Executive Employment Agreement
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Exhibit
10.22.1
EMPLOYMENT
AGREEMENT (the "Agreement") made as of October 25, 2007 between ARIAD
Pharmaceuticals, Inc. (the "Company") a Delaware corporation, and Xxxxxxx X. Xxx
(the "Employee").
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1.
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Employment, Duties and
Acceptance.
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1.1 The
Company hereby employs the Employee, for the Term (as hereinafter defined), to
render full-time services to the Company, and to perform such duties, as the
Chief Commercial Officer of the Company shall reasonably direct him to
perform. The Employee's title shall be designated by the Chief
Executive Officer and initially shall be Vice President, Marketing.
1.2
The Employee hereby accepts such employment and agrees to render the services
described above.
1.3 The
principal place of employment of the Employee hereunder shall be in the greater
Boston, Massachusetts area, or other locations reasonably acceptable to the
Employee. The Employee acknowledges that for limited periods of time
he may be required to provide services to the Company outside of the Boston,
Massachusetts area.
1.4 Notwithstanding
anything to the contrary herein, although the Employee shall provide services as
a full-time employee, it is understood that the Employee may (a) have an
academic appointment and (b) participate in professional activities
(collectively, "Permitted Activities'); provided, however, that such
Permitted Activities do not interfere with the Employee's duties to the
Company.
1.5 The
Employee represents and affirms that he does not have any other contractual
obligations to any other person or entity that would prohibit or limit his
employment with the Company, except for the duty not to use or disclose another
entity’s confidential information without authorization. Employee
further acknowledges that the Company instructs him not to bring with him, use
or disclose in the course of his employment any confidential information
belonging to another person or entity, without that person or entity’s express
authorization.
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2. Term of
Employment.
The term of the Employee's employment
under this Agreement (the "Term") shall commence on November 19, 2007 (the
"Effective Date"), or such other date mutually agreed upon by the parties, and
shall end on October 31, 2010, unless sooner terminated pursuant to Section 4 or
5 of this Agreement; provided, however, that this
Agreement shall automatically be renewed for successive one-year terms (the Term
and, if the period of employment is so renewed, such additional period(s) of
employment are collectively referred to herein as the "Term") unless terminated
by written notice given by either party to the other at least ninety (90) days
prior to the end of the applicable Term.
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3.
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Compensation.
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3.1
As full compensation for all services to be rendered pursuant to this Agreement,
the Company agrees to pay the Employee, during the Term, a salary at the fixed
rate of $245,000 per annum during the first year of the Term and increased each
year, by amounts, if any, to be determined by the Board of Directors of the
Company (the "Board"), in its sole discretion, payable in equal biweekly
installments, less such deductions or amounts to be withheld as shall be
required by applicable law and regulations.
3.2
Each year, Employee shall be eligible to receive a discretionary bonus of up to
30% of base salary, which bonus shall be determined annually by the
Board. The bonus, if any, may be paid in the form of stock options,
restricted stock awards or units, deferred compensation or cash, as determined
by the Board.
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3.3
The Company shall pay or reimburse the Employee for all reasonable expenses
actually incurred or paid by him during the Term in the performance of his
services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as it may require.
3.4
The Employee shall be eligible under any incentive plan, stock award plan,
bonus, deferred or extra compensation plan, pension, group health, disability,
long-term care, and life insurance or other so-called "fringe" benefits which
the Company provides for its executives at the comparable level. All
stock options and restricted stock awards or units granted to the Employee shall
be subject to a vesting schedule which shall be determined by the Compensation
Committee of the Board. The stock options and restricted stock awards
or units, if any, granted to the Employee shall also be subject to the terms of
the Company’s long-term incentive plan and certificates. Any unvested
stock options or restricted stock awards or units subject to repurchase shall be
forfeited to the Company in the event (a) this Agreement is terminated by the
Company for Cause pursuant to Section 4 herein, or (b) either party elects not
to renew this Agreement pursuant to Section 2 herein.
