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TRANSKARYOTIC THERAPIES INC.
[LOGO: TKT]
EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of July 1, 1996, between Transkaryotic Therapies, Inc.,
a Delaware corporation (the "Company"), and Xxxx Xxxxxxxxx Xxxxxx, M.D. (the
"Executive").
1. EMPLOYMENT. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company upon the terms and conditions herein
set forth.
2. DUTIES. The Executive shall be engaged as a full-time employee to act as
the Company's Vice President, Clinical and Regulatory Affairs, and shall report
to the Company's Founder and Chief Executive Officer. The Executive shall
perform the duties consistent with such position as the Founder and Chief
Executive Officer shall from time to time designate. The Executive shall devote
his entire time, attention and energies to the business of the Company and shall
not engage in any other business activity or activities, whether or not such
business activity is pursued for gain, profit or other pecuniary advantage,
that, in the judgment of the Company, may conflict with the proper performance
of the Executive's duties under this Agreement. Notwithstanding the foregoing,
(a) with respect to businesses which do not compete with the Company, the
Executive may invest his personal or family assets in such form or manner as
will not require any services on the part of the Executive in the operation of
the affairs of the companies in which such investments are made and in which his
participation is solely that of an investor, and (b) the Executive may purchase
securities in any corporation whose securities are regularly traded in
recognized securities markets, provided that such investments shall not result
in his collectively owning beneficially at any time one per cent (1%) or more of
the equity securities of any corporation engaged in a business competitive to
that of the Company.
3. COMPENSATION.
(a) BASE SALARY. For services rendered under this Agreement, the Company
shall pay the Executive an annual salary of $150,000 (the "Base Salary"),
payable (after deduction of applicable withholding for federal and state
income and payroll taxes) in equal semi-monthly installments. For the
period of time that the Executive performs his duties from the Maryland
address (July 1, 1996 to August 26, 1996) the Company shall pay the
Executive at the rate of one-half of the Base Salary after deduction of
applicable withholding for taxes. The Company may review the Executive's
compensation annually and make such increases to the Base Salary as the
Company determines are merited, based upon the Executive's performance and
consistent with the Company's compensation policies as established by
195 ALBANY STREET, CAMBRIDGE, MA 00000 000 000-0000 FAX 000 000-0000
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the Compensation Committee of the Company's Board of Directors. Any such
increase in annual Base Salary shall be communicated to the Executive
shortly after the January meeting of the Board of Directors and shall be
made effective on the first day of January each year.
(b) SIGN-ON BONUS. Upon commencement of duties the Company shall promptly
pay to the Executive a sign-on bonus of $10,000, payable after deduction of
applicable withholding for federal and state income and payroll taxes.
(c) BONUS. The Executive shall receive a guaranteed bonus of $25,000,
without reference to achievement of any established performance goals, for
the remainder of the calendar year of 1996. This bonus shall be payable
(after deduction of applicable withholdings for taxes) at the same date as
performance bonuses are paid to other executives of the Company. At least
thirty (30) days prior to each subsequent calendar year under this
Agreement, the Company shall establish objective performance goals for the
Executive for such calendar year. Upon the attainment of such performance
goals, but subject to the overall performance of the Company during such
year, the Executive may be entitled to a bonus, as determined by the
Compensation Committee of the Company's Board of Directors. Within thirty
(30) days after the close of each such calendar year, the Company shall
evaluate the attainment of the performance goals for such calendar year and
determine the amount of any performance bonus payable hereunder. Any such
performance bonus shall be payable within ninety (90) days after the
calendar year to which it relates.
(d) FRINGE BENEFITS. In addition to Base Salary and Bonus payments under
Sections 3(a), (b) and (c) above, the Executive shall be eligible for and
participate in such fringe benefits, in accordance with the terms of each
such benefit, as shall be generally provided to executives of the Company,
including incentive compensation, the Company's 401(k) Plan, health and
dental insurance, and any retirement programs, stock options plans or
employee stock purchase plans which may be adopted from time to time during
the term hereof by the Company. Nothing herein contained shall be deemed to
preclude the Company from granting such additional compensation or benefits
to the Executive as it shall in its sole discretion determine.
