AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
and entered into as of the 22nd day of September 1997, by and between SERAGEN,
Inc., a Delaware corporation with its principal place of business at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Ph.D., an individual residing at ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Executive").
WHEREAS, the Executive is currently employed by the Company as its
President and Chief Technology Officer pursuant to an Employment Agreement
dated November 6, 1996, as amended by amendments or waivers dated December 18,
1996, January 6, 1997, January 31, 1997, and May 30, 1997 (as so amended, the
"Old Agreement"); and
WHEREAS, the Company desires to continue to employ the Executive, and
the Executive desires to continue to be employed by the Company, on the terms
and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereto hereby agree as follows:
1. Term of Agreement. This Agreement shall commence on the date
hereof (the "Effective Date") and shall continue thereafter, unless sooner
terminated pursuant to Section 4, until November 6, 1999 (the "Term").
2. Title; Capacity. The Executive shall serve as President, Chief
Technology Officer and a director of the Company, based at the Company's
headquarters in Hopkinton, Massachusetts, or such place or places in the
continental United States as the Chief Executive Officer shall determine. The
Executive shall be subject to the supervision of the Chief Executive Officer.
The Executive hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties
and responsibilities as the Chief Executive Officer shall from time to time
reasonably assign to her consistent with the Executive's position. The
Company shall use its best efforts to solicit and encourage shareholders of
the Company to appoint and elect the Executive to the board of directors of
the Company during the term of her employment, and the Executive agrees to
serve as a director of the Company without additional compensation. The
Executive agrees to devote her entire business time, attention and energies to
the business and interests of the Company during the term.
3. Compensation and Benefits.
3.1 Salary. The Company shall pay the Executive, in accordance
with its normal payroll practices, an annual base salary of $225,000 ("Base
Salary").
3.2 Fringe Benefits. The Executive shall be entitled, at the
Company's expense, to participate in all bonus and benefit programs, if any,
that the Company establishes and makes available to its employees to the
extent that the Executive's position, tenure, salary, age, health and other
qualifications make her eligible to participate. The Executive shall be
entitled to four (4) weeks paid vacation per year in addition to other paid
holidays provided to all other Company executives. The Executive shall also
be entitled to health insurance for herself and her family, life insurance and
appropriate disability insurance coverage for an executive of her position and
salary level. The Company will pay for membership in appropriate professional
organizations as reasonably required.
3.3 Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with, or related to, the performance of
her duties, responsibilities, or services under this Agreement, upon
presentation by the Executive of appropriate documentation, expense
statements, vouchers and/or such other supporting information in such form as
the Company may reasonably request.
3.4 Severance. Upon the termination of Executive's employment for
any reason, or within 30 days after Executive's death or disability, as
applicable, the Company shall pay Executive for any unused accrued vacation
time together with all salary and other benefits accrued through the date of
termination. After the Company or Executive has given to the other party a
notice of termination (other than a termination for Just Cause), the Company
may request in writing that Executive vacate her office within 3 business
days; in that event, Executive shall vacate her office within the 3-day period
and shall not be obligated to perform any additional services thereafter,
although in this event, Executive will not be deemed "terminated" until the
expiration of the notice period. If (a) Executive shall voluntarily terminate
her employment for Good Reason or (b) Executive's employment hereunder is
terminated (1) as a result of Executive's death or disability or (2) by the
Company without Just Cause, the Company shall provide Executive with the
following severance benefits:
(i) upon the date of termination, or within 30 days after
Executive's death or disability, as applicable, the Company shall pay
Executive as termination and severance pay in a lump sum an amount equal to
one year's salary based on her then salary rate; and
(ii) the Company will continue to provide Executive and her family
without cost or charge of any nature other than applicable deductibles or co-
payments with the same medical and dental insurance coverage provided to them
prior to Executive's termination, death or disability for the maximum period
provided with respect to group health plan benefits subject to "COBRA"
continuation coverage requirements (provided all applicable deductible and co-
payments amounts shall apply).