3.5 The
Company shall grant the Employee an option to purchase 50,000 shares of the Company's
Common Stock at the fair market value on the date of the Board's approval of the
grant. The Employee agrees that all such options shall be subject to
a four-year vesting schedule, vesting in equal increments of 25% on each
anniversary of their issuance. Any unvested options shall be
forfeited to the Company in the event (a) this Agreement is terminated by the
Company for Cause pursuant to Section 4 herein, or (b) either party elects not
to renew this Agreement pursuant to Section 2 herein.
4.
Termination by the
Company.
The
Company may terminate this Agreement, if any one or more of the following shall
occur:
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(a) The
Employee shall die during the Term; provided, however, the
Employee's legal representatives shall be entitled to receive the compensation
provided for hereunder to the last day of the month in which his death
occurs.
(b)
The Employee shall become physically or mentally disabled, whether totally or
partially, so that he is unable substantially to perform his services hereunder
for (i) a period of one-hundred eighty (180) consecutive days, or (ii) for shorter
periods aggregating one-hundred eighty (180) days during any twelve (12) month
period.
(c) The
Employee acts, or fails to act, in a manner that provides Cause for
termination. For purposes of this Agreement, the term "Cause" means
(i) the failure by the Employee to perform any of his material duties hereunder,
(ii) the conviction of the Employee of any felony involving moral turpitude,
(iii) any acts of fraud or embezzlement by the Employee involving the Company or
any of its Affiliates, (iv) violation of any federal, state or local law, or
administrative regulation related to the business of the Company, (v) a conflict
of interest, (vi) conduct that could result in publicity reflecting unfavorably
on the Company in a material way, (vii) failure to comply with the written
policies of the Company, or (viii) a breach of the terms of this Agreement by
the Employee. If the conduct constituting Cause hereunder is
susceptible to cure, the Company shall provide the Employee written notice of
termination pursuant to this Section 4, and Employee shall have thirty (30) days
to cure or remedy such failure or breach, in which case this Agreement shall not
be terminated. If the conduct is not susceptible to cure, this Agreement shall
terminate upon written notice by the Company.
5.
Termination by the
Employee.
5.1 The
Employee may terminate this Agreement, if any one or more of the following shall
occur:
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(a)
a material breach of the terms of this Agreement by the Company and such breach
continues for thirty (30) days after the Employee gives the Company written
notice of such breach;
(b)
the Company shall make a general assignment for benefit of creditors; or any
proceeding shall be instituted by the Company seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property or the Company shall take any corporate action to authorize any
of the actions set forth above in this subsection 5(b);
(c)
an involuntary petition shall be filed or an action or proceeding otherwise
commenced against the Company seeking reorganization, arrangement or
readjustment of the Company's debts or for any other relief under the Federal
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing and remain undismissed or
unstayed for a period of thirty (30) days; or
(d)
a receiver, assignee, liquidator, trustee or similar officer for the Company or
for all or any part of its property shall be appointed
involuntarily.
6.
Severance.
6.1 If (i) the
Company terminates this Agreement without Cause or (ii) the Employee terminates
this Agreement pursuant to Section 5.1(a), then: (1) except in the case of death
or disability, the Company shall continue to pay Employee his then-current
salary for the remaining period of the applicable Term; (2) all stock options
granted pursuant to this Agreement that would have vested during the Term shall
vest immediately prior to such termination; and (3) the Company shall continue
to provide all benefits subject to COBRA at its expense for up to one (1)
year.
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7.
Other
Benefits.
In addition to all other benefits
contained herein, the Employee shall be entitled to:
(a) Relocation
expenses for the Employee, consisting of (i) all reasonable direct out-of-pocket
costs of transporting the Employee, the Employee’s immediate family, and the
Employee's household items from the Employee's current residence in Pennsylvania
to a new residence in the greater Boston, Massachusetts area; (ii) reasonable
travel and lodging to visit the greater Boston, Massachusetts area to search for
a new residence; (iii) reasonable costs of rent and primary services associated
with temporary housing at an approved location in the greater Boston,
Massachusetts area for a maximum period of seven (7) months from January 1, 2008
or until he finds a suitable residence, if earlier, (iv) reasonable costs of
travel between his current residence and Boston, Massachusetts during the time
he is living in temporary housing for a maximum period of one-hundred eighty
(180) days, (v) except as described in the next succeeding sentence and subject
to prior approval, the reasonable closing costs associated with the Employee’s
purchase of a new residence in the greater Boston, Massachusetts area within ten
months of the Employee's date of employment. The following closing
(settlement) costs will not be paid by the
Company: (1) real estate and other taxes, (2) insurance premiums
other than title insurance, and (3) commitment fees and prepaid interest (i.e., "points") in excess of
2%.
