EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 17th day of January, 1997 by and between PerSeptive
Biosystems, Inc., a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxx
("Afeyan" or the "Employee").
WHEREAS, the Employee is currently employed as the Chief Executive Officer
and Chairman of the Board of Directors of the Company;
WHEREAS, the Company believes that it is in its best interest to ensure that
the Employee continues to render services to the Company as hereinafter
provided;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
herein contained, it is mutually agreed between the parties hereto as follows:
1. PERIOD OF EMPLOYMENT. The Company hereby employs the Employee and the
Employee agrees to serve the Company as provided in Section 2 hereof commencing
on the date hereof (the "Commencement Date") and continuing until the occurrence
of any of the circumstances described in Section 4 hereof.
2. POSITION AND RESPONSIBILITIES. The Employee shall be employed as the
Chief Executive Officer and Chairman of the Board of Directors of the Company,
and the Employee shall exercise such powers and comply with and perform such
directions and duties in relation thereto as may from time to time be vested in
or given to him by the board of Directors of the Company and shall use his best
endeavors to improve and extend the business of the Company. In his capacity as
Chief Executive Officer, the Employee shall at all times report to, and his
activities shall be subject to the direction and control of, the Board of
Directors of the Company and the Employee shall devote his full business time
and attention to his duties hereunder. The Employee hereby accepts said
employment and agrees faithfully to perform said duties and render said services
for the term of his employment.
3. COMPENSATION.
A. In consideration of all of the services to be rendered by the
Employee to the Company, the Company will pay to the Employee a salary of
$330,000 per annum, or such greater amount as the Compensation Committee of the
Board of Directors may, from time to time, determine. Such salary shall be
payable in conformity with the Company's prevailing compensation practice, as
such practice shall be established or modified from time to time and shall be
subject to all taxes and other legally required payroll deductions and
withholdings.
B. At the sole discretion of the Compensation Committee of the Board
of
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Directors, the Employee may also be entitled to receive bonus compensation or to
participate in incentive compensation plans or programs as may be determined or
established from time to time by the Compensation Committee.
C. The Employee will be entitled to participate on the same basis
with all other officers of the Company in the Company's standard benefits
package generally available to other executive officers of the Company.
D. The Company shall reimburse the Employee for reasonable expenses
incurred directly by the Employee in connection with his employment. Further,
the Employee agrees to provide suitable and accurate documentation evidencing
such costs incurred and the Company shall provide reimbursement within a
reasonable time after the receipt of such documentation.
4. TERMINATION. The Employee's employment may be terminated as follows:
A. AT THE EMPLOYEE'S OPTION. Subject to the Company's right to
terminate the Employee's employment pursuant to Sections 4.B and 4.C below and
the Employee's right to terminate his employment pursuant to Section 4.D, the
Employee may terminate his employment for any reason, or for no reason, at any
time upon at least sixty (60) days' prior notice. In the event the Employee
terminates his employment pursuant to this Section, the Employee shall be
entitled to no severance or other termination benefits, except as required by
law.
B. AT THE ELECTION OF THE COMPANY FOR MISCONDUCT. The Company may,
immediately and unilaterally, terminate the Employee's employment for
"misconduct" at any time by notice to the Employee. Termination of the
Employee's employment by the Company shall constitute a termination for
"misconduct" if such termination is for one or more of the following reasons:
dishonesty, gross negligence, or other willful conduct which causes substantial
damages, liabilities or cost to the Company. In the event that the Employee's
employment is terminated for misconduct pursuant to this Section 4.B, the
employee shall not be entitled to any severance or other termination benefits,
except as required by law.
C. AT THE ELECTION OF THE COMPANY FOR REASONS OTHER THAN MISCONDUCT.
The Company may, immediately and unilaterally, terminate the Employee's
employment at any time for any reason, or for no reason, and without cause by
giving written notice to the Employee of the Company's election to so terminate.