3.5 Stock Options. On or before September 30, 1997, the Company
shall grant the Executive stock options under the Seragen, Inc. 1992 Long Term
Incentive Plan (the "Plan") to purchase a number of shares of the Company's
common stock, par value $0.01 per share ("Common Stock"), equal to 2.75% of
the outstanding Common Stock on the date of grant, measured on a fully diluted
basis, taking into account all options, warrants, conversion rights and other
rights issued by the Company to acquire equity securities issued prior to the
actual date of grant and based upon the exercise or conversion price that
would apply if such options, warrants, conversion rights, and other rights
were exercised or converted on the grant date. For purposes of the provisions
of this Section 3.5, stock options granted to the Executive pursuant to
Section 3.6 of the Old Agreement through the date hereof and stock options to
purchase 54,000 shares of Common Stock previously granted by the Company to
the Executive listed on Schedule I hereto shall be deemed to be in partial
fulfillment of, and not in addition to, the Company's obligations hereunder.
To the extent permitted by federal income tax law, options issued under the
Plan to the Executive shall be "incentive stock options." Stock options
issued after the Effective Date pursuant to the provisions of this Section 3.5
("New Stock Options") shall be evidenced by an Incentive Stock Option
Agreement and, if required, a Non-Qualified Stock Option Agreement
substantially in the form of Exhibits A and B to this Agreement (the "Stock
Option Agreements"), except as expressly provided otherwise herein. The
exercise price per share of Common Stock for New Stock Options shall be the
Fair Market Value as defined in the Plan as of the date of grant. Both Stock
Option Agreements shall provide that (i) the options issued thereunder shall
vest, i.e., become exercisable, in monthly installments of 2.7778% commencing
as of November 6, 1996 (the "Old Agreement Effective Date") and on the first
day of each calendar month thereafter so that the Executive shall be fully
(100%) vested on the first day of the month immediately before the third
anniversary of the Old Agreement Effective Date; (ii) upon a Change in
Ownership (as hereinafter defined), in place of the vesting schedule provided
in clause "i" above the options shall vest retroactively 25% as of the Old
Agreement Effective Date and an additional 2.0833% as of the first day of each
calendar month thereafter so that the Executive shall be fully (100%) vested
on the first day of the month in which falls the third anniversary of the Old
Agreement Effective Date; (iii) upon the termination by the Company of the
Executive's employment without Just Cause or the Executive's termination for
Good Reason (as those terms are defined in Section 4), in place of the vesting
schedules provided in clauses "i" and "ii" above, the options shall vest
retroactively 25% as of the Old Agreement Effective Date and at the
accelerated rate of an additional 3.125% on the first day of each calendar
month thereafter so that the Executive shall be fully (100%) vested on the
first day of the month in which falls the second anniversary of the Old
Agreement Effective Date; (iv) options issued shall, to the extent vested, be
fully exercisable until the tenth (10th) anniversary of December 18, 1996 (the
"Effective Option Date"); (v) the options shall be exercisable in accordance
with the terms of the Plan, including the right to pay the option exercise
price in whole or in part by surrendering shares of Common Stock held by the
Executive for at least six months prior to the exercise date with an aggregate
fair market value equal to the option exercise price or in accordance with a
cashless exercise program established with a securities brokerage firm and
approved by the Company, and shall provide that stock certificates shall be
issued outright and free of escrow no later than five (5) business days after
the date of exercise; (vi) stock certificates issued pursuant to the exercise
of an option shall not include any legends or be subject to any transfer
restrictions, except for restrictions required by Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); (vii) the Company shall
not terminate any option issued to the Executive upon a "Change in Control"
(as defined in the Plan) without the Executive's prior written approval;
(viii) in the event that the Company grants options or other equity interests
to management, employees, directors or consultants or the Company sells shares
of its Common Stock or any equity securities or securities convertible or
exchangeable into any equity securities of the Company, as part of a plan or
series of plans of financing, or the number of shares of Common Stock
outstanding on a fully diluted basis increases as a result of a change in the
conversion ratio of any class of securities convertible or exchangeable into
any equity securities of the Company (each, a "Dilution Event"), the Company
shall grant the Executive additional stock options under the Plan covering
that number of shares of Common Stock necessary to cause the Executive's
