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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of April 30,1998, between OSI
PHARMACEUTICALS, INC., a Delaware corporation having a place of business at 000
Xxxxxxx Xxxxxxxxx Xxxx., Xxxxxxxxx, XX 00000 (the "Company"), and Xxxxx Xxxxxxx,
Ph.D., who resides at 00 Xxxxxx Xxxx, Xxxx Xxxxxxx, XX 00000 ("Executive").
WITNESSETH:
WHEREAS, the Company desires to engage Executive to perform services
for the Company and any subsidiary or affiliate of the Company, and Executive
desires to perform such services, on the terms and conditions hereinafter set
forth; and
WHEREAS, the Company and Executive have determined to terminate their
prior employment agreement dated April 28, 1993 and enter into this agreement;
NOW, THEREFORE, the Company and Executive, in consideration of the
mutual promises contained herein and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, hereby agree
as follows:
1. Term. The Company hereby employs Executive, and Executive
hereby accepts such employment, upon the terms and conditions hereinafter set
forth. Executive shall perform the duties required of him hereunder during the
period commencing on May 1, 1998 and ending on April 30, 2001; provided,
however, that on April 30, 2001, and on each April 30 thereafter, such period
shall be automatically extended by one additional year unless at least 60 days
prior to any such April 30 either party shall deliver to the other written
notice that such period will not be extended, in which case this Agreement will
terminate upon the expiration of this then existing term of this Agreement,
including any previous extension. The
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period during which Executive shall perform the services required of him
hereunder (as same may be extended as provided in this Section 1 or reduced as
hereinafter provided) is hereinafter referred to as the "Employment Period."
2. Duties.
(a) Executive shall serve, at the pleasure of the Board
of Directors of the Company, as President of the Company. In his capacities as
President shall perform for the Company, and any subsidiary or affiliate of the
Company, such duties generally associated with such position as well as such
other duties consistent with such position as may be prescribed from time to
time by the Board of Directors.
(b) Executive agrees to devote his full time, labor,
energies and attention to the performance of his duties hereunder, subject to
the provisions of Paragraph 10(a) hereof.
(c) Executive agrees not to become involved in any
personal investment or business matters which may detract from the performance
of his duties or otherwise adversely affect the Company or any subsidiary or
affiliate of the Company.
3. Place of Performance. In connection with his employment by the
Company, Executive shall be based at the principal executive offices of the
Company, but shall be available to travel at such times and to such places as
may be reasonably necessary in connection with the performance of his duties
hereunder.
4. Compensation.
(a) Base Salary. During the Employment Period, Executive
shall receive a minimum base salary at the annual rate of $192,000, plus such
other amounts, if any, as the Board of Directors of the Company, in its sole
discretion, may from time to time determine.
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Executive's base salary shall be reviewed annually; provided, however, that in
no event shall Executive's base salary be reduced below an annual rate of
$192,000. Executive's salary shall be payable in bi-weekly installments or at
such other frequency as the Company may from time to time determine.
(b) Incentive Bonus Opportunity. In addition to his base
salary, Executive may receive incentive bonus compensation in respect of each
fiscal year ending during the Employment Period. The amount, if any, of each
such Annual Award shall be determined by the Board of Directors of the Company
in its sole discretion. Executive shall not receive any Annual Award unless he
is employed by the Company at the end of the fiscal year to which such Annual
Award relates. Any Annual Award will be paid to Executive within 120 days
following the end of the fiscal year to which such Annual Award relates.
5. Stock Options. Executive shall be eligible to receive stock
options as the Board of Directors of the Company shall determine in its sole
discretion and in accord with established Company policy and incentive goals.
6. Expenses.
(a) During the Employment Period, Executive shall be
entitled to reimbursement for all reasonable out-of-pocket expenses necessarily
incurred in performing services hereunder within the limits of authority which
may be established from time to time by the Board of Directors, provided that
Executive properly accounts for such expenses in accordance with Company policy.
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7. Employee Benefits.
(a) Use of Automobile. The Company shall provide
Executive with the use of an automobile during the Employment Period and shall
reimburse Executive for his reasonable and necessary expenses in connection with
the use of such vehicle in furtherance of the business of the Company, provided
that Executive properly accounts for such expenses in accordance with Company
policy.
