Executive Employment Agreement
Exhibit 10.14
This executive employment agreement (the “Agreement”) is entered into as of July 1, 2006 by and
between Micromet, Inc. (hereinafter “Company”) and Xxxxxxxx Xxxxx (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. Employment by Company
1.1 Position. Subject to terms set forth herein, Company agrees to employ Executive in the
position of Senior Vice President, General Counsel and Secretary, 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 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.
1.3 Location.
(a) Executive understands that Company’s current headquarter offices are located in Carlsbad,
CA, and that Company anticipates that it will move its headquarter offices to an East Coast
location. As of the date of this Agreement, Executive’s primary office location will be in the
greater Washington, D.C. metropolitan area. Unless Company’s permanent headquarter offices are in
the greater Washington, D.C. metropolitan area, Company will pay the reasonable cost of a satellite
office at Executive’s primary office location (e.g. Regus Group or a similar organization leasing
temporary office space) and Executive’s expenses for travel, lodging and incidentals incurred in
connection with Executive’s travel to Company’s permanent headquarter offices. Further, 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.
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(b) If Company’s permanent headquarter offices are not in the greater Washington, D.C.
metropolitan area, then Company may request that Executive relocate his primary office location to
Company’s permanent headquarter offices, and Executive will effect such relocation within six
months following such request. Company will reimburse Executive for the cost of renting an
apartment in the area of Company’s headquarter offices for the period commencing upon Executive’s
relocation and ending on the earlier to occur of the purchase of the family home in the area of
Company’s headquarter offices or six months from the date of relocation; provided that Company will
not be required to reimburse any such rental costs in excess of $15,000.
(c) In the event of any relocation of Executive’s primary office location, Company will pay
all of Executive’s reasonable expenses for the relocation of Executive, his family and household to
the area of Company’s headquarter offices. In addition, if the sale of Executive’s then-current
home at the original primary office location 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 then-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 $25,000.
1.4 Term. The term of this Agreement will commence on July 1, 2006 and will continue from that
date until June 30, 2010 (the “Initial Term”), and will be extended automatically for consecutive
one (1) year periods (each an “Extension Term”, and collectively with the Initial Term referred to
herein as the “Employment Term”). If Company or Executive decides not to extend the Initial Term
or any Extension Term, it or he may terminate this Agreement by providing written notice of
termination in accordance with Section 7.2 or 7.4, respectively, and the terms of Section 7.2 or
7.4 will apply with respect to any such termination by Company or Executive, respectively. In
addition, the Employment Term terminates upon termination of employment pursuant to Section 7
below.
1.5 Policies and Procedures. In addition to the terms of this Agreement, the employment
relationship between the parties will be governed by the general employment policies and practices
of Company, including those relating to protection of confidential information and assignment of
inventions. If the terms of this Agreement differ from or are in conflict with Company’s general
employment policies or practices, this Agreement will control.
2. Compensation
2.1 Base Salary. For services rendered hereunder by Executive during the Employment Term,
Executive will receive an annualized base salary of three hundred US dollars (US$ 300,000) (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 Base Salary
covers all overtime.
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2.2 Transition Compensation. To assist Executive in his transition from his current
partnership position at Xxxxxx Godward, for the period from July 1, 2006 through December 31, 2006,
Executive will receive additional compensation of US$ 16,666 per month, payable in accordance with
the Company’s payroll policies and subject to customary deductions and withholdings, as required by
law.
2.3 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.
2.4 Equity Compensation.
(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 250,000 shares of Common Stock of the Company (the “Initial 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. 2006
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 after 12 months 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.
2.5 Acceleration of Vesting. The provisions concerning vesting pursuant to clauses (a), (b)
and (c) of this Section 2.5 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.
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(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.
(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;
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(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 2.5(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:
(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.
2.6 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.
2.7 Business Expenses. Company will reimburse Executive for Company-related travel,
entertainment and other expenses reasonably incurred by Executive on behalf of Company pursuant to
Company’s expense reimbursement policy for its employees.
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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.
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.
4. Vacation
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 greater Munich metropolitan area. 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.
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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.