In the event that the Company exercises its right to terminate under this
Section 4.C, the Employee shall be entitled to receive (i) severance payments
equal to twenty-four (24) months salary at the Employee's then current rate
payable, at the Company's election, monthly or quarterly in arrears in equal
installments over twenty-four (24) months (herein sometimes called the
"Severance Payments"), (ii) continuation of health insurance coverage on the
same or substantially the same terms and conditions then applicable to such
coverage until the earlier of (a) twenty-four (24) months from the date of
termination or (b) the date on which Employee becomes eligible to participate in
the health insurance plans of a subsequent employer, and (iii) if the Employee
had received a cash performance bonus, or a cash performance bonus was earned
and payable, with respect to a fiscal year of the Company ending within the
three year period immediately preceding the date of such termination, an amount
equal
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to two (2) times the highest cash performance bonus in fact paid to the
Employee, or in fact earned and payable to the Employee, for any fiscal year of
the Company ending during such three year period (the "Performance Bonus
Amount"), payable on the date of termination of the Employee's employment. The
Performance Bonus Amount shall be subject to all taxes and other legally
required payroll deductions and withholding. If the employee neither received
nor earned a cash performance bonus during the three year period immediately
preceding the date of such termination, no Performance Bonus Amount shall be
payable pursuant to this section 4.C.(iii). Nothing herein contained shall be
deemed to constitute an obligation to pay the Employee a cash performance bonus
with respect to any period during which the Employee is employed by the Company
or not employed by the Company, other than as expressly set forth herein.
D. AT THE ELECTION OF THE EMPLOYEE FOR GOOD REASON. Not
withstanding any other provision of this Agreement, the Employee may terminate
his employment for Good Reason if: (a) there is a material breach of this
Agreement by the Company, or (b) there is a Change in Control as defined in
Section 4.D.1.(i-v) and the conditions described in Section 4.D.2.(i-iv) exist.
in the event that the Employee exercises his right to terminate under this
Section 4.D, the employee shall be entitled to receive the Severance Payments,
benefits and, if payable as provided in Section 4.C.(iii) hereof, the
Performance Bonus Amount, which shall be paid as set forth in Section 4.C.
1. For purposes hereof, "Change In Control" means the occurrence
of any of the following events:
(i) The Company is merged or consolidated or reorganized into or
with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such surviving, resulting
or reorganized corporation or person immediately after such transaction is
held in the aggregate by the holders of the then-outstanding securities
entitled to vote generally in the election of directors of the Company
("Voting Stock") immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or substantially
all of its assets to any other corporation or other legal person, and as a
result of such sale or transfer less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
holders of Voting Stock of the Company immediately prior to such sale or
transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
1934 Act, disclosing that any "person" (as such term is used in Section
13(d)(3) or Section 14(d)(2) of the 0000 Xxx) has become the "beneficial
owner" (as such term is used in Rule 13d-3 under the 0000 Xxx) of securities
representing 35% or more of the Voting Stock of the Company;
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(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the 1934 Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has occurred;
or
(v) Individuals who, as of the date of this Agreement, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose election, or
nomination for election by the Company's stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board:
provided, however, that a "Change In Control" shall not be deemed to have
occurred for purposes of this Agreement solely because (i) the Company, (ii) an
entity in which the Company directly or indirectly beneficially owns 50% or more
of the voting securities, or (iii) any Company-sponsored employee stock
ownership plan or any other employee benefit plan of the Company, either files
or becomes obligated to file a report or a proxy statement under or in response
to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report) under the Securities Exchange Act of 1934, disclosing
beneficial ownership by it of shares of Voting Stock or because the Company
reports that a change in control of the Company has or may have occurred or will
or may occur in the future by reason of such beneficial ownership.
