EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 6th
day of May, 2003 between Idenix Pharmaceuticals Inc., a corporation domesticated
under the laws of the State of Delaware (together with its successors and
assigns, the "Company") and Xx. Xxxx-Xxxxxx Xxxxxxxxxx (the "Employee").
WHEREAS, the Employee is currently serving as the Chairman of
the Board of Directors of the Company (the "Board") and as Chief Executive
Officer of the Company and the Company wishes the Employee to continue in such
positions;
WHEREAS, the Employee is a shareholder of the Company and a
holder of options to purchase shares of the Company's capital stock;
WHEREAS, Novartis Pharma AG, a corporation organized under the
laws of Switzerland, has entered into a Stock Purchase Agreement with the
Company, dated as of March 18, 2003 (the "Purchase Agreement") pursuant to which
Novartis Pharma AG will acquire a majority of the fully diluted outstanding
shares of the Company from the shareholders and option holders of the Company,
including the Employee; and
WHEREAS, the consummation of the transactions contemplated by
the Purchase Agreement is conditioned upon the Employee entering into an
employment agreement upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein and in the Purchase Agreement, the Company and
the Employee (individually, a "Party" and, together, the "Parties") hereto agree
as follows:
1. EMPLOYMENT PERIOD
Commencing upon the closing date under the Purchase Agreement
(the "Effective Date"), the Company shall employ the Employee, and the Employee
shall serve the Company, under the terms of this Agreement for a term of five
(5) years ending on fifth anniversary of the Effective Date (the "Term"),
provided, however, that the Term shall automatically renew for successive
one-year terms, unless either Party gives written notice to the other party not
less than 90 calendar days prior to the expiration of any such term that such
Party is electing not to so extend the Term. Notwithstanding the foregoing, the
Employee's employment hereunder may be terminated at any time, subject to
Section 4 and Section 5 hereof, following the
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Effective Date. The period of time during which the Employee is employed
hereunder shall be referred to herein as the "Employment Period."
2. DUTIES AND STATUS; PLACE OF EMPLOYMENT
During the Employment Period, the Employee shall serve as the
Chairman of the Board and as Chief Executive Officer of the Company and shall be
responsible for the general management of the affairs of the Company. As
Chairman and Chief Executive Officer, the Employee shall have all authorities,
duties and responsibilities customarily associated with such positions and shall
not be assigned duties that are materially inconsistent with his ability to
discharge the foregoing duties and responsibilities. The Employee in carrying
out his duties under this Agreement shall report solely and directly to the
Board. During the Employment Period, the Employee agrees to devote substantially
all of the Employee's business time, efforts and skills to the performance of
the Employee's duties and responsibilities under this Agreement, provided,
however, that the Employee shall be permitted to (A) serve on the boards of
directors of a reasonable number of other corporations (with the concurrence of
the Board), (B) serve on the boards of a reasonable number of trade associations
and/or charitable organizations, (C) engage in charitable activities and
community affairs and (D) manage his personal and family investments and
affairs, provided that such activities do not materially interfere with the
effective discharge of the Employee's duties and responsibilities hereunder.
During the Employment Period, the Employee's principal place of employment shall
be in the Boston, Massachusetts metropolitan area.
3. COMPENSATION AND BENEFITS
A. Salary. During the Employment Period, the Company shall pay to the
Employee, as compensation for the performance of the Employee's duties and
obligations under this Agreement, an annual base salary of $381,600 ("Base
Salary"), payable in accordance with the normal payroll practices of the
Company. The Base Salary shall be reviewed annually for additional increases, if
any, which in the sole discretion of the Board are merited or necessary to
adjust for cost of living increases or to retain a competitive Base Salary for
the Employee. After any such increase, the term "Base Salary" as utilized in
this Agreement shall thereafter refer to the increased amount. Base Salary shall
not be reduced at any time without the express prior written consent of the
Employee.
