EMPLOYMENT AGREEMENT
Employment Agreement dated as of April 30, 1998 between Seragen, Inc.
(the "Company"), having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), residing at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
WHEREAS, Crane is currently employed by the Company as acting Chief
Financial Officer; and
WHEREAS, the Company agreed to employ Crane in the aforesaid capacity on
and after November 11, 1996;
WHEREAS, Crane has provided services to the Company substantially on the
terms set forth herein since November 11, 1996
WHEREAS, the Company and Crane now desire to reduce to writing their
agreement in respect to Crane's employment;
Unless otherwise specifically provided, all capitalized terms are defined
in Section 5.
1. Term of Employment.
Subject to the terms and conditions of this Agreement, the Company hereby
employs Crane, and Crane hereby accepts employment by the Company, commencing
on April 30, 1998 (the "Effective Date") and continuing until the date Crane
is terminated or otherwise resigns pursuant to Section 4 of this Agreement,
except that any rights or obligations arising before such date (including the
right to future severance payments) shall remain in full force and effect
after such date.
2. Duties.
(a) General. Crane is hereby engaged to serve as Vice President of
Finance and Chief Financial Officer of the Company. Crane shall report solely
to the Chief Executive Officer of the Company, shall perform such executive
duties as may be assigned to him from time to time by the Company's Chief
Executive Officer and shall possess such other titles, without additional
compensation, as may be assigned or granted to him from time to time by the
Company's Chief Executive Officer or Board of Directors. If such additional
titles involve significant additional responsibilities, Crane and the Company
shall negotiate in good faith to determine any additional compensation that
shall be paid to Crane. Except as provided in Section 2(b) hereof, Crane
agrees to devote his full business time, energy and skill to the Company's
affairs and shall at all times act with due regard to the best interests of
the Company.
(b) Outside Commitments. Crane represents and agrees that he shall not
accept employment by or serve as a consultant to, any person other than the
Company except to the extent that such activities do not exceed 10% of his
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business time, do not materially interfere with his ability to perform his
duties for the Company, and are not competitive with the business of the
Company.
3. Compensation and Other Benefits. For all services to be rendered by
Crane and all covenants undertaken by him pursuant to this Agreement, the
Company shall pay and Crane shall accept the compensation set forth in this
Section 3.
(a) Salary. The Company shall pay Crane a salary at the rate of One
Hundred Ninety-Five Thousand Dollars ($195,000) per annum during the term of
his employment hereunder, payable in accordance with the Company's normal
payroll practices for its senior management. The Company may, at any time, in
the discretion of its Board of Directors increase, but not decrease, Crane's
base salary based upon merit as a result of positive reviews of Crane's
performance by the Chief Executive Officer.
(b) Stock Options. The Company shall ▇▇▇▇▇ ▇▇▇▇▇ stock options (the
"Options") under the Seragen, Inc. 1992 Long Term Incentive Plan (the "Plan")
to purchase sufficient shares of the Company's common stock, par value $.01
per share ("Common Stock"), to equal two point seven five percent (2.75%) of
the then outstanding Common Stock, measured on a Fully Diluted Basis (as the
term is defined in Section 5), at the Fair Market Value (as defined in the
Plan) per share of Common Stock on the date of grant. To the extent permitted
by federal income tax law, options issued to Crane under the Plan shall be
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code (the "Code")). The Options shall be evidenced by a Stock Option Agreement
(the "Option Agreement") setting forth the terms and conditions applicable to
the Options.
(i) Vesting. The Option Agreement shall provide that:
(1) the Options shall vest, i.e., become exercisable as
follows: (A) 1/48 of the Options, multiplied by the number of calendar months
or partial calendar months that have elapsed from November 11, 1996 until the
date of grant of the Options, shall vest immediately upon the grant of the
Options and (B) 1/48 of the Options shall vest on the first day of each
calendar month thereafter, so that Crane shall be fully (100%) vested on
October 1, 2000;
(2) upon the termination by the Company of Crane's employment
without Just Cause or Crane's termination for Good Reason (as the terms are
defined in Section 5), in place of the vesting schedule provided in Section
3(b)(i)(1) above, the number of Options that shall vest as of the date of such
termination shall be equal to the sum of (A) 25% of the Options and (B) 3.125%
of the Options, multiplied by the number of calendar months or partial
calendar months that have elapsed from November 11, 1996 until the date of
such termination; and
(3) upon a Change in Ownership (as the term is defined in
Section 5), in place of the vesting schedule provided in Section 3(b)(i)(1)
above, the Options shall become fully (100%) vested.
