Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 4th day
of January, 2005 (the "Effective Date"), by and between Xxxxx Xxxxx
("Executive") and Eyetech Pharmaceuticals, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for such services; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. Employment By The Company.
1.1 The Company agrees to employ Executive in the position of Chief
Clinical and Commercial Strategy of the Company. During Executive's
employment with the Company, Executive will devote his best efforts
and substantially all of his business time and attention to the
business of the Company.
1.2 Executive shall serve in an executive capacity and shall perform
such duties as are customarily associated with his then current
title, consistent with the Bylaws of the Company and as required by
the Company's Board of Directors (the "Board") or the Company's
Chief Executive Officer. Subject to the preceding sentence, the
Executive shall report directly to the Chief Executive Officer.
1.3 The employment relationship between the parties shall also be
governed by the general employment policies and practices of the
Company, including those relating to protection of confidential
information and assignment of inventions, except that when the terms
of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall
control.
1.4 The Company and Executive each acknowledge that either party has the
right to terminate Executive's employment with the Company at any
time for any reason whatsoever, with or without Cause or advance
notice. This at-will employment relationship cannot be changed
except in a writing signed by both Executive and the Chief Executive
Officer.
2. Compensation.
2.1 Salary. Executive shall receive, for services to be rendered under
this Agreement, a base salary ("Base Salary") at the annualized rate
of $225,000.00, less
applicable federal and state withholdings. Such Base Salary shall
commence as of the Effective Date, and shall be payable in
installments consistent with the Company's regular payroll
practices. Executive's Base Salary shall be reviewed at least
annually by the Board, and in the Board's sole discretion, may be
adjusted at any time upon thirty (30) days written notice to the
Executive.
2.2 Termination.
(a) In the event Executive's employment terminates as a result of
a voluntary termination by Executive for Good Reason, or a
termination by the Company without Cause, upon execution of an
effective general release of all claims against the Company,
its employees, officers, directors and agents, in a form
reasonably acceptable to the Company: (i) Executive shall
receive twelve (12) monthly payments each equal in amount to
one-twelfth (1/12th) of Executive's then Base Salary, less
applicable state and federal withholdings; and (ii) for a
period of twelve (12) months (or until comparable benefits
coverage becomes available to Executive, if sooner), the
Company shall reimburse Executive (or pay him directly, at the
Company's option) the costs associated with the continuation
of Executive's and his dependents' medical and dental benefits
under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA") as in effect immediately prior to
Executive's termination of employment. In addition, in the
event Executive's employment is terminated by the Company
without Cause within the first twelve (12) months following
the Effective Date, and after signing the release described
above, any stock option he receives from the Company at the
commencement of employment shall become pro rata vested at the
rate of 1/48th of such option for each completed month of
service the Executive has provided to the Company.
(b) For purposes of this Agreement, "Good Reason" means that any
of the following are undertaken without Executive's express
written consent: (i) the assignment to Executive of any duties
or responsibilities which result in any material diminution or
adverse change of Executive's position, status or
circumstances of employment; (ii) the taking of any action by
the Company which would adversely affect Executive's
participation in, or reduce Executive's benefits under, the
Company's benefit plans (including equity benefits) as of the
time this Agreement is executed, except to the extent the
benefits of all other executive officers of the Company are
similarly reduced; (iii) a relocation of Executive's principal
office to a location more than thirty-five (35) miles from
Manhattan, New York, except for required travel by Executive
on the Company's business; or (iv) any failure by the Company
to obtain the assumption of this Agreement by any successor or
assign of the Company. For purposes of this Agreement, "Cause"
means: (V) an intentional action or intentional failure to act
by Executive which was performed in bad faith and to the
material detriment of the Company; (W) Executive intentionally
refuses or intentionally fails
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to act in accordance with any lawful and proper direction or
order of the Board; (X) Executive willfully and habitually
neglects the duties of his employment; (Y) Executive violates
Sections 3, 4 or 5 of this Agreement; or (Z) Executive is
convicted of a felony crime involving moral turpitude;
provided, however, that in the event that any of the foregoing
events under clauses (V), (W), (X) or (Y) above is capable of
being cured, the Company shall provide written notice to
Executive describing the nature of such event and Executive
shall thereafter have ten (10) business days to cure such
event.
(c) In the event Executive's employment terminates as a result of
termination of Executive by the Company or its successor
without Cause, or by the Executive voluntarily for Good
Reason, within the three (3) months before or twelve (12)
months following a Change in Control Event, upon execution of
an effective general release of all claims against the
Company, its employees, officers, directors and agents, in a
form reasonably acceptable to the Company: (i) Executive shall
receive, within fifteen (15) days of such termination, one
lump sum payment equivalent to fifteen (15) months of his then
Base Salary, less applicable state and federal withholdings;
(ii) Executive's unvested Equity Rights (as defined below)
shall become vested and exercisable as set forth in Section
2.3(b); and (iii) for a period of fifteen (15) months (or
until comparable benefits coverage becomes available to
Executive, if sooner), the Company shall reimburse Executive
(or pay him directly at the Company's option) the costs
associated with the continuation of Executive's and his
dependents' medical and dental benefits under COBRA as in
effect immediately prior to Executive's termination of
employment. For purposes of this paragraph, Executive's "Base
Salary" shall be the greater of the amount in effect either
immediately prior to the Change in Control Event or the
termination date of Executive's employment. The benefits
provided under this Section 2.2(c) shall be in lieu of any
benefits the Executive would have otherwise been entitled to
pursuant to Section 2.2(a) of this Agreement.
(d) For purposes of this Agreement, a "Change in Control Event"
shall mean:
(i) The acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a "Person") of beneficial ownership
of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) 50% or more of either (x) the then-outstanding
shares of common stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined voting power
of the then-outstanding securities of the Company
entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this
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subsection (i), the following acquisitions shall not
constitute a Change in Control Event: (A) any
acquisition directly from the Company (excluding an
acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting
securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such
security directly from the Company or an underwriter or
agent of the Company), (B) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled
by the Company, or (C) any acquisition by any
corporation pursuant to a Business Combination (as
defined below) which complies with clauses (x) and (y)
of subsection (iii) of this definition; or
(ii) Such time as the Continuing Directors (as defined below)
do not constitute a majority of the Board (or, if
applicable, the Board of Directors of a successor
corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (x)
who was a member of the Board on the date of the initial
adoption of this Agreement by the Board or (y) who was
nominated or elected subsequent to such date by at least
a majority of the directors who were Continuing
Directors at the time of such nomination or election or
whose election to the Board was recommended or endorsed
by at least a majority of the directors who were
Continuing Directors at the time of such nomination or
election; or
(iii) The consummation of a merger, consolidation,
reorganization, recapitalization or share exchange
involving the Company or a sale or other disposition of
all or substantially all of the assets of the Company (a
"Business Combination"), unless, immediately following
such Business Combination, each of the following two
conditions is satisfied: (x) all or substantially all of
the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly
or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of
the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of
the resulting or acquiring corporation or other form of
entity in such Business Combination (which shall
include, without limitation, a corporation which as a
result of such transaction owns the Company or
substantially all of the Company's assets either
directly or through one or more subsidiaries) (such
resulting or acquiring corporation or entity is referred
to herein as the "Acquiring Corporation") in
substantially the same proportions as
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their ownership of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, respectively,
immediately prior to such Business Combination and (y)
no Person (excluding the Acquiring Corporation or any
employee benefit plan (or related trust) maintained or
sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly,
30% or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such
corporation entitled to vote generally in the election
of directors (except to the extent that such ownership
existed prior to the Business Combination).
(iv) Notwithstanding the foregoing, a Change in Control Event
will not be deemed to have occurred in the case of a
Management Buy Out. A "Management Buy Out" is any event
which would otherwise be deemed a "Change in Control
Event", in which the Executive, directly or indirectly
(as a beneficial owner) acquires equity securities,
including any securities convertible into or
exchangeable for equity securities, of the Company or
the Acquiring Corporation in connection with any Change
in Control Event.
2.3 Treatment of Equity Upon Change in Control Event. Upon a Change in
Control Event, as defined in Section 2.2(d):
(a) 50% of all of the Executive's unvested Equity Rights shall
become vested and immediately exercisable; and
(b) If Executive's employment terminates as a result of the
circumstances outlined in Section 2.2(c), and provided that
Executive executes an effective general release as required by
Section 2.2(c), 100% of the Executive's unvested Equity Rights
shall then become vested and immediately exercisable.
(c) For purposes of this Agreement, the term "Equity Rights" shall
mean only those equity rights, including but not limited to,
stock options and restricted shares, which were granted to the
Executive on or after December 9, 2004. Accordingly, Equity
Rights which have been granted to the Executive before
December 9, 2004 are unaffected by this Amendment.