2. For purposes hereof, "Good Reason" means the occurrence of one
or more of the following events following a Change In Control:
(i) Failure to elect, reelect or otherwise maintain the Employee in
the office or position in the Company which the Employee held immediately
prior to a Change In Control, or the removal of the Employee as the Chairman
of the Board or a director of the Company (or any successor thereto) if the
Employee shall have been the Chairman of the Board or a director of the
Company, as the case may be, immediately prior to the Change In Control;
(ii) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to the
position with the Company which the Employee held immediately prior to the
Change In Control, a material reduction in the aggregate of the Employee's
salary received from the Company, or the termination of the Employee's rights
to any benefits to which he was entitled immediately prior to the Change In
Control or a material reduction in scope or value thereof without the prior
written consent of the Employee, any of which is not remedied within ten (10)
calendar days after receipt by the Company of written notice from the
Employee of such change, reduction or termination,
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as the case may be;
(iii) A determination by the Employee made in good faith that as a
result of a Change In Control and a change in circumstances thereafter
significantly affecting his position, including without limitation a change
in the scope of the business or other activities for which he was responsible
immediately prior to the Change In Control, he has been rendered
substantially unable to carry out, has been substantially hindered in the
performance of, or has suffered a substantial reduction in, any of the
authorities, powers, functions, responsibilities or duties attached to the
position held by the Employee immediately prior to the Change In Control,
which situation is not remedied within ten (10) calendar days after written
notice to the Company from the Employee of such determination;
(iv) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a significant portion of
its business and/or assets, unless the successor or successors (by
liquidation, merger, consolidation, reorganization or otherwise) to which all
or a significant portion of its business and/or assets have been transferred
(directly or by operation of law) shall have assumed all duties and
obligations of the Company under this Agreement;
(v) The Company shall relocate its principal executive offices, or
require the Employee to have his principal location of work changed, to any
location which is in excess of twenty (20) miles from the location thereof
immediately prior to the Change In Control or the Company shall require the
Employee to travel away from his office in the course of discharging his
responsibilities or duties thereunder significantly more (in terms of either
consecutive days or aggregate days in any calendar year) than was required of
him prior to the Change In Control without, in either case, his prior written
consent; or
(vi) Without limiting the generality or effect of the foregoing, any
material breach of this Agreement by the Company or any successor thereto.
E. BY REASON OF DEATH OR DISABILITY. If the Employee dies
during his employment during the term of this Agreement, the Company shall have
no further obligation to pay compensation or other benefits, except that the
Employee's estate shall be entitled to receive an amount equal to twenty four
(24) months of the employee's salary at his then current rate, and, if the
Employee had received a cash performance bonus, or a cash performance bonus was
earned and payable, with respect to a fiscal year of the Company ending within
the three year period immediately preceding the date of the Employee's death, an
amount equal to two (2) times the highest performance cash bonus in fact paid to
the employee, or in fact earned and payable to the employee, for any fiscal year
of the Company ending during such three year period, such amounts to be payable,
at the election of the Company, monthly or quarterly in arrears over the twenty-
four (24) months subsequent to the Employee's death. if during the term of the
employee's employment he becomes disabled (by reason of physical disability,
mental incompetence or otherwise) for such period of time and under
circumstances which entitle him to receive disability benefits under the terms
of any disability insurance policy now maintained or
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to be purchased for the Employee by the Company, then the Board of Directors of
the Company, in its discretion, may elect to terminate the Employee's employment
by reason of such disability as of the date benefits first become payable under
such disability policy by giving the employee written notice to such effect.
Upon any such termination for disability, the employee shall be entitled to
receive severance payments equal to twenty four (24) months salary at the
Employee's then current rate payable over twenty four (24) months and, if the
employee had received a cash performance bonus, or a cash performance bonus was
earned and payable, with respect to a fiscal year of the Company ending within
the three year period immediately preceding the date of such termination, an
amount equal to two (2) times the highest performance cash bonus in fact paid to
the employee, or in fact earned and payable to the Employee, for any fiscal year
of the Company ending during such three year period, reduced by any amounts
received by the employee pursuant to any disability insurance policy maintained
or paid for by the Company. The employee shall be deemed to be disabled for the
purposes of this Section 4.E. if he is unable to perform his duties hereunder
for a period of three consecutive months.
F. Any severance payments shall be calculated on the basis of the
Employee's annual salary rate at the time of termination and shall be payable in
conformity with the Company's then current payroll practices and shall be
subject to all taxes and other legally required payroll deductions and
withholding.
G. In the event of any termination of the Employee's employment, in
addition to any severance payments, benefits or cash performance bonus which may
be payable hereunder, the Employee shall receive all earned but unpaid salary,
accrued but unused vacation and earned but unpaid bonus or incentive
compensation, each as of the termination date, and all other benefits required
by law.
H. In the event of any voluntary termination of the Employee's
employment (other than for Good Reason) pursuant to Section 4.A, or any
termination of the Employee's employment by the Company for Misconduct pursuant
to Section 4.B, or as a result of disability pursuant to Section 4.E, then the
Employee specifically agrees and acknowledges that he will be deemed to have
resigned from all offices and directorships (including without limitation his
position as Chairman of the Board and as a Director of the Company if he holds
such position(s) at the time of any such termination) he holds with the Company,
its subsidiaries, and/or affiliated entities, effective as of his last day of
employment.
