Exhibit
10.8


 


FACET
BIOTECH CORPORATION


RETENTION
AND SEVERANCE PLAN


 


1.             ESTABLISHMENT AND PURPOSE OF PLAN


 


1.1           Establishment. 
The Facet Biotech Corporation Retention and Severance Plan (the “Plan”) is hereby established
by the Compensation Committee of the Board of Directors of Facet Biotech
Corporation, effective
                    ,
2008 (the “Effective Date”).


 


1.2           Purpose. 
The Company draws upon the knowledge, experience and advice of its
officers and key employees in order to manage its business for the benefit of
the Company’s stockholders.  Due to the
widespread awareness of the possibility of mergers, acquisitions and other
strategic alliances in the Company’s industry, the topics of compensation and
other employee benefits in the event of a Change in Control or other
circumstances that may result in termination of employment are issues in
competitive recruitment and retention efforts. 
The Committee recognizes that the possibility or pending occurrence of a
Change in Control could lead to uncertainty regarding the consequences of such
an event and could adversely affect the Company’s ability to attract, retain
and motivate present and future officers and key employees.  The Committee has therefore determined that
it is in the best interests of the Company and its stockholders to provide for
the continued dedication of its officers and key employees notwithstanding the
possibility or occurrence of circumstances that may result in termination of
employment by establishing this Plan to provide designated officers and
designated key employees with enhanced financial security in the event of a
termination of employment.  The purpose
of this Plan is to provide its Participants with specified compensation and
benefits in the event of termination of employment under circumstances
specified herein.


 


2.             DEFINITIONS AND CONSTRUCTION


 


2.1           Definitions. 
Whenever used in this Plan, the following terms shall have the meanings
set forth below:


 


(a)           “Applicable Benefit Period” means:


 


(1)           with respect to a Participant’s
Involuntary Termination Absent a Change in Control:


 


(i)            a period of eighteen (18) months if the
Participant is the Chief Executive Officer; or


 


(ii)           a period of twelve (12) months if the
Participant is an Executive Officer; or


 


(iii)          a
period of nine (9) months if the Participant is an Officer; or


 


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(iv)          a period of six (6) months if the
Participant is a Key Employee;


 


(2)           with respect to a Participant’s
Involuntary Termination Following a Change in Control:


 


(i)            a period of twenty-four (24) months if
the Participant is the Chief Executive Officer; or


 


(ii)           a period of eighteen (18) months if the
Participant is an Executive Officer; or


 


(iii)          a
period of twelve (12) months if the Participant is an Officer; or


 


(iv)          a period of nine (9) months if the
Participant is a Key Employee.


 


(b)           “Base Salary
Rate”
means, as applicable, either:


 


(1)           with respect to a Participant’s
Involuntary Termination Absent a Change in Control, the Participant’s monthly
base salary rate in effect immediately prior to such termination of employment
(without giving effect to any reduction in the Participant’s base salary rate
constituting Good Reason); or


 


(2)           with respect to a Participant’s
Involuntary Termination Following a Change in Control, the greater of (i) the
Participant’s monthly base salary rate in effect immediately prior to such
termination of employment (without giving effect to any reduction in the
Participant’s base salary rate constituting Good Reason) or (ii) the Participant’s
monthly base salary rate in effect immediately prior to the applicable Change
in Control.


 


For this purpose, base salary does not include any bonuses,
commissions, fringe benefits, car allowances, other irregular payments or any
other compensation except base salary.


 


(c)           “Board” means the Board of Directors of the
Company.


 


(d)           “Bonus Rate” means the quotient determined by
dividing whichever of the following amounts is the greatest by twelve (12):


 


(1)           the aggregate of all annual incentive
bonuses earned by the Participant (whether or not actually paid) under the
terms of the programs, plans or agreements providing for such bonuses for the
fiscal year of the Company immediately preceding the fiscal year of the Change
in Control; or


 


(2)           the aggregate of all annual incentive
bonuses earned by the Participant (whether or not actually paid) under the
terms of the programs, plans or agreements providing for such bonuses for the
fiscal year of the Company immediately preceding the fiscal year of the Participant’s
Involuntary Termination Following a Change in Control; or


 


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(3)           the aggregate of all annual incentive
bonuses that would be earned by the Participant at the Participant’s annual
incentive bonus target rate (assuming attainment of 100% of all applicable
performance goals) under the terms of the programs, plans or agreements
providing for such bonuses in which the Participant was participating for the
fiscal year of the Participant’s Involuntary Termination Following a Change in
Control (without giving effect to any reduction in the Participant’s annual
incentive bonus target rate constituting Good Reason);


 


provided, however, that for the purposes of this
definition, “annual incentive bonuses” shall not include signing bonuses,
retention bonuses or other nonrecurring cash awards that are not part of an
annual incentive bonus program.


 


(e)           “Cause” means the occurrence of any of the
following:


 


(1)           the Participant’s intentional theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit,
or falsification of any Company Group documents or records; or


 


(2)           the Participant’s material failure to
abide by the Company’s code of conduct or other written policies (including,
without limitation, policies relating to confidentiality and reasonable
workplace conduct); or


 


(3)           the Participant’s material and
intentional unauthorized use, misappropriation, destruction or diversion of any
tangible or intangible asset or corporate opportunity of the Company Group
(including, without limitation, the Participant’s improper use or disclosure of
Company Group confidential or proprietary information); or


 


(4)           any intentional act by the Participant
which has a material detrimental effect on the Company Group’s reputation or
business; or


 


(5)           the Participant’s repeated failure or
inability to perform any reasonable assigned duties after written notice from a
member of the Company Group of, and a reasonable opportunity to cure, such
failure or inability; or


 


(6)           any material breach by the Participant of
any employment, service, non-disclosure, non-competition, non-solicitation or
other similar agreement between the Participant and a member of the Company
Group, which breach is not cured pursuant to the terms of such agreement or
within twenty (20) days of receiving written notice of such breach; or


 


(7)           the Participant’s conviction (including
any plea of guilty or nolo contendere) of any criminal act involving fraud,
dishonesty, misappropriation or moral turpitude, or which impairs the
Participant’s ability to perform his or her duties with the Company Group.


 


(f)            “Change in
Control”
means the occurrence of any of the following:


 


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(1)           any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total fair market value or
total combined voting power of the Company’s then-outstanding securities
entitled to vote generally in the election of directors of the Company;
provided, however, that a Change in Control shall not be deemed to have
occurred if such degree of beneficial ownership results from any of the
following: (i) an acquisition by any person who on the Effective Date is
the beneficial owner of more than fifty percent (50%) of such voting power, (ii) any
acquisition directly from the Company, including, without limitation, pursuant
to or in connection with a public offering of securities, (iii) any
acquisition by the Company, (iv) any acquisition by a trustee or other
fiduciary under an employee benefit plan of a member of the Company Group or (v) any
acquisition by an entity owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of the
voting securities of the Company; or


 


(2)           the Company is party to a merger, consolidation
or similar corporate transaction, or series of related transactions, which
results in the holders of the voting securities of the Company outstanding
immediately prior to such transaction(s) failing to retain immediately
after such transaction(s) direct or indirect beneficial ownership of more
than fifty percent (50%) of the total combined voting power of the securities
entitled to vote generally in the election of directors of the Company or the
surviving entity outstanding immediately after such transaction(s); or


 


(3)           the sale, exchange or transfer of all or
substantially all of the assets of the Company or consummation of any
transaction, or series of related transactions, having similar effect (other
than a sale or disposition to one or more subsidiaries of the Company); or


 


(4)           a change in the composition of the Board
within any consecutive twelve-month period as a result of which fewer than a
majority of the directors are Incumbent Directors;


 


provided, however, that a Change in Control shall be deemed not to
include (i) a transaction described in subsections (1) or (2) of
this Section in which a majority of the members of the board of directors
of the continuing, surviving or successor entity, or parent thereof,
immediately after such transaction is comprised of Incumbent Directors, or (ii) a
transaction described in subsection (3) of this Section in which the
holders of the voting securities of the Company outstanding immediately prior
to such transaction(s) retain immediately after such transaction(s) direct
or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the securities entitled to vote generally in the
election of directors of the entity to which the assets of the Company were
transferred.


 


(g)           “Change in
Control Period” means a period commencing upon the consummation of a
Change in Control and ending on the date occurring eighteen (18) months
thereafter.


 


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(h)           “Chief
Executive Officer” means the individual appointed by the Board as the
Chief Executive Officer of the Company and who is serving in such capacity
immediately prior to the first to occur of: (1) a condition constituting
Good Reason with respect to such individual, (2) such individual’s
termination of employment with the Company Group, or (3) the commencement
of the applicable Change in Control Period.


 


(i)            “COBRA” means the group health plan continuation coverage
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and
any applicable regulations promulgated thereunder.


 


(j)            “Code” means the Internal Revenue Code
of 1986, as amended, and any applicable regulations or administrative
guidelines promulgated thereunder.


