THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”), dated as of January 1, 2009
(the “Effective Date”), between NANOSPHERE, INC., a
Delaware corporation having an office at 4088 Commercial Avenue,
Northbrook, Illinois 60062 (the “Company’), and WILLIAM
P. MOFFITT, an individual residing at 942 Pine Tree Lane, Winnetka,
Illinois 60093 (“Executive”).
The Company and Executive are parties to that
certain Employment Agreement (the “Initial Employment
Agreement”) dated as of July 19, 2004, as amended by
First Amendment to Moffitt Employment Agreement dated as of
March 16, 2006, providing for Executive to be employed as the
Company’s President and Chief Executive Officer. The
“Employment Term” under the Initial Employment
Agreement expired on July 19, 2008 but, pursuant to its terms,
was automatically extended through July 19, 2009. Executive
and the Company wish to replace the Initial Employment Agreement
with this Agreement from and after the Effective Date
hereof.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and for other good and valuable
consideration, the sufficiency and receipt whereof is hereby
acknowledged, the parties agree as follows:
1. Definitions . Unless otherwise
defined herein, the following terms shall have the following
respective meanings:
“Benefits” means those benefits set
forth in Section 3.3 herein.
“Board” means the Board of Directors
of the Company.
“Bonus” means payments earned by
Executive to the date of determination provided for in
Section 3.2 herein.
“Cause” means (i) any felony
conviction or admission of guilt, (ii) any breach or
nonobservance by Executive of any material covenant set forth
herein, provided that the Board has given Executive written notice
of such breach or nonobservance and Executive has failed to cure
such breach or nonobservance within a period reasonable under the
circumstances, (iii) any willful, intentional or deliberate
disobedience or neglect by Executive of the lawful and reasonable
orders or directions of the Board, provided that the Board has
given Executive written notice of such disobedience or neglect and
Executive has failed to cure such disobedience or neglect within a
period reasonable under the circumstances, or (iv) any willful
or deliberate misconduct by Executive that is materially injurious
to the Company.
“Change in Control” means
(i) the purchase or other acquisition by any person, entity or
group of persons, within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934 or any comparable successor
provisions (other than stockholders (or affiliates thereof) of the
Company as of the date of the Initial Employment Agreement), of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the
outstanding shares of Common Stock of the Company (on a
fully-diluted basis) or the combined voting power of the
Company’s then outstanding voting securities entitled to vote
generally in the election of directors of the Company;
(ii) the consummation of a reorganization, merger or
consolidation of the Company, in each case, with respect to which
persons who were stockholders of the Company immediately prior to
such reorganization, merger or consolidation do not, immediately
thereafter, own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized,
merged or consolidated company; or (iii) the sale of all or
substantially all of the Company’s assets.
“Diminution in Responsibility” means
any of (i) a material diminution in Executive’s duties
or responsibilities or the assignment to Executive of duties that
are materially inconsistent with his duties as President and Chief
Executive Officer of the Company or that materially impair
Executive’s ability to function in his position;
(ii) the Company’s failure, during the Employment Term,
to cause the election of Executive to the Board; (iii) a
relocation of the Company’s principal offices, without
Executive’s acquiescence or consent, to a location that is
more than a 50 mile radius from its current location; (iv) any
material reduction in the compensation and benefit opportunities of
the Executive (measured in the aggregate); or (v) any breach
by the Company of any material provision of this Agreement,
provided that Executive has given the Company written notice of
such breach and the Company has failed to cure such breach within a
period that is reasonable under the circumstances.
“Employment Term” is as defined in
Section 4.
“Good
Reason” means either a Change in Control or a Diminution in
Responsibility.
“Permanent Disability” means
Executive’s inability to substantially perform his duties and
responsibilities hereunder by reason of any physical or mental
incapacity for a period of 180 consecutive days, or two or more
periods of 90 consecutive days each in any 360-day
period.
“Plan” means the Company’s
2007 Equity Incentive Plan.
2.1 Employment Duties . Subject to the
terms and conditions of this Agreement, Executive is hereby
employed by the Company to continue to serve as its President and
Chief Executive Officer. Executive accepts such employment, and
agrees to discharge all of the duties normally associated with said
positions, and to faithfully and to the best of his abilities
perform such other services consistent with his position as a
senior executive officer as may from time to time be assigned to
him by the Board. Notwithstanding the foregoing, however, Executive
may serve on the boards of directors of other companies, and in
civic, cultural, philanthropic and professional organizations, so
long as such service does not detract from the performance of
Executive’s duties hereunder. At all times during which
Executive remains President and Chief Executive Officer of the
Company, Executive shall, as and when duly elected or appointed,
serve as a member of the Board and, at the request of the Board, as
an officer or director of any Company affiliate, in each case
without additional remuneration therefor. Employee will perform his
duties hereunder at the Company’s offices.
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2.2 No Conflicting Agreements . Executive
represents and warrants that neither Executive’s entry into
this Agreement nor Executive’s performance of
Executive’s obligations hereunder, will conflict with or
result in a breach of the terms, conditions or provisions of any
other agreement, understanding or obligation of any nature to which
Executive is a party or by which Executive is bound, including,
without limitation, any development agreement, noncompetition
agreement or confidentiality or nondisclosure agreement previously
entered into by Executive.
3.
Compensation and Benefits .
3.1 Base Salary . During the term of
Executive’s employment hereunder, the Company shall pay
Executive a salary at the annual rate of $427,450 or such greater
amount as the Board may from time to time establish pursuant to the
terms hereof (the “Base Salary”). Such Base Salary
shall be reviewed annually and may be increased, but not decreased,
by the Board in its sole discretion. The Base Salary shall be
payable in accordance with the Company’s customary payroll
practices for its senior management personnel.
(a) Performance Bonus Opportunity .
For calendar year 2009, Executive will be eligible to earn and
receive a performance bonus, to a target of $256,470, which bonus
amount will be discretionary and awarded by the Board, based upon
the recommendations of the Compensation Committee of the Board. For
calendar year 2010, the target amount of this bonus opportunity
will be not less than $150,000. For calendar years after 2010,
Executive will be entitled to participate in a senior management
bonus plan at a bonus percentage or target amount appropriate to
the then stage of the Company’s development and commensurate
with the compensation of other chief executive officers of
comparable companies, but in no event less than $150,000 per
calendar year.
(b) Transaction Bonus Opportunity .
In addition, Executive shall have the right to earn and receive a
transaction bonus in an amount equal to 1% of the net proceeds of
any transaction constituting a Change in Control of the Company,
accomplished during the Employment Term, or within six months
thereafter (unless Executive’s termination was voluntary
other than for Good Reason, or was for Cause), with the consent,
approval or direction of the Board, which bonus will be paid to
Executive in the same form and at the same times and subject to the
same conditions as proceeds of the transaction are payable to the
Company or shareholders of the Company upon and following the
consummation of such Change in Control transaction.
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(a) Benefit Plans . During the
Employment Term, Executive may participate, on the same basis and
subject to the same qualifications as other senior management
personnel of the Company, in any benefit plans and policies in
effect with respect to senior management personnel of the
Company.
(b) Reimbursement of Expenses .
During the Employment Term, Company shall pay or promptly reimburse
Executive, upon submission of proper invoices in accordance with
the Company’s normal procedures, for all reasonable
out-of-pocket business, entertainment and travel expenses incurred
by Executive in the performance of his duties hereunder.
(c) Vacation . During the
Employment Term, Executive shall be entitled to vacations in
accordance with the policies of the Company applicable to senior
management personnel from time to time.
(d) Withholding . The Company shall
be entitled to withhold from amounts payable or benefits accorded
to Executive under this Agreement all federal, state and local
income, employment and other taxes, as and in such amounts as may
be required by applicable law.
(e) Reimbursement of Legal Fees .
The Company will reimburse Executive, upon presentation of an
invoice therefor, in an amount not to exceed Five Thousand Dollars
($5,000), for attorneys’ fees and costs incurred by Executive
in connection with the review, negotiation and documentation of
this Agreement and related agreements on Exec
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