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(ii) General Provisions.
(1) The Options shall, to the extent vested, be fully
exercisable until the tenth (10th) anniversary of the date of grant, except
that the Options will expire 15 days after a termination of employment with
Just Cause. To the extent that any Options that are "incentive stock options"
are not exercised before the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Options will remain outstanding for
the remainder of their term but will thereafter be treated as non-qualified
stock options.
(2) The Options shall be exercisable in accordance with the
terms of the Plan, including the right to pay the option exercise price in
whole or in part by surrendering shares of Common Stock or Restricted Stock
(as such term is defined in the Plan) held by Crane for at least six months
prior to the exercise date with an aggregate Fair Market Value equal to the
option exercise price or in accordance with a cashless exercise program
established with a securities brokerage firm and approved by the Company, and
shall provide that stock certificates to be issued upon exercise of vested
Options shall be issued outright and free of escrow no later than three (3)
days after the date of exercise.
(3) Stock certificates issued pursuant to the exercise of an
Option shall include only such legends as are required to comply with federal
or state securities law or regulations.
(4) The Options shall include all rights and benefits under
the Plan, including Section 11 (relating to accelerated vesting on a Change in
Control), and the Company shall not terminate any Option issued to Crane upon
a Change in Control (as defined in the Plan) without Crane's written approval.
(5) In the event that the Company grants options or other
equity interests to management, employees, directors or consultants, or the
Company sells shares of its Common Stock or any equity securities or
securities convertible or exchangeable into any equity securities of the
Company, as part of a plan or series of plans of financing, or the number of
shares of Common Stock outstanding on a Fully Diluted Basis increases as a
result of a change in the conversion ratio of any class of securities
convertible or exchangeable into any equity securities of the Company, the
Company shall ▇▇▇▇▇ ▇▇▇▇▇ additional stock options under the Plan covering
that number of shares of Common Stock necessary to cause Crane's proportionate
holdings of the outstanding Common Stock on a Fully Diluted Basis, immediately
after the grant or sale of such options, shares or other equity interests to
equal his proportionate holdings of the outstanding Common Stock, on a Fully
Diluted Basis, immediately prior to the grant or sale of such options, shares
or other equity interests (the "Dilution Options"), but not to exceed two
point seven five percent (2.75%) of the Common Stock on a Fully Diluted Basis.
Dilution Options will be granted on the last day of the calendar quarter
during which such grant or sale of options, shares or other equity interests
is completed, based on the number of shares of Common Stock outstanding on a
Fully Diluted Basis on the last day of such calendar quarter, except that, in
the case of any target Equity Financing (as the term is defined in Section 5)
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from which the Company receives proceeds of at least Ten Million ($10,000,000)
Dollars, the Dilution Options will be granted immediately upon the
consummation of such Target Equity Financing. Dilution Options will have an
exercise price equal to the fair market value per share of Common Stock on the
date of grant of such Dilution Options, and will otherwise be subject to the
same terms and conditions, and will vest and remain exercisable on the same
terms, as are set forth in Section 3(b) for all other Options granted to
Crane.
Crane's right to receive Dilution Options pursuant to this subsection
3(b)(ii)(5) will terminate after the Company has received cumulative proceeds
(since November 11, 1996) of at least Twenty Million ($20,000,000) Dollars
from one or more Target Equity Financings.
(6) The Company shall, on or before December 31, 1998, at its
own expense register under the Securities Act of 1933 the maximum aggregate
number of shares issuable under the Plan on a Registration Statement on Form
S-8 and use its best efforts to maintain the effectiveness of such
Registration Statement for as long as any of the Options or Dilution Options
remain outstanding.
