Genentech (NYSE:DNA) disclosed in an SEC filing last week details of the retention and severance plans it has put in place to cover “substantially all” of its employees and executives as the biotech negotiates over the proposed takeover by Roche.
The retention plan provides incentives to stay through June 30, 2009, and in some cases through June 30, 2010, following a merger.
The plan also provides severance parachutes should executives and employees be terminated without cause or leave because the merger results in loss of pay or responsibilities, or forces a substantial relocation.
As recompense for employee uncertainty over the coming months, a retention bonus based on the employee’s job level will be paid on June 30, 2009, if a merger with Roche has not occurred.
If the merger has occurred and the biotech’s stock option vesting has not been accelerated to 100%, then the employee or executive will be paid the full retention bonus upon completion of the merger.
If a merger has occurred and option vesting has been accelerated to 100%, then half of the retention bonus will be paid upon completion of the merger, with the remainder to be paid on the first anniversary of the merger’s completion.
The executive participants in the retention and severance programs are the CEO, members of the executive committee, SVPs and vice presidents, the executive vice president of research drug discovery, the controller and chief accounting officer, and the treasurer.
Of the named executive officers under the retention plan, Chairman and CEO Arthur Levinson stands to receive $8.7 million; President of Product Development Susan Desmond-Hellman would receive $4.6 million; and EVP of Research Richard