1
EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 5th day of
September, 1996, is entered into by Medicines Development Company, a Delaware
corporation with its principal place of business at Xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and XXXXX XXXXXXXX, residing at
000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxxxxx 00000 (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the Employee,
and the Employee hereby accepts employment with the Company, upon the terms set
forth in this Agreement, for the period commencing on September 5, 1996 (the
"Commencement Date") and ending on July 31, 1997 (such period, as it may be
renewed as provided in the following sentence, the "Employment Period"), unless
sooner terminated in accordance with the provisions of Section 4. The Employment
Period shall automatically be renewed for successive one (1) year periods unless
either the Employee or the company provide written notice of non-renewal to the
other party at least ninety (90) days prior to the expiration of the then
current term.
2. TITLE; CAPACITY. The Employee shall serve as Chief Executive Officer
or in such other position as the Company or its Board of Directors (the "Board")
may
2
determine from time to time. The Employee shall be based at the Company's
headquarters in Cambridge, Massachusetts, unless otherwise agreed. The Employee
shall be subject to the supervision of, and shall have such authority as is
delegated to him by, the Board or such officer of the Company as may be
designated by the Board.
The Employee hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and/or such other duties
and responsibilities as the Board or its designee shall from time to time
reasonably assign to him. The Employee agrees to devote his entire business
time, attention and energies to the business and interests of the Company during
the Employment Period. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company. The Employee
acknowledges receipt of copies of all such rules and policies committed to
writing as of the date of this Agreement.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Employee, in monthly
installments, an annual base salary of or the one-year period commencing
on the Commencement Date. Such salary shall be subject to adjustment thereafter
as determined by the Board, but shall not be reduced below the amount set forth
above without the Employee's consent.
3.2 BONUS. The Employee shall be eligible to receive a bonus equal to
up to of his base salary upon the achievement of annual objectives to be
-2-
3
approved by the CEO of the Company after discussion with the Employee. The Board
shall review the Employee's performance and determine the amount of the bonus,
if any, to be paid to the Employee.
3.3 FRINGE BENEFITS. The Employee shall be entitled to participate in
all other bonus and benefit programs that the Company establishes and makes
available to its employees, if any, to the extent that Employee's position,
tenure, salary, age, health and other qualifications make him eligible to
participate. The Employee shall be entitled to four (4) weeks paid vacation per
year, to be taken at such times as may be approved by the Board or its designee.
3.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request.
4. EMPLOYMENT TERMINATION. The employment of the Employee by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:
4.1 EXPIRATION OF EMPLOYMENT PERIOD. Expiration of the Employment
Period in accordance with Section 1.
-3-
4
4.2 TERMINATION FOR CAUSE. At the election of the Company,
immediately upon written notice by the Company to the Employee, for "cause" as
determined by the Board. For purposes of this Section 4.2, "cause" for
termination shall be deemed to exist only if any of the following shall have
occurred:
(a) the Employee's conviction of any crime (whether or not
involving the Company) which constitutes a felony in the jurisdiction involved
(other than unintentional motor vehicle felonies);
(b) any act of theft, fraud, misappropriation of funds or
embezzlement by the Employee, in connection with his work with the Company, or
any other act or acts of dishonesty on the part of the Employee resulting or
intended to result directly or indirectly in personal gain or enrichment of the
Employee at the expense of the Company;
(c) the Employee's failure to perform in all material respects
the services required to be performed pursuant to Section 2 of this Agreement,
PROVIDED THAT if such failure is capable of being corrected, such failure
continues uncorrected for a period of thirty (30) days after the Employee shall
have received written notice from the Company stating with reasonably
specificity the nature of such failure;
(d) the Employee's breach of Sections 6 or 7 of this Agreement
or any material breach of the Invention and Nondisclosure Agreement dated of
even date herewith between the Employee and the Company (the "Nondisclosure
Agreement");
-4-
5
(e) the Employee's excessive use of alcohol and/or drugs which
is judged by the CEO and the Board to materially interfere with the performance
of his duties; or
(f) any misconduct by the Employee which in the reasonable
judgment of the CEO and the Board would jeopardize the success of the Company.
4.3 DEATH OR DISABILITY. Thirty (30) days after the death or disability of
the Employee. As used in this Agreement, the term "disability" shall mean the
inability of the Employee, due to a physical or mental disability, for a period
of ninety (90) days, whether or not consecutive, during any 360-day period to
perform the services contemplated under this Agreement. A determination of
disability shall be made by a physician satisfactory to both the Employee and
the Company, PROVIDED THAT if the Employee and the Company do not agree on a
physician, the Employee and the Company shall each select a physician and these
two together shall select a third physician, whose determination as to
disability shall be binding on all parties.
4.4 VOLUNTARY TERMINATION. At the election of either party, upon written
notice of termination given at least ninety (90) days prior to the end of the
then current Employment Period.
4.5 VOLUNTARY TERMINATION FOR "GOOD REASON." At the election of the
Employee, for "Good Reason," which shall be deemed to exist only if the Company
fails to comply in any material respect with the provisions of Section 3, other
than an isolated,
-5-
6
insubstantial and inadvertent failure which is remedied by the Company promptly
after receipt of notice thereof given by the employee.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR CAUSE OR AT ELECTION OF EMPLOYEE. In the event
the Employee's employment is terminated for cause pursuant to Section 4.2, or at
the election of the Employee, pursuant to Section 4.4, the Company shall pay to
the Employee all sums otherwise payable to him under Section 3 through the last
day of his actual employment by the Company.