(c) Commuting and Living Expense Reimbursement. The Company shall,
within ten (10) days of receipt of reasonable substantiation, reimburse Crane
for (i) all reasonable costs incurred by him in connection with obtaining
lodging accommodations in the vicinity of the Company's principal office in
order to carry out his duties and responsibilities under this Agreement and
weekly travel between such location and his family residence located in
Titusville, New Jersey, plus (ii) any federal, state or local income or
payroll taxes incurred by Crane with respect to payments made under this
Section 3(c), including this subsection 3(c)(ii), so that Crane shall be made
whole on an after tax basis.
(d) Vacation and Employee Benefits. Crane shall be entitled to paid
vacations in accordance with the policies of the Company from time to time in
effect, subject to a minimum of four (4) weeks per year, accruing and earned
pro-rata over each 12 month period following the execution hereof, and shall
be eligible to participate in any pension, profit sharing or similar plan and
any health, hospitalization, medical, accident, disability, sick leave,
supplementary income benefit, life insurance or other similar benefit plan or
program of the Company now existing or hereafter established and available to
the Company's employees generally or to key employees as a group to the extent
his age, health, and other qualifications make him eligible to participate.
Furthermore, Crane shall be entitled to such additional benefits as may be
granted to him from time to time by the Chief Executive Officer or the Board
of Directors of the Company.
(e) Severance. Upon the termination of Crane's employment for any
reason, the Company shall pay Crane for up to four (4) weeks of any unused
accrued vacation time, together with all salary and other benefits accrued
through the date of termination. If either Crane shall voluntarily terminate
his employment for Good Reason (as defined in Section 5) or Crane's employment
hereunder is terminated by the Company without Just Cause (as defined in
Section 5), the Company shall provide Crane with the following severance
benefits:
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(i) upon the date of such termination the Company shall pay Crane,
as termination and severance pay, in a lump sum, an amount equal to twelve
(12) months' salary based on his then salary rate; and
(ii) upon the date of such termination the Company shall pay Crane,
in a lump sum, the amount of any remaining obligations under any lease for
local lodging, up to a maximum of one year; and
(iii) the Company will continue to provide Crane and his family
with the same group health plan benefits coverage provided to them prior to
Crane's termination for the maximum period set forth in the continuation
coverage requirements under "COBRA", and the Company will provide such
coverage without cost or charge of any nature to Crane or any member of his
family, other than any applicable deductible or co-payment, for such maximum
period, but in no event for a period longer than twelve (12) months following
the date of Crane's termination.
(iv) the Company shall transfer to Crane full ownership of the
Gateway 2000 portable computer (including all accessories) which he is
currently using and in which he has already invested his own personal funds,
provided, however that Crane shall provide to the Company a copy, in machine
readable format, of all computer files relating to his employment with the
Company.
(f) Death or Disability. If Crane's employment is terminated by death
or disability, the Company shall pay to Crane's estate or to Crane, as the
case may be, the balance of his accrued and unpaid salary through the date of
such termination and unreimbursed expenses and his unused accrued vacation
time (up to four (4) weeks). For the purposes of this section, the word
"disability" shall have the same meaning as in the Company's then-applicable
long-term disability policy that would qualify Crane for full benefits under
the policy.
(g) Employment. All compensation payable and other benefits provided
under this Section 3 shall be subject to customary withholding for income,
F.I.C.A. and other employment taxes. The value of stock issued pursuant to the
exercise of an Option or Dilution Option shall be measured solely in
accordance with IRS rules and regulations.
(h) Asset Value Realization Bonus. As of the date hereof, it is
understood that a major goal of Crane's employment hereunder shall be to
assist the Company in obtaining a satisfactory sale or merger of the Company.
