's severance benefit, if any, shall be governed by the terms
of such plan, policy or practice and shall be governed by this Plan only to the
extent that (i) the employee elects to waive and release all claims and rights
the employee has to severance pay or benefits under such plan, policy, or
practice or (ii) the reduction pursuant to Section 3(c) below does not entirely
eliminate benefits under this Plan. For the avoidance of doubt, an employee is
not disqualified from being an Eligible Employee as a result of his or her
rights to receive severance benefits pursuant to the terms of an individually
negotiated written employment agreement between the Eligible Employee and the
Company.
(3) The employee's employment is terminated as a result of his
or her death or disability.
(4) The employee voluntarily terminates employment with the
Company or an Employer. Voluntary terminations include, but are not limited to,
resignation, retirement, failure to return from a leave of absence on the
scheduled date and/or termination 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 offered an identical or substantially
equivalent or comparable position with the Company or an affiliate of the
Company. For purposes of the foregoing, a "substantially equivalent or
comparable position" is one that offers the employee substantially the same
level of responsibility and compensation and does not require a relocation of
the employee's place of employment to a location that would increase the
employee's round trip commute by more than forty (40) miles.
2.
(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 of Control. 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 of Control.
(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 has not signed the Company's standard form of
confidential/proprietary/trade secret information non-disclosure and inventions
assignment agreement ("Proprietary Agreement") covering the employee's period of
employment with the Company (and with any predecessor) and does not confirm in
writing that he or she is and shall remain subject to the terms of that
agreement.
(9) Following notification of involuntary termination by the
Company, the employee does not satisfactorily perform his or her assigned job
duties until the date set by the Company or an Employer for the termination of
employment.
(10) The Company determines, in its sole discretion, that the
employee's receipt of severance benefits would not under the circumstances
further the purposes of the Plan or would otherwise be inappropriate and not in
the best interests of the Company.
(c) An involuntary termination without "Cause" means an involuntary
termination of an employee's employment by the Company or an Employer other than
for one of the following reasons:
(1) an intentional action or intentional failure to act by the
employee that was performed in bad faith and to the material detriment of the
business of the Company or an Employer;
(2) an employee's intentional refusal or intentional failure
to act in accordance with any lawful and proper direction or order of his or her
superiors;
(3) an employee's habitual neglect of the duties of
employment;
(4) an employee's indictment, charge, or conviction of a
felony or any crime involving moral turpitude, or participation in any act of
theft or dishonesty that has had or could reasonably be expected to have a
material detrimental effect on the business of the Company or an Employer; or
(5) an employee's violation of any material provision of the
Proprietary Agreement or violation of any material provision of any other
written Company or Employer policy or procedure.
(d) A "Change of Control" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:
3.
(1) a sale, lease or other disposition in one transaction or a
series of transactions, of all or substantially all of the assets of the
Company;
(2) a merger or consolidation in which the Company is not the
surviving entity or if the Company is the surviving entity, as a result of which
the shares of the Company's capital stock are converted into or exchanged for
cash, securities of another entity, or other property, unless (in any case) the
holders of the Company's outstanding shares of capital stock immediately before
such transaction own more than fifty percent (50%) of the combined voting power
of the outstanding securities of the surviving entity immediately after the
transaction;
(3) the Company's stockholders approve a plan or proposal to
liquidate or dissolve the Company; or
(4) a person or group hereafter acquires beneficial ownership
of more than fifty percent (50%) of the outstanding voting securities of the
Company (all within the meaning of Section 13(d) of the Securities Exchange Act
of 1934, as amended, and the regulations promulgated thereunder).
Section 3. AMOUNT OF BENEFIT.
(a) Severance Benefits. Subject to the exceptions set forth in
Section 2(b), severance benefits under the Plan, if any, shall be provided to
Eligible Employees described in Section 2(a) in the amount provided in Appendix
B.
(b) Additional Benefits. Notwithstanding the foregoing, the Company
may, in its sole discretion, (i) authorize benefits in an amount and/or form
different from or in addition to those benefits set forth in Section 3(a) to
Eligible Employees; (ii) waive or modify, in respect to one or more employees or
classes of employees, the eligibility requirements for receipt of benefits under
this Plan and/or (iii) modify the method of calculating the amount of benefits
to be received under the Plan. The provision of any such benefits to an Eligible
Employee or to any other employee shall in no way obligate the Company to
provide such benefits to any other Eligible Employee or to any other employee,
even if similarly situated. An employee for whom any eligibility requirement has
been waived or modified, or who is offered benefits under this Plan that are
different than, or in addition to, those set forth in Section 3(a) will receive
specific written notice that the Plan Administrator is exercising discretion in
that regard. Receipt of benefits under this Plan pursuant to such exceptions may
be subject to a covenant of confidentiality and non-disclosure.