proportionate holdings of the outstanding Common Stock, on a fully diluted
basis, as of the last day of the calendar quarter in which the Dilution Event
occurs, to equal her proportionate holdings of the outstanding Common Stock,
on a fully diluted basis, immediately prior to the Dilution Event, or 2.75% of
the Common Stock on a fully diluted basis, whichever is higher; provided that
the Executive's right to receive additional stock options under this
subsection 3.5(viii) will terminate with respect to Dilution Events which
occur after the Company has received cumulative proceeds (since the Old
Agreement Effective Date) of at least Twenty Million Dollars ($20,000,000) of
cash proceeds from one or more Target Equity Financings and the Executive has
received all additional stock options with respect to Dilution Events which
occur prior to or in connection with the receipt by the Company of such
cumulative proceeds; (ix) all additional stock options shall be granted on the
last day of each calendar quarter during which such grant or sale of options,
shares or other equity interests is completed, based on the number of shares
of Common Stock outstanding on a fully diluted basis on the last day of such
calendar quarter, except that in the case of any Target Equity Financing from
which the Company receives proceeds of at least Ten Million Dollars
($10,000,000), the additional stock options will be granted immediately upon
the consummation of such Target Equity Financing, and each such additional
stock option shall have an exercise price equal to the Fair Market Value per
share of Common Stock on the date of its grant, and shall otherwise be subject
to the same terms and conditions, and shall vest and remain exercisable on the
same terms as though it were granted on the Effective Option Date; (x) each
option shall include all other rights and benefits under the Plan, including
Section 11 of the Plan (regarding accelerated vesting on Change in Control);
and (xi) the Company shall on or before December 31, 1997, at its own expense
register under the Securities Act of 1933, as amended, all shares issued or to
be issued pursuant to the exercise of the stock options on Form S-8, the
obligation to maintain such registration to continue following the Executive's
termination of employment. The Executive agrees that, if requested by an
underwriter of the Company's securities, the Executive will comply with any
reasonable customary lock-up periods in connection with the Company's offering
of securities provided that all other executive officers and directors of the
Company also must comply with such restrictions and provided that no such
lock-up period shall exceed 180 days. The Plan shall be amended as necessary
to provide or permit the issuance of the options described in this Section
3.5. All additional stock options shall have the same terms and conditions,
and shall vest as though they were granted on the same date, as the options
issued pursuant to this Section. For purposes of determining the outstanding
Common Stock on a fully diluted basis, all shares of Common Stock issuable
upon exercise of options outstanding under the Plan or any other stock option
plan (including the options granted to the Executive pursuant to this
Agreement) and all shares of Common Stock issuable on exercise of all other
outstanding options, warrants, conversion rights or other rights issued by the
Company to acquire equity securities shall be deemed to be outstanding.
The Board shall in good faith take all necessary action to effect the
terms of this Agreement and to register the underlying shares of Common Stock
under applicable securities laws as provided herein.
For purposes of this Agreement, the following terms shall be defined as
set forth below:
A "Change in Control" of the Company shall have the same meaning as
provided by Section 11(b) of the Seragen, Inc. 1992 Long Term Incentive Plan
as amended through the date hereof.
A "Change in Ownership" of the Company shall mean (i) the acquisition by
any "person" or group of "persons" (as defined in Section 13(d)(3) of the
Exchange Act, whether by way of merger, sale of assets, stock purchase, tender
offer or otherwise, of (A) all or substantially all of the equity securities
of the Company or (B) all or substantially all of the operating assets of the
Company, or (ii) the sale or out-licensing of the majority (in value) of the
Company's technology assets. However, the sale of the Company's manufacturing
and clinical operations facilities to Boston University or Boston University's
designated affiliate pursuant to the Asset Purchase Agreement dated as of
February 14, 1997 between the Company and Boston University shall not
constitute a "Change in Ownership."
"Fully Diluted Basis" shall mean that all shares of Common Stock
issuable upon exercise of options outstanding under the Plan or any other
stock option plan (including the Options and Dilution Options granted to
Executive pursuant to this Agreement) and all shares of Common Stock issuable
on exercise of all other outstanding options, warrants, conversion rights or
other rights issued by the Company to acquire equity securities shall be
deemed to be outstanding.
