Document:

exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

     This Consulting Agreement (the “Agreement”) is made and entered into this 18th day of March,
2011, by and among Green Bankshares, Inc., a Tennessee corporation (the “Company”), GreenBank, a
Tennessee state-chartered bank and wholly owned subsidiary of the Company (the “Bank”) and James E.
Adams (“Consultant”). Except as set forth in Section 1, this Agreement shall be effective as of
May 17, 2011 (the “Effective Date”).

WITNESSETH:

     WHEREAS, Consultant serves as the Company’s and the Bank’s Executive Vice President, Chief
Financial Officer and Secretary;

     WHEREAS, Consultant has notified the Company that he intends to retire from his positions as
the Company’s and the Bank’s Executive Vice President, Chief Financial Officer and Secretary
effective May 16, 2011;

     WHEREAS, the Company intends to hire a new Chief Financial Officer to replace Consultant;

     WHEREAS, in order to facilitate the transition related to the hiring of a new Chief Financial
Officer, the Company wishes to obtain the future consulting services of Consultant; and

     WHEREAS, Consultant is willing, upon the terms and conditions herein set forth, to provide
such services to the Company.

     NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the Company and Consultant hereby agree as follows:

     Section 1. Agreement to Serve as Consultant. So long as Consultant is no longer an
employee of the Company or the Bank as of the Effective Date, the Company engages Consultant and
Consultant agrees to serve as a consultant to the Company and the Bank beginning on the Effective
Date and provide consultation and advice in accordance with the terms and conditions of this
Agreement.

     Section 2. Term. The term of this Agreement shall commence on the Effective Date and
shall continue for a term of six (6) months thereafter unless earlier terminated pursuant to the
provisions of Section 4 hereof (the “Term”).

     Section 3. Services; Extent of Services.

          (a) Consultant is hereby engaged to provide consultation and advice to the Company’s and the
Bank’s Chief Financial Officer, Chief Executive Officer and other members of senior management, as
well as each of the Company’s and the Bank’s Board of Directors. Consultant agrees to perform such
services as the Company or the Bank may reasonably request for a total of up to eighty (80) hours
per month. At all times, Consultant shall perform the services consistent with policies and
practices established from time to time by the Boards of Directors of the Company and the Bank.

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          (b) During the Term, Consultant shall perform the services faithfully and to the best of his
ability. Consultant shall be reasonably available using such time, energy and skill as may be
reasonably necessary for the performance of his duties, responsibilities and obligations hereunder,
consistent with past practices and norms in similar positions.

     Section 4. Termination of Engagement. Consultant’s engagement by the Company and the
Bank shall immediately terminate if the Company or the Bank elects to terminate this Agreement for
Cause. For purposes hereof, “Cause” shall mean (i) an act of fraud, misappropriation, embezzlement
or dishonesty with respect to the Company or the Bank by Consultant; (ii) the conviction of, or
plea of guilt or no contest to, any felony by Consultant; (iii) gross negligence or intentional
misconduct by Consultant in the performance of his duties that is not promptly remedied upon
receipt of notice thereof from the Company or the Bank; (iv) the disregard by Consultant of any
lawful policy established by the Boards of Directors of the Company or the Bank or any other person
to whom Consultant reports that is not promptly remedied upon receipt of notice thereof from the
Company or the Bank; or (v) any breach by Consultant of any other provision of this Agreement that
is not promptly remedied upon receipt of notice thereof from the Company or the Bank. Upon a
termination of this Agreement for Cause pursuant to this Section 4, Consultant shall be entitled to
all accrued compensation through the date of termination with no further payment obligation
hereunder on the part of the Company or the Bank.

     Section 5. Compensation and Expenses. In consideration of the Services, the Company
shall pay Consultant during the Term a fee equal to $10,000.00 per month payable on the first day
of each month during the Term (provided that the fee payable on May 17, 2011 for the consulting
services performed from the Effective Date through May 31, 2011 shall be $5,000.00). Upon receipt
of itemized vouchers, expense account reports and supporting documents submitted to the Bank in
accordance with the Bank’s policies and procedures then in effect, the Bank shall reimburse
Consultant for all reasonable and necessary business expenses incurred ordinarily and necessarily
by Consultant in connection with the performance of Consultant’s duties hereunder.

