EXHIBIT 10.10
EMPLOYMENT AGREEMENT
BioMarin Pharmaceutical, Inc, a California corporation ("BioMarin"), and
Xxxxxxxxxxx X. Xxxxx ("Xxxxx"), an individual resident of California, enter into
this Employment Agreement ("Agreement"), effective on the date that it is signed
by the second of them.
RECITALS
A. BioMarin wishes to employ Starr as its Vice President for Research and
Development, and once Starr is employed, to retain him, in order to avail itself
of Starr's experience, skills, and knowledge.
X. Xxxxx wishes to be employed as BioMarin's Vice President for Research
and Development and, once employed, to be assured of security in his position.
C. BioMarin and Starr wish to enter into this Agreement on the terms and
conditions set forth below.
AGREEMENT
1. TERM. 1.1 BioMarin shall employ Starr as its Vice President for
Research and Development for three years, commencing on the effective date of
this agreement. Unless BioMarin or Starr gives notice of its or his intention
not to renew in accord with the notice requirements of Paragraph 11.2 this
Agreement shall be deemed renewed at the expiration of its three-year term on
all of its terms and conditions, except those governing Starr's compensation,
which shall be renewed under Paragraph 1.2
1.2. If this Agreement is renewed under the provisions of Paragraph
1.1, BioMarin and Starr shall confer, as soon as is practicable after the
commencement of the renewal term, and shall negotiate in good faith the
adjustment of Starr's compensation during this Agreement's renewal term. Should
BioMarin and Starr fail to meet or to agree upon the adjustment of Starr's
compensation within fifteen days after the renewal of this Agreement, BioMarin
may, upon two day's written notice, unilaterally adjust the compensation by
amounts that, under the circumstances, BioMarin reasonably believes will
compensate Starr fairly for his services during the renewal term. In that event,
Starr, without penalty or liability for BioMarin or Starr, and upon fifteen
days' written notice, may terminate this agreement as of the effective date of
the compensation adjustment, unless BioMarin agrees on or before such effective
date to any compensation adjustment demanded by Starr in his written notice.
2. STARR'S DUTIES. 2.1 In his capacity as BioMarin's Vice
President of Research and Development, Starr shall perform all acts or services
and do all things necessary or advisable to manage or conduct BioMarin's
business, subject to the policies set by BioMarin's board of directors.
2.2 Except with the written consent of BioMarin's board of
directors, Starr shall devote seventy percent (70%) of his productive time,
ability, and attention to BioMarin's business and during this 70% of his time
shall not engage in any other business or render any services of a business,
commercial, or professional nature to or on behalf of any other person or
enterprise. With respect to the 30% of his time not devoted to BioMarin, Starr
shall not do any activity which is directly competitive with BioMarin. This
provision shall not prevent Starr from making passive personal investments,
except investments that result in Starr's direct or indirect acquisition of an
interest in a business actually or potentially competitive with BioMarin,
provided, however, that notwithstanding the foregoing Starr shall not
be prohibited from acquiring in the public market shares of securities that do
not exceed 1% of the outstanding stock of such issuer and to the extent that, on
the effective date of this Agreement, Starr has interests in businesses actually
or potentially competitive with BioMarin, nothing in this Agreement shall be
construed to require Starr to divest himself of such interests.
2.3 Starr shall not misuse, misappropriate, or, except as
authorized by BioMarin's board of directors, disclose to persons not employed by
BioMarin, any confidential information concerning BioMarin so long as the
information is reasonably subject to characterization as a "trade secret" within
the meaning of California Civil Code Section 3426.1 (d) as that section exists
on the date of this Agreement is executed or renewed. The confidential
information subject to the prohibition in this paragraph includes, but is not
limited to, information concerning finances, personnel, customers, computer
operations and programs, research and development, products, or services.
3. BIOMARIN'S DUTIES. 3.1 BioMarin shall provide Starr with the
compensation, incentives, benefits, and business expense reimbursement set out
in other paragraphs of this Agreement.
