Executive Severance Plan, as amended
Exhibit 10.1
RIGEL PHARMACEUTICALS, INC.
AMENDED AND RESTATED EXECUTIVE SEVERANCE PLAN
Section 1. Introduction.
The Rigel Pharmaceuticals, Inc. Executive Severance Plan (the “Plan”) is established effective January 24, 2018, and amended and restated effective August 10, 2023. The purpose of the Plan is to provide for the payment of severance benefits to certain eligible executives of Rigel Pharmaceuticals, Inc. (the “Company”) who meet the eligibility criteria set forth in Section 2(a) below. This Plan document also is the Summary Plan Description for the Plan.
Section 2. Eligibility For Benefits.
(2) | Obligations of Eligible Employees. In order to receive any benefits under the Plan: |
(1) | one of the following actions has been taken: |
Section 3. Amount Of Benefit.
within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Eligible Employee’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, the reduction shall occur in the manner that results in the greatest economic benefit for the Eligible Employee. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.
In the event it is subsequently determined by the Internal Revenue Service that some portion of the Reduced Amount as determined pursuant to clause (x) in the preceding paragraph is subject to the Excise Tax, the Eligible Employee agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount is determined pursuant to clause (y) in the preceding paragraph, the Eligible Employee will have no obligation to return any portion of the Payment pursuant to the preceding sentence.
Unless the Eligible Employee and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations. If the 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 accounting or law firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder.
The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to the Eligible Employee and the Company 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 Eligible Employee or the Company) or such other time as requested by the Eligible Employee or the Company.
exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v). In addition to the above, to the extent required to comply with Section 409A and the applicable regulations and guidance issued thereunder, if the applicable permitted period for Executive to execute (and not revoke) the applicable Release spans two calendar years, payment of the applicable severance payments shall not commence until the beginning of the second calendar year.
Section 4. Company Property.
Section 5. Time Of Payment and Form Of Benefit.
Except as otherwise provided in Section 3, all severance benefits under the Plan shall be paid at the time and in the form provided in Appendix A and Appendix B following the Eligible Employee’s satisfaction of all of the requirements under the Plan. 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 benefits 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, the Company may offset any severance benefits 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 401(k) loan repayments or other employee benefit and benefit plan contributions.
Section 6. Right To Interpret Plan; Amendment and Termination.
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.
Section 7. 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 (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.
Section 8. 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 9. Claims, Inquiries And Appeals.
Rigel Pharmaceuticals, Inc. Attn: General Counsel
611 Gateway Boulevard, Suite 900 South San Francisco, CA 94080
(1) | the specific reason or reasons for the denial; |
(2) | references to the specific Plan provisions upon which the denial is based; |
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.
Rigel Pharmaceuticals, Inc. Attn: General Counsel
611 Gateway Boulevard, Suite 900 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.
(1) | the specific reason or reasons for the denial; |
(2) | references to the specific Plan provisions upon which the denial is based; |
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 an 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 10. 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 11. Other Plan Information.
Rigel Pharmaceuticals, Inc. Attn: General Counsel
611 Gateway Boulevard, Suite 900 South San Francisco, CA 94080
Rigel Pharmaceuticals, Inc. Attn: General Counsel
611 Gateway Boulevard, Suite 900 South San Francisco, CA 94080
The Plan Sponsor’s and Plan Administrator’s telephone number is ###-###-#### and facsimile number is ###-###-####.
Section 12. 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:
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.
Section 13. GENERAL PROVISIONS.
obligations hereunder. Following a Change of Control, any references to the “Company” in this Plan shall be deemed to be references also to any successor to the company.
Section 14. Execution
To record the adoption of the Plan as set forth herein, effective as of January 24, 2018, as most recently amended and restated on August 10, 2023, Rigel Pharmaceuticals, Inc. has caused its duly authorized officer to execute the same this 10th day of August, 2023.
Rigel Pharmaceuticals, Inc.
By: /s/Raymond Furey
Title: EVP, General Counsel, Corporate Secretary
Exhibit A
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Rigel Pharmaceuticals, Inc. Executive Severance 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, I understand that nothing in this Release limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). I further understand that this Release does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company and/or the Employer. While this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Release. 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.