     Section 6. Taxes. Consultant shall have the entire responsibility to
discharge any and all of his (and not the Company’s or the Bank’s) obligations under federal, state
or local laws, regulations or orders now or hereafter in effect, relating to taxes, unemployment
compensation or insurance, social security, workers’ compensation, disability pensions and tax
withholdings (the “Tax Obligations”). Consultant hereby agrees to indemnify and hold each of the
Company and the Bank harmless for any and all claims, losses, costs, fees, liabilities, damages or
injuries suffered by the Company arising out of Consultant’s failure to properly discharge the Tax
Obligations.

     Section 7. Relationship of Parties. It is the express intention of the parties that
the relationship of Consultant to the Company and the Bank, for so long as Consultant is providing
services under this Agreement, shall be, from and after the Effective Date, that of independent
contractor, and nothing in this Agreement is intended or shall be construed to create, from and
after the Effective Date, a relationship of employer and employee, principal and agent or master
and servant between the Company and the Bank and Consultant. Consultant has no authority to act
for or on behalf of the Company or the Bank or to enter into any obligations, contracts or
commitments on behalf of the Company or the Bank.

     Section 8. Indemnity. Consultant hereby agrees to defend, indemnify, protect, and
hold harmless the Company and the Bank and their shareholders, directors, employees, and agents
from

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any and all claims, losses, demands, suits, or actions arising out of or incidental to the services
provided pursuant to this Agreement, including any liability or claim for taxes payable by or on
behalf of Consultant.

     Section 9. Remedies. Consultant acknowledges and agrees that a breach by him of any
provision of this Agreement cannot be reasonably or adequately compensated in damages in an action
at law, and that the Company and the Bank shall each be entitled to seek injunctive relief and any
other remedies that may be available at law or in equity, all of which remedies shall be cumulative
and in addition to any rights and remedies available by contract, law, rule, regulation, or order.

     Section 10. Intellectual Property. All right, title and interest of every kind and
nature whatsoever in and to any intellectual property, including any inventions, patents,
trademarks, copyrights, ideas, creations, and properties furnished to the Bank or the Company
during the Term, and/or used in connection with any of the Bank’s or the Company’s activities, or
written or created by the Consultant, or with which the Consultant is connected in the performance
of his services hereunder, shall as between the parties hereto be, become, and remain the sole and
exclusive property of the Bank or the Company, as the case may be, for any and all purposes and
uses whatsoever, regardless of whether the same were invented, created, written, developed,
furnished, produced, or disclosed by the Consultant or any other party, and the Consultant shall
have no right, title or interest of any kind or nature therein or thereto, or in and to any results
and proceeds therefrom. The Consultant agrees, during the Term hereof, to execute any and all
documents and agreements which the Bank or the Company may deem necessary and appropriate to
effectuate the provisions of this Section 10.

     Section 11. Privacy Compliance.

(a) Definitions. As used in this Agreement:

     (i) “Customer Information” means nonpublic personal information about any
individual (or that individual’s legal representative) who obtains or seeks to
obtain a financial product or service from you when (1) the financial product or
service is to be used primarily for personal, family or household purposes and (2)
the information about the information is protected by Privacy Laws.

     (ii) “Privacy Laws” refers collectively to the various federal and state laws
and regulations governing the privacy of Customer Information, as the same may be
amended from time to time. The Privacy Laws include, but are not limited to, Title V
of the Gramm-Leach-Bliley Act of 1999 (Public Law 106-102, 113 Stat. 1338) and its
implementing regulations, and any applicable implementing guidelines.