7. Termination Of Employment
7.1 Termination by Company for Cause
(a) Company may terminate Executive’s employment with Company at any time for Cause,
determined in the Board’s discretion, upon written notice to Executive.
(b) “Cause” means: (i) a material breach of this Agreement or any other written agreement
between Executive and Company; (ii) Executive’s gross negligence or willful misconduct in the
performance of his duties; (iii) the commission of any act or omission constituting dishonesty or
fraud that has a material adverse impact on Company or any successor or affiliate thereof; (iv) any
conviction of, or plea of “guilty’ or “no contest” to, a felony; (v) conduct by Executive which in
the good faith and reasonable determination of the Board demonstrates gross unfitness to serve;
(vi) failure to attempt in good faith to implement a clear and reasonable directive of the
Company’s Chief Executive Officer after written notice of such failure, and failure by Executive to
cure the same within fifteen (15) business days after receipt of such notice; (vii) persistent
unsatisfactory performance of job duties after written notice of such and failure to cure the same
after having been provided with a reasonable opportunity to cure if deemed curable; or (viii)
breach of fiduciary duty; provided, however, that prior to the determination that Cause
under this subsection (b) has occurred, Company will (1) provide to Executive in writing, in
reasonable detail, the reasons for the determination that such “Cause” exists, (2) afford Executive
a reasonable opportunity to remedy any such breach except with respect to clause (vi) above which
specifies the applicable period of time for Executive to remedy his breach, (3) provide the
Executive an opportunity to be heard prior to the final
decision to terminate the Executive’s employment hereunder for such Cause, and (4) make any
decision that such Cause exists in good faith.
(c) In connection with a termination of the employment pursuant to this Section 7.1, Executive
will not be entitled to receive any Severance Benefits (as defined in Section 7.2 below), unpaid
bonuses or other compensation, other than accrued Base Salary plus other amounts to which Executive
is entitled under any bonus or compensation plan or practice of Company through the date of
termination.
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7.2 Termination by Company without Cause.
(a) Company may terminate Executive’s employment with Company at any time without Cause.
(b) In the event Company terminates Executive’s employment without Cause, Company will pay
Executive the Base Salary due the Executive through the date of termination, plus other amounts to
which Executive is entitled under any bonus or compensation plan or practice of Company at the time
of termination. In addition, and provided that Executive executes and does not revoke a release as
provided in Section 8, Company will pay or grant Executive in lieu of any other severance benefits
or any other compensation the following as severance benefits (“Severance Benefits”):
(i) an amount that is the greater of (1) the equivalent to the Base Salary for a period of
twelve (12) months from the date of termination, less any payroll withholding and deductions due on
such salary in accordance with applicable law, or (2) the benefits under Company severance benefit
plan applicable to Executive, if any, in effect on the termination date; and
(ii) an amount equal to Executive’s Bonus (as defined below) for the year in which the
employment is terminated prorated for the period during such year Executive was employed prior to
the date of termination (or the full amount of the Bonus if Executive’s employment is terminated
within six (6) months prior to or twelve (12) months following a Change of Control). As used in
this Agreement, “Bonus” means the average of the bonuses awarded to Executive for each of the three
(3) fiscal years prior to the date of termination, or such lesser number of years as may be
applicable if Executive has not been employed for three (3) full years on the date of termination.
For purposes of determining Executive’s “Bonus,” to the extent Executive received no bonus in a
year due to a failure to meet the applicable performance objectives, such year will still be taken
into account (using zero (0) as the applicable bonus) in determining Executive’s “Bonus” for
purposes of this subsection (ii), and if any portion of the bonuses awarded to Executive consisted
of securities or other property, the fair market value thereof will be determined in good faith by
the Board; and
(iii) acceleration of vesting of Stock Awards pursuant to Section 2.5(b) or 2.5(c), as
applicable; and
(iv) for the period beginning on the date of termination and ending on the date which is
twelve (12) full months (or eighteen (18) months if Executive’s employment is terminated within six
(6) months prior to or twelve (12) months following a
Change of Control) following the date of termination (or, if earlier, the date on which the
applicable continuation period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) expires), (1) reimburse Executive for the costs associated with continuation
coverage pursuant to COBRA for Executive and his eligible dependents who were covered under
Company’s health plans as of the date of Executive’s termination (provided that Executive will be
solely responsible for all matters relating to his continuation of coverage pursuant to COBRA,
including, without limitation, his election of such coverage and his timely payment of premiums),
or for any health insurance premiums of Executive’s health insurance paid by Company prior to
termination of employment pursuant to this Section 7.2 for which continuation coverage pursuant to
COBRA is not available, and (2) pay for and provide Executive and such eligible dependents with
life insurance benefits coverage to the extent such Executive and/or such dependents were receiving
such benefits prior to the date of Executive’s termination;
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(v) executive-level outplacement services at Company’s expense, not to exceed $15,000, by a
firm selected by Executive from a list compiled by Company.