B. Annual Bonus.
(i) During the Employment Period, the Employee shall be
eligible for an annual target bonus equal to no less than 40% of the
Employee's Base Salary (the "Target Bonus"), based upon criteria
established by the Board in consultation with senior management of the
Company and payable in such
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amount if the relevant criteria are met. If such performance goals are
exceeded, the Employee shall receive a larger amount of up to 200% of
the annual target bonus opportunity. Any annual bonus shall be payable
in accordance with the terms of the bonus program established by the
Board, provided that any bonus earned shall be paid no later than 90
calendar days after the end of the applicable performance period. The
Employee's target bonus opportunity as a percentage of Base Salary may
be reviewed periodically for any increase in the discretion of the
Board. After any such increase, the term "Target Bonus" as utilized in
this Agreement shall thereafter refer to the increased amount. The
Target Bonus shall not be reduced at any time without the express prior
written consent of the Employee.
(ii) In addition to any bonus due pursuant to Section
3.B(i) hereof, on or promptly following the Effective Date, the Company
shall pay the Employee a special cash incentive bonus equal to
$400,000.
C. Equity.
(i) Waiver. The Employee hereby waives the right under
any employment agreement, equity compensation plan, award agreement or
any other plan or agreement with respect to the Company to any
acceleration of vesting (or lapsing of restrictions) of any options to
purchase shares of the Company's capital stock, any restricted shares
of the Company's capital stock or any other equity-based awards of the
Company held by the Employee on the date hereof (together, the "Equity
Awards") that would otherwise be triggered, either directly or
indirectly, by the Purchase Agreement or the transactions contemplated
by the Purchase Agreement.
(ii) Continued Vesting. Subject to paragraph (i) above,
any unvested or restricted Equity Awards will continue to vest (or have
restrictions lapse) in accordance with the terms of this Agreement or
the applicable plan and award agreement, including any provision
providing for acceleration of vesting (or lapsing of restrictions) upon
any "change in control" of the Company (as defined in the applicable
plan or award agreement) that may occur following the consummation of
the transactions contemplated by the Purchase Agreement.
(iii) Equity Holding Requirement. The Employee agrees not
to sell, transfer, pledge or otherwise dispose of any interest in more
than 50% of the "Holding Period Shares" until the fifth anniversary of
the Effective Date. For purposes of this Agreement, "Holding Period
Shares" shall mean the sum of (i) the unrestricted shares of the
Company's capital stock owned by the Employee on the date hereof and
(ii) any shares acquired upon the exercise or vesting of the Equity
Awards (other than unrestricted shares included in clause
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(i)). The foregoing restriction shall not apply in the case of (i)
Disability (as defined below) of the Employee, (ii) the death of the
Employee, (iii) dispositions to a family member, family trust or
family-controlled entity for estate planning purposes of the Employee,
(iv) termination by the Company for any reason other than Cause, (v)
termination by the Employee for Good Reason or (vi) dispositions
otherwise specifically provided for in the Stockholders' Agreement to
be entered into by and among Idenix Pharmaceuticals, Inc., the
Preference Holders, and Other Holders named therein, dated May _, 2003
(the "Stockholders' Agreement"), in each such case, whether before or
following a Change in Control (as defined in Section 6.C hereof).
(iv) New Equity Awards. The Employee shall be eligible to
participate in any long-term incentive award program of the Company,
including, but not limited to, the Company's 1998 Equity Incentive
Plan, as amended from time to time, and any successor thereto. In
addition, the Employee shall have an annual performance target equity
opportunity to be awarded an option to purchase 100,000 shares of the
Company's stock (with such award vesting over 5 years, as to 25% of the
shares on the first anniversary on the date of grant and as to the
balance on a ratable basis over the remaining 48 months). The actual
number of shares granted under such option shall be subject to annual
approval by the Company's Board of Directors and conditioned upon the
achievement of annual performance targets established by the Board.
D. Employee Benefits. During the Employment Period, the Employee shall
be entitled to participate in all of the employee and fringe benefit plans of
the Company in effect during the Employment Period on the same basis as provided
generally to other senior-level executives of the Company, subject to, and on a
basis consistent with, the participation requirements and other terms and
conditions of such plans. The Employee shall be entitled to four (4) weeks
vacation per calendar year, subject to such carry-over policy as is approved by
the Board. In all events, the Employee shall be entitled to (i) Company-paid
life insurance (or self-insurance by the Company) with a death benefit amount of
$2 million and (ii) Company-paid disability insurance (or self-insurance by the
Company) with an aggregate benefit amount of $2 million, with either policy
being payable in a lump-sum or as an annuity.