5.2 TERMINATION FOR DEATH OR DISABILITY. If the Employee's employment
is terminated by death or because of disability pursuant to Section 4.3, the
Company shall pay to the estate of the Employee or to the Employee, as the case
may be, all sums which would otherwise be payable to the Employee under Section
3 up to the end of the month in which the termination of his employment because
of death or disability occurs.
5.3 TERMINATION FOR GOOD REASON OR AT ELECTION OF COMPANY. In the
event that Employee's employment is terminated by the Employee for "Good Reason"
pursuant to Section 4.5, or at the election of the Company pursuant to Section
4.4, the Company shall continue to pay to the Employee the salary set forth in
Section 3.1, and shall continue to make available to the Employee the benefits
set forth in Section 3.3, excluding vacation days and bonus sums under said
Section 3.3 accrued during this period, until the later of (a) the first
anniversary of the Commencement Date of this
-6-
7
Agreement, or (b) three (3) months after the date of termination, but in no
event later than such date as the Employee shall have commenced full-time
employment with a new employer.
5.4 SURVIVAL. The provisions of Sections 6 and 7 shall survive the
termination of this Agreement.
6. NON-COMPETE.
6.1 NON-COMPETE RESTRICTIONS. During the Employment Period and for a
period of one (1) year after the termination or expiration thereof (such one (1)
year period being inapplicable in the event of a termination pursuant to Section
4.4 at the election of the Company or by the Employee pursuant to Section 4.5),
the Employee will not directly or indirectly as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, investor,
lender, or in any other capacity whatsoever (other than as the holder of not
more than an one percent (1%) equity interest in any publicly held company),
engage in the business of developing, producing, marketing or selling products
with chemical or commercial characteristics of the kind or type developed or
being developed, produced, marketed or sold by the Company while the Employee
was employed by the Company.
6.2 LIMITATIONS. Notwithstanding the provisions of Section 6.1, it is
recognized that the Employee's primary experience is in the pharmaceutical
industry, and that his ability to earn a livelihood is likely to be dependent on
future employment in such industry. Accordingly, the Company agrees that: (a)
the employment of the Employee by
-7-
8
a pharmaceutical company in a position in which he assumes responsibility for
multiple products, most of which are not competitive with the Company's
products, shall not be considered a violation of Section 6.1, so long as (i) the
Employee's responsibilities in such Position are not directed principally to
products that are competitive with the Company's products, (ii) the portfolio of
the pharmaceutical company which hires the Employee must contain the specific
product or products which are competitive with Company's products prior to the
hiring of the Employee, and (iii) the pharmaceutical company which hires the
Employee has been in existence for at least five (5) years prior to hiring the
Employee; and (b) in the event that the Company ceases to conduct business, the
provisions of Section 6.1 shall terminate.
6.3 CUTBACK CLAUSE. If any restriction set forth in this Section 6 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.
6.4 EQUITABLE REMEDIES. The restrictions contained in this Section 6
are necessary for the protection of the business and goodwill of the Company and
are considered by the Employee to be reasonable for such purpose. The Employee
agrees that any breach of Section 6.1 is likely to cause the Company substantial
and irrevocable damage and therefore, in the event of any such breach, the
Employee agrees that the
-8-
9
Company, in addition to such other remedies which may be available, shall be
entitled to specific performance and other injunctive relief.
7. NON-SOLICITATION.
7.1 NON-SOLICITATION RESTRICTIONS. While the Employee is employed by
the Company and for a period of one (1) year after the termination or cessation
of such employment for any reason, the Employee will not directly or indirectly
recruit, solicit or hire any employee of the Company, or induce or attempt to
induce any employee of the Company to terminate his/her employment with, or
otherwise cease his/her relationship with, the Company. If the Employee violates
the provisions of this Section 7.1, the Employee shall continue to be bound by
the restrictions set forth in this Section 7.1 until a period of one (1) year
has expired without any violation of such provisions.
7.2 CUTBACK CLAUSE. If any restriction set forth in Section 7.1 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time or range of activities as to which it may be enforceable.
7.3 EQUITABLE REMEDIES. The restrictions contained in Section 7.1 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. The Employee
agrees that any breach of Section 7 is likely to cause the Company substantial
and irrevocable damage and therefore, in the event of any such breach, the
Employee agrees that the
-9-
10
Company, in addition to such other remedies which may be available, shall be
entitled to specific performance and other injunctive relief.
8. OTHER AGREEMENTS. Employee hereby represents that he is not bound by
the terms of any agreement with any previous employer or other party to refrain
from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Employee further represents that his performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge or
data acquired by him in confidence or in trust prior to his employment with the
Company.
9. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon Personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 9.
10. PRONOUNS. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether
-10-
11
written or oral, relating to the subject matter of this Agreement. Reference is
made to the following separate agreements between the Employee and the Company
dated of even date herewith which cover additional agreements between the
parties: the Stock Restriction Agreement and the Invention and Nondisclosure
Agreement.
12. AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
13. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any entity with which or into which the Company may be merged or which
may succeed to its assets or business, provided, however, that the obligations
of the Employee are personal and shall not be assigned by him.
15. MISCELLANEOUS.
15.1 NO WAIVER. No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
-11-
12
15.2 CAPTIONS. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
15.3 ENFORCEABILITY. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
MEDICINES DEVELOPMENT COMPANY
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Title:____________________________
XXXXX XXXXXXXX
/s/ Xxxxx Xxxxxxxx
----------------------------------
-12-