Therefore, in the event a Change in Ownership of the Company (as the term is
defined in Section 5) is Effected (as hereinafter defined) during the term of
Crane's employment with the Company or at any time before the first
anniversary of Crane's termination of employment, then the Company shall pay
Crane as an addition to his other compensation a fee (the "Asset Value
Realization Bonus") equal to two point seven-five percent (2.75%) of the Net
Proceeds (as hereinafter defined) for any acquisition that is part of the
Change in Ownership, which amount shall be reduced (but not below zero) by the
Option Stock Gain (as hereinafter defined) recognized by Crane as a result of
the sale by him of Common Stock acquired upon the exercise of Options or
Dilution Options granted to him under Section 3(b) above. The Company shall
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pay the Asset Value Realization Bonus, or any increase in the Asset Value
Realization Bonus, on or before the closing of any acquisition that is part of
a Change in Ownership. If any part of the Net Proceeds is payable after
closing (the "Deferred Payments"), however, then the Company may defer the
payment of the part of the Asset Value Realization Bonus allocable to the
Deferred Payments until receipt of the Deferred Payments, provided the payor
of the Deferred Payments has agreed in writing to pay directly to Crane the
Asset Value Realization Bonus allocable to the Deferred Payments as and when
such Deferred Payments are made to the Company or its shareholders. "Net
Proceeds" shall mean the total cash plus any property received directly or
indirectly by the Company or its shareholders in kind with respect to all
acquisitions constituting the Change in Ownership, reduced by all investment
banking fees, brokerage fees, appraisal fees, and other professional expenses
directly attributable to the acquisitions. A transaction shall be "Effected"
by a certain date if it is consummated by that date or is the subject matter
of an agreement or memorandum of intent executed by that date and subsequently
consummated. "Option Stock Gain" shall mean the difference between the net
proceeds from Crane's sale of Common Stock and the net cost to Crane to
exercise the Options and Dilution Options for such stock on the assumption
that Crane has, in fact, exercised all vested options and sold all Common
Stock received on such exercise as of the date of the Change in Ownership;
Crane shall for this purpose be deemed to have sold all Common Stock that (i)
he owns at the time of the Change of Ownership or could then own if he
exercised all vested options, (ii) he is permitted to sell, and (iii) in the
event of a merger or sale of securities, he has received an offer to purchase,
and is permitted to sell, on the same terms and conditions as those of the
transactions that constitute the Change in Ownership.
4. Termination of Employment.
(a) Termination by Company. The Company may terminate Crane's employment
hereunder at any time without Just Cause, effective upon not less than thirty
(30) days' prior written notice. The Company may terminate Crane's employment
hereunder with Just Cause immediately without notice. If the termination is
for Just Cause, the Company shall provide Crane as soon as practicable with a
written explanation of the facts on which the termination is based. For the
purposes of this Agreement, the Company shall be deemed to have terminated
Crane without Just Cause if (i) Crane shall have notified the Company in
writing that he has Good Reason (as defined in Section 5) to terminate
employment with the Company, (ii) the Company shall not have eliminated such
Good Reason within thirty (30) days of such notice, and (iii) Crane shall have
given notice of termination of his employment more than thirty (30) days after
delivery of such notice of Good Reason and less than sixty (60) days after
delivery of such notice of Good Reason.
(b) Termination by Crane. Crane may terminate his employment hereunder
at any time upon not less than thirty (30) days' prior written notice. Upon
Crane's voluntary termination of employment without Good Reason pursuant to
this Section 4(b), Crane shall not be entitled to the severance benefits
described in Section 3(e) above.
(c) Disability. If Crane shall incur a disability, the Company may
terminate Crane's employment upon not less than thirty (30) days' prior
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written notice. Upon such termination, Crane shall be entitled to receive
from the Company only those payments set forth in Section 3(f) hereof. For
the purposes of this section, the word "disability" shall have the same
meaning as in the Company's then-applicable long-term disability policy that
would qualify Crane for full benefits under the policy.
5. Definitions.
(a) Just Cause. For the purposes of this Agreement, "Just Cause" shall
mean:
(i) the commission by Crane of an act of, or omission of an act
that would constitute, willful and material malfeasance or gross negligence in
the performance of his duties on behalf of the Company;
(ii) the commission by Crane of a willful act of material fraud in
the performance of his duties on behalf of the Company;
(iii) the conviction of Crane for commission of a felony; or
(iv) the breach by Crane of any material term of this Agreement or
the continuing willful failure of Crane to perform his material duties to the
Company (other than any such failure resulting from Crane's incapacity due to
physical or mental illness) after written notice thereof (specifying the
particulars thereof in reasonable detail) and a reasonable opportunity to be
heard and cure such breach or failure are given to Crane by the Chief
Executive Officer of the Company or the Board of Directors of the Company. No
notice, however, shall be due for a breach or failure to perform that cannot
be cured or for any act described in clauses (i), (ii) or (iii) above.
