AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

 

 

                                                                    EXHIBIT 10.7

 

 

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

 

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),

dated as of May 1, 2003, between Celgene Corporation, a Delaware corporation

with offices at 7 Powder Horn Drive, Warren, New Jersey 07059 (the "Company"),

and John W. Jackson, a resident of New Jersey ("Employee").

 

                           W I T N E S S E T H

 

         WHEREAS, the Company and Employee have previously entered into an

employment agreement, originally effective September 30, 1997 and amended and

restated as of January 1, 2000 (the "Employment Agreement");

 

         WHEREAS, Employee is currently employed as the Chief Executive Officer

of the Company, and serves as Chairman of the Board of Directors of the Company

(the "Board");

 

         WHEREAS, the Company and Employee desire to amend and restate the

Employment Agreement again to modify certain terms of the Employment Agreement,

effective as of the date set forth above.

 

         NOW THEREFORE, in consideration of the premises and mutual covenants

contained herein and for other good and valuable consideration, the parties

agree as follows:

 

         1. Term. The Company agrees to continue to employ Employee, and

Employee agrees to continue to serve, on the terms and conditions of this

Agreement for a period commencing on the date hereof and ending three years from

the date hereof, or such other period as may be provided for in Section 10 or

11. The period during which Employee is employed hereunder is hereinafter

referred to as the "Employment Period." The Employment Period shall be

automatically renewed for successive one-year terms unless either party gives

written notice to the other at least six (6) months prior to the expiration of

the then Employment Period, of such party's intention to terminate Employee's

employment hereunder at the end of the then current Employment Period.

 

         2. Duties and Services. During the Employment Period, Employee shall

continue to be employed in the business of the Company as Chief Executive

Officer of the Company. In addition, Employee shall continue to serve as

Chairman of the Board. Employee shall perform such duties and services, within

his expertise and experience, as may be assigned to him by, and subject to the

direction of, the Board. Employee agrees to continue his employment as described

in this Section 2 and agrees to devote all of his working time and efforts to

the performance of his duties under this Agreement, excepting disabilities,

illness and vacation time as provided by Section 3(e). In performing his duties

hereunder, Employee shall be available for reasonable travel as the needs of the

business require. Except as provided in Section 6 hereof, the foregoing shall

not be construed as preventing Employee from: (i) making

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investments in other businesses and managing his and his family's personal

investments; and (ii) participating in charitable, civic, educational,

professional, community or industry affairs or serving on the board of directors

of other companies ("Professional Activities"), provided that these Professional

Activities are approved by the Company's Board.

 

         3. Compensation and Other Benefits.

 

         (a) As compensation for his services hereunder, the Company shall pay

Employee, during the Employment Period, a base salary payable in equal

semi-monthly installments at an annual rate of $750,000, provided that such

salary shall be reviewed annually by the Company's Board, or a committee

thereof, which may, in its sole discretion, increase (but not decrease) such

salary.

 

         (b) The Company shall also pay Employee, during the Employment Period,

an annual target bonus, payable in January of each year for the preceding year,

in an amount equal to sixty-five percent (65%) of Employee's base salary

(payable under Section 3(a) of this Agreement) measured against objective

criteria to be determined by the Company's Board, or a committee thereof, after

good faith consultation with Employee.

 

         (c) Employee shall be entitled to continue to participate in all group

health and insurance programs and all other fringe benefit or retirement plans

which the Company may, in its sole and absolute discretion, elect to make

available to its employees generally, provided Employee meets the qualifications

therefor.

 

         (d) Employee shall be eligible to participate in the Company's 1998

Long- Term Incentive Plan (the "Plan") and any other incentive plans of the

Company. Upon the Employee's Disability (as defined in the Plan), termination of

employment with the Company due to Retirement (as defined in the Plan) or death,

Employee (or the legal representative of his estate, in the case of Employee's

death) shall be entitled to: (i) full vesting and immediate exercisability of

any outstanding stock options and other equity awards (and lapse of any

forfeiture provisions) granted to Employee at any time; and (ii) with respect to

stock options granted to Employee on or after January 1, 2000, Employee (or the

legal representative of his estate, in the case of Employee's death) shall be

entitled to exercise such stock options at any time during the three (3) year

period from the date of Employee's Disability, Retirement or death.

