EMPLOYMENT AGREEMENT
Exhibit
10.2
This Employment Agreement (“Agreement”) is made as of the 12th day of December 2007
between Alkermes, Inc., a Pennsylvania corporation (the “Company”), and Xxxxx X. Xxxxxxxx
(“Executive”).
WHEREAS, the Company has previously entered into a letter agreement with Executive dated
December 22, 2000, as amended on April 1, 2007 (the “Letter Agreement”), and a change in control
employment agreement dated June 27, 2001 (the “Change in Control Agreement”);
WHEREAS, the Company and Executive wish to replace the Letter Agreement and the Change in
Control Agreement with the provisions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Employment. The term of this Agreement shall extend from December 12, 2007 (the
“Commencement Date”) until this Agreement is terminated by either the Executive or the Company
pursuant to Paragraph 4. The term of this Agreement may be referred to herein as the “Period of
Employment.”
2. Position and Duties. During the Period of Employment, Executive shall serve as the
President and Chief Executive Officer of the Company, and shall have supervision and control over
and responsibility for the day-to-day business and affairs of those functions and operations of the
Company and shall have such other powers and duties as may from time to time be prescribed by the
Board of Directors of the Company (the “Board”), provided that such duties are consistent with
Executive’s position or other positions that he may hold from time to time. Executive shall devote
his full working time and efforts to the business and affairs of the Company.
3. Compensation and Related Matters.
(a) Base Salary. Executive’s initial annual base salary shall be his annual base
salary on the Commencement Date. Executive’s base salary shall be redetermined annually by the
Compensation Committee of the Board (the “Compensation Committee”). The base salary in effect at
any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in
substantially equal bi-weekly installments.
(b) Incentive Compensation. Executive shall be eligible to receive cash incentive
compensation as determined by the Compensation Committee from time to time, and shall also be
eligible to participate in such incentive compensation plans as the Compensation Committee shall
determine from time to time.
(c) Expenses. Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses incurred by him in performing services hereunder during the
Period of Employment, in accordance with the policies and procedures then in effect and
established by the Company.
(d) Other Benefits. During the Period of Employment, Executive shall be entitled to
continue to participate in or receive benefits under all of the Company’s Employee Benefit Plans in
effect on the date hereof, as these plans or arrangements may thereafter be amended from time to
time. As used herein, the term “Employee Benefit Plans” includes, without limitation, each pension
and retirement plan; supplemental pension, retirement and deferred compensation plan; savings and
profit-sharing plan; stock ownership plan; stock purchase plan; stock option plan; life insurance
plan; medical insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company on the date hereof for employees of the same status
within the hierarchy of the Company. Executive shall have the right in accordance with applicable
law and the Company’s long-term disability plan to elect to pay the premiums for his disability
coverage with after-tax dollars. During the Period of Employment, Executive shall be entitled to
participate in or receive benefits under any Employee Benefit Plan or arrangement which may, in the
future, be made available by the Company to its executives and key management employees, subject to
and on a basis consistent with the terms, conditions and overall administration of such plan or
arrangement. Any payments or benefits payable to Executive under a plan or arrangement referred to
in this Subparagraph 3(d) in respect of any calendar year during which Executive is employed by the
Company for less than the whole of such year shall, unless otherwise provided in the applicable
plan or arrangement, be prorated in accordance with the number of days in such calendar year during
which he is so employed. Should any such payments or benefits accrue on a fiscal year (rather than
calendar year) basis, then the proration in the preceding sentence shall be on the basis of a
fiscal year rather than calendar year.
(e) Vacations. Executive shall be entitled to the number of paid vacation days in
each calendar year to which he is entitled on the Commencement Date, which vacation days shall be
accrued ratably during the calendar year and the number of which may be increased in accordance
with Company policies. Executive shall also be entitled to all paid holidays given by the Company
to its executives.
4. Termination. Executive’s employment hereunder may be terminated without any breach
of this Agreement under the following circumstances:
(a) Death. Executive’s employment hereunder shall terminate upon his death.
(b) Disability. If Executive is prevented from performing his duties hereunder by
reason of any physical or mental incapacity that results in Executive’s satisfaction of all
requirements necessary to receive benefits under the Company’s long-term disability plan due to a
total disability, then, to the extent permitted by law, Company may terminate the employment of
Executive at or after such time. Nothing in this Subparagraph 4(b) shall be construed to waive
Executive’s rights, if any, under existing law including, without limitation, the Family and
Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42
U.S.C. §12101 et seq.
