EXHIBIT 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement, as amended and restated effective as of July 13, 2002, is
made by and between Pharmacia Corporation, a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D. (the "Executive").
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITION; DUTIES; RETIREMENT DATE. During the Employment Term (as defined in
paragraph 2) until June 30, 2002, the Company will employ Executive as Senior
Executive Vice President and Chief Scientific Officer and Chairman of Research
and Development of the Company or in such other substantially equivalent
position requested by the Company's Chief Executive Officer ("CEO") for which
the Executive is qualified by education, training, and experience. Executive
will serve as an Officer of the Company, and will initially report to the CEO.
From July 1, 2002 through the effective date of his retirement ("Retirement
Date"), Executive shall be employed with the Company as Senior Executive Vice
President and Chief Scientific Officer, but shall no longer be the Chairman of
Research and Development. During this period, Executive will perform duties and
responsibilities as assigned by the CEO, in his full discretion. Executive's
duties and responsibilities will primarily be advice and consultation with the
CEO.
Executive's Retirement Date shall be no earlier than February 28, 2003 and no
later than December 31, 2003, unless a later date is mutually agreed upon. For
the period between February 28, 2003 and December 31, 2003, either party may
identify a specific Retirement Date by providing the other party ninety-days
advance written notice.
If the parties mutually agree to extend Executive's Retirement Date beyond
December 31, 2003, the parties agree that (i) the Retirement Date will be no
earlier than one year following the effective date of the Company's 2003 annual
stock option grants, and (ii) notwithstanding the provisions of Section 3, the
CEO shall determine Executive's cash compensation beyond December 31, 2003, in
his sole discretion, based on Executive's duties and responsibilities as agreed
upon by CEO and Executive.
(b) OBLIGATIONS. During the Employment Term, Executive will devote substantially
all of his business efforts and time to the Company. Executive agrees, during
the Employment Term, not to actively engage in any other employment, occupation
or consulting activity for any direct or indirect remuneration without the prior
approval of the CEO; provided, however, that Executive may (i) serve on the
board of directors of other companies (subject to the reasonable approval of the
CEO) and boards of trade associations or charitable organizations; (ii) engage
in charitable activities and community affairs; or (iii) manage Executive's
personal investments and affairs, as long as such activities do not materially
interfere with Executive's duties and responsibilities with the Company.
2. EMPLOYMENT TERM. The Company hereby agrees to employ Executive and Executive
hereby accepts employment, in accordance with the terms and conditions of this
Agreement, commencing on June 1,2000 (the "Employment Commencement Date"). The
period of Executive's employment under this Agreement will be referred to as the
"Employment Term." Subject to the Company's obligation to provide severance
benefits as may be specified in this
Agreement, Executive and the Company acknowledge that this employment
relationship may be terminated at any time and for any or no cause or reason, at
the option of either the Company or Executive.
3. CASH COMPENSATION. During the Employment Term, the Company will pay Executive
the following as cash compensation for services to the Company:
(a) BASE SALARY. From April 1, 2002 through Executive's Retirement Date,
Executive's annualized base salary will be $832,000 and will be subject to
annual review pursuant to the Company's normal review policy for other similarly
situated senior executives of the Company.
(b) VARIABLE COMPENSATION. Executive will also be eligible to participate in the
Company's annual incentive plan ("Incentive Plan") at a level determined by the
Compensation Committee of the Board of Directors of the Company (the "Board")
(such committee hereafter being referred to as the "Compensation Committee") to
be appropriate based on Executive's position, job performance and Company
policy. For each plan year until Executive's Retirement Date, Executive's target
under the Incentive Plan will be 75% of Executive's base salary. Payment of
incentive compensation, if the performance criteria determined by the
Compensation Committee are met, will generally be made in March of the year
following the incentive plan year, unless Executive elects to defer payment
pursuant to an applicable plan of the Company.
4. EQUITY COMPENSATION. During the Employment Term, Executive will be eligible
to participate in the Company's equity compensation plans, in accordance with
the terms of such plans and any applicable grants (except as provided herein),
at a level determined by the Compensation Committee to be appropriate based on
the Company's equity compensation policy. Executive will receive a grant of
125,000 stock options to purchase shares of the Company's common stock pursuant
to the Company's long-term incentive plan. The date of the stock option grant
will be June 1, 2000.