(c) Certain Reductions. The Company shall reduce an Eligible
Employee's severance benefits under this Plan 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 California Plant Closing Act, or
any other similar state law or (ii) any Company or Employer policy or practice
providing for severance, termination pay, or otherwise allowing the Eligible
Employee to remain on the payroll for a
4.
limited period of time after being given notice of the termination of the
Eligible Employee's employment, and the Plan Administrator shall so construe and
implement the terms of the Plan. In the Company's sole discretion, such
reductions may be applied on a retroactive basis, with severance benefits
previously paid being re-characterized as payments pursuant to the Company's
statutory obligation. Notwithstanding the foregoing, an Eligible Employee's
severance benefits under this Plan will not be reduced by the amount of any
severance benefits to which an Eligible Employee is contractually entitled
pursuant to the terms of an individually negotiated written employment agreement
between the Eligible Employee and the Company.
(d) Best After Tax. If any payment or benefit (including payments
and benefits pursuant to this Plan) that an Eligible Employee would receive in
connection with a Change of Control from the Company or otherwise ("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 the Company shall cause to be determined, before any
amounts of the Payment are paid to the Eligible Employee, which of the following
two alternative forms of payment would maximize the Eligible Employee's
after-tax proceeds: (i) payment in full of the entire amount of the Payment (a
"Full Payment"), or (ii) payment of only a part of the Payment so that the
Eligible Employee receives the largest payment possible without the imposition
of the Excise Tax (a "Reduced Payment"), whichever amount results in the
Eligible Employee's 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. For purposes of determining whether to make a Full Payment or
a Reduced Payment, the Company shall cause to be taken into account all
applicable federal, state and local income and employment taxes and the Excise
Tax (all computed at the highest applicable marginal rate, net of the maximum
reduction in federal income taxes which could be obtained from a deduction of
such state and local taxes). If a Reduced Payment is made, (i) the Payment shall
be paid only to the extent permitted under the Reduced Payment alternative, and
the Eligible Employee shall have no rights to any additional payments and/or
benefits constituting the Payment, and (ii) reduction in payments and/or
benefits shall occur in the following order unless the Eligible Employee elects
in writing a different order (provided, however, that such election shall be
subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs): (1) reduction of cash payments; (2) cancellation
of accelerated vesting of equity awards other than stock options; (3)
cancellation of accelerated vesting of stock options; and (4) reduction of other
benefits paid to the Eligible Employee. In the event that acceleration of
compensation from the Eligible Employee's equity awards is to be reduced, such
acceleration of vesting shall be canceled in the reverse order of the date of
grant unless the Eligible Employee elects in writing a different order for
cancellation.
The independent registered public accounting firm engaged by
the Company for general audit purposes as of the day prior to the effective date
of the Change of Control shall make all determinations required to be made under
this Section 3(d). If the independent registered public accounting firm so
engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Company shall appoint a
nationally recognized independent registered public accounting firm to make the
determinations required hereunder. The Company shall bear all expenses with
respect
5.
to the determinations by such independent registered public accounting firm
required to be made hereunder.
The independent registered public accounting firm engaged to
make the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to the Company and the Eligible Employee
within fifteen (15) calendar days after the date on which the Eligible
Employee's right to a Payment is triggered (if requested at that time by the
Company or the Eligible Employee) or such other time as requested by the Company
or the Eligible Employee. If the independent registered public accounting firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and the Eligible Employee with an opinion reasonably acceptable to the
Eligible Employee that no Excise Tax will be imposed with respect to such
Payment. Any good faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and the Eligible
Employee.
(e) Code Section 409A. If the Company (or, if applicable, the
successor entity thereto) determines that the payments and benefits provided
under the Plan (the "Plan Payments") constitute "deferred compensation" under
Code Section 409A (together, with any state law of similar effect, "Section
409A") and an Eligible Employee is a "specified employee" of the Company or any
successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) (a
"Specified Employee"), then, solely to the extent necessary to avoid the
incurrence of the adverse personal tax consequences under Section 409A, the
timing of the Plan Payments shall be delayed as follows: on the earliest to
occur of (i) the date that is six months and one day after the termination date,
(ii) the date of the Eligible Employee's death, or (iii) such earlier date, as
reasonably determined in good faith by the Company (or any successor entity
thereto), as would not result in any of the Plan Payments being subject to
adverse personal tax consequences under Section 409A (such earliest date, the
"Delayed Initial Payment Date"), the Company (or the successor entity thereto,
as applicable) shall (A) pay to the Eligible Employee a lump sum amount equal to
the sum of the Plan Payments that the Eligible Employee would otherwise have
received through the Delayed Initial Payment Date if the commencement of the
payment of the Plan Payments had not been delayed pursuant to this Section 3(e)
and (B) commence paying the balance of the Plan Payments in accordance with the
applicable payment schedules set forth in on Appendix B. For the avoidance of
doubt, it is intended that (1) each installment of the Plan Payments provided on
Appendix B is a separate "payment" for purposes of Section 409A, (2) all Plan
Payments provided on Appendix B satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A provided under Treasury
Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (3) the Plan
Payments consisting of COBRA premiums also satisfy, to the greatest extent
possible, the exemption from the application of Section 409A provided under
Treasury Regulations Sections 1.409A-1(b)(9)(v).