(b) Confidentiality Obligations. Except as provided in (c) below, Consultant

will:

     (i) Limit access to Customer Information to the Bank’s or the Company’s
partners, officers, directors, employees, and agents who have a need to know such
information to carry out the purposes for which the information was disclosed or

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made available and who have an obligation to maintain the confidentiality of
the information;

     (ii) Safeguard and maintain the confidentiality of Customer Information and not
directly or indirectly disclose the same to any other person or entity in violation
of or in any manner inconsistent with applicable Privacy Laws or any other standards
that govern the Bank or the Company and also immediately notify the Bank or the
Company of any such direct or indirect disclosure; and

     (iii) Not use Customer Information in violation of or in any manner
inconsistent with applicable Privacy Laws or any other standards that govern the
Bank or the Company.

(c) Exceptions. Provided the disclosure of Customer Information is permitted
under any other standards that govern the Bank or the Company, the Consultant will
not be in violation of this Agreement for disclosing Customer Information when:

     (i) The Consultant discloses the information with the Bank’s consent or
pursuant to (1) a subpoena or court order, (2) a federal or state law or regulation,
or (3) the rules or regulations of a governmental agency; or

     (ii) The disclosure is (1) reasonably necessary and appropriate to carry out
the purposes for which the Customer Information was provided or made available to
the Consultant, (2) made in the ordinary course of business and, (3) required or
permitted under applicable Privacy Laws.

(d) Security Measures. The Consultant has implemented or will implement
appropriate measures designed to ensure the security and confidentiality of Customer
Information, protect against any anticipated threats or hazards to the security or
integrity of Customer Information, and protect against unauthorized access to or use
of Customer Information that could result in substantial harm or inconvenience to
any of the Bank’s customers. Where indicated by the Bank’s risk assessment, the Bank
may monitor the Consultant to confirm that the Consultant has satisfied the
Consultant’s obligations under this Agreement.

(e) Remedies. The Consultant acknowledges that the Bank has the right to
take all reasonable steps to protect the Customer Information of the Bank or the
Company, including, but not limited to, seeking injunctive relief and any other
remedies that may be available at law or in equity, all of which remedies shall be
cumulative and in addition to any rights and remedies available by contract, law,
rule, regulation, or order.

     Section 12. Confidentiality; Non-Competition; Non-Solicitation.

(a) Consultant recognizes and acknowledges that he has had, and may continue to
have, access to certain information of Company and the Bank that is confidential

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and constitutes valuable, special and unique property of Company. Consultant shall
not at any time, either during or subsequent to the term of this Agreement, disclose
to others, use, copy or permit to be copied, except as directed by law or in
pursuance of Consultants’ duties for or on behalf of Company, its successors,
assigns or nominees, any Confidential Information of Company (regardless of whether
developed by Consultant), without the prior written consent of the Company. The
term “Confidential Information” means any Company secret or confidential information
or know-how and shall include, but shall not be limited to, the plans; customers;
customer specific information; customer specific loan pricing, loan needs, and
maturity dates; costs, prices, rates, uses, and applications of products and
services; customer specific deposit information; results of investigations; studies
owned or used by such person; and all products, processes, compositions, computer
programs, and servicing, marketing or operational methods and techniques at any time
used, developed, investigated, made or sold by such person, before or during the
term of this Agreement, that are not readily available in the banking industry.

(b) For and in consideration of the payments that the Company and the Bank have each
agreed to make to Consultant under the terms of this Agreement, Consultant agrees
that he will not, during the Term, directly or indirectly engage in the business of
banking, or any other business in which Company directly or indirectly engages
during the Term, in any county of any state in which the Company has an office or
branch at the Effective Date. For purposes of this Section 12(b), Consultant shall
be deemed to engage in a business if he directly or indirectly, engages or invests
in, owns, manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner connected with,
or renders services or advice to, any business engaged in banking or financial
services; provided, however, that Consultant may invest in the securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if the following two conditions are met: (A) such securities are listed
on any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934; and (B) Consultant does not
beneficially own as defined in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934 in excess of 1% of the outstanding capital stock of such enterprise.

