Exhibit 10.41
Execution Copy
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 17th day of
June, 1996, is entered into by Ontogeny, Inc., a Delaware corporation, and Doros
Platika (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. Employment. Commencing as of June 17, 1996, the Company agrees to
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employ the Employee, and the Employee accepts employment with the Company, upon
the terms set forth in this Agreement. The period during which the Employee is
employed by the Company hereunder is referred to as the "Employment Period."
2. Position.
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(a) The Employee shall serve as President and Chief Executive Officer
of the Company. The Employee shall have duties and authority consistent with his
position as President and Chief Executive Officer. The Employee shall report to,
and be subject to the supervision of, the Board of Directors of the Company (the
"Board"). The Employee agrees to devote his entire business time to the business
and interests of the Company during the Employment Period.
(b) During the Employment Period, the Company shall use its best
efforts to cause the election of the Employee to the Board. Upon termination of
the Employment Period, the Employee shall be deemed to have automatically
resigned as a member of the Board; such resignation shall be effective
immediately without the requirement of any further written notice.
(c) The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.
3. Compensation and Benefits.
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3.1 Salary. The Company shall pay the Employee, in monthly
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installments, a base salary of $250,000 per annum. Such salary shall be subject
to annual review by the Board.
3.2 Bonus. The Employee's annual bonus shall be determined by the
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Board and shall be based on the achievement of specific objectives established
by the Board. Such bonus may be paid in the form of cash or additional shares of
Common Stock of the Company (or options therefor).
3.3 Benefits; Vacation. The Employee shall be entitled to
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participate in all medical and other benefit programs that the Company
establishes and makes available to its employees, if any, to the extent that
Employee's position, tenure, salary, age, health and other qualifications make
him eligible to participate. The Employee shall be entitled to four weeks paid
vacation per year.
3.4 Reimbursement of Expenses. The Company shall reimburse the
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Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided, however, that the
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amount available for such travel, entertainment and other expenses may be fixed
in advance by the Board.
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3.5 Relocation Expenses. The Company shall reimburse the Employee
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for reasonable moving and travel expenses not to exceed $30,000, incurred by him
in moving himself and his immediate family from Columbus, Ohio to the Boston,
Massachusetts area. Such reimbursement will include the Employee's travel costs
in connection with his acquisition of a residence in Massachusetts and weekly
trips between Ohio and Massachusetts.
3.6 Insurance. During the Employment Period, the Company shall
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purchase and maintain, if available, $3 million of insurance on the life of the
Employee, with $2 million of the proceeds payable, to the Company and $1 million
payable to the Employee's designated beneficiaries. Upon the termination of
Employee's employment hereunder, Employee shall have the right to purchase any
such insurance from the Company, to the extent permitted by such policy, for an
amount equal to the actual premiums thereon previously paid by the Company.
4. Equity.
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(a) The Company shall issue and sell to the Employee 400,000 shares of
its Common Stock ("Common Stock"), at a purchase price of $.15 per share,
vesting in equal monthly installments over the five-year period ending June 30,
2001 or, at the election of the Employee, shall grant to the Employee a stock
option for such shares, at an exercise price of $.15 per share, vesting on the
same basis. Such shares (or options) shall become fully vested immediately upon
the earliest of: (i) the death of the Employee; (ii) the Disability (as defined
below) of the Employee; (iii) the termination of the Employee by the Company
without Cause (as defined below); (iv) the resignation of the Employee for Good
Reason (as defined below); or (v) a Change in Control (as defined below).