Section 4. COMPANY PROPERTY.
(a) Return of Company Property. Except as provided in Section 4(b)
below, an Eligible Employee will not be entitled to any severance under the Plan
unless and until the Eligible Employee returns all Company Property. For this
purpose, "Company Property" means all paper and electronic Company and/or
Employer documents (and all copies thereof)
6.
created and/or received by the Eligible Employee during his or her period of
employment with the Company and other Company and/or Employer property which the
Eligible Employee had in his or her possession or control at any time,
including, but not limited to, Company and/or Employer files, notes, drawings
records, plans, forecasts, reports, studies, analyses, proposals, agreements,
financial information, research and development information, sales and marketing
information, operational and personnel information, specifications, code,
software, databases, computer-recorded information, tangible property and
equipment (including, but not limited to, leased vehicles, computers, computer
equipment, software programs, facsimile machines, mobile telephones, servers),
credit and calling cards, entry cards, identification badges and keys; and any
materials of any kind which contain or embody any proprietary or confidential
information of the Company and/or an Employer (and all reproductions thereof in
whole or in part). As a condition to receiving benefits under the Plan, Eligible
Employees must not make or retain copies, reproductions or summaries of any such
Company or Employer property. However, an Eligible Employee is not required to
return his or her personal copies of documents evidencing the Eligible
Employee's hire, termination, compensation, benefits and stock options and any
other documentation received as a shareholder of the Company
(b) Retention of Certain Company Equipment. Notwithstanding the
provisions of Section 4(a), the Company may, in its sole discretion, agree to
allow the Eligible Employee to retain certain Company or Employer equipment
(e.g., cell phones) ("Company Equipment") for his or her personal use following
the Eligible Employee's termination of employment, and the Company will transfer
title to the Company Equipment to the Eligible Employee. The receipt of such
Company Equipment will be subject to the same terms and conditions as the
receipt of severance under this Plan, including the execution of the applicable
form of release. The Eligible Employee acknowledges that the Company Equipment
is provided "as is" without warranty of any kind. Furthermore, the Eligible
Employee acknowledges that the Eligible Employee will have imputed income
related to the retention of any Company Equipment, the Eligible Employee will be
solely responsible for any tax assessments made by any taxing authority based on
this transfer of title, and that the Eligible Employee will be solely
responsible for the use and maintenance of the Company Equipment and all costs
associated therewith arising after the termination of employment. The Eligible
Employee will follow all Company instructions as to the return and/or deletion
of any Company information and any licensed software contained on the Company
Equipment.
(c) Prepayment of Advanced Amounts. An Eligible Employee will not be
entitled to any severance benefit under the Plan if the Eligible Employee
previously received an advance(s) for business travel and entertainment expenses
unless and until the Eligible Employee (i) properly completes and submits an
expense reimbursement form(s) and supporting receipts to his or her manager no
later than seven (7) days after the Eligible Employee's Qualifying Termination
and (ii) repays (via check payable to "VaxGen, Inc.") any amounts advanced but
not used and approved for reimbursement.
(d) Transition of Work. An Eligible Employee will not be entitled to
any severance benefit under the Plan unless and until the Eligible Employee (i)
has satisfactorily transitioned his or her work and information concerning his
or her work to the Company to the extent requested by the Company and (ii) has
provided the Company with all logins, passwords, passcodes and similar
information created by the Eligible Employee for documents, email and
7.
electronic files that the Eligible Employee created or used on Company systems.
Section 5. TIME OF PAYMENT AND FORM OF BENEFIT.
All severance benefits under the Plan shall be paid as provided in
Appendix B following the Eligible Employee's satisfaction of all of the
requirements set forth in Sections 2 and 4. All 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. Additionally, if an Eligible Employee is
subject to withholding for taxes related to any non-Plan benefits, including but
not limited to any imputed income related to perquisites or the retention of
Company Equipment, the Company may offset any severance payments under the Plan
by the amount of such withholding taxes. However, payments under the Plan will
not be subject to any other deductions such as, but not limited to, 401(k) plan
contributions and/or loan repayments or other employee benefit and benefit plan
contributions.
Section 6. REEMPLOYMENT.
In the event of an Eligible Employee's reemployment by the Company
or an Employer or other affiliate of the Company during the period of time in
respect of which severance benefits pursuant to the Plan have 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 7. RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.