For purposes of this Section 5(a), no act, or failure to act, on Crane's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission
was in the best interests of the Company.
(b) Good Reason. For the purposes of this Agreement, "Good Reason"
shall mean:
(i) the Company shall have materially breached its obligations
under this Agreement (including any substantial change in Crane's duties or
responsibilities), and such breach is not cured within twenty (20) days of
Crane's sending a written notice of such breach;
(ii) the Company shall have incurred a Change in Ownership;
(iii) the Company shall have incurred a Change in Control;
(iv) the Company shall be Insolvent;
(v) the Company shall have acted in bad faith to cause Crane to
resign from the Company;
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(vi) the Options shall not have been granted within six (6) months
of the date of execution of this Agreement; or
(vii) the Dilution Options shall not have been granted within the
time period set forth in Section 3(b).
Good Reason shall not arise in any situation in which Crane shall have
given written consent to the act or failure to act of the Company.
(c) Insolvency. For the purposes of this Agreement, the Company shall be
"Insolvent" if
(i) it commences any case, proceeding or other action (A) under the
Federal Bankruptcy Code seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment of
a receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its property, or the Company shall make a general
assignment for the benefit of its creditors, or
(ii) there shall be commenced against the Company any case,
proceeding or other action of a nature referred to in Section 5(c)(i) above,
which case, proceeding or other action
results in the entry of an order for relief from which no stay has been
granted within sixty (60) days, or
(iii) for a period in excess of sixty (60) days, the Company shall
generally not, or shall be unable to, pay its debts as they become due or
shall admit in writing its inability to pay its debts.
(d) Change in Ownership. For purposes of this Agreement, a "Change in
Ownership" of the Company shall mean (i) the acquisition by any "person" or
group of "persons" (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934 ("Exchange Act")), whether by way of merger, sale of assets, stock
purchase, tender offer or otherwise, of (A) all or substantially all of the
equity securities of the Company or (B) all or substantially all of the
operating assets of the Company and its subsidiaries taken as a whole,
provided that the sale of the Company's manufacturing and clinical operations
facilities to Boston University or Boston University's designated affiliate,
shall not constitute a change in ownership, or (ii) the sale or out-licensing
after the date hereof of the majority (in value) of the technology assets of
the Company and its subsidiaries taken as a whole.
(e) Change in Control. For purposes of this Agreement, a "Change in
Control" of the Company shall have the same meaning as provided in Section
11(b) of the Plan as in effect on the date hereof.
(f) Fully Diluted Basis. For purposes of this Agreement, "Fully Diluted
Basis" shall mean that all shares of Common Stock issuable upon exercise of
8
options outstanding under the Plan or any other stock option plan (including
the Options and Dilution Options granted to Crane pursuant to this Agreement)
and all shares of Common Stock issuable on exercise of all other outstanding
options, warrants, conversion rights or other rights issued by the Company to
acquire equity securities shall be deemed to be outstanding.
(g) Target Equity Financing. Target Equity Financing shall mean the
sale or issuance of stock of the Company or of debt securities of the Company
with conversion rights, other than
(i) stock or debt securities sold or issued to a shareholder and/or affiliated
investment entities who as of the Effective Date collectively own at least 1%
of the Common Stock as measured on a Fully Diluted Basis or (ii) stock issued
as a result of the exercise of options presently outstanding or issued
pursuant to the Plan.
6. Confidentiality.
(a) Crane acknowledges that during the course of his employment with the
Company he has had access to, will have access to and may obtain, develop or
learn of Confidential Information (as defined below).
(b) Crane agrees that while employed by the Company and thereafter he
shall hold such Confidential Information in strictest confidence and that,
except pursuant to his employment with the Company, he shall not at any time,
during or after the conclusion of his employment with the Company, or in any
manner, either directly or indirectly, use (for his own benefit or otherwise),
divulge, disclose or communicate to any unauthorized person, firm or
corporation in any manner whatsoever any Confidential Information.
