Exhibit 10.7
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”), made this 22 nd day of August 2006, is entered into by
Momenta Pharmaceuticals, Inc., a Delaware corporation with its
principal place of business at 675 West Kendall Street, Cambridge,
Massachusetts (the “Company”), and Craig Wheeler,
residing at 3 Valley View Lane, Orinda, California 94563 (the
“Employee”).
The Company desires to employ the
Employee and the Employee desires to be employed by the
Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged by the parties hereto, the parties agree as
follows:
1.
Term of
Employment . The Company hereby
agrees to employ the Employee and the Employee hereby accepts
employment with the Company, upon the terms set forth in this
Agreement, commencing on August 22, 2006 (the
“Commencement Date”). There shall be no definite
term of employment, and the Employee’s employment shall be
at-will such that both the Company and the Employee remain free to
end the employment relationship for any reason, at any time, with
or without notice.
2.
Title and
Capacity . The Employee shall
initially serve as President of the Company and shall report to the
Board of Directors of the Company (the “Board”).
Effective the Commencement Date, the Employee shall be appointed to
the Board. On or about September 12, 2006, the Employee shall
assume the duties of Chief Executive Officer. The Employee
shall be based at the Company’s headquarters in Cambridge,
Massachusetts.
The Employee hereby accepts such
employment and agrees to undertake the duties and responsibilities
inherent in such position and such other duties and
responsibilities as the Board
shall from time to time reasonably
assign to him. The Employee agrees to devote his entire
business time, attention and energies to the business and interests
of the Company; provided, however , the Employee may
continue to serve on the board of Avanir Pharmaceuticals, Inc. and
with regard to future board or other business activities he will
obtain prior approval from the Board. The Employee agrees to abide
by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein that may be adopted
from time to time by the Company.
3.
Compensation
and Benefits .
3.1
Base
Salary . The Company shall pay
the Employee, in accordance with the Company’s regular
payroll practices, a base salary at the annualized rate of
$500,000, or such salary adjusted upward thereafter, as determined
by the Board.
3.2
Bonus . In addition to a base
salary, the Employee will be eligible to receive discretionary
bonus compensation as follows:
(a)
for the fiscal
year 2006, a guaranteed bonus of a minimum of sixty percent (60%)
of the base salary in effect as of the last day of the fiscal year,
prorated for the Employee’s length of service within the
fiscal year which bonus is payable on or about January 15,
2007.
(b)
beginning in
fiscal year 2007, an annual bonus in the range of zero (0%) to one
hundred and fifty (150%) of his base salary for the applicable
fiscal year as of the last day of the applicable fiscal year.
The annual target for the Employee’s bonus will be at sixty
percent (60%) of the applicable base salary. The Board will
determine, in its sole discretion, after consideration of the
recommendation of the Compensation Committee, whether (and in what
amount) a bonus award is payable to the Employee. In
determining whether a bonus award
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in any given year
shall be granted, the Board will review whether the Company has
achieved its annually approved operating plan as well as whether
the Employee has achieved his personal objectives as established by
the Board.
To be eligible to receive a bonus
award, the Employee must be an active employee on the date any such
bonuses are distributed.
3.3
Employee
Benefits .
(a)
Company-Sponsored Benefit
Plans . The Employee shall be
entitled to participate in all benefit plans and programs that the
Company establishes and makes available to its employees to the
extent that the Employee is eligible under (and subject to the
provisions of) the plan documents governing those programs.
The Employee shall be entitled to five (5) weeks paid vacation per
year to be administered in accordance with Company
policy.
(b)
Life and
Disability Insurance . The Company shall
reimburse the Employee the premium for maintaining a $3 million
life and disability insurance policy up to a maximum reimbursement
of $5,000 per year, for as long as and to the extent that the
Employee is employed by the Company. In addition, the Company
will provide the Employee with an additional payment to offset the
estimated tax liability for such reimbursement (hereinafter, for
purposes of this section only, the “gross up”), but
such payment shall not include any payments to offset the estimated
tax liability of such gross up.
