EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT (this "Agreement"), dated as of September
30, 1997, between Celgene Corporation, a Delaware corporation with offices at 0
Xxxxxx Xxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), and Xxx X. Xxxxx,
residing at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Employee"). The Company
and Employee agree as follows:
1. Term. The Company agrees to employ Employee, and Employee
agrees to serve, on the terms and conditions of this Agreement for a period
commencing on the date hereof and ending three years from the date hereof, or
such other period as may be provided for in Section 10 or 11. The period during
which Employee is employed hereunder is hereinafter referred to as the
"Employment Period." The Employment Period shall be automatically renewed for
successive one-year terms unless either party gives written notice to the other
at least one year prior to the expiration of the then Employment Period, of such
party's intention to terminate Executive's employment hereunder at the end of
the then current Employment Period.
2. Duties and Services. During the Employment Period, Employee
shall be employed in the business of the Company as President and Chief
Operating Officer of the Company. In addition, Employee shall serve as a member
of the Board of Directors of the Company. Employee shall perform such duties and
services, within his expertise and experience, as may be assigned to him by, and
subject to the direction of, the Chief Executive Officer and the Board of
Directors of the Company. Employee agrees to his employment as described in this
Section 2 and agrees to devote all of his working time and efforts to the
performance of his duties under this Agreement, excepting disabilities, illness
and vacation time as provided by Section 3(e). In performing his duties
hereunder, Employee shall be available for reasonable travel as the needs of the
business require.
3. Compensation and Other Benefits.
(a) As compensation for his services hereunder, the Company
shall pay Employee, during the Employment Period, a salary payable in equal
semi-monthly installments at an annual rate of $235,000, provided that such
salary shall be reviewed annually by the Company's Board of Directors, or a
committee thereof, which may, in its sole discretion, increase (but not
decrease) such salary.
(b) The Company shall also pay Employee, during the Employment
Period, an annual bonus, payable in January of each year for the preceding year,
in such amount as may be determined by the Company's Board of Directors, or a
committee thereof, in its sole discretion.
(c) Employee shall be entitled to participate in all group
health and insurance programs and all other fringe benefit or retirement plans
which the Company may, in its sole and absolute discretion, elect to make
available to its employees generally, provided Employee meets the qualifications
therefor.
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(d) Employee shall be eligible to participate in the Company's
1992 Long-Term Incentive Plan and any other incentive plans of the Company.
(e) Employee shall be entitled to four weeks of paid vacation
per year during the Employment Period.
4. Expenses. Employee shall be entitled to reimbursement for
all reasonable travel and other out-of-pocket expenses necessarily incurred in
the performance of his duties hereunder, upon submission and approval of written
statements and bills in accordance with the then regular procedures of the
Company.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that Employee is under no contractual or
other restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder or the other rights of the
Company hereunder.
6. Non-Competition. In view of the unique and valuable
services it is expected Employee will render to the Company, Employee's
knowledge of the customers, trade secrets and other proprietary information
relating to the business of the Company and its customers and suppliers and
similar knowledge regarding the Company which it is expected that Employee will
obtain, and in consideration of the compensation to be received hereunder,
Employee agrees that, (a) during the period he is employed by the Company under
this Agreement or otherwise, he will not Participate In (as hereinafter defined
in this Section 6) any other business or organization, whether or not such
business or organization now is or shall then be competing with or of a nature
similar to the business of the Company, without obtaining the prior written
consent of the Chief Executive Officer, and (b) until the first anniversary of
the date of the termination of Employee's employment under this Agreement or
otherwise, he will not Participate In any business which is engaged, directly or
indirectly, in the same business as the Company with respect to any specific
product or specific service sold or activity in which the Company engages up to
the time of termination of employment in any geographical area in which at the
time of termination such product or service is sold or activity is engaged in by
the Company. For purposes of this Section 6 the term "Participate In" shall
mean: "directly or indirectly, for his own benefit or for, with or through any
other person, firm or corporation, own, manage, operate, control, loan money to
or participate in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor or otherwise with, or acquiesce in the use of his name
in." Employee further agrees that, during the period he is employed by the
Company under this Agreement or otherwise and until the first anniversary of the
date of the termination of Employee's employment under this Agreement or
otherwise, he will not directly or indirectly reveal the name of, solicit or
interfere with, or endeavor to entice away from the Company, any of its
suppliers, customers or employees.