"Target Equity Financing" shall mean the sale or issuance of stock of
the Company or of debt securities of the Company with conversion rights, other
than (i) stock or debt securities sold or issued to a shareholder and/or
affiliated investment entities who as of the Old Agreement Effective Date
collectively owned at least 1% of the Common Stock as measured on a fully
diluted basis; or (ii) stock issued as a result of the exercise of options
presently outstanding or issued pursuant to the Plan.
3.6 Asset Value Realization Fee. The Company and its shareholders
presently intend to develop the business of the Company over the long term
through the efforts of Executive and the other Company employees, which is
intended to result in a substantial increase in the value of the Common Stock
and of the options issued to Executive under Section 3.5 above. If, however,
there is a Change in Ownership of the Company (as defined in Section 3.5),
then the Company shall pay Executive a bonus (the "Asset Value Realization
Bonus") equal to 2.75% of the "Net Proceeds" for any acquisition that is part
of the Change in Ownership "Effected" during Executive's employment or at any
time before the first anniversary of the termination of Executive's
employment, which amount shall be reduced (but not below zero) by the "Option
Stock Gain" recognized by Executive as a result of the sale by her of Common
Stock acquired as a result of exercise of stock options granted to her in
fulfillment of the Company's obligations under Section 3.5 above. Except as
provided by Section 3.7 below, the Company shall pay the Asset Value
Realization Bonus, or any increase in the Asset Value Realization Bonus, on or
before the closing of any acquisition that is part of a Change in Ownership.
If any part of the Net Proceeds is payable after closing (the "Deferred
Payments"), however, then the Company may defer the payment of the part of the
Asset Value Realization Bonus allocable to the Deferred Payments until receipt
of the Deferred Payments, provided the payor of the Deferred Payments has
agreed in writing to pay directly to Executive the Asset Value Realization
Bonus allocable to the Deferred Payments as and when such Deferred Payments
are made to the Company or its shareholders. "Net Proceeds" shall mean the
total cash plus any property received directly or indirectly by the Company or
its shareholders in kind with respect to all acquisitions constituting the
Change in Ownership, reduced by all investment banking fees, brokerage fees,
appraisal fees, and other professional expenses directly attributable to the
acquisitions. A transaction shall be "Effected" by a certain date if it is
consummated by that date or is the subject matter of an agreement or
memorandum of intent executed by that date and subsequently consummated.
"Option Stock Gain" shall mean the difference between the net proceeds from
Executive's sale of Common Stock and the net cost to Executive to exercise the
options for such stock on the assumption that Executive has, in fact,
exercised all vested options and sold all Common Stock received on such
exercise as of the date of the Change in Ownership; Executive shall for this
purpose be deemed to have sold all Common Stock (i) that she owns at the time
of the Change in Ownership or could then own if she exercised all vested
options, (ii) that she is permitted to sell, and (iii) in the event of a
merger or sale of securities, for which she has received an offer to purchase,
and is permitted to sell, on the same terms and conditions as those of the
transactions that constitute the Change in Ownership.
3.7 Continuing Employment With Purchaser. The Company and
Executive recognize that Executive's willingness to work for a potential
purchaser of the Company's business may be an important factor in a sale of
the business. Consequently, to assure a potential purchaser that Executive
will be available to continue employment for up to six months after closing
the sale of the Company's business, Executive agrees that the Company may
defer the payment of 75% of her Asset Value Realization Bonus for up to six
months after such closing on the following terms of this Section 3.7. If a
person or group of persons (individually and collectively, including any
affiliate, the "Purchaser") acquires property that results in a Change in
Ownership, Executive is employed by the Company on the date of closing of the
acquisition resulting in a Change in Ownership (the "Closing"), and on or
before the Closing the Purchaser makes a "Bona Fide Employment Offer" (as
defined below) to Executive, then the Company shall pay to Executive her Asset
Value Realization Bonus (i) 25% on Closing, (ii) 25% two months after Closing,
(iii) 25% four months after Closing, and (iv) 25% six months after Closing.
