EXHIBIT 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
dated as of May 1, 2003, between Celgene Corporation, a Delaware corporation
with offices at ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"),
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a resident of New Jersey ("Employee").
W I T N E S S E T H
WHEREAS, the Company and Employee have previously entered into an
employment agreement, originally effective September 30, 1997 and amended and
restated as of January 1, 2000 (the "Employment Agreement");
WHEREAS, Employee is currently employed as the Chief Executive Officer
of the Company, and serves as Chairman of the Board of Directors of the Company
(the "Board");
WHEREAS, the Company and Employee desire to amend and restate the
Employment Agreement again to modify certain terms of the Employment Agreement,
effective as of the date set forth above.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term. The Company agrees to continue to employ Employee, and
Employee agrees to continue to serve, on the terms and conditions of this
Agreement for a period commencing on the date hereof and ending three years from
the date hereof, or such other period as may be provided for in Section 10 or
11. The period during which Employee is employed hereunder is hereinafter
referred to as the "Employment Period." The Employment Period shall be
automatically renewed for successive one-year terms unless either party gives
written notice to the other at least six (6) months prior to the expiration of
the then Employment Period, of such party's intention to terminate Employee's
employment hereunder at the end of the then current Employment Period.
2. Duties and Services. During the Employment Period, Employee shall
continue to be employed in the business of the Company as Chief Executive
Officer of the Company. In addition, Employee shall continue to serve as
Chairman of the Board. Employee shall perform such duties and services, within
his expertise and experience, as may be assigned to him by, and subject to the
direction of, the Board. Employee agrees to continue his employment as described
in this Section 2 and agrees to devote all of his working time and efforts to
the performance of his duties under this Agreement, excepting disabilities,
illness and vacation time as provided by Section 3(e). In performing his duties
hereunder, Employee shall be available for reasonable travel as the needs of the
business require. Except as provided in Section 6 hereof, the foregoing shall
not be construed as preventing Employee from: (i) making
investments in other businesses and managing his and his family's personal
investments; and (ii) participating in charitable, civic, educational,
professional, community or industry affairs or serving on the board of directors
of other companies ("Professional Activities"), provided that these Professional
Activities are approved by the Company's Board.
3. Compensation and Other Benefits.
(a) As compensation for his services hereunder, the Company shall pay
Employee, during the Employment Period, a base salary payable in equal
semi-monthly installments at an annual rate of $750,000, provided that such
salary shall be reviewed annually by the Company's Board, or a committee
thereof, which may, in its sole discretion, increase (but not decrease) such
salary.
(b) The Company shall also pay Employee, during the Employment Period,
an annual target bonus, payable in January of each year for the preceding year,
in an amount equal to sixty-five percent (65%) of Employee's base salary
(payable under Section 3(a) of this Agreement) measured against objective
criteria to be determined by the Company's Board, or a committee thereof, after
good faith consultation with Employee.
(c) Employee shall be entitled to continue to participate in all group
health and insurance programs and all other fringe benefit or retirement plans
which the Company may, in its sole and absolute discretion, elect to make
available to its employees generally, provided Employee meets the qualifications
therefor.
(d) Employee shall be eligible to participate in the Company's 1998
Long- Term Incentive Plan (the "Plan") and any other incentive plans of the
Company. Upon the Employee's Disability (as defined in the Plan), termination of
employment with the Company due to Retirement (as defined in the Plan) or death,
Employee (or the legal representative of his estate, in the case of Employee's
death) shall be entitled to: (i) full vesting and immediate exercisability of
any outstanding stock options and other equity awards (and lapse of any
forfeiture provisions) granted to Employee at any time; and (ii) with respect to
stock options granted to Employee on or after January 1, 2000, Employee (or the
legal representative of his estate, in the case of Employee's death) shall be
entitled to exercise such stock options at any time during the three (3) year
period from the date of Employee's Disability, Retirement or death.
(e) Employee shall be entitled to paid vacation in accordance with the
Company's policy applicable to senior executives, but in no event less than four
(4) weeks per calendar year.
(f) Without limiting the generality of Section 3(c), the Company shall
pay or reimburse Employee for the reasonable expenses incurred by the Employee
in connection with obtaining professional tax and financial planning advice, up
to a maximum of $7,500 in any calendar year during the Employment Period.
4. Expenses. Employee shall be entitled to reimbursement for all
reasonable travel and other out-of-pocket expenses necessarily incurred in the
performance of his duties
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hereunder, upon submission and approval of written statements and bills in
accordance with the then regular procedures of the Company.