E. Business Expenses. During the Employment Period, the Company shall
promptly reimburse the Employee for all appropriately documented, reasonable
business expenses incurred by the Employee in the performance of the Employee's
duties under this Agreement, in accordance with the Company's policies.
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4. TERMINATION OF EMPLOYMENT
A. Termination by the Company. The Company shall have the right to
terminate the Employment Period and the Employee's employment hereunder for any
reason at any time, including for any reason that does not constitute Cause,
subject to the consequences of such termination as provided in this Agreement.
For purposes of this Agreement, and subject to the Employee's opportunity to
cure as provided below, the Board shall have "Cause" to terminate the Employee's
employment hereunder if such termination shall be the result of: (i) the
Employee's willful and repeated failure to substantially perform his duties
hereunder after written notice from the Board describing such failure; (ii) the
Employee's willful commission of, or willful participation in, an act of
material fraud or embezzlement against the Company or its affiliates; (iii) the
Employee's willful and material violation of Section 7 hereof, which is not
corrected within 30 calendar days after receipt of written notice from the
Company stating the actions constituting such alleged violation and the steps
the Employee must take to correct such alleged violations; or (iv) the
Employee's conviction of, or plea of nolo contendere to, a charge of commission
of a felony. For purposes of this definition of "Cause," no act, or failure to
act, on the part of the Employee shall be considered "willful" unless it is
done, or omitted to be done, by the Employee in bad faith or without reasonable
belief that the Employee's action or omission was in the best interests of the
Company.
B. Termination by the Employee. The Employee shall have the right to
terminate the Employment Period for any reason at any time, including for any
reason that does not constitute Good Reason, subject to the consequences of such
termination and the Employee's covenants as provided in this Agreement and such
termination shall not be deemed to be a breach of this Agreement. For purposes
of this Agreement, and subject to the Company's opportunity to cure as provided
below, the Employee shall have "Good Reason" to terminate the Employee's
employment hereunder if such termination shall be the result of the following,
without the Employee's prior written consent: (i) any adverse change in the
Employee's titles; (ii) a reduction in the Employee's Base Salary or the target
equity amount or target bonus percentage; (iii) the failure to elect or reelect
the Employee to the positions of Chairman of the Board and Chief Executive
Officer of the Company or as a member of the Board or the removal of the
Employee from such positions; (iv) a change in reporting structure such that the
Employee reports to someone other than the Board; (v) a material diminution in
the Employee's authority, duties or responsibilities as set forth in Section 2
hereof; (vi) a relocation of the Employee's current primary place of employment
to a location more than 40 miles from the Employee's current primary place of
employment; (vii) any other material breach by the Company of this Agreement,
which breach adversely affects the Employee and is not promptly cured after the
Employee's delivery of a written notice of such breach to the Company; (viii)
any purported termination of the Employee's employment by the Company or the
Board that is not effected in
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accordance with the applicable provisions of this Agreement; or (ix) the failure
of the Company to obtain the assumption in writing of its obligations under this
Agreement by any successor to all or substantially all of the assets of the
Company within 15 calendar days after a merger, consolidation, sale or similar
transaction.
C. Notice and Opportunity to Cure. Notwithstanding the foregoing, it
shall be a condition precedent to the Company's right to terminate the
Employee's employment for Cause and the Employee's right to terminate the
Employee's employment for Good Reason that (1) the party (which in the case of a
termination for Cause shall be the Board) seeking the termination shall first
have given the other party written notice stating with reasonable specificity
the reason for the termination ("breach"), (2) if such breach is susceptible of
cure or remedy, a period of 30 calendar days from and after the giving of such
notice shall have elapsed without the breaching party having effectively cured
or remedied such breach during such 30-day period and (3) in the case of a
termination for Cause, if the Employee fails to cure such neglect or conduct
within such 30-day period, the Employee has an opportunity to be heard before
the full Board and, after such hearing, there is a vote of three-quarters (3/4)
of the Board (not including the Employee) to terminate him for Cause.
D. Termination Upon Death or Disability. The Employment Period and the
Employee's employment hereunder shall be terminated by the death of the
Employee. The Employment Period and the Employee's employment hereunder may be
terminated by the Company or the Employee if the Employee shall be rendered
incapable of performing the Employee's duties to the Company by reason of any
medically determined physical or mental impairment that can reasonably be
expected to result in death or has lasted for a period of six (6) or more
consecutive months from the first date of the Employee's absence due to the
disability (a "Disability").