3.4
Reimbursement
of Expenses . The Company shall
reimburse the Employee for all reasonable travel, entertainment and
other expenses incurred or paid by the Employee in connection with,
or related to, the performance of his duties, responsibilities or
services under this Agreement, upon presentation by the Employee of
documentation, expense statements, vouchers and/or such other
supporting information as the Company may reasonably
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request;
provided , however , that the amount available for
such travel, entertainment and other expenses may be fixed in
advance by the Board.
3.5
Equity
.
(a)
On the
Commencement Date, the Company will grant the Employee an option to
purchase 375,000 shares of common stock of the Company $.0001 par
value per share (“Common Stock”) at an exercise price
equal to the fair market value of the Common Stock on the date of
the grant (such shares, the “Initial Shares”), as
evidenced by Stock Option Agreements with the Employee (the
“Option Agreements”), substantially in the forms of
Exhibit A and Exhibit B to this Agreement.
The option to purchase such Initial Shares shall vest over a four
(4) year period in accordance with the terms
and provisions of the Option Agreements.
(b)
On the
Commencement Date, the Company will grant the Employee 100,000
shares of Common Stock (the “Time-Based Shares”).
The grant of the Time-Based Shares shall be governed by a
Restricted Stock Agreement, substantially in the form of
Exhibit C to this Agreement, which shall provide for,
among other things, the forfeiture of the unvested Time-Based
Shares under certain circumstances. The Time-Based Shares
will be subject to a four (4) year cliff vesting in accordance with
the Restricted Stock Agreement.
(c)
On or about
January 1, 2007, and provided the Employee is employed by the
Company on such date, the Company will grant the Employee 175,000
shares of Common Stock (the “Performance-Based
Shares”). The grant of the Performance-Based Shares
shall be governed by a Restricted Stock Agreement, substantially in
the form of Exhibit D to this Agreement, which shall provide
for, among other things, the forfeiture of the unvested
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Performance-Based
Shares under certain circumstances. The Performance-Based
Shares will vest in accordance with the terms of the Restricted
Stock Agreement.
(d)
At the end of
fiscal year 2007, and provided the Employee is employed by the
Company, the Employee will be eligible for: (1) a target grant of
75,000 shares of Common Stock (the “First Target
Shares”) which shares will vest over a four (4) year period
unless the Company and the Employee agree in writing that such
shares will vest pursuant to the satisfaction of performance
conditions to be determined by the Board in its sole discretion;
and (2) a target option grant of 100,000 shares of Common Stock
(the “Second Target Shares”), with an exercise price
equal to the fair market value of the Common Stock on the date of
grant, which option shall vest over a four (4) year period.
The size of the option and stock grants shall be presented to the
Board for its approval in its sole discretion if recommended and
approved by the Compensation Committee. The Company and the
Employee acknowledge that the Company stock plans will be reviewed
during the coming year to determine, among other things, the
appropriate annual equity and options to be granted to the Employee
after fiscal 2007 in light of the overall revised equity plans and
practices of the Company.
(e)
The number of
Performance-Based Shares, First Target Shares and Second Target
Shares, as set forth in Section 3.5(c) and (d), shall be adjusted
as necessary if, after the Commencement Date and prior to the date
of each applicable grant, the Company effects a stock split,
reverse stock split, stock dividend, recapitalization or similar
transaction affecting the Company’s Common Stock.
3.6
Moving
Expenses and Temporary Accommodations .
(a)
The Company shall
reimburse the Employee for pre-approved reasonable moving and travel
expenses not to exceed three hundred and fifty thousand
dollars
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($350,000), and
make additional payments to the extent the reimbursement is taxable
to the Employee, incurred by the Employee in moving himself and his
immediate family from California to the Cambridge, Massachusetts
metropolitan area to commence employment with the Company.
The fees and expenses for which the Employee is eligible for
reimbursement are set forth in Exhibit E to this
Agreement.
(b)
For one year from
the date the Employee becomes Chief Executive Officer of the
Company, the Company will arrange for temporary housing, living
expenses (including utilities) and a rental car, in an amount to be
mutually agreed upon by the Employee and the Chairman of the
Board
(c)
Until the earlier
of one year from the date the Employee becomes the Chief Executive
Officer of the Company or until the Employee relocates his family
to the Cambridge, Massachusetts metropolitan area, the Company will
pay for the Employee to travel to and from his home in California
and Cambridge, Massachusetts as mutually agreed with the Chairman
of the Board.