4. STARR'S COMPENSATION.
4.1 During the first year of this Agreement Starr's BioMarin
compensation shall be the sum of $105,000.00 payable in twenty-four equal
installments of $4,375.00 each. During the second and third years of this
Agreement, Starr's compensation shall be reviewed by the board of directors and
appropriate adjustments based on cost-of-living and performance, but in no case
will the salary be less than paid in the first year of this Agreement. During
any renewal of this Agreement, Starr's compensation shall be as set forth in an
addendum to this Agreement, signed by or on behalf of BioMarin and Starr.
4.2 The installments provided in Paragraph 4.1 shall be paid on the
fifteenth and last days of each month, unless those days are Saturdays, Sundays,
or legal holidays, in which case the installments shall be paid on the last
preceeding business day.
4.3 On the first day of every quarter or the first trading day of
a quarter, the Company will calculate the capitalization of BioMarin using the
price of the common stock either on a publically traded exchange or the most
recent price at which a disinterested third party has acquired securities with a
value of at least one million dollars ($1,000,000) times the number of
outstanding shares. The first adjustment in Starr's salary occurs when the
capitalization of BioMarin reaches 50 million dollars ($50,000,000) and for each
subsequent increase or decrease of 50 million dollars ($50,000,000), Starr's
compensation shall be adjusted upwards or downwards by adding or subtracting
fifty thousand dollars ($50,000) in compensation for each fifty million dollar
($50,000,000) change in BioMarin's capitalization.
5. STARR'S BENEFITS. 5.1 BioMarin shall reimburse Starr for
the use of his personal automobile(s) for BioMarin-related activities, and Starr
shall maintain written records of such use and shall be reimbursed at standard
mileage rates acceptable to the Internal Revenue Service payable to him as a
result of such personal use.
5.2 BioMarin shall provide Starr with term life insurance, payable
as directed by Starr, in the amount of twice his annual compensation, but in no
case less than $300,000.00, and shall provide Starr and his dependents with
coverage under the Company's health insurance policy.
5.3 If Starr, in the opinion of a licensed medical doctor, becomes
mentally or physically incapacitated to the extent that he is unable to
discharge his employment duties under this Agreement for a period of six months
or more, BioMarin shall continue to provide Starr, for a period ending six
months from the determination of incapacity, or at the end of the term of this
Agreement if earlier, with his compensation as set out in Paragraph 4.1.
5.4 If Starr dies during the term of this Agreement, BioMarin shall
continue to pay, for six months following Starr's death, or until the end of the
term of this Agreement if earlier, Starr's compensation, as set out in Paragraph
4.1 of this Agreement, to Starr's surviving spouse, if there is one, or, if not,
to the executor or administrator of Starr's estate. BioMarin shall pay any sums
owed to Starr as of the date of his death to the executor or administrator of
his estate.
5.5 Starr shall be entitled to such vacation time each year as
BioMarin provides to its other management employees, on the same terms and
conditions.
6. REIMBURSEMENT OF STARR'S REASONABLE BUSINESS EXPENSES. BioMarin
shall promptly reimburse Starr for all reasonable business expenses incurred by
Starr in the discharge of his duties under this agreement, so long as the
expenditures qualify as proper business deductions under the Internal Revenue
Code, and they are properly substantiated by Starr with documentation adequate
to establish their deductibility under the Internal Revenue Code.
9. TERMINATION.
7.1. This Agreement shall be terminated upon Starr's disability,
subject to the provisions of Paragraph 5.3; death, subject to the provisions of
Paragraph 5.4; upon Starr's voluntary resignation, or retirement.
7.2 This Agreement may be terminated at any time by BioMarin
without cause upon six months' notice to Starr and by Starr upon three months'
notice to BioMarin's board of directors. If this Agreement is terminated under
the provisions of this paragraph, BioMarin shall determine in its sole
discretion whether Starr shall continue to discharge his duties as BioMarin's
vice president or if his duties shall terminate at a date prior to the date this
Agreement is terminated. In any case, Starr shall be entitled to compensation
and benefits as provided in this Agreement until the effective date of this
Agreement's termination.