(a) Exclusive Discretion. The Plan Administrator is the Company. As
Plan Administrator, the Company is the named fiduciary charged with the
responsibility for administering the Plan. The Plan Administrator shall have the
exclusive discretion and authority to establish rules, forms, and procedures for
the administration of the Plan and to construe and interpret the Plan and to
decide any and all questions of fact, interpretation, definition, computation or
administration arising in connection with the operation of the Plan, including,
but not limited to, the eligibility to participate in the Plan and amount of
benefits paid under the Plan. The Plan Administrator may delegate any or all of
its administrative duties to an officer of the Company and any such delegation
shall convey with it the full discretionary authority of the Plan Administrator
to carry out the delegated duties. The Company or the Plan Administrator shall
indemnify and hold harmless any person to whom it delegated its
responsibilities; provided, however, such person does not act with gross
negligence or willful misconduct. The rules, interpretations, computations and
other actions of the Plan Administrator or its delegate shall be binding and
conclusive on all persons.
(b) Amendment or Termination. The Company reserves the right to
amend or terminate this Plan (including Appendix A and Appendix B) or the
benefits provided hereunder at any time prior to a Change of Control of the
Company; provided, however, that no such amendment or termination shall affect
the right to any unpaid benefit of any Eligible Employee whose termination date
has occurred prior to amendment or termination of the Plan. Any purported
amendment or termination of this Plan (and the exhibits and appendices hereto)
8.
upon or following a Change of Control of the Company will not be effective as to
any Eligible Employee who has not consented, in writing, to such amendment or
termination. Any action amending or terminating the Plan shall be in writing and
executed by a duly authorized executive officer of the Company.
Section 8. NO IMPLIED EMPLOYMENT CONTRACT.
The Plan shall not be deemed (i) to give any employee or other
person any right to be retained in the employ of the Company or an Employer or
(ii) to interfere with the right of the Company or an Employer to discharge any
employee or other person at any time, with or without cause, which right is
hereby reserved.
Section 9. LEGAL CONSTRUCTION.
This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 ("ERISA")
and, to the extent not preempted by ERISA, the laws of the State of California
(without regard to principles of conflict of laws).
Section 10. CLAIMS, INQUIRIES AND APPEALS.
(a) Applications for Benefits and Inquiries. Any application for
benefits, inquiries about the Plan or inquiries about present or future rights
under the Plan must be submitted to the Plan Administrator in writing by an
applicant (or his or her authorized representative). The Plan Administrator is:
VaxGen, Inc.
Attn: Chief Financial Officer
349 Oyster Point Blvd
South San Francisco, CA 94080
(b) Denial of Claims. In the event that any application for benefits
is denied in whole or in part, the Plan Administrator must provide the applicant
with written or electronic notice of the denial of the application, and of the
applicant's right to review the denial. Any electronic notice will comply with
the regulations of the U.S. Department of Labor. The notice of denial will be
set forth in a manner designed to be understood by the applicant and will
include the following:
(1) the specific reason or reasons for the denial;
(2) references to the specific Plan provisions upon which the
denial is based;
(3) a description of any additional information or material
that the Plan Administrator needs to complete the review and an explanation of
why such information or material is necessary; and
9.
(4) an explanation of the Plan's review procedures and the
time limits applicable to such procedures, including a statement of the
applicant's right to bring a civil action under Section 502(a) of ERISA
following a denial on review of the claim, as described in Section 10(d) below.
This notice of denial will be given to the applicant within ninety
(90) days after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the applicant before the end of the
initial ninety (90) day period.
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application.
(c) Request for a Review. Any person (or that person's authorized
representative) for whom an application for benefits is denied, in whole or in
part, may appeal the denial by submitting a request for a review to the Plan
Administrator within sixty (60) days after the application is denied. A request
for a review shall be in writing and shall be addressed to:
VaxGen, Inc.
Attn: Chief Financial Officer
349 Oyster Point Blvd
South San Francisco, CA 94080
A request for review must set forth all of the grounds on which it
is based, all facts in support of the request and any other matters that the
applicant feels are pertinent. The applicant (or his or her representative)
shall have the opportunity to submit (or the Plan Administrator may require the
applicant to submit) written comments, documents, records, and other information
relating to his or her claim. The applicant (or his or her representative) shall
be provided, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant to his or her claim.
The review shall take into account all comments, documents, records and other
information submitted by the applicant (or his or her representative) relating
to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.
(d) Decision on Review. The Plan Administrator will act on each
request for review within sixty (60) days after receipt of the request, unless
special circumstances require an extension of time (not to exceed an additional
sixty (60) days), for processing the request for a review. If an extension for
review is required, written notice of the extension will be furnished to the
applicant within the initial sixty (60) day period. This notice of extension
will describe the special circumstances necessitating the additional time and
the date by which the Plan Administrator is to render its decision on the
review. The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. In the event that the Plan
Administrator
10.
confirms the denial of the application for benefits in whole or in part, the
notice will set forth, in a manner calculated to be understood by the applicant,
the following:
(1) the specific reason or reasons for the denial;
(2) references to the specific Plan provisions upon which the
denial is based;
(3) a statement that the applicant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to his or her claim; and
(4) a statement of the applicant's right to bring a civil
action under Section 502(a) of ERISA.
(e) Rules and Procedures. The Plan Administrator will establish
rules and procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims.