3.7
Financial and
Tax Advice . The Company will
reimburse the Employee up to $15,000 for actual financial and tax
advisor fees incurred during the first year, and up to $5,000 per
year for such actual incurred fees for each subsequent calendar
year, of his employment pursuant to this Agreement.
3.8
Withholding
. All
salary, bonus and other compensation or benefits payable to the
Employee shall be subject to applicable withholdings and
taxes.
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4.
Payments Upon
Resignation By The Employee Without Good Reason or Termination By
The Company For Cause.
4.1
Payment upon
Voluntary Resignation or Termination for Cause
. If the
Employee voluntarily resigns his employment other than for Good
Reason (as defined in Section 4.2), or if the Company terminates
the Employee for Cause (as defined in Section 4.3), the Company
shall pay the Employee all accrued and unpaid base salary through
the Employee’s date of termination and any vacation that is
accrued but unused as of such date. The Employee shall not be
eligible for any severance or separation payments (including, but
not limited to, those described in Sections 5 and 6
of this
Agreement) or any continuation of benefits (other than those
provided for under the Federal Consolidated Omnibus Budget
Reconciliation Act (“COBRA”)), or any other
compensation pursuant to this Agreement or otherwise. The
Employee also shall have such rights, if any, with respect to
outstanding stock options and restricted stock grants as may be
provided under the agreement applicable to each.
4.2
Definition of
“Good Reason” . For purposes of this
Agreement, “Good Reason” means the occurrence, without
the Employee’s written consent, of any of the events or
circumstances set forth in clauses (a) through (d) below, provided,
however, that an event described in clauses (a) through (d) below
shall not constitute Good Reason unless it is communicated in
writing, within 90 days of the event giving rise to the claim, by
the Employee to the Board or its successor and unless it is not
corrected by the Company or its successor and the Employee has not
been reasonably compensated for any loss or damages resulting
therefrom within thirty (30) days of the Company’s receipt of
such written notice:
(a)
the assignment to
the Employee of duties inconsistent in any material respect with
the Employee’s position (including status, offices, titles
and reporting
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requirements),
authority or responsibilities, or any other action or omission by
the Company which results in a material diminution in such
position, authority or responsibilities;
(b)
the Board
requiring the Employee to engage in unlawful conduct;
(c)
a material
reduction in the Employee’s base salary; or
(d)
a change by the
Company in the location at which the Employee performs his
principal duties for the Company to a new location that is both (i)
outside a radius of 50 miles from the Employee’s principal
residence and (ii) more than 30 miles from the location at which
the Employee performed his principal duties for the
Company.
4.3
Definition of
“Cause ”. For purposes
of this Agreement, “Cause” is defined as: (i) a good
faith finding by no fewer than two-thirds of the members of the
Board (excluding the Employee, if applicable) of (a) the
Employee’s failure to (1) perform reasonably assigned lawful
duties or (2) comply with a lawful instruction of the Board so long
as, in the case of (2), the instruction is consistent with the
scope and responsibilities of the Employee’s position, or (b)
the Employee’s dishonesty, willful misconduct or gross
negligence, or (c) the Employee’s substantial and material
failure or refusal to perform according to, or to comply with, the
policies, procedures or practices established by the Company or the
Board and, in the case of (a) or (c), the Employee has had ten (10)
days written notice to cure his failure to so perform or comply; or
(ii) the Employee’s indictment, or the entering of a guilty
plea or plea of “no contest” with respect to a felony
or any crime involving moral turpitude.
4.4
Taxes .