Executive will receive a grant of 100,000 restricted shares or share units under
the Company's Founders Performance Contingent Shares Program, which shall vest
according to the terms of the Program based on the Company's total shareholder
return ranking as compared to a designated peer group and the Company's targeted
five year compounded shareholder return. Except as otherwise provided in the
Founders Performance Contingent Shares Program, Executive must be employed by
the Company on December 31, 2004 in order for the restricted shares or share
units to vest.
5. EMPLOYEE BENEFITS. During the Employment Term, Executive will, to the extent
eligible, be entitled to participate in all employee welfare and retirement
benefit plans and programs provided by the Company to its senior executives in
accordance with the terms of those plans or programs as they may be modified
from time to time. Executive will be entitled to post-retirement welfare
benefits as are made available by the Company to its senior executive officers
at the time of Executive's retirement, provided that for this purpose
Executive's period of employment shall be deemed to be the period necessary to
obtain the maximum level of such benefits. In the event that adverse tax
consequences may result if medical benefits are provided to Executive directly,
the Company will pay Executive the amount necessary to purchase the coverage,
adjusted for taxes, on an after-tax basis.
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6. FINANCIAL PLANNING ASSISTANCE. During the Employment Term, Executive will be
eligible to participate in the Company's Financial Planning Assistance program
for senior executives. Executive will be entitled to up to $10,000 for the first
year of financial planning assistance, and $7,000 each year thereafter.
7. BUSINESS EXPENSES. During the Employment Term, upon submission of appropriate
documentation in accordance with its policies in effect from time to time, the
Company will pay or reimburse Executive for all reasonable business expenses
that Executive incurs in performing Executive's duties under this Agreement,
including, but not limited to, travel, entertainment, professional dues and
subscriptions.
8. RELOCATION. The Company acknowledges and agrees that Executive's business
location will remain in St. Louis. However, in the event Executive chooses to
relocate during the Employment Term, Executive will be entitled to relocation
benefits pursuant to the Company's relocation benefit program.
9. SUPPLEMENTAL RETIREMENT BENEFIT. During the Employment Term, Executive will
be eligible to participate in the Key Executive Pension Plan ("▇▇▇▇").
Notwithstanding anything in this Agreement to the contrary, if the amount of
Executive's Supplemental Benefit under the ▇▇▇▇ is adversely impacted by the
terms of this Agreement, then Executive's benefit under the ▇▇▇▇ shall be
calculated without regard to the terms of this Agreement. In the event
Executive's Retirement Date is after February 28, 2003, the Company agrees that
the Executive's Supplemental Benefit under the ▇▇▇▇ shall be no less than a
Supplement Benefit under the ▇▇▇▇ calculated as if he terminated from employment
on February 28, 2003.
10. RELEASE.
(a) In consideration of the agreements and undertakings of the Company set forth
herein, and intending to be legally bound hereby, Executive, on behalf of
himself, his spouse and his dependents, heirs, executors, administrators and
assigns, past and present, and each of them (hereinafter collectively referred
to as "Releasors"), agrees to release and forever discharge the Company,
together with its Affiliates, and its or their officers, directors, employees,
agents, predecessors, partners, successors, assigns, heirs, executors, insurers
and administrators (hereinafter "Company Releasees") from any and all rights,
claims, actions and causes of action of any nature whatsoever, cognizable at law
or equity, which Releasors now have or claim, or might hereafter have or claim,
against the Company Releasees up to the date of this Agreement relating to
Executive's employment by the Company and its Affiliates, including, without
limitation, claims arising under the Age Discrimination in Employment Act, 29
U.S.C. ss. 621 et seq.; the Older Workers Benefit Protection Act, 29 U.S.C. ss.
621 et seq.; Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
ss. 2000e et seq.; the Employee Retirement Income Security Act of 1974, 29
U.S.C. ss. 1001 et seq.; the Americans With Disabilities Act, 42 U.S.C. ss.12101
et seq.; the Family and Medical Leave Act, 29 ▇.▇.▇.▇▇. 2601 et seq.; any
anti-discrimination statutes; any claims for breach of express or implied
contract; any claims for wrongful discharge or violation of public policy; any
claims under any federal, state or local laws of any jurisdiction; and any
common law claims now or hereafter recognized; as well as all claims for counsel
fees and costs.