(b) The Company shall issue and sell to the Employee an additional
400,000 shares of its Common Stock, at a purchase price of $.15 per share,
vesting in equal monthly
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installments during the fourth through seventh year of the Employee's employment
with the Company or, at the Employee's election, shall grant to the Employee a
stock option for such shares, at an exercise price of $.15 per share, vesting on
the same basis. The vesting of such shares or option shall accelerate upon the
closing of any of the following events (each, a "Change in Control"): (i) a
merger or consolidation of the Company with any other entity, other than (A) a
merger or consolidation which would result in the holders of the voting
securities of the Company outstanding immediately prior thereto continuing to
hold more than 50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
(hereinafter defined), other than the holder or holders of more than 50% of the
combined voting power of the Company's outstanding securities immediately prior
to such recapitalization, acquires more than 50% of the combined voting power of
the Company's then outstanding voting securities; or (ii) any transaction which
results in any Person (or related group of Persons) beneficially owning more
than 50% of the outstanding voting securities of the Company, or (iii) the first
sale or disposition by the Company of all or substantially all of the Company's
assets in a single transaction or pursuant to a series of transactions related
by agreement or plan. For purposes of the foregoing, "Person" shall mean a
corporation, individual, partnership, limited liability company, trust or other
entity.
(c) The issuance of shares or options under this Section 4 shall be
evidenced by a Stock Restriction Agreement or Stock Option Agreement, as the
case may be, in the form and upon the terms provided to the Employee by the
Company.
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(d) During the Employment Period and, if the Employee's employment is
terminated by the Company without Cause or by the Employee for Good Reason,
during the period of three years after such termination, if the Company engages
in an underwritten public offering of its Common Stock and if any officers of
the Company are permitted by the Company and the underwriters to sell any of
their shares of Common Stock in such offering ("management shares"), then the
Employee shall be permitted to include in such offering a pro rata share of the
total number of management shares entitled to be included. Such pro rata share
shall be based on the ratio of the number of vested shares of Common Stock, or
options therefor, then held by the Employee to the aggregate number of
management shares included in the offering. If the Employee elects to include
shares in such offering, he shall execute an underwriting agreement for such
offering and comply with such other requirements as are customary for selling
stockholders in an underwritten public offering. If so requested by the managing
underwriters of the Company's initial public offering of Common Stock, the
Employee shall not sell publicly (other than in the underwritten offering) any
shares of Common Stock during such period following the effective date of such
offering, not to exceed 180 days, as may be requested by the managing
underwriters, provided that this sentence shall apply only if all then executive
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officers and members of the Board of Directors also agree not to sell shares of
Common Stock during the same period.
(e) As used in this Agreement, the following terms shall have the following
respective meanings:
(i) "Cause" shall mean (a) fraud, embezzlement or theft by the Employee
in connection with his duty to the Company or in the course of his employment
with the Company; (b) a breach of this Agreement by the Employee, which is not
cured within thirty (30) days after notice thereof to the Employee; or (c) the
Employee's engaging in misconduct injurious to the Company which is not cured,
to the reasonable satisfaction of the Board of Directors, within thirty
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(30) days after notice thereof is given to the Employee.
(ii) "Good Reason" shall mean (a) any significant diminution in
the Employee's position, duties, power or title; (b) any reduction in his annual
base salary; (c) any breach by the Company of this Agreement which is not cured
within thirty (30) days after notice of such breach by the Employee to the
Company; (d) any requirement by the Company or of any person in control of the
Company that the location at which the Employee performs his principal duties
for the Company be changed to a new location that is more than forty (40) miles
from the current principal location of the Company; (e) any material breach of
this Agreement by the Company which is not cured within 30 days after written
notice thereof, or (f) the failure of the Company to obtain a reasonably
satisfactory agreement from any successor to the business of the Company to
assume and agree to perform this Agreement, as contemplated by Section 14 below.
(iii) "Disability" shall be deemed to occur if, as a result of the
Employee's incapacity due to physical or mental illness, the Employee shall have
been absent from the full-time performance of his duties with the Company for
six consecutive months.