The Plan Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so at
the applicant's own expense.
(f) Exhaustion of Remedies. No legal action for benefits under the
Plan may be brought until the applicant (i) has submitted a written application
for benefits in accordance with the procedures described by Section 10(a) above,
(ii) has been notified by the Plan Administrator that the application is denied,
(iii) has filed a written request for a review of the application in accordance
with the appeal procedure described in Section 10(c) above, and (iv) has been
notified that the Plan Administrator has denied the appeal. Notwithstanding the
foregoing, if the Plan Administrator does not respond to a applicant's claim or
appeal within the relevant time limits specified in this Section 10, the
applicant may bring legal action for benefits under the Plan pursuant to Section
502(a) of ERISA.
Section 11. BASIS OF PAYMENTS TO AND FROM PLAN.
The Plan shall be unfunded, and all benefits under the Plan shall be
paid only from the general assets of the Company. An Eligible Employee's right
to receive payments under the Plan is no greater than that of the Company's
unsecured general creditors. Therefore, if the Company were to become insolvent,
the Eligible Employee might not receive benefits under the Plan.
Section 12. OTHER PLAN INFORMATION.
(a) Employer and Plan Identification Numbers. The Employer
Identification Number assigned to the Company (which is the "Plan Sponsor" as
that term is used in ERISA) by the Internal Revenue Service is 36-3855489. The
Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 501.
11.
(b) Ending Date for Plan's Fiscal Year and Type of Plan. The date of
the end of the fiscal year for the purpose of maintaining the Plan's records is
December 31. The Plan is a welfare benefit plan.
(c) Agent for the Service of Legal Process. The agent for the
service of legal process with respect to the Plan is:
VaxGen, Inc.
Attn: Chief Financial Officer
349 Oyster Point Blvd
South San Francisco, CA 94080
(d) Plan Sponsor and Administrator. The Plan Sponsor and the "Plan
Administrator" of the Plan is:
VaxGen, Inc.
Attn: Chief Financial Officer
349 Oyster Point Blvd
South San Francisco, CA 94080
The Plan Sponsor's and Plan Administrator's telephone number is
(650) 624-1000 and facsimile number is (650) 624-1001.
Section 13. STATEMENT OF ERISA RIGHTS.
Participants in this Plan are entitled to certain rights and
protections under ERISA. If you are an Eligible Employee, you are considered a
participant in the Plan and, under ERISA, you are entitled to:
(a) Receive Information About Your Plan and Benefits
(1) Examine, without charge, at the Plan Administrator's
office and at other specified locations, such as worksites, all documents
governing the Plan and a copy of the latest annual report (Form 5500 Series), if
applicable, filed by the Plan with the U.S. Department of Labor and available at
the Public Disclosure Room of the Employee Benefits Security Administration;
(2) Obtain, upon written request to the Plan Administrator,
copies of documents governing the operation of the Plan and copies of the latest
annual report (Form 5500 Series), if applicable, and an updated (as necessary)
Summary Plan Description. The Administrator may make a reasonable charge for the
copies; and
(3) Receive a summary of the Plan's annual financial report,
if applicable. The Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.
(b) Prudent Actions by Plan Fiduciaries. In addition to creating
rights for Plan participants, ERISA imposes duties upon the people who are
responsible for the operation
12.
of the employee benefit plan. The people who operate the Plan, called
"fiduciaries" of the Plan, have a duty to do so prudently and in the interest of
you and other Plan participants and beneficiaries. No one, including your
employer, your union or any other person, may fire you or otherwise discriminate
against you in any way to prevent you from obtaining a Plan benefit or
exercising your rights under ERISA.
(c) Enforce Your Rights. If your claim for a Plan benefit is denied
or ignored, in whole or in part, you have a right to know why this was done, to
obtain copies of documents relating to the decision without charge, and to
appeal any denial, all within certain time schedules as set forth in detail in
Section 10 herein.
Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request a copy of Plan documents or the latest
annual report from the Plan, if applicable, and do not receive them within 30
days, you may file suit in a Federal court and you are not required to follow
the claims procedure set forth in Section 10 herein. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$110 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Plan Administrator.
If you have completed the claims and appeals procedure
described in Section 10 and have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or Federal court.
If you are discriminated against for asserting your rights,
you may seek assistance from the U.S. Department of Labor, or you may file suit
in a Federal court. The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these costs
and fees, for example, if it finds your claim is frivolous.
(d) Assistance with Your Questions. If you have any questions about
the Plan, you should contact the Plan Administrator. If you have any questions
about this statement or about your rights under ERISA, or if you need assistance
in obtaining documents from the Plan Administrator, you should contact the
nearest office of the Employee Benefits Security Administration, U.S. Department
of Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You
may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration or accessing its website at http://www.dol.gov/ebsa/.
Section 14. GENERAL PROVISIONS.