(b)
Paid time-off of five (5) weeks per year taken in accordance with the paid
time-off policy of the Company.
(c)
After six (6) years of employment, one three-month period of fully paid leave of
absence in accordance with Company policies in place at that time; it being
understood that such policies may restrict the Employee from taking such leave
of absence until a time that is acceptable to the Company and may include other
such limitations.
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(d) Group
health, disability, long-term care and life insurance.
(e) The
Company shall provide the Employee with an automobile allowance of $750 per
month and
standard tax preparation and planning services.
(f) To
facilitate the Employee's relocation, the Company will provide the Employee with
a transition advance (the “Advance”) in the total amount of
$100,000, $50,000 of which shall be payable by the Company within
thirty (30) days of the start of employment, $25,000 of which shall be payable
upon purchase of a new residence in the greater Boston area, and $25,000 of
which shall be payable one (1) year after the purchase of said
residence. In order to be eligible to receive any portion of the
Advance, the Employee must be a full-time employee of the Company at the time
such payment is due. The Employee shall be obligated to repay any
portion of the Advance made by the Company immediately upon the occurrence of
any of the following events: (a) the Employee terminates his
employment or this Agreement at any time prior to December 31, 2009, except as
provided pursuant to Section 5.1 herein, or (b) the Company terminates this
Agreement for Cause at any time pursuant to Section 4 herein. As of
January 1, 2010, the Advance shall no longer be subject to repayment by the
Employee. The Employee authorizes the Company to withhold from final
wages, expense reimbursements, or other forms of compensation due to him at the
time of separation any portion of the Advance that he is required to
repay.
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8.
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Confidentiality.
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8.1 The
Employee acknowledges that, during the course of performing his services
hereunder, the Company shall be disclosing information to the Employee related
to the Company's Field of Interest, Inventions, projects and business plans, as
well as other information (collectively, "Confidential
Information"). The Employee acknowledges that the Company's business
is extremely competitive, dependent in part upon the maintenance of secrecy, and
that any disclosure of the Confidential Information would result in serious harm
to the Company.
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8.2 The
Employee agrees that the Confidential Information only shall be used by the
Employee in connection with his activities hereunder as an employee of the
Company, and shall not be used in any way that is detrimental to the
Company.
8.3 The
Employee agrees not to disclose, directly or indirectly, the Confidential
Information to any third person or entity, other than representatives or agents
of the Company. The Employee shall treat all such information as
confidential and proprietary property of the Company.
8.4 The
term "Confidential Information" does not include information that (a) is or
becomes generally available to the public other than by disclosure in violation
of this Agreement, (b) was within the Employee's possession prior to being
furnished to such Employee, (c) becomes available to the Employee on a
nonconfidential basis or (d) was independently developed by the Employee without
reference to the information provided by the Company.
8.5
The Employee may disclose any Confidential Information that is required to be
disclosed by law, government regulation or court order. If disclosure
is required, the Employee shall give the Company advance notice so that the
Company may seek a protective order or take other action reasonable in light of
the circumstances.
8.6 Upon
termination of this Agreement, the Employee shall promptly return to the Company
all materials containing Confidential Information, as well as data, records,
reports and other property, furnished by the Company to the Employee or produced
by the Employee in connection with services rendered
hereunder. Notwithstanding such return or any of the provisions of
this Agreement, the Employee shall continue to be bound by the terms of the
confidentiality provisions contained in this Section 8 for a period of three (3)
years after the termination of this Agreement.