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(c) Termination by Company for Cause. At any time during the Period of Employment,
the Company may terminate Executive’s employment hereunder for Cause if such termination is
approved by not less than a majority of the Board at a meeting of the Board, at which Executive
would not participate, called and held for such purpose. For purposes of this Agreement, “Cause”
shall mean: (i) conduct by Executive constituting a material act of willful misconduct in
connection with the performance of his duties, including, without limitation, misappropriation of
funds or property of the Company or any of its affiliates other than the occasional, customary and
de minimis use of Company property for personal purposes; (ii) the commission by Executive of a
felony or any misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or conduct by
Executive that would reasonably be expected to result in material injury to the Company if he were
retained in his position; (iii) continued, willful and deliberate non-performance by Executive of
his duties hereunder (other than by reason of Executive’s physical or mental illness, incapacity or
disability) which has continued for more than thirty (30) days following written notice of such
non-performance from the Company; (iv) a breach by Executive of any of the provisions contained in
Paragraph 7 of this Agreement; (v) a violation by Executive of the Company’s employment policies
which has continued following written notice of such violation from the Company; or (vi) willful
failure to cooperate with a bona fide internal investigation or an investigation by regulatory or
law enforcement authorities, after being instructed by the Company to cooperate, or the willful
destruction or failure to preserve documents or other materials known to be relevant to such
investigation or the willful inducement of others to fail to cooperate or to produce documents or
other materials.
(d) Termination Without Cause. At any time during the Period of Employment, the
Company may terminate Executive’s employment hereunder without Cause if such termination is
approved by a majority of the Board at a meeting of the Board, at which Executive would not
participate, called and held for such purpose. Any termination by the Company of Executive’s
employment under this Agreement which does not constitute a termination for Cause under
Subparagraph 4(c) or result from the death or disability of Executive under Subparagraph 4(a) or
(b) shall be deemed a termination without Cause.
(e) Termination by Executive. At any time during the Period of Employment, Executive
may terminate his employment hereunder for any reason, including but not limited to Good Reason.
For purposes of this Agreement, “Good Reason” shall mean that Executive has complied with the “Good
Reason Process” (hereinafter defined) following the occurrence of any of the following events: (i)
a substantial diminution or other substantive adverse change, not consented to by Executive, in the
nature or scope of Executive’s responsibilities, authorities, powers, functions or duties; (ii) an
involuntary material reduction in Executive’s Base Salary except for across-the-board reductions
similarly affecting all or substantially all management employees; (iii) a breach by the Company of
any of its other material obligations under this Agreement, or (iv) a material change in the
geographic location at which Executive must perform his services. “Good Reason Process” shall mean
that (A) Executive reasonably determines in good faith that a “Good Reason” event has occurred; (B)
Executive notifies the Company in writing of the occurrence of the Good Reason event within ninety
(90) days of the occurrence of such event; (C) Executive cooperates in good faith with the
Company’s efforts, for a period not less than thirty (30) days following such notice, to modify
Executive’s employment situation in a manner acceptable to Executive and Company; (D)
notwithstanding such efforts, one or more of the Good Reason events continues to exist and has not
been modified in a manner
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acceptable to Executive; and (E) Executive terminates his employment no later than sixty (60)
days after the end of the thirty-day cure period. If the Company cures the Good Reason event in a
manner acceptable to Executive during the thirty-day period, Good Reason shall be deemed not to
have occurred.
(f) Notice of Termination. Except for termination as specified in Subparagraph 4(a),
any termination of Executive’s employment by the Company or any such termination by Executive shall
be communicated by written Notice of Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(g) Date of Termination. “Date of Termination” shall mean: (i) if Executive’s
employment is terminated by his death, the date of his death; (ii) if Executive’s employment is
terminated on account of disability under Subparagraph 4(b) or by the Company for Cause under
Subparagraph 4(c), the date on which Notice of Termination is given; (iii) if Executive’s
employment is terminated by the Company under Subparagraph 4(d), thirty (30) days after the date on
which a Notice of Termination is given; and (iv) if Executive’s employment is terminated by
Executive under Subparagraph 4(e), thirty (30) days after the date on which a Notice of Termination
is given.
