EXHIBIT 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"), dated as
of January 1, 2000, 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, Xxx Xxxxxx 00000
("Employee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company and Employee have previously entered into an
employment agreement, originally effective September 30, 1997 (the "Employment
Agreement");
WHEREAS, Employee is currently employed as the President of the Company,
and serves as a member of the Board of Directors of the Company (the "Board");
WHEREAS, the Company and Employee desire to amend and restate the
Employment Agreement to modify certain terms of the Employment Agreement,
effective as of the date set forth above or such other date as specified herein.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term. The Company agrees to continue to employ Employee, and Employee
agrees to continue 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 six (6) months prior to the expiration of the then Employment
Period, of such party's intention to terminate Employee'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 continue to serve as a member of the
Board. 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. Employee agrees to continue 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. Except as provided in Section 6 hereof, the foregoing
shall not be construed as preventing Employee from: (i) making investments in
other businesses and managing his and his family's personal investments; and
(ii) participating in charitable, civic, educational, professional, community or
industry affairs or serving on the board of directors of other companies
("Professional Activities"), provided that these Professional Activities are
approved by the Company's Board.
3. Compensation and Other Benefits.
(a) As compensation for his services hereunder, the Company shall pay
Employee, during the Employment Period, a base salary payable in equal
semi-monthly installments at an annual rate of $258,000, provided that such
salary shall be reviewed annually by the Company's Board, 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 target bonus, payable in January of each year for the preceding year, in
an amount equal to forty-five percent (45%) of Employee's base salary (payable
under Section 3(a) of this Agreement) measured against objective criteria to be
determined by the Company's Board, or a committee thereof, after good faith
consultation with Employee.
(c) Employee shall be entitled to continue 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.
(d) Employee shall be eligible to participate in the Company's 1998 Long-
Term Incentive Plan (the "Plan") and any other incentive plans of the Company.
Upon the Employee's Disability (as defined in the Plan), termination of
employment with the Company due to Retirement (as defined in the Plan) or death,
Employee (or the legal representative of his estate, in the case of Employee's
death) shall be entitled to: (i) full vesting and immediate exercisability of
any outstanding stock options and other equity awards (and lapse of any
forfeiture provisions) granted to Employee at any time; and (ii) with respect to
stock options granted to Employee on or after January 1, 2000, Employee (or the
legal representative of his estate, in the case of Employee's death) shall be
entitled to exercise such stock options at any time during the three (3) year
period from the date of Employee's Disability, Retirement or death.
(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.
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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.
(a) In view of the unique and valuable services that Employee has rendered
or is expected to 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 Employee has obtained or is expected to obtain, and in
consideration of the compensation to be received hereunder, Employee agrees
that:
(i) 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 of the Company;
(ii) 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;
(iii) if a Change in Control occurs and Employee's employment with the
Company is terminated under this Agreement without Cause (as hereinafter
defined) or by Employee for Good Reason (as hereinafter defined) at any
time during the period beginning on the date of a Change in Control and
ending one (1) year after the date of such Change in Control or within
ninety (90) days prior to a Change in Control, then beginning on the later
of the date Employee's employment terminates (as described under this
Section 6(a)(iii)) and the date of a Change in Control and ending on the
second anniversary of such date, he will not Participate In any activity or
business in the United States involved in the research, development,
commercialization of a small molecule which is: (A) the generic equivalent
of THALOMID (i.e., the same chemical structure); (B) an anti-angiogenic
agent for oncology use; (C) a substantially specific TNFalpha inhibitor
(via inhibition of synthesis of TNFalpha, including via inhibition of PDE4)
for the treatment of Crohn's disease, rheumatoid arthritis, dermatological
and auto-immune conditions having excess levels of TNFalpha as the prime
causative factor, cachexia (AIDS or cancer), or any other indication for
which the Company has been
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granted orphan drug status; or (D) a formulation of d- or dl-methylphenidate for
the treatment of ADD/ADHD.