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8.7 In
connection with his employment by the Company, the Employee hereby acknowledges
that he may enter into more than one agreement with regard to (a) the
confidentiality of certain books, records, documents and business, (b) rights to
certain inventions, proprietary information, and writings, (c) publication of
certain materials, and (d) other related matters (the "Confidential Matters") of
the Company (the "Confidentiality Agreements"). In order to clarify
any potential conflicts between certain respective provisions of such
Confidentiality Agreements, the Employee and the Company hereby agree that, as
among such Confidentiality Agreements, the provision (or part thereof) in any
such Confidentiality Agreement which affords the greatest protection to the
Company with respect to the Confidential Matters shall control.
9.
Inventions Discovered
by the Employee WhilePerforming Services
Hereunder.
During the Term, the Employee shall
promptly disclose to the Company any invention, improvement, discovery, process,
formula, or method or other intellectual property, whether or not patentable,
whether or not copyrightable (collectively, "Inventions") made, conceived or
first reduced to practice by the Employee, either alone or jointly with others,
while performing service hereunder. The Employee hereby assigns to
the Company all of his right, title and interest in and to any such
Inventions. During and after the Term, the Employee shall execute any
documents necessary to perfect the assignment of such Inventions to the Company
and to enable the Company to apply for, obtain, and enforce patents and
copyrights in any and all countries on such Inventions. The Employee
hereby irrevocably designates the Chief Patent Counsel to the Company as his
agent and attorney-in-fact to execute and file any such document and to do all
lawful acts necessary to apply for and obtain patents and copyrights and to
enforce the Company's rights under this paragraph. This Section 9
shall survive the termination of this Agreement.
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10.
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Non-Competition and
Non-Solicitation.
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During the
Term and for a period of one year following the date of termination or
nonrenewal for any reason (other than termination pursuant to Section
5.1(a): (a) the Employee shall not in the United States or in any
country in which the Company shall then be doing business, directly or
indirectly, enter the employ of, or render any services to, any person, firm or
corporation engaged in any business competitive with the business of the Company
or of any of its subsidiaries or affiliates of which the Employee may become an
employee or officer during the Term; he shall not engage in such business on his
own account; and he shall not become interested in any such business, directly
or indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or any other relationship or
capacity; provided, however, that nothing contained in this Section 10 shall be
deemed to prohibit the Employee from acquiring, solely as an investment, shares
of capital stock of any public corporation; (b) neither the Employee
nor any Affiliate of the Employee shall solicit or utilize, or assist any person
in any way to solicit or utilize, the services, directly or indirectly, of any
of the Company's directors, consultants, members of the Board of Scientific and
Medical Advisors, officers or employees (collectively, "Associates of the
Company"). This nonsolicitation and nonutilization provision shall
not apply to Associates of the Company who have previously terminated their
relationship with the Company.
10.1
If the Employee commits a breach, or threatens to commit a breach, of any of the
provisions of this Section 10, the Company shall have the following rights and
remedies:
10.1.1
The right and remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach shall cause irreparable injury
to the Company and that money damages shall not provide an adequate remedy to
the Company; and
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10.1.2
The right and remedy to require the Employee to account for and pay over to the
Company all compensation, profits, monies, accruals,increments or other benefits
(collectively "Benefits") derived or received by the Employee as the result of
any transactions constituting a breach of any of the provisions of the preceding
paragraph, and the Employee hereby agrees to account for and pay over such
Benefits to the Company.
Each of
the rights and remedies enumerated above shall be independent of the other, and
shall be severally enforceable, and all of such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.
10.2 If
any of the covenants contained in Section 8, 9 or 10, or any part thereof, is
hereafter construed to be invalid or unenforceable, the same shall not affect
the remainder of the covenant or covenants, which shall be given full effect
without regard to the invalid portions.
10.3 If
any of the covenants contained in Section 8, 9 or 10, or any part thereof, is
held to be unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and,
in its reduced form, such provision shall then be enforceable.