E. Expiration of Term. The Employment Period shall terminate upon the
expiration of the Term. Any continuation of the Employee's employment beyond the
expiration of the original Term or any extended Term shall not be subject to the
terms and conditions of this Agreement, except that the "Inventions Agreement"
set forth as Exhibit A shall survive the Term and the expiration of the
Employment Period, and Sections 7 and 9 hereof shall survive in accordance with
their terms for the periods specified therein.
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5. CONSEQUENCES OF TERMINATION
A. Without Cause; For Good Reason. In the event of a termination of the
Employee's employment during the Employment Period by the Company other than for
Cause or by the Employee for Good Reason (a "Covered Termination"), the Company
shall provide the Employee with the following:
(i) payment of a cash lump-sum amount equal to the sum of
two (2) times (x) the Employee's Base Salary and (y) the greater of (1)
Target Bonus or (2) the bonus earned by the Employee for the year
preceding the year in which termination of employment occurs, payable
as soon as practicable following the termination of employment and the
expiration of the revocation period in the Employee Release (as defined
in Section 8 hereof);
(ii) for the year in which termination occurs, a pro-rata
Target Bonus determined by multiplying the Target Bonus by a fraction,
the numerator of which is the number of days that the Employee was
employed in the applicable performance period and the denominator of
which shall be the number of days in the applicable performance period
("Pro-Rata Target Bonus"), payable as soon as practicable following the
termination of employment and the expiration of the revocation period
in the Employee Release;
(iii) for the year in which termination occurs, a pro-rata
target equity award determined by multiplying the target equity award
set forth in section 3.C(iv) hereof by a fraction, the numerator of
which is the number of days that the Employee was employed in the
applicable performance period and the denominator of which shall be the
number of days in the applicable performance period ("Pro-Rata Equity
Award") with such award being granted as soon as practicable following
the date of termination and the expiration of the revocation period in
the Employee Release;
(iv) immediate vesting and exercisability of all
outstanding equity awards, including any Equity Awards and the Pro-Rata
Equity Award, upon a Covered Termination, with any equity awards that
are stock options remaining exercisable for 24 months following the
date of a Covered Termination (or until the expiration of the term of
the option, if earlier);
(v) continued coverage for the Employee and the
Employee's eligible dependents under all group medical, dental and life
insurance coverages that are provided to employees of the Company
generally for a period of 24 months following a Covered Termination,
with such coverage to be at the Company's cost (subject to standard
employee contribution requirements). Any such coverage shall be
discontinued in the event that the Employee obtains substitute coverage
from subsequent employment or service during such 24-month period; and
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(vi) payment of (x) any earned but unpaid amounts as of
the date of termination, including, but not limited to, Base Salary
through the date of termination, reimbursement of business expenses and
any incentive awards earned for performance periods that have ended,
(y) any compensation previously deferred by the Employee together with
any vested Company matching contributions and (z) any accrued but
unpaid vacation days under Company policy through the date of
termination ("Accrued Obligations"), payable as soon as practicable
following such termination.
B. Death or Disability. In the event the Employee's employment with the
Company is terminated on account of death or Disability during the Employment
Period, the Company shall provide the Employee (or his estate or legal
representative, as the case may be) with such death or disability benefits as
are provided under the death and disability plans that are available to
employees of the Company generally on the date of termination. In addition, the
Employee (or his estate or legal representative, as the case may be) shall be
entitled to:
(i) in the case of Disability, payment of 60% of Base
Salary per year until the Employee reaches age 65 (with such payment
obligation offset by any amounts the Employee receives from any
insurance plan or policy of the Company);
(ii) the Pro-Rata Target Bonus, payable as soon as
practicable following the date of termination and, if applicable, the
expiration of the revocation period in the Employee Release;
(iii) granting of the Pro-Rata Equity Award as soon as
practicable following the date of termination and, if applicable, the
expiration of the revocation period in the Employee Release;
(iv) immediate vesting and exercisability of all
outstanding equity awards, including any Equity Awards and the Pro-Rata
Equity Award, upon such termination of employment, with any equity
awards that are stock options remaining exercisable for 24 months
following the date of termination (or until the expiration of the term
of the option, if earlier);
(v) continued coverage for the Employee (in the case of
Disability) and the Employee's eligible dependents under all group
medical, dental and life insurance coverages that are provided to
employees of the Company generally for a period of 12 months following
such termination, with such coverage to be at the Company's cost
(subject to standard employee contribution requirements). Any such
coverage shall be discontinued in the event that the Employee obtains
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substitute coverage from subsequent employment or service during such
12-month period; and
(vi) payment of Accrued Obligations as soon as practicable
following the termination of employment.