(e) STOCK OPTIONS. Upon authorization by the Company's Board of Directors
or Compensation Committee, the Company will promptly grant the Executive
under the Company's 1993 Long-Term Incentive Plan (the "Plan") a
nonstatutory stock option to purchase an aggregate of fifty thousand
(50,000) shares of the Common Stock of the Company, par value $.01 per
share, at a purchase price of one cent ($0.01) per share. Such option will
vest annually for a period of six (6) years in installments of 8,333 shares
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each, with any remaining shares vesting on the sixth anniversary hereof.
Such option shall be exercisable during the ten (10) year period following
its date of vesting and shall be subject to all the terms and conditions of
the Plan and the Company's standard form of Stock Option Agreement, copies
of which have been delivered to the Executive separately.
4. SICK LEAVE AND VACATION. During the term of this Agreement, the
Executive shall be entitled to sick leave and annual vacation consistent with
the Company's customary sick leave and vacation policies; the latter providing
for vacation of ten (10) days in the first twelve (12) months of employment, and
fifteen (15) days in subsequent annual periods from July 1.
5. EXPENSES.
(a) GENERAL. During the term of this Agreement, the Company shall reimburse
the Executive in accordance with the Company's customary policies for all
reasonable out-of-pocket expenses incurred by the Executive in connection
with the business of the Company and in performance of his duties under
this Agreement upon the Executive's presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data.
(b) RELOCATION EXPENSES. The Company shall pay to the Executive a $50,000
lump sum amount (net after applicable withholding and payroll taxes) which
may be applied to the costs of purchasing a home in the greater Boston
area. In addition, the Company will reimburse the Executive, or pay
directly, the costs of (1) two house-hunting trips to the greater Boston
area; (2) the Executive's reasonable, out-of-pocket moving expenses
relating to his relocation from Maryland to the greater Boston area, and
(3) the reasonable, out-of-pocket expense of staying up to two weeks at a
hotel in the greater Boston area. Reimbursement of expenses by the Company
hereunder will be made upon the Executive's presentation of an itemized
accounting of such expenses with reasonable supporting data.
(c) EXISTING MORTGAGE EXPENSES AND CLOSING EXPENSES. The Company shall
reimburse the Executive for payment on his current mortgage for six (6)
months or for the period until sale of his existing home in Maryland,
whichever is earlier. In addition, the Company will reimburse the Executive
for closing costs (including broker's commission) associated with the sale
of that house.
Reimbursements or payments of costs for the Executive for items 5(b) and
(c), to the extent they are reported on the Executive's W-2 forms as
taxable income in accordance with Internal Revenue Service code, shall be
paid "net" to the Executive (after applicable withholding for income and
payroll taxes).
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6. TERM.
(a) The Executive's employment under this Agreement shall commence on July
1, 1996 (the "Commencement Date") and shall continue until terminated by
the Company as provided in this Section 6(a) or by the Executive as
provided in Section 6(c) below. The Company may, at its election, terminate
the obligations of the Company under this Agreement as follows:
(i) Upon at least sixty (60) days prior written notice if the
Executive becomes physically or mentally incapacitated or is injured
so that he is unable to perform the services required of him hereunder
and such inability to perform continues for a period in excess of six
(6) months and is continuing at the time of such notice; or
(ii) For "Cause" upon prior written notice of such termination to the
Executive. For purposes of this Agreement, the Company shall have
"Cause" to terminate its obligations hereunder upon (a) the Company's
determination that the Executive has ceased or failed to substantially
perform his duties hereunder (other than as a result of his incapacity
due to physical or mental illness or injury), and at least thirty (30)
days prior written notice to the Executive, (b) the Executive's death,
(c) the Company's determination that the Executive has engaged or is
about to engage in conduct materially injurious to the Company, (d)
the Executive's having been convicted of a felony, or (e) the
Executive's participation in activities proscribed by the provisions
of Sections 2, 8 or 10 hereof or material breach of any of the other
covenants herein; or
(iii) Without Cause upon at least sixty (60) days prior written notice
of such termination to the Executive.