 


(k)           “Committee” means the Compensation Committee of the
Board.


 


(l)            “Company” means Facet Biotech Corporation, a
Delaware corporation, and, following a Change in Control, a Successor that
agrees to assume all of the rights and obligations of the Company under this
Plan or a Successor which otherwise becomes bound by operation of law under
this Plan.


 


(m)          “Company
Group”
means the group consisting of the Company and each present or future parent and
subsidiary corporation or other business entity thereof.


 


(n)           “Equity Award” means any stock option (excluding,
however, an option described in Section 423 of the Code), stock
appreciation right, stock bonus, stock purchase, restricted stock, restricted
stock unit, performance share, performance unit, phantom stock or other
stock-based compensation award of any kind granted by any member of the Company
Group and held by a Participant, including any such award which is assumed by,
or for which a replacement award is substituted by, the Successor or any other
member of the Company Group in connection with a Change in Control.


 


(o)           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.


 


(p)           “Executive Officer” means an individual appointed by the
Board as an officer of the Company having a title of Executive Vice President
or Senior Vice President and who is serving in such capacity immediately prior
to the first to occur of: (1) a condition constituting Good Reason with
respect to such individual, (2) such individual’s termination of
employment with the Company Group, or (3) the commencement of the
applicable Change in Control Period.


 


(q)           “Good Reason” means the occurrence of any of the
following conditions without the Participant’s informed written consent:


 


(1)           a material diminution in the Participant’s
authority, duties or responsibilities, causing the Participant’s position to be
of materially lesser rank or responsibility within the Company Group; or


 


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(2)           a material diminution in the authority,
duties or responsibilities of the supervisor to whom the Participant is
required to report, causing such supervisor’s position to be of materially
lesser rank or responsibility within the Company Group; or, if the Participant
reported directly to the Board at or following the time of becoming a Participant,
a requirement that the Participant report to a corporate officer or other
employee rather than directly to the Board or the board of directors of the
Company’s parent; or


 


(3)           a material reduction in the Participant’s
Base Salary Rate or annual incentive bonus target rate, unless reductions
comparable in amount and duration are concurrently made for all other officers
and key employees of the Company Group; or


 


(4)           a change in the Participant’s work
location that increases the regular one-way commute distance between the
Participant’s residence prior to such change and work location by more than
thirty (30) miles; or


 


(5)           any action or inaction by a member of the
Company Group that constitutes, with respect to the Participant, a material
breach of this Plan or an employment agreement under which the Participant
provides services to the Company Group, including a breach described in Section 14.2.


 


(r)            “Incumbent
Director”
means a director who either (1) is a member of the Board as of the
Effective Date, or (2) is elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination, but (3) who was not elected or
nominated in connection with an actual or threatened proxy contest relating to
the election of directors of the Company.


 


(s)           “Involuntary Termination” means the occurrence of any of the
following events:


 


(1)           termination by the Company Group of the
Participant’s employment for any reason other than Cause, the Participant’s
death, or the Participant’s Permanent Disability; or


 


(2)           failure by the Company Group to renew an
employment agreement under which the Participant provides services to the
Company Group, provided that the Participant was willing and able to execute a
new employment agreement providing terms and conditions substantially similar
to those of the expiring employment agreement and to continue providing such
services; or


 


(3)           the Participant’s resignation for Good
Reason from employment with the Company Group within one hundred eighty (180)
days following the initial existence of a condition constituting Good Reason,
provided that the Participant delivered written notice to the Company of such
condition within ninety (90) days after its initial existence and the Company
failed to cure such condition within thirty (30) days following such written
notice;


 


provided, however, that Involuntary Termination shall not include any
voluntary resignation from employment by the Participant for any reason other
than Good Reason.


 


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(t)            “Involuntary
Termination Absent a Change in Control” means an Involuntary Termination that
does not occur during a Change in Control Period.


 


(u)           “Involuntary
Termination Following a Change in Control” means an Involuntary Termination that
occurs during a Change in Control Period.


 


(v)           “Key Employee” means an individual, other than the
Chief Executive Officer, an Executive Officer or an Officer, who is so
designated by the Committee and who is employed by a member of the Company
Group immediately prior to the first to occur of: (1) a condition
constituting Good Reason with respect to such individual, (2) such
individual’s termination of employment with the Company Group, or (3) the
commencement of the applicable Change in Control Period.


 


(w)          “Officer” means an individual appointed by the Board as an
officer of the Company (other than as the Chief Executive Officer or an
Executive Officer) having a title of Vice President and who is serving in such
capacity immediately prior to the first to occur of: (1) a condition
constituting Good Reason with respect to such individual, (2) such
individual’s termination of employment with the Company Group, or (3) the
commencement of the applicable Change in Control Period.


 


(x)            “Participant” means each individual designated by the
Committee to participate in the Plan and who has executed a Participation
Agreement.


 


(y)           “Participation
Agreement” means an Agreement to Participate in the Facet Biotech Corporation
Retention and Severance Plan in the form attached hereto as Exhibit A
or in such other form as the Committee may approve from time to time; provided,
however, that, after a Participation Agreement has been entered into between a
Participant and the Company, it may be modified only by a supplemental written
agreement executed by both the Participant and the Company.  The terms of such forms of Participation
Agreement need not be identical with respect to each Participant.


 


(z)            “Performance-Based
Equity Award” means an Equity Award the vesting or earning of which is conditioned
in whole or in part upon the achievement of one or more performance goals
(e.g., the attainment of a target stock price, achievement of a corporate
financial goal or achievement of an individual goal other than continued
performance of services for a specified period of time), notwithstanding that
the vesting or earning of such Equity Award may also be conditioned upon the
continued performance of services for the Company Group.


 


(aa)         “Permanent Disability” means a Participant’s incapacity due to
bodily injury or physical or mental illness which (1) prevents the
Participant from engaging in the full-time performance of the Participant’s
duties for a period of six (6) consecutive months and (2) will, in
the opinion of a qualified physician, be permanent and continuous during the
remainder of the Participant’s life.


 


(bb)         “Release” means a general release of all known and
unknown claims against the Company and its affiliates and their stockholders,
directors, officers, employees, agents, successors and assigns substantially in
the form attached hereto as Exhibit B (“General Release of Claims
[Age 40 and over]”) or Exhibit C (“General Release of Claims


 


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[Under age 40]”), whichever is applicable, with any modifications
thereto determined by legal counsel to the Company to be necessary or advisable
to comply with applicable law or to accomplish the intent of Section 8
(Exclusive Remedy) hereof.


 


(cc)         “Section 409A” means Section 409A
of the Code.


 


(dd)         “Section 409A Deferred Compensation”
means compensation, benefits or arrangements provided by the Plan or otherwise
that constitute or would give rise to deferred compensation subject to and not
exempted from the requirements of Section 409A.


 


(ee)         “Separation from Service”
means a separation from service within the meaning of Section 409A.


 


(ff)           “Service-Based Equity Award”
means an Equity Award the vesting or earning of which is conditioned solely
upon the continued performance of services for the Company Group.


 


(gg)         “Specified Employee” means a
specified employee within the meaning of Section 409A.


 


(hh)         “Successor” means any
successor in interest to substantially all of the business and/or assets of the
Company.


 


(ii)           “Target Bonus Rate” means,
with respect to the Participant’s Involuntary Termination Absent a Change in
Control, the quotient determined by dividing the following amount by twelve
(12):  the aggregate of all annual
incentive bonuses that would be earned by the Participant at the Participant’s
annual incentive bonus target rate (assuming attainment of 100% of all
applicable performance goals) under the terms of the programs, plans or
agreements providing for such bonuses in which the Participant was
participating for the fiscal year of the Participant’s Involuntary Termination
Absent a Change in Control (without giving effect to any reduction in the
Participant’s annual incentive bonus target rate constituting Good Reason);
provided, however, that for the purposes of this definition, “annual incentive
bonuses” shall not include signing bonuses, retention bonuses or other
nonrecurring cash awards that are not part of an annual incentive bonus
program.


 


2.2           Construction.  The
Company intends that all payments and benefits provided by this Plan be exempt
from or comply with all applicable requirements of Section 409A, and any
ambiguities in the Plan shall be construed in a manner consistent with such
intent.  Captions and titles contained
herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. 
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.


 


3.             ELIGIBILITY AND PARTICIPATION


 


The individuals eligible to be designated to
participate in the Plan shall be the Chief Executive Officer, the Executive
Officers, the Officers and the Key Employees. 
The 


 


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Committee shall designate
from time to time each eligible individual who shall become a Participant upon
such individual’s execution of a Participation Agreement.


 


4.             PAYMENTS AND BENEFITS
UPON TERMINATION OF EMPLOYMENT


 


In the
event of a Participant’s termination of employment with the Company Group, the
Participant shall be entitled to receive the applicable compensation and
benefits described in this Section 4.