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(b) Nothing herein shall be construed to negate the provisions of this Agreement
or Executive's right to enforce the provisions of this Agreement.
11. REVIEW AND CONSIDERATION OF RELEASE. Executive certifies and acknowledges:
(a) that he has read the terms of this Agreement, and he understands its
terms and effects, including the fact that he has agreed to RELEASE AND FOREVER
DISCHARGE Company Releasees from any legal or administrative action arising out
of his employment with the Company, and the terms and conditions of that
employment relationship, up to the date of this Agreement;
(b) that he has signed this Agreement voluntarily and knowingly in
exchange for the consideration provided to him and described herein. He
acknowledges that he would not otherwise be entitled to the consideration
provided and that the consideration provided as a result of signing this
Agreement is adequate and satisfactory;
(c) that he has been advised through this document that the signing of
this Agreement does not waive rights or claims that may arise after the date it
is executed;
(d) that he has been advised through this writing to consult with an
attorney concerning this Agreement prior to signing this Agreement;
(e) that he has been advised that he has the right to consider this
Agreement for a period of 21 days from receipt, and that he has signed on the
date indicated below after concluding that this Agreement is satisfactory to
him;
(f) that neither the Company, nor any of its agents, representatives,
employees, or attorneys has made any representations to him concerning the terms
or effects of this Agreement other than those contained herein; and
(g) that he understands that he has the right to revoke this Agreement
within 7 days after its execution by giving written notice to the Company, and
that this Agreement will not become effective or enforceable until the
revocation period has expired.
12. TERMINATION OF EMPLOYMENT.
(a) NOTICE OF TERMINATION. Any termination by the Company or by the Executive
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 27. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specifies the date of termination which date shall not be
less than fifteen (15) (thirty (30), if such termination is by the Company for
Disability) nor more than sixty (60) days after the giving of such notice. The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude
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the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(b) TERMINATION OTHER THAN FOR CAUSE. Upon termination of Executive's employment
on the Retirement Date, or earlier in the event of death, disability, or upon an
involuntary termination by the Company other than for Cause or by the Executive
for Good Reason (within 6 months after learning of the event constituting Good
Reason) prior to the Retirement Date, Executive will receive the payments or
other benefits described in this paragraph as liquidated damages and in lieu of
any other damages or compensation under this Agreement or otherwise; provided
(A) Executive does not enter into Competition (as defined in the Agreement) with
the Company for a period of two years following the termination of Executive's
employment (it being understood that the duration of this non-compete
requirement shall not delay payment of any amounts otherwise due hereunder), and
(B) Executive executes, and does not revoke a written waiver and release, in a
form prescribed by the Company, of all claims against the Company and related
parties arising out of the Executive's employment or the termination of that
employment except that the condition specified in Clause (A) shall not apply if
such termination occurs during the two-year period after the consummation of a
transaction approved by the stockholders of the Company and described in Section
13(c) or (d) of the Company's 2001 Long-Term Incentive Plan ("LTIP"), such event
being hereafter referred to as a "Section 13(c) Change in Control") (and such
two-year period being hereafter referred to as the "CIC Period"):
(i) Executive will receive a lump sum severance payment, payable within 60
days after termination of Executive's employment, of $4,764,006.00; provided,
however, if the termination occurs during a CIC Period such lump sum severance
payment shall be payable within 10 days after the termination of Executive's
employment.
