EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of June 23, 2004, is made
by and between Biopure Corporation, a Delaware corporation, having its principal
place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the "Company"), and
Xx. Xxxxxxx G. Zafirelis, residing at Xxxxxx Xxxxxx, Xxxxxxx, XX 00000 (the
"Executive").
RECITALS
1. The Company wishes to employ the Executive as the President and
Chief Executive Officer of the Company.
2. The Executive possesses the background, experience and skills to
perform as President and Chief Executive Officer of the Company.
3. The Company has determined that it is essential to enter into an
employment agreement having the compensation and benefits herein to induce the
Executive to be so employed.
4. The Executive agrees to accept such employment by the Company on the
terms set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, and other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive hereby agree as
follows.
1. CERTAIN DEFINITIONS.
1.1 "EFFECTIVE DATE" shall mean the date of this Agreement
first above written.
1.2 "EMPLOYMENT PERIOD" shall mean the period commencing on
the Effective Date and ending on the first anniversary of the Effective Date, as
further extended in accordance with the provisions of this Section 1.2. The
Employment Period (as it may have been extended pursuant to the provisions of
this sentence and subject to the provisions of Section 5 below) shall be
extended or further extended, as the case may be, without any action by the
Company or the Executive, on the first anniversary of the Effective Date and on
each subsequent anniversary thereof for an additional period of one year, unless
and until either party gives written notice to the other party at least thirty
(30) days in advance of any such anniversary that the Employment Period in
effect when such notice is given is not to be extended or further extended, as
the case may be.
1.3 "BOARD" shall mean the Board of Directors of the Company.
2. EMPLOYMENT. Subject to the terms and conditions provided herein, the
Company hereby agrees, during the Employment Period, to employ the Executive as
its President and Chief Executive Officer. The Executive hereby agrees to accept
such employment during the Employment Period. The Company agrees to nominate the
Executive to be a member of the Board and to use its best efforts to cause him
to be elected and reelected a member of the Board throughout the Employment
Period, said membership to be at all times subject to the provisions of the
Company's bylaws as in effect.
3. EMPLOYMENT DUTIES. During the Employment Period, the Executive shall
have such duties and responsibilities as are reasonably assigned to the
Executive by the Board and are consistent with his status as President and Chief
Executive Officer. The Executive shall take direction from and report to the
Board. During the Employment Period, the Executive agrees to devote
substantially all of his business attention and time to the business and affairs
of the Company and its subsidiaries, and to use the Executive's professional
skills to perform faithfully the duties and responsibilities assigned to the
Executive under this Section 3. It is expressly understood that (a) the
Executive may devote a reasonable amount of time to the management of his
investments and affairs and to such industry associations, charitable and civic
endeavors as shall not materially interfere with the obligations set forth in
the preceding sentence, and (b) with the prior approval of the Board (which
shall not be unreasonably withheld and subject to the non-competition provision
in Section 9 of this Agreement and to the terms and conditions of the Protection
of Company Property Agreement as defined in Section 8 below), the Executive may
serve as a member of one or more boards of directors of companies that are not
affiliated with the Company. In entering into this Agreement with the Executive,
the Board hereby consents (subject to the Protection of Company Property
Agreement) to the Executive serving during the Employment Period as a director
of MedQuest Products, Inc. ("MedQuest").
4. COMPENSATION.
4.1 BASE SALARY. During the Employment Period, the Company
shall pay the Executive a base salary (the "Base Salary") of no less than
$250,000 per annum, payable in accordance with the Company's normal payroll
practices for senior executives. The Base Salary shall be reviewed at least once
each year for increase (but not decrease) by the Board (including through the
Compensation Committee of the Board), and if so increased, then such increased
amount shall become the Base Salary.