(b) 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."
(c) 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 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
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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.
10. Termination.
(a) Employee's employment and the Employment Period shall terminate on the
first of the following to occur:
(i) the Company provides written notice to Employee of a termination
for Cause; such written notice shall be provided to Employee not less than
ten (10) days prior to the date of termination. "Cause" shall mean: (A)
Employee's conviction of a crime involving moral turpitude or a felony, (B)
Employee's acts or omissions taken in bad faith and to the detriment of the
Company after a written demand for cessation of such conduct is delivered
to Employee by the Company, which demand specifically identifies the manner
in which the Company believes that Employee has engaged in such conduct and
the injury to the Company, and after Employee's failure to correct such act
or omission within ten (10) days following such written demand, or (C)
Employee's breach of any material term of this Agreement after written
demand for substantial performance is delivered to Employee by the Company,
which demand specifically identifies the manner in which the Company
believes Employee has breached this Agreement, and after Employee's failure
to correct such breach within ten (10) days following such written demand.
(ii) Employee's death, in which case, 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 a lump sum payment in an amount
equal to Employee's annual base salary (at the rate in effect, or required
to be in effect, immediately prior to the date of Employee's death) and the
portion of Employee's annual target bonus (as provided in Section 3(b))
pro-rated up to Employee's date of death (assuming the target has been
met).
(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.
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(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 10(b), 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 payment in an
amount equal to Employee's annual base salary (at the rate in effect, or
required to be in effect, immediately prior to the date of Employee's
termination) and the portion of Employee's annual target bonus (as provided
in Section 3(b)) pro-rated up to Employee's date of disability,
incapacitation or termination (assuming the target has been met).
(v) In the event of the Employee's termination for any reason under
this Agreement or otherwise, the Company shall pay and provide to Employee
(in addition to any other payments or benefits payable under this
Agreement): (A) any incurred but reimbursed business expenses for the
period prior to the termination payable in accordance with the Company's
policies; (B) any base salary, bonus, vacation pay or other deferred
compensation accrued or earned under law or in accordance with the
Company's policies applicable to Employee but not yet paid; and (C) any
other amounts or benefits due under the terms of the then applicable
employee benefit, equity or incentive plans of the Company applicable to
Employee (the "Accrued Benefits").
(vi) Payments of any amounts or benefits hereunder shall be made no
later than ten (10) days after Employee's termination date, other than
benefits under a plan with the terms which do not require or permit payment
within such ten (10) day period.
(b) During the ninety (90) day period prior to Change in Control or during
the one (1) year period following a Change in Control, Employee may terminate
his employment by written notice to the Company within thirty (30) calendar days
after he has obtained actual knowledge of the occurrence of a Good Reason event.
For purposes of this Agreement, Good Reason shall mean the occurrence of any of
the following events without Employee's express written consent:
(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 or as a member of the Board, except in connection
with the termination of Employee's employment pursuant to Section 10(a);
(ii) a significant change in the nature or scope of the authorities,
powers, functions, duties or responsibilities normally attached to
Employee's position as President and Chief Operating Officer or as a member
of the Board, except in each case in connection with the termination of
Employee's employment for Cause or as a result of Employee's death, or
temporarily as a result of Employee's illness or other absence;
(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,
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functions, duties or responsibilities attached to his position as President
and Chief Operating Officer or as a member of the Board and the situation
is not remedied within 30 calendar days after receipt by the Company of
written notice from Employee of such determination;
(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))
or of any other agreement, which is not remedied within 30 calendar days
after receipt by the Company of written notice from Employee of such
breach;
(v) a reduction in Employee's annual base salary;
(vi) a fifty (50) mile or greater relocation of the Company's
principal office;
(vii) failure of the Company to continue in effect any health or
welfare plan, employee benefit plan, pension plan, fringe benefit plan or
compensation plan in which Employee (and eligible dependents) are
participating immediately prior to a Change in Control, unless Employee
(and eligible dependents) are permitted to participate in other plans
providing Employee (and eligible dependents) with substantially comparable
benefits at no greater after-tax cost to Employee (and eligible
dependents), or the taking of any action by the Company which would
adversely affect the Employee's (and eligible dependents) participation in
or reduce Employee's (and eligible dependents) benefits under any such
plan; or
(viii) failure of a successor to assume this Agreement.