(ii) Executive will have Executive's period of employment service used to
calculate retirement extended as if Executive had worked an additional three
years, and the compensation used to calculate Executive's retirement benefits
will be determined as if Executive had continued to receive for an additional
three years salary and incentive compensation equal to the highest annual base
salary and highest annual incentive compensation Executive received from the
Company or its Affiliates within three years prior to Executive's date of
termination (such amounts to be payable from a non-qualified, supplemental
retirement plan);
(iii) Subject to subsection 12(d) below, Executive will be entitled to
exercise, in accordance with their terms, any remaining stock options that had
been granted prior to Executive's termination (all of which will become vested
under such circumstances) for the maximum period permitted under the terms of
the grant;
(iv) Executive will receive a pro-rated portion of his target annual
incentive compensation award in or around March of the year following
Executive's termination based on the number of months (rounded to the next
highest number for a partial month) of the year elapsed prior to Executive's
termination; provided, however, that if the termination occurs during a CIC
Period any such awards which have become vested under the terms of the Annual
Incentive Plan or the Operating Committee Incentive Plan shall be payable within
10 days after the termination of Executive's employment;
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(v) Executive and Executive's dependents will continue to participate
(with the same level of coverage) for three years in all medical, dental,
hospitalization, accident, disability, life insurance and any other benefit
plans of the Company on the same terms as in effect immediately prior to
Executive's termination unless changed for senior executives generally;
provided, however, that such benefits will be offset to the extent that
Executive or Executive's dependents receive benefits from another source (in
such event, Executive agrees to provide reasonable notice of the receipt of
benefits from another source); and, provided that in the event adverse tax
consequences may result if medical benefits are provided to Executive directly,
the Company will pay Executive the amount necessary to purchase the coverage,
adjusted for taxes, on an after-tax basis;
(vi) Executive shall be entitled to continue any and all current
individual life insurance and individual disability insurance plans at
Executive's own cost. Within twenty (20) days after Executive's termination
date, the Company's share of cash value under Policy #CUL0021952, determined in
accordance with the terms of the Split Dollar Life Insurance Plan and as of the
termination date, will be returned to the Company; the Company shall then
release the collateral assignment agreement. At that point, all ownership rights
in connection with Policy # CUL0021952 will be vested in the Executive or his
designee. The Executive or his designee will then have the option to maintain
the policy by paying the future premiums, use the remaining cash value (if any)
to purchase paid-up life insurance, withdraw any remaining cash value and cancel
the policy, or exercise any other ownership rights in accordance with the terms
of the life insurance policy;
(vii) Executive will be entitled to outplacement services, at the expense
of the Company, from a provider selected by Executive, subject to a maximum
expense of $25,000; provided, however, Executive shall not be entitled to such
services upon his retirement from the Company on the Retirement Date;
(viii) Executive will be entitled to participate in the Company's
Financial Planning Assistance program for three (3) consecutive years from the
date of termination in accordance with the policies of the Company as in effect
immediately prior to the Change in Control (as such term is defined in the
LTIP); and
(ix) Executive will receive any other amounts earned, accrued or owing to
Executive under the plans and programs of the Company.
(c) INVOLUNTARY TERMINATION FOR CAUSE. If Executive is involuntarily terminated
by the Company for Cause, then:
(i) All unvested or unexercisable equity compensation will be cancelled
upon Executive's termination of employment;
(ii) Executive will forfeit Executive's right to receive any salary,
incentive compensation, equity compensation, or other compensation that has not
been fully earned at the time Executive's employment terminates; provided,
however, Executive will be entitled to receive any benefits or amounts accrued
but not yet paid as of the date of termination; and
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(iii) Executive will receive any other amounts earned, accrued or owing to
Executive under the plans and programs of the Company.
(d) Notwithstanding the foregoing, in no event will this paragraph cause any
stock options to become vested or exercisable prior to the first anniversary of
the stock option grant, unless Executive's termination occurs during a CIC
Period, in which case such stock options shall become vested and exercisable.
13. CAUSE; GOOD REASON.
(a) For purposes of this Agreement, "Cause" means:
(i) a material breach by Executive of Executive's duties and
responsibilities (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the part of Executive,
which is committed in bad faith or without reasonable belief that such breach is
in the best interests of the Company, and which is not remedied within 30 days
after receipt of written notice from the Company specifying such breach; or
(ii) Executive's conviction of a felony which is materially and
demonstrably injurious to the Company as determined in the sole discretion of
the Board;
provided that if the Executive's employment is terminated during a CIC
Period the cessation of Executive's employment shall not be deemed for Cause
unless and until the Company has delivered to Executive a copy of a resolution
duly adopted by not less than 75% of the entire Board (excluding Executive if
Executive is a Board member) at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity for Executive,
together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board an event set forth above has occurred and specifying
the particulars thereof in detail.