(b) If, within six (6) months of the date the Executive's employment
hereunder commences, this Agreement is terminated for any reason
(including, without limitation, termination by the Company without Cause or
voluntary termination by the Executive, the Executive shall receive no
severance pay. If, subsequent to such six (6) month period, this Agreement
is terminated pursuant to Section 6(a)(i) above, subject to Section 10(d)
below, the Executive shall receive severance pay until the fourth
anniversary of the date hereof at the rate of one hundred per cent (100%)
of Base Salary, reduced by applicable payroll taxes and further reduced by
the amount received by the Executive during such period under any Company
maintained disability insurance policy or plan or under Social Security or
similar laws. Such severance payments shall be paid periodically to the
Executive as provided in Section 3(a) for the payment of Base Salary. If
this Agreement is terminated
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at any time pursuant to Section 6(a)(ii) above, the Executive shall receive
no severance pay. If this Agreement is terminated pursuant to Section
6(a)(iii) above more than six (6) months but within one (1) year after the
date the Executive's employment hereunder commences, the Executive shall
receive severance pay, for a period of six (6) months from and after such
termination, equal to the Base Salary less the amount, if any, earned by
the Executive during such six (6) month period, whether as salary,
consulting fees, deferred payments or other direct or indirect
compensation. If this Agreement is terminated pursuant to Section 6(a)(iii)
above more than one (1) year after the date the Executive's employment
hereunder commences, the Executive shall receive severance pay, for a
period of twelve (12) months from and after such termination, equal to the
Base Salary less the amount, if any, earned by the Executive during such
twelve (12) month period, whether as salary, consulting fees, deferred
payments or other direct or indirect compensation. During any such six (6)
month or twelve (12) month period the Executive shall inform the Company
from time to time, but no less often than every three (3) months, of the
Executive's employment and the amount of the Executive's compensation and
earnings during such period. Such severance payments (less applicable
withholding and payroll taxes) shall be paid periodically to the Executive
as provided in Section 3(a) for the payment of Base Salary.
(c) The Executive may terminate this Agreement for any reason upon at least
sixty (60) days prior written notice. In the event of any such termination,
the Executive shall not be entitled to any severance payments.
7. REPRESENTATIONS. The Executive hereby represents to the Company that (a)
he is legally entitled to enter into this Agreement and to perform the services
and other obligations contemplated herein; (b) he has, and throughout the term
of this Agreement will continue to have, the full right, power and authority,
subject to no rights of third parties, to grant to the Company the rights
contemplated by Section 9 hereof; and (c) he is not subject to any agreement,
rule, regulation or policy of any university, research institution or other
third party inconsistent with the foregoing representations.
8. DISCLOSURE OF INFORMATION.
(a) The Executive recognizes and acknowledges that the Company's trade
secrets, know-how and proprietary processes as they may exist from time to
time (including, without limitation, information regarding methods,
cultures, vectors, plasmids, synthesis techniques, nucleic acid sequences,
purification techniques and assay procedures) as well as the Company's
confidential business plans and financial data are valuable, special and
unique assets of the Company's business, access to and knowledge of which
are essential to the performance of the Executive's duties hereunder. The
Executive shall not, during or after the term of his employment by the
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Company, in whole or in part, disclose such secrets, know-how, processes,
business plans or financial data to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, nor shall
the Executive make use of any such property for his own purposes or for the
benefit of any person, firm, corporation or other entity (except the
Company) under any circumstances during or after the term of his
employment, provided that after the term of his employment, these
restrictions shall not apply to such secrets, know-how and processes which
the Executive can establish by competent proof:
(i) were known, other than under binder of secrecy, to the
Executive prior to his employment by the Company;
(ii) were passed into the public domain prior to or after their
development by or for the Company, other than through acts or
omissions attributable to the Executive; or
(iii) were subsequently obtained, other than under binder of
secrecy, from a third party not acquiring the information under an
obligation of confidentiality from the disclosing party.
(b) Upon termination of his employment hereunder, the Executive shall
promptly turn over to the Company all originals and copies which he may
have of any of the Company's confidential information described in this
Section 8.
9. INTELLECTUAL PROPERTY. The Executive hereby sells, transfers and assigns
to the Company, or to any person or entity designated by the Company, the entire
right, title and interest of the Executive in and to all inventions, ideas,
discoveries and improvements (including, without limitation, all microorganisms,
strains or cultures) whether patented or unpatented, and copyrightable material
made or conceived by the Executive, solely or jointly, during the term hereof,
which arise out of research or other activities conducted by, for or under the
direction of the Company, whether or not conducted at the Company's facilities,
or which relate to methods, apparatus, designs, products, processes or devices,
sold, leased, used or under consideration or development by the Company. The
Executive acknowledges that all copyrightable materials developed or produced by
the Executive within the scope of his employment constitute works made for hire.