	 	(c)	 	Consultant hereby agrees that, during the Term, he will not, without the
Company’s prior written consent, directly or indirectly, (i) induce, attempt to induce
or encourage any person employed with the Company or any of its subsidiaries to leave
the employ of the Company or such subsidiary or in any way interfere with the
relationship between the Company or such subsidiary and such persons, or (ii) solicit
for employment or hire any person who is or has been employed with the Company or any
of its subsidiaries, unless such person has ceased to be an employee of the Company or
any of its subsidiaries for at least six months (other than as a result of a breach of
this Section 12(c)); provided, however, that this prohibition shall not apply to
solicitations made to the public or the industry generally through advertising or
electronic listing which are not targeted at employees of the Company or any
subsidiary, or the subsequent employment of any person (other than any of the Company’s
executive officers) as a result of such permitted solicitations.

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     Section 13. No Conflicting Obligations. Consultant certifies that Consultant has no
outstanding agreement or obligation that is in conflict with any of the provisions of this
Agreement, or that would preclude Consultant from complying with the provisions hereof, and further
certifies that Consultant will not enter into any such conflicting agreement during the term of
this Agreement.

     Section 14. Assignment. This Agreement may not be assigned by any party hereto without
the prior written consent of the non-assigning party; provided that the Company and the Bank may
each assign this Agreement without the consent of Consultant to any affiliate thereof.

     Section 15. Waiver. Any party’s failure to enforce any provision(s) of this Agreement
shall not in any way be construed as a waiver of any such provision(s), or to prevent that party
thereafter from enforcing each and every other provision of this Agreement.

     Section 16. Severability. The invalidity or unenforceability of any provision of this
Agreement shall in no way effect the validity or enforceability of any other provision.
Furthermore, to the extent this Agreement is inconsistent with federal or state law, this Agreement
shall be deemed amended to the extent necessary to make it consistent and in compliance with such
laws.

     Section 17. Entire Agreement. The terms and conditions of this Agreement supersede
any previous oral or written agreement with respect to Consultant’s engagement by the Company and
the Bank and may be altered only by another written agreement, signed by the parties hereto. This
Agreement sets forth the entire understanding of the parties with respect to the subject matter
hereof, and no representation, warranty, promise or agreement whatsoever not expressly contained
herein has been made to Consultant by the Company or the Bank or any representative, consultant or
agent of the Company or the Bank.

     Section 18. Attorneys’ Fees. The parties agree that in the event it becomes necessary
to seek judicial remedies for the breach or threatened breach of this Agreement, any prevailing
party shall be entitled, in addition to all other remedies, to recover from any non-prevailing
party all costs of such judicial action, including but not limited to, reasonable attorneys’ fees
and costs and paralegals’ fees, together with all sales taxes thereon, and also including all such
expenses related to any appeal.

     Section 19. Notices. All notices, offers, requests, demands, and other communications
pursuant to this Agreement shall be given in writing by personal delivery, by prepaid first class
registered or certified mail properly addressed with appropriate postage paid thereon, or by
overnight delivery service, and shall be deemed to be duly given and received on the date of
delivery if delivered personally, on the second day after the deposit in the United States Mail if
mailed, or on the first day after delivery to an overnight delivery service if delivered by
overnight delivery service to the following addresses:

	 	 	 

	If to the Company or the Bank:

	 	Green Bankshares, Inc.
	 

	 	100 North Main Street
	 

	 	Greeneville, TN 37743
	 

	 	Attn: Stephen Rownd

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	with a copy to:

	 	Bass, Berry & Sims PLC
	 

	 	150 Third Avenue South, Suite 2800
	 

	 	Nashville, TN 37201
	 

	 	Attention: D. Scott Holley, Esq.
	 
	 	 
	If to Consultant:

	 	James E. Adams
	 

	 	125 Watercress Drive
	 

	 	Greeneville, TN 37745

or to such other addresses as the parties shall from time to time designate by like notice.

     Section 20. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Tennessee, without applying the conflict of laws rules of
such state. In addition, the parties consent to the jurisdiction of the State of Tennessee for any
lawsuit arising under this Agreement. The parties also agree that the venue for any lawsuit arising
under this Agreement shall be in Greene County, Tennessee.