7. Patents, etc. Any interest in patents, patent applications,
inventions, technological innovations, copyrights, copyrightable works,
developments, discoveries, designs and processes ("Inventions") which Employee
during the period he is employed by the Company
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under this Agreement or otherwise, and for six months thereafter, may conceive
of or develop and either relating to the specific fields in which the Company
may then be engaged or conceived of or developed utilizing the time, material,
facilities or information of the Company shall belong to the Company; as soon as
Employee conceives of or develops any Invention, he agrees immediately to
communicate such fact in writing to the Secretary of the Company, and without
further compensation, but at the Company's expense (except as noted in clause
(a) of this Section 7), forthwith upon request of the Company, Employee shall
execute all such assignments and other documents (including applications for
patents, copyrights, trademarks and assignments thereof) and take all such other
action as the Company may reasonably request in order (a) to vest in the Company
all Employee's right, title and interest in and to the Inventions, free and
clear of liens, mortgages, security interests, pledges, charges and encumbrances
arising from the acts of Employee ("Liens") (Employee to take such action, at
his expense, as is necessary to remove all such Liens) and (b) if patentable or
copyrightable, to obtain patents or copyrights (including extensions and
renewals) therefor in any and all countries in such name as the Company shall
determine.
8. Confidential Information. All confidential information
which Employee may now possess, may obtain during or after the Employment
Period, or may create prior to the end of the period he is employed by the
Company under this Agreement or otherwise relating to the business of the
Company or of any customer or supplier of the Company shall not be published,
disclosed or made accessible by him to any other person, firm or corporation
either during or after the termination of his employment or used by him except
during the Employment Period in the business and for the benefit of the Company,
in each case without the prior written permission of the Company. Employee shall
return all tangible evidence of such confidential information to the Company
prior to or at the termination of his employment. As used in this Section 8,
"confidential information" shall mean any information except that information
which is or comes into the public domain through no fault of Employee or which
Employee obtains after the termination of his employment by the Company under
this Agreement or otherwise from a third party who has the right to disclose
such information.
9. Life Insurance. If requested by the Company, Employee shall
submit to such physical examinations and otherwise take such actions and execute
and deliver such documents as may be reasonably necessary to enable the Company,
at its expense and for its own benefit, to obtain life insurance on the life of
Employee. Subject to its ability to do so under the terms of such policy, if
any, insuring the life of Employee, upon the termination of Employee's
employment hereunder, the Company will assign to Employee its rights under such
insurance policy, provided that, concurrently with such assignment, Employee
shall reimburse the Company for any premium payments made by the Company in
respect of time periods subsequent to such date of termination. Nothing herein
contained shall obligate the Company to obtain such insurance.
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10. Termination.
(a) If on or after the date hereof and prior to the end of the
Employment Period,
(i) either (A) Employee shall be convicted of a crime
of moral turpitude or a felony, (B) Employee shall commit any act or
omit to take any action in bad faith and to the detriment of the
Company or (C) Employee shall breach any material term of this
Agreement and fail to correct such breach within 10 days after notice
by the Company to Employee of his commission of the same then, and in
each such case, the Company shall have the right to give notice of
termination of Employee's services hereunder as of a date (not earlier
than 10 days from such notice) to be specified in such notice and this
Agreement shall terminate on the date so specified, or
(ii) Employee shall die, then this Agreement shall
terminate on the date of Employee's death, whereupon Employee or his
estate, as the case may be, shall be entitled to receive only his
salary at the rate then provided pursuant to Section 3(a) to the date
on which termination shall take effect; provided, however, that if this
Agreement is terminated pursuant to this Section 10(a)(ii), Employee's
estate shall be entitled to receive a lump-sum payment in the amount of
three months' compensation at the rate then provided in Section 3(a).
(iii) Nothing contained in this Section 10(a) shall
be deemed to limit any other right the Company may have to terminate
Employee's employment hereunder upon any ground permitted by law.
(iv) If Employee's employment is terminated by the
Company as a result of the disability or incapacitation of Employee or
for any reason other than pursuant to the provisions of paragraphs (i)
or (ii) of this Section 10(a) or the provisions of Section 11, upon
termination by the Company of Employee's employment, whether during the
Employment Period or thereafter, Employee shall be entitled to receive
a lump-sum severance payment in an amount equal to the greater of (A)
twelve (12) months' salary at the prevailing rate provided for by
Section 3(a) on the date of such termination, or (B) salary at such
rate for the unexpired portion of the Employment Period, if any.