(a) Notices. Any notice, demand or request required or permitted to
be given by either the Company or an Eligible Employee pursuant to the terms of
this Plan shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, with postage prepaid, and addressed to
the parties, in the case of the Company, at the address set forth in Section
12(d) and, in the case of an Eligible Employee, at the address as set forth in
the
13.
Company's employment file maintained for the Eligible Employee as previously
furnished by the Eligible Employee or such other address as a party may request
by notifying the other in writing.
(b) Transfer and Assignment. The rights and obligations of an
Eligible Employee under this Plan may not be transferred or assigned without the
prior written consent of the Company. This Plan shall be binding upon any person
who is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company without regard to whether or not
such person or entity actively assumes the obligations hereunder.
(c) Waiver. Any party's failure to enforce any provision or
provisions of this Plan shall not in any way be construed as a waiver of any
such provision or provisions, nor prevent any party from thereafter enforcing
each and every other provision of this Plan. The rights granted the parties
herein are cumulative and shall not constitute a waiver of any party's right to
assert all other legal remedies available to it under the circumstances.
(d) Severability. Should any provision of this Plan be declared or
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
(e) Section Headings. Section headings in this Plan are included for
convenience of reference only and shall not be considered part of this Plan for
any other purpose.
Section 15. CIRCULAR 230 DISCLAIMER.
THE FOLLOWING DISCLAIMER IS PROVIDED IN ACCORDANCE WITH THE INTERNAL
REVENUE SERVICE'S CIRCULAR 230 (21 CFR PART 10). ANY ADVICE IN THIS PLAN IS NOT
INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED BY YOU FOR THE PURPOSE OF
AVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON YOU. ANY ADVICE IN THIS PLAN WAS
WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF PARTICIPATION IN THE COMPANY'S
SEVERANCE BENEFIT PLAN. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
Section 16. EXECUTION.
To record the adoption of the Plan as set forth herein, effective as
of August 1, 2007, VaxGen, Inc. has caused its duly authorized officer to
execute the same this _____ day of _______________, 2007.
VAXGEN, INC.
By:____________________________
Title:_________________________
14.
For Employees Age 40 or Older
Individual Termination
EXHIBIT A
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the VaxGen,
Inc. Severance Benefit Plan (the "Plan").
I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company or the
Employers that is not expressly stated therein. Certain capitalized terms used
in this Release are defined in the Plan.
I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.
Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the "Released Parties") from any and all
claims, liabilities and obligations, both known and unknown, that arise out of
or are in any way related to events, acts, conduct, or omissions occurring prior
to my signing this Agreement (collectively, the "Released Claims"). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company, the Employers or their
affiliates, or the termination of that employment; (2) all claims related to my
compensation or benefits, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or
any other ownership interests in the Company, the Employers, or their
affiliates; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys' fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) ("ADEA"), the
federal Employee Retirement Income Security Act of 1974 (as amended), and the
California Fair Employment and Housing Act (as amended). Notwithstanding the
foregoing, the following are not included in the Released Claims (the "Excluded
Claims"): (1) any rights or claims for indemnification I may have pursuant to
any written indemnification agreement with the Company to which I am a party,
the charter, bylaws, or operating agreements of the Company, or under applicable
law; or (2) any rights which are not waivable as a matter of law. In addition,
nothing in this Release prevents me from filing, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, or the California Department of Fair
Employment and Housing, except that I hereby waive my right to any monetary
benefits in connection with any such claim, charge or proceeding. I hereby
represent and warrant that, other than the Excluded
1.
For Employees Age 40 or Older
Individual Termination
Claims, I am not aware of any claims I have or might have against any of the
Released Parties that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA. I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have twenty-one (21) days to consider this
Release (although I may choose to voluntarily to sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release ("Effective
Date").
I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor." I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.
I hereby represent that I have been paid all compensation owed and for all
hours worked, I have received all the leave and leave benefits and protections
for which I am eligible, and I have not suffered any on-the-job injury for which
I have not already filed a workers' compensation claim.
I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than twenty-one (21)
days following the date it is provided to me, and I must not revoke it
thereafter.
EMPLOYEE
Name:________________________
Date:________________________
2.
For Employees Age 40 or Older
Group Termination
EXHIBIT B
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the VaxGen,
Inc. Severance Benefit Plan (the "Plan").
I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company or the
Employers that is not expressly stated therein. Certain capitalized terms used
in this Release are defined in the Plan.
I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.
Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the "Released Parties") from any and all
claims, liabilities and obligations, both known and unknown, that arise out of
or are in any way related to events, acts, conduct, or omissions occurring prior
to my signing this Agreement (collectively, the "Released Claims"). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company, the Employers or their
affiliates, or the termination of that employment; (2) all claims related to my
compensation or benefits, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or
any other ownership interests in the Company, the Employers, or their
affiliates; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys' fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) ("ADEA"), the
federal Employee Retirement Income Security Act of 1974 (as amended), and the
California Fair Employment and Housing Act (as amended). Notwithstanding the
foregoing, the following are not included in the Released Claims (the "Excluded
Claims"): (1) any rights or claims for indemnification I may have pursuant to
any written indemnification agreement with the Company to which I am a party,
the charter, bylaws, or operating agreements of the Company, or under applicable
law; or (2) any rights which are not waivable as a matter of law. In addition,
nothing in this Release prevents me from filing, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, or the California Department of Fair
Employment and Housing, except that I hereby waive my right to any monetary
benefits in connection with any such claim, charge or proceeding. I hereby
represent and warrant that, other than the Excluded
1.