(c) The Severance Benefits due pursuant to Section 7.2(b)(i) and (b)(ii) will be payable as a
lump sum payment or in equal installments over a twelve (12) month period, as determined by the
Board in its discretion.
(d) Company will have the right to withhold further payments of unpaid Severance Benefits,
upon its notice to Executive of the Board’s good faith reasonable belief, and the basis for the
reasonable belief, that Executive has breached any of his post-termination obligations to Company.
7.3 Termination by Executive for Good Reason.
(a) Executive may voluntarily terminate his employment for Good Reason by notifying Company in
writing, within ten (10) days after obtaining knowledge of the occurrence of a Good Reason, that
Executive intends to terminate his employment for Good Reason.
(b) “Good Reason” means: (i) the assignment to Executive of any duties or responsibilities
which result in the material diminution of Executive’s position; (ii) a reduction by Company in
Executive’s annual Base Salary; (iii) a relocation of Executive’s place of employment to a location
other than Company’s permanent headquarters on the East Coast established following the relocation
of the headquarters from Carlsbad; (iv) any material breach by Company of this Agreement after
written notice of such breach and failure by Company to cure the breach within fifteen (15)
business days after receipt of such notice; (v) any purported termination of Executive’s employment
for Cause by Company that is not in accordance with the definition of Cause set forth in this
Agreement; (vi) any failure to pay Executive the earned bonus for any period under any management
incentive compensation plan adopted by Company, if a majority of other officers of Company or any
successor or affiliate have been paid bonuses for such period under such plan; or (vii) any failure
by Company to obtain the assumption of this Agreement by any successor or assign of Company.
(c) In the event Executive terminates his employment under circumstances which constitute Good
Reason, and provided that Executive executes and does not revoke a release as provided in Section
8, Company will pay or grant Executive the Severance Benefits according to Section 7.2(b), provided
that Company will have the right to withhold further payments of unpaid Severance Benefits, upon
its notice to Executive of the Board’s good faith reasonable belief, and the basis for the
reasonable belief, that Executive has breached any of his post-termination obligations to Company.
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7.4 Termination by Executive Without Good Reason.
(a) Executive may terminate the employment with Company at any time without Good Reason.
(b) In connection with a termination of the employment pursuant to this Section 7.4, Executive
will not be entitled to receive any Severance Benefits, unpaid bonuses or other compensation,
except that Company will pay Executive the Base Salary due the Executive through the date of
termination, plus other amounts to which Executive is entitled under any bonus or compensation plan
or practice of Company at the time of termination.
7.5 Termination for Death.
(a) The Employment Term will terminate immediately upon Executive’s death. Upon such
termination, Company will pay to any beneficiaries designated by Executive in writing in Exhibit C
(the “Death Benefits Recipients”), or in the absence of such designation, to Executive’s estate, in
lieu of any other severance benefits or any other compensation:
(i) the Base Salary due the Executive through the date of Executive’s death, plus other
amounts to which Executive is entitled under any bonus or compensation plan or practice of Company
at the time of Executive’s death;
(ii) Executive’s annual Base Salary as in effect immediately prior to the date of death,
payable over the twelve (12) month period commencing on the date of death in equal monthly
installments;
(iii) an amount equal to Executive’s Bonus for the year in which Executive’s death occurs,
payable over the twelve (12) month period commencing on the date of death in equal monthly
installments.