It shall be a condition to the obligation of the Company to make each of the
aforesaid partial payments of the Asset Value Realization Bonus that on the
date such payment is due Executive has accepted the Bona Fide Employment Offer
and is currently employed by the Company or the Purchaser. The Company shall
immediately pay Executive the balance of her Asset Value Realization Bonus
upon Executive's termination of employment with the Purchaser for Good Reason
or the Purchaser's termination of Executive's employment without Just Cause.
In the event that Executive's Asset Value Realization Bonus is to be paid on
the schedule set forth in the third sentence of this Section 3.7, on or before
Closing, the Company shall open with a national banking association (the
"Escrow Agent"), to be mutually agreed upon by the Company, the Purchaser, and
Executive, an escrow account (the "Escrow Account") into which it shall
deposit 75% of the Asset Value Realization Bonus. With respect to any cash
portion of the Asset Value Realization Bonus, the agreement with the Escrow
Agent (the "Escrow Agreement") shall provide that the Escrow Agent invest that
portion in United States Treasury Bills, other securities issued by the United
States government, or both, as the Escrow Agent may from time to time
determine. With respect to any non-cash portion of the Asset Value
Realization Bonus, the Escrow Agreement shall provide that the Escrow Agent
hold that property and not dispose of that property except through a transfer
to Executive, the Company, or the Purchaser as provided for in this Section
3.7. The Escrow Agreement shall provide that (a) the Escrow Agent shall
release assets held in the Escrow Account to Executive in accordance with the
payment schedule set forth in this Section 3.7 unless prior to any specified
payment date the Escrow Agent has received notice from the Company or the
Purchaser that Executive's employment has been terminated for "Just Cause" or
without "Good Reason;" (b) in the event that Executive provides notice to the
Escrow Agent that Executive's employment has been terminated without "Just
Cause" or for "Good Reason," the Escrow Agent shall, on the tenth day (or, if
such day is not a business day, the next business day) following its receipt
of such notice, if it has not then received notice from the Company or the
Purchaser disputing Executive's notice, pay and deliver to Executive all
assets then remaining in the Escrow Account; and (c) in the event that the
Company or the Purchaser provides notice to the Escrow Agent that Executive's
employment has been terminated for "Just Cause" or without "Good Reason," the
Escrow Agent shall, on the tenth day (or, if such day is not a business day,
the next business day) following its receipt of such notice, if it has not
then received notice from Executive disputing the notice of the Company or the
Purchaser, as the case may be, pay and deliver to the Company all assets then
remaining in the Escrow Account. The Escrow Agreement shall provide that a
copy of any notice to the Escrow Agent given by Executive, on one hand, or the
Company or the Purchaser, on the other, shall be delivered by the Escrow Agent
to the other party promptly upon receipt; the Escrow Agreement shall provide
that the Escrow Agent provide actual notice to Executive of any notice by the
Company or the Purchaser under this Section 3.7. The Escrow Agreement shall
terminate eight months after closing, and, unless assets in the Escrow Account
are then otherwise distributable pursuant to the provisions of this Section
3.7, all assets then remaining in the Escrow Account shall be distributed by
the Escrow Agent to Executive. The parties to this Agreement agree to
negotiate in good faith for the purpose of the finalization, execution, and
delivery of an Escrow Agreement as contemplated in this Section 3.7.
For the purposes of this Section 3.7, "Bona Fide Employment Offer" shall
mean a written offer from the Purchaser to employ Executive (i) on terms at
least as favorable to Executive as provided by this Agreement excluding
consideration of Sections 3.5, 3.6 and this 3.7, (ii) with duties and
responsibilities commensurate with Executive's education, skills and
abilities, and (iii) a commitment to reimburse Executive within 10 days of
receipt of reasonable substantiation all reasonable costs incurred by her for
at least six months following Closing in connection with (a) maintaining a
temporary residence or living facility at any place of business to which the
Purchaser requires Executive to relocate in order to carry out her duties and
responsibilities under this Agreement and (b) weekly travel between such
residence and the location of her family residence located in Wayland,
Massachusetts, plus any federal, state or local income or payroll taxes
incurred by Executive with respect to all such reimbursement payments,
including these tax reimbursement payments, so that Executive shall be made
whole on an after-tax basis. For the purposes of this Section 3.7, the terms
"Just Cause" and "Good Reason" shall have the same meaning as provided in
Sections 4.1 and 4.5, respectively, except that: (i) any references to the
Company shall be deemed to include the Purchaser that makes the Bona Fide
Employment Offer, (ii) a Change in Control or a Change in Ownership does not
constitute Good Reason, and (iii) the termination of Executive's employment as
a result of death or disability, or by agreement between Executive and the
Purchaser, constitutes Good Reason.
