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Exhibit 10.3
E MPLOYMENT A GREEMENT
T HIS E MPLOYMENT A GREEMENT (the " Agreement ") is
made as of this 12 th
day of September, 2006, by and between Targanta
Therapeutics Corporation, (the " Company "), and Mark
Leuchtenberger (" Employee ") (collectively, the "
Parties ").
W HEREAS , the
Company wishes to employ Employee and to assure itself of the
continued services of Employee on the terms set forth
herein;
W HEREAS ,
Employee wishes to be so employed under the terms set forth
herein;
N OW , T
HEREFORE , in consideration of
the mutual promises and covenants contained herein, it is hereby
agreed by and between the Parties hereto as follows:
1. E MPLOYMENT . The Company will employ Employee and Employee shall
serve the Company in the capacity of President and Chief Executive
Officer (" CEO "). The Employee’s employment with the
Company shall commence on September 18, 2006.
2. A T -W
ILL E MPLOYMENT . It is understood and
agreed by the Parties that this Agreement does not contain any
promise or representation concerning the duration of
Employee’s employment with the Company. Employee specifically
acknowledges that his employment with the Company is at-will and
may be altered or terminated by either Employee or the Company at
any time, with or without Cause (as defined below) and with or
without notice. The nature, terms or conditions of Employee’s
employment with the Company cannot be changed by any oral
representation, custom, habit or practice. In addition, that the
rate of salary, any bonuses, paid time off, other compensation, or
vesting schedules are stated in units of years or months or weeks
does not alter the at-will nature of the employment, and does not
mean and should not be interpreted to mean that Employee is
guaranteed employment to the end of any period of time or for any
period of time. In the event of conflict between this disclaimer
and any other statement, oral or written, present or future,
concerning terms and conditions of employment, the at-will
relationship confirmed by this disclaimer shall control. This
at-will status cannot be altered except in a writing signed by
Employee and approved by the Board of Directors of the Company (the
" Board of Directors ")
3. D UTIES .
Employee shall render exclusive, full-time services to the Company
as its President and CEO and, subject to election by the
stockholders, shall also serve as a member of the Board of
Directors of the Company and each of its two Canadian subsidiaries
pursuant to Section 3 of the Unanimous Shareholders Agreement,
dated as of December 23, 2005, by and among the Company, its
two Canadian subsidiaries and their respective shareholders (as
such agreement may be amended or restated from time to time).
Employee shall report to the Board of Directors. Employee shall
perform services under this Agreement primarily at the office of
the Company to be located in the Commonwealth of Massachusetts, and
from time to time at such other locations (including Indianapolis)
as is necessary to perform the duties of President and CEO under
this Agreement. Subject to the terms of this Agreement,
Employee’s responsibilities, working conditions and duties
may be changed, added to, diminished or eliminated during his
employment at the sole discretion of the Board of Directors.
During
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Employee’s employment with the Company he
shall devote his best efforts and his full business time, skill and
attention to the performance of his duties on behalf of the
Company. Employee shall be permitted to (i) continue to engage
in his existing charitable and civic activities with Beth Israel
Deaconess Medical Center, the Massachusetts Biotech Council and
Wake Forest University (ii) continue to serve on the board of
directors of Epix Pharmaceuticals, Inc., and (iii) engage in
other charitable or civic activities, provided that such activities
described in (i) through (iii) above do not unreasonably
interfere (as determined in the reasonable discretion of the Board
of Directors) with the performance of his duties on behalf of the
Company.
4. P OLICIES AND P ROCEDURES . Employee agrees that
he is subject to and will comply with the policies and procedures
of the Company as such policies and procedures may be modified,
added to or eliminated from time to time at the sole discretion of
the Company, except to the extent any such policy or procedure
specifically conflicts with the express terms of this Agreement.
Employee further agrees and acknowledges that any written or oral
policies and procedures of the Company do not constitute contracts
between the Company and Employee.
5. B ASE S
ALARY . For all
services rendered and to be rendered hereunder, the Company agrees
to pay to the Employee, and the Employee agrees to accept a salary
of $350,000 per annum (" Base Salary "), which salary will
be paid periodically in accordance with normal Company payroll
practices and shall be subject to such deductions and withholdings
as the Company is required to make pursuant to law, or by further
agreement with the Employee. Employee’s salary shall be
subject to annual review and discretionary adjustment by the Board
of Directors.
6. S TOCK O
PTIONS .