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 hereby agree not to disparage the Company, the Employers, or their officers, directors, employees, shareholders or agents, in any manner likely to be harmful to them or their business, business reputation, or personal reputation; provided, however, that I will respond accurately and fully to any question, inquiry or request for information when required by legal process or in connection with a government investigation. In addition, I understand that nothing in this Release is intended to prohibit or restrain me in any manner from making disclosures that are protected under the whistleblower provisions of federal or state law or regulation.
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:
Exhibit B
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Rigel Pharmaceuticals, Inc. Executive Severance 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, I understand that nothing in this Release limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). I further understand that this Release does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company and/or the Employer. While this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Release. 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.
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 (under 29 U.S.C. § 626(f)(1)(H)), 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 hereby agree not to disparage the Company, the Employers, or their officers, directors, employees, shareholders or agents, in any manner likely to be harmful to them or their business, business reputation, or personal reputation; provided, however, that I will respond accurately and fully to any question, inquiry or request for information when required by legal process or in connection with a government investigation. In addition, I understand that nothing in this Release is intended to prohibit or restrain me in any manner from making disclosures that are protected under the whistleblower provisions of federal or state law or regulation.
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:
Exhibit C
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Rigel Pharmaceuticals, Inc. Executive Severance 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, I understand that nothing in this Release limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). I further understand that this Release does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company and/or the Employer. While this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Release.. 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.
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 hereby agree not to disparage the Company, the Employers, or their officers, directors, employees, shareholders or agents, in any manner likely to be harmful to them or their business, business reputation, or personal reputation; provided, however, that I will respond accurately and fully to any question, inquiry or request for information when required by legal process or in connection with a government investigation. In addition, I understand that nothing in this Release is intended to prohibit or restrain me in any manner from making disclosures that are protected under the whistleblower provisions of federal or state law or regulation.
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:
Appendix A
Rigel Pharmaceuticals, Inc.
Executive Severance Plan (COC Qualifying Termination)
Severance benefits provided to Eligible Employees under the Rigel Pharmaceuticals, Inc. Executive Severance 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 suffers a COC Qualifying Termination and who meets all of the requirements set forth in the Plan, including, without limitation, executing and not revoking 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, shall receive severance benefits as set forth in this Appendix A. |
(a) | Cash Severance. The Company shall make a lump sum payment of “Cash Severance” to the Eligible Employee in an amount determined as follows in the table below: |
Title at Termination | Amount |
CEO, President or EVP | 2.5 x (Base Salary + Eligible Bonus) |
SVP or VP | 2.0 x (Base Salary +Eligible Bonus) |
Subject to Sections 2(a)(2)(ii) and 3(e) of the Plan, the Cash Severance will be paid in a lump sum on the first regular payroll date following the Release Effective Date, but in no event later than March 15 of the year following the year in which the COC Qualifying Termination occurs.
(b) | COBRA Premium Benefit. If the Eligible Employee was enrolled in a group health plan (i.e., medical, dental, or vision plan) sponsored by the Company or an affiliate of the Company immediately prior to the COC Qualifying 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 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. |
Provided that the Eligible Employee and/or his or her eligible dependents elect continued medical insurance coverage in accordance with the applicable provisions of COBRA, the Company will continue to pay the employer portion of applicable premium payments for Eligible Employee’s and his or her eligible dependents’ continued COBRA coverage under such plan (as in effect or amended from time to time) at the same rates and levels in effect immediately prior to Eligible Employee’s termination of employment (the “COBRA Subsidy”), until the earlier of (1) the expiration of eighteen (18) months following the termination date or (2) the date Eligible Employee is covered or becomes eligible for any other health care plan coverage from a new employer that does not impose an applicable preexisting condition exclusion (the “COBRA Subsidy Period”). Eligible Employee shall promptly inform the Company in writing when he or she is covered or becomes eligible for
any such other health care coverage. The COBRA Subsidy for a given month shall be an amount equal to the employer share of the premium that the Company otherwise would pay for such group health care plan coverage if Eligible Employee were an active employee as of such month. Eligible Employee shall be responsible for paying the full unsubsidized costs (without any COBRA Subsidy) of the applicable COBRA premium for any and all COBRA coverage after the COBRA Subsidy Period. In the event such COBRA Subsidiary would result in adverse tax consequences, as determined by the Company, the Company shall reimburse Eligible Employee for the cost of the COBRA Subsidy rather than pay the COBRA Subsidy directly to the applicable plan administrator. If the Company reimburses Eligible Employee, the Company shall notify Eligible Employee in writing and Eligible Employee shall be responsible for timely paying the full costs of the applicable COBRA premium and submitting a request for reimbursement to the Company within thirty (30) days of such premium payment. The Company will then reimburse Eligible Employee on a monthly basis, within thirty (30) days after its receipt of sufficient documentation of payment by Eligible Employee of the applicable COBRA premium.