In the event that Executive dies, her estate shall be entitled to any
payments to which Executive would be entitled under this Section 3.7.
4. Employment Termination. Section 1 of this Agreement
notwithstanding, the employment of the Executive by the Company pursuant to
this Agreement shall terminate upon the occurrence of any of the following:
4.1 Just Cause. At the election of the Company, for Just Cause,
immediately upon written notice by the Company to the Executive. For the
purposes of this Section 4.1, "Just Cause" shall mean (a) the commission by
the Executive of a willful act of material fraud in the performance of her
duties on behalf of the Company; (b) the conviction of the Executive of, or
the entry of a plea of guilty or nolo contendere by the Executive to, any
crime involving moral turpitude or any felony; or (c) the breach by the
Executive of any material term of this Agreement or the continuing willful
failure of the Executive to perform her material duties to the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness) after written notice thereof (specifying the
particulars thereof in reasonable detail) and a reasonable opportunity to cure
such breach or failure are given to the Executive by the Board of Directors or
the Chief Executive Officer of the Company, provided that no notice shall be
due for any act described in subparagraphs (a) and (b).
For purposes of this Paragraph 4.1, no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or omitted to be
done, by her not in good faith and without reasonable belief that her action
or omission was in the best interests of the Company.
4.2 Death or Disability. Thirty days after the death or total
disability of the Executive. As used in this Agreement, the term "total
disability" shall mean the inability of the Executive, due to a physical or
mental disability, for a period of 90 consecutive days or 150 days in the
aggregate, during any 360-day period to perform the services contemplated
under this Agreement. A determination of total disability shall be made by a
physician satisfactory to both the Executive and the Company, provided that if
the Executive and the Company do not agree on a physician, the Executive and
the Company shall each select a physician and these two together shall select
a third physician, whose determination as to disability shall be binding on
all parties.
4.3 Without Just Cause. Upon notice of termination given at the
election of the Company without Just Cause, which shall include a Change in
Ownership of the Company or a Change in Control of the Company, provided that
the Executive shall be entitled to the severance payment provided in Section
3.4 in such event.
4.4 Termination by the Executive. The Executive may terminate her
employment hereunder at any time upon not less than thirty (30) days' prior
written notice.
4.5 Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the Company shall have materially breached its obligations
under this Agreement, and such breach is not cured within twenty (20) days of
the Executive's sending a written notice of such breach;
(ii) the Company shall have incurred a Change in Ownership;
(iii) the Company shall have incurred a Change in Control;
(iv) the Executive shall at any time during her employment and
more than 30 days after the Effective Date not be a member of the Board of
Directors of the Company or the President of the Company, unless the Executive
shall have resigned from or failed to accept such position(s); or
(v) the Company shall have acted in bad faith to cause the
Executive to resign from the Company.
Good Reason shall not arise in any situation in which the Executive
shall have given prior written consent to the act or failure to act of the
Company.
5. Survival. The provisions of Sections 3.4, 4, 6 and 7 shall survive
the termination of this Agreement.
6. Non-Compete.
6.1 During her employment and for a period of one (1) year after
the termination or expiration thereof, the Executive will not directly or
indirectly;
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one percent (1%) of the
total outstanding stock of a publicly held company), engage in the business of
developing, producing, marketing or selling products competitive with the
products, and using technologies which are utilized in the products, developed
or being developed, produced, marketed or sold by the Company while the
Executive was employed by the Company;
(ii) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment with, or
otherwise cease their relationship with, the Company, or
(iii) solicit, divert or take away, or attempt to divert or take
away, the business of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company which were
contacted, solicited or served by the Company during the last 24 months of the
employment of the Executive.