(c) Under this Agreement, the term "Confidential Information" shall
include but not be limited to any of the following information relating to the
Company learned by Crane during or as a result of his employment or prior
consulting engagement with the Company:
(i) information relating to the products, product development
activities, research, technical and/or scientific know-how, plans, projects,
processes or manner of operations;
(ii) computer databases, software programs and information relating
to the nature of the hardware or software and how said hardware and software
are used in combination or alone;
(iii) methods of selling, pricing and business operations in
general as well as specific;
(iv) the identity of customers, market research information and any
other information in any form relating to such customers and their
relationships or dealings with the Company or any subsidiary or affiliate
thereof;
(v) any trade secret or confidential information of or concerning
any customers, affiliates or business relations; and
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(vi) any other trade secret or information of a confidential or
proprietary nature.
(d) While an employee of the Company, Crane shall use, divulge, disclose
or communicate Confidential Information only in the scope of his employment
with the Company. Crane shall not at any time after the termination of his
employment with the Company, for whatever reason, use, divulge, disclose, or
communicate for any purpose any Confidential Information.
(e) Crane will not make or use any notes or memoranda relating to any
Confidential Information except for the benefit of the Company, and will, at
the Company's request, return each original and every copy of any and all
notes, memoranda, correspondence, diagrams or other records, in written or
other form, that he may at any time have within his possession or control that
contain any Confidential Information.
(f) Notwithstanding the above, this Section 6 shall not apply to any
matter which is now or becomes part of the public domain, other than through
Crane's improper act or omission, was known to Crane prior to the commencement
of his employment or any prior consulting arrangements with the Company or is
disclosed to Crane by a third party which did not obtain the information,
directly or indirectly, under an obligation of confidence to the Company.
Further, this agreement shall not apply to information which Crane is required
to disclose by enforceable legal process.
7. Non-Competition.
Crane acknowledges and recognizes the highly competitive nature of the
business conducted by the Company. Accordingly, Crane agrees that, in
consideration of the premises
contained herein, he shall not, for his own benefit or for the benefit of any
other person or entity, while employed by the Company and for a one-year
period thereafter:
(a) become an employer, officer, director, owner, employee, partner,
consultant or other participant in any entity, or assist any person, which
competes with or which is about to compete with the Company in the business of
developing, manufacturing, marketing or selling pharmaceutical products based
upon diphtheria fusion toxins or any other technology owned by the Company
before Crane's termination (a "Competitive Business"); or
(b) own any interest in any entity which engages, or is about to engage
in a Competitive Business; provided, however, that Crane shall have the right
to acquire as a passive investor an equity interest of not more than one
percent (1%) of the issued and outstanding shares of any publicly traded
corporation's stock.
8. Company Right to Inventions.
Crane shall promptly disclose, grant and assign to the Company for its
sole use and benefit any and all inventions, improvements, technical
information and suggestions relating in any way to diphtheria fusion toxins or
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other technology created by the Company, which he may develop or acquire while
employed by the Company (whether or not during usual working hours), together
with all patent applications, letters patent, copyrights and reissues thereof
that may at any time be granted for or upon any such invention, improvement or
technical information. In connection therewith:
(a) Crane shall without charge, but at the expense of the Company,
promptly at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be reasonably necessary
or proper in the reasonable opinion of the Company to vest title to any such
inventions, improvements, technical information, patent applications, patents,
copyrights or reissues thereof in the Company and to enable it to obtain and
maintain the entire right and title thereto throughout the world; and
(b) Crane shall render to the Company at its expense (including a
reasonable payment for the time involved in case he is not then in its employ)
all such assistance as it may reasonably require in the prosecution of
applications for said patents, copyrights or reissues thereof, in the
prosecution or defense of interferences which may be declared involving any of
said applications, patents or copyrights and in any litigation in which the
Company may be involved relating to any such patents, inventions, improvements
or technical information.
9. Breach. In the event of breach by Crane of any provision of Sections
6, 7 and 8 hereof, the remedy at law will be deemed inadequate, and the
Company will be entitled, in addition to any other remedies available by law,
to appropriate injunctive and other relief. Should any provision hereof be
adjudged to any extent invalid by any competent tribunal, such provision will
be deemed modified to the extent necessary to make it enforceable.