 


4.1           Involuntary Termination Absent a Change in Control.  In the event of a Participant’s Involuntary
Termination Absent a Change in Control, the Participant shall be entitled to
receive the following compensation and benefits:


 


(a)           Accrued Obligations.  The Participant shall be entitled
to receive:


 


(1)           all
salary, commissions, bonuses and accrued but unused vacation earned through the
date of the Participant’s termination of employment, which shall be paid at the
time required by applicable law or pursuant to the terms and conditions of the
plans or agreements providing for such payments; and


 


(2)           reimbursement
within ten (10) business days of submission of proper reports, such
submission to be made within thirty (30) days following the Participant’s
termination of employment, of all business expenses reasonably and necessarily
incurred by the Participant in connection with the business of the Company
Group prior to his or her termination of employment in accordance with the
Company Group’s business expense policy; and


 


(3)           the
benefits, if any, under any Company Group retirement plan, nonqualified
deferred compensation plan, Equity Award plan or agreement, welfare benefit
plan or other Company Group compensation or benefit plan to which the
Participant may be entitled pursuant to the terms and conditions of such plans
or agreements.


 


(b)           Severance Benefits.  Provided that the Participant resigns upon
such Involuntary Termination Absent a Change in Control from all capacities in
which the Participant is then rendering service to the Company Group
(including, without limitation, service as a member of the Board), executes the
applicable form of Release and such Release becomes effective in accordance
with its terms on or before the sixtieth (60th) day following the date of the
Participant’s Involuntary Termination Absent a Change in Control, the
Participant shall be entitled to receive the following severance payments and
benefits to which the Participant would not otherwise be entitled:


 


(1)           Cash Severance Payments. 
Subject to Section 6.2, the Company shall pay to the Participant in
a lump sum cash payment on the sixtieth (60th) day following the date of the
Participant’s termination of employment an amount equal to (i) the sum of
the Participant’s applicable Base Salary Rate and the Participant’s Target
Bonus Rate multiplied by (ii) the number of months contained in the
Participant’s Applicable Benefit Period.


 


(2)           Health and Life Insurance Benefits.  Subject to Section 6.2, for the period
commencing immediately following the Participant’s termination of 


 


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employment and
continuing for the duration of the Applicable Benefit Period, the Company shall
arrange to provide the Participant and his or her dependents with health benefits
(including medical and dental) and life insurance benefits substantially
similar to those provided to the Participant and his or her dependents
immediately prior to the date of such termination of employment or shall
reimburse the Participant for the cost of obtaining such benefits to the extent
described below.  Such benefits shall be
provided to the Participant at the same premium cost to the Participant and at
the same coverage level as in effect as of the Participant’s termination of
employment; provided, however, that the Participant shall be subject to any
change in the premium cost and/or level of coverage applicable generally to all
employees holding the position or comparable position with the Company Group
which the Participant held immediately prior to termination of employment.  The Company may satisfy its obligation to
provide a continuation of health benefits by paying that portion of the
Participant’s premiums required under COBRA that exceeds the amount of premiums
that the Participant would have been required to pay for continuing coverage
had he or she continued in employment. 
If the Company is not reasonably able to continue such coverage under
the Company’s health benefit plans, the Company shall provide substantially
equivalent coverage under other sources or will reimburse (without a tax
gross-up) the Participant for premiums (in excess of the Participant’s premium
cost described above) incurred by the Participant to obtain his or her own such
coverage.  If the Participant and/or the
Participant’s dependents become eligible to receive such coverage under another
employer’s health benefit plans during the Applicable Benefit Period, the
Participant shall report such eligibility to the Company, and the Company’s
obligations under this subsection shall be secondary to the coverage provided
by such other employer’s plans.  For the
balance of any period in excess of the Applicable Benefit Period during which
the Participant is entitled to continuation coverage under COBRA, the
Participant shall be entitled to maintain coverage for himself or herself and
the Participant’s eligible dependents at the Participant’s own expense.


 


(3)           Outplacement Benefits. 
Subject to Section 6.2, for the period commencing immediately
following the Participant’s termination of employment and continuing for a
period of six (6) months, the Company will provide the Participant with
reasonable outplacement services from vendors designated by the Company.


 


(4)           Acceleration of Vesting of Equity Awards.


 


(i)            Service-Based Equity Awards. 
Notwithstanding any provision to the contrary contained in any plan or
agreement evidencing a Service-Based Equity Award, but subject to Section 6.2
and subsections (iv) and (v) below, each of the Participant’s
Service-Based Equity Awards outstanding at the time of the Participant’s
termination of employment with the Company Group shall vest effective as of the
time of the Participant’s termination of employment to the same extent that
such Equity Award would have vested in accordance with its terms over the
period of twelve (12) months following the date of the Participant’s
termination of employment had the Participant’s employment with the Company
Group continued throughout such period.


 


(ii)           Performance-Based Equity Awards Other Than Section 162(m) Exempt
Awards.  Notwithstanding any
provision to the contrary contained in any plan or agreement evidencing a
Performance-Based Equity Award, but subject to Section 6.2 


 


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and subsection (iv) below, each of the Participant’s
Performance-Based Equity Awards, other than any such Equity Award intended to
result in “qualified performance-based compensation” within the meaning of Section 162(m) of
the Code (a “Section 162(m) Exempt
Award”), outstanding at the time of the Participant’s
termination of employment with the Company Group shall vest effective as of the
time of the Participant’s termination of employment as follows:


 


(A)          If the
performance period of such award is scheduled to end within twelve (12) months
following the date of the Participant’s termination of employment, such award
shall vest to the same extent that it would have vested had one hundred percent
(100%) of the target level of performance been achieved and had the Participant’s
employment with the Company Group continued through the date on which such
award was to be settled in accordance with its terms.


 


(B)           If the
performance period of such award is scheduled to end more than twelve (12)
months following the date of the Participant’s termination of employment, such
award shall vest in an amount equal to the product of: (1) the amount of
such award that would have vested had one hundred percent (100%) of the target
level of performance been achieved and had the Participant’s employment with
the Company Group continued through the date on which such award was to be
settled in accordance with its terms, and (2) a fraction (not greater than
one), the numerator of which is the number of days from the commencement of the
performance period until the date twelve (12) months following the date of the
Participant’s termination of employment and the denominator of which is the
total number of days contained in the performance period.


 


(iii)          Performance-Based Equity
Awards Which Are Section 162(m) Exempt Awards.  Notwithstanding any provision to the contrary
contained in any plan or agreement evidencing a Performance-Based Equity Award,
but subject to Section 6.2, each of the Participant’s Performance-Based
Equity Awards which is a Section 162(m) Exempt Award and is
outstanding at the time of the Participant’s termination of employment with the
Company Group shall continue to remain outstanding and shall vest and be
settled as follows:


 


(A)          The
Participant shall vest in and be entitled to receive an amount equal to the
product of: (1) the amount of such award that would actually vest based
upon the extent to which the applicable performance goals are actually attained
as of the completion of the applicable performance period and had the Participant’s
employment with the Company Group continued through the date on which such
award was to be settled in accordance with its terms, and (2) a fraction
(not greater than one), the numerator of which is the number of days from the
commencement of the performance period until the date twelve (12) months
following the date of the Participant’s termination of employment and the
denominator of which is the total number of days contained in the performance
period.


 


(B)           Payment
of the amount determined under subsection (A) above shall be made at the same
time payments are made to other participants in the plan or arrangement
governing such award in accordance with its terms, but in any event no later
than the 15th day of the third month following the later of (x) end of the
Participant’s 


 


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taxable year in
which the performance period ends or (y) the end of the Company’s taxable
year in which the performance period ends.


 


(C)           Notwithstanding
the foregoing, in the event of the consummation of a Change in Control prior to
the date on which payment would otherwise be made in accordance with subsection
(B) above, then such award shall vest and be settled as provided by Section 5.2,
but subject in any event to Section 6.2.


 


(iv)          Settlement of Certain Equity Awards Not Subject to Exercise.  Any Equity Award the vesting of which is
accelerated by this Section 4.1(b)(4), other than a Section 162(m) Exempt
Award, which is an award of restricted stock units, performance shares,
performance units, phantom stock or similar stock-based compensation
representing a future right to receive shares or other consideration the
settlement of which is not determined by its holder’s election to exercise such
award shall be settled in full on the first to occur of (A) the sixtieth
(60th) day following the date of the Participant’s termination of employment,
and (B) the effective time of a Change in Control, but subject in either
case to Section 6.2.


 


(v)           Extension of Stock Option Exercise Period.  Notwithstanding any provision to the contrary
contained in the agreement evidencing any Equity Award which is a stock option,
the stock option, to the extent unexercised on the date on which the
Participant’s employment terminated, may be exercised by the Participant (or
the Participant’s guardian or legal representative) at any time prior to the
expiration of one (1) year after the date on which the Participant’s
employment terminated, but in any event no later than the date of expiration of
the stock option’s term as set forth in the agreement evidencing such stock
option.