(b) In addition, for the period beginning on the date of death and ending on the date which is
twelve (12) full months following the date of death (or, if earlier, the date on which the
applicable continuation period under COBRA expires), Company will reimburse Executive’s eligible
dependents for the costs associated with continuation coverage for such eligible dependents
pursuant to COBRA) (provided that Executive’s dependents will be solely responsible for all
matters relating to such continuation of coverage pursuant to COBRA, including, without limitation,
election of such coverage and the timely payment of premiums), or for any health insurance premiums
of Executive’s health insurance paid by Company prior to
termination of employment pursuant to this Section 7.5 for which continuation coverage
pursuant to COBRA is not available.
(c) Executive may change the Death Benefits Beneficiaries by written notice to Company.
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7.6 Termination for Permanent Disability.
(a) Company may terminate Executive’s employment by written notice at any time for Permanent
Disability (as defined in subsection (c) below). Upon such termination, Company will pay Executive
(i) the Base Salary due Executive through the date of termination, plus other amounts to which
Executive is entitled under any bonus or compensation plan or practice of Company at the time of
termination, and (ii) provided that Executive executes and does not revoke a release as provided in
Section 8, the Severance Benefits.
(b) The payments and Severance Benefits due the Executive under subsection (a) above are in
lieu of any other severance benefits or any other compensation. The Severance Benefits due
pursuant to Section 7.2(b)(i) and 7.2(b)(ii) will be payable as a lump sum payment or in equal
installments over a twelve (12) month period, as determined by the Board in its discretion.
(c) “Permanent Disability” will be deemed to have occurred if Executive was physically or
mentally incapacitated or disabled or otherwise unable fully to discharge his duties hereunder for
(i) a period in excess of ninety (90) consecutive days, or (ii) a period in excess of one hundred
twenty (120) days in the aggregate in any consecutive one hundred eighty (180) day period. This
definition will be interpreted and applied consistent with the Americans with Disabilities Act, the
Family and Medical Leave Act and other applicable law. The existence of Executive’s Permanent
Disability will be determined by Company on the advice of a physician chosen by Company and
Executive (or in the event of mental disability, Executive’s Death Benefits Recipients) and Company
reserves the right to have the Executive examined by such physician at Company’s expense.
7.7 Cooperation Obligations.
(a) Transition Activities. After delivery or receipt of any notice of termination by
Executive, and for a reasonable period following any termination of Executive’s employment for any
reason, Executive will fully cooperate with Company in all matters relating to the winding up of
Executive’s pending work and the orderly transfer of any such pending work to such other employees
as may be designated by Company.
(b) Return of Company’s Property. If Executive’s employment is terminated for any reason
Company will have the right, at its option, to require Executive to vacate his offices prior to or
on the effective date of termination and to cease all activities on Company’s behalf. Upon the
termination of his employment in any manner, as a condition to the Executive’s receipt of any
post-termination benefits described in this Agreement, Executive will immediately surrender to
Company all lists, books and records of, or in connection with, Company’s business, and all other
property belonging to Company, it being distinctly understood that all such lists, books and
records, and other documents, are the property of Company.
Executive will deliver to Company a signed statement certifying compliance with this Section
7.7 prior to the receipt of any post-termination benefits described in this Agreement
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(c) Litigation. After the Employment Term, Executive will cooperate with Company in
responding to the reasonable requests of Company’s Chairman of the Board, CEO or General Counsel,
in connection with any and all existing or future litigation, arbitrations, mediations or
investigations brought by or against Company, or its or their respective affiliates, agents,
officers, directors or employees, whether administrative, civil or criminal in nature, in which
Company reasonably deems Executive’s cooperation necessary or desirable. In such matters,
Executive agrees to provide Company with reasonable advice, assistance and information, including
offering and explaining evidence, providing sworn statements, and participating in discovery and
trial preparation and testimony. Executive also agrees to promptly send Company copies of all
correspondence (for example, but not limited to, subpoenas) received by Executive in connection
with any such legal proceedings, unless Executive is expressly prohibited by law from so doing.