5. Compensation Upon Termination.
(a) Termination Generally. If Executive’s employment with the Company is terminated
for any reason during the Period of Employment, the Company shall pay or provide to Executive (or
to his authorized representative or estate) any earned but unpaid Base Salary, incentive
compensation earned but not yet paid, unpaid expense reimbursements, accrued but unused vacation
and any vested benefits Executive may have under any Employee Benefit Plan of the Company,
including without limitation any benefits that may accrue on Executive’s retirement from the
Company, to the extent applicable (the “Accrued Benefit”).
(b) Termination by the Company Without Cause or by Executive with Good Reason. If
Executive’s employment is terminated by the Company without Cause as provided in Subparagraph 4(d),
or Executive terminates his employment for Good Reason as provided in Subparagraph 4(e), then the
Company shall, through the Date of Termination, pay Executive his Accrued Benefit. The Company
shall within seven (7) days of the Date of Termination provide to Executive a general release of
claims in a form and manner satisfactory to the Company (the “Release”). If Executive signs the
Release and delivers it to Company within twenty-one (21) days of Executive’s receipt of the
Release and does not revoke it within seven (7) days thereafter:
(i) Company shall pay Executive an amount equal to one and one-half (11/2) times the sum
of Executive’s Base Salary and his Average Incentive Compensation (the “Severance Amount”).
The Severance Amount shall be paid out in substantially equal bi-weekly installments over
eighteen (18) months, in arrears beginning on the first payroll date after the Date of
Termination, or expiration of the seven-day revocation period for the Release, if later.
Solely for the purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), each bi-weekly payment is considered
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a separate payment. For purposes of this Agreement, “Average Incentive Compensation”
shall mean the average of the annual cash incentive compensation under Subparagraph 3(b)
received by Executive for the two (2) immediately preceding fiscal years. In no event shall
“Average Incentive Compensation” include any sign-on bonus, retention bonus or any other
special bonus. Notwithstanding the foregoing, if Executive breaches any of the provisions
contained in Paragraph 7 of this Agreement, all payments of the Severance Amount shall
immediately cease.
(ii) Subject to Executive’s copayment of premium amounts at the active employees’ rate,
continued participation in the Company’s group health, dental and vision program for
eighteen (18) months; provided, however, that the continuation of health benefits
under this Subparagraph shall reduce and count against Executive’s rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).
(iii) Anything in this Agreement to the contrary notwithstanding, if at the time of
Executive’s termination of employment, Executive is considered a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment or benefit that
Executive becomes entitled to under this Agreement is considered deferred compensation
subject to interest, penalties and additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable or benefit shall be provided prior to the date that is the earlier
of (A) six months after Executive’s separation from service, or (B) Executive’s death, and
the initial payment shall include a catch-up amount covering amounts that would otherwise
have been paid during the first six-month period but for the application of this
Subparagraph 5(b)(iii). The parties intend that this Agreement will be administered in
accordance with Section 409A of the Code. The parties agree that this Agreement may be
amended, as reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to preserve the
payments and benefits provided hereunder without additional cost to either party.
6. Change in Control Payment. The provisions of this Paragraph 6 set forth certain
terms of an agreement reached between Executive and the Company regarding Executive’s rights and
obligations upon the occurrence of a Change in Control of the Company. These provisions are
intended to assure and encourage in advance Executive’s continued attention and dedication to his
assigned duties and his objectivity during the pendency and after the occurrence of any such event.
These provisions shall apply in lieu of, and expressly supersede, the provisions of Subparagraph
5(b) regarding the amount of severance pay and benefits upon a termination of employment, if such
termination of employment occurs within twenty-four (24) months after the occurrence of the first
event constituting a Change in Control, provided that such first event occurs during the Period of
Employment. These provisions shall terminate and be of no further force or effect beginning
twenty-four (24) months after the occurrence of a Change in Control.