7.3 If, within twelve months of the effective date of this
Agreement, Starr employment terminates for "Cause" (as defined herein), Starr
shall not be entitled to compensation and benefits as provided in this
Agreement. "Cause" is defined as (i) an act of personal dishonesty taken by
Starr in connection with his responsibilities as an employee and intended to
result in personal enrichment of Starr, (ii) Starr's conviction of, plea of nolo
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contendere to, a felony, (iii) a willful act by Starr which constitutes gross
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misconduct and which is injurious to the Company, and (iv) following delivery to
Starr of a written demand for performance from the Company which describes the
basis for the Company's belief that Starr has not substantially performed his
duties, continued violations by Starr of Starr's obligations to the Company. The
notice of termination under the provisions of this paragraph shall state the
grounds for termination and state all relevant facts supporting the grounds.
8. PURCHASE OF STOCK AND STOCK BUY-BACK RIGHTS. Starr shall be
entitled to purchase 400,000 shares of the Company's stock at a purchase price
of one dollar ($1.00) per share. The Company shall provide a 4-year loan as of
the effective date of this Agreement to Starr for the purpose of share purchase.
Any stock purchase loans to Starr from the Company shall be due and payable upon
termination of employment.
If this Agreement is terminated for any reason, then Starr agrees to resell back
to BioMarin up to one half of any stock sold or given to him by BioMarin as
compensation at the original purchase price on a pro-rata basis as stated below:
For example if Starr has been sold 1000 Shares, such shares resold are
equal to 1000 minus (1000 times the number of days from June 26, 1997 until June
25, 2001 divided by one thousand four hundred sixty (1460)). For example if the
agreement is terminated at 300 days after June 26, 1997, the number of shares
resold would be:
1000 - 1000 x 300 = 794 Shares (capped at 50% or 500 shares)
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1460
9. EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION. This
Agreement shall not be terminated by a voluntary or involuntary termination of
BioMarin's existence resulting from a merger or consolidation in which BioMarin
is not the consolidated or surviving entity or a transfer of all or
substantially all of BioMarin's assets. If such a merger, consolidation, or
transfer of assets occurs, BioMarin's obligations shall be delegated to the
surviving, resulting, or transferee entity.
10. OWNERSHIP OF INTANGIBLES. All research, development, designs,
processes, inventions, copyrights, patents, trademarks, service marks, and the
like that Starr conceives or develops while this Agreement is in effect shall be
BioMarin's property. Starr shall execute and deliver to BioMarin a copy of
BioMarin's standard employee confidentiality and proprietary rights agreement.
11. NON-COMPETITION BY STARR AFTER TERMINATION 10.1. Immediately
upon termination of this Agreement, Starr shall immediately deliver to BioMarin
all of BioMarin's property then in his possession or under his control.
11.2 For a period of two years after termination of this Agreement.
Starr agrees not to compete unfairly, whether directly or indirectly, with
BioMarin. For purposes of this paragraph, to "compete unfairly" is to (a) use or
provide to third parties property that is owned by BioMarin under Paragraph 9;
(b) use or provide to third parties trade secrets within the definition of
California Civil Code Section 3426.1 (d) as that section exists on the date this
Agreement is executed or renewed; (c) compete or to assist third parties to
compete with BioMarin for the business of BioMarin's customers with respect to
the services offered by BioMarin on the date this Agreement is terminated; or
(d) attempt to induce or assist third parties to induce or attempt to induce,
any of BioMarin's employees to terminate employment with BioMarin and obtain
employment by any person or entity that competes with BioMarin.
12. MISCELLANEOUS PROVISIONS. 11.1. This Agreement is made in and
is subject to the law of the State of California.
12.2 Notices to be given in writing shall be transmitted by personal
delivery or by certified mail, return receipt requested, addressed as set forth
below or to another address given through written notice under the provisions of
this paragraph:
If to BioMarin:
BioMarin, Inc
Attention: Board of directors
00 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
If to Starr:
Xxxxxxxxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Notices delivered personally shall be deemed communicated as of the date of
receipt. Mailed notices shall be deemed communicated as of the date of mailing.
12.3 Disputes concerning this Agreement shall be referred to
arbitration under the California Arbitration Act upon written notice to the
other by the party seeking arbitration. BioMarin and Starr shall each appoint
one person to hear the dispute, and those persons shall appoint a third. The
decision of the arbitrators shall be final, and costs of the arbitration are to
be borne in such proportion as the arbitrators may decide.
