Executive Employment
Agreement
This executive
employment agreement (the “Agreement”) is entered into
as of October 10, 2006 by and between Micromet, Inc.
(hereinafter “ Company ”) and Christopher P.
Schnittker (hereinafter “ Executive
”).
Whereas,
Company desires to employ Executive
to provide personal services to Company, and wishes to provide
Executive with certain compensation and benefits in return for his
services; and
Whereas,
Executive wishes to be employed by
Company and provide personal services to Company in return for
certain compensation and benefits;
Now,
therefore, in
consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as
follows:
1.1 Position. Subject to terms set forth herein, Company
agrees to employ Executive in the position of Senior Vice
President, Chief Financial Officer, and Executive hereby accepts
such employment. During his employment with Company, Executive will
devote his best efforts and substantially all of his business time
and attention to the business of Company, except for vacation
periods and reasonable periods of illness or other incapacities
permitted by Company’s general employment
policies.
1.2 Duties. Executive will serve in an executive capacity
and will perform such duties as are customarily associated with his
then current title, consistent with the certificate of
incorporation and the bylaws of Company, and as required by the
board of directors of Company (the “ Board ”),
including, without limitation, the performance of activities as an
officer of Company or Company’s subsidiaries. Executive will
report directly to the Chief Executive Officer. Upon termination of
the employment pursuant to Section 7, Executive agrees to
resign from all functions which he exercised or assumed on the
basis of or in connection with Executive’s employment by
Company.
(a) Executive’s primary office location will be
at the Company’s headquarter offices on the East Coast to be
determined by the Board in the fourth quarter of 2006. Company
reserves the right to reasonably require Executive to perform his
duties at places other than at his primary office location from
time to time, and to require reasonable business travel.
(b) In order to facilitate Executive’s potential
relocation from his current domicile to the area of the
Company’s headquarter offices on the East Coast, the Company
will reimburse Executive for the cost of renting an apartment in
the area of Company’s
headquarter
offices for a period of up to six months; provided that Company
will not be required to reimburse any such rental costs in excess
of $15,000. Further, Company will pay all of Executive’s
reasonable expenses for the relocation of Executive and his
household to the area of Company’s headquarter offices. In
addition, if the sale of Executive’s current home occurs
after the lease or purchase of Executive’s new home in the
area of Company’s headquarter offices, Company will reimburse
the mortgage payments for Executive’s current home during the
period starting on the date on which it is first offered for sale
and ending on the date of closing of the sale, but in no event for
longer than six (6) months; provided that Executive will use
good faith efforts to effect the sale as soon as practicable, and
provided further that Company will not be required to reimburse any
such mortgage payments in excess of $25,000.
1.4 Term. The term of this Agreement will commence on
October 10, 2006 and will continue from that date until
September 30, 2010 (the “ Initial Term ”),
and will be extended automatically for consecutive one
(1) year periods (each an “ Extension Term
”, and collectively with the Initial Term referred to herein
as the “ Employment Term ”). If Company or
Executive decides not to extend the Initial Term or any Extension
Term, it or he may terminate this Agreement by providing written
notice of termination in accordance with Section 7.2 or 7.4,
respectively, and the terms of Section 7.2 or 7.4 will apply with
respect to any such termination by Company or Executive,
respectively. In addition, the Employment Term terminates upon
termination of employment pursuant to Section 7
below.
1.5 Policies and Procedures. In addition to the terms of
this Agreement, the employment relationship between the parties
will be governed by the general employment policies and practices
of Company, including those relating to protection of confidential
information and assignment of inventions. If the terms of this
Agreement differ from or are in conflict with Company’s
general employment policies or practices, this Agreement will
control.
2.1 Base Salary. For services rendered hereunder by
Executive during the Employment Term, Executive will receive an
annualized base salary of two hundred thirty thousand US dollars
(US$ 230,000) (the “ Base Salary ”), payable in
accordance with Company’s regular payroll schedule (but not
less frequently than monthly), less any payroll withholding and
deductions due on such salary in accordance with applicable law and
Company’s general employment policies or practices. Such Base
Salary will be reviewed annually by the Compensation Committee of
the Board and may be increased at its discretion. The initial such
review will occur in Spring 2007 in accordance with the
Company’s review process for its executives. The Base Salary
covers all overtime.
2.2 Bonus. Executive will participate in Company’s
Management Incentive Compensation Plan adopted by Company from time
to time or in such other bonus plan as the Board may approve for
the senior executive officers of Company. Except as otherwise
provided in this Agreement, Executive’s participation in and
benefits under any such plan will be on the terms and subject to
the conditions specified in the governing document of the
particular plan.
