EXHIBIT 10.52
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of July 1, 2002 between
ARIAD Pharmaceuticals, Inc. (the "Company") a Delaware corporation, and Xxxxxx
X. Xxxxxxx (the "Employee").
1. Employment, Duties and Acceptance.
1.1 The Company hereby employs the Employee, for the Term (as
hereinafter defined), to render full-time services to the Company, and to
perform such duties as he shall reasonably be directed by the Chief Executive
Officer of the Company to perform. The Employee's title shall be designated by
the Chief Executive Officer and initially shall be Senior Vice President,
Corporate Strategy and Communications.
1.2 The Employee hereby accepts such employment and agrees to
render the services described above.
1.3 The Employee's principal office hereunder shall be in the
greater Philadelphia, Pennsylvania area, or other locations reasonably
acceptable to the Employee. The Employee acknowledges that for periods of time,
he will be required to provide services to the Company in the greater Boston,
Massachusetts area at the Company's headquarters.
1.4 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,
1
"Permitted Activities"); provided, however, that such Permitted Activities do
not interfere with the Employee's duties to the Company.
2. Term of Employment.
The term of the Employee's employment under this Agreement
(the "Term") shall commence on July 1, 2002 (the "Effective Date"), or such
other date mutually agreed upon by the parties, and shall end on December 31,
2004, unless sooner terminated pursuant to Section 4 or 5 of this Agreement;
provided that this Agreement shall automatically be renewed for successive
one-year terms (the Term and, if the period of employment is so renewed, such
additional period(s) of employment are collectively referred to herein as the
"Term") unless terminated by written notice given by either party to the other
at least ninety days prior to the end of the applicable Term.
3. Compensation.
3.1 As full compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay the Employee, during the
Term, a salary at the fixed rate of $210,000 per annum during the first year of
the Term and increased each year thereafter, by amounts, if any, to be
determined by the Board of Directors of the Company (the "Board"), 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 Each year, Employee shall be eligible to receive a
discretionary bonus of up to 30% of base salary, which bonus shall be determined
annually by the Board. The bonus, if any, may be paid in the form of stock
options, stock awards, deferred compensation or cash, as determined by the
Board.
2
3.3 The Company shall pay or reimburse the Employee for all
reasonable expenses actually incurred or paid by him during the Term in the
performance of his services under this Agreement, except those relating to
maintenance of his office in the greater Philadelphia, Pennsylvania area, upon
presentation of expense statements or vouchers or such other supporting
information as it may require.
3.4 The Employee shall be eligible under any incentive plan,
stock award plan, bonus, deferred or extra compensation plan, pension, group
life and group disability insurance plan, which the Company provides for its
executives at the comparable level. All stock options and stock awards granted
to the Employee shall be subject to a vesting schedule, which shall be
determined by the Compensation Committee of the Board. The stock options and
stock awards, if any, to be granted to the Employee shall also be subject to the
terms of a stock option plan and certificate and stock award plan and
certificate, respectively. Any unvested options shall be forfeited to the
Company in the event (a) this Agreement is terminated by the Company for Cause
pursuant to Section 4 herein, or (b) either party elects not to renew this
Agreement pursuant to Section 2 herein.
4. Termination by the Company.
The Company may terminate this Agreement, if any one or more
of the following shall occur:
(a) The Employee shall die during the Term; provided,
however, the Employee's legal representatives shall be entitled to receive the
compensation provided for hereunder to the last day of the month in which his
death occurs.
3
(b) The Employee shall become physically or mentally
disabled, whether totally or partially, so that he is unable substantially to
perform his services hereunder for (i) a period of 180 consecutive days, or (ii)
for shorter periods aggregating 180 days during any twelve month period.
(c) The Employee acts, or fails to act, in a manner
that provides Cause for termination. For purposes of this Agreement, the term
"Cause" means (i) the failure by the Employee to perform any of his material
duties hereunder, (ii) the conviction of the Employee of any felony involving
moral turpitude, (iii) any acts of fraud or embezzlement by the Employee
involving the Company or any of its Affiliates, (iv) violation of any federal,
state or local law, or administrative regulation related to the business of the
Company, (v) a conflict of interest, (vi) conduct that could result in publicity
reflecting unfavorably on the Company in a material way, (vii) failure to comply
with the written policies of the Company, or (viii) a breach of the terms of
this Agreement by the Employee. The Company shall provide the Employee written
notice of termination pursuant to this Section 4, and Employee shall have 30
days to cure or remedy such failure or breach, in which case this Agreement
shall not be terminated.
5. Termination by the Employee.
5.1 The Employee may terminate this Agreement, if any one or
more of the following shall occur:
(a) a material breach of the terms of this Agreement
by the Company and such breach continues for 30 days after the Employee gives
the Company written notice of such breach;
4
(b) the Company shall make a general assignment for
benefit of creditors; or any proceeding shall be instituted by the Company
seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking entry of an order for relief or
the appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property or the Company shall take any corporate
action to authorize any of the actions set forth above in this subsection 5(b);
(c) an involuntary petition shall be filed or an
action or proceeding otherwise commenced against the Company seeking
reorganization, arrangement or readjustment of the Company's debts or for any
other relief under the Federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter existing
and remain undismissed or unstayed for a period of 30 days; or
(d) a receiver, assignee, liquidator, trustee or
similar officer for the Company or for all or any part of its property shall be
appointed involuntarily.
(e) a Change in Control as defined in Section 14.
6. Severance.
6.1 If (i) the Company terminates this Agreement without Cause
or (ii) the Employee terminates this Agreement pursuant to Section 5.1(a), then:
(1) except in the case of death or disability, the Company shall continue to pay
Employee his then-current salary for the
5
remaining period of the applicable Term; and (2) all stock options granted
pursuant to this Agreement that would have vested during the Term shall vest
immediately prior to such termination.
6.2 In the event of a consummation of a Change in Control of
the Company, and if the Employee gives notice of termination within 90 days
after such occurrence, then (i) all stock, stock options, stock awards, and
similar equity rights granted to the Employee shall immediately vest and remain
fully exercisable through their original term with all rights; and (ii) the
Company shall continue to pay the Employee his then-current salary for the
shorter of (a) six months, or (b) the remaining period of the applicable Term.
7. Other Benefits.
In addition to all other benefits contained herein, the
Employee shall be entitled to:
(a) Vacation time of four weeks per year taken in accordance
with the vacation policy of the Company.
(b) After six years of employment hereunder, one three-month
period of fully paid leave of absence in accordance with Company policies in
place at that time; it being understood that such policies may restrict the
Employee from taking such leave of absence until a time that is acceptable to
the Company and may include other such limitations.
(c) Group life and group disability insurance.
(d) The Company shall provide the Employee with an automobile
allowance of $750 per month, effective as of January 1, 2002.
6
(e) The Company also will provide the Employee with a
one-time, non-recurring payment of $3,500, payable on the effective date of this
Agreement, in lieu of the provision of standard tax preparation and planning
services.
8. Confidentiality.
8.1 The Employee acknowledges that, during the course of
performing his services hereunder, the Company shall be disclosing information
to the Employee related to the Company's Field of Interest, Inventions, projects
and business plans, as well as other information (collectively, "Confidential
Information"). The Employee acknowledges that the Company's business is
extremely competitive, dependent in part upon the maintenance of secrecy, and
that any disclosure of the Confidential Information would result in serious harm
to the Company.
8.2 The Employee agrees that the Confidential Information only
shall be used by the Employee in connection with his activities hereunder as an
employee of the Company, and shall not be used in any way that is detrimental to
the Company.
8.3 The Employee agrees not to disclose, directly or
indirectly, the Confidential Information to any third person or entity, other
than representatives or agents of the Company. The Employee shall treat all such
information as confidential and proprietary property of the Company.
8.4 The term "Confidential Information" does not include
information that (a) is or becomes generally available to the public other than
by disclosure in violation of this Agreement, (b) was within the Employee's
possession prior to being furnished to such Employee, (c)
7
becomes available to the Employee on a nonconfidential basis or (d) was
independently developed by the Employee without reference to the information
provided by the Company.
8.5 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.
8.6 Upon termination of this Agreement, the Employee shall
promptly return to the Company all materials 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. Notwithstanding such return or any of the
provisions of this Agreement, the Employee shall continue to be bound by the
terms of the confidentiality provisions contained in this Section 8 for a period
of three years after the termination of this Agreement.
8.7 In connection with his employment by the Company, the
Employee hereby acknowledges that he may enter into more than one agreement with
regard to (a) the confidentiality of certain books, records, documents and
business, (b) rights to certain inventions, proprietary information, and
writings, (c) publication of certain materials, and (d) other related matters
(the "Confidential Matters") of the Company (the "Confidentiality Agreements").
In order to clarify any potential conflicts between certain respective
provisions of such Confidentiality Agreements, the Employee and the Company
hereby agree that, as among
8
such Confidentiality Agreements, the provision (or part thereof) in any such
Confidentiality Agreement which affords the greatest protection to the Company
with respect to the Confidential Matters shall control.
9. Inventions Discovered by the Employee While Performing
Services Hereunder.
During the Term, the Employee shall promptly disclose
to the Company any invention, improvement, discovery, process, formula, or
method or other intellectual property, whether or not patentable, whether or not
copyrightable (collectively, "Inventions") made, conceived or first reduced to
practice by the Employee, either alone or jointly with others, while performing
service hereunder. The Employee hereby assigns to the Company all of his right,
title and interest in and to any such Inventions. During and after the Term, 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 Patent Counsel to the Company
as his 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. This Section 9 shall
survive the termination of this Agreement.
10. Non-Competition and Non-Solicitation.
During the Term and for a period of one year
following the date of termination or nonrenewal for any reason (other than
termination pursuant to Section 5.1(a): (a) the Employee shall not in the United
States or in any country in which the Company shall then be
9
doing business, directly or indirectly, enter the employ of, or render any
services to, any person, firm or corporation engaged in any business competitive
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 Term; he shall
not engage in such business on his own account; and he 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 10 shall be deemed to prohibit the Employee
from acquiring, solely as an investment, shares of capital stock of any public
corporation; (b) neither the Employee nor any Affiliate of the Employee shall
solicit or utilize, or assist any person in any way to solicit or utilize, the
services, directly or indirectly, of any of the Company's directors,
consultants, members of the Board of Scientific and Medical Advisors, officers
or employees (collectively, "Associates of the Company"). This nonsolicitation
and nonutilization provision shall not apply to Associates of the Company who
have previously terminated their relationship with the Company.
10.1 If the Employee commits a breach, or threatens to commit
a breach, of any of the provisions of this Section 10, the Company shall have
the following rights and remedies:
10.1.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach shall
cause irreparable injury to the Company and that money damages shall not provide
an adequate remedy to the Company; and
10
10.1.2 The right and remedy to require the Employee
to account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Employee as the result of any transactions constituting a breach
of any of the provisions of the preceding paragraph, and the Employee hereby
agrees to account for and pay over such Benefits to the Company. Each of the
rights and remedies enumerated above shall be independent of the other, and
shall be severally enforceable, and all of such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.
10.2 If any of the covenants contained in Section 8, 9 or 10,
or any part thereof, is hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect without regard to the invalid portions.
10.3 If any of the covenants contained in Section 8, 9 or 10,
or any part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision and, in its reduced form, such provision shall then be
enforceable.
10.4 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 8, 9 and 10 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold any such
covenant wholly unenforceable by reason of the
11
breadth of such scope or otherwise, it is the intention of the parties hereto
that such determination not bar or in any way affect the Company's right to the
relief provided above in the courts of any other states within the geographical
scope of such covenants, as to breaches of such covenants in such other
respective jurisdictions, the above covenants as they relate to each state
being, for this purpose, severable into diverse and independent covenants.
11. Indemnification.
The Company shall indemnify the Employee, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by him in connection with any action, suit or proceeding
to which he may be made a party by reason of his being an officer, director or
employee of the Company or of any subsidiary or affiliate of the Company. The
Company shall provide, subject to its availability upon reasonable terms (which
determination shall be made by the Board) at its expense, directors and officers
insurance for the Employee in reasonable amounts. Determination with respect to
(a) the availability of insurance upon reasonable terms and (b) the amount of
such insurance coverage shall be made by the Board in its sole discretion.
12. Notices.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if sent by prepaid telegram (confirmed delivery
by the telegram service), private overnight mail service (delivery confirmed by
such service), registered or certified mail (return receipt requested), or
delivered personally, as follows (or to
12
such other address as either party shall designate by notice in writing to the
other in accordance herewith):
If to the Company:
ARIAD Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Employee:
Xx. Xxxxxx X. Xxxxxxx
00 Xxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000
13. General.
13.1 This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts
applicable to agreements made and to be performed entirely in Massachusetts.
13.2 The Section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
13.3 This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No
13
representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.
13.4 This Agreement and the Employee's rights and obligations
hereunder may not be assigned by the Employee or the Company; provided, however,
the Company may assign this Agreement to an Affiliate or a successor-in
interest.
13.5 This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by a written instrument executed by the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of a party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by a party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.
14. Definitions. As used herein the following terms have the
following meaning:
(a) "Affiliate" means and includes any corporation or
other business entity controlling, controlled by or under common control with
the corporation in question.
(b) The "Company's Field of Interest" is the
discovery, development and commercialization of pharmaceutical products based on
(a) intervention in signal transduction pathways and
14
(b) gene and cell therapy. The Company's Field of
Interest may be changed at any time at the sole discretion of the Company and
upon written notice to Employee.
(c) "Person" means any natural person, corporation,
partnership, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental body or other entity.
(d) "Subsidiary" means any corporation or other
business entity directly or indirectly controlled by the corporation in
question.
(e) "Change in Control" means the occurrence of any
of the following events (without the consent of the Employee):
(i) Any corporation, person or other entity
makes a tender or exchange offer for shares of the Company's Common Stock
pursuant to which such corporation, person or other entity acquires more than
50% of the issued and outstanding shares of the Company's Common Stock;
(ii) The stockholders of the Company approve a
definitive agreement to merge or consolidate the Company with or into another
corporation or to sell or otherwise dispose of all or substantially all of the
Company's assets; or
(iii) Any person within the meaning of Section
3(a)(9) or Section 13(d) of the Securities Exchange Act of 1934 acquires more
than 50% of the combined voting power of Company's issued and outstanding voting
securities entitled to vote in the election of the Board."
15
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ARIAD PHARMACEUTICALS, INC.
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, M.D.
Chairman and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
9/15/02
-----------------------------------------
Date
16