C. Other Termination. In the event that the Employee's employment with
the Company is terminated during the Employment Period (i) by the Company for
Cause or (ii) by the Employee other than for Good Reason or Disability, the
Employee shall not be entitled to any further payments, compensation or other
benefits under this Agreement, except the Employee shall be entitled to (i)
payment of Accrued Obligations as soon as practicable following such termination
and (ii) treatment of any outstanding equity awards in accordance with the
applicable plan or award agreement.
D. Other Benefits. The benefits payable to the Employee under this
Agreement are not in lieu of any benefits payable or entitlements due under any
applicable plan, program, policy or arrangement of, or other agreement with, the
Company or any affiliate, and upon termination the Employee shall receive such
benefits, payments or entitlements, if any, as he may be entitled to receive
pursuant to the terms of such plans, programs, policies, arrangements or other
agreements. Except for the obligations of the Company provided by the foregoing
and this Section 5, the Company shall have no further severance obligations to
the Employee or the Employee's beneficiaries upon the Employee's termination of
employment.
E. No Mitigation or Offset. The Employee shall have no obligation to
mitigate the damages provided by this Section 5 by seeking substitute employment
or otherwise and, except as provided in Section 5.A(v) and Section 5.B(v)
hereof, there shall be no offset of the payments or benefits provided in this
Section 5. In addition, except as provided in Section 7.E hereof, the Company's
obligation to make any payment pursuant to, or otherwise perform its obligations
under, this Agreement shall not be affected by any claim or other right the
Company or any affiliate may have against the Employee for any reason.
6. CHANGE IN CONTROL PROTECTIONS
A. Termination Within One Year After a Change in Control. If the
Employee's employment is terminated by the Company without Cause or the Employee
terminates his employment for Good Reason, in each case within one (1) year
following a Change in Control and during the Term, in addition to the payments,
benefits and entitlements provided pursuant to Section 5.A hereof, the Employee
shall also be entitled to an additional lump-sum amount equal to the sum of (x)
the Employee's Base Salary and (y) the greater of (1) Target Bonus or (2) the
bonus earned by the Employee for the year preceding the year in which
termination of employment occurs, payable as soon as
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practicable following the termination of employment and the expiration of the
revocation period in the Employee Release.
B. Excise Tax Provision. In the event that any payment, entitlement or
benefit made or provided to or for the benefit of the Employee in connection
with this Agreement, pursuant to any applicable plan, policy, program or
arrangement, or other agreement with the Company or any affiliate or in
connection with the Employee's employment with the Company or any affiliate or
the termination thereof (a "Payment") is determined to be subject to any excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (or
any successor to such section) or under any similar Federal or state law (an
"Excise Tax"), the Company shall pay to the Employee, prior to the time any
Excise Tax is due in respect to such Payment (through withholding or otherwise),
an additional amount (the "Gross-Up Payment") which, after the imposition of all
income, employment, excise and other taxes thereon, is equal to the sum of (i)
the Excise Tax on such Payments plus (ii) any penalty and interest assessments
associated with such excise Tax. The amount and timing of any payment shall
promptly be determined by an independent accounting firm selected by the Parties
and paid for by the Company. Any Gross-Up Payment shall be paid by the Company
to the Employee within five (5) calendar days of the receipt of the accounting
form's determination.