(b) For purposes of this Agreement, "Good Reason" means:
(i) Executive's rate of annual base salary, the target amount of
Executive's annual cash incentive bonus, or, if applicable, any other benefit
under any long-term incentive plan is reduced in a manner that is not applied
proportionately to all other senior executive officers of the Company, including
the Chief Executive Officer;
(ii) the Company fails to retain Executive in the position specified in
paragraph 1(a) or another substantially equivalent position for which the
Executive is qualified by education, training and experience;
(iii) during a CIC Period, the Company assigns to the Executive any duties
materially inconsistent with the Executive's title, position, status, reporting
relationships, authority, duties or responsibilities as they existed immediately
prior to such CIC Period, or any other action by the Company which results in a
diminution in such title, position, status, reporting relationships, authority,
duties or responsibilities, other than an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
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(iv) a successor, or any subsidiary or affiliate thereof, to the Company
fails to assume this Agreement;
(v) the Company terminates the Executive's employment other than as
expressly permitted by this Agreement;
(vi) during a CIC Period, the Company fails to keep in effect any employee
benefit plan in which Executive is participating immediately prior to such CIC
Period or provide benefits to Executive that are substantially equivalent; or
(vii) during a CIC Period, Executive is required to relocate more than
fifty (50) miles within the state where the Executive maintains his office
immediately prior to such relocation or Executive's principal office is
relocated to a different state or Executive is required to materially increase
his business travel.
14. DIRECTORSHIPS, OTHER OFFICES. In the event of termination of employment,
Executive will immediately, unless otherwise requested by the Board, resign from
all directorships, trusteeships, other offices and employment held at that time
with the Company or any of its Affiliates.
15. CONFIDENTIALITY. Executive recognizes and acknowledges that by reason of
Executive's employment by and service to the Company, Executive will have access
to proprietary or confidential information, technical data, trade secrets or
know-how relating to the Company, which may include, but is not limited to,
market and product research and plans, markets, products, services, customer
lists and customers, advertising, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, marketing and sales
techniques, strategies and programs, distribution methods and systems, sales and
profit figures, pricing and discount plans, financial and other business
information (hereafter, "Confidential Information"). Executive acknowledges that
such Confidential Information is a valuable and unique asset of the Company and
covenants that Executive will not, either during employment or after the
termination of employment, disclose any such Confidential Information to any
person for any reason whatsoever (except as Executive's duties as an employee of
the Company may require) without the prior written authorization of the CEO,
unless such information is in the public domain through no fault of Executive or
except as may be required by law or in a judicial or administrative proceeding,
in which case Executive will promptly inform the Company in writing of such
required disclosure, but in any event at least two business days prior to the
disclosure. All written Confidential Information (including, without limitation,
in any computer or other electronic format) which comes into Executive's
possession during the course of Executive's employment will remain the property
of the Company. Unless expressly authorized in writing by the CEO, Executive
will not remove any written Confidential Information from the Company's
premises, except in connection with the performance of Executive's duties for
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of employment, Executive agrees
immediately to return to the Company all written Confidential Information in
Executive's possession.
For the purposes of this paragraph, the term "Company" will be deemed to include
the Company and its Affiliates. For purposes of this Agreement, "Affiliate" will
mean an "affiliate" as defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
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16. NON-COMPETE; NON-SOLICIT.
(a) The Company hereby agrees to pay Executive the amounts described under this
Agreement as being expressly conditioned on Executive's undertakings under this
paragraph as well as under paragraph 15 above. In exchange for the consideration
provided in the preceding sentence, Executive agrees that during the term of
Executive's employment with the Company and for a period of two years after
Executive's termination of employment for any reason, Executive will not, except
with the prior written consent of the CEO, directly or indirectly, engage in
Competition. For purposes of this Agreement, Competition means that Executive
commences employment with, or provides substantial consulting services to, any
pharmaceutical company (except companies where sales from pharmaceutical
products constitute less than 20% of total sales). Notwithstanding anything to
the contrary herein, Executive's service solely as a member of the board of
directors of a company whose annual sales are less than $100 million shall not
be deemed to be Competition for purposes of this Agreement. For purposes of the
preceding sentence, if a company is a subsidiary of another company, the sales
of both companies shall be taken into account. Notwithstanding anything to the
contrary herein, Executive's service solely as a member of the board of
directors of a company whose annual sales are less than $100 million shall not
be deemed to be Competition for purposes of this Agreement. For purposes of the
preceding sentence, if a company is a subsidiary of another company, the sales
of both companies shall be taken into account. Notwithstanding any other
provision in this Agreement, any equity grant agreement or any other agreement
or plan covering Executive, all of the non-competition restrictions imposed on
Executive under this Agreement, any equity grant agreement or any other
agreement or plan covering Executive, including, but not limited to, direct
restrictions on employment with other companies and any potential forfeiture of
compensation or benefits (including, but not limited to, separation benefits and
equity compensation), shall cease to apply for all purposes upon Executive's
termination of employment for any reason during a CIC Period.