4.2 INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, the Executive shall be eligible to participate in all bonus,
short- or long-term incentive plans and programs established by the Board from
time to time and in existence on or after the Effective Date for the benefit of
senior executives of the Company. The Company and the Executive shall design and
implement an annual bonus plan, and it is understood that the Executive's annual
target cash bonus shall be no less than 50% of his Base Salary. In addition, the
Executive shall receive a one-time bonus of $200,000 if, prior to December 31,
2006, (a) the price per share of Biopure Class A common stock trades above $7.00
for any five (5) trading days within a twenty-day
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trading period or (b) Biopure is a party to an agreement contemplating a merger,
consolidation or other business combination transaction, or is the subject of a
tender or exchange offer, which values Biopure Class A common stock at or above
$7.00 per share. During the Employment Period, the Executive shall be eligible
to participate in all savings and retirement plans and programs, as the plan
terms allow, maintained by the Company from time to time on or after the
Effective Date for the benefit of employees and/or senior executives or
employees of the Company. In addition, the Executive shall be eligible to
receive annual or periodic awards under the Company's 2002 Omnibus Securities
and Incentive Plan (the "Plan") or any other such plan in which senior
executives may become eligible to participate from time to time; provided,
however, that such awards shall be granted in the sole discretion of the Board,
but further provided that, in determining whether the Executive should receive
any such annual or periodic awards, the Board shall give great weight to the
fact that the Executive's stock options granted under Section 4.5 or any other
stock-based award granted to the Executive after the Effective Date were subject
to any dilution.
4.3 WELFARE BENEFIT PLANS. During the Employment Period and as
of the Effective Date, the Executive and/or the Executive's family, as the terms
allow, shall be eligible to participate in all welfare benefit plans, programs
and arrangements maintained by the Company from time to time on or after the
Effective Date for the benefit of senior executives or employees of the Company.
4.4 VACATION; FRINGE BENEFITS. During the Employment Period,
the Executive shall be entitled to five (5) weeks of vacation annually, and any
accrued and unused vacation shall be carried over to the next year without any
reduction; provided, however, that the maximum carryover on a year-to-year basis
shall be five (5) weeks. During the Employment Period, the Executive shall
receive such perquisites and fringe benefits as are generally provided to senior
executives of the Company in accordance with Company policy. The Executive shall
also be reimbursed for reasonable business expenses in accordance with Company
policy. Any benefit received by the Executive under this Section 4.4 that is
taxed as compensation (other than vacation pay, if any) will be "grossed up" by
the Company for all applicable taxes.
4.5 INITIAL STOCK OPTION GRANT.
(a) As partial consideration for becoming President
and Chief Executive Officer of the Company, the Executive has been granted (i)
stock options entitling the Executive to acquire 1,000,000 shares of the
Company's Class A common stock at an exercise price equal to the Fair Market
Value on the date of grant, with such options to vest over a four-year period in
accordance with Biopure's normal vesting schedule for senior executives; (ii)
stock options to purchase 500,000 shares of the Company's Class A common stock,
at an exercise price equal to 250% of the Fair Market Value on the date of
grant, with such options to vest over a four-year period in accordance with
Biopure's normal vesting schedule for senior executives; and (iii) stock options
to purchase 500,000 shares of the Company's Class A common stock at an exercise
price equal to 150% of the Fair Market Value on the date of grant, with such
options to vest on the date of the closing of any capital raising transaction
that closes on
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or before December 31, 2004. Such options shall be for a term of ten (10) years
from the date of grant. The options shall be governed by one or more stock
option agreements, the terms of which shall not be inconsistent with this
Section 4.5 and otherwise shall be consistent with the terms of the Plan.
(b) The Executive shall forfeit any unvested options
upon termination of employment with the Company for any reason, except as
otherwise specifically provided in Section 6.1 or 6.2 of this Agreement or in
the options or the plans pursuant to which the options were issued.
(c) If there is a Change in Control (as defined in
the Plan as in effect as of the date of this Agreement), then all outstanding
unvested stock options held by the Executive as of the date of such Change in
Control shall immediately vest as of the date of such Change in Control.
(d) "Fair Market Value" shall mean, as of any
specified date, the average of the reported high and low sales prices of the
Class A common stock on the stock exchange composite tape on that date, or if no
sales prices are reported on that date, on the last preceding date on which such
prices of the Class A common stock are so reported. If the Class A common stock
is traded over the counter at the time a determination of its fair market value
is required to be made hereunder, its fair market value shall be deemed to be
equal to the average between the reported high and low or closing bid and asked
prices of Class A common stock on the most recent date on which the Class A
common stock was publicly traded. In the event Class A common stock is not
publicly traded at the time a determination of this value is required to be made
hereunder, the determination of its fair market value shall be made by the Board
in such manner as it deems appropriate.