12.4 This Agreement is BioMarin's and Starr's entire agreement with
respect to Starr's employment and it supersedes all other agreements, whether
written or oral, between them. Each acknowledges there is no representation,
inducement, promise, or agreement, whether oral or in writing, with respect to
this Agreement's subject matter that is not incorporated into this Agreement.
Executed at Toronto, Canada
this 26th day of June, 1997
BioMarin Pharmaceuticals, Inc
By /s/ [SIGNATURE]
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Director
Executed at Toronto, Canada
this 26th day of June, 1997
Xxxxxxxxxxx X. Xxxxx
/s/ XXXXXXXXXXX X. XXXXX
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AMENDMENT TO EMPLOYMENT AGREEMENT
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WHEREAS: BioMarin Pharmaceutical Inc. (the "COMPANY") and Xxxxxxxxxxx X.
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Starr ("EMPLOYEE") entered into an Employment Agreement dated as of June 26,
1997, a copy of which is attached hereto as Exhibit "A" (the "EMPLOYMENT
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AGREEMENT"); and
WHEREAS: Each of the Company and Employee now desire to amend, in part,
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Section 2.2 of the Employment Agreement.
NOW, THEREFORE, the Company and Employee agree that, as of October 26,
1998, the first two sentences of Section 2.2 of the Employment Agreement shall
be amended to read as follows:
"2.2 Except with the written consent of BioMarin's board of directors,
Starr shall devote one hundred percent (100%) of his productive, time, ability
and attention to BioMarin's business and shall not engage in any other business
or render any services of a business, commercial or professional nature to or on
behalf of any other person or enterprise. Starr shall not engage in any activity
which is directly competitive with BioMarin."
IN WITNESS WHEREOF, each of the parties have executed this Amendment to the
Employment Agreement as of October 26, 1998.
BIOMARIN PHARMACEUTICAL INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
EMPLOYEE
/s/ XXXXXXXXXXX X. XXXXX
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Xxxxxxxxxxx X. Xxxxx
AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------
WHEREAS: BioMarin Pharmaceutical Inc. (the "COMPANy") and Xxxxxxxxxxx X.
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Starr ("EMPLOYEE") entered into an Employment Agreement dated as of June 26,
1997, a copy of which is attached hereto as Exhibit "A";
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WHEREAS: The Company and Employee entered into an amendment to the
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Employment Agreement dated October 26, 1998, a copy of which is attached hereto
as Exhibit "B" (Exhibit A and Exhibit B together, the "EMPLOYMENT AGREEMENT");
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and
WHEREAS: Each of the Company and Employee now desire to amend Section 4.3
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of the Employment Agreement.
NOW, THEREFORE, the Company and Employee agree that, as of January 1, 1998,
Section 4.3 of the Employment Agreement shall be amended to read as follows:
"4.3 Starr shall be paid an annual bonus, in addition to annual cash
compensation as detailed in Sections 4.1 and 4.2, according to the guidelines
enumerated on the document titled `Founders' Incentive Compensation Adjustment
as of January 1, 1998,' which document is hereby deemed incorporated by
reference herein. "
The document titled "Founders' Incentive Compensation Adjustment as of
January 1, 1998" is attached hereto as Exhibit "C".
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IN WITNESS WHEREOF, each of the parties have executed this Amendment to the
Employment Agreement as of January 1, 1998.
BIOMARIN PHARMACEUTICAL INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
EMPLOYEE
/s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx
Exhibit C
BioMarin Pharmaceutical Inc.
Founders' Incentive Compensation
Adjustment As Of January 1, 1998
Definitions
Quarterly Market Capitalization (QMC)
The QMC is the average market capitalization for the last ten trading days
of the calendar quarter. The market capitalization for a trading day is
the product of the shares outstanding times the NASD market system closing
price for that day. If the stock is not traded on a major exchange
(NASDAQ), then the common stock price of the last major investment of $1
million or greater by an independent investor will be the stock price used
for the QMC calculation.
Quarterly Adjustment Factor (QAF)
The QAF will be .24 for the first calendar quarter, .25 for the second
calendar quarter, .25 for the third calendar quarter, and .26 for the
fourth calendar quarter.
Valuation Minimum (VM)
The VM will be $20,000,000 for the first quarter of 1998 and will increase
by $1,000,000 per quarter every quarter through the second quarter of 2000.
Maximum Cash Bonus (MCB)
The MCB will be 100% of base salary.
Valuation Step-up (VSU)
The VSU will be $5,000,000.
Bonus Factor (BF)
The BF (for each complete VSU) will be a $5,000 bonus on an annual basis.
Quarterly Calculation (QC)
The QC is equal to the (QMC-VM)/VSU*BF*QAF where the quantity (QMC-VM)/VSU
is rounded down to the nearest whole number.
BioMarin Pharmaceutical Inc.
Founders' Incentive Compensation
Adjustment as of January 1, 1998
Annual Bonus (AB)
The AB will be the sum of the four QC (quarterly calculations).
Other
This bonus program will be effective to June 30, 2000 unless otherwise
extended by mutual agreement of the Board of Directors and the named
executive.
The AB (annual bonus) will be paid in cash advances made with each
bimonthly salary payment up to the MCB. A final annual cash bonus, if
needed, up to the MCB and bonus stock options will be paid/granted within
30 days of year-end. The final cash payment will reconcile any cash
differences for the year up to the MCB.
If stock options are required to pay the full AB amount, the stock options
will have the following characteristics:
Exercise price as of December 31 for 1998 and 1999 and June 30 for
2000 if not extended.
Black-Scholes Value
Fully vested
The bimonthly cash advance will be paid in amounts that do not cumulatively
exceed 100% of base salary for the year-to-date period.
AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------
WHEREAS: BioMarin Pharmaceutical Inc. (the "COMPANY") and Xxxxxxxxxxx X.
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Starr ("EMPLOYEE") entered into an Employment Agreement dated as of June 26,
1997, a copy of which is attached hereto as Exhibit "A";
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WHEREAS: Each of the Company and Employee now desire to amend the
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Employment Agreement.
NOW, THEREFORE, the Company and Employee agree that, as of January 1, 1999,
the Employment Agreement shall be amended to add the following provisions:
In the event of the Involuntary Termination, as defined below, of
Employee's employment with the Company within one (1) year of a Change of
Control, as defined below, Employee shall be entitled to receive from the
Company, within ten (10) days of such Involuntary Termination, a severance
payment equal to six (6) months of Employee's then-current annual salary and
fifty percent (50%) of the annual bonus that Employee would otherwise be
entitled to receive for the calendar year in which such Involuntary Termination
occurs. Additionally, upon such Involuntary Termination, fifty percent (50%) of
the then-unvested portion of all of Employee's options to purchase capital stock
of the Company shall immediately vest. The capitalized terms used above shall
have the following meanings:
1. "Change of Control" shall mean the occurrence of any of the
following events:
a) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities;
b) A change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board of Directors
of the Company with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or
c) The approval by stockholders of the Company of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the approval by
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
2. "Involuntary Termination" shall mean (i) without the Employee's
express written consent, a significant reduction of the Employee's duties,
position or responsibilities, or the removal of the Employee from such position
and responsibilities, unless the Employee is provided with a comparable position
(i.e., a position of equal or greater organizational level, duties, authority,
compensation and status); (ii) without the Employee's express written consent, a
substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to the Employee immediately prior to such reduction; (iii) a
reduction by the Company in the annual salary of the Employee as in effect
immediately prior to such reduction; (iv) a material reduction by the Company in
the kind or level of employee benefits to which the Employee is entitled
immediately prior to such reduction with the result that the Employee's overall
benefits package is significantly reduced; (v) without the Employee's express
written consent, the relocation of the Employee to a facility or a location more
than 25 miles from the Employee's then present location; (vi) any purported
termination of the Employee by the Company which is not effected for disability
or for Cause, or any purported termination for which the grounds relied upon are
not valid; or (vii) the failure of the Company to obtain the assumption of this
Agreement by any successors in the event of a Change of Control.
IN WITNESS WHEREOF, each of the parties have executed this Amendment to the
Employment Agreement as of January 1, 1999.
BIOMARIN PHARMACEUTICAL INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
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Xxxxx X. Xxxxxxx, Xx., Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx