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) | Accelerated Vesting. The vesting and exercisability of all then-outstanding compensatory equity awards held by the Eligible Employee shall be accelerated such that the awards are fully vested and exercisable as of the date of the COC Qualifying Termination. |
(d) | Extended Period to Exercise Post Termination. If the Eligible Employee has signed an agreement to extend the period to exercise post termination within thirty (30) days after becoming eligible to participate in the Plan, the Company will amend such Eligible Employee’s then- outstanding stock options to extend the post-termination exercise period of such options that is applicable upon a COC Qualifying Termination until the earlier of (i) the original end of the term of each such option (generally 10 years from the date of grant) or (ii) the one (1) year anniversary of the date of the COC Qualifying Termination. |
2. | Definitions: The following definitions shall apply for purposes of this Appendix A: |
(a) | “Base Salary” shall mean the greater of the Eligible Employee’s base salary in effect immediately prior to (i) the Change of Control or (ii) the date of the COC Qualifying Termination. Base Salary does not include variable forms of compensation such as bonuses, incentive compensation, commissions, expenses or expense allowances and Base Salary shall not include any impact of a reduction in Base Salary that gives rises to Good Reason. |
(b) | “Eligible Bonus” shall mean the product of (i) the average percentage of the target annual incentive bonus earned by the Eligible Employee for performance during the two fiscal years immediately prior to the fiscal year in which the Qualifying Termination occurs and (ii) the target annual incentive bonus, expressed in dollars, which the Eligible Employee is eligible to earn in the fiscal year in which (A) the Change of Control occurs or (B) the Qualifying Termination occurs, whichever of (A) or (B) is greater, provided that the target incentive shall not include any impact of a reduction in target annual incentive that gives rises to Good Reason, provided further that if the Eligible Employee has been employed for less than two years or has not participated in the Company’s annual incentive bonus program for each of the prior two years, the performance achievement for purposes of clause (i) shall be 100% for the years in which the Eligible Employee was not employed or did not participate in the annual incentive bonus program.. |
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.
Rigel Pharmaceuticals, Inc.
By:/s/Raymond Furey
Title: EVP, General Counsel, Corporate Secretary
Appendix B
Rigel Pharmaceuticals, Inc.
Executive Severance Plan (Non-COC Qualifying Termination)
Severance benefits provided to Eligible Employees under the Rigel Pharmaceuticals, Inc. Executive Severance 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 suffers a Non-COC Qualifying Termination and who meets all of the requirements set forth in the Plan, including, without limitation, executing and letting become effective 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, shall receive severance benefits as set forth in this Appendix B. |
(a) | Cash Severance. The Company shall provide for continuing Base Salary payments (“Cash Severance”) to the Eligible Employee in an amount equal to the Base Salary that would have been paid during the period (the “Severance Period”) in the table below had the Eligible Employee continued the service through such Severance Period: |
Title at Termination | Severance Period |
CEO | 18 months |
EVP | 12 months |
SVP | 12 months |
VP | 9 months |
Subject to Sections 2(a)(2)(ii) and 3(e) of the Plan, the Cash Severance will be paid in regular installments on each regularly scheduled payroll date until the earlier to occur of the Severance Period following the Non-COC Qualifying Termination or the March 14 of the calendar year following the Non-COC Qualifying Termination.