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(a) Grant of Options. In connection with Employee’s
commencement of employment by the Company, the Company will grant
Employee options to purchase 1,600,000 shares of the
Company’s common stock, such options to be granted at the
then-current fair market value of the common stock as determined by
the Board of Directors (the " Options "). The terms,
conditions and limitations of the Options will be set forth in the
Company’s 2005 Stock Option Plan (the " Plan ") and in
the standard form of notice of stock option grant and stock option
agreement to be approved by the Board of Directors and to be
entered into by Employee, such terms and conditions to include
provisions providing that the Options shall vest quarterly over
four years, commencing on September 18, 2006 (such that the
first 100,000 shares shall vest on December 18, 2006), subject
to acceleration in certain circumstances as further described
below. Employee shall be eligible to receive future grants of
equity incentives as determined by the Board of Directors (or the
compensation committee thereof) in its sole discretion.
(b) Anti-Dilution Protection on Options. The Parties
acknowledge that the Company and its subsidiaries anticipate
consummating a future financing transaction, which transaction
shall be approved by the Board of Directors and result in aggregate
proceeds to the Company and its subsidiaries of at least
$20,000,000 (the " Next Financing "). If Employee’s
equity ownership in the Company on a fully diluted, as-if exercised
basis (assuming full conversion of all convertible securities
(including the
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exchange of all exchangeable shares) and full
exercise of all outstanding warrants and options and all options
reserved for issuance under the Plan) (a " Fully Diluted
Basis ") following the Next Financing would be less than 3% of
the total number of shares of the Company’s capital stock
deemed to be outstanding on a Fully Diluted Basis, the Board of
Directors agrees, in connection with the closing of the Next
Financing, under the Plan, to grant to Employee options to purchase
such number of additional shares of the Company’s common
stock as would be necessary to provide that Employee’s
ownership of the Company on a Fully Diluted Basis equals
3%.
7. B ONUS .
Employee may be eligible to receive an annual performance bonus of
up to 50% of his Base Salary (subject to employment taxes,
withholding and deductions) for each year of this Agreement
beginning January 1, 2007, based upon Employee’s
achievements of certain milestones and performance objectives to be
mutually agreed upon by the Board of Directors and the Employee
(the " Bonus "). Except as expressly provided otherwise
herein, Employee must remain employed by the Company throughout the
applicable bonus year in order to be eligible for any Bonus. The
Board of Directors, in its sole discretion, shall determine the
extent to which Employee has achieved the performance targets upon
which Employee’s Bonus is based, and the amount of Bonus to
be paid to Employee, if any. Bonuses are not earned until they are
approved in writing by the Board of Directors.
8. O THER B
ENEFITS . While
employed by the Company as provided herein:
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(a) Employee Benefits. Employee shall be entitled to all
benefits to which other executive officers of the Company are
entitled, on terms comparable thereto, including, without
limitation, participation in pension and profit sharing plans,
401(k) plan, group insurance policies and plans, medical, health,
vision, and disability insurance policies and plans, and the like,
which benefits may be maintained by the Company for the benefit of
its executives. The Company reserves the right to alter and amend
the benefits received by Employee from time to time at the
Company’s discretion.
(b) Expense Reimbursement. Employee shall receive,
against presentation of proper receipts and vouchers, reimbursement
for direct and reasonable out-of-pocket expenses incurred by him in
connection with the performance of his duties hereunder, according
to the Company’s policies.
(c) Vacation. Employee will be entitled to thirty
(30) vacation days per year, which will accrue in monthly
increments.
(d) Life Insurance. For so long as Employee remains
employed by the Company and provided that the cost associated
herewith is reasonably acceptable to the Board of Directors (or the
compensation committee thereof), the Company shall pay the annual
premium on a life insurance policy, valued at $1,000,000, on
Employee’s life, the beneficiary of which shall be selected
by Employee.
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9. C ONFIDENTIAL
I NFORMATION
, R IGHTS AND D UTIES
.
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(a) Proprietary Information. Employee will, as a condition to
commencing his employment with the Company, execute and deliver to
the Company an Agreement Re: Non-Competition, Non-Solicitation,
Non-Disclosure and Ownership of Inventions in the form attached
hereto as Exhibit A .
(b) Exclusive Property. Employee agrees that all
Company-related business procured by the Employee, and all
Company-related business opportunities and plans made known to
Employee while employed by the Company, are and shall remain the
permanent and exclusive property of the Company.
(c) Non-Solicitation; Non-Competition. Employee agrees
that following his last day of employment with the Company, he
shall continue to comply with the non-competition and
non-solicitation obligations set forth in the Agreement Re:
Non-Competition, Non-Solicitation, Non-Disclosure and Ownership of
Inventions for the entire time period set forth therein.
10. T ERMINATION . The Parties each acknowledge that either of the
Parties has the right to terminate Employee’s employment with
the Company at any time for any reason whatsoever, with or without
Cause or advance notice.
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(a) Payments through Termination. Upon termination of
Employee’s employment for any reason, whether voluntary,
involuntary, or due to death or Disability, the Company’s
obligation to make payments shall terminate except the Company
shall pay Employee (or his estate) any amount of Base Salary and
Bonus earned through the date of termination, any benefits vested
throu
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