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) Upon the occurrence of a Change in Control and thereafter: (A) if
Employee's employment with the Company is terminated by the Company without
Cause or as a result of the disability or incapacitation of Employee, or by
Employee with Good Reason at any time during the period beginning on the date of
the Change in Control and ending one (1) year after the date of such Change in
Control, or (B) if Employee's employment with the Company is terminated by the
Company without Cause or by Employee for Good Reason within ninety (90) days
prior to the occurrence of a Change in Control, then Employee shall be entitled
to receive from the Company:
(i) a lump sum amount, payable within ten (10) days after such
termination (or, if such termination occurred prior to a Change in Control,
within ten (10) days after the Change in Control) equal to (A) three (3)
times Employee's base salary in effect, or required to be in effect,
immediately prior to the Change in Control,
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and (B) three (3) times the highest annual bonus paid or payable to
Employee within three (3) years prior to the Change in Control;
(ii) within ten (10) days after such termination (or, if such
termination occurred prior to a Change in Control, within ten (10) days
after the Change in Control) equal to the Accrued Benefits;
(iii) payment by the Company of the premiums for Employee (except in
the case of Employee's death) and Employee's and dependents' health and
welfare coverage (including, without limitation, medical, dental, life
insurance and disability coverage) for three (3) years from the later of
the occurrence of a Change in Control or the date of termination of
Employee's employment, under the Company's health and welfare plans which
cover the senior executives of the Company or materially similar benefits
("Continuation Coverage"), subject to Employee's payment of customary
premiums (if any) in effect prior to the Change in Control;
(iv) upon the occurrence of a Change in Control, full and immediate
vesting of all stock options and equity awards held by Employee.
Payments under (iii) above may, at the discretion of the Company, be made
by continuing Employee's participation in the plan as a terminee or by covering
Employee and Employee's dependents under substitute arrangements, provided that,
notwithstanding anything herein to the contrary, to the extent Employee incurs
tax that Employee would not have incurred as an active employee as a result of
the aforementioned coverage or the benefits provided thereunder, Employee shall
receive from the Company an additional grossed up payment in the amount
necessary so that Employee will have no additional cost for receiving such items
or any additional payment. Notwithstanding anything herein to the contrary,
Employee (and his eligible dependents) shall retain all rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and
such COBRA continuation coverage shall be available to Employee (and his
eligible dependents) at the expiration of the Continuation Coverage described
herein.
(d) For purposes of this Agreement, a Change in Control shall mean the
occurrence of the following:
(i) any person (as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as used in
Sections 13(d) and 14(d) thereof), excluding the Company, any subsidiary of
the Company and any employee benefit plan sponsored or maintained by the
Company or any subsidiary of the Company (including any trustee of any such
plan acting in his capacity as trustee), becoming the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act) of securities of the
Company representing thirty percent (30%) of the total combined voting
power of the Company's then outstanding securities;
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(ii) the merger, consolidation or other business combination of the
Company (a "Transaction"), other than (A) a Transaction involving only the
Company and one or more of its subsidiaries, or (B) a Transaction
immediately following which the stockholders of the Company immediately
prior to the Transaction continue to have a majority of the voting power in
the resulting entity and no person (other than those covered by the
exceptions in (a) above) becomes the beneficial owner of securities of the
resulting entity representing more than twenty-five percent (25%) of the
voting power in the resulting entity;
(iii) during any period of two (2) consecutive years beginning on or
after the date hereof, the persons who were members of the Board
immediately before the beginning of such period (the "Incumbent Directors")
ceasing (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of any successor to the Company,
provided that, any director who was not a director as of the date hereof
shall be deemed to be an Incumbent Director if such director was elected to
the board of directors by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as Incumbent
Directors either actually or by prior operation of the foregoing unless
such election, recommendation or approval occurs as a result of an actual
or threatened election contest (as such terms are used in Rule 14a- 11 of
Regulation 14A promulgated under the Exchange Act or any successor
provision) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board; or
(iv) the approval by the stockholders of the Company of any plan of
complete liquidation of the Company or an agreement for the sale of all or
substantially all of the Company's assets other than the sale of all or
substantially all of the assets of the Company to a person or persons who
beneficially own, directly or indirectly, at least fifty percent (50%) or
more of the combined voting power of the outstanding voting securities of
the Company at the time of such sale.