(a) A “Change in Control” shall be deemed to have occurred upon the occurrence of any one of
the following events:
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(i) any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together with
all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of
such Person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s then outstanding
securities having the right to vote in an election of the Board (“Voting
Securities”) (in such case other than as a result of an acquisition of securities
directly from the Company); or
(ii) a majority of the members of the Board is replaced during any twelve-month period
by directors whose appointment or election is not endorsed by a majority of the Board before
the date of such appointment or election; or
(iii) the consummation of (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more
than fifty percent (50%) of the voting shares of the company issuing cash or securities in
the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale
or other transfer (in one transaction or a series of transactions contemplated or arranged
by any party as a single plan) of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred
for purposes of the foregoing clause (i) solely as the result of an acquisition of
securities by the Company that, by reducing the number of shares of Voting Securities
outstanding, increases the proportionate number of shares of Voting Securities beneficially
owned by any person to fifty percent (50%) or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any additional shares of
Voting Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns fifty percent (50%) or more of the combined voting
power of all then outstanding Voting Securities, then a “Change in Control” shall be deemed
to have occurred for purposes of the foregoing clause (i).
(b) Effect of a Change in Control.
(i) If within twenty-four (24) months after a Change in Control occurs, the Executive’s
employment is terminated by the Company without Cause as provided in Subparagraph 4(d) or
the Executive terminates his employment for Good Reason as provided in Subparagraph 4(e),
then, the Company shall pay Executive a lump sum in cash equal to the sum of:
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(A) to the extent not theretofore paid, an amount equal to the Executive’s
Base Salary through the Date of Termination;
(B) an amount equal to the following formula: A x (B ÷ 365); where A equals
Executive’s Average Incentive Compensation and B equals the number of days in the
current calendar year through the Date of Termination; and
(C) an amount equal to two (2) times the sum of (I) Executive’s Base Salary
(or Executive’s Base Salary in effect immediately prior to the Change in Control, if
higher) plus (II) Executive’s Average Incentive Compensation; and
(ii) Subject to Executive’s copayment of premium amounts at the active employees’ rate,
Executive shall continue to participate in the Company’s group health, dental and vision
program for twenty-four (24) months; provided, however, that the continuation of
health benefits under this Section shall reduce and count against Executive’s rights under
COBRA.
(iii) Anything in this Agreement to the contrary notwithstanding, if at the time of
Executive’s separation from service within the meaning of Section 409A of the Code,
Executive is considered a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, and if any payment or benefit that Executive becomes entitled
to under this Agreement is considered deferred compensation subject to interest, penalties
and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable
or benefit shall be provided prior to the date that is the earlier of (A) six (6) months and
one day after Executive’s separation from service, or (B) Executive’s death. The parties
intend that this Agreement will be administered in accordance with Section 409A of the Code.
The parties agree that this Agreement may be amended, as reasonably requested by either
party, and as may be necessary to fully comply with Section 409A of the Code and all related
rules and regulations in order to preserve the payments and benefits provided hereunder
without additional cost to either party.
(c) Gross-Up Payment.
(i) Anything in this Agreement to the contrary notwithstanding, in the event it shall
be determined that any compensation, payment or distribution by the Company to or for the
benefit of Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the “Severance Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) such that the net
amount retained by Executive, after deduction of any Excise Tax on the Severance Payments,
any Federal, state, and local income tax, employment tax and Excise Tax upon the payment
provided by this Section, and any interest and/or penalties assessed with respect to such
Excise Tax, shall be equal to the Severance Payments.
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(ii) Subject to the provisions of Subparagraph 6(c)(iii) below, all determinations
required to be made under this Subparagraph 6(c)(ii), including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by a nationally
recognized accounting firm selected by the Company (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and the Executive within
fifteen (15) business days of the Date of Termination, if applicable, or at such earlier
time as is reasonably requested by the Company or Executive. For purposes of determining
the amount of the Gross-Up Payment, Executive shall be deemed to pay Federal income taxes at
the highest marginal rate of Federal income taxation applicable to individuals for the
calendar year in which the Gross-Up Payment is to be made, and state and local income taxes
at the highest marginal rates of individual taxation in the state and locality of
Executive’s residence on the Date of Termination, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local taxes. The
initial Gross-Up Payment, if any, as determined pursuant to this Subparagraph 6(c)(ii),
shall be paid to the taxing authorities as withholding taxes on behalf of Executive at such
time or times when the Excise Tax is due. Any determination by the Accounting Firm shall be
binding upon the Company and Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (an “Underpayment”). In the event that the Company exhausts
its remedies pursuant to Subparagraph 6(c)(iii) below and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred, consistent with the calculations required to be made
hereunder, and any such Underpayment, and any interest and penalties imposed on the
Underpayment and required to be paid by Executive in connection with the proceedings
described in Subparagraph 6(c)(iii) below, shall be promptly paid by the Company to the
taxing authorities for the benefit of Executive.