 


(5)           Forfeiture of Benefits. 
If the Release which is a condition to the Participant’s right to
payments and benefits pursuant to this Section 4.1(b) does not become
effective on or before the sixtieth (60th) day following the date of the
Participant’s termination of employment, then the Company shall have the right
to: (i) terminate any further provision of such severance benefits
pursuant to this Plan, (ii) seek reimbursement from the Participant for
all such severance benefits previously provided to the Participant pursuant to
this Plan, (iii) recover from the Participant all shares of the Company’s
stock owned by the Participant (or the proceeds therefrom, reduced by any exercise
or purchase price paid to acquire such shares) the vesting of which was
accelerated pursuant to this Plan, and (iv) to immediately cancel all
Equity Awards the vesting of which was accelerated pursuant to this Plan.


 


4.2           Involuntary Termination Following a Change in Control.  In the event of a Participant’s Involuntary
Termination Following a Change in Control, the Participant shall be entitled to
receive the following compensation and benefits:


 


(a)           Accrued Obligations.  The Participant shall be entitled
to receive all of the accrued obligations described in Section 4.1(a),
which shall be provided in the same manner as described in such Section.


 


12

















 


(b)           Severance Benefits.  Provided that the Participant resigns upon
such Involuntary Termination Following a Change in Control from all capacities
in which the Participant is then rendering service to the Company Group
(including, without limitation, service as a member of the Board), executes the
applicable form of Release and such Release becomes effective in accordance
with its terms on or before the sixtieth (60th) day following the date of the
Participant’s Involuntary Termination Following a Change in Control, the
Participant shall be entitled to receive the following severance payments and
benefits to which the Participant would not otherwise be entitled:


 


(1)           Cash Severance Payments. 
Subject to Section 6.2, the Company shall pay to the Participant in
a lump sum cash payment on the sixtieth (60th) day following the date of the
Participant’s termination of employment an amount equal to (i) the sum of
the Participant’s applicable Base Salary Rate and the Participant’s applicable
Bonus Rate multiplied by (ii) the number of months contained in the
Participant’s Applicable Benefit Period.


 


(2)           Health and Life Insurance Benefits.  Subject to Section 6.2, for the period
commencing immediately following the Participant’s termination of employment
and continuing for the duration of the Applicable Benefit Period, the Company
shall arrange to provide the Participant and his or her dependents with health
benefits (including medical and dental) and life insurance benefits
substantially similar to those provided to the Participant and his or her
dependents immediately prior to the date of such termination of employment or
shall reimburse the Participant for the cost of obtaining such benefits to the
extent described below.  Such benefits
shall be provided to the Participant at the same premium cost to the
Participant and at the same coverage level as in effect as of the Participant’s
termination of employment; provided, however, that the Participant shall be
subject to any change in the premium cost and/or level of coverage applicable
generally to all employees holding the position or comparable position with the
Company Group which the Participant held immediately prior to termination of
employment.  The Company may satisfy its
obligation to provide a continuation of health benefits by paying that portion
of the Participant’s premiums required under COBRA that exceeds the amount of
premiums that the Participant would have been required to pay for continuing
coverage had he or she continued in employment. 
If the Company is not reasonably able to continue such coverage under
the Company’s health benefit plans, the Company shall provide substantially
equivalent coverage under other sources or will reimburse (without a tax
gross-up) the Participant for premiums (in excess of the Participant’s premium
cost described above) incurred by the Participant to obtain his or her own such
coverage.  If the Participant and/or the
Participant’s dependents become eligible to receive such coverage under another
employer’s health benefit plans during the Applicable Benefit Period, the
Participant shall report such eligibility to the Company, and the Company’s
obligations under this subsection shall be secondary to the coverage provided
by such other employer’s plans.  For the
balance of any period in excess of the Applicable Benefit Period during which
the Participant is entitled to continuation coverage under COBRA, the
Participant shall be entitled to maintain coverage for himself or herself and
the Participant’s eligible dependents at the Participant’s own expense.


 


(3)           Outplacement Benefits. 
Subject to Section 6.2, for the period commencing immediately
following the Participant’s termination of employment and 


 


13

















 


continuing for a
period of six (6) months, the Company will provide the Participant with
reasonable outplacement services from vendors designated by the Company.


 


(4)           Acceleration of Vesting of Equity Awards; Extension of Stock Option
Exercise Period.


 


(i)            Notwithstanding
any provision to the contrary contained in any plan or agreement evidencing an
Equity Award granted to a Participant, but subject to Section 6.2, the
vesting of each of the Participant’s Equity Awards outstanding at the time of
the Participant’s termination of employment with the Company Group shall be
accelerated in full effective as of the time of the Participant’s termination
of employment.


 


(ii)           In
determining the extent of such acceleration of vesting of any Performance-Based
Equity Award, it shall be assumed that one hundred percent (100%) of the target
level of performance has been achieved.


 


(iii)          Any Equity Awards the vesting of which is
accelerated by this Section 4.2(b)(4) which is an award of restricted
stock units, performance shares, performance units, phantom stock or similar
stock-based compensation representing a future right to receive shares or other
consideration the settlement of which is not determined by its holder’s
election to exercise such award shall be settled in full on the sixtieth (60th)
day following the date of the Participant’s termination of employment, subject
to Section 6.2.


 


(iv)          Notwithstanding
any provision to the contrary contained in the agreement evidencing any Equity
Award which is a stock option, the stock option, to the extent unexercised on
the date on which the Participant’s employment terminated, may be exercised by
the Participant (or the Participant’s guardian or legal representative) at any
time prior to the expiration of one (1) year after the date on which the
Participant’s employment terminated, but in any event no later than the date of
expiration of the stock option’s term as set forth in the agreement evidencing
such stock option.


 


(5)           Forfeiture of Benefits. 
If the Release which is a condition to the Participant’s rights to
payments and benefits pursuant to this Section 4.2(b) does not become
effective on or before the sixtieth (60th) day following the date of the
Participant’s termination of employment, then the Company shall have the right
to: (i) terminate any further provision of such severance benefits pursuant
to this Plan, (ii) seek reimbursement from the Participant for all such
severance benefits previously provided to the Participant pursuant to this
Plan, (iii) recover from the Participant all shares of the Company’s stock
owned by the Participant (or the proceeds therefrom, reduced by any exercise or
purchase price paid to acquire such shares) the vesting of which was
accelerated pursuant to this Plan, and (iv) to immediately cancel all
Equity Awards the vesting of which was accelerated pursuant to this Plan.


 


4.3           Other Termination.  In the event of a Participant’s termination
of employment with the Company Group which is not an Involuntary Termination,
the Participant shall be entitled to receive only the accrued obligations described in Section 4.1(a), which shall be
provided in the same manner as described in such Section.


 


14














 


4.4                                 Indemnification; Insurance.


 


(a)           In addition to any
rights a Participant may have under any indemnification agreement previously
entered into between the Company and such Participant (a “Prior Indemnity Agreement”), from and after the
date of the Participant’s Involuntary Termination Absent a Change in Control or
Involuntary Termination Following a Change in Control, the Company shall
indemnify and hold harmless the Participant against any costs or expenses
(including attorneys’ fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, by
reason of the fact that the Participant is or was a director, officer, employee
or agent of the Company Group, or is or was serving at the request of the
Company Group as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether asserted or
claimed prior to, at or after the date of the Participant’s termination of
employment, to the fullest extent permitted under applicable law, and the
Company shall also advance fees and expenses (including attorneys’ fees) as
incurred by the Participant to the fullest extent permitted under applicable
law.  In the event of a conflict between
the provisions of a Prior Indemnity Agreement and the provisions of this Plan,
the Participant may elect which provisions shall govern.


 


(b)           For a period of six (6) years
from and after the date of the Participant’s Involuntary Termination Following
a Change in Control, the Company shall use its best efforts to maintain a
policy of directors’ and officers’ liability insurance for the benefit of such
Participant which provides him or her with coverage no less favorable than that
provided for the Company’s continuing officers and directors.


 


5.                                       TREATMENT OF EQUITY AWARDS UPON A
CHANGE IN CONTROL


 


5.1           Acceleration of Vesting Upon Non-Assumption of Service-Based Equity
Awards.  Notwithstanding any
provision to the contrary contained in any plan or agreement evidencing a
Service-Based Equity Award held by a Participant, but subject to Section 6.2,
in the event of a Change in Control in which the surviving, continuing,
successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the “Acquiring
Corporation”), does not assume or continue the Company’s
rights and obligations under such then-outstanding Service-Based Equity Award
or substitute for such then-outstanding Service-Based Equity Award a
substantially equivalent equity award for the Acquiring Corporation’s stock,
then the vesting, exercisability and settlement of such Service-Based Equity
Award which is not assumed, continued or substituted for shall be accelerated
in full effective immediately prior to but conditioned upon the consummation of
the Change in Control, provided that the Participant remains an employee or
other service provider with the Company Group immediately prior to the Change
in Control.