C. Definition of Change in Control. For purposes of Section 3 hereof
and this Section 6, the term "Change in Control" shall mean:
(i) any "person," as such term is used in Sections
3(a)(9) and 13(d) of the Securities Exchange Act of 1934, becomes
a "beneficial owner," as such term is used in Rule 13d-3
promulgated under that act, of fifty percent (50%) or more of the
Voting Stock of the Company, or Novartis Pharma AG disposes of its
entire interest in the Company's Voting Stock (except in
connection with an initial public offering of the Voting Stock);
(ii) the Company adopts any plan of liquidation providing
for the distribution of all or substantially all of its assets;
(iii) all or substantially all of the assets or business of
the Company is disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Company
immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, at least
fifty percent (50%) of the Voting Stock or other ownership
interests of the entity or entities, if any, that succeed to the
business of the Company); or
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(iv) the Company combines with another company and is the
surviving corporation but, immediately after the combination, the
shareholders of the Company immediately prior to the combination
hold, directly or indirectly, fifty percent (50%) or less of the
Voting Stock of the combined company (there being excluded from
the number of shares held by such shareholders, but not from the
Voting Stock of the combined company, any shares received by
affiliates of such other company in exchange for stock of such
other company).
For purposes of this definition of "Change in Control" the "Company"
shall include any entity that succeeds to all or substantially all of the
business of the Company and "Voting Stock" shall mean securities of any class or
classes having general voting power under ordinary circumstances, in the absence
of contingencies, to elect the directors of a corporation.
7. RESTRICTIVE COVENANTS
A. Inventions. The Employee agrees to sign and honor an "Inventions
Agreement" in the form attached hereto as Exhibit A.
B. Nonsolicitation of Employees. During the Restricted Period (as
defined in Section 7.D below), the Employee shall not, without the express prior
written approval of the Company, (i) directly or indirectly, knowingly solicit
any employee of the Company or any of its affiliates (or any employee who was
employed by the Company or any of its affiliates at any time within six (6)
months prior to the date the Employee seeks to solicit such person ("Former
Employee")) to leave the employ of the Company or its affiliates, as the case
may be.
C. Nonsolicitation of Customers. During the Restricted Period, the
Employee agrees that, other than in the ordinary course of business, he shall
not, without the express prior written approval of the Company, knowingly
solicit, recruit or encourage any customer of the Company or any of its
affiliates who was a customer at, or was a customer within the six (6)-month
period preceding, the date of the Employee's termination of employment to reduce
or cease its business with the Company or any such affiliate.
D. Noncompetition. In consideration of the consummation of the
transactions contemplated by the Purchase Agreement and in consideration of the
continued employment of the Employee by the Company under the terms of this
Agreement, the Employee shall not, during the Restricted Period, without the
express written approval of the Company, other than in the ordinary course of
performing his duties hereunder, engage in a "Competitive Business," directly or
indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or in any
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relationship or capacity, in any geographic location in which the Company or any
of its Affiliates is engaged in business. Anything to the contrary
notwithstanding, it shall not be a violation of this Section 7.D for the
Employee to (i) own or acquire up to two percent (2%) of the outstanding equity
securities (measured by value) of any entity, (ii) serve as a member of the
board of directors or as a member of an advisory committee of any entity on
which Employee was serving prior to the date of termination of his employment or
of any entity which is not engaged in a Competitive Business or (iii) provide
services to a subsidiary, division or affiliate of a Competitive Business if
such subsidiary, division or affiliate is not itself engaged in a Competitive
Business and the Employee does not provide services to, or have any
responsibilities regarding, the Competitive Business.
For purposes of this Agreement, the term "Competitive Business" shall
mean a commercial, for profit entity that discovers, develops and commercializes
therapeutics for the treatment of human viral diseases in the same geographic
area that the therapeutics for the treatment of human viral diseases are
discovered, developed, marketed and commercialized by the Company or any of its
subsidiaries or affiliates. For purposes hereof, the "Restricted Period" shall
be the Employment Period and a period of two (2) years following the termination
of the Employment Period for any reason.
E. Enforcement. The Employee acknowledges that if he breaches any
provision of this Section 7, the Company will suffer irreparable injury. It is
therefore agreed that the Company shall have the right, if permitted by a court
of the applicable jurisdiction, to enjoin any such breach, without posting any
bond. The Employee hereby waives the adequacy of a remedy at law as a defense to
such relief. The existence of this right to injunctive, or other equitable
relief, shall not limit any other rights or remedies which the Company may have
at law or in equity including, without limitation, the right to monetary,
compensatory and punitive damages. The Employee acknowledges and agrees that the
provisions of this Section 7 are reasonable and necessary for the successful
operation of the Company and was required by the Company as condition of the
Purchase Agreement. In the event a court of competent jurisdiction determines
that the Employee has breached the Employee's obligations in any material
respect under this Section 7 (other than through the issuance of an injunction
determined on the merits), the Company, in addition to pursuing all available
remedies under this Agreement, at law or otherwise, and without limiting its
right to pursue the same, shall be entitled to cease all payments due to the
Employee under this Agreement as of the date of such determination.