(d) Expenses and Fees. Company will reimburse Executive for reasonable out-of-pocket expenses
incurred by Executive as a result of his cooperation with the obligations described in this Section
7.7, within thirty (30) days of the presentation of appropriate documentation thereof, in
accordance with Company’s standard reimbursement policies and procedures. Except as provided in
the preceding sentence, Executive will not be entitled to any compensation for activities performed
pursuant to this Section 7.7 during the period in which Executive receives any Severance Benefits.
Thereafter, Company will pay Executive a compensation for activities performed pursuant to this
Section 7.7 based on an hourly rate of 160th of Executive’s monthly Base Salary
immediately preceding the termination of employment (the “Fees”). In performing obligations under
this Section 7.7 following termination of the employment, Executive agrees and acknowledges that
he will be serving as an independent contractor, not as a Company employee, and he will be entirely
responsible for the payment of all income taxes and any other taxes due and owing as a result of
the payment of Fees, will not be eligible to participate in any Company benefit plans while
performing such services.
7.8 Surviving Clauses. Sections 2.5, 3, 6, 7, 8, 9, 10, and 11 (including the definitions of
any defined terms referenced therein) will survive any termination or expiration of this Agreement.
8. Release
As a condition precedent to receipt of any Severance Benefits, Executive will provide Company
with an executed and effective general release substantially in the form attached hereto as Exhibit
B (the “Release”), or a release in such other form as the parties may agree upon at the time.
9. Non-Competition
Executive will not, for a period of twelve (12) months from the end of the Employment Term,
for Executive’s own account, or as owner, manager, officer, shareholder,
consultant, director, representative or employee of a company, participate in the research or
development of (i) antibodies against the EpCAM target molecule, or (ii) BiTE molecules or active
agents which trigger the same mechanism as BiTE molecules (collectively, the “Non-Compete Field”).
The Board may, in its discretion, reduce the scope of the Non-Compete Field.
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10. Non-Solicitation
While employed by Company, and for six (6) months immediately following the date of
termination of the employment, Executive will not interfere with the business of Company by (a)
soliciting, attempting to solicit, inducing, or otherwise causing any employee of Company to
terminate employment in order to become an employee, consultant or independent contractor to or for
any other person or entity; or (b) directly or indirectly causing any third party that provides
services to Company to terminate such business relationship.
11. General Provisions
11.1 Notices. Any notices provided hereunder must be in writing and will be deemed effective
upon the earlier of personal delivery or receipt if delivered by mail or courier service, to
Company at its primary office location and to Executive at his address as listed on Company payroll
or the Executive’s then current place of abode.
11.2 Confidentiality. Executive will hold the provisions of this Agreement in strictest
confidence and will not publicize or disclose this Agreement in any manner whatsoever;
provided, however, that Executive may disclose this Agreement: (a) to Executive’s immediate
family; (b) in confidence to his attorneys, accountants, auditors, tax preparers, and financial
advisors; (c) insofar as such disclosure may be necessary to enforce its terms or as otherwise
permitted or required by law. In particular, and without limitation, Executive agrees not to
disclose the terms of this Agreement to any current or former employee of Company.
11.3 Reasonableness of Restrictions. Executive acknowledges and agrees that (a) he has read
this entire Agreement and understands it, (b) the limitations imposed in this Agreement do not
prevent him from earning a living or pursuing his career following the termination of the
employment, and (c) the restrictions contained in this Agreement are reasonable, proper, and
necessitated by Company’s legitimate business interests. Executive represents and agrees that he
is entering into this Agreement freely and with knowledge of its contents with the intent to be
bound by the Agreement and the restrictions contained in it.
11.4 Remedies. Executive agrees that it may be impossible to assess the damages caused by
Executive’s violation of this Agreement or any of its terms. Executive agrees that any threatened
or actual violation of this Agreement or any of its terms will constitute immediate and irreparable
injury to Company and Company will have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other relief, without bond and without prejudice
to any other rights and remedies that Company may have for a breach or threatened breach of this
Agreement.
11.5 Severability. In the event that a court finds this Agreement, or any of its
restrictions, to be ambiguous, unenforceable, or invalid, the parties agree that the court will
read the Agreement as a whole and interpret the restriction(s) at issue to be enforceable and
valid to the maximum extent allowed by law. If the court declines to enforce this Agreement in the
manner provided in this Section 11.5, Executive and Company agree that this Agreement will be
automatically modified to provide Company with the maximum protection of its business interests
allowed by law and Executive agrees to be bound by this Agreement as modified.