 


5.2           Acceleration of Vesting of Performance-Based Equity Awards.  Notwithstanding any provision to
the contrary contained in any plan or agreement evidencing a Performance-Based
Equity Award held by a Participant, but subject to Section 6.2, in the
event of a Change in Control the vesting, exercisability and settlement of such
then-outstanding Performance-Based Equity Award shall be accelerated in full
immediately prior to but conditioned upon the consummation of the Change in
Control (assuming for the purpose of 


 


15

















 


determining the extent of such acceleration, if applicable, that one
hundred percent (100%) of the target level of performance has been achieved),
provided that the Participant remains an employee or other service provider
with the Company Group immediately prior to the Change in Control or as
otherwise provided by Section 4.1(b)(4)(iii)(C).


 


6.                                       CERTAIN FEDERAL TAX
CONSIDERATIONS


 


6.1                                 Federal Excise Tax Under Section 4999 of the Code.


 


(a)           Excess
Parachute Payments.  In the
event that any payment or benefit received or to be received by the Participant
pursuant to this Plan or otherwise (collectively, the “Payments”)
would subject the Participant to any excise tax pursuant to Section 4999
of the Code (the “Excise Tax”) due to the characterization of such
Payments as “excess parachute payments” under Section 280G of the Code,
then, notwithstanding the other provisions of this Plan, the amount of such
Payments shall not exceed the amount which produces the greatest after-tax
benefit to the Participant.


 


(b)           Determination
by Accountants.  Upon the occurrence of any event (the “Event”)
that would give rise to any Payments pursuant to this Plan that may be
reasonably anticipated to resulting in the Participant’s receipt of an excess
parachute payment under Section 280G of the Code, the Company shall
promptly request a determination in writing by independent public accountants
(the “Accountants”)
selected by the Company of the amount and type of such Payments which would
produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the
Accountants may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code.  The Company and the Participant shall furnish
to the Accountants such information and documents as the Accountants may
reasonably request in order to make their required determination.  The Company shall bear all fees and expenses
charged by the Accountants in connection with their services contemplated by
this Section.


 


6.2                                 Compliance with Section 409A. 
Notwithstanding any other provision of the Plan to the
contrary, the provision, time and manner of payment or distribution of all
compensation and benefits provided by the Plan that constitute Section 409A
Deferred Compensation shall be subject to, limited by and construed in
accordance with the requirements of Section 409A, including but not
limited to the following:


 


(a)           Installment
Payments Treated as Series of Separate Payments.  It is the intent of this Plan that any right
of a Participant to receive installment payments hereunder shall, for purposes
of Section 409A, be treated as a right to a series of separate payments.


 


(b)           Separation
from Service.  Payments and
benefits constituting Section 409A Deferred Compensation otherwise payable
or provided pursuant to the Plan as a result of the Participant’s termination
of employment shall be paid or provided only at or following the time that the
Participant has experienced a Separation from Service.


 


(c)           Six-Month
Delay Applicable to Specified Employees.  Payments and benefits constituting Section 409A
Deferred Compensation to be paid or provided pursuant 


 


16

















 


to the Plan upon
or following and due to the Separation from Service of a Participant who is a
Specified Employee shall be paid or provided only upon the later of (1) the
date that is six (6) months and one (1) day after the date of such
Separation from Service or, if earlier, the date of death of the Participant
(in either case, the “Delayed
Payment Date”), or (2) the date or dates on which
such Section 409A Deferred Compensation would otherwise be paid or
provided in accordance with the Plan. 
All such amounts that would, but for this Section, become payable prior
to the Delayed Payment Date shall be accumulated and paid on the Delayed
Payment Date.


 


(d)                                 Limitation
on Health and Life Insurance Benefits.  To the extent that all or any portion of the
Company’s payment or reimbursement to the Participant for the cost of the
Company’s obligation to provide health benefits or life insurance benefits
pursuant to Section 4.1(b)(2) or Section 4.2(b)(2) (in
either case, the “Company-Provided Benefits”)
would exceed an amount for which, or continue for a period of time in excess of
which, such Company Provided Benefits would qualify for an exemption from
treatment as Section 409A Deferred Compensation, the Company shall, for
the duration of the Applicable Benefit Period, pay or reimburse the Participant
for the Company-Provided Benefits in an amount not to exceed $150,000 per
calendar year or any portion thereof included in the Applicable Benefit
Period.  The amount of Company-Provided
Benefits furnished in any taxable year of the Participant shall not affect the
amount of Company-Provided Benefits furnished in any other taxable year of the
Participant.  Any right of a Participant
to Company-Provided Benefits shall not
be subject to liquidation or exchange for another benefit.  Any reimbursement for Company-Provided
Benefits to which a Participant is entitled shall be paid no later than the
last day of the Participant’s taxable year following the taxable year in which
the Participant’s expense for such Company-Provided Benefits was incurred.


 


(e)                                  Payment Upon a Change in Control.  Notwithstanding any provision of the Plan to
the contrary, to the extent that any amount constituting Section 409A
Deferred Compensation would become payable under this Plan solely by reason of
a Change in Control, such amount shall become payable only if the event
constituting a Change in Control would also constitute a change in ownership or
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company within the meaning of Section 409A.


 


(f)                                    Equity Awards Constituting Section 409A Deferred Compensation.  The following shall apply to any Equity Award
held by a Participant which constitutes Section 409A Deferred
Compensation:


 


(1)           The vesting of any
Equity Award which constitutes Section 409A Deferred Compensation and
which is held by a Participant who is a Specified Employee shall be accelerated
upon the Participant’s Involuntary Termination in accordance with Section 4.1(b)(4) or
4.2(b)(4) to the extent applicable; provided, however, that the payment in
settlement of such Equity Award shall occur on the Delayed Payment Date or on
such later date as provided by such applicable Section.


 


(2)           Any Equity Award
which constitutes Section 409A Deferred Compensation and which would vest
and become payable upon a Change in Control in accordance with Section 5.1
(subject to the requirement of Section 6.2(e)) shall vest in full as 


 


17

















 


provided by Section 5.1
but shall be converted automatically at the effective time of such Change in
Control into a right to receive in cash on the date or dates such award would
have been settled in accordance with its then existing settlement schedule (or
on such earlier date as provided in Section 4.2(b)(4) or as required
by Section 6.2(c)) an amount or amounts equal in the aggregate to the
intrinsic value of the Equity Award at the time of the Change in Control.


 


(3)           Equity Awards
constituting Section 409A Deferred Compensation which vest and become
payable upon a Change in Control in accordance with Section 5.2 shall not
be subject to this Section but shall be subject to Section 6.2(e).


 


7.                                       CONFLICT IN BENEFITS;
NONCUMULATION OF BENEFITS


 


7.1           Effect of
Plan.  The terms of this Plan,
when accepted by a Participant pursuant to an executed Participation Agreement,
shall supersede all prior arrangements, whether written or oral, and
understandings regarding the subject matter of this Plan and, subject to Section 7.2,
shall be the exclusive agreement for the determination of any payments and
benefits due to the Participant upon the events described in Section 4 and
Section 5.  It is the express intent
of the Company and the Participant that the provisions of this Plan applicable
to Equity Awards shall be deemed incorporated into any agreement evidencing an
Equity Award granted to the Participant subsequent to the date of the
Participant’s Participation Agreement, notwithstanding any “integration” or
other provision of such Equity Award agreement to the contrary or the failure
of such Equity Award agreement to make reference to this Plan, excluding only
an Equity Award agreement which expressly refers to this Plan and disclaims
such incorporation.


 


7.2           Noncumulation
of Benefits.  Except as
expressly provided in a written agreement between a Participant and the Company
entered into after the date of such Participant’s Participation Agreement and
which expressly disclaims this Section 7.2 and is approved by the Board or
the Committee, the total amount of payments and benefits that may be received
by the Participant as a result of the events described in Section 4 and Section 5
pursuant to (a) the Plan, (b) any agreement between the Participant
and the Company or (c) any other plan, practice or statutory obligation of
the Company, shall not exceed the amount of payments and benefits provided by
this Plan upon such events (plus any payments and benefits provided pursuant to
a Prior Indemnity Agreement, as described in Section 4.4(a)), and the
aggregate amounts payable under this Plan shall be reduced to the extent of any
excess (but to not less than zero).


 


8.                                       EXCLUSIVE REMEDY


 


The payments and benefits provided by Section 4
(plus any payments and benefits provided pursuant to a Prior Indemnity
Agreement, as described in Section 4.4(a)), if applicable, shall
constitute the Participant’s sole and exclusive remedy for any alleged injury
or other damages arising out of the cessation of the employment relationship
between the Participant and the Company in the event of the Participant’s
termination of employment with the Company Group.  The Participant shall be entitled to no other
compensation, benefits, or other payments from the Company Group as a result of
the Participant’s termination of employment with respect to which the payments
and benefits provided by this Plan (plus any payments and benefits 


 


18

















 


provided pursuant to a
Prior Indemnity Agreement) have been provided to the Participant, except as
expressly set forth in this Plan or, subject to the provisions of Section 7.2,
in a duly executed employment agreement between Company and the Participant.