(b) The foregoing restrictions will not be construed to prohibit Executive's
ownership of less than five percent of any class of securities of any
corporation which is engaged in any business having a class of securities
registered pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"),
provided that such ownership represents a passive investment and that neither
Executive nor any group of persons including Executive in any way, either
directly or indirectly, manage or exercise control of any such corporation,
guarantee any of its financial obligations, otherwise take any part in its
business, other than exercising Executive's rights as a shareholder, or seek to
do any of the foregoing.
(c) Executive further covenants and agrees that during Executive's employment by
the Company and for the period of two years thereafter, Executive will not,
except with the prior written consent of the CEO, directly or indirectly,
solicit, or encourage the solicitation or hiring of, any person who was an
employee of the Company at any time during the term of this Agreement by any
employer other than the Company for any position as an employee, independent
contractor, consultant or otherwise. This covenant will not prevent Executive
from giving references and will not preclude the solicitation or hiring of any
individual after 12 months have elapsed subsequent to the date on which such
individual's employment or engagement by the Company has terminated.
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(d) For the purposes of this paragraph 16, the term "Company" will be deemed to
include the Company and its Affiliates.
17. REMEDIES; INJUNCTION.
(a) Executive acknowledges and agrees that the restrictions contained in
paragraphs 15 and 16 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those paragraphs. Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
legal counsel with respect to this Agreement, and (ii) that Executive has had
full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with counsel.
(b) Executive further acknowledges and agrees that a breach of any of the
restrictions in paragraphs 15 and 16 cannot be adequately compensated by
monetary damages. Executive agrees that, unless Executive's employment is
terminated pursuant to paragraph 12(b) during a CIC Period (in which case the
provisions of this sentence shall not apply), the Company will be entitled to a
return of the cash consideration set forth in this Agreement as being
conditioned on the covenants contained in paragraph 16 and that all remaining
stock options will be forfeited if Executive breaches the provisions of that
paragraph and that, in any event, the Company will be entitled to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, as well as provable damages and an equitable accounting of all
earnings, profits and other benefits arising from any violation of paragraphs 15
or 16, which rights will be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. In the event that any of the
provisions of paragraphs 15 or 16 should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the provision will be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment will apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.
(c) Executive irrevocably and unconditionally (i) agrees that any suit, action
or other legal proceeding arising out of paragraphs 15 or 16, including without
limitation, any action commenced by the Company for preliminary and permanent
injunctive relief and other equitable relief, may be brought in the United
States District Court for the District of New Jersey, or if such court does not
have jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in Somerset County, New Jersey, (ii) consents to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding, and (iii)
waives any objection which Executive may have to the laying of venue of any such
suit, action or proceeding in any such court.
(d) For the purposes of this paragraph 17, the term "Company" will be deemed to
include the Company and its Affiliates.
18. INTELLECTUAL PROPERTY. To the fullest extent permitted by applicable law,
all intellectual property (including patents, trademarks, and copyrights) which
are made, developed or acquired by Executive in the course of Executive's
employment with the Company will be and remain the
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absolute property of the Company, and Executive shall assist the Company in
perfecting and defending its rights to such intellectual property.
19. INDEMNIFICATION. To the fullest extent permitted by applicable law, the
Company will, during and after termination of employment, indemnify Executive
(including providing advancement of expenses) for any judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys' fees, incurred
by Executive in connection with the defense of any lawsuit or other claim or
investigation to which Executive is made, or threatened to be made, a party or
witness by reason of being or having been an officer, director or employee of
the Company or any of its Affiliates. In addition, Executive will be covered
under any directors and officers' liability insurance policy for his acts (or
non-acts) as an officer or director of the Company or any of its Affiliates to
the extent the Company provides such coverage for its senior executive officers
for a period of 5 years following any termination of Executive's employment
other than for Cause or for such longer period of limitations that may apply to
any claim.