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In case any one or
more of the provisions, subsections, or sentences contained in this Agreement will, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect the other provisions of this Agreement, and this Agreement will be
construed as if such invalid, illegal or unenforceable provision had never been contained herein.
11.6 Waiver. If either party should waive any breach of any provisions of this Agreement or
fail to enforce performance by the other party, he or it will not thereby be deemed to have waived
any preceding or succeeding breach or performance of the same or any other provision of this
Agreement. Any such waiver will be effective only if made in writing and signed by the Party
waiving such breach or performance.
11.7 Complete Agreement; Amendment. This Agreement and its Exhibits, constitute the entire
agreement between Executive and Company and it is the complete, final, and exclusive embodiment of
their agreement with regard to this subject matter. This Agreement replaces all previous
agreements regarding the service relationship of Executive with Company. After commencement of the
Agreement Executive does not have any further claim to compensation, including bonuses which were
agreed in the contract replaced by this Agreement, except outstanding due amounts. Without
limiting the preceding sentence, this Agreement supersedes the offer letter by and between
Executive and Company dated as of May 31, 2006. It is entered into without reliance on any promise
or representation other than those expressly contained herein. This Agreement cannot be modified
or amended except in a writing signed by an authorized representative of Company and Executive.
11.8 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.
11.9 Assignment; Assumption by Successor; Non-transferability of Interest.
(a) Company may assign this Agreement, without the consent of Executive, to any business
entity which at any time, whether by purchase, merger or otherwise, directly or indirectly,
acquires all or substantially all of the assets or business of Company. Company will require any
successor (whether direct or indirect, by purchase, merger or otherwise) to all or substantially
all of the business or assets of Company expressly to assume and to agree to perform this Agreement
in the same manner and to the same extent that Company would be required to perform it if no such
succession had taken place; provided, however, that no such assumption will relieve Company
of its obligations hereunder. As used in this Agreement, the “Company” will mean Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.
(b) None of the rights of Executive to receive any form of compensation payable pursuant to
this Agreement will be assignable or transferable except through a testamentary disposition or by
the laws of descent and distribution upon the death of Executive. Any attempted assignment,
transfer, conveyance, or other disposition (other than as aforesaid) of any interest in the rights
of Executive to receive any form of compensation to be made by Company pursuant to this Agreement
will be void.
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11.10 Headings. The headings of the sections hereof are inserted for convenience only and
will not be deemed to constitute a part hereof nor to affect the meaning thereof.
11.11 Construction. The language in all parts of this Agreement will in all cases be
construed simply, according to its fair meaning, and not strictly for or against any of the parties
hereto. Without limitation, there will be no presumption against any party on the ground that such
party was responsible for drafting this Agreement or any part thereof.
11.12 Choice of Law. All questions concerning the construction, validity, interpretation of
this Agreement will be governed by the laws of the State of Delaware as applicable to contracts
made and wholly performed within the State of Delaware by residents of that State.
11.13 Arbitration. Except for claims relating to the breach of Section 9 or 10, or the
Proprietary Information and Inventions Agreement attached hereto as Exhibit A which may be pursued
in any court of applicable jurisdiction, any claim or controversy arising out of or relating to
this Agreement or Executive’s employment by Company will be settled by binding arbitration in New
York, New York, in accordance with the Employment Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction. Each party will select one arbitrator and the two arbitrators so chosen will
select a third arbitrator who will act as the sole arbitrator of any dispute. Each party will pay
the fees of its own attorneys, the expenses of its witnesses and all other expenses connected with
presenting its case; however, Executive and Company agree that, to the extent permitted by law, the
arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party.
Other costs of the arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the sole arbitrator, and all other fees and costs,
will be borne by Company.
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In Witness Whereof, the parties have executed this Agreement on the day and year first
above written.
/s/ Xxxxxxxxx Xxxx
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Title: President & CEO |
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/s/ Xxxxxxxx Xxxxx
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