The Executive shall communicate promptly and disclose to the Company, in such
form as the Company may reasonably request, all information, details and data
pertaining to any such inventions, ideas, discoveries and improvements; and the
Executive shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents and shall give such testimony as
may be necessary or required of the Executive to permit the Company or any
person or entity designated by the Company to file and prosecute patent
applications and, as to copyrightable material, to obtain copyrights thereof.
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such invention, idea, discovery or improvement disclosed by the Executive within
one (1) year following the termination of this Agreement shall be deemed to fall
within the provisions of this Section 9 unless proved to have been first
conceived and made following such termination.
10. COVENANTS NOT TO COMPETE OR INTERFERE.
(a) Subject to Section 10(b) below, during the term of this Agreement and
the period ending twenty-four (24) months from and after the termination of
the Executive's employment hereunder, the Executive shall not engage in any
business (whether as an officer, director, owner, employee, partner,
consultant, advisor or other direct or indirect participant) engaged in the
development of gene therapy and/or gene targeting and/or gene isolation
methods and/or the sale of products or rendering of services related to
gene therapy and/or gene targeting and/or gene isolation and/or to any
other activities which directly compete with the Company's business
activities. This Agreement shall not be construed to restrict the
Executive's right to be employed as a faculty member of any university or
employee of any nonprofit agency or foundation after any termination of
this Agreement where this covenant not to compete shall continue to be in
effect. During the period in which this covenant not to compete is in
effect the Executive also shall not interfere with, disrupt or attempt to
disrupt the relationship, contractual or otherwise, between the Company and
any customer, supplier, lessor, lessee, employee, consultant, research
partner or investor of the Company.
(b) If this Agreement is terminated by the Company pursuant to Section
6(a)(iii) above, the provisions of the first sentence of Section 10(a)
shall apply until twelve (12) months from and after such termination.
(c) It is the desire and intent of the parties that the provisions of this
Section 10 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular Subsection or portion of this
Section 10 shall be adjudicated to be invalid or unenforceable, this
Section 10 shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this Section in the particular
jurisdiction in which such adjudication is made.
(d) In the event of any breach of the provisions of this Section 10 by the
Executive, any and all rights of the Executive to receive severance
payments under Section 6(b) above shall automatically terminate.
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11. INJUNCTIVE RELIEF. If there is a breach or threatened breach of the
provisions of Section 8, 9 or 10 of this Agreement, the Company shall be
entitled to an injunction, without bond, restraining the Executive from such
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach.
12. INSURANCE. The Company may, at its election and for its benefit, insure
the Executive against accidental loss or death, and the Executive shall submit
to such physical examinations and supply such information as may be required in
connection therewith.
13. NOTICES. Any notice required or permitted to be given under this
Agreement to the Executive shall be sufficient if in writing and if sent by
certified or registered mail to his residence, or in the case of the Company, to
Transkaryotic Therapies, Inc., 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000,
Attention: Chief Executive Officer, or to such other offices or addresses as the
Company shall designate from time to time in writing to the Executive. Any such
notice shall be effective on the earlier of (a) the date on which it is
personally delivered or (b) three (3) days after it is deposited in the United
States mails, postage prepaid.
14. WAIVER OF BREACH. A waiver by the Company or the Executive of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
15. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts.
16. ASSIGNMENT. This Agreement may be assigned, without the consent of the
Executive, by the Company to any person, partnership, corporation or other
entity which succeeds to the business of the Company or which has purchased
substantially all the assets of the Company, provided such assignee assumes all
the liabilities of the Company hereunder.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and supersedes any prior understandings or agreements between the
Executive and the Company. This agreement may be changed only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date first above written.
TRANSKARYOTIC THERAPIES, INC.
By: /s/ Xxxxxxx X Xxxxxx, M.D., Ph.D.
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Xxxxxxx X Xxxxxx, M.D., Ph.D.
Founder and Chief Executive
Officer
/s/ Xxxx X. Xxxxxx, M.D.
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Xxxx Xxxxxxxxx Xxxxxx, M.D.
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