20. ARBITRATION. Unless other arrangements are agreed to by Executive and the
Company, any disputes arising under or in connection with this Agreement, other
than a dispute in which the primary relief sought is an equitable remedy such as
an injunction, will be resolved by binding arbitration to be conducted pursuant
to the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association. Costs of the arbitration, including (but not by way of
limitation) reasonable attorney's fees of both parties, will be borne by the
party which does not prevail in the proceedings. In the event that each party
prevails as to certain aspects of the proceedings, the arbitrator(s) or the
court will determine an appropriate allocation of costs between the parties. If,
however, any dispute arises relating to Executive's rights or obligations as a
result of the occurrence of a Section 13(c) Change in Control, the Company shall
pay Executive any such costs unless the Company is determined to have
substantially prevailed on all material claims.
21. GROSS-UP PAYMENT. In addition to any other payments due to Executive under
this Agreement, the Company shall pay to Executive any amounts due to Executive
under the terms of the Company's Excess Parachute Tax Indemnity Plan.
22. NO SET-OFF; NO MITIGATION REQUIRED. The obligation of the Company to make
any payments provided for hereunder and otherwise to perform its obligations
hereunder will not be affected by any set-off, counterclaim, recoupment, defense
or other claim, right or action which the Company may have against Executive or
others. In no event will Executive be obligated to seek other employment or take
other action by way of mitigation of the amounts payable to Executive under any
of the provisions of this Agreement, and such amounts will not be reduced
(except as otherwise specifically provided herein) whether or not Executive
obtain other employment.
23. PAYMENT OF LEGAL FEES. The Company will pay Executive's reasonable legal and
financial consulting fees and costs associated with entering into this Agreement
up to a maximum of $10,000.
24. CORPORATE TRANSACTIONS, IMPACT ON EQUITY COMPENSATION. In the event of any
change in the outstanding shares of the Company's Common Stock (including any
increase or decrease in such shares) by reason of any stock dividend or split,
recapitalization, merger, consolidation,
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spinoff, combination or exchange of shares or other similar corporate change, or
any distributions to common stockholders other than regular cash dividends, the
Compensation Committee of the Board may make such substitution or adjustment, if
any, as it deems to be equitable, as to the number or kind of shares of Common
Stock provided for in this Agreement.
25. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New Jersey.
26. ASSIGNMENTS; TRANSFERS; EFFECT OF MERGER.
(a) No rights or obligations of the Company under this Agreement may be assigned
or transferred by the Company except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or pursuant to the sale or transfer of all
or substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company.
(b) This Agreement will not be terminated by any merger, consolidation or
transfer of assets of the Company referred to above. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement
will be binding upon the surviving or resulting corporation or the person or
entity to which such assets are transferred.
(c) The Company agrees that concurrently with any merger, consolidation or
transfer of assets referred to above, it will cause any successor or transferee
unconditionally to assume, either contractually or as a matter of law, all of
the obligations of the Company hereunder.
(d) This Agreement will inure to the benefit of, and be enforceable by or
against, Executive or Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, designees and legatees. None of
Executive's rights or obligations under this Agreement may be assigned or
transferred by Executive other than Executive's rights to compensation and
benefits, which may be transferred only by will or operation of law. If
Executive should die while any amounts or benefits have been accrued by
Executive but not yet paid as of the date of Executive's death and which would
be payable to Executive hereunder had Executive continued to live, all such
amounts and benefits unless otherwise provided herein will be paid or provided
in accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no such person
is so appointed, to Executive's estate.
27. NOTICES AND OTHER COMMUNICATIONS. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Pharmacia Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to the Company:
Pharmacia Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President Human Resources
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
28. MODIFICATION. No provisions of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by both Executive and the CEO. No waiver by any party hereto at any time
of any breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
29. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of the subject matter contained
herein.
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PHARMACIA CORPORATION
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------ ------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D. By: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
12/17/02 12/17/02
------------------------------------ ------------------------------------
Date Date
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