4.6 BOARD COMPOSITION. The Company acknowledges the Board's
intent to add new independent directors. In filling these positions, the Board
and its Nominating Committee will give due consideration to candidates brought
to their attention by the Executive.
5. TERMINATION.
5.1 DEATH OR DISABILITY. The Employment Period shall terminate
automatically upon the Executive's death. If, during the Employment Period, the
Disability (as defined below) of the Executive has occurred, the Company may
give to the Executive written notice of its intention to terminate the
Executive's employment due to such Disability. The Executive's employment with
the Company shall be terminated by the Company on the 60th day after receipt by
the Executive of such notice (the "Disability Effective Date"), if, within such
sixty (60) day period, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means a physical or mental disability resulting in the inability of
the Executive to substantially perform his duties under this Agreement, as set
forth in Section 3, with or without reasonable accommodation, during any
consecutive six-month period, as determined by a licensed physician mutually
selected by the Company and the
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Executive or his legal representative. If the Company and the Executive cannot
agree as to the selection of a licensed physician for purposes of making such
determination, then each party shall select a licensed physician and these two
licensed physicians shall select a third licensed physician who shall make such
determination. Nothing in this Section 5.1 is intended to be inconsistent with
applicable federal or state law regarding disabilities, if any.
5.2 CAUSE.
(a) The Company may terminate the employment of the
Executive for Cause by written notice to the Executive. Upon receipt of such
written notice, the Executive shall have the right to seek (within ten (10)
business days) an opportunity to be heard by the Board, which opportunity the
Board shall arrange as promptly and in such format as directors' schedules
permit. For purposes of this Agreement, "Cause" shall have the meaning set forth
in the Plan in effect as of the date of this Agreement.
(b) In the event the Company wishes to terminate the
Executive for breach of this Agreement pursuant to Section 5.2(a), and such
breach is capable of being cured, the Company shall provide the Executive with
written notice specifying in reasonable detail the services or matters which it
contends the Executive has not adequately performed, or the material provisions
of this Agreement of which the Executive is in violation and the acts
constituting such violation, why the Company has Cause to terminate this
Agreement and what the Executive should do to adequately perform his obligations
hereunder. If within thirty (30) days of receipt of the notice the Company
reasonably believes that the Executive has performed the required services or
has modified his performance to correct the matters complained of, the
Executive's breach will be deemed cured, and the Executive shall not be
terminated. However, if the nature of the service not performed by the Executive
or the matters complained of are such that more than thirty (30) days are
reasonably required to perform the required service or to correct the matters
complained of, then his breach will be deemed cured if the Executive commences
to perform such service or to correct such matters within the thirty-day period
and thereafter diligently prosecutes such performance or correction to
completion in a time frame established by the Company, in its reasonable
judgment. If the Executive does not perform the required services or modify his
performance to correct the matter complained of within the thirty-day period or
the Company-approved extension thereof, the Company shall have the right to
terminate this Agreement at the end of the thirty-day period or extension
thereof. If the Company, in its reasonable judgment, determines that the
Executive's breach of this Agreement pursuant to Section 5.2(a) is not capable
of being cured, and in the event of any breach of Section 9 or of any of
Sections 1 through 5 of the Protection of Company Property Agreement
(hereinafter defined in Section 8), the Company may terminate the Executive
immediately for Cause by written notice to the Executive.
5.3 WITHOUT CAUSE. During the Employment Period, upon written
notice given to the Executive, the Company may terminate the Executive's
employment hereunder other than for Cause.