(a)
In the event that
the Company undergoes a “Change in Ownership or
Control” (as defined below), the Company shall, within 30
days after each date on which the Employee becomes entitled to
receive (whether or not then due) a Contingent
Compensation
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Payment (as
defined below) relating to such Change in Ownership or Control,
determine and notify the Employee (with reasonable detail regarding
the basis for its determinations) (i) which of the payments or
benefits due to the Employee (under this Agreement or otherwise)
following such Change in Ownership or Control constitute Contingent
Compensation Payments, (ii) the amount, if any, of the excise tax
(the “Excise Tax”) payable pursuant to Section 4999 of
the Internal Revenue Code of 1986, as amended (the
“Code”), by the Employee with respect to such
Contingent Compensation Payment and (iii) the amount of the
Gross-Up Payment (as defined below) due to the Employee with
respect to such Contingent Compensation Payment. Within
30 days after delivery of such notice to the Employee, the Employee
shall deliver a response to the Company (the “Employee
Response”) stating either (A) that he agrees with the
Company’s determination pursuant to the preceding sentence or
(B) that he disagrees with such determination, in which case he
shall indicate which payment and/or benefits should be
characterized as a Contingent Compensation Payment, the amount of
the Excise Tax with respect to such Contingent Compensation Payment
and the amount of the Gross-Up Payment due to the Employee with
respect to such Contingent Compensation Payment. In the event
that the Employee fails to deliver an Employee Response on or
before the required date, the Company’s initial determination
shall be final. If the Employee Response differs from the
Company notice, the Employee and the Company, and their respective
tax advisors, shall attempt in good faith to resolve any
disagreements concerning the foregoing. Within 90 days after
the due date of each Contingent Compensation Payment to the
Employee, the Company shall pay to the Employee, in cash, the
Gross-Up Payment with respect to such Contingent Compensation
Payment, in the amount determined pursuant to this
Section 4.4).
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(b)
For purposes of
this Section 4.4, the following terms shall have the following
respective meanings:
(i)
“Change in
Ownership or Control” shall mean a change in the ownership or
effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in
accordance with Section 280G(b)(2) of the Code.
(ii)
“Contingent
Compensation Payment” shall mean any payment (or benefit) in
the nature of compensation that is made or made available (under
this Agreement or otherwise) to a “disqualified
individual” (as defined in Section 280G(c) of the Code) and
that is contingent (within the meaning of Section 280G(b)(2)(A)(i)
of the Code) on a Change in Ownership or Control of the
Company.
(iii)
“Gross-Up
Payment” shall mean an amount equal to the sum of (i) the
amount of the Excise Tax payable with respect to a Contingent
Compensation Payment and (ii) the amount necessary to pay all
additional taxes imposed on (or economically borne by) the Employee
(including the Excise Taxes, state and federal income taxes and all
applicable employment taxes) attributable to the receipt of such
Gross-Up Payment. For purposes of the preceding sentence, all
taxes attributable to the receipt of the Gross-Up Payment shall be
computed assuming the application of the maximum tax rates provided
by law.
(c)
The provisions of
this Section 4.4 are intended to apply to any and all payments
or benefits available to the Employee under this Agreement or any
other agreement or plan of the Company under which the Employee
receives Contingent Compensation Payments.
5.
Termination
Without Cause, Termination by Reason of Death or Disability,
Resignation for Good Reason . If the
Employee’s employment with the Company is
terminated
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by reason of the
Employee’s death or Disability (as defined in Section 5.5),
by the Company without Cause (as defined in Section 4.3),
or by the
Employee’s voluntary resignation for Good Reason (as defined
in Section 4.2), other than in connection with
a Change in Control (as defined in Section 6.1(a)), then the
Employee shall be paid all accrued and unpaid base salary and any
accrued but unused vacation through the date of termination.