(v) To the extent that Employee is entitled to payment under Section
10(c) upon a Change in Control due to Employee's termination without Cause
or for Good Reason within ninety (90) days prior to a Change in Control,
any such payments under Section 10(c) shall be reduced by any payments made
to Employee prior to a Change in Control under Sections 10(a)(iv) and
10(a)(v).
11. Limitation on Payments.
(a) In the event that Employee shall become entitled to the payments and/or
benefits provided by Section 10(c) or any other amounts (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a change of ownership covered by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")
or any person affiliated with the Company or such person) as a result of a
Change of Control (collectively the "Company Payments"), and such Company
Payments will be subject to the tax (the "Excise Tax") imposed by Section 4999
of
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the Code (and any similar tax that may hereafter be imposed) the Company shall
pay to Employee at the time specified in subsection (d) below an additional
amount (the "Gross-up Payment") such that the net amount retained by Employee,
after deduction of any Excise Tax on the Company Payments and any federal,
state, and local income or payroll tax upon the Gross-up Payment pro vided for
by this paragraph (a), but before deduction for any federal, state, and local
income or payroll tax on the Company Payments, shall be equal to the Company
Payments. Notwithstanding the foregoing provisions of this Section 11 to the
contrary, if it shall be determined that Employee is entitled to a Gross-up
Payment, but the Company Payments do not exceed one hundred five percent (105%)
of the greatest amount that could be paid to Employee such that the receipt of
Company Payments would not give rise to any Excise Tax (the "Reduced Amount"),
then no Gross-up Payment shall be made to Employee and the Company Payments, in
the aggregate, shall be reduced to the Reduced Amount.
(b) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and determining the amount of such Excise Tax: (i) the Total Payments
shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "parachute payments" in excess of the "base
amount" (as defined under Code Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, unless and except to the extent that, in the
opinion of the Company's independent certified public accountants appointed
prior to any change in ownership (as defined under Code Section 280G(b)(2)) or
tax counsel selected by such accountants (the "Accountants") such Total Payments
(in whole or in part), (A) do not constitute "parachute payments," (B) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code" or (C) are otherwise not subject to the Excise
Tax; and (ii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.
(c) For purposes of determining the amount of the Gross-up Payment,
Employee shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Employee's residence for the
calendar year in which the Company Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, Employee shall repay
to the Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the prior Gross-up Payment attributable to
such reduction (plus the portion of the Gross-up Payment attributable to the
Excise Tax and federal, state and local income tax imposed on the portion of the
Gross-up Payment being repaid by Employee if such repayment results in a
reduction in Excise Tax or a federal, state and local income tax deduction),
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any
portion of the Gross-up Payment to be refunded to the Company has been paid to
any federal, state and local tax authority, repayment thereof (and related
amounts) shall not be
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required until actual refund or credit of such portion has been made to
Employee, and interest payable to the Company shall not exceed the interest
received or credited to Employee by such tax authority for the period it held
such portion. Employee and the Company shall mutually agree upon the course of
action to be pursued (and the method of allocating the expense thereof) if
Employee's claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the Accountants or
the Internal Revenue Service to exceed the amount taken into account hereunder
at the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.
(d) The Gross-up Payment or portion thereof provided for in subsection (c)
above shall be paid not later than the thirtieth (30th) day following an event
occurring which sub jects Employee to the Excise Tax; provided, however, that if
the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to Employee on such day
an estimate, as determined in good faith by the Accountants, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Code Section 1274(b)(2)(B) of the Code),
subject to further payments pursuant to subsection (c) hereof, as soon as the
amount thereof can reasonably be determined, but in no event later than the
ninetieth (90th) day after the occurrence of the event subjecting Employee to
the Excise Tax. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to Employee, payable on the fifth (5th) day
after demand by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).
(e) In the event of any controversy with the Internal Revenue Service (or
other taxing authority) under this Section 11, Employee shall permit the Company
to control issues related to this Section 11 (at its expense), provided that
such issues do not potentially materially adversely affect Employee, but
Employee shall control any other issues. In the event the issues are
interrelated, Employee and the Company shall in good faith cooperate so as not
to jeopardize resolution of either issue, but if the parties cannot agree,
Employee shall make the final determination with regard to the issues. In the
event of any conference with any taxing authority as to the Excise Tax or
associated income taxes, Employee shall permit the representative of the Company
to accompany him, and Employee and his representative shall cooperate with the
Company and its representative.
(f) The Company shall be responsible for all charges of the Accountants.
12. Successors. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree in writing to perform this
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Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
13. Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment.
14. 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
(including, without limitation, the employment agreement in effect prior to the
date hereof) and may be modified only by a written instrument duly executed by
each party.
15. 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 15). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 15. 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.
16. 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.
17. 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 12.
18. 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 12 and 17).
19. Legal Fees. To the fullest extent permitted by law, the Company shall
promptly pay upon submission of statements all legal and other professional
fees, costs of litigation, prejudgment interest, and other expenses incurred in
connection with any dispute
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concerning payments, benefits and other entitlements to which Employee may have
under this Agreement; provided, however, the Company shall be reimbursed by
Employee for the fees and expenses advanced in the event Employee's claim is, in
a material manner, in bad faith or frivolous and the arbitrator or court, as
applicable, determines that the reimbursement of such fees and expenses is
appropriate.
20. Pooling of Interests; Severability. In the event that the Company's
independent public accountants determine in good faith that any provision of
this Agreement would preclude "pooling of interests" accounting and provided
that the Company engages in a transaction which utilizes "pooling of interests"
accounting, such provision shall be deemed invalid and inoperative solely to the
extent necessary to permit "pooling of interests" transactions. If any portion
of this Agreement is held invalid or inoperative (including a determination by
the Company's independent public accountants in good faith that any provision of
this Agreement would preclude "pooling of interests" accounting), the other
provisions of this Agreement shall be deemed to be valid and operative and, so
far as is reasonable and possible, effect shall be given to the intent
manifested by the portion held valid or inoperative.
21. No Duty to Mitigate/No Offset. The Company agrees that if Employee's
employment with the Company is terminated pursuant to this Agreement during the
term of this Agreement, Employee shall not be required to seek other employment
or to attempt in any way to reduce any amounts payable to Employee by the
Company pursuant to this Agreement. Further, the amount of any payment or
benefit provided for in this Agreement shall not be reduced by any compensation
earned by Employee or benefit provided to Employee as the result of employment
by another employer or otherwise. The Company's obligations to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against Employee. Notwithstanding the foregoing, payments
and benefits under the Agreement will cease to be paid and may be recouped by
the Company in the event Employee breaches any of the terms of Section 6, 7 or 8
hereunder.
22. 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.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
CELGENE CORPORATION
By:
-----------------------------
Xxxxxxx X. X. Xxxxxx
Chairman of the
Compensation Committee
By:
-----------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
--------------------------------
Xxx X. Xxxxx
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