6.2 If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends too
long a period of time or over too great a range of activities or in too broad
a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
6.3 The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and are considered
by the Executive to be reasonable for such purpose. The Executive agrees that
any breach of this Section 6 will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the
right to seek specific performance and injunctive relief.
7. Proprietary Information and Developments.
7.1 Proprietary Information.
(a) The Executive agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively
"Proprietary Information") is and shall be the exclusive property of the
Company. By way of illustration, but not limitation, Proprietary Information
may include inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, research data,
clinical data, and financial data of the Company, whether or not generated
during normal working hours or on the premises of the Company. Proprietary
Information shall not include any information that (i) is generally known
within the industry before the date of this Agreement or becomes common
knowledge within the industry thereafter, (ii) is disclosed to the Executive
by a third party which did not obtain the information, directly or indirectly,
under an obligation of confidence to the Company, or (iii) the Executive is
required to disclose by enforceable legal process.
(b) The Executive agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material
concerning Proprietary Information, whether created by the Executive or
others, which shall come into her custody or possession, shall be and are the
exclusive property of the Company to be used by the Executive only in the
performance of her duties for the Company.
(c) The Executive agrees that her obligations not to disclose or
use information, know-how and records of the types set forth in paragraphs (a)
and (b) above, also extends to such types of information, know-how, records
and tangible property of customers of the Company or suppliers to the Company
or other third parties who may have disclosed or entrusted the same to the
Company or to the Executive in the course of the Company's business.
7.2 Developments.
(a) The Executive will make full and prompt disclosure to the
Company of all inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which are
created, made, conceived or reduced to practice by the Executive or under her
direction or jointly with others during her employment by the Company, whether
or not during normal working hours or on the premises of the Company (all of
which are collectively referred to in this Agreement as "Developments").
(b) The Executive agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company) all her right,
title and interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this Section
7.2(b) shall not apply to Developments which do not relate to the present or
planned business or research and development of the Company and which are made
and conceived by the Executive not during normal working hours, not on the
Company's premises and not using the Company's tools, devices, equipment or
Proprietary Information.
(c) The Executive agrees to cooperate fully with the Company at the
Company's expense, both during and after her employment with the Company, with
respect to the procurement, maintenance and enforcement of copyrights and
patents (both in the United States and foreign countries) relating to
Developments. The Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignment of priority rights, and powers of attorney,
which the Company may deem necessary or desirable in order to protect its
rights and interests in any of the Developments.
7.3 Other Agreements. The Executive hereby represents that she is
not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of her employment with the Company or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. The Executive further represents that
her performance of all the terms of this Agreement as an employee of the
Company does not and will not breach any agreement with any previous employer
or other party to keep in confidence proprietary information, knowledge or
data acquired by her in confidence or in trust prior to her employment with
the Company.
8. Notices. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or
upon deposit in the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the other party at the address shown
above, or at such other address or addresses as either party shall designate
to the other in accordance with this Section 8.
9. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms or nouns and pronouns shall include the plural,
or vice versa.
10. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes as of the Effective Date all prior
agreements and understandings, whether written or oral and including, without
limitation, the Old Agreement, relating to the subject matter of this
Agreement.
11. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
12. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by
her.
14. Legal Fees. The Company shall pay the Executive's reasonable
legal fees incurred with respect to the negotiation and preparation of this
Agreement.
15. Miscellaneous.
15.1 No Waiver. No delay or omission by the Company in exercising
any right under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion shall be
effective only in the instance and shall not be construed as a bar or waiver
of any right on any other occasion.
15.2 Captions. The captions of the sections of this Agreement are
for convenience and reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
15.3 Severance. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Employment Agreement as of the day and year set forth above.
SERAGEN, INC.
By: /s/ Reed R. Prior
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Reed R. Prior
Chairman of the Board and
Chief Executive Officer
EXECUTIVE
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D