     Section 21. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their permitted successors and assigns.

     Section 22. Further Assurances. Each party hereto shall perform such further acts and
execute and deliver such further documents as may be reasonably necessary to carry out the
provisions of this Agreement.

     Section 23. Survival. The provisions of Sections 6, 8, 10, 11, 12, 17, 19 and 22
hereof shall survive termination for any reason or expiration of this Agreement for the period
described or referenced in each such Section or, if no period is described or referenced in such
Section, indefinitely.

[Signatures on next page]

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     IN WITNESS WHEREOF, the undersigned parties have caused this Consulting Agreement to be
executed by themselves or by their duly authorized representatives as of the day and date first
written above.

	 	 	 	 	 
	

Dated: March 18, 2011
	GREEN BANKSHARES, INC.

 	 
	 	By:  	 /s/
Stephen M. Rownd	 
	 	Name:  	Stephen M. Rownd 	 
	 	Title:  	Chairman and Chief Executive Officer 	 
	 
	 	GREENBANK

 	 
	 	By:  	 /s/
Stephen M. Rownd	 
	 	Name:  	Stephen M. Rownd 	 
	 	Title:  	Chairman and Chief Executive Officer 	 
	 	 	 
	 	 
 /s/ James E. Adams	 
	 	James E. Adams 	 
	 	 	 
	 

8Unassociated Document

 

 

Exhibit 10.6

TENGION, INC.

 

CHANGE IN CONTROL PAYMENT PLAN

 

This Change in Control Payment Plan (this “Plan”), effective as of May 11, 2011, has been approved by the Board of Directors (the “Board”) of Tengion, Inc., a Delaware corporation (the “Company”).

 

1.           Purpose.  It is expected that the Company from time to time will consider the possibility of a Change in Control.  The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continuous dedication and objectivity of these employees, notwithstanding the possibility, threat or occurrence of a Change in Control. The Board believes that it is in the best interests of the Company and its stockholders to provide these employees with certain economic benefits upon a Change of Control. Such benefits provide these employees with an incentive to remain with the Company, notwithstanding the possibility or occurrence of a Change in Control, and to maximize the value of the Company upon a Change in Control for the benefit of its stockholders.

 

2.           Definitions.

 

(a)           “Accountants” has the meaning ascribed such term in Section 6(a) of the Plan.

 

(b)           “Affiliate” means, as applied to any Person, any Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person

 

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

 

(d)           “Cause” means (i) an Eligible Employee’s material failure to perform the duties of his or her position (other than as a result of physical or mental illness, accident or injury) or any other material breach by such Eligible Employee; (ii) dishonesty, misconduct, or illegal conduct by an Eligible Employee in connection with his or her employment with the Company, which in the reasonable judgment of the Company may result in damage to the business or reputation of the Company; (iii) failure, in any material respect, to comply with Company’s written policies that are of material significance to the Company’s operations, reputation or compliance program; (iv) an Eligible Employee’s conviction of, or plea of guilty or nolo contendere to, a charge of commission of a felony (exclusive of any felony relating to negligent operation of a motor vehicle); or (v) a material breach by an Eligible Employee of his or her offer letter or any employment agreement, including the confidentiality, non-competition and invention assignment agreements included therewith.

 

 

  

  

  

 

 

 

(e)            “Change in Control” or “CIC” means:

 

i)           The acquisition, directly or indirectly, by any person, entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), excluding, for this purpose, the Company, its subsidiaries, and any employee benefit plan of the Company or its subsidiaries (a “Third Party”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

 

ii)           Consummation of (1) a reorganization, merger or consolidation, or (2) a liquidation or dissolution of the Company, or (3) the sale of all or substantially all of the assets of the Company (whether such assets are held directly or indirectly) to a Third Party; or

 

iii)           During any twelve (12) month period, individuals who constitute the Board at the beginning of such twelve (12) month period (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a member of the Board whose election was approved by a vote of at least a majority of the members of the Incumbent Board shall not be considered a replacement Director for purposes of a Change in Control.