(a) On the date of this Agreement or as soon as practicable
thereafter, but in no event later than thirty (30) days after
the date of this Agreement Executive will be granted an option to
purchase up to 200,000 shares of Common Stock of the Company (the
“Initial
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Stock
Options”). The Initial Stock Options will have an exercise
price equal to the fair market value of the Company’s Common
Stock on the date of grant, as determined by the Board. The Initial
Stock Options will be granted as incentive stock options to the
maximum extent permitted by law, and otherwise will be
non-qualified stock options. The Initial Stock Options will be
subject to the Micromet, Inc. 2003 Equity Incentive Award Plan (the
“Plan”) and the Company’s standard form of stock
option agreement, which Executive will be required to execute as a
condition to this grant. The Initial Stock Options will vest over a
four-year period, with 25% of the shares subject to the Initial
Stock Options vesting on the 12 month anniversary date of the
date of this Agreement, and 1/48 of the shares subject to the
options vesting on a monthly basis thereafter.
(b) In addition to the Initial Stock Options,
Executive will participate in any equity or other employee benefit
plan that is generally available to senior executive officers, as
distinguished from general management, of Company, including,
without limitation, Company’s current Equity Incentive Award
Plan. Except as otherwise provided in this Agreement,
Executive’s participation in and benefits under any such plan
will be on the terms and subject to the conditions specified in the
governing document of the particular plan.
2.4 Acceleration of Vesting. The provisions concerning
vesting pursuant to clauses (a), (b) and (c) of this
Section 2.4 will be cumulative, and are hereby deemed to be a
part of all stock options, including the Initial Stock Options,
restricted stock and such other awards granted pursuant to
Company’s stock option and equity incentive award plans or
agreements and any shares of stock issued upon exercise thereof,
(each a “ Stock Award ”) and to supersede any
less favorable provision in any agreement or plan regarding such
Stock Award.
(a) Subject to any additional acceleration of vesting
and exercisability in connection with a Change of Control (as
defined in subsection (d) below), fifty percent (50%) of
Executive’s outstanding unvested Stock Awards will be
automatically vested and exercisable on the date of first closing
of any transaction or the stockholder vote resulting in such Change
of Control.
(b) If Executive’s employment is terminated by
Company without Cause, by Executive for Good Reason, or as a result
of Executive’s death or Permanent Disability,
Executive’s outstanding unvested Stock Awards that would have
vested over the twelve (12) month period following the date of
termination had Executive remained continuously employed by Company
during such period, will be automatically vested and exercisable on
the date of termination.
(c) If Executive’s employment is terminated by
Company without Cause or by Executive for Good Reason within six
(6) months prior to or twelve (12) months following a
Change of Control, all of Executive’s outstanding unvested
Stock Awards will be automatically vested and exercisable on the
later of (i) the date of termination or (ii) the date of
first closing of any transaction or the stockholder vote resulting
in such Change of Control. If the employment is terminated prior to
the Change of Control, Company will inform Executive in writing of
any Change of Control occurring within six (6) months of such
termination, and will offer to Executive any of Executive’s
Stock Awards that had not vested at the time of
termination.
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(d) “Change of Control” means and includes
each of the following events:
(i) the acquisition, directly or indirectly, by any
“person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), and the rules thereunder) of “beneficial
ownership” (as determined pursuant to Rule 13d-3 under
the Exchange Act) of securities entitled to vote generally in the
election of directors (“ Voting Securities ”) of
Company that represent fifty percent (50%) or more of the combined
voting power of Company’s then outstanding Voting Securities,
other than :
(1) an acquisition by a trustee or other fiduciary
holding securities under any employee benefit plan (or related
trust) sponsored or maintained by Company or any person controlled
by Company or by any employee benefit plan (or related trust)
sponsored or maintained by Company or any person controlled by
Company, or
(2) an acquisition of Voting Securities by Company or
a corporation owned, directly or indirectly by the stockholders of
Company in substantially the same proportions as their ownership of
the stock of Company, or
(3) an acquisition of Voting Securities pursuant to a
transaction described in clause (iii) below that would not be a
Change of Control under clause (iii);
Provided, however, that notwithstanding the
foregoing, the following event will not constitute an
“acquisition” by any person or group for purposes of
this subsection (i): an acquisition of Company’s securities
by Company (the “ Securities Repurchase ”) which
causes Company’s Voting Securities beneficially owned by a
person or group to represent fifty percent (50%) or more of the
combined voting power of Company’s then outstanding Voting
Securities, except that such Securities Repurchase
will constitute a Change of Control if and when such person or
group, after such Securities Repurchase, becomes the beneficial
owner of any additional Voting Securities of Company;
(ii) if, during any period of two (2) consecutive
years, individuals who, at the beginning of such period, constitute
the Board together with any new director(s) (other than any
director designated by a person who has entered into an agreement
with Company to effect a transaction described in clauses
(i) or (iii) of this Section 2.4(d) whose election
by the Board or nomination for election by Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the two (2) year period or whose election or
nomination for election was previously so approved), cease for any
reason to constitute a majority thereof;
(iii) the consummation by Company (whether directly
involving Company or indirectly involving Company through one or
more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other
disposition of all or substantially all of Company’s assets
or (z) the acquisition of assets or stock of another entity,
in each case other than:
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(1) a transaction which results in Company’s
Voting Securities outstanding immediately before the transaction
continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of Company or the person
that, as a result of the transaction, controls, directly or
indirectly, Company or owns, directly or indirectly, all or
substantially all of Company’s assets or otherwise succeeds
to the business of Company (Company or such person, the “
Successor Entity ”) directly or indirectly, at least a
majority of the combined voting power of the Successor
Entity’s outstanding Voting Securities immediately after the
transaction, and
(2) a transaction after which no person or group
beneficially owns Voting Securities representing fifty percent
(50%) or more of the combined voting power of the Successor Entity;
provided, however , that no person or group will be
treated for purposes of this clause (2) as beneficially owning
fifty percent (50%) or more of combined voting power of the
Successor Entity solely as a result of the voting power held in
Company prior to the consummation of the transaction.