X. Xxxxx-up. If any of the payments under Section 4 or any other
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payments made or deemed made to the Employee pursuant to this Agreement or any
other agreement, including but not limited to the acceleration of stock options
upon a Change In Control, or the Death or Disability of the Employee, (the
"Payments," etc.) will be subject to the tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), (or
any similar tax that may hereafter be imposed) the Company shall pay to the
Employee an additional amount (the "Gross-Up Payment") such that the net amount
retained by the Employee, after deduction of any Excise Tax on the Payments,
without regard to this sentence, (after the deduction of any federal, state and
local income tax upon the Gross-Up Payment), shall be equal to the Payments,
without regard to this sentence. For purposes of determining whether any of the
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Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(A) any other payments or benefits received or to be received by the Employee in
connection with a Change in Control of the Company or the Employee's termination
of employment (whether pursuant to the terms of any Section of this Agreement or
any other plan, arrangement or agreement with the Company, any person whose
actions result in a Change in Control of the company or any person affiliated
with the Company or such person) shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as subject
to the Excise Tax, unless in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Employee such other
payments or benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax,
(B) the amount of the Payments which shall be treated as subject to the Excise
Tax shall be equal to the lesser of (I) the total amount of the Payments or (II)
the amount of excess parachute payments within the meaning of Section 280G(b)(1)
(after applying clause (A), above), and (C) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code. For purposes of determining the amount of the Gross-Up
Payment, the 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 the Employee's residence
on the Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time of termination of the Employee's
employment, the 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 Gross-
Up Payment attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax imposed on the Gross-Up Payment being
repaid by the Employee if such repayment results in a reduction in Excise Tax)
plus interest on the amount of such repayment at the rate provided in Section
7872(f)(2) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the termination of
the Employee's employment (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 payable with respect to such excess) at the time that the
amount of such excess is finally determined.
5. NON-COMPETITION AGREEMENT. the employee and the Company have entered
into a Non-competition, Proprietary Information and Inventions Agreement dated
as of march 30, 1989 (the "Non-Competition Agreement"), which shall remain in
full force and effect in accordance with its terms. The Non-Competition
Agreement shall survive, in accordance with its terms, the termination of
Employee's employment with the Company for any reason whatsoever.
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6. CONSENT AND WAIVER BY THIRD PARTIES. The Employee hereby represents and
warrants that he has obtained all necessary waivers and/or consents from third
parties as to enable him to accept and continue employment with the company on
the terms and conditions set forth herein and to execute and perform this
Agreement and the Non-Competition Agreement without being in conflict with any
other agreement, obligation or understanding with any such third party.
7. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and the
rights and remedies of any provision hereof may be waived, only in writing,
signed by both the Company and the Employee. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any such or other provision
of this Agreement. This agreement sets forth all of the terms of the
understandings between the parties with reference to the subject matter set
forth herein and may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
8. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts.
9. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement for any reason shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provisions had never
been contained herein.
10. TERMINATION OF ALL PRIOR AGREEMENTS; ENTIRE AGREEMENT. Upon execution of
this Agreement, all prior employment agreements shall be terminated and of no
further force or effect, except for the Non-Competition Agreement, which shall
continue in full force and effect in accordance with its terms. This Agreement
and the Non-Competition Agreement constitute the entire agreement and
understanding between the Company and the Employee with respect to the subject
matter hereof and thereof and supersede any other prior agreements or
understandings, whether oral or written.
11. NOTICES. Any notice required or permitted to be given pursuant to this
Agreement shall be in writing, and sent to the party for whom or which it is
intended, at the address of such parties set forth below, by registered or
certified mail, return receipt requested, or at such other address either party
shall designate by notice to the other in the manner provided herein for giving
notice.
If to the Company: PerSeptive Biosystems, Inc.
000 Xxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chairman of Compensation Committee
With a copy to:
0
Xxxxx X. Xxxx, Xxx.
Xxxxx, Xxxxxxx and Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
If to the Employee: Xx. Xxxxxx X. Xxxxxx
0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, each of the parties hereto has executed this Employment
Agreement as of the date and year first above written.
PERSEPTIVE BIOSYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
___________________________
Title: Chairman, Compensation Committee
Board of Directors
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
______________________________
Signature