In addition, subject to the Employee’s execution and
non-revocation of a binding severance and mutual release agreement
in a form satisfactory to the Company (hereinafter, a
“Severance Agreement”), the Employee shall be eligible
to receive the following separation benefits:
5.1
an amount equal
to twelve (12) months of the highest base salary in effect during
the twelve (12) months prior to the Employee’s date of
termination, and an amount equal to the greater of (i) sixty
percent (60%) of such base salary or (ii) the last bonus, if
any, paid to the Employee pursuant to Section 3.2, all of which
shall be payable, in full and in a lump-sum cash payment, six
months and one day after the date of termination; and
5.2
if the
Employee’s termination is without Cause (as defined in
Section 4.3), immediate vesting of the Time Based Shares and the
Initial Shares as described in Section 3.5(a) and (b) and
seventy-five thousand (75,000) of the Performance Based Shares in
accordance with Section 3.5(c) provided the Company has granted to
the Employee the Performance Based Shares in accordance with
Section 3.5(c), and, provided further, that the Company has granted
to the Employee the First Target Shares and the Second Target
Shares in accordance with Section 3.5(d), immediate vesting of that
portion of the First Target Shares, Second Target Shares and any
future grants that would have vested if the Employee had remained
employed for an additional twelve (12) months as well as vesting of
twenty-five percent (25%) of any unvested future performance based
shares granted to the Employee. All such equity awards
(whether
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stock options or
restricted stock grants) will remain exercisable in accordance with
the applicable stock option plan or grant agreement,
5.3
if the
Employee’s termination is by reason of the Employee’s
death or Disability (as defined in Section 5.5) or for Good Reason
(as defined in Section 4.2), immediate vesting of the Time Based
Shares and the Initial Shares as described in Section 3.5(a) and
(b) and of the Performance Based Shares in accordance with Section
3.5(c) provided the Company has granted to the Employee the
Performance Based Shares in accordance with Section 3.5(c), and,
provided further, that the Company has granted to the Employee the
First Target Shares and the Second Target Shares in accordance with
Section 3.5(d), immediate vesting of that portion of the First
Target Shares, Second Target Shares and any future grants that
would have vested if the Employee had remained employed for an
additional twelve (12) months as well as vesting of twenty-five
percent (25%) of any unvested future performance based shares
granted to the Employee. All such equity awards (whether
stock options or restricted stock grants) will remain exercisable
in accordance with the applicable stock option plan or grant
agreement; and
5.4
upon the
Employee’s termination from employment pursuant to this
Section 5, the Company shall continue the Employee and his
dependants on its medical and dental plans in accordance with the
applicable plans. To the extent the Employee and his
dependants cannot be maintained on such plans, the Company will
obtain comparable policies for the Employee and shall, for twelve
(12) months after the Employee’s termination, continue to pay
that portion of the medical and dental premiums that it pays on
behalf of its actively employed executives who receive the same
type of coverage; provided , however, that if the Employee
becomes re-employed with another employer and is eligible to
receive such benefits from such employer on terms at least as
favorable to the Employee and his dependants as those
12
being provided by
the Company, then the Company shall no longer be required to
provide those particular benefits to the Employee and his
dependants. At the end of the twelve (12) month period, the
Employee may continue such policies on his own behalf or pursuant
to the Federal Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), if applicable, and shall be responsible for
all premiums thereafter.
5.5
For purposes of
this Agreement, “Disability” shall mean the
Employee’s absence from the full-time performance of the
Employee’s duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Employee or the Employee’s legal
representative.
6.
Termination
Following Change of Control .
6.1
Key
Definitions . As used herein, the
following terms shall have the following respective
meanings:
(a)
“ Change
in Control ” means an event or occurrence set forth in
any one or more of subsections (i) through (iv) below (including an
event or occurrence that constitutes a Change in Control under one
of such subsections but is specifically exempted from another such
subsection):
(i)
the acquisition
by an individual, 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”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if,
after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or
more of either (x) the then-outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or
(y) the
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combined voting
power of the then-outstanding securities of the Company entitled to
vote generally in the election of directors (the “Outstanding
Company Voting Securities”); or
(ii)
the consummation
of a merger, consolidation, reorganization, recapitalization or
share exchange involving the Company or a sale or other disposition
of all or substantially all of the assets of the Company in one or
a series of transactions (a “Business Combination”),
unless, immediately following such Business Combination, all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of
the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities,
respectively; or
(iii)
approval by the
stockholders of the Company of a complete or substantially complete
liquidation or dissolution of the Company; or
(iv)
individuals who
constitute the Board on the date of this Agreement (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board, provided that, any individual
that becomes a director of the Company subsequent to
date
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of this Agreement
whose (A) election to the Board or (B) nomination for election by
the Company’s stockholders, in each case is approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board, shall be considered for all time thereafter as a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of directors of the Company.
(b)
“ Change
in Control Date ” means the first date during the period
of time the Employee is employed pursuant to this Agreement on
which a Change in Control occurs. Anything in this Agreement
to the contrary notwithstanding, if (a) a Change in Control
occurs, (b) the Employee’s employment with the Company
is terminated prior to the date on which the Change in Control
occurs, and (c) it is reasonably demonstrated by the Employee
that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with or in
anticipation of a Change in Control, then for all purposes of this
Agreement the “Change in Control Date” shall mean the
date immediately prior to the date of such termination of
employment.