 

except that any event or transaction which would be a “Change of Control” pursuant to (i), (ii) or (iii) shall not be a “Change in Control” (A) if persons who were the stockholders of the Company immediately prior to such event or transaction (other than the acquiror in the case of a reorganization, merger or consolidation) immediately thereafter beneficially own more than fifty percent (50%) of the combined voting power of the Company’s or the reorganized, merged or consolidated company’s then outstanding voting securities entitled to vote generally in the election of directors or (B) if such transaction does not constitute a change in control event as such term is defined in Section 409A of the Code.

 

(f)           “CIC Benefit” means with respect to each Eligible Employee, a lump sum payment calculated in accordance with Exhibit A hereto.

 

(g)            “Code” means the Internal Revenue Code of 1986, as amended.

 

(h)           “Common Stock” means the Company’s common stock, par value $0.001 per share.

 

 

 

  

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(i)           “Common Stock Equivalents” or “CSEs” means (1) Common Stock (other than shares purchased by an Eligible Employee for fair market value) and (2) restricted Common Stock and all stock options and warrants to purchase or otherwise acquire shares of Common Stock and which CSEs are held by Eligible Employees or their respective Family Members.

 

(j)           “Company” has the meaning ascribed to such term in the preamble set forth above.

 

(k)           “Disability” means the permanent and total disability of a person within the meaning of Section 409A(a)(2)(C) of the Code.

 

(l)           “Eligible Employee(s)” means (i) all employees of the Company who are employed by the Company on the effective date of a Change in Control  and (ii) any employee of the Company whose employment was terminated (A) without Cause by the Company (or its successor or Affiliate) (including termination of employment because of the Eligible Employee’s death or Disability) or (B) for Good Reason by the Eligible Employee (to the extent the Eligible Employee has such right under the terms of any Company severance plan or other agreement between the Company and such Eligible Employee) and such termination of employment occurs following either (i) a decision by the Board to initiate negotiations with a third-party that would result in a Change in Control, providing such negotiations have not ceased, or (ii) the receipt of a bona fide unsolicited offer by an unrelated third-party, which if accepted would result in a Change in Control, providing such unsolicited offer has not been rejected.

 

(m)            “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the employee's household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Eligible Employee) control the management of assets, and any other entity in which these persons (or the Eligible Employee) own more than fifty percent of the voting interests.

 

(n)           “Good Reason” with respect to any applicable Eligible Employee shall have the meaning ascribed to such term in any Company severance plan or other agreement between the Company and such Eligible Employee.

 

(o)           “Person” means any individual, partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization and any government, governmental department or agency or political subdivision thereof.

 

 

 

  

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(p)           “Plan” has the meaning ascribed to such term in the preamble set forth above.

 

(q)           “Plan Administrator” means the Board or the Compensation Committee of the Board, to the extent the Board has so delegated its authority under the Plan.

 

(r)            “Total Payments” has the meaning ascribed to such term in Section 6(a) of the Plan.

 

3.           Administration.

 

(a)           Discretion and Authority.  The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan, and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and the amount of any CIC Benefit paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.

 

(b)           No Liability.  Neither the Plan Administrator nor any employee, officer, agent, or director of the Company shall be personally liable by reason of any action taken with respect to the Plan for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each employee, officer, agent, or director of the Company, including the Plan Administrator, to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any reasonable cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Plan Administrator) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud, bad faith, or gross negligence.

 

4.           Change in Control Benefits; Offset.

 

(a)           Payment of CIC Benefit.  Upon the occurrence of a Change in Control during the term of this Plan and subject to Sections 4(b) and 7(e) of this Plan, each Eligible Employee will be entitled to receive payment of his or her respective CIC Benefit.  Such payment shall be made to the Eligible Employee within sixty (60) days following the effective date of the Change in Control, provided that if such sixty (60) day period spans two calendar years, payment shall be made in the latter calendar year.