10. Indemnity. To the extent permitted by law, the Company shall
indemnify Crane and hold him harmless for all acts or decisions made by him in
good faith while performing services for the Company or any designee of the
Company and shall pay or reimburse Crane for all expenses as and when
incurred, including attorneys' fees, actually and necessarily incurred by
Crane in connection with the defense of any action, suit or proceeding to
which Crane may be made a party by reason of his performing services hereunder
and in connection with any related appeal including the cost of court
settlements. The Company shall also use its best efforts to obtain coverage
for him under any insurance policy obtained during the term of this Agreement
covering the other officers and directors of the Company against lawsuits.
11. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been given when sent by facsimile or when mailed at any general or branch
United States Post Office enclosed in a certified postpaid envelope and
addressed to the address of the respective party stated below or to such
changed address as the party may have fixed by notice:
To the Company: Seragen, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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To Crane: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
12. Legal Fees. The Company shall pay Crane's reasonable legal fees
incurred with respect to the preparation of this Agreement and other documents
related to his employment by the Company.
13. Miscellaneous.
(a) Construction. This Agreement shall be construed, interpreted and
governed by the laws of the State of Delaware without regard to the principles
of conflicts of laws.
(b) Binding Agreement; Assignability. This Agreement shall be binding
upon and inure to the benefit of Crane, his legal representatives, heirs and
distributees, and the Company, its successors and assigns; provided, however,
that because this Agreement is a personal service contract, Crane shall not
assign any of his employment duties or obligations hereunder and any purported
assignment shall be null and void ab initio.
(c) Previous Agreements. This Agreement supersedes all other agreements
between the Company and Crane relating to Crane's employment by the Company.
(d) Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, and no waiver, modification
or change of any of its provisions shall be valid unless in writing and signed
by the party against whom such claimed waiver, modification or change is
sought to be enforced.
(e) Waiver. The waiver of any breach of any duty, term or condition of
this Agreement shall not be deemed to constitute a waiver of any preceding or
succeeding breach of the same or of any other duty, term or condition of this
Agreement.
(f) Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof or to affect the meaning thereof.
(g) Survival. The provisions of Sections 6, 7, 8 and 10 shall survive
termination of this Agreement.
(h) Representations and Warranties of Crane. Crane represents and
warrants that his performance of all of the terms of this Agreement and as an
employee of the Company does not and will not breach any consulting,
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employment, non-compete or other agreement to keep in confidence proprietary
information, knowledge, or data acquired by him in confidence or in trust from
a third party prior to his employment with the Company.
(i) Representations and Warranties of Company.
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified to do business in the Commonwealth of Massachusetts and has full
power and authority to operate its businesses as now operated and to perform
this Employment Agreement in accordance with its terms.
(ii) The execution and delivery of this Employment Agreement to
Crane and the carrying out of the provisions hereof have been duly authorized
by the Board of Directors of the Company based upon the unanimous
recommendation of the Compensation Committee of the Board of Directors.
(iii) This Employment Agreement shall be, when duly executed and
delivered, a legal and binding obligation of the Company, enforceable in
accordance with its terms.
(iv) Neither the execution nor delivery of this Employment
Agreement, nor the compliance with its terms, shall constitute a violation or
breach of the Certificate of Incorporation, as amended to date, or of the
by-laws, as currently in effect, of the Company or of any agreement between
the Company and any other party.
(j) Capitalized Terms. All capitalized terms shall have the meanings
provided in Section 5 unless provided elsewhere.
(k) Arbitration. Except as provided in Paragraph 9 above, any claim or
controversy arising out of or relating to this Agreement or the breach thereof
shall be settled by arbitration in accordance with the laws of the
Commonwealth of Massachusetts. Such arbitration shall be conducted in the City
of Boston in accordance with the rules then-existing of the American
Arbitration Association for commercial disputes. In any such arbitration each
party shall have the right to demand (i) a written statement setting forth,
for each cause of action, a detailed statement of the facts on which it is
based and a description of how the amount demanded was calculated; and (ii) to
demand inspection and copying of relevant documents and things in the
possession or control of any of the other parties, prior to the arbitration
hearing. The arbitrator shall have authority to order compliance with, and
shall otherwise supervise, such demands for written statements and/or for
pre-hearing inspection and copying. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
SERAGEN, INC.
By: /s/ Reed R. Prior
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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