2.5 Standard Company Benefits. Executive will be entitled to
all rights and benefits for which he is eligible under the terms
and conditions of the standard benefits and compensation practices
which may be in effect from time to time and provided by Company to
its employees generally, as may be adopted, amended or discontinued
in its discretion, consistent with then applicable law. Until such
time as Company has established its own health insurance for which
Executive is eligible, Company will reimburse Executive for his
payments for a continuation of his current health insurance
pursuant to COBRA.
2.6 Business Expenses . Company will reimburse Executive for
Company-related travel, entertainment, professional licensing,
continuing education and other expenses reasonably incurred by
Executive on behalf of Company pursuant to Company’s expense
reimbursement policy for its employees.
3.
Insurance and
Indemnification
3.1 AD&D, Long-Term Care and Life Insurance.
(a) Company will reimburse Executive for the cost of
his AD&D, long-term care and life insurance in place as of the
date of this Agreement, or corresponding insurance coverage by
different insurers at comparable or lesser cost.
(b) Company will have the right to take out life,
health, accident, “key-man” or other insurance covering
Executive, in the name of Company and at Company’s expense in
any amount deemed appropriate by Company. Executive will assist
Company in obtaining such insurance, including, without limitation,
submitting to any required examinations and providing information
and data required by insurance companies.
3.2 D&O Insurance. Company will obtain and maintain at
Company’s expense during the Employment Term and for six
(6) years thereafter liability insurance for the directors and
officers of Company (D&O insurance) in the amount of at least
US$ 10 million.
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3.3 Indemnification. Company and Executive will enter into a
separate indemnification agreement, and Company will indemnify
Executive in accordance with the terms of such
agreement.
Executive
is entitled to an annual, paid vacation in accordance with
Company’s standard policies and as otherwise provided for
senior executive officers, but in no event less than twenty
(20) working days. Working days are all calendar days with the
exception of Saturdays, Sundays and statutory holidays in the
United States. Executive will coordinate the date of vacation
reasonably in advance with the other executive officers of Company,
and the timing of such vacation will be subject to the prior
approval of the Chief Executive Officer.
5.
Outside Activities During
Employment
5.1 Exclusive Employment. Executive agrees not to become
engaged in any other business activity which, in the reasonable
judgment of the Chief Executive Officer, is likely to interfere
with Executive’s ability to discharge his duties and
responsibilities to Company. Executive may engage in civic and
not-for-profit activities, and participate in industry associations
so long as such activities do not materially interfere with the
performance of his duties hereunder. Executive agrees that he will
not join any boards, other than community and civic boards and
boards of industry associations which do not interfere with his
duties to Company, without the prior approval of the
Board.
5.2 No Adverse Interests. Except as permitted by
Section 5.3, Executive agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or
interest known by him to be adverse or antagonistic to Company, its
business or prospects, financial or otherwise.
5.3 Non-Competition during Employment Term. During the
Employment Term, except on behalf of Company or as expressly
authorized by the Board, Executive will not directly or indirectly,
whether as an officer, director, stockholder, partner, proprietor,
associate, representative, consultant, or in any capacity
whatsoever engage in, become financially interested in, be employed
by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which
were known by him to compete directly with Company, throughout the
world, in any line of business engaged in (or planned to be engaged
in) by Company; provided, however , that anything
above to the contrary notwithstanding, he or his immediate family
may own, as a passive investor, securities of any competitor
corporation, so long as his direct holdings in any one such
corporation will not in the aggregate constitute more than one
percent (1%) of the voting stock of such corporation.
6.
Proprietary Information
Obligations
As
a condition of employment, Executive agrees to execute and abide by
the Proprietary Information and Inventions Agreement attached
hereto as Exhibit A.
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7.
Termination Of
Employment
7.1 Termination by Company for Cause
(a) Company may terminate Execu
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