(c)
Change of
Control Termination occurs where the Employee is
terminated without Cause (as defined in Section 4.3) or resigns for
Good Reason (as defined in Section 4.2), in either case within
twenty-four (24) months following the Change in Control
Date.
6.2
Benefits to
Employee Upon a Change of Control Termination
.
In the event of a Change of Control
Termination, the Employee shall be entitled to all accrued and
unpaid base salary and any accrued but unused vacation through the
date of
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termination. In addition,
subject to the Employee’s (or his legal
representative’s, as applicable) execution and non-revocation
of a binding Severance Agreement, the Employee shall be eligible to
receive the following separation benefits:
(a)
the Company shall
pay in full to the Employee in a lump sum cash payment six months
and one day after the termination of employment the aggregate of
the following amounts:
(i)
an amount equal
to twenty-four (24) months of the highest base salary in effect
during the twelve (12) months prior to the Employee’s
termination from employment, and an amount equal to the greater of
(a) sixty percent (60%) of two years of such base salary or
(b) twice the last bonus, if any, paid to the Employee
pursuant to Section 3.2; and
(ii)
if, and only if,
the aggregate purchase price with respect to a Business Combination
as set forth in 6.1(a)(ii) equals or exceeds $1.1 billion, the
amount equal to twelve (12) months of base salary in effect at the
time of the Employee’s termination from employment and an
amount equal to the greater of (a) sixty percent (60%) of one year
of such base salary or (b) the last bonus, if any, paid to the
Employee pursuant to Section 3.2; and
(b)
upon the
Employee’s termination from employment, the Company shall
continue the Employee and his dependants on its medical and dental
plans in accordance with the applicable plans for a period of
twenty-four (24) months (or thirty-six (36) months if the
conditions set forth in (ii) above are met). To the extent
the Employee and his dependants cannot be maintained on such plans,
the Company will obtain comparable policies for the Employee and
shall, for twenty-four (24) months (or thirty-six (36) months if
the conditions set forth in (ii) above are met) after the
Employee’s termination, continue to pay that portion of the
medical and dental premiums that it pays on behalf of its actively
employed executives who receive the same
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type of coverage;
provided , however, that if the Employee becomes re-employed
with another employer and is eligible to receive such benefits from
such employer on terms at least as favorable to the Employee and
his dependants as those being provided by the Company, then the
Company shall no longer be required to provide those particular
benefits to the Employee and his dependants. At the end of
the applicable twenty-four (24) or thirty-six (36) month period,
the Employee may continue such policies on his own behalf or
pursuant to COBRA, if applicable, and shall be responsible for all
premiums thereafter.
(c)
The Employee
shall be entitled to immediate vesting of any unvested Time-Based
Shares, the Initial Shares, the First Target Shares, the Second
Target Shares, the Performance Based Shares and all future grants
awarded to the Employee. All such equity awards (whether
stock options or restricted stock grants) will remain exercisable
in accordance with the applicable stock option plan or grant
agreement.
7.
Mitigation
. The
Employee shall not be required to mitigate the amount of any
payment or benefits provided for in Sections 5 or 6 by seeking
other employment or otherwise except with regard to medical and
dental coverage if new employment is obtained.
8.
Survival
. The
provisions of Sections 5, 6, 9, 10 and 11 shall survive the
termination of this Agreement for any reason.
9.
Non-Competition and
Non-Solicitation .