(b) | COBRA Premium Benefit. If the Eligible Employee was enrolled in a group health plan (i.e., medical, dental, or vision plan) sponsored by the Company or an affiliate of the Company immediately prior to the Non-COC Qualifying 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 COBRA. The Company will notify the Eligible Employee of any such right to continue such coverage at the 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. |
Provided that the Eligible Employee and/or his or her eligible dependents elect continued medical insurance coverage in accordance with the applicable provisions of COBRA, the Company will continue to pay the employer portion of applicable premium payments for Eligible Employee’s and his or her eligible dependents’ continued COBRA coverage under such plan (as in effect or amended from time to time) at the same rates and levels in effect immediately prior to Eligible Employee’s termination of employment (the “COBRA Subsidy”), until the earlier of (1) the
Severance Period in the table above or (2) the date Eligible Employee is covered or becomes eligible for any other health care plan coverage from a new employer that does not impose an applicable preexisting condition exclusion (the “COBRA Subsidy Period”). Eligible Employee shall promptly inform the Company in writing when he or she is covered or becomes eligible for any such other health care coverage. The COBRA Subsidy for a given month shall be an amount equal to the employer share of the premium that the Company otherwise would pay for such group health care plan coverage if Eligible Employee were an active employee as of such month. Eligible Employee shall be responsible for paying the full unsubsidized costs (without any COBRA Subsidy) of the applicable COBRA premium for any and all COBRA coverage after the COBRA Subsidy Period. In the event such COBRA Subsidiary would result in adverse tax consequences, as determined by the Company, the Company shall reimburse Eligible Employee for the cost of the COBRA Subsidy rather than pay the COBRA Subsidy directly to the applicable plan administrator. If the Company reimburses Eligible Employee, the Company shall notify Eligible Employee in writing and Eligible Employee shall be responsible for timely paying the full costs of the applicable COBRA premium and submitting a request for reimbursement to the Company within thirty (30) days of such premium payment. The Company will then reimburse Eligible Employee on a monthly basis, within thirty (30) days after its receipt of sufficient documentation of payment by Eligible Employee of the applicable COBRA premium.
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) | Accelerated Vesting. The vesting and exercisability of any then-outstanding and unvested time- based compensatory equity awards held by the Eligible Employee that would have vested during the period in the table below (the “Vesting Amount”) had the Eligible Employee continued employment with the Company through the end of such period shall become vested and exercisable as of the date of the Non-COC Qualifying Termination: |
Title at Termination | Vesting Amount |
CEO | 18 months |
EVP | 12 months |
SVP | 12 months |
VP | 9 months |
Further, the vesting and exercisability of any then-outstanding and unvested performance-based compensatory equity awards held by the Eligible Employee that would have vested during the Period to Exercise in the table below had the Eligible Employee continued employment with the Company through the end of such period shall become vested and exercisable as of the date, if any, that the performance goal relating to such performance-based vesting awards is achieved.
(d) | Extended Period to Exercise Post Termination. If the Eligible Employee has signed an agreement to extend the period to exercise post termination within thirty (30) days after becoming eligible to participate in the Plan, the post-termination exercise period of such Eligible Employee’s then-outstanding stock options will be automatically extended until the earlier of (i) the original end of the term of each such option (generally 10 years from the date of grant) or (ii) the Period to Exercise in the table below: |
Title at Termination | Period to Exercise |
CEO | 30 months |
EVP | 24 months |
SVP | 24 months |
VP | 21 months |
2. | Definition: The following definition shall apply for purposes of this Appendix B: |
(a) | “Base Salary” shall mean the Eligible Employee’s base salary in effect immediately prior to the date of the Non-COC Qualifying Termination. Base Salary does not include variable forms of compensation such as bonuses, incentive compensation, commissions, expenses or expense allowances and Base Salary shall not include any impact of a reduction in Base Salary that gives rises to Good Reason. |
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.
Rigel Pharmaceuticals, Inc.
By:/s/Raymond Furey
Title: EVP, General Counsel, Corporate Secretary