 


9.                                       PROPRIETARY AND
CONFIDENTIAL INFORMATION


 


The Participant agrees to continue at all times, during
the Participant’s employment with the Company Group and following the
termination thereof, to abide by the terms and conditions of the
confidentiality and/or proprietary rights agreement between the Participant and
the Company or any other member of the Company Group.


 


10.                                 NONSOLICITATION


 


If the Company performs its obligations to deliver the
payments and benefits set forth in Section 4 (plus any payments and
benefits provided pursuant to an agreement evidencing an Equity Award or a
Prior Indemnity Agreement), then for a period equal to the Applicable Benefit
Period applicable to a Participant following the Participant’s Involuntary
Termination, the Participant shall not, directly or indirectly, recruit,
solicit or invite the solicitation of any employees of any member of the
Company Group to terminate their employment relationship with the Company
Group.


 


11.                                 NO CONTRACT OF EMPLOYMENT


 


Neither the establishment of the Plan, nor any
amendment thereto, nor the payment or provision of any benefits shall be
construed as giving any person the right to be retained by the Company, a
Successor or any other member of the Company Group.  Except as otherwise established in an
employment agreement between the Company and a Participant, the employment
relationship between the Participant and the Company is an “at-will”
relationship.  Accordingly, either the
Participant or the Company may terminate the relationship at any time, with or
without cause, and with or without notice except as otherwise provided by Section 15.  In addition, nothing in this Plan shall in
any manner obligate any Successor or other member of the Company Group to offer
employment to any Participant or to continue the employment of any Participant
which it does hire for any specific duration of time.


 


12.                                 CLAIMS FOR BENEFITS


 


12.1         ERISA Plan. 
This Plan is intended to be (a) an employee welfare plan as defined
in Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”)
and (b) a “top-hat” plan maintained for the benefit of a select group of
management or highly compensated employees of the Company Group.


 


12.2         Application for Benefits.  All applications for payments and/or benefits
under the Plan (“Benefits”) shall be submitted to the Company’s
chief human resources officer (the “Claims Administrator”), with
copies to the Company’s chief legal officer and the Committee.  Applications for Benefits must be in writing
on forms acceptable to the Claims Administrator and must be signed by the
Participant or beneficiary.  The Claims
Administrator reserves the right to require the Participant or beneficiary to
furnish such other proof of the 


 


19

















 


Participant’s
expenses, including without limitation, receipts, canceled checks, bills, and
invoices as may be required by the Claims Administrator.


 


12.3                           Appeal of Denial of Claim.


 


(a)                                  If
a claimant’s claim for Benefits is denied, the Claims Administrator shall
provide notice to the claimant in writing of the denial within ninety (90) days
after its submission.  The notice shall
be written in a manner calculated to be understood by the claimant and shall
include:


 


(1)           The specific reason
or reasons for the denial;


 


(2)           Specific references
to the Plan provisions on which the denial is based;


 


(3)           A description of any
additional material or information necessary for the applicant to perfect the
claim and an explanation of why such material or information is necessary; and


 


(4)           An explanation of
the Plan’s claims review procedures and a statement of claimant’s right to
bring a civil action under ERISA Section 502(a) following an adverse
benefit determination.


 


(b)                                 If
special circumstances require an extension of time for processing the initial
claim, a written notice of the extension and the reason therefor shall be
furnished to the claimant before the end of the initial ninety (90) day
period.  In no event shall such extension
exceed ninety (90) days.


 


(c)                                  If
a claim for Benefits is denied, the claimant, at the claimant’s sole expense,
may appeal the denial to the Committee (the “Appeals Administrator”) within
sixty (60) days of the receipt of written notice of the denial.  In pursuing such appeal the applicant or his
duly authorized representative:


 


(1)           may request in
writing that the Appeals Administrator review the denial;


 


(2)           may review pertinent
documents; and


 


(3)           may submit issues
and comments in writing.


 


(d)                                 The
decision on review shall be made within sixty (60) days of receipt of the
request for review, unless special circumstances require an extension of time
for processing, in which case a decision shall be rendered as soon as possible,
but not later than one hundred twenty (120) days after receipt of the request
for review.  If such an extension of time
is required, written notice of the extension shall be furnished to the claimant
before the end of the original sixty (60) day period.  The decision on review shall be made in
writing, shall be written in a manner calculated to be understood by the
claimant, and, if the decision on review is a denial of the claim for Benefits,
shall include:


 


20

















 


(1)           The specific reason
or reasons for the denial;


 


(2)           Specific references
to the Plan provisions on which the denial is based;


 


(3)           A description of any
additional material or information necessary for the applicant to perfect the
claim and an explanation of why such material or information is necessary; and


 


(4)           An explanation of
the Plan’s claims review procedures and a statement of claimant’s right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination.


 


13.                                 ARBITRATION


 


13.1     Disputes
Subject to Arbitration.  Any
claim, dispute or controversy arising out of this Plan, the interpretation,
validity or enforceability of this Plan or the alleged breach thereof shall be
submitted by the parties to binding arbitration by the American Arbitration
Association or as otherwise required by ERISA; provided, however, that (a) the
arbitrator shall have no authority to make any ruling or judgment that would
confer any rights with respect to trade secrets, confidential and proprietary
information or other intellectual property; and (b) this arbitration
provision shall not preclude the parties from seeking legal and equitable relief
from any court having jurisdiction with respect to any disputes or claims
relating to or arising out of the misuse or misappropriation of intellectual
property.  Judgment may be entered on the
award of the arbitrator in any court having jurisdiction.


 


13.2     Site of
Arbitration.  The site of the
arbitration proceeding shall be in San Mateo County, California or any other
site mutually agreed to by the Company and the Participant.


 


13.3     Costs and Expenses Borne
by Company.  All costs and
expenses of arbitration, including but not limited to reasonable attorneys’
fees and other costs reasonably incurred by the Participant in connection with
arbitration in accordance with this Section 13, shall be paid by the
Company.  Notwithstanding the foregoing,
if the Participant initiates the arbitration, and the arbitrator finds that the
Participant’s claims were totally without merit or frivolous, then the
Participant shall be responsible for the Participant’s own attorneys’ fees and
costs


 


14.                                 SUCCESSORS AND ASSIGNS


 


14.1     Successors of the Company.  The Company shall require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Plan in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken
place.


 


21














 


14.2         Acknowledgment
by Company.  If, after a
Change in Control, the Company fails to reasonably confirm in writing to the
Participant that it has performed the obligation described in Section 14.1
within twenty (20) days after a written request for such confirmation is
delivered by the Participant to the Company in the manner provided by Section 15.1,
such failure shall constitute a material breach of this Plan and shall entitle
the Participant to resign for Good Reason and to receive the benefits provided
under this Plan upon an Involuntary Termination Following a Change in Control.


 


14.3         Heirs and
Representatives of Participant. 
This Plan shall inure to the benefit of and be enforceable by the
Participant’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises, legatees or other beneficiaries.  If the Participant should die while any
amount would still be payable to the Participant hereunder (other than amounts
which, by their terms, terminate upon the death of the Participant) if the
Participant had continued to live, then all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the
executors, personal representatives or administrators of the Participant’s
estate.


 


15.                                 NOTICES


 


15.1                           General.  For purposes
of this Plan, notices and all other communications provided for herein shall be
in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States certified mail, return receipt
requested, or by overnight courier, postage prepaid, as follows:


 


(a)           if to the Company:


 


Facet Biotech Corporation


1400 Seaport Boulevard


Redwood City, California
94063


Attention: Chief Legal
Officer


 


(b)           if to the Committee:


 


Compensation Committee of
the


Board of Directors of


Facet Biotech Corporation


1400 Seaport Boulevard


Redwood City, California
94063


Attention: Corporate
Secretary


 


(c)           if to the
Participant, at the home address which the Participant most recently
communicated to the Company in writing.


 


Either party may provide
the other with notices of change of address, which shall be effective upon
receipt.


 


15.2                           Notice of Termination. 
Any termination by the Company of the Participant’s employment or any
resignation of employment by the Participant shall be 


 


22

















 


communicated by a
notice of termination or resignation to the other party hereto given in
accordance with Section 15.1.  Such
notice shall indicate the specific termination provision in this Plan relied
upon, shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated, and shall
specify the termination date.