10.4 The
parties hereto intend to and hereby confer jurisdiction to enforce the covenants
contained in Sections 8, 9 and 10 upon the courts of any state within the
geographical scope of such covenants. In the event that the courts of
any one or more of such states shall hold any such covenant wholly unenforceable
by reason of the breadth of such scope or otherwise, it is the intention of the
parties hereto that such determination not bar or in any way affect the
Company's right to the relief provided above in the courts of any other states
within the geographical scope of such covenants, as to breaches of such
covenants in such other respective jurisdictions, the above covenants as they
relate to each state being, for this purpose, severable into diverse and
independent covenants.
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11. Indemnification.
The Company shall indemnify the
Employee, to the maximum extent permitted by applicable law, against all costs,
charges and expenses incurred or sustained by him in connection with any action,
suit or proceeding to which he may be made a party by reason of his being an
officer, director or employee of the Company or of any subsidiary or affiliate
of the Company. The Company shall provide, subject to its
availability upon reasonable terms (which determination shall be made by the
Board of Directors) at its expense, directors and officers insurance for the
Employee in reasonable amounts. Determination with respect to (a) the
availability of insurance upon reasonable terms and (b) the amount of such
insurance coverage shall be made by the Board of Directors in its sole
discretion.
12. Notices.
All notices, requests, consents and
other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given if sent by prepaid telegram
(confirmed delivery by the telegram service), private overnight mail service
(delivery confirmed by such service), registered or certified mail (return
receipt requested), or delivered personally, as follows (or to such other
address as either party shall designate by notice in writing to the other in
accordance herewith):
If
to the Company:
ARIAD
Pharmaceuticals, Inc.
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Chief Executive Officer
Telephone: (000)
000-0000
Fax: (000)
000-0000
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If
to the Employee:
Xxxxxxx X.
Xxx
0000
Xxxxxx Xxx
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
Telephone: (000)
000-0000
13. General.
13.1 This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the Commonwealth of Massachusetts applicable to agreements made and to
be performed entirely in Massachusetts.
13.2
The Section headings contained herein are for reference purposes only and shall
not in any way affect the meaning or interpretation of this
Agreement.
13.3
This Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
13.4
This Agreement and the Employee's rights and obligations hereunder may not be
assigned by the Employee or the Company; provided, however, the Company
may assign this Agreement to an Affiliate or a successor-in
interest.
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13.5 This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms or covenants hereof may be waived, only by a written instrument
executed by the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by a party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.
14. Definitions. As
used herein the following terms have the following meaning:
(a)
"Affiliate" means and includes any corporation or other business entity
controlling, controlled by or under common control with the corporation in
question.
(b) The
“Company’s Field of Interest” is the discovery, development and
commercialization of pharmaceutical products based on (a) intervention in signal
transduction pathways and (b) gene and cell therapy. The Company’s
Field of Interest may be changed at any time at the sole discretion of the
Company and upon written notice to Employee.
(c)
"Person" means any natural person, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental body or other entity.
(d)
"Subsidiary" means any corporation or other business entity directly or
indirectly controlled by the corporation in question.
(e) "Change
in Control” means the occurrence of any of the following events (without the
consent of the Employee):
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(i) Any corporation, person
or other entity makes a tender or exchange offer for shares of the Company's
Common Stock pursuant to which such corporation, person or other entity acquires
more than 50% of the issued and outstanding shares of the Company's Common
Stock;
(ii) The stockholders of the
Company approve a definitive agreement to merge or consolidate the Company with
or into another corporation or to sell or otherwise dispose of all or
substantially all of the Company's assets; or
(iii) Any person within the meaning of
Section 3 (a) (9) or Section 13 (d) of the Securities Exchange Act of 1934
acquires more than 50% of the combined voting power of Company's issued and
outstanding voting securities entitled to vote in the election of the
Board.
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IN WITNESS
WHEREOF, the parties have executed this Agreement
as of the date first above written.
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ARIAD
PHARMACEUTICALS, INC.
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By:
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/s/
Xxxxxx X. Xxxxxx
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Xxxxxx
X. Xxxxxx, M.D.
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Chairman
and Chief Executive Officer
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EMPLOYEE
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/s/ Xxxxxxx
X. Xxx
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| Xxxxxxx X. Xxx | |||
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