(b) Vacation. Executive shall be entitled to one month
paid vacation per calendar year which may be taken at such time or times as
Executive may elect, subject to the needs of the Company's business. Executive
shall also be entitled to all paid holidays given by the Company to its senior
executive officers.
(c) Other Benefits. Executive shall be entitled to
participate in such term life insurance, basic medical, major medical, dental
and other employee benefit plans established by the Company from time to time
and generally made available to employees at levels similar to Executive's for
which he meets the eligibility requirements.
8. Termination.
(a) The Company may terminate this Agreement at any time
after the first anniversary of the date of commencement of the Employment
Period, and for any reason whatsoever (or for no reason), by giving not less
than 30 days' prior written notice to Executive. In the event this Agreement is
terminated by the Company other than for a reason set forth in Paragraph 8(b)
hereof, (i) Executive shall be entitled to receive his base salary at the rate
in effect on the date notice of termination is given through the effective date
of such termination and any Annual Award granted through such date which has not
yet been paid;
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and (ii) Executive shall continue to receive his base salary at the rate in
effect on the date notice of termination is given for the twelve months
immediately succeeding the effective date of such termination.
(b) Notwithstanding anything herein contained to the
contrary, if after the date hereof and prior to the end of the Employment
Period, (i) either (A) Executive shall be physically or mentally incapacitated
or disabled or otherwise unable fully to discharge his duties hereunder
("Disabled") for a period of 90 consecutive days or for an aggregate of 90 days
within any period of twelve consecutive months, (B) Executive shall be convicted
of a felony or other crime involving moral turpitude, (C) Executive shall commit
any act or omit to take any action in bad faith and to the detriment of the
Company or any subsidiary or affiliate of the Company, or (D) Executive shall
breach any material term of this Agreement and fail to correct such breach
within 10 days after receiving notice of the same, then, and in each such case,
the Company shall have the right to give notice of termination of Executive's
services hereunder as of a date to be specified in such notice (which date may
be the date such notice is given), and this Agreement shall terminate on the
date so specified; or (ii) Executive shall die, then this Agreement shall
terminate the date of Executive's death.
If this Agreement is terminated by the Company for any of the reasons
set forth in this Paragraph 8(b), Executive or his estate, as the case may be,
shall be entitled to receive his base salary at the rate in effect on the date
notice of termination is given or the date of Executive's death, as the case may
be, to the date on which termination shall take effect and any Annual Award
granted through such date which has not been paid; provided, however that if
Executive is Disabled, the amount payable to Executive pursuant to this
Paragraph 8(b) shall
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be reduced by an amount equal to the amounts, if any, to which he is entitled
with respect to such period pursuant to any insurance or other plan established
by the Company in which he is a participant.
(c) Termination by the Employee. The Executive may terminate this
agreement after the date herein if in the event of a change of control of the
Company or for any other reason his title, responsibilities or salary are
reduced from those in effect at the time and he shall be entitled to full
payment for the remaining term of this Agreement. However, the payment shall not
be less than nine months pay in any event. Upon such termination, all
outstanding stock options granted to the Executive shall become fully vested.
(d) Executive may terminate this agreement if, within one year of
the effective date, the Board of Directors does not nominate the Executive for
election as Chief Executive Officer and as a director of the Company. Executive
shall continue to receive his base salary at the rate in effect on the date of
notice of termination for the 12 months succeeding such notice.
9. Confidentiality.
(a) Executive shall continue to treat as confidential any
proprietary, confidential or secret information relating to the business or
interests of the Company or any subsidiary or affiliate of the Company,
including, without limitation, the organizational structure, operations,
business plans or technical projects of the Company or any subsidiary or
affiliate of the Company, and any research datum or result, invention, trade
secret, customer list, process or other work product developed by or for the
Company or any subsidiary or affiliate of the Company, whether on the premises
of the Company or elsewhere ("Confidential
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Information"). Beginning on the date hereof, and at any time hereafter,
Executive shall not disclose, utilize or make accessible in any manner or in any
form any Confidential Information other than in connection with performing the
services required of him under this Agreement, without the prior written consent
of the Company. Notwithstanding the foregoing, the provisions of this Paragraph
9(a) shall not apply to any proprietary, confidential or secret information or
other research datum or result, invention, trade secret, customer list or work
product which is, at the commencement of this Agreement or at some later date,
publicly known under circumstances involving no breach of this Agreement or is
lawfully and in good faith made available to Executive by a third party under no
obligation of confidentiality with respect thereto.