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5.4 TERMINATION BY EXECUTIVE FOR GOOD REASON. During the
Employment Period, the Executive may terminate his employment hereunder by
written notice for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean: (a) the reduction of the Executive's Base Salary or target bonus
opportunity without the Executive's prior written consent; (b) the diminution,
without his consent, of the Executive's title, authority, duties or
responsibilities as specified in Section 3, or the assignment of duties and
responsibilities that are inconsistent with his position as President and Chief
Executive Officer of a public corporation, or if the Executive reports to anyone
other than the Board; (c) the Company requiring the Executive, without his
consent, to be based in any office or location other than the Company's
headquarters, and such headquarters shall not be located during the Employment
Period outside of a 00-xxxx xxxxxx xx Xxxxxxxxx, Xxxxxxxxxxxxx; (d) the material
breach by the Company of any provision of this Agreement which has not been
cured within thirty (30) days after a notice of termination has been given by
the Executive to the Company; (e) failure by the Board to have elected the
Executive to the Board on or before July 1, 2004, the removal of the Executive
as a member of the Board or the Executive not being renominated or reelected to
the Board during the Employment Period; or (f) failure of the Company to obtain
the assumption in writing of its obligations under this Agreement by any
successor within thirty (30) days of such succession.
5.5 TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. During the
Employment Period the Executive may terminate employment hereunder by written
notice without Good Reason, and such termination shall not be deemed to be a
breach of this Agreement.
5.6 DATE OF TERMINATION. "Date of Termination" shall mean:
(a) if the Executive's employment is terminated by
the Company, other than for Cause or Disability, the Date of Termination shall
be the date on which the Company notifies the Executive in writing of such
termination under Section 5.3;
(b) if the Executive's employment is terminated by
the Company for Cause, the Date of Termination shall be at the end of the
thirty-day cure period or any extension given under Section 5.2;
(c) if the Executive's employment is terminated by
the Executive for Good Reason, the Date of Termination shall be the 30th day
after written notice of termination is given (provided that the Company has not
cured its breach of this Agreement prior to such 30th day);
(d) if the Executive's employment is terminated
voluntarily by the Executive other than for Good Reason, the date of termination
shall be the date on which the Executive notifies the Company of such
termination;
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(e) if the Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be; and
(f) if the Executive's employment is terminated by
reason of the fact that the Company has not extended the Employment Period under
Section 1.2, the Date of Termination shall be the date the Employment Period
ends.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
6.1 CAUSE, DEATH, DISABILITY OR VOLUNTARILY BY THE EXECUTIVE.
If the Executive's employment is terminated by reason of the Executive's death,
the Executive's Disability, for Cause by the Company or by the Executive
voluntarily (other than for Good Reason), the Executive, or the Executive's
legal representative, as the case may be, shall be entitled to receive (a) the
Executive's Base Salary through the Date of Termination; (b) any compensation
previously deferred by the Executive (together with any accrued interest thereon
through the Date of Termination) and not yet paid by the Company, and any bonus
earned in the previous year and not yet paid by the Company; (c) any accrued
vacation pay through the Date of Termination not yet paid by the Company; and
(d) a pro rata bonus for the year of termination calculated and payable after
year-end in accordance with the bonus programs, policies or practices then in
place for current senior executives that have been approved by the Board,
provided, however that no such pro rata bonus shall be paid to the Executive if
his employment is terminated for Cause (such amounts specified in clauses (a),
(b), (c) and (d) are hereinafter referred to as the "Accrued Obligations").
Accrued Obligations shall not include other compensation not described in the
preceding sentence accrued but not yet paid through the Date of Termination. All
such Accrued Obligations except for that specified in clause (d) shall be paid
to the Executive or to the Executive's estate or beneficiary, as applicable, in
a lump sum in cash within thirty (30) days after the Date of Termination. In
addition to the foregoing, if the Executive's employment is terminated by reason
of the Executive's death or Disability, unvested options granted to the
Executive during his employment shall immediately vest. Incentive Stock Options
as defined in the Plan shall remain exercisable for ninety (90) days from the
Date of Termination, and Non-Qualified Stock Options as defined in the Plan
shall remain exercisable for one (1) year from the Date of Termination. In the
case of death, the Executive's family shall be entitled to receive any family
death benefits provided by the Company to surviving families of senior
executives. In the case of the Executive's Disability, the Executive shall be
entitled to receive the disability benefits provided by the Company to disabled
senior executives.
6.2 OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR BY THE
EXECUTIVE FOR GOOD REASON. If, during the Employment Period, the Company
terminates the Executive's employment (other than for Cause, death or
Disability), or the Company does not extend the Employment Period under Section
1.2, or the Executive terminates his employment for Good Reason, the Executive
shall be entitled to receive, within thirty (30) days after the Date of
Termination, the following:
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(a) The Company shall pay to the Executive all
Accrued Obligations.
(b) The Company shall pay to the Executive in cash a
lump sum equal to (i) twelve (12) months of the Executive's then current Base
Salary plus (ii) an amount equal to the total bonus payments made to the
Executive during the preceding calendar year (the "Bonus Amount"). If the
Executive has not received any bonus payments in the preceding calendar year,
then, for the purposes of this Section 6.2(b), the Bonus Amount will be 50% of
the Executive's then current annual Base Salary.
(c) The Company shall pay its proportionate share of
the cost of the Executive's COBRA continuation coverage for a period of 12
months.
(d) Unvested options granted to the Executive during
his employment shall immediately vest. Incentive Stock Options as defined in the
Plan shall remain exercisable for ninety (90) days from the Date of Termination,
and Non-Qualified Stock Options as defined in the Plan shall remain exercisable
for one (1) year from the Date of Termination.
(e) The parties recognize and agree that, if the
Company terminates the Executive's employment during the Employment Period other
than for Cause, death or Disability or if the Executive terminates his
employment during the Employment Period for Good Reason, the actual damages to
the Executive would be difficult if not impossible to ascertain and agree that
the Executive's sole remedy shall be a right to receive amounts determined and
paid in accordance with the provisions of this Section 6.2. The Executive shall
not be required to mitigate the amount of any payment provided for in this
Section 6.2 by seeking other employment or otherwise, nor shall any compensation
earned by the Executive in other employment or otherwise reduce the amount of
any payment provided for in this Section 6.2.
6.3 FULL SATISFACTION. The payments actually received,
accepted and retained by the Executive (or his legal representatives) under this
Agreement that are attributable to the termination of the Executive's employment
shall be in full and complete satisfaction of any and all claims the Executive
(or his legal representatives) may have against the Company which are, in any
way related to the employment relationship (including the Executive's hiring)
between the Executive and the Company or the termination of that relationship.
6.4 OTHER PAYMENTS. Notwithstanding anything to the contrary
contained herein (including without limitation Section 6.3), any compensation or
benefits, if any, which are vested in the Executive or which the Executive is
otherwise entitled to receive under any plan, program or arrangement of the
Company before, at or subsequent to the Date of Termination shall be payable in
accordance with the terms and provisions of such plan, program or arrangement.
Any incentive, savings, retirement, or welfare or fringe benefit plan or program
may be changed by the Company in its discretion, provided, however, that such
change shall not adversely affect, impair or
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impact the Executive (unless such change is broad-based and applies to all
current and former employees of the Company).
7. TAXES. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes or other withholdings as shall be
required or permitted to be withheld pursuant to any applicable law or
regulation, the operation of any incentive, savings, retirement, or welfare or
fringe benefit plan, or by written agreement with the Executive. In addition, if
any payment to the Executive would trigger "golden parachute" excise taxes
pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision, a gross-up payment will be provided in an
amount sufficient to make the Executive whole for applicable excise taxes and
all income, employment, additional excise taxes or any interest or penalties
with respect to such gross-up payment (the "Gross-Up Payment"). All
determinations concerning whether a Gross-Up Payment is due to the Executive and
the amount of such Gross-Up Payment will be made by a nationally recognized
certified public accounting firm (the "Accounting Firm") selected by the Company
and subject to the approval of the Executive, such approval not to be
unreasonably withheld. If the Accounting Firm determines that any Gross-Up
Payment is due to the Executive, the Company shall pay the required Gross-Up
Payment to the Executive or on the Executive's behalf within ten (10) business
days after receipt of such determination and calculations. If the Accounting
Firm determines that no "golden parachute" excise taxes would be triggered, it
will, at the same time as it makes such determination, furnish the Executive
with an opinion that the Executive has substantial authority not to report any
excise tax on the Executive's federal, state, local income or other tax return.
Any determination by the Accounting Firm as to the amount of the Gross-Up
Payment will be binding upon the Company and the Executive.