 


16.                                 TERMINATION AND AMENDMENT OF PLAN


 


This Plan and/or any
Participation Agreement executed by a Participant may not be terminated with
respect to such Participant without the written consent of the Participant and
the approval of the Board or the Committee. 
This Plan and/or any Participation Agreement executed by a Participant
may be modified, amended or superseded with respect to such Participant only by
a supplemental written agreement between the Participant and the Company
approved by the Board or the Committee. 
Notwithstanding any other provision of the Plan to the contrary, the
Committee may, in its sole and absolute discretion and without the consent of
any Participant, amend the Plan or any Participation Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Participation Agreement to any present or future
law relating to plans of this or similar nature (including, but not limited to,
Section 409A of the Code), and to the administrative regulations and
rulings promulgated thereunder.


 


17.                                 MISCELLANEOUS PROVISIONS


 


17.1         Administration.  The Plan shall be administered by the
Committee.  The Committee shall have the
exclusive discretion and authority to establish rules, forms and procedures for
the administration of the Plan, to construe and interpret the Plan, and to
decide all questions of fact, interpretation, definition, computation or
administration arising in connection with the Plan, including, but not limited
to, eligibility to participate in the Plan and the type and amount of benefits
paid under the Plan.  The rules,
interpretations and other actions of the Committee shall be binding and
conclusive on all persons.


 


17.2         Unfunded
Obligation.  Any amounts
payable to Participants pursuant to the Plan are unfunded obligations.  The Company shall not be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations.  The Company shall retain at all times
beneficial ownership of any investments, including trust investments, which the
Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or
maintenance of any trust or any Participant account shall not create or
constitute a trust or fiduciary relationship between the Board or the Company
and a Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of the Company.


 


17.3         No Duty to
Mitigate; Obligations of Company. 
A Participant shall not be required to mitigate the amount of any
payment or benefit contemplated by this Plan by seeking employment with a new
employer or otherwise, nor shall any such payment or benefit (except for
benefits to the extent described in Section 4.1(b)(2) or Section 4.2(b)(2))
be reduced by any compensation or benefits that the Participant may receive
from employment by another employer. 
Except as otherwise provided by this Plan, including, without
limitation, the 


 


23

















 


forfeiture of
benefits provisions contained in Section 4.1(b)(5) and Section 4.2(b)(5),
the obligations of the Company to make payments to the Participant and to make
the arrangements provided for herein are absolute and unconditional and may not
be reduced by any circumstances, including without limitation any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against the Participant or any third party at any time.


 


17.4         No
Representations.  By executing
a Participation Agreement, the Participant acknowledges that in becoming a
Participant in the Plan, the Participant is not relying and has not relied on
any promise, representation or statement made by or on behalf of the Company
which is not set forth in this Plan.


 


17.5         Waiver.  No waiver by the Participant or the Company
of any breach of, or of any lack of compliance with, any condition or provision
of this Plan by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.


 


17.6         Choice of
Law.  The validity,
interpretation, construction and performance of this Plan shall be governed by
the substantive laws of the State of California, without regard to its conflict
of law provisions.


 


17.7         Validity.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall remain in full force and effect.


 


17.8         Benefits Not
Assignable.  Except as
otherwise provided herein or by law, no right or interest of any Participant
under the Plan shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, without limitation, by
execution, levy, garnishment, attachment, pledge or in any other manner, and no
attempted transfer or assignment thereof shall be effective.  No right or interest of any Participant under
the Plan shall be liable for, or subject to, any obligation or liability of
such Participant.


 


17.9         Tax
Withholding.  All payments
made pursuant to this Plan will be subject to withholding of applicable income
and employment taxes.


 


17.10       Consultation
with Legal and Financial Advisors. 
By executing a Participation Agreement, the Participant acknowledges
that this Plan confers significant legal rights, and may also involve the
waiver of rights under other agreements; that the Company has encouraged the
Participant to consult with the Participant’s personal legal and financial
advisors; and that the Participant has had adequate time to consult with the
Participant’s advisors before executing the Participation Agreement.


 


17.11       Further Assurances.  From time to time, at the Company’s request
and without further consideration, the Participant shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of the Plan, the Participant’s
Participation Agreement and the Release, and to provide adequate assurance of
the Participant’s due performance thereunder.


 


24

















 


18.                                 AGREEMENT


 


By executing a Participation Agreement, the Participant
acknowledges that the Participant has received a copy of this Plan and has
read, understands and is familiar with the terms and provisions of this
Plan.  This Plan shall constitute an
agreement between the Company and the Participant executing a Participation
Agreement.


 


IN WITNESS
WHEREOF, the undersigned Secretary of the Company certifies that the foregoing
sets forth the Plan as duly adopted by the Committee on
                      ,
2008.


 


	
   

  	
   

  



 


25

















 


EXHIBIT A


 


FORM OF


 


AGREEMENT TO
PARTICIPATE IN THE


 


FACET BIOTECH
CORPORATION


 


RETENTION AND
SEVERANCE PLAN


 

















 


AGREEMENT
TO PARTICIPATE IN THE


FACET
BIOTECH CORPORATION


RETENTION
AND SEVERANCE PLAN


Effective
                      ,
2008


 


In consideration of the benefits provided by the Facet
Biotech Corporation Retention and Severance Plan (the “Plan”), the undersigned employee of Facet Biotech
Corporation (the “Company”)
or its
                                    
subsidiary and the Company agree that, as of the date written below, the
undersigned shall become a Participant in the Plan and shall be fully bound by
and subject to all of its provisions. 
All references to a “Participant” in the Plan shall be deemed to refer
to the undersigned.


 


The undersigned employee acknowledges that the Plan
confers significant legal rights and may also constitute a waiver of rights
under other agreements with the Company; that the Company has encouraged the
undersigned to consult with the undersigned’s personal legal and financial
advisors; and that the undersigned has had adequate time to consult with the
undersigned’s advisors before executing this agreement.


 


The undersigned employee acknowledges that he or she
has received a copy of the Plan and has read, understands and is familiar with
the terms and provisions of the Plan. 
The undersigned employee further acknowledges that (1) by accepting
the arbitration provision set forth in Section 13 of the Plan, the
undersigned is waiving any right to a jury trial in the event of any dispute
covered by such provision and (2) except as otherwise established in an
employment agreement between a member of the Company Group and the undersigned,
the employment relationship between the undersigned and the Company Group is an
“at-will” relationship.


 


Executed on
                                                  .


 


	
  PARTICIPANT

  	
   

  	
  FACET BIOTECH
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Name Printed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 

















 


EXHIBIT B


 


FORM OF


 


GENERAL RELEASE OF
CLAIMS


[Age 40 and over]


 














 


GENERAL
RELEASE OF CLAIMS


[Age
40 and over]


 


This Agreement is by and
between [Employee Name] (“Employee”)
and [Facet Biotech Corporation or successor
that agrees to assume the Retention and Severance Plan following a Change in
Control] (the “Company”).  This
Agreement will become effective on the eighth (8th) day after it is signed by
Employee (the “Effective Date”), provided that the Company has signed this
Agreement and Employee has not revoked this Agreement (by written notice to [Company Contact Name] at the Company) prior
to that date.


 


RECITALS


 


A.            Employee was employed by the Company or its
                                    
subsidiary as of
                      ,
        .


 


B.            Employee and the Company entered into an Agreement to
Participate in the Facet Biotech Corporation Retention and Severance Plan (such
agreement and plan being referred to herein as the “Plan”) effective as of
                    ,
         wherein Employee is entitled
to receive certain benefits in the event of an Involuntary Termination (as
defined by the Plan), provided Employee signs and does not revoke a Release (as
defined by the Plan).


 


C.            [A Change in Control
(as defined by the Plan) has occurred as a result of [briefly describe change in control]


 


D.            Employee’s employment is being terminated as a result of
an [Involuntary Termination Absent a Change
in Control] [Involuntary Termination Following a Change in Control].  Employee’s last day of work and termination
are effective as of
                              ,
        .  Employee desires to receive the payments and
benefits provided by the Plan by executing this Release.


 


NOW, THEREFORE, the
parties agree as follows:


 


1.             The Company shall provide Employee with the applicable
payments and benefits set forth in the Plan in accordance with the terms of the
Plan.  Employee acknowledges that the
payments and benefits made pursuant to this paragraph are made in full
satisfaction of the Company’s obligations under the Plan.  Employee further acknowledges that Employee
has been paid all wages and accrued, unused vacation that Employee earned
during his or her employment with the Company or its subsidiary.


 


2.             Employee and Employee’s successors release the Company,
its respective subsidiaries, stockholders, investors, directors, officers,
employees, agents, attorneys, insurers, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Employee now has, or at any other time had, or shall or may have
against those released parties based upon or arising out of any matter, cause,
fact, thing, act or omission whatsoever related to Employee’s employment by the
Company or a subsidiary or the termination of such employment and occurring or
existing at any time up to and including the date on which Employee signs this
Agreement, including, but not limited to, any 


 

















 


claims of breach of
written, oral or implied contract, wrongful termination, retaliation, fraud,
defamation, infliction of emotional distress, or national origin, race, age,
sex, sexual orientation, disability or other discrimination or harassment under
the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967,
the Americans with Disabilities Act, the Fair Employment and Housing Act or any
other applicable law.  Notwithstanding
the foregoing, this release shall not apply to (a) any right of the
Employee pursuant to Section 4.4 of the Plan or pursuant to a Prior
Indemnity Agreement (as such term is defined by the Plan) or (b) any
rights or claims that cannot be released by Employee as a matter of law,
including, but not limited to, any claims for indemnity under California Labor
Code Section 2802.