(b) Executive hereby agrees that any and all information,
inventions and discoveries, whether or not patentable, that he conceives and/or
creates during the Employment Period and any extensions thereof, and which are a
direct or indirect result of work performed hereunder, shall be the sole and
exclusive property of the Company. Executive hereby assigns to the Company any
and all right, title and interest which he has or may acquire in the same.
Executive further agrees that he will promptly execute any and all applications,
assignments or other instruments which an officer of the Company or the Board of
Directors of the Company shall deem necessary or useful in order to apply for
and obtain Letters Patent in the United States and all foreign countries for
said information, inventions and discoveries and in order to assign and convey
to the Company the sole and exclusive right, title and interest in and to said
information, inventions, discoveries, patent applications and patents thereon.
The Company will bear the cost of preparation of all such patent applications
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and assignments, and the cost of prosecution of all such patent applications in
the United States Patent Office and in the patent offices of foreign countries.
(c) All documents, records, apparatus, equipment and
other physical property furnished to Executive by the Company or produced by
Executive or others in connection with his employment shall be and remain the
sole property of the Company. Executive will return and deliver such property to
the Company as and when requested by the Company.
(d) Executive agrees that the provisions of this
Paragraph 9 shall survive the termination of his employment and of this
Agreement.
10. Non-Competition.
(a) Executive agrees that, during the period he is
employed by the Company or any subsidiary or affiliate of the Company, under
this Agreement or otherwise, he will not engage in, or otherwise directly or
indirectly be employed by, or act as a consultant, advisor or lender to, or be a
director, officer, employee, stockholder, owner or partner of, any other
business or organization, whether or not such business or organization now is or
shall then be competing with the Company or any parent, subsidiary or affiliate
of the Company; provided, however, that Executive shall not be prohibited either
from managing his own personal investments on his own personal time or from
serving on up to three outside boards of directors or advisory boards, so long
as such activities do not (i) involve a business or organization which competes
with the Company or any subsidiary or affiliate of the Company, (ii) interfere
or conflict with the performance of his duties as an employee of the Company or
any subsidiary or affiliate of the Company, (iii) otherwise result in a breach
of any of the
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provisions of this Agreement, or (iv) in the case of serving as a director or
advisory board member of other companies, such activities for all such companies
do not require, in the aggregate, more than 15 days per year, including travel
time.
Executive further agrees that (y) if his employment with the Company is
terminated by the Company pursuant to Paragraphs 8(a) or 8(b)(i) hereof, or (z)
if he resigns or otherwise fails or refuses to perform the services required of
him under this Agreement other than as a result of a breach of this Agreement by
the Company (which breach is not cured within 30 days after receiving notice
thereof), then during the two-year period commencing on the date he ceases to be
employed by any of the Company or any subsidiary or affiliate of the Company,
under this Agreement or otherwise, Executive shall not directly or indirectly
compete with or be engaged in the same business as the Company or any subsidiary
or affiliate of the Company, or be employed by, or act as consultant, advisor or
lender to, or be a director, officer, employee, stockholder, owner or partner
of, any business or organization which, at the time of such cessation, directly
or indirectly competes with or is engaged in the same business as the Company or
any subsidiary or affiliate of the Company; provided, however, that if
Executive's employment with the Company is terminated pursuant to Paragraphs
8(a) or 8(b)(i)(A) hereof, Executive's obligations pursuant to this sentence
shall continue only so long as the Company pays Executive compensation at the
same rate compensation was being paid to him pursuant to Paragraph 4 of this
Agreement at the time of such termination (subject, in the case of termination
pursuant to Paragraphs 8(a). Notwithstanding anything contained herein to the
contrary, the provisions of this Paragraph 10(a) will not be deemed breached
merely because Executive owns not more than 1% of the
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outstanding common stock of a corporation if, at the time of its acquisition by
Executive, such stock is listed on a national securities exchange, is reported
on NASDAQ, or is regularly traded in the over-the-counter market by a member of
a national securities exchange.