8. CONFIDENTIAL INFORMATION. The Executive shall execute and deliver to
the Company on or prior to the Effective Date an Employee Agreement Concerning
Protection of Company Property and the Arbitration of Legal Disputes
("Protection of Company Property Agreement") in the form attached hereto, the
terms of which are incorporated herein by reference; provided, however, that to
the extent that a term or provision of this Agreement conflicts with any term or
provision of the Protection of Company Property Agreement, such term or
provision of this Agreement shall prevail over such term or provision of the
Protection of Company Property Agreement.
9. NON-COMPETITION. During the Executive's employment with the Company,
and for one year thereafter, the Executive agrees that, without the prior
written consent of the Company, (a) the Executive shall not, directly or
indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee, or in any other capacity,
carry on or engage in, or advise or have any financial interest in any company
that carries on or engages in, business in North America which is in
competition, with the Business of the Company or its subsidiaries (as defined
below); (b) the Executive shall not, on his own behalf or on behalf of any
person, firm or company, directly or indirectly, solicit for employment any
person that has been employed by the Company or any of its subsidiaries at any
time during the one (1) year period immediately preceding such solicitation,
provided, however, that this provision
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does not apply to (i) any employee hired by the Company during the 90-day period
following the Effective Date and who was first presented to the Company by the
Executive, and (ii) the Executive's personal administrative assistant and/or
secretary; and (c) the Executive shall not, on his own behalf or on behalf of
any competitor in the Business, solicit or divert the business of any person or
entity which was a customer (or a prospective customer) of the Company or any of
its subsidiaries at any time during the Executive's employment with the Company
or as of the Executive's Date of Termination. The "Business" of the Company or
its subsidiaries shall mean the development, manufacture and marketing of oxygen
therapeutics for intravenous use in humans or animals. Anything in this Section
9 to the contrary notwithstanding, the Executive may invest in stock, bonds, or
other securities of any business in competition with the Business of the Company
(but without otherwise participating in such competition with the Company) if
his investment does not exceed, in the case of any class of the capital stock of
any one issuer, three percent (3%) of the issued and outstanding shares, or, in
the case of other securities, three percent (3%) of the aggregate principal
amount thereof issued and outstanding. Under no circumstance shall the
Executive's membership on the board of directors of MedQuest or on such other
boards of directors on which he may serve without violating this Agreement, or
what he reasonably believes is the exercise of his fiduciary duties in such
capacities, be deemed to violate this Agreement.
10. INDEMNIFICATION.
(a) The Company agrees that if the Executive is made
a party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director, officer or employee of the
Company or is or was serving at the request of the Company as a director,
officer, member, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is the Executive's
alleged action in an official capacity while serving as a director, officer,
member, employee or agent, the Executive shall be indemnified and held harmless
by the Company to the fullest extent legally permitted or authorized by the
Company's certificate of incorporation or bylaws or resolutions of the Board or,
if greater, by the laws of the State of Delaware, against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
he has ceased to be a director, member, employee or agent of the Company or
other entity and shall inure to the benefit of the Executive's heirs, executors
and administrators. The Company shall advance to the Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within twenty
(20) days after receipt by the Company of a written request for such advance.
Such request shall include an undertaking by the Executive to repay the amount
of such advance if it shall ultimately be determined that he is not entitled to
be indemnified against such costs and expenses.
(b) Neither the failure of the Company (including its
Board, independent legal counsel or stockholders) to have made a determination
prior to the
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commencement of any proceeding concerning payment of amounts claimed by the
Executive under Section 10(a) that indemnification of the Executive is proper
because he has met the applicable standard of conduct, nor a determination by
the Company (including its Board, independent legal counsel or stockholders)
that the Executive has not met such applicable standard of conduct, shall create
a presumption that the Executive has not met the applicable standard of conduct.
(c) The Company also agrees that if the Executive is
made a party, or is threatened to be made a party, to any action, suit or
proceeding by reason of the termination of his employment with his prior
employer or his accepting employment with the Company, he shall be indemnified
and held harmless by the Company against all cost, expense, liability and loss
(including, without limitation, attorney's fees) reasonably incurred or suffered
by the Executive in connection therewith.