2.4 Golden Parachute Taxes. Notwithstanding anything contained in this
Agreement to the contrary, to the extent that payments and benefits
provided under this Agreement to Executive and benefits provided to,
or for the benefit of, Executive under any other Company plan or
agreement (such payments or benefits are collectively referred to as
the "Payments") would be subject to the excise tax (the
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"Excise Tax") imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Payments shall be reduced
(but not below zero) to the extent necessary so that no Payment to
be made or benefit to be provided to the Executive shall be subject
to the Excise Tax, but only if, by reason of such reduction, the net
after-tax benefit received by Executive shall exceed the net
after-tax benefit received by him if no such reduction was made. For
purposes of this Section 2.4, "net after-tax benefit" shall mean (a)
the Payments which Executive receives or is then entitled to receive
from the Company that would constitute "parachute payments" within
the meaning of Section 280G of the Code, less (b) the amount of all
federal, state and local income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for
each year in which the foregoing shall be paid Executive (based on
the rate in effect for such year as set forth in the Code as in
effect at the time of the first payment of the foregoing), less (c)
the amount of excise taxes imposed with respect to the payments and
benefits described in (a) above by Section 4999 of the Code. The
foregoing determination will be made by a nationally recognized
accounting firm (the "Accounting Firm") selected by the Company
(which may be, but will not be required to be, the Company's
independent auditors). The Company will direct the Accounting Firm
to submit its determination and detailed supporting calculations to
both the Executive and the Company within fifteen (15) days after
the date of termination of his employment. If the Accounting Firm
determines that such reduction is required by this Section 2.4, the
Executive, in his sole and absolute discretion, may determine which
Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999
of the Code, and the Company shall pay such reduced amount to him.
The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by
this Section 2.4 will be borne by the Company.
2.5 Discretionary Incentive Compensation. Executive will be eligible to
participate in any discretionary incentive compensation programs
that the Company establishes and makes available to executives, in
its sole discretion, from time to time. Executive's discretionary
compensation target bonus, which shall be granted at the discretion
of the Board, will be 50% of his then current annual base salary. As
this bonus is discretionary, any failure by the Board to provide
compensation under this section shall not give rise to any claim by
the Executive for unpaid compensation.
2.6 Medical and Dental Coverage. The Company shall provide Executive
with medical and dental coverage which is no less favorable than
that provided to any other executive of the Company.
2.7 Standard Company Benefits. Executive shall be entitled to
participate in any benefit programs which may be in effect from time
to time and provided by the Company to its employees generally
and/or to its management and executive
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employees in particular, provided that Executive is eligible to
participate under the terms and conditions of any such benefits
plans.
2.8 Expenses. Executive shall be entitled to receive prompt
reimbursement of all reasonable and necessary business expenses
incurred by Executive in performing Company services, provided that
Executive furnishes the Company with adequate records and other
documentary evidence of such expenses for which Executive seeks
reimbursement. Such expenses shall be accounted for under the
policies and procedures established by the Company.
2.9 Vacation and Sick Leave. Executive shall be eligible for vacation
and sick leave in accordance with policies as periodically
established by the Company for Company officers.
3. Confidential Information Obligations and Conflicts.
3.1 Executive agrees that all information and know-how, whether or not
in writing, of a private, secret or confidential nature concerning
the Company's business or financial affairs (collectively,
"Proprietary Information") is and shall be the exclusive property of
the Company. By way of illustration, but not limitation, Proprietary
Information may include inventions, products, processes, methods,
techniques, formulas, compositions, compounds, projects,
developments, plans, research data, clinical data, financial data,
personnel data, computer programs, and customer and supplier lists.
Executive will not disclose any Proprietary Information to others
outside the Company or use the same for any unauthorized purposes
without written approval by an officer of the Company, either during
or after his employment, unless and until such Proprietary
Information has become public knowledge without fault by the
Executive.
3.2 Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the Executive
or others, which shall come into his custody or possession, shall be
and are the exclusive property of the Company to be used by the
Executive only in the performance of his duties for the Company.
3.3 Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in
paragraphs 3.1 and 3.2 above, also extends to such types of
information, know-how, records and tangible property of customers of
the Company or suppliers to the Company or other third parties who
may have disclosed or entrusted the same to the Company or to the
Executive in the course of the Company's business.
3.4 During Executive's employment, Executive agrees not to acquire,
assume, or participate in (directly or indirectly) any position,
investment or interest known by him to be adverse or antagonistic to
the Company, its business, or its prospects, financial or otherwise
or which may otherwise create a conflict in Executive's
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interests. Nothing in this paragraph shall bar Executive from owning
securities of any competitor corporation as a passive investor after
the termination of his employment, so long as his aggregate direct
holdings in any one such corporation shall not constitute more than
one percent (1%) of the voting stock of that corporation.
4. Developments.
4.1 Executive will make full and prompt disclosure to the Company of all
inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which
are created, made, conceived or reduced to practice by the Executive
or under his direction or jointly with others during his employment
by the Company, whether or not during normal working hours or on the
premises of the Company (all of which are collectively referred to
in this Agreement as "Developments").
4.2 Executive agrees to assign and does hereby assign to the Company (or
any person or entity designated by the Company) all his right, title
and interest in and to all Developments and all related patents,
patent applications, copyrights and copyright applications. However,
this Section 4.2 shall not apply to Developments which do not relate
to the present or planned business or research and development of
the Company and which are made and conceived by the Executive not
during normal working hours, not on the Company's premises and not
using the Company's tools, devices, equipment or Proprietary
Information.
4.3 Executive agrees to cooperate fully with the Company, both during
and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights, patents and
all other legal rights (both in the United States and foreign
countries) relating to Developments. Executive shall sign all
papers, including, without limitation, copyright applications,
patent applications, declarations, oaths, formal assignments,
assignment of priority rights, and powers of attorney, which the
Company may deem necessary or desirable in order to protect its
rights and interests in any Development.
5. General Provisions.
5.1 Other Agreements. Executive hereby represents that he is not bound
by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of his
employment with the Company or to refrain from competing, directly
or indirectly, with the business of such previous employer or any
other party. Executive further represents that his performance of
all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in
confidence or in trust prior to his employment with the Company.
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5.2 Notices. Any notices provided hereunder must be in writing and shall
be deemed effective upon the earlier of (i) personal delivery
(including delivery by overnight courier) or (ii) the third day
after mailing by first-class mail, to the Company at its primary
office location and to Executive at his address as then listed in
the Company's payroll records.
5.3 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held
to be invalid, illegal, or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity,
illegality, or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed and
construed in such jurisdiction so as to render it enforceable under
applicable law insofar as possible consistent with the intent of the
parties.
5.4 Waiver. If either party should waive any breach of any provisions of
this Agreement, that party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other
provision of this Agreement.
5.5 Complete Agreement. This Agreement constitutes the entire agreement
between Executive and the Company and it is the complete, final, and
exclusive embodiment of their agreement with regard to this subject
matter and supersedes all prior agreements and understandings
between the parties. It is entered into without reliance on any
promise or representation other than those expressly contained
herein, and it cannot be modified or amended except in a writing
signed by both the Executive and a duly authorized signatory of the
Company.
5.6 Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more
than one party, but all of which taken together will constitute one
and the same Agreement.
5.7 Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof
nor to affect the meaning thereof.
5.8 Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive and the Company,
and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign any duties
hereunder and may not assign any rights hereunder without the
written consent of the Company, which shall not be withheld
unreasonably.
5.9 Choice of Law. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of
the State of New York, without regard to such state's conflict-of-
laws rules.
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5.10 Non-Publication. To the extent permitted by law, the parties
mutually agree not to disclose publicly the terms of this Agreement
except to the extent that disclosure is mandated by applicable law
or such disclosure is to the parties' respective attorneys,
accountants other advisors, and immediate family.
5.11 Agreement Controls. In the event of a conflict between the text of
this Agreement and any summary, description or other information
regarding this Agreement, the text of this Agreement shall control.
5.12 Tax Withholding. All payments made pursuant to this Agreement shall
be subject to all applicable federal, state and local income and
employment tax withholding.
5.13 No Duty to Seek Employment. Executive and the Company acknowledge
and agree that nothing contained in this Agreement shall be
construed as requiring Executive to seek or accept alternative or
replacement employment in the event of his termination of employment
by the Company for any reason, and no payment or benefit payable
hereunder shall be conditioned on Executive's seeking or accepting
such alternative or replacement employment.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
EYETECH PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ Xxxxx Xxxxx
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XXXXX XXXXX
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