5. Representations and Warranties of Employee. Employee represents and
warrants to the Company that Employee 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 hereunder.
6. Non-Competition.
(a) In view of the unique and valuable services that Employee has
rendered or is expected to render to the Company, Employee's knowledge of the
customers, trade secrets and other proprietary information relating to the
business of the Company and its customers and suppliers and similar knowledge
regarding the Company which Employee has obtained or is expected to obtain, and
in consideration of the compensation to be received hereunder, Employee agrees
that:
(i) during the period he is employed by the Company under this
Agreement or otherwise, he will not Participate In (as hereinafter
defined in this Section 6) any other business or organization, whether
or not such business or organization now is or shall then be competing
with or of a nature similar to the business of the Company, without
obtaining the prior written consent of the Executive Committee of the
Board;
(ii) until the first anniversary of the date of the
termination of Employee's employment under this Agreement or otherwise,
he will not Participate In any business which is engaged, directly or
indirectly, in the same business as the Company with respect to any
specific product or specific service sold or activity in which the
Company engages up to the time of termination of employment in any
geographical area in which at the time of termination such product or
service is sold or activity is engaged in by the Company;
(iii) if a Change in Control occurs and Employee's employment
with the Company is terminated under this Agreement without Cause (as
hereinafter defined) or by Employee for Good Reason (as hereinafter
defined) at any time during the period beginning on the date of a
Change in Control and ending one (1) year after the date of such Change
in Control or within ninety (90) days prior to a Change in Control,
then beginning on the later of the date Employee's employment
terminates (as described under this Section 6(a)(iii)) and the date of
a Change in Control and ending on the second anniversary of such date,
he will not Participate In any activity or business in the United
States involved in the research, development, commercialization of a
small molecule which is: (A) the generic equivalent of THALOMID (i.e.,
the same chemical structure); (B) an anti-angiogenic agent for oncology
use; (C) a substantially specific TNFalpha inhibitor (via inhibition of
synthesis of TNFalpha, including via inhibition of PDE4) for the
treatment of Crohn's disease, rheumatoid arthritis, dermatological and
auto-immune conditions having excess levels of TNFalpha as the prime
causative factor, cachexia (AIDS or cancer), or any other indication
for which the Company has been granted
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orphan drug status; or (D) a formulation of d- or dl-methylphenidate
for the treatment of ADD/ADHD.
(b) For purposes of this Section 6 the term "Participate In" shall
mean: "directly or indirectly, for his own benefit or for, with or through any
other person, firm or corporation, own, manage, operate, control, loan money to
or participate in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor or otherwise with, or acquiesce in the use of his name
in."
(c) Employee further agrees that, during the period he is employed by
the Company under this Agreement or otherwise and until the first anniversary of
the date of the termination of Employee's employment under this Agreement or
otherwise, he will not directly or indirectly reveal the name of, solicit or
interfere with, or endeavor to entice away from the Company, any of its
suppliers, customers or employees.
7. Patents, etc. Any interest in patents, patent applications,
inventions, technological innovations, copyrights, copyrightable works,
developments, discoveries, designs and processes ("Inventions") which Employee
during the period he is employed by the Company under this Agreement or
otherwise, and for six months thereafter, may conceive of or develop and either
relating to the specific fields in which the Company may then be engaged or
conceived of or developed utilizing the time, material, facilities or
information of the Company shall belong to the Company; as soon as Employee
conceives of or develops any Invention, he agrees immediately to communicate
such fact in writing to the Secretary of the Company, and without further
compensation, but at the Company's expense (except as noted in clause (a) of
this Section 7), forthwith upon request of the Company, Employee shall execute
all such assignments and other documents (including applications for patents,
copyrights, trademarks and assignments thereof) and take all such other action
as the Company may reasonably request in order (a) to vest in the Company all
Employee's right, title and interest in and to the Inventions, free and clear of
liens, mortgages, security interests, pledges, charges and encumbrances arising
from the acts of Employee ("Liens") (Employee to take such action, at his
expense, as is necessary to remove all such Liens) and (b) if patentable or
copyrightable, to obtain patents or copyrights (including extensions and
renewals) therefor in any and all countries in such name as the Company shall
determine.
8. Confidential Information. All confidential information which
Employee may now possess, may obtain during or after the Employment Period, or
may create prior to the end of the period he is employed by the Company under
this Agreement or otherwