This Executive Employment Agreement involves
Title: Executive Employment Agreement
Governing Law: Massachusetts Date: 8/8/2016
Industry: Biotechnology and Drugs Sector: Healthcare
Executive Employment Agreement
ARIAD Pharmaceuticals, Inc. (the “ Company ”) a Delaware corporation, and Jayne M. Gansler (the “ Employee ”) enter into the following Executive Employment Agreement as of the 1 st day of June, 2016 (hereafter, the “ Agreement ”).
WHEREAS, the Company wishes to offer the Employee employment according to the following terms and conditions;
WHEREAS, the Employee wishes to accept employment with the Company on such terms; and
WHEREAS, the parties mutually intend that this Agreement shall be the sole agreement between them concerning the Company’s employment of the Employee and the terms and conditions of such employment.
NOW, THEREFORE, the Company and the Employee agree as follows:
1. Employment, Duties and Acceptance .
1.1 The Company hereby employs the Employee to render full-time services to the Company, and to perform such duties as the Company shall reasonably direct Employee to perform. The Employee’s initial title shall be Senior Vice President, Human Resources, responsible for human resources, and Employee initially shall report directly to the Chief Executive Officer, unless and until the Chief Executive Officer shall change such title or reporting relationship, in his or her sole discretion.
1.2 The principal place of employment of the Employee hereunder shall be in the greater Boston, Massachusetts area. Employee acknowledges that, from time to time, Employee may be required to provide services to the Company outside of the Boston, Massachusetts area.
1.3 Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full-time employee, it is understood that the Employee may (a) have an academic appointment and (b) participate in professional activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.
1.4 The Employee represents and affirms that, as of the Effective Date (as defined in Section 2), Employee does not have any other contractual obligations to any other Person that would prohibit or limit Employee’s employment with the Company or that would conflict with the terms of this Agreement, except for the duty not to use or disclose another Person’s confidential information without authorization. Employee further acknowledges that the Company instructs Employee not to bring to the Company or use or disclose in the course of Employee’s employment with the Company any confidential information belonging to another Person, without that Person’s express authorization.
1.5 The Employee acknowledges and agrees that employment with the Company and receipt of the payments, benefits, and other terms set forth in this Agreement are contingent upon satisfactory completion and passing of the Company’s standard HR intake procedures, including completion of an employment application and other new employee forms, authorization to work in the United States, background check, verification of employment history, educational and professional licenses, degrees and/or credentials, and verification of any other professional qualifications that Employee’s responsibilities at the Company may warrant.
2. Term of Employment .
The term of the Employee’s employment under this Agreement shall commence on June 6, 2016 or such other date as mutually agreed by Employee and the Company (the “ Effective Date ”), and shall end on December 31, 2018, unless sooner terminated pursuant to Section 4 or 5 of this Agreement; provided , however , that this Agreement shall automatically be renewed for successive one-year terms absent ninety (90) days written notice by either party to terminate the Employee’s employment. The date on which the Employee’s employment ends, regardless of the reason for the termination, shall be called the “ Termination Date .”
3. Compensation .
3.1 As full compensation for all services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee a base salary at the fixed rate of $350,000 per year, and increased each year, by amounts, if any, to be determined by the Company, in its sole discretion, payable in equal biweekly installments, less such deductions or amounts to be withheld as shall be required by applicable law and regulations.
3.2 The Employee shall be eligible to receive an annual discretionary bonus (“Discretionary Bonus”), in accordance with the annual incentive program applicable generally to officers of the Company. The target for such Discretionary Bonus shall be forty-five percent (45%) of the Employee’s annual base salary (“Discretionary Bonus Target”); provided that the Company may elect to pay a greater or lesser bonus in any year, in its sole discretion, based on the assessment of Employee’s individual performance objectives and the Company’s annual financial and operating objectives, performance, and other factors as the Company may determine appropriate. Any Discretionary Bonus payable under this Section 3.2 shall be paid to the Employee no later than March 15th of the year following the year in which such Discretionary Bonus is earned. Notwithstanding Sections 6.1 and 6.2, in order to receive the Discretionary Bonus, Employee must be employed by the Company on the date the Discretionary Bonus is paid.
3.3 Subject to the approval of the Compensation Committee and as soon as practicable following the Effective Date, the Company shall grant the Employee in accordance with the Company’s equity incentive plan then in effect (the “Equity Plan”) and the terms and conditions set forth in the Company’s customary award agreement:
3.3.1 Stock options to purchase 144,000 shares of the Company’s common stock, with an exercise price equal to the fair market value of the Company’s common stock on the date of grant. The options shall be subject to a four-year vesting schedule, vesting as to 25% of the shares on the first anniversary of the Effective Date and the remainder pro rata every three months thereafter for 36 months. Any portion of the option that is unvested as of the Termination Date shall be forfeited to the Company on the Termination Date, except as set forth in Sections 6.1 and 6.2; and
3.3.2 Restricted stock units for 72,000 shares of the Company’s common stock, which shall vest with respect to one-third of the shares on the first, second and third anniversary of the Effective Date. The underlying shares of the Company’s common stock shall be issued as soon as practicable following each vesting date. Unvested restricted stock units shall be forfeited to the Company on the Termination Date, except as set forth in Sections 6.1 and 6.2.
3.4 The Employee shall be eligible to participate in any incentive plan, stock-based compensation plan, bonus, deferred or extra compensation plan, pension, group health, disability, long-term care, life, paid time off, insurance or other so-called “fringe” benefits, which the
Company provides for its executives at the comparable level. The terms of any such benefits will be governed by the applicable plan documents and Company policies in effect from time to time.
3.5 In accordance with the Company’s travel and expense policies in effect, the Company shall reimburse the Employee for all reasonable travel and other expenses incurred by the Employee in connection with the performance of his or her duties and obligations under this Agreement.
3.6 The Employee agrees to abide by the Company’s Incentive Compensation Recoupment Policy and Stock Ownership Policy and such other policies as the Company may adopt from time to time generally for senior executives.
4. Termination by the Company .
4.1 The Company may terminate the Employee’s employment at any time upon the occurrence of any of the following:
(a) The Employee shall die while employed by the Company.
(b) The Employee shall become physically or mentally disabled, whether totally or partially, so that the Employee is unable substantially to perform his or her services hereunder for (i) a period of one-hundred eighty (180) consecutive days, or (ii) for shorter periods aggregating one-hundred eighty (180) days during any twelve (12) month period.
(c) The Employee acts in a manner that provides Cause for termination, as determined in the sole discretion of the Company. If the conduct constituting Cause hereunder is susceptible to cure, the Company shall provide the Employee written notice of termination pursuant to this Section 4, and Employee shall have thirty (30) days to cure or remedy such failure or breach, in which case Employee’s employment shall not be terminated. If the conduct is not susceptible to cure as determined by the Company in its sole discretion, the Employee’s employment shall terminate upon written notice by the Company.
(d) The Company elects to terminate the Employee’s employment not due to the death or disability of the Employee or in circumstances not constituting Cause. The Company shall provide thirty (30) days’ notice of such termination, provided, however, that Company may elect to pay Employee in lieu of providing notice.
5. Termination by the Employee .
5.1 The Employee may terminate Employee’s employment, within thirty (30) days of the initial occurrence of either of the following:
(a) A material breach of the terms of this Agreement by the Company and such breach continues for thirty (30) days after the Employee gives the Company written notice of such breach and an opportunity to cure it.
(b) The Employee elects to terminate the Employee’s employment in all other circumstances not constituting a material breach that is not cured by the Company (as set forth in Section 5.1(a)).
6. Compensation on Termination .
6.1 Termination by the Company Pursuant to Section 4.1(d) or by the Employee Pursuant to Section 5.1(a) . If the Employee executes a separation agreement and release of claims in the Company’s standard form (the “ Separation Agreement ”) and (i) the Company terminates the Employee’s employment pursuant to Section 4.1(d) or (ii) the Employee terminates Employee’s employment pursuant to Section 5.1(a), then, subject to compliance with Sections 7, 8, and 9 below: (1) the Company shall continue to pay Employee’s then-current base salary for the period of twelve (12) months (the “ Severance Period ”); (2) the Company shall pay the Employee an amount equal to any earned and accrued but unpaid Discretionary Bonus for the prior fiscal year which has not been previously paid; (3) all equity awards outstanding as of the Termination Date except for performance awards for which the performance has not yet been achieved as of the Termination Date shall vest as of the Termination Date to the extent that the equity award would have vested during the Severance Period; the remainder of the unvested equity awards and performance awards shall be forfeited on the Termination Date; and (4) the Company shall continue to pay its share of the costs for Employee’s coverage under the Company’s group health insurance plan during the Severance Period, provided Employee makes an effective COBRA election regarding group health insurance. Except as otherwise required under Section 13.2, all monetary payments referenced in this Section 6.1 shall be paid in equal installments over the course of the Severance Period beginning on the first regular pay date following the effective date of the Separation Agreement. The Employee will not be eligible for any payments or benefits under the following Section 6.2, if Employee is eligible to receive payments and benefits under this Section 6.1; provided, however, that if Employee commences receiving payments and benefits under this Section 6.1 and a Change in Control occurs within three (3) months of the Termination Date, the Company shall pay Employee the payments and benefits set forth in Section 6.2, less any payments and benefits received to date by the Employee under this Section 6.1. If Employee obtains alternate group health insurance benefits during the Severance Period, Employee shall immediately notify Company in writing and Company shall no longer be obligated to pay its share of the costs for continuing Employee’s coverage under the Company’s group health insurance plan.
6.2 Termination in the Event of a Change in Control . In the event of a consummation of a Change in Control of the Company, and if, upon such occurrence or within the period of one (1) year following such occurrence or three (3) months before a Change in Control, (i) the Company terminates the Employee’s employment pursuant to Section 4.1(d) or the Employee resigns for Good Reason and (ii) the Employee executes a Separation Agreement, then, subject to compliance with Sections 7, 8, and 9 below: (1) the Company shall pay Employee an amount equal to two (2) times the sum of the Employee’s then-current base salary and Discretionary Bonus Target; (2) the Company shall pay the Employee an amount equal to any earned and accrued but unpaid Discretionary Bonus for the prior fiscal year which has not been previously paid; (3) all equity awards outstanding as of the Termination Date shall vest in full, except for performance awards for which the performance has not been achieved as of the Termination Date; (4) all performance awards outstanding as of the Termination Date for which performance has not been achieved shall be deemed earned as of the Termination Date at the greater of actual performance or target and shall vest on the Termination Date as to the number of shares earned; and (5) the Company shall continue to pay its share of the costs for Employee’s coverage under the Company’s group health insurance plan for a period of twenty-four (24) months (the “ Change in Control Severance Period ”), provided Employee makes an effective COBRA election regarding group health insurance. Except as otherwise required under Section 13.2, all monetary payments referenced in this Section 6.2 shall be made in a lump sum on the first regularly scheduled payroll following the effective date of the Separation Agreement. If Employee obtains alternate group health insurance benefits during the Change in Control Severance Period, Employee shall immediately notify Company in writing and Company shall no longer be obligated to pay its share of the costs for continuing Employee’s
coverage under the Company’s group health insurance plan. Notwithstanding the foregoing in the event the equity awards are not assumed or substituted and are cancelled in connection with a Change in Control without the substitution of a cash payment all equity awards shall vest in full immediately prior to the Change in Control (and the performance awards shall be deemed vested and earned as to the number of shares set forth in (4) above).
6.3 All Other Terminations . If the Company terminates Employee’s employment due to the death or disability of the Employee or for Cause pursuant to Sections 4.1(a), (b) or (c) or the Employee terminates Employee’s employment pursuant to Section 5.1(b), Employee shall only receive payment for all earned and/or vested benefits and wages pursuant to the terms of the underlying benefit plans and programs and all applicable laws through the Termination Date, and Employee shall not be entitled to any of the other payments and benefits set forth in Sections 6.1 or 6.2.
7. Confidentiality .
7.1 The Employee acknowledges that, during the course of performing Employee’s services hereunder, the Company shall disclose to Employee Confidential Information.
7.2 The Employee acknowledges that the Company’s business is extremely competitive, dependent in part upon the maintenance of secrecy, and that any disclosure of Confidential Information would result in serious irreparable harm to the Company.
7.3 The Employee agrees that Confidential Information only shall be used by the Employee in connection with Employee’s activities hereunder as an employee of the Company, and shall not be used in any way that is detrimental to the Company.
7.4 The Employee agrees not to disclose, directly or indirectly, any Confidential Information to any third Person, other than representatives or agents of the Company.
7.5 The Employee may disclose any Confidential Information that is required to be disclosed by law, government regulation or court order. If disclosure is required, the Employee shall give the Company advance notice so that the Company may seek a protective order or take other action reasonable in light of the circumstances. Additionally, the Employee may disclose a Company trade secret in confidence to an attorney or federal, state or local government official solely for the purpose of reporting or investigating a suspected violation of law or in a filing in a lawsuit made under seal consistent with the Company’s Standard Operating Procedure on Compliance Violations.
7.6 Upon termination of Employee’s employment, regardless of the reason for termination, the Employee shall promptly return to the Company all materials, whether in electronic or hardcopy format, containing Confidential Information, as well as data, records, reports and other property, furnished by the Company to the Employee or produced by the Employee in connection with services rendered hereunder.
7.7 The terms of this Section 7 are in addition to, and not in lieu of, any statutory or other contractual or legal obligation that Employee may have relating to the protection of the Company’s Confidential Information.
7.8 The Employee shall continue to be bound by the terms of the confidentiality provisions contained in this Section 7 following the termination of Employee’s employment, regardless of the reason for termination.
8. Inventions Discovered by the Employee While Performing Services Hereunder .
8.1 During Employee’s employment with the Company, the Employee shall promptly disclose to the Company any Inventions, whether patentable, copyrightable or not, made, conceived, developed or first reduced to practice by the Employee, either alone or jointly with others, while performing services for the Company. Without limiting the foregoing, Employee also acknowledges that all original works of authorship which are made by Employee (solely or jointly with others) within the scope of the Employee’s employment or which relate to the business of the Company and which are protectable by copyright are “works made for hire” pursuant to the United States Copyright Act (17 U.S.C. § 101). Employee hereby assigns to the Company all of Employee’s right, title and interest in and to any such Inventions. During and after the Employee’s employment with the Company, the Employee shall execute any documents necessary to perfect the assignment of such Inventions to the Company and to enable the Company to apply for, obtain, and enforce patents and copyrights in any and all countries on such Inventions. The Employee hereby irrevocably designates the Chief Intellectual Property Officer of the Company, or other person performing such function, as Employee’s agent and attorney-in-fact to execute and file any such document and to do all lawful acts necessary to apply for and obtain patents and copyrights and to enforce the Company’s rights under this paragraph.
8.2 With respect to any Inventions, and work of any similar nature (from any source), whenever created, which Employee has not conceived, reduced to practice or developed during the period while Employee is performing services for the Company, but which Employee provides to the Company or incorporates in any Company product or system, Employee hereby grants to the Company a royalty-free, fully paid-up, non-exclusive, perpetual and irrevocable license throughout the world to use, modify, create derivative works from, disclose, publish, translate, reproduce, deliver, perform, sell, license, dispose of, and to authorize others so to do, all such Inventions. Employee shall not include in any Inventions Employee delivers to the Company or uses on its behalf, without the prior written approval of the Company, any material which is or shall be patented, copyrighted or trademarked by Employee or others unless Employee provides the Company with the written permission of the holder of any patent, copyright or trademark owner for the Company to use such material in a manner consistent with then-current Company policy.
8.3 This Section 8 shall survive the termination of Employee’s employment, regardless of the reason for termination.
9. Non-Competition and Non-Solicitation .
During the Employee’s employment with the Company and for a period of one (1) year following the Termination Date: (a) the Employee shall not in the United States or in any country in which the Company shall then be doing business, directly or indirectly, enter the employ of, or render any services to, any person, firm or corporation engaged in any business that is Competing with the business of the Company or of any of its Subsidiaries or Affiliates of which the Employee may become an employee or officer during the Employee’s employment with the Company; Employee shall not engage in such business on Employee’s own account; and Employee shall not become interested in any such business, directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or any other relationship or capacity; provided, however, that nothing contained in this Section 9 shall be deemed to prohibit the Employee from acquiring, solely as an investment, up to two percent (2%) of the shares of capital stock of any Competing public corporation or from being employed by or associated with (including serving as a consultant to) a subsidiary, division, department, unit or affiliate (each, a “ Unit ”) of an entity if that Unit is not engaged in any business which is Competing with the business of the Company, irrespective of whether some other Unit of such entity
engages in such competition; and (b) the Employee nor any Affiliate of the Employee shall not, directly or indirectly, solicit, entice or persuade, or attempt to solicit, entice or persuade, any directors, key advisors, officers or employees of or consultants to the Co