(d) The Company agrees to continue and maintain a
directors and officers' liability insurance policy covering the Executive during
the Employment Period and for six (6) years thereafter, provided that the
Company or a successor or parent company at such time maintains such insurance
for any other current or former director or officer.
11. PREPARATION OF AGREEMENT. The Company shall, pay all costs
(including attorneys' fees) incurred by the Executive in connection with the
preparation of this Agreement, the Protection of Company Property Agreement and
the term sheet entered into by the parties.
12. SURVIVAL; INJUNCTIVE RELIEF.
12.1 SURVIVAL. The Executive and the Company agree that
Sections 8, 9 and 10 of this Agreement and the Protection of Company Property
Agreement shall survive the termination of (a) this Agreement, (b) the
Employment Period and/or (c) the Executive's employment with the Company. The
Executive acknowledges that the Company has no adequate remedy at law and would
be irreparably harmed if the Executive breaches or threatens to breach any of
the provisions of Section 8 or Section 9 of this Agreement, and, therefore,
agrees that the Company shall be entitled to seek injunctive relief to prevent
any such breach or threatened breach thereof, and to seek specific performance
of the terms of such sections (in addition to any other legal or equitable
remedy the Company may have). The Executive further agrees that he shall not, in
any equity proceeding relating to the enforcement of Section 8 or Section 9 of
this Agreement, raise the defense that the Company has an adequate remedy at
law.
12.2 REASONABLE RESTRICTIONS. All of the provisions of this
Agreement, including, without limitation, Sections 8 and 9, are intended by the
parties hereto as separate and divisible provisions and if, for any reason, any
one of them (or part thereof) is held to be invalid or unenforceable neither the
validity nor the enforceability of any other provision (or part thereof) shall
be affected thereby. The Executive agrees that the restrictions imposed by
Section 9 are reasonable in scope and duration. The Executive understands that
the provisions of Sections 8 and 9 of this Agreement may
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affect or limit the Executive's ability to earn a livelihood in a business
similar to the businesses engaged in by the Company (or any of its
subsidiaries), but the Executive nevertheless believes and agrees that the
Executive shall receive (or shall have received) sufficient consideration,
remuneration and other benefits from the Company to make enforceable the
restrictions and limitations contained in Sections 8 and 9 of this Agreement.
13. JUDICIAL CONSTRUCTION. If for any reason any court of competent
jurisdiction shall find the provisions of Section 9 of this Agreement
unreasonable in scope or duration, the Executive and the Company agree that the
restrictions and limitations contained in Section 9 shall be construed by the
court so that they are effective and enforceable to the fullest extent allowed
or allowable under the applicable law of any such jurisdiction. It is further
agreed by the Executive and the Company that any judicial restraints ordered by
any such court in respect of the restrictions and limitations imposed by Section
9 of this Agreement shall be applicable and effective only with respect to the
particular jurisdiction in which such order is made.
14. SUCCESSORS. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of the Executive in the event the Company shall hereafter
affect a reorganization, consolidate with, or merge into, any other entity or
person or transfer all or substantially all of its properties or assets to
another entity or person. This Agreement shall inure to the benefit of and be
binding upon the Company and to the Executive and their respective successors,
executors, administrators, heirs and permitted assigns.
15. NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by facsimile transmission, hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, to the addresses set forth below:
If to the Company: Biopure Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
With a copy to: General Counsel
If to the Executive: Xxxxxxx X. Xxxxxxxxxx
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
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With a copy to: Xxxx Xxxxxxxx, Esq.
Ropes & Xxxx, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Any such notice and communications
shall be effective when actually received by the addressee.
16. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without reference
to principles of conflict of laws thereunder. The captions of this Agreement are
not part of the provisions hereof and shall not have any force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors, assigns and legal
representatives. This Agreement contains the entire understanding of the Company
and the Executive with respect to the subject matter hereof and supersedes any
prior oral or written agreement between the Company and the Executive. This
Agreement may be executed in two or more counterparts.
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IN WITNESS WHEREOF, the Executive has signed this Agreement and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be signed in its name and on its behalf, all as of the day and
year first above written.
BIOPURE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name Xxxxxxx X. Xxxxxx
Title Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxx
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