5. Loan.
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(a) The Company has lent to the Employee $500,000, of which $5,000
(together with all accrued interest on such $5,000) shall be forgiven at the end
of each full month of the Employee's employment with the Company during his
first five years of employment with the Company. In addition, the then unpaid
principal amount of, and all accrued but unpaid interest on, such loan shall be
forgiven in the event that (i) the Employee terminates his employment hereunder
by reason of any material breach of this Agreement by the Company
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which is not cured within 30 days after written notice thereof; or (ii) the
Company terminates the Employee's employment hereunder without Cause and for any
reason other than a determination by the Board that the Employee is not
effective in the performance of his responsibilities as President and Chief
Executive Officer of the Company. The Company shall pay to the Employee a bonus
in the amount of any federal and state income tax payable by him as a result of
any such forgiveness, as well as any federal and state income taxes payable by
the Employee with respect to bonuses paid under this sentence; such bonus shall
be paid at the time such tax payments are payable by the Employee. Such loan
shall bear interest at the applicable federal interest rate for loans of such
duration. Such loan shall be secured by a mortgage on the Employee's house and
the shares of Common Stock held by the Employee. The principal of, and interest
on, such loan, to the extent not forgiven, shall be due and payable on the
earliest of (i) June 30, 2003, (ii) thirty (30) days after the Employee's
resignation as an employee of the Company without Good Reason, and (iii) one
year after termination of the Employee's employment with the Company for any
reason other than voluntary resignation without Good Reason. Such loan shall be
evidenced by a Note in the form attached hereto as Exhibit A.
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(b) The Company shall lend to the Employee $100,000, which shall be
due and payable on June 30, 1997. Such loan shall bear interest at the minimum
applicable federal interest rate for loans of such duration. Such loan shall be
secured by a mortgage on the Employee's house. Such loan shall be evidenced by a
Note in the form attached hereto as Exhibit A-1.
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6. Termination.
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(a) The Company has the right to terminate the Employee's employment
under this Agreement, by notice to the Employee in writing at any time (i) for
Cause, (ii) without
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Cause for any or no reason, or (iii) due to the Disability of the Employee. Any
such termination shall be effective upon the date of such notice to the Employee
or such other date as may be specified in such notice.
(b) Employee's employment under this Agreement shall terminate
immediately upon the Employee's death.
(c) The Employee shall have the right to terminate his employment
under this Agreement (i) for any reason or no reason upon sixty (60) days' prior
written notice to the Company or (ii) for Good Reason upon thirty (30) days'
prior written notice specifying such Good Reason.
7. Compensation upon Termination.
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(a) If the Employment Period is terminated (i) by the Company without
Cause or due to the death or Disability of the Employee, or (ii) by the Employee
for Good Reason, then the Company shall (A) pay to the Employee his base salary
accrued through the date of termination, and (B) pay to the Employee, or his
estate, in equal bi-weekly installments over a twelve-month period following
such termination, a severance amount equal to his annual base salary as in
effect at the time of termination; provided, however, that such severance
payments during the second six months of such twelve-month period shall be
reduced by the amount of any compensation earned by the Employee as an employee
or a consultant for another person or entity during such six-month period.
(b) If the Employment Period is terminated by the Company for Cause or
by the Employee without Good Reason, the Company shall (i) pay to the Employee
his base salary accrued through the date of termination, and (ii) pay to the
Employee, in equal bi-weekly
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installments over a two-month period, a severance amount equal to one-sixth of
his annual base salary as in effect at the time of termination.
(c) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise.
8. Non-Compete. The Employee shall sign the form of Non-Compete and Non-
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Solicitation Agreement in the form attached hereto as Exhibit B.
9. Invention and Non-Disclosure Agreement. The Employee shall sign the form
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of Invention and Non-Disclosure Agreement in the form attached hereto as Exhibit
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C.
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10. Notices. All notices required or permitted under this Agreement shall
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be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 10.
11. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
12. Amendment. This Agreement may be amended or modified only by a written
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instrument executed by both the Company and the Employee.
13. Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the Commonwealth of Massachusetts.
14. Successors and Assigns. The Company will require any successor (whether
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direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to
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the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, Company shall mean the
Company as defined above and any successor to its business or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
15. Miscellaneous.
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15.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
15.2 There shall be deducted from any payments provided for hereunder
any applicable withholding taxes required under federal, state or local law.
15.3 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
15.4 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ONTOGENY, INC.
By:
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Title:
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EMPLOYEE
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Doros Platika
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