(iii) Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-up Payment. Such notification shall be given as soon as practicable but no later than
ten (10) business days after Executive knows of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the thirty-day period
following the date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period that it desires
to contest such claim, provided that the Company has set aside adequate reserves to cover
the Underpayment and any interest and penalties thereon that may accrue, Executive shall:
(A) give the Company any information reasonably requested by the Company
relating to such claim,
(B) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including,
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without limitation, accepting legal representation with respect to such claim
by an attorney selected by the Company,
(C) cooperate with the Company in good faith in order to effectively contest
such claim, and
(D) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive harmless, on
an after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Subparagraph 6(c)(iii), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and xxx for
a refund, the Company shall advance the amount of such payment to Executive on an
interest-free basis (to the extent not prohibited by applicable law) and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issues raised by the Internal Revenue Service or any other taxing authority.
(iv) If, after the receipt by Executive of an amount advanced by the Company pursuant
to Subparagraph 6(c)(iii), Executive becomes entitled to receive any refund with respect to
such claim, Executive shall (subject to the Company’s complying with the requirements of
Subparagraph 6(c)(iii)) promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Executive of an amount advanced by the Company pursuant to Subparagraph
6(c)(iii), a determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall
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not be required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
7. Confidential Information, Nonsolicitation and Cooperation.
(a) Confidential Information. As used in this Agreement, “Confidential Information”
means information belonging to the Company which is of value to the Company in the course of
conducting its business and the disclosure of which could result in a competitive or other
disadvantage to the Company. Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other intellectual property;
trade secrets; know-how; designs, processes or formulae; software; market or sales information or
plans; customer lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been discussed or considered
by the management of the Company. Confidential Information includes information developed by
Executive in the course of Executive’s employment by the Company, as well as other information to
which Executive may have access in connection with Executive’s employment. Confidential
Information also includes the confidential information of others with which the Company has a
business relationship. Notwithstanding the foregoing, Confidential Information does not include
information in the public domain, unless due to breach of Executive’s duties under Subparagraph
7(b).
(b) Confidentiality. Executive understands and agrees that Executive’s employment
creates a relationship of confidence and trust between Executive and the Company with respect to
all Confidential Information. At all times, both during Executive’s employment with the Company
and after its termination, Executive will keep in confidence and trust all such Confidential
Information, and will not use or disclose any such Confidential Information without the written
consent of the Company, except as may be necessary in the ordinary course of performing Executive’s
duties to the Company.
(c) Documents, Records, etc. All documents, records, data, apparatus, equipment and
other physical property, whether or not pertaining to Confidential Information, which are furnished
to Executive by the Company or are produced by Executive in connection with Executive’s employment
will be and remain the sole property of the Company. Executive will return to the Company all such
materials and property as and when requested by the Company. In any event, Executive will return
all such materials and property immediately upon termination of Executive’s employment for any
reason. Executive will not retain with Executive any such material or property or any copies
thereof after such termination.
(d) Nonsolicitation. During the Period of Employment and for six (6) months
thereafter, Executive (i) will refrain from directly or indirectly recruiting or otherwise
soliciting, inducing or influencing any person to leave employment with the Company (other than
terminations of employment of subordinate employees undertaken in the course of Executive’s
employment with the Company); and (ii) will refrain from soliciting or encouraging any customer or
supplier to terminate or otherwise modify adversely its business relationship with the Company.
However, nothing in this Subparagraph 7(d) will prohibit Executive from indirectly recruiting,
soliciting, inducing or influencing a person to leave employment with the Company through the use
of advertisements in trade journals and the like or from discussing
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employment opportunities with such employees to the extent such employees contact Executive
first. Executive understands that the restrictions set forth in this Subparagraph 7(d) are
intended to protect the Company’s interest in its Confidential Information and established
employee, customer and supplier relationships and goodwill, and agrees that such restrictions are
reasonable and appropriate for this purpose.
(e) Litigation and Regulatory Cooperation. During and after Executive’s employment,
Executive shall cooperate fully with the Company in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future against or on behalf of the Company
which relate to events or occurrences that transpired while Executive was employed by the Company.