(b) Notwithstanding Section 11, after a Change in Control (as
hereinafter defined) has occurred, Employee may terminate his employment within
30 calendar days after he has obtained actual knowledge of the occurrence of any
of the following events (unless Employee consents in writing to such
occurrence):
(i) failure to elect or appoint, or reelect or
reappoint, Employee to, or removal of Employee from, his position with
the Company as President and Chief Operating Officer except in
connection with the termination of Employee's employment pursuant to
Section 10(a);
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(ii) a significant change in the nature or scope of
the authorities, powers, functions or duties normally attached to
Employee's position as President and Chief Operating Officer of the
Company;
(iii) a determination by Employee made in good faith
that, as a result of a Change in Control, he is unable effectively to
carry out the authorities, powers, functions or duties attached to his
position as President and Chief Operating Officer of the Company and
the situation is not remedied within 30 calendar days after receipt by
the Company of written notice from Employee of such determination; or
(iv) a breach by the Company of any material
provision of this Agreement not covered by clause (i), (ii) or (iii) of
this Section 10(b), which is not remedied within 30 calendar days after
receipt by the Company of written notice from Employee of such breach.
An election by Employee to terminate his employment under the
provisions of this Section 10(b) shall not constitute a breach by Employee of
this Agreement and shall not be deemed a voluntary termination of employment by
Employee for the purpose of interpreting the provisions of any of the Company's
employee benefit plans, programs or policies.
(c) After a Change in Control has occurred, if Employee
terminates his employment with the Company pursuant to Section 10(b) or if
Employee's employment is terminated by the Company as a result of the disability
or incapacitation of Employee or for any reason other than pursuant to the
provisions of paragraphs (i) or (ii) of Section 10(a), Employee (i) shall be
entitled to his normal salary, bonuses, awards, perquisites and benefits,
through the termination date of his employment and, in addition thereto, (ii)
shall be paid in a lump-sum, on such date of termination, an amount of cash, to
be computed at the expense of the Company by its independent certified public
accountants (whose computation shall be conclusive and binding upon Employee and
the Company), equal to 2.99 times Employee's "base amount," as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986.
(d) For purposes hereof, a Change in Control shall be deemed
to have occurred (i) if a person within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, other than the Company or any of its
subsidiaries, has become the beneficial owner within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, directly or indirectly, of securities
of the Company representing more than 50% of the Company's then outstanding
securities having the right to vote on the election of directors, (ii) when
individuals who are members of the Company's Board of Directors at any one time
shall immediately thereafter cease to constitute a majority of the Board of
Directors, (iii) when a majority of the directors elected at any special or
annual meeting of stockholders are not individuals nominated by the Company's
incumbent Board of Directors, or (iv) the merger or other business combination
of the Company, sale of all or substantially all of the Company's assets or
combination of the foregoing transactions (a "Transaction"), other than a
Transaction immediately following which the shareholders of the
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Company immediately prior to the Transaction continue to have a majority of the
voting power in the resulting entity.
11. Merger, etc. Subject to Section 10(b), in the event of a
future disposition of the properties and business of the Company substantially
as an entirety by merger, consolidation, sale of assets or otherwise, then the
Company may elect:
(a) to assign this Agreement and all of its rights and
obligations hereunder to the acquiring or surviving entity; provided that such
entity shall assume in writing all of the obligations of the Company hereunder;
and provided, further, that the Company (in the event and so long as it remains
in existence) shall remain liable for the performance of its obligations
hereunder in the event of a breach by the acquiring entity of this Agreement; or
(b) in addition to its other rights of termination, to
terminate this Agreement upon at least 90 days' written notice and by paying
Employee in a lump-sum on such date of termination, an amount of cash determined
in accordance with Section 10(c).
12. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment.
13. Entire Agreement; Modification. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements between them concerning such subject
matter and may be modified only by a written instrument duly executed by each
party.
14. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 14).
Notice to the estate of Employee shall be sufficient if addressed to Employee as
provided in this Section 14. Any notice or other communication given by
certified mail shall be deemed given three days after the time of certification
thereof, except for a notice changing a party's address which shall be deemed
given at the time of receipt thereof.
15. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by the party giving such waiver.
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16. Binding Effect. Employee's rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of
Employee and his heirs and personal representatives, and shall be binding upon
and inure to the benefit of the Company and its successors and its assigns under
Section 11.
17. No Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement (except as provided in Sections 11 and 16).
18. Counterparts; Governing Law. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws of
the State of New Jersey, without giving effect to the conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
CELGENE CORPORATION
By
Xxxx X. Xxxxxxx
Chairman of the Board of Directors and
Chief Executive Officer
Xxx X. Xxxxx
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