(b) Executive agrees that for a period of three years
from the termination of this Agreement he will not, directly or indirectly,
employ or solicit the employment or engagement by others of any employees of, or
consultants hired by, the Company, or any subsidiary or affiliate of the
Company, without the prior written consent of the Company.
(c) The obligations of Executive pursuant to this
Paragraph 10 shall survive the termination of this Agreement.
11. Equitable Relief. Executive acknowledges that the restrictions
contained in Paragraphs 9 and 10 of this Agreement are reasonable in view of the
nature of the business in which the Company is engaged and the knowledge he will
obtain concerning the Company's business (and the business of any subsidiary or
affiliate of the Company), and that any breach of his obligations under
Paragraphs 9 and 10 hereof will cause the Company irreparable harm for which the
Company will have no adequate remedy at law. As a result, the Company shall be
entitled to the issuance by a court of competent jurisdiction of an injunction,
restraining order or other equitable relief in favor of itself restraining
Executive from committing or continuing any such violation, and Executive
consents to such an injunction, restraining order or other equitable relief. Any
right to obtain an injunction, restraining order or other equitable relief
hereunder will not be deemed a waiver of any right to assert any other remedy
the Company may have under this Agreement or otherwise at law or in equity.
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12. Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder or the other rights of the
Company and any subsidiary or affiliate of the Company hereunder, and (ii)
Executive is under no physical or mental disability that would hinder the
performance by him of his duties under this Agreement.
13. Assignment. Under no circumstances shall Executive assign,
pledge or otherwise dispose of any of his rights or obligations under this
Agreement, and any such attempted assignment, pledge or disposition shall be
void and shall, at the Company's option, relieve the Company of all its
obligations under this Agreement. The Company may assign any of its rights or
obligations under this Agreement to any parent, subsidiary, affiliate or
successor.
14. Entire Agreement. This Agreement and the stock option
agreements referred to in Paragraph 5 hereof represent the entire agreement
between the Company and Executive with respect to the subject matter hereof and
there have been no oral or other agreements of any kind whatsoever as a
condition precedent or inducement to the signing of this Agreement or otherwise
concerning this Agreement or the subject matter hereof.
15. Waivers. Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such
terms or conditions or any other term or condition, nor shall any failure to
enforce any provision hereof on any one occasion operate as a waiver of such
provision or of any other provision hereof or a waiver of the right to enforce
such provision or any other provision on any subsequent occasion.
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16. Amendments. This Agreement may not be amended, nor shall any
waiver, change, modification, consent or discharge be effected, except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any such amendment, waiver, change, modification, consent or
discharge is sought.
17. Severability.
(a) If any provision of this Agreement shall be held or
deemed to be invalid, inoperative or unenforceable as written, it shall be
construed, to the greatest extent possible, in a manner which shall render it
valid and enforceable and any limitation on the scope or duration of any such
provision necessary to make it valid and enforceable shall be deemed to be part
thereof.
(b) If any provision of this Agreement shall be held or
deemed to be invalid, inoperative or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions or in all
cases, because of the conflict or any provision with any constitution or statute
or rule of public policy or for any other reason, such circumstance shall not
have the effect of rendering the provision or provisions in question invalid,
inoperative or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative or unenforceable provision
had never been contained herein, and such provision reformed so that it would be
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valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case.
18. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without giving effect to rules governing conflict of laws.
19. Courts. Any action to enforce any of the provisions of this
Agreement may be brought in the courts of the State of New York. The parties
hereby consent to the jurisdiction of the courts of the State of New York.
20. Notices. Any notice or other communication required or
permitted by this Agreement shall be in writing and personally delivered or
mailed by certified mail, return receipt requested, addressed to the parties at
their addresses set forth above, or to such other addresses as one party may
specify to the other party, from time to time, in writing. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
OSI PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxxxx Date: June 29, 1998
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Xxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
/s/ Xxxxx Xxxxxxx, Ph.D. Date: June 29, 1998
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Xxxxx Xxxxxxx, Ph.D.
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