For Employees Age 40 or Older
Group Termination
Claims, I am not aware of any claims I have or might have against any of the
Released Parties that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA. I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have forty-five (45) days to consider this
Release (although I may choose to voluntarily to sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release ("Effective
Date").
I have received with this Release all of the information required by the
ADEA, including without limitation a detailed list of the job titles and ages of
all employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated, along with information on the eligibility factors used
to select employees for the group termination and any time limits applicable to
this group termination program.
I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor." I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.
I hereby represent that I have been paid all compensation owed and for all
hours worked, I have received all the leave and leave benefits and protections
for which I am eligible, and I have not suffered any on-the-job injury for which
I have not already filed a workers' compensation claim.
I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than forty-five (45)
days following the date it is provided to me, and I must not revoke it
thereafter.
EMPLOYEE
Name:________________________
Date:________________________
2.
For Employees Under Age 40
Individual and Group Termination
EXHIBIT C
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the VaxGen,
Inc. Severance Benefit Plan (the "Plan").
I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company or the
Employers that is not expressly stated therein. Certain capitalized terms used
in this Release are defined in the Plan.
I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.
Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the "Released Parties") from any and all
claims, liabilities and obligations, both known and unknown, that arise out of
or are in any way related to events, acts, conduct, or omissions occurring prior
to my signing this Agreement (collectively, the "Released Claims"). The Released
Claims include, but are not limited to: (1) all claims arising out of or in any
way related to my employment with the Company, the Employers or their
affiliates, or the termination of that employment; (2) all claims related to my
compensation or benefits, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or
any other ownership interests in the Company, the Employers, or their
affiliates; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys' fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, and the
California Fair Employment and Housing Act (as amended). Notwithstanding the
foregoing, the following are not included in the Released Claims (the "Excluded
Claims"): (1) any rights or claims for indemnification I may have pursuant to
any written indemnification agreement with the Company to which I am a party,
the charter, bylaws, or operating agreements of the Company, or under applicable
law; or (2) any rights which are not waivable as a matter of law. In addition,
nothing in this Release prevents me from filing, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, or the California Department of Fair
Employment and Housing, except that I hereby waive my right to any monetary
benefits in connection with any such claim, charge or proceeding. I hereby
represent and warrant that, other than the Excluded Claims, I am not aware of
any claims I have or might have against any of the Released Parties that are not
included in the Released Claims.
1.
For Employees Under Age 40
Individual and Group Termination
I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor." I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.
I hereby represent that I have been paid all compensation owed and
for all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, and I have not suffered any on-the-job
injury for which I have not already filed a workers' compensation claim.
I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than fourteen (14) days
following the date it is provided to me.
EMPLOYEE
Name:___________________
Date:___________________
2.
APPENDIX A
VAXGEN, INC.
SEVERANCE BENEFIT PLAN
Affiliates of the Company whose employees are eligible to participate in the
VaxGen, Inc. Severance Benefit Plan (each an "Employer") are as follows:
NONE
The foregoing list of Employers is subject to such change as the Company,
pursuant to Section 1 of the Plan, may determine in its sole and absolute
discretion. Any such change to the participating Employers shall be set forth in
a revised version of this Appendix A.
Appendix A Adopted: August 1, 2007
VaxGen, Inc.
By:_______________________________
Title:____________________________
1.
APPENDIX B
VAXGEN, INC.
SEVERANCE BENEFIT PLAN
Severance benefits provided to Eligible Employees under the VaxGen, Inc.
Severance Benefit Plan (the "Plan") are as follows:
1. Severance Benefits. Subject to the exceptions set forth in Section 2 of
the Plan, each Eligible Employee who meets all the requirements set forth
in Sections 2 and 4 of the Plan, including, without limitation, executing
a general waiver and release in substantially the form attached to the
Plan as Exhibit A, Exhibit B or Exhibit C, as applicable, within the
applicable time period set forth therein and provided that such release
becomes effective in accordance with its terms, shall receive severance
benefits as set forth in this Appendix B. The Company, in its sole
discretion, may modify the form of the required general waiver and release
to comply with applicable law, and may incorporate such waiver and release
into a termination agreement or other agreement with the Eligible
Employee.
(a) Salary Continuation Payment Benefit. The Company shall continue to
pay, as severance, an Eligible Employee's Base Salary for a period
after his or her Qualifying Termination, based on the Eligible
Employee's Years of Service with the Company as of the date of his
or her Qualifying Termination. The period for which the Eligible
Employee's Salary Continuation Payment Benefit will continue is
calculated as follows:
2 months and one week of Base Salary plus
1 week of Base Salary if the Eligible Employee has completed two
Years of Service plus
1 week of Base Salary for each additional complete Year of Service.
Except as the Plan Administrator may otherwise determine, no
Eligible Employee shall receive a Salary Continuation Payment
Benefit in an amount exceeding twenty-six (26) weeks of Base Salary.
Subject to Section 3(e) of the Plan, the Salary Continuation Payment
Benefit will be paid on the same schedule as the Company's regular
payroll as in effect from time to time, commencing with the first
regular payroll pay date following the effective date of the release
of claims.
(b) COBRA Premium Benefit. If the Eligible Employee was enrolled in a
group health plan (e.g., medical, dental, or vision plan) sponsored
by the Company or an affiliate of the Company immediately prior to
termination, the Eligible Employee may be eligible to continue
coverage under such group health 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 (together with any state law of similar
effect, "COBRA"). The Company will notify the Eligible Employee of
any such right to continue such coverage at the
1.
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, or
waiver of any cost of coverage under any self-funded group health
plan, 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 group health 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 (except the obligation to pay insurance
premiums that the Company pays, if any, or, with respect to a
self-funded plan, any obligation to pay the cost of coverage to the
Company that the Company waives, if any) will be applied in the same
manner that such rules would apply in the absence of this Plan.
If an Eligible Employee timely elects continued coverage under
COBRA, the Company shall pay the full amount of the Eligible
Employee's COBRA premiums, or shall provide coverage under any
self-funded plan, on behalf of the Eligible Employee for the
Eligible Employee's continued coverage under the Company's group
health plans, including coverage for the Eligible Employee's
eligible dependents, for up to two (2) months following the Eligible
Employee's termination of employment; provided, however, that no
such premium payments shall be made, and no coverage shall be
provided under any self-funded group health plan, following the
Eligible Employee's death, the effective date of cessation of
continued coverage under COBRA, or the effective date of the
Eligible Employee's coverage by a group health plan of a subsequent
employer. Each Eligible Employee shall be required to notify the
Company immediately if the Eligible Employee becomes covered by a
group health plan of a subsequent employer. Upon the conclusion of
such period of insurance premium payments made by the Company, or
the provision of coverage under a self-funded group health plan, the
Eligible Employee will be responsible for the timely payment of the
full amount of premiums (or payment for the cost of coverage)
required under COBRA for the duration of the COBRA period.
For purposes of this Section 1(b), 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.
(c) Additional PTO Accrual. The Company shall pay an additional cash
amount, as severance, equal to 1/6th of the Eligible Employee's
annual paid time off ("PTO") accrual, at the accrual rate in effect
immediately prior to the date of the Qualifying Termination (such
amount, the "PTO Bonus"). The PTO Bonus will be paid in a lump sum
on the first regular payroll pay date following the effective date
of the release of claims. For the avoidance of doubt, the Company
will pay the Eligible Employee for any accrued but unused PTO in the
Eligible Employee's final paycheck, regardless of whether the
Eligible Employee receives
2.
any severance under this Plan or executes a release; the PTO Bonus
is in addition to any such amount.
(d) Pro-Rata Bonus. If the Eligible Employee is not an executive officer
of the Company, the Company shall pay such Eligible Employee an
additional cash amount, as severance, equal to the Eligible
Employee's target incentive bonus for the quarter in which the
Qualifying Termination occurs (the "Pro-Rata Bonus"). The Pro-Rata
Bonus will be paid in a lump sum on the first regular payroll pay
date following the effective date of the release of claims. For the
avoidance of doubt, the Pro-Rata Bonus shall not include any portion
of any performance bonus to which executive officers of the Company
may otherwise be entitled.
2. Definitions: The following definitions shall apply for purposes of this
Appendix B:
(a) "Base Salary" shall mean the Eligible Employee's base salary or
regular wage rate in effect immediately prior to the Eligible
Employee's receipt of written notice of the Eligible Employee's
termination. "Base Salary" does not include variable forms of
compensation such as but not limited to overtime, lead premiums,
shift differentials, bonuses, incentive compensation, commissions,
expenses or expense allowances.
(b) "Year of Service" shall mean each full 12 month period of regular
and active employment with the Company from the effective date of
the Eligible Employee's most recent date of hire or rehire with the
Company through the effective date of the Eligible Employee's
termination. Leaves of absence periods greater than 3 months are not
periods of active employment with the Company. Periods of employment
prior to the Eligible Employee's most recent date of hire or rehire
with the Company are disregarded.
The foregoing severance benefits are subject to all of the terms and
conditions of the Plan, including reduction against any other severance owed to
the Eligible Employee.
Appendix B Adopted: August 1, 2007
VaxGen, Inc.
By:________________________________
Title:_____________________________
3.