 

         (e) Employee shall be entitled to paid vacation in accordance with the

Company's policy applicable to senior executives, but in no event less than four

(4) weeks per calendar year.

 

         (f) Without limiting the generality of Section 3(c), the Company shall

pay or reimburse Employee for the reasonable expenses incurred by the Employee

in connection with obtaining professional tax and financial planning advice, up

to a maximum of $7,500 in any calendar year during the Employment Period.

 

         4. Expenses. Employee shall be entitled to reimbursement for all

reasonable travel and other out-of-pocket expenses necessarily incurred in the

performance of his duties

 

 

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hereunder, upon submission and approval of written statements and bills in

accordance with the then regular procedures of the Company.

 

         5. Representations and Warranties of Employee. Employee represents and

warrants to the Company that Employee is under no contractual or other

restriction or obligation which is inconsistent with the execution of this

Agreement, the performance of his duties hereunder or the other rights of the

Company hereunder.

 

         6. Non-Competition.

 

         (a) In view of the unique and valuable services that Employee has

rendered or is expected to render to the Company, Employee's knowledge of the

customers, trade secrets and other proprietary information relating to the

business of the Company and its customers and suppliers and similar knowledge

regarding the Company which Employee has obtained or is expected to obtain, and

in consideration of the compensation to be received hereunder, Employee agrees

that:

 

                  (i) during the period he is employed by the Company under this

         Agreement or otherwise, he will not Participate In (as hereinafter

         defined in this Section 6) any other business or organization, whether

         or not such business or organization now is or shall then be competing

         with or of a nature similar to the business of the Company, without

         obtaining the prior written consent of the Executive Committee of the

         Board;

 

                  (ii) until the first anniversary of the date of the

         termination of Employee's employment under this Agreement or otherwise,

         he will not Participate In any business which is engaged, directly or

         indirectly, in the same business as the Company with respect to any

         specific product or specific service sold or activity in which the

         Company engages up to the time of termination of employment in any

         geographical area in which at the time of termination such product or

         service is sold or activity is engaged in by the Company;

 

                  (iii) if a Change in Control occurs and Employee's employment

         with the Company is terminated under this Agreement without Cause (as

         hereinafter defined) or by Employee for Good Reason (as hereinafter

         defined) at any time during the period beginning on the date of a

         Change in Control and ending one (1) year after the date of such Change

         in Control or within ninety (90) days prior to a Change in Control,

         then beginning on the later of the date Employee's employment

         terminates (as described under this Section 6(a)(iii)) and the date of

         a Change in Control and ending on the second anniversary of such date,

         he will not Participate In any activity or business in the United

         States involved in the research, development, commercialization of a

         small molecule which is: (A) the generic equivalent of THALOMID (i.e.,

         the same chemical structure); (B) an anti-angiogenic agent for oncology

         use; (C) a substantially specific TNFalpha inhibitor (via inhibition of

         synthesis of TNFalpha, including via inhibition of PDE4) for the

         treatment of Crohn's disease, rheumatoid arthritis, dermatological and

         auto-immune conditions having excess levels of TNFalpha as the prime

         causative factor, cachexia (AIDS or cancer), or any other indication

         for which the Company has been granted

 

 

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         orphan drug status; or (D) a formulation of d- or dl-methylphenidate

         for the treatment of ADD/ADHD.

 

         (b) For purposes of this Section 6 the term "Participate In" shall

mean: "directly or indirectly, for his own benefit or for, with or through any

other person, firm or corporation, own, manage, operate, control, loan money to

or participate in the ownership, management, operation or control of, or be

connected as a director, officer, employee, partner, consultant, agent,

independent contractor or otherwise with, or acquiesce in the use of his name

in."

 

         (c) Employee further agrees that, during the period he is employed by

the Company under this Agreement or otherwise and until the first anniversary of

the date of the termination of Employee's employment under this Agreement or

otherwise, he will not directly or indirectly reveal the name of, solicit or

interfere with, or endeavor to entice away from the Company, any of its

suppliers, customers or employees.

