Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 25th
day of August, 2003 (the "Effective Date"), by and between Xxxxxxx X. Xxxxxxxxxx
("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
General Counsel of the Company. During Executive's employment
with the Company, Executive will devote his 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.
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 $250,000.00, 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 tot 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 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;
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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 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 the 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. Fur 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 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
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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 an 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 endorse 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 al 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 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
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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 of 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 an
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.
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 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 "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
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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 calculation 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
will range from 0 to 35% of his then current annual base salary. As
this 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 provided 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 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.
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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
no 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 interests. Nothing in this
paragraph shall bar Executive from owning securities of nay
competitor corporation as a passive investor after the
termination of his employment, so long as his aggregate direct
holdings in any 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
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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 interest 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 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.
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 the 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
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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 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 party
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.
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 be 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
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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 XXXXX
-------------------------------
Name: Xxxxx Xxxxx
Title: CEO
/s/ XXXXXXX XXXXXXXXXX
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XXXXXXX XXXXXXXXXX
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