 

(b)           Certain Offsets for CSEs.  For each Eligible Employee with a title of Vice President or above, the amount of each such Eligible Employee’s CIC Benefit shall be reduced and offset by the product of 0.5 and the dollar value, if any, of such Eligible Employee’s vested CSEs (net of any exercise price) as of the Change in Control (including any CSEs sold within the term of this Plan).

 

 

 

  

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(c)           Form of CIC Payment.  Payment of the CIC Benefits hereunder shall be in the form of a lump sum cash payment.  Notwithstanding the foregoing, to the extent permissible under Federal and state securities laws and in a manner that does not violate Section 409A of the Code, the Plan Administrator may pay all or a portion of the CIC Benefit to be distributed hereunder to Eligible Employees in the same form or forms of payment (whether cash, securities, or other property) that is paid or payable to the holders of the Common Stock in connection with the Change in Control.  In administering this Section 4(c), the Plan Administrator need not treat all Eligible Employees in the same manner.

 

5.           Withholding; Taxes.  The Company shall have the right to deduct from all payments made pursuant to the Plan any taxes required by law to be withheld with respect to such payments.

 

6.           280G Parachute Payments; Section 409A.

 

(a)           280G Parachute Payments.  Notwithstanding any provision of the Plan to the contrary, if any payments or benefits an Eligible Employee would receive from the Company under the Plan or otherwise in connection with a Change in Control (the “Total Payments”) (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 6(a), would be subject to the excise tax imposed by Section 4999 of the Code, then such employee will be entitled to receive either (x) the full amount of the Total Payments or (y) a portion of the Total Payments having a present value equal to $1 less than three (3) times such individual’s “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of (x) and (y), after taking into account applicable federal, state, and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by such employee on an after-tax basis, of the greatest portion of the Total Payments. Any determination required under this Section 6 shall be made in writing by the independent public accountant of the Company (or such other nationally recognized accounting firm selected by the Plan Administrator if the performance of such determination would compromise the independence of the independent public accountant) immediately prior to the closing of any Change in Control (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and the applicable Eligible Employee. For purposes of making the calculations required by this Section 6(a), the Accountants shall assume that each Eligible Employee is deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of the Eligible Employee's residence for the calendar year in which the determination is to be made,  net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes, and the Accountants may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code.  If there is a reduction pursuant to this Section 6(a) of the Total Payments to be delivered to the applicable employee, such reduction shall first be applied to any cash amounts to be delivered to the applicable Eligible Employee under the Plan and thereafter to any other severance benefits or payments otherwise owing to such applicable employee.

 

 

  

5

  

 

 

 

(b)           Section 409A.  This Plan is intended to satisfy the short-term deferral exemption from the requirements of Section 409A of the Code, as described in Section 1.409A-1(b)(4) of the Treasury regulations.  However, to the extent that compliance with Section 409A is required, the Company intends that the Plan will be administered in accordance with Section 409A.  To the extent that any provision of the Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that payments hereunder are either exempt from, or comply with, Section 409A of the Code.  The Company may amend the Plan as may be necessary to fully comply with, or be exempt from, Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereafter.  The Company makes no representation or warranty and shall have no liability to any Eligible Employee or any other person if any CIC Benefit is determined to constitute deferred compensation subject to Section 409A of the Code but does not satisfy any exemption from, or the conditions of, such Section.

 

7.           Miscellaneous.

 

(a)           No Transferability.  In no event may any Eligible Employee sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan.  At no time will any such right or interest under the Plan be subject to the claims of creditors or liable to attachment, execution or other legal process.

 

(b)           Unfunded Plan.  The Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund.  Likewise, the Plan shall not establish any fiduciary relationship between the Company or any of its Affiliates and any Eligible Employee.  The Plan is not intended to be an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

 

(c)           Severability.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan and the Plan will be construed and enforced as if such provision had not been included.

 

(d)           Employment At Will.  Nothing herein shall change the at-will status or confer any right with respect to the continuation of employment by the Company, nor shall it interfere in any way with the Company’s right to terminate the employment of any Eligible Employee at any time, with or without Cause.