 

         7. Patents, etc. Any interest in patents, patent applications,

inventions, technological innovations, copyrights, copyrightable works,

developments, discoveries, designs and processes ("Inventions") which Employee

during the period he is employed by the Company under this Agreement or

otherwise, and for six months thereafter, may conceive of or develop and either

relating to the specific fields in which the Company may then be engaged or

conceived of or developed utilizing the time, material, facilities or

information of the Company shall belong to the Company; as soon as Employee

conceives of or develops any Invention, he agrees immediately to communicate

such fact in writing to the Secretary of the Company, and without further

compensation, but at the Company's expense (except as noted in clause (a) of

this Section 7), forthwith upon request of the Company, Employee shall execute

all such assignments and other documents (including applications for patents,

copyrights, trademarks and assignments thereof) and take all such other action

as the Company may reasonably request in order (a) to vest in the Company all

Employee's right, title and interest in and to the Inventions, free and clear of

liens, mortgages, security interests, pledges, charges and encumbrances arising

from the acts of Employee ("Liens") (Employee to take such action, at his

expense, as is necessary to remove all such Liens) and (b) if patentable or

copyrightable, to obtain patents or copyrights (including extensions and

renewals) therefor in any and all countries in such name as the Company shall

determine.

 

         8. Confidential Information. All confidential information which

Employee may now possess, may obtain during or after the Employment Period, or

may create prior to the end of the period he is employed by the Company under

this Agreement or otherwise relating to the business of the Company or of any

customer or supplier of the Company shall not be published, disclosed or made

accessible by him to any other person, firm or corporation either during or

after the termination of his employment or used by him except during the

Employment Period in the business and for the benefit of the Company, in each

case without the prior written permission of the Company. Employee shall return

all tangible evidence of such confidential information to the Company prior to

or at the termination of his employment. As used in this Section 8,

"confidential information" shall mean any information except that information

which is or comes into the public domain through no fault of Employee or which

Employee obtains

 

 

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after the termination of his employment by the Company under this Agreement or

otherwise from a third party who has the right to disclose such information.

 

         9. Life Insurance. If requested by the Company, Employee shall submit

to such physical examinations and otherwise take such actions and execute and

deliver such documents as may be reasonably necessary to enable the Company, at

its expense and for its own benefit, to obtain life insurance on the life of

Employee. Subject to its ability to do so under the terms of such policy, if

any, insuring the life of Employee, upon the termination of Employee's

employment hereunder, the Company will assign to Employee its rights under such

insurance policy, provided that, concurrently with such assignment, Employee

shall reimburse the Company for any premium payments made by the Company in

respect of time periods subsequent to such date of termination. Nothing herein

contained shall obligate the Company to obtain such insurance.

 

         10. Termination.

 

         (a) Employee's employment and the Employment Period shall terminate on

the first of the following to occur:

 

                  (i) the Company provides written notice to Employee of a

         termination for Cause; such written notice shall be provided to

         Employee not less than ten (10) days prior to the date of termination.

         "Cause" shall mean: (A) Employee's conviction of a crime involving

         moral turpitude or a felony, (B) Employee's acts or omissions taken in

         bad faith and to the detriment of the Company after a written demand

         for cessation of such conduct is delivered to Employee by the Company,

         which demand specifically identifies the manner in which the Company

         believes that Employee has engaged in such conduct and the injury to

         the Company, and after Employee's failure to correct such act or

         omission within ten (10) days following such written demand, or (C)

         Employee's breach of any material term of this Agreement after written

         demand for substantial performance is delivered to Employee by the

         Company, which demand specifically identifies the manner in which the

         Company believes Employee has breached this Agreement, and after

         Employee's failure to correct such breach within ten (10) days

         following such written demand.

 

                  (ii) Employee's death, in which case, this Agreement shall

         terminate on the date of Employee's death, whereupon Employee or his

         estate, as the case may be, shall be entitled to receive a lump sum

         payment in an amount equal to Employee's annual base salary (at the

         rate in effect, or required to be in effect, immediately prior to the

         date of Employee's death) and the portion of Employee's annual target

         bonus (as provided in Section 3(b)) pro-rated up to Employee's date of

         death (assuming the target has been met).

 

                  (iii) Nothing contained in this Section 10(a) shall be deemed

         to limit any other right the Company may have to terminate Employee's

         employment hereunder upon any ground permitted by law.

 

 

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