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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
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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
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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
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