Executive’s full cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery or trial and to act as a
witness on behalf of the Company at mutually convenient times. During and after Executive’s
employment, Executive also shall cooperate fully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while Executive was
employed by the Company. The Company shall reimburse Executive for any reasonable out-of-pocket
expenses incurred in connection with Executive’s performance of obligations pursuant to this
Subparagraph 7(e).
(f) Injunction. Executive agrees that it would be difficult to measure any damages
caused to the Company which might result from any breach by Executive of the promises set forth in
this Paragraph 7, and that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, subject to Paragraph 9 of this Agreement, Executive agrees that if Executive
breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in
addition to all other remedies that it may have, to an injunction or other appropriate equitable
relief to restrain any such breach without showing or proving any actual damage to the Company.
8. Arbitration of Disputes. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof or otherwise arising out of Executive’s employment or the
termination of that employment (including, without limitation, any claims of unlawful employment
discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such
an agreement, under the auspices of the American Arbitration Association (“AAA”) in Boston,
Massachusetts in accordance with the Employment Dispute Resolution Rules of the AAA, including, but
not limited to, the rules and procedures applicable to the selection of arbitrators. In the event
that any person or entity other than Executive or the Company may be a party with regard to any
such controversy or claim, such controversy or claim shall be submitted to arbitration subject to
such other person or entity’s agreement. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. This Paragraph 8 shall be specifically
enforceable. Notwithstanding the foregoing, this Paragraph 8 shall not preclude either party from
pursuing a court action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate; provided that any
other relief shall be pursued through an arbitration proceeding pursuant to this Paragraph 8.
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9. Consent to Jurisdiction. To the extent that any court action is permitted
consistent with or to enforce Paragraphs 7 or 8 of this Agreement, the parties hereby consent to
the jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts. Accordingly, with respect to any such court
action, Executive (i) submits to the personal jurisdiction of such courts; (ii) consents to service
of process; and (iii) waives any other requirement (whether imposed by statute, rule of court, or
otherwise) with respect to personal jurisdiction or service of process.
10. Integration. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements between the parties
with respect to any related subject matter, including without limitation the Letter Agreement and
the Change in Control Agreement. Notwithstanding the foregoing, except to the extent in conflict
therewith, this Agreement does not supersede either the Employee Agreement with respect to
Inventions and Proprietary Information dated January 3, 2001 between Executive and the Company or
the Covenant Not to Compete dated January 3, 2001 between Executive and the Company.
11. Assignment; Successors and Assigns. Neither the Company nor Executive may make
any assignment of this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; provided that the Company may assign its rights under
this Agreement without the consent of Executive in the event that the Company shall effect a
reorganization, consolidate with or merge into any other corporation, partnership, organization or
other entity, or transfer all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity. This Agreement shall inure to the benefit
of and be binding upon the Company and Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
12. Enforceability. If any portion or provision of this Agreement (including, without
limitation, any portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this
Agreement, or the application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion
and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
13. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the performance of
any term or obligation of this Agreement, or the waiver by any party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
14. Notices. Any notices, requests, demands and other communications provided for by
this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally
recognized overnight courier service or by registered or certified mail, postage prepaid, return
receipt requested, to Executive at the last address Executive has filed in writing with the Company
or, in the case of the Company, at its main offices, attention of the General Counsel,
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and shall be effective on the date of delivery in person or by courier or three (3) days after
the date mailed.
15. Amendment. This Agreement may be amended or modified only by a written instrument
referencing this Agreement signed by Executive and by a duly authorized representative of the
Company.
16. Legal Expenses. The Company agrees to reimburse Executive, to the full extent
permitted by law, for all costs and expenses (including, without limitation, reasonable attorneys’
fees) which Executive may reasonably incur as a result of any contest of the validity or
enforceability of, or the Company’s liability under, any provision of this Agreement, plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that such payment shall be made only if the Executive prevails on at
least one material issue.
17. Governing Law. This is a Massachusetts contract and shall be construed under and
be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect
to the conflict of laws principles of such Commonwealth. With respect to any disputes concerning
Federal law, such disputes shall be determined in accordance with the law as it would be
interpreted and applied by the United States Court of Appeals for the First Circuit.
18. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
| ALKERMES, INC. |
||||
| By: | /s/ Xxxxxxxx Xxxxxx | |||
| Its: | VP, Human Resources | |||
| /s/ Xxxxx X. Xxxxxxxx | |||
| Xxxxx X. Xxxxxxxx |
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