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8. WAIVER
All payments and benefits provided by Section 5.A hereof are
conditioned upon the Employee executing and honoring a release of claims in
favor of the Company following the Employee's termination of employment in a
form attached hereto as Exhibit B (the "Employee Release").
9. DISPUTE RESOLUTION
Except as otherwise provided in Section 7.E hereof, any
controversy, dispute or claim arising out of or relating to this Agreement shall
be resolved by final and binding arbitration, to be held in Boston,
Massachusetts, in accordance with the Commercial Arbitration Rules (and not the
National Rules for the Resolution of Employment Disputes) of the American
Arbitration Association and this Section 9. Judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Neither Party shall be liable for punitive or exemplary damages.
10. WITHHOLDING OF TAXES
All payments required to be made by the Company to the
Employee under this Agreement shall be subject to the withholding of such
amounts relating to income tax, employment tax and such other taxes and
withholdings as the Company may reasonably determine it should withhold pursuant
to any applicable U.S. Federal, state or local law or regulation.
11. NOTICE
All notices, requests and other communications pursuant to
this Agreement shall be in writing and shall be deemed to have been duly given,
if delivered in person or by courier, sent by express, registered or certified
mail, postage prepaid, or sent by facsimile transmission, addressed to the
Employee at the Employee's personal residence as reflected in the Company's
records, and to the Company at 000 XxxxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000. Either party may, by written notice to the other in accordance herewith,
change the address to which notices to such party are to be delivered or mailed.
12. GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of law principles thereof.
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13. WAIVER OF BREACH
Any waiver of any breach of this Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on the
part either of the Employee or of the Company. Any waiver to be effective must
be in writing and signed by the Party against whom it is being enforced (either
the Employee or an authorized officer of the Company, as the case may be) and
must specifically refer to the provision of this Agreement which is being
waived.
14. NON-ASSIGNMENT; SUCCESSORS
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs (in the case of the
Employee) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
other disposition of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. No rights or
obligations of the Employee under this Agreement may be assigned or transferred
by the Employee other than his accrued rights to compensation and benefits,
which may be transferred only by will or operation of law, except as provided in
this Section 14 or in an applicable plan, program, grant or agreement of the
Company or any affiliate. In the event of the Employee's death or a judicial
determination of his incompetence, references in this Agreement to the Employee
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
15. SEVERABILITY
If any provision of this Agreement is determined by a court of
competent jurisdiction to be not enforceable in the manner set forth in this
Agreement, the Employee and the Company agree that it is the intention of the
parties that such provision should be enforceable to the maximum extent possible
under applicable law. If any provisions of this Agreement are held to be invalid
or unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or any
portion thereof).
16. ENTIRE AGREEMENT
This Agreement and the Inventions Agreement constitute the
entire agreement by the Company and the Employee with respect to the subject
matter hereof
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and except as specifically provided herein, supersedes any and all prior
agreements or understandings between the Employee and the Company with respect
to the subject matter hereof, whether written or oral, including, without
limitation, the employment agreement between the Employee and the Company, dated
November 1, 2000 and all amendments thereto (including the amendment dated
November 20, 2002 providing for the payment of a $400,000 bonus to the
Employee). Any award agreement relating to an Equity Award to the extent
inconsistent with any provision of this Agreement, shall be treated as amended
in a manner consistent with the terms of this Agreement. This Agreement may be
amended or modified only by a written instrument (specifically referencing the
provision of this Agreement being so amended) executed by the Employee and an
authorized officer of the Company.
17. COUNTERPARTS
This Agreement may be executed in two or more counterparts.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above and this Agreement shall be effective and
binding on the Parties from such date.
IDENIX PHARMACEUTICALS, INC.
/s/ Xxxxxx Xxxxxxxx
------------------------------------
By: Xxxxxx Xxxxxxxx
Its: Sr. VP. Legal
EMPLOYEE
/s/ Xxxx-Xxxxxx Sommadossi
-----------------------------------
Name: Xxxx-Xxxxxx Sommadossi
Title: Chairman and Chief Executive
Officer
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