 

 

  

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(e)           General Release.  The Company’s obligation to make any payment to any Eligible Employee pursuant to the Plan shall be contingent upon the Eligible Employee delivering to the Company a general release of claims against the Company and its successors with regard to the subject matter of the Plan in a form reasonably satisfactory to the Company.  Failure to deliver such general release by the payment date set forth in Section 4(a) shall result in forfeiture and non-payment of any CIC Benefit to the Eligible Employee.

 

(f)           Amendment of Plan.  Except as provided in this Section 7(f), the Plan Administrator reserves the right to amend, modify or terminate the Plan or the benefits provided hereunder at any time; provided, however, that any such amendment, modification or termination that adversely affects the rights of an Eligible Employee or diminishes the benefits of an Eligible Employee under the Plan shall require the written consent of such Eligible Employee.  Notwithstanding the foregoing, if the Change in Control is for stockholder consideration of less than $25 million, the Plan Administrator, in its discretion, may reduce the benefits provided under the Plan proportionately (in relation to the amount by which $25 million exceeds the  stockholder consideration for the Change in Control), or by any method that would yield a benefit that is greater than a proportionate reduction, without the consent of any Eligible Employee.

 

(g)           Term; Termination of Plan.

 

i)           Term.  The term of this Plan shall commence on the Effective Date and will terminate on September 30, 2012.    Notwithstanding the foregoing, if a Change in Control occurs during the term of this Plan, this Plan shall, subject to the provisions of Section 7(g)(ii), continue in effect until sixty (60) days following the effective date of the Change in Control.

 

ii)           Termination After Change in Control.  This Plan will automatically terminate upon distribution to the Eligible Employees of all CIC Benefits required to be paid in connection with a Change in Control under the Plan.

 

(h)           Existing Rights.  Except as expressly provided herein, the provisions of this Plan, any payment or benefit provided for hereunder and any General Release required by the Company pursuant to Section 7(e) above, shall not reduce any amounts otherwise payable, or in any way diminish an Eligible Employee’s existing rights, or rights which would accrue solely as a result of the passage of time, under any Company benefit plan, severance plan, contract, plan or arrangement.  Without limiting the generality of the foregoing, all stock options and other equity awards granted to an Eligible Employee under the Restated and Amended Tengion, Inc. 2004 Stock Incentive Plan and the Tengion, Inc. 2010 Stock Option and Incentive Plan shall be governed by the terms of the applicable plan.

 

 

 

  

7

  

 

 

(i)           Company Benefit Plans.  No portion of the benefits payable pursuant to this Plan shall be considered “compensation” for purposes of determining any benefits provided under any pension, savings, or other benefit plan maintained by the Company.

 

(j)           Binding Effect on Successor to Company.  This Plan shall be binding upon any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, or upon any successor to the Company as the result of a Change in Control, and any such successor or assignee shall be required to perform the Company’s obligations under the Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment or Change in Control had taken place. In such event, the term “Company,” as used in the Plan, shall mean the Company as hereinafter defined and any successor or assignee as described above which by reason hereof becomes bound by the terms and provisions of the Plan, and the term “Board” shall refer to the Board of Directors of any such surviving or continuing entity.

 

(k)           Governing Law.  This Plan shall be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflict of laws of such state.

 

(l)           Effective Date.  The Plan shall be effective on the date on which this Plan is approved by the Board, which date shall be reflected in the preamble to this Plan.

 

 

 

  

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EXHIBIT A

 

CIC BENEFIT AMOUNTS

 

 

 

	
Title

 

	
CIC Benefit Amount

 

	
Vice President and above

	
2x Total Annual Compensation

	 	 
	
Executive Directors

	
1x Total Annual Compensation

	 	 
	
Director and Senior Directors

	
0.5x Total Annual Compensation

	 	 
	
All levels below Director

	
0.25x Total Annual Compensation

 

 

“Total Annual Compensation” equals an amount calculated by adding the employee’s annualized base salary and target annual bonus (assuming payment at 100% level) for the year in which the effective date of the Change in Control occurs.

 

 

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