(a)
During the
Employee’s employment and for a period of one (1) year after
the termination or expiration thereof for any reason, the Employee
will not, in the geographical areas that the Company or any of its
subsidiaries does business or has done business at the time of the
Employee’s separation from employment, directly or
indirectly:
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(i)
engage in any
business or enterprise (whether as owner, partner, officer,
director, employee, consultant, investor, lender or otherwise,
except as the holder of not more than one percent (1%) of the
outstanding stock of a publicly-held company) relying on
competitive technologies similar to the Company’s core
technologies to develop biosimilar or generic pharmaceuticals or
that sells directly competing products or services in the same
therapeutic class as proprietary pharmaceuticals developed, by the
Company or any of its subsidiaries while the Employee was employed
by the Company; or
(ii)
either alone or
in association with others: (A) solicit, recruit,
induce, attempt to solicit, recruit or induce, or permit any
organization directly or indirectly controlled by the Employee to
solicit, recruit, induce, or attempt to solicit, recruit or induce
any employee of the Company to leave the employ of the Company; or
(B) solicit, recruit, induce, attempt to solicit, recruit or
induce for employment or as an independent contractor, or permit
any organization directly or indirectly controlled by the Employee
to solicit, recruit, induce, attempt to solicit, recruit or induce
for employment or as an independent contractor, any person who was
employed by the Company at any time during the Employment Period;
provided , however , that subsection 9(a)(ii)(B)
shall not apply to any individual whose employment or engagement
with the Company has been terminated for a period of six (6)
months; provided further , that if an individual
covered by this section initiates contact with the Employee for
purposes of employment with the Employee or with any entity the
Employee is employed by, the mere referral by the Employee of such
individual to another person at such entity shall not breach this
section; or
(iii)
either alone or
in association with others, solicit, divert or take away, or
attempt to solicit, divert or take away, or permit any organization
directly or
18
indirectly
controlled by the Employee to solicit, divert or take away, or
attempt to solicit, divert or take away, the business or patronage
of any of the clients, customers or accounts, or prospective
clients, customers or accounts, of the Company, which were
contacted, solicited or served by the Company at any time while
employed pursuant to this Agreement.
(b)
If the Employee
violates the provisions of Section 9, the Employee shall
continue to be bound by the restrictions set forth in this
Section 9 until a period of one (1) year has expired without
any violation of such provisions.
(c)
If any
restriction set forth in this Section 9 is found by any court
of competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range
of activities or geographic area as to which it may be
enforceable.
(d)
The restrictions
contained in this Section 9 are necessary for the protection
of the business and goodwill of the Company and are considered by
the Employee to be reasonable for such purpose. The Employee
agrees that any breach of this Section 9 is likely to cause
the Company substantial and irrevocable damage that is difficult to
measure. Therefore, in the event of any such breach or
threatened breach, the Employee agrees that the Company, in
addition to such other remedies that may be available, shall have
the right to obtain an injunction from a court restraining such a
breach or threatened breach and the right to specific performance
of the provisions of this Section 9 without posting a bond and
the Employee hereby waives the adequacy of a remedy at law as a
defense to such relief.
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10.
Proprietary
Information and Developments .
10.1
Proprietary
Information .
(a)
The Employee
agrees that all information, whether or not in writing, of a
private, secret or confidential nature concerning the
Company’s business, business relationships or financial
affairs (collectively, “Proprietary Information”) is
and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may
include discoveries, inventions, products, product improvements,
product enhancements, processes, methods, techniques, formulas,
compositions, compounds, negotiation strategies and positions,
projects, developments, plans (including business and marketing
plans), research data, clinical data, financial data (including
sales, costs, profits and pricing methods), personnel data,
computer programs (including software used pursuant to a license
agreement), customer and supplier lists, and contacts at or
knowledge of customers or prospective customers of the
Company. The Employee will not disclose any Proprietary
Information to any person or entity other than employees of the
Company or use the same for any purposes (other than in the
performance of his duties as an employee of the Company), either
during or after his employment with the Company, unless and until
such Proprietary Information has become public knowledge without
fault by the Employee.
(b)
The Employee
agrees that all files, documents, letters, memoranda, reports,
records, data, sketches, drawings, methods, laboratory notebooks,
program listings, computer equipment or devices, computer programs
or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the Employee
or others, which shall come into his custody or possession, shall
be and are the exclusive property of the Company and are to be used
by the Employee only in the performance of his duties for
the
20
Company.
All such materials or copies thereof and all tangible property of
the Company in the custody or possession of the Employee shall be
delivered to the Company upon the earlier of (i) a request by
the Company or (ii) termination of his employment. After
such delivery, the Employee shall not retain any such materials or
copies thereof or any such tangible property.
(c)
The Employee
agrees that his obligation not to disclose or to use information
and materials of the types set forth in subsections (a) and (b)
above, and his obligation to return materials and tangible property
set forth in subsection (b) above, also extends to such types of
information, materials and tangible property of customers of the
Company or suppliers to the Company or other third parties who may
have disclosed or entrusted the same to the Company or to the
Employee.
10.2
Developments.
(a)
The Employee
will
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