 


3.             Employee acknowledges that he or she has read Section 1542
of the Civil Code of the State of California, which states in full:


 


A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.


 


Employee waives any
rights that Employee has or may have under Section 1542 and comparable or
similar provisions of the laws of other states in the United States to the full
extent that he or she may lawfully waive such rights pertaining to this general
release of claims, and affirms that Employee is releasing all known and unknown
claims that he or she has or may have against the parties listed above.


 


4.             Employee and the Company acknowledge and agree that they
shall continue to be bound by and comply with the terms and their obligations
under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the
Plan) to which Employee is a party, and (iv) any agreement between the
Company or its subsidiary and Employee evidencing an Equity Award (as such term
is defined by the Plan), as modified by the Plan.


 


5.             This Agreement shall be binding upon, and shall inure to
the benefit of, the parties and their respective successors, assigns, heirs and
personal representatives.


 


6.             The parties agree that any and all disputes that both (i) arise
out of the Plan, the interpretation, validity or enforceability of the Plan or the
alleged breach thereof and (ii) relate to the enforceability of this
Agreement or the interpretation of the terms of this Agreement shall be subject
to binding arbitration pursuant to Section 13 of the Plan.


 


7.             The parties agree that any and all disputes that (i) do
not arise out of the Plan, the interpretation, validity or enforceability of
the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
subject to binding arbitration, to the extent permitted by law, in San Mateo
County, California or any other site mutually agreed to by the Company and
Employee, before the American Arbitration Association, as provided in this
paragraph.  The parties agree to and
hereby waive their rights to jury trial as to such matters to 


 


2

















 


the extent permitted by
law; provided however, that (a) the arbitrator shall have no authority to
make any ruling or judgment that would confer any rights with respect to trade
secrets, confidential and proprietary information or other intellectual
property; and (b) this arbitration provision shall not preclude the
parties from seeking legal and equitable relief from any court having
jurisdiction with respect to any disputes or claims relating to or arising out
of the misuse or misappropriation of intellectual property.  The Company shall bear the costs of the
arbitrator, forum and filing fees and each party shall bear its own respective
attorney fees and all other costs, unless otherwise provided by law and awarded
by the arbitrator.


 


8.             This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
negotiations and agreements, whether written or oral, with the exception of any
agreements described in paragraph 4 of this Agreement.  This Agreement may not be modified or amended
except by a document signed by an authorized officer of the Company and
Employee.  If any provision of this
Agreement is deemed invalid, illegal or unenforceable, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected.


 


EMPLOYEE UNDERSTANDS THAT
EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND
THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED
ABOVE BY SIGNING THIS AGREEMENT. 
EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO [Insert as applicable: [45 DAYS] [21
DAYS] TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT
AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT
BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED.  EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS
SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE
COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Employee Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Company]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  



 


3

















 


EXHIBIT C


 


FORM OF


 


GENERAL RELEASE OF
CLAIMS


[Under age 40]


 

















 


GENERAL
RELEASE OF CLAIMS


[Under
age 40]


 


This Agreement is by and
between [Employee Name] (“Employee”)
and [Facet Biotech Corporation or successor
that agrees to assume the Retention and Severance Plan following a Change in
Control] (the “Company”). 
This Agreement is effective on the day it is signed by Employee (the “Effective
Date”).


 


RECITALS


 


A.            Employee was employed by the Company or its
                                    subsidiary
as of
                        ,
        .


 


B.            Employee and the Company entered into an Agreement to
Participate in the Facet Biotech Corporation Retention and Severance Plan (such
agreement and plan being referred to herein as the “Plan”) effective as of
                      ,
         wherein Employee is entitled
to receive certain benefits in the event of an Involuntary Termination (as
defined by the Plan), provided Employee signs a Release (as defined by the
Plan).


 


C.            [A Change in Control (as
defined by the Plan) has occurred as a result of [briefly describe change in control]


 


D.            Employee’s employment is being terminated as a result of
an [Involuntary Termination Absent a Change
in Control] [Involuntary Termination Following a Change in Control].  Employee’s last day of work and termination
are effective as of
                            ,
         (the “Termination Date”).  Employee desires to receive the payments and
benefits provided by the Plan by executing this Release.


 


NOW, THEREFORE, the
parties agree as follows:


 


1.             The Company shall provide Employee with the applicable
payments and benefits set forth in the Plan in accordance with the terms of the
Plan.  Employee acknowledges that the
payments and benefits made pursuant to this paragraph are made in full
satisfaction of the Company’s obligations under the Plan.  Employee further acknowledges that Employee
has been paid all wages and accrued, unused vacation that Employee earned
during his or her employment with the Company or its subsidiary.


 


2.             Employee and Employee’s successors release the Company,
its respective subsidiaries, stockholders, investors, directors, officers,
employees, agents, attorneys, insurers, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Employee now has, or at any other time had, or shall or may have
against those released parties based upon or arising out of any matter, cause,
fact, thing, act or omission whatsoever related to Employee’s employment by the
Company or a subsidiary or the termination of such employment and occurring or
existing at any time up to and including the date on which Employee signs this
Agreement, including, but not limited to, any claims of breach of written, oral
or implied contract, wrongful termination, retaliation, fraud, defamation,
infliction of emotional distress, or national origin, race, age, sex, sexual orientation,



 

















 


disability or other
discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Americans with Disabilities Act,
the Fair Employment and Housing Act or any other applicable law.  Notwithstanding the foregoing, this release
shall not apply to (a) any right of the Employee pursuant to Section 4.4
of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined
by the Plan) or (b) any rights or claims that cannot be released by
Employee as a matter of law, including, but not limited to, any claims for
indemnity under California Labor Code Section 2802.


 


3.             Employee acknowledges that he or she has read Section 1542
of the Civil Code of the State of California, which states in full:


 


A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.


 


Employee waives any
rights that Employee has or may have under Section 1542 and comparable or
similar provisions of the laws of other states in the United States to the full
extent that he or she may lawfully waive such rights pertaining to this general
release of claims, and affirms that Employee is releasing all known and unknown
claims that he or she has or may have against the parties listed above.


 


4.             Employee and the Company acknowledge and agree that they
shall continue to be bound by and comply with the terms and their obligations
under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the
Plan) to which Employee is a party, and (iv) any agreement between the
Company or its subsidiary and Employee evidencing an Equity Award (as such term
is defined by the Plan), as modified by the Plan.


 


5.             This Agreement shall be binding upon, and shall inure to
the benefit of, the parties and their respective successors, assigns, heirs and
personal representatives.


 


6.             The parties agree that any and all disputes that both (i) arise
out of the Plan, the interpretation, validity or enforceability of the Plan or
the alleged breach thereof and (ii) relate to the enforceability of this
Agreement or the interpretation of the terms of this Agreement shall be subject
to binding arbitration pursuant to Section 13 of the Plan.


 


7.             The parties agree that any and all disputes that (i) do
not arise out of the Plan, the interpretation, validity or enforceability of
the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
subject to binding arbitration, to the extent permitted by law, in San Mateo
County, California or any other site mutually agreed to by the Company and
Employee, before the American Arbitration Association, as provided in this paragraph.  The parties agree to and hereby waive their
rights to jury trial as to such matters to the extent permitted by law;
provided however, that (a) the arbitrator shall have no authority to make
any ruling or judgment that would confer any rights with respect to trade
secrets, 


 

















 


confidential and
proprietary information or other intellectual property; and (b) this
arbitration provision shall not preclude the parties from seeking legal and
equitable relief from any court having jurisdiction with respect to any
disputes or claims relating to or arising out of the misuse or misappropriation
of intellectual property.  The Company
shall bear the costs of the arbitrator, forum and filing fees and each party
shall bear its own respective attorney fees and all other costs, unless
otherwise provided by law and awarded by the arbitrator.


 


8.             This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
negotiations and agreements, whether written or oral, with the exception of any
agreements described in paragraph 4 of this Agreement.  This Agreement may not be modified or amended
except by a document signed by an authorized officer of the Company and
Employee.  If any provision of this
Agreement is deemed invalid, illegal or unenforceable, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected.


 


EMPLOYEE UNDERSTANDS THAT
EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND
THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES
RELEASED ABOVE BY SIGNING THIS AGREEMENT. 
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY,
WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS
DESCRIBED IN PARAGRAPH 1.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Employee Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Company]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By: