Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 25th
day of August, 2003 (the "Effective Date"), by and between Xxxx Xxxxxx
("Executive") and Eyetech Pharmaceuticals, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for such services; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the 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. Employment By The Company.
1.1 The Company agrees to employ Executive in the position of
Chief Operating Officer of the Company. During Executive's
employment with the Company, Executive will devote his best
efforts and substantially all of his business time and
attention to the business of the Company.
1.2 Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his
then current title, consistent with the Bylaws of the Company
and as required by the Company's Board of Directors (the
"Board") or the Company's Chief Executive Officer.
1.3 The employment relationship between the parties shall also be
governed by the general employment policies and practices of
the Company, including those relating to protection of
confidential information and assignment of inventions, except
that when the terms of this Agreement differ from or are in
conflict with the Company's general employment policies or
practices, this Agreement shall control.
1.4 The Company and Executive each acknowledge that either party
has the right to terminate Executive's employment with the
Company at any time for any reason whatsoever, with or without
Cause or advance notice. This at-will employment relationship
cannot be changed except in a writing signed by both Executive
and the Chief Executive Officer.
2. Compensation.
2.1 Salary. Executive shall receive, for services to be rendered
under this Agreement, a base salary ("Base Salary") at the
annualized rate of $275,000.00, less applicable federal and
state withholdings. Such Base Salary shall commence as of the
Effective Date, and shall be payable in installments
consistent with the Company's regular payroll practices.
Executive's Base Salary shall be reviewed
at least annually by the Board, and in the Board's sole
discretion, may be adjusted at any time upon thirty (30) days
written notice to the Executive.
2.2 Termination.
(a) In the event Executive's employment terminates as a
result of a voluntary termination by Executive for
Good Reason, or a termination by the Company without
Cause, upon execution of an effective general release
of all claims against the Company, its employees,
officers, directors and agents, in a form reasonably
acceptable to the Company: (i) Executive shall
receive twelve (12) monthly payments each equal in
amount to one-twelfth (1/12th) of Executive's then
Base Salary, less applicable state and federal
withholdings; and (ii) for a period of twelve (12)
months (or until comparable benefits coverage becomes
available to Executive, if sooner), the Company shall
reimburse Executive (or pay him directly, at the
Company's option) the costs associated with the
continuation of Executive's and his dependents'
medical and dental benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA") as in effect immediately prior to
Executive's termination of employment. In addition,
in the event Executive's employment is terminated by
the Company without Cause within the first twelve
(12) months following the Effective Date, and after
signing the release described above, any stock option
he receives from the Company at the commencement of
employment shall become pro rata vested at the rate
of 1/48th of such option for each completed month of
service the Executive has provided to the Company.
(b) For purposes of this Agreement, "Good Reason" means
that any of the following are undertaken without
Executive's express written consent: (i) the
assignment to Executive of any duties or
responsibilities which result in any material
diminution or adverse change of Executive's position,
status or circumstances of employment; (ii) the
taking of any action by the Company which would
adversely affect Executive's participation in, or
reduce Executive's benefits under, the Company's
benefit plans (including equity benefits) as of the
time this Agreement is executed, except to the extent
the benefits of all other executive officers of the
Company are similarly reduced; (iii) a relocation of
Executive's principal office to a location more than
thirty-five (35) miles from Manhattan, New York,
except for required travel by Executive on the
Company's business; or (iv) any failure by the
Company to obtain the assumption of this Agreement by
any successor or assign of the Company. For purposes
of this Agreement, "Cause" means: (V) an intentional
action or intentional failure to act by Executive
which was performed in bad faith and to the material
detriment of the Company; (W) Executive intentionally
refuses or intentionally fails to act in accordance
with any lawful and proper direction or order of the
Board; (X) Executive willfully and habitually
neglects the duties of his employment; (Y) Executive
violates Sections 3, 4 or 5 of this Agreement;
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or (Z) Executive is convicted of a felony crime
involving moral turpitude; provided, however, that in
the event that any of the foregoing events under
clauses (V), (W), (X) or (Y) above is capable of
being cured, the Company shall provide written notice
to Executive describing the nature of such event and
Executive shall thereafter have ten (10) business
days to cure such event.
(c) In the event Executive's employment terminates as a
result of termination of Executive by the Company or
its successor without Cause, or by the Executive
voluntarily for Good Reason, within the three (3)
months before or twelve (12) months following a
Change in Control Event, upon execution of an
effective general release of all claims against the
Company, its employees, officers, directors and
agents, in a form reasonably acceptable to the
Company: (i) Executive shall receive, within fifteen
(15) days of such termination, one lump sum payment
equivalent to fifteen (15) months of his then Base
Salary, less applicable state and federal
withholdings; (ii) Executive's unvested equity rights
shall become vested and exercisable as set forth in
Section 2.3(b); and (iii) for a period of fifteen
(15) months (or until comparable benefits coverage
becomes available to Executive, if sooner), the
Company shall reimburse Executive (or pay him
directly at the Company's option) the costs
associated with the continuation of Executive's and
his dependents' medical and dental benefits under
COBRA as in effect immediately prior to Executive's
termination of employment. For purposes of this
paragraph, Executive's "Base Salary" shall be the
greater of the amount in effect either immediately
prior to the Change in Control Event or the
termination date of Executive's employment. The
benefits provided under this Section 2.2(c) shall be
in lieu of any benefits the Executive would have
otherwise been entitled to pursuant to Section 2.2(a)
of this Agreement.
(d) For purposes of this Agreement, a "Change in Control
Event" shall mean:
(i) The acquisition by an individual, entity or
group (within the meaning of Section
13(d)(3) or 14(d)(2) of 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) 50% or
more of either (x) the then-outstanding
shares of common stock of the Company (the
"Outstanding Company Common Stock") or (y)
the 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"); provided, however, that
for purposes of this subsection (i), the
following acquisitions shall not constitute
a Change in Control Event: (A) any
acquisition directly from the Company
(excluding an acquisition pursuant to the
exercise, conversion or exchange of any
security exercisable for, convertible
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into or exchangeable for common stock or
voting securities of the Company, unless the
Person exercising, converting or exchanging
such security acquired such security
directly from the Company or an underwriter
or agent of the Company), (B) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by
the Company or any corporation controlled by
the Company, or (C) any acquisition by any
corporation pursuant to a Business
Combination (as defined below) which
complies with clauses (x) and (y) of
subsection (iii) of this definition; or
(ii) Such time as the Continuing Directors (as
defined below) do not constitute a majority
of the Board (or, if applicable, the Board
of Directors of a successor corporation to
the Company), where the term "Continuing
Director" means at any date a member of the
Board (x) who was a member of the Board on
the date of the initial adoption of this
Agreement by the Board or (y) who was
nominated or elected subsequent to such date
by at least a majority of the directors who
were Continuing Directors at the time of
such nomination or election or whose
election to the Board was recommended or
endorsed by at least a majority of the
directors who were Continuing Directors at
the time of such nomination or election; or
(iii) 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 (a
"Business Combination"), unless, immediately
following such Business Combination, each of
the following two conditions is satisfied:
(x) 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 or other form of entity 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 or entity is referred to herein
as the "Acquiring Corporation") in
substantially the same proportions as their
ownership of the Outstanding Company Common
Stock and Outstanding Company Voting
Securities, respectively, immediately prior
to such Business Combination and (y) no
Person (excluding the Acquiring Corporation
or any employee benefit
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plan (or related trust) maintained or
sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or
indirectly, 30% or more of the
then-outstanding shares of common stock of
the Acquiring Corporation, or of the
combined voting power of the
then-outstanding securities of such
corporation entitled to vote generally in
the election of directors (except to the
extent that such ownership existed prior to
the Business Combination).
(iv) Notwithstanding the foregoing, a Change in
Control Event will not be deemed to have
occurred in the case of a Management Buy
Out. A "Management Buy Out" is any event
which would otherwise be deemed a "Change in
Control Event", in which the Executive,
directly or indirectly (as a beneficial
owner) acquires equity securities, including
any securities convertible into or
exchangeable for equity securities, of the
Company or the Acquiring Corporation in
connection with any Change in Control Event.
2.3 Treatment of Equity Upon Change in Control Event. Upon a
Change in Control Event, as defined in Section 2.2(d):
(a) 50% of all of the Executive's unvested equity rights
shall become vested and immediately exercisable; and
(b) If Executive's employment terminates as a result of
the circumstances outlined in Section 2.2(c), and
provided that Executive executes an effective general
release as required by Section 2.2(c), 100% of the
Executive's unvested equity rights shall then become
vested and immediately exercisable.
2.4 Golden Parachute Taxes. Notwithstanding anything contained in
this Agreement to the contrary, to the extent that payments
and benefits provided under this Agreement to Executive and
benefits provided to, or for the benefit of, Executive under
any other Company plan or agreement (such payments or benefits
are collectively referred to as the "Payments") would be
subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), the Payments shall be reduced (but not below
zero) to the extent necessary so that no Payment to be made or
benefit to be provided to the Executive shall be subject to
the Excise Tax, but only if, by reason of such reduction, the
net after-tax benefit received by Executive shall exceed the
net after-tax benefit received by him if no such reduction was
made. For purposes of this Section 2.4, "net after-tax
benefit" shall mean (a) the Payments which Executive receives
or is then entitled to receive from the Company that would
constitute "parachute payments" within the meaning of Section
280G of the Code, less (b) the amount of all federal, state
and local income taxes payable with respect to the foregoing
calculated at the maximum
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marginal income tax rate for each year in which the foregoing
shall be paid Executive (based on the rate in effect for such
year as set forth in the Code as in effect at the time of the
first payment of the foregoing) less (c) the amount of excise
taxes imposed with respect to the payments and benefits
described in (a) above by Section 4999 of the Code. The
foregoing determination will be made by a nationally
recognized accounting firm (the "Accounting Firm") selected by
the Company (which may be, but will not be required to be, the
Company's independent auditors). The Company will direct the
Accounting Firm to submit its determination and detailed
supporting calculations to both the Executive and the Company
within fifteen (15) days after the date of termination of his
employment. If the Accounting Firm determines that such
reduction is required by this Section 2.4, the Executive, in
his sole and absolute discretion, may determine which Payments
shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section
4999 of the Code, and the Company shall pay such reduced
amount to him. The fees and expenses of the Accounting Firm
for its services in connection with the determinations and
calculations contemplated by this Section 2.4 will be borne by
the Company.
2.5 Discretionary Incentive Compensation. Executive will be
eligible to participate in any discretionary incentive
compensation programs that the Company establishes and makes
available to executives, in its sole discretion, from time to
time. Executive's discretionary compensation will range from 0
to 35% of his then current annual base salary. As this is
discretionary, any failure by the Board to provide
compensation under this section shall not give rise to any
claim by the Executive for unpaid compensation.
2.6 Medical and Dental Coverage. The Company shall provide
Executive with medical and dental coverage which is no less
favorable than that provided to any other executive of the
Company.
2.7 Standard Company Benefits. Executive shall be entitled to
participate in any benefit programs which may be in effect
from time to time and provided by the Company to its employees
generally and/or to its management and executive employees in
particular, provided that Executive is eligible to participate
under the terms and conditions of any such benefits plans.
2.8 Expenses. Executive shall be entitled to receive prompt
reimbursement of all reasonable and necessary business
expenses incurred by Executive in performing Company services,
provided that Executive furnishes the Company with adequate
records and other documentary evidence of such expenses for
which Executive seeks reimbursement. Such expenses shall be
accounted for under the policies and procedures established by
the Company.
2.9 Automobile Allowance. The Executive shall receive an
all-inclusive monthly automobile allowance of $900. The
Executive shall be solely responsible for
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costs and fees related to any automobile purchased or leased
with such allowance, including, but not limited to, insurance,
maintenance, and mileage.
2.10 Vacation and Sick Leave. Executive shall be eligible for
vacation and sick leave in accordance with policies as
periodically established by the Company for Company officers.
3. Confidential Information Obligations and Conflicts.
3.1 Executive agrees that all information and know-how, whether or
not in writing, of a private, secret or confidential nature
concerning the Company's business 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
inventions, products, processes, methods, techniques,
formulas, compositions, compounds, projects, developments,
plans, research data, clinical data, financial data, personnel
data, computer programs, and customer and supplier lists.
Executive will not disclose any Proprietary Information to
others outside the Company or use the same for any
unauthorized purposes without written approval by an officer
of the Company, either during or after his employment, unless
and until such Proprietary Information has become public
knowledge without fault by the Executive.
3.2 Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, or other
tangible material containing Proprietary Information, whether
created by the Executive or others, which shall come into his
custody or possession, shall be and are the exclusive property
of the Company to be used by the Executive only in the
performance of his duties for the Company.
3.3 Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in
paragraphs 3.1 and 3.2 above, also extends to such types of
information, know-how, records 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 to
the Company or to the Executive in the course of the Company's
business.
3.4 During Executive's employment, 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 the Company, its business, or its
prospects, financial or otherwise or which may otherwise
create a conflict in Executive's interests. Nothing in this
paragraph shall bar Executive from owning securities of any
competitor corporation as a passive investor after the
termination of his employment, so long as his aggregate direct
holdings in any one such corporation shall not constitute more
than one percent (1%) of the voting stock of that corporation.
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4. Developments.
4.1 Executive will make full and prompt disclosure to the Company
of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, whether
patentable or not, which are created, made, conceived or
reduced to practice by the Executive or under his direction or
jointly with others during his employment by the Company,
whether or not during normal working hours or on the premises
of the Company (all of which are collectively referred to in
this Agreement as "Developments").
4.2 Executive agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company)
all his right, title and interest in and to all Developments
and all related patents, patent applications, copyrights and
copyright applications. However, this Section 4.2 shall not
apply to Developments which do not relate to the present or
planned business or research and development of the Company
and which are made and conceived by the Executive not during
normal working hours, not on the Company's premises and not
using the Company's tools, devices, equipment or Proprietary
Information.
4.3 Executive agrees to cooperate fully with the Company, both
during and after his employment with the Company, with respect
to the procurement, maintenance and enforcement of copyrights,
patents and all other legal rights (both in the United States
and foreign countries) relating to Developments. Executive
shall sign all papers, including, without limitation,
copyright applications, patent applications, declarations,
oaths, formal assignments, assignment of priority rights, and
powers of attorney, which the Company may deem necessary or
desirable in order to protect its rights and interests in any
Development.
5. General Provisions.
5.1 Other Agreements. Executive hereby represents that he is not
bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the
course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such
previous employer or any other party. Executive further
represents that his performance of all the terms of this
Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence
or in trust prior to his employment with the Company.
5.2 Notices. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of (i) personal
delivery (including delivery by overnight courier) or (ii) the
third day after mailing by first-class mail, to the Company at
its primary office location and to Executive at his address as
then listed in the Company's payroll records.
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5.3 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality, or
unenforceability will not affect any other provision or any
other jurisdiction, but this Agreement will be reformed and
construed in such jurisdiction so as to render it enforceable
under applicable law insofar as possible consistent with the
intent of the parties.
5.4 Waiver. If either party should waive any breach of any
provisions of this Agreement, that party shall not thereby be
deemed to have waived any preceding or succeeding breach of
the same or any other provision of this Agreement.
5.5 Complete Agreement. This Agreement constitutes the entire
agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement
with regard to this subject matter and supersedes all prior
agreements and understandings between the parties. It is
entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by both the
Executive and a duly authorized signatory of the Company.
5.6 Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of
more than one party, but all of which taken together will
constitute one and the same Agreement.
5.7 Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
5.8 Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and
the Company, and their respective successors, assigns, heirs,
executors and administrators, except that Executive may not
assign any duties hereunder and may not assign any rights
hereunder without the written consent of the Company, which
shall not be withheld unreasonably.
5.9 Choice of Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed
by the law of the State of New York, without regard to such
state's conflict-of-laws rules.
5.10 Non-Publication. To the extent permitted by law, the parties
mutually agree not to disclose publicly the terms of this
Agreement except to the extent that disclosure is mandated by
applicable law or such disclosure is to the parties'
respective attorneys, accountants other advisors, and
immediate family.
5.11 Agreement Controls. In the event of a conflict between the
text of this Agreement and any summary, description or other
information regarding this Agreement, the text of this
Agreement shall control.
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5.12 Tax Withholding. All payments made pursuant to this Agreement
shall be subject to all applicable federal, state and local
income and employment tax withholding.
5.13 No Duty to Seek Employment. Executive and the Company
acknowledge and agree that nothing contained in this Agreement
shall be construed as requiring Executive to seek or accept
alternative or replacement employment in the event of his
termination of employment by the Company for any reason, and
no payment or benefit payable hereunder shall be conditioned
on Executive's seeking or accepting such alternative or
replacement employment.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
EYETECH PHARMACEUTICALS, INC.
By: /s/ XXXXXXX X. XXXXXXXXXX
-----------------------------------------
Name: XXXXXXX X. XXXXXXXXXX
Title: Senior Vice-President/General Counsel
/s/ XXXX XXXXXX 8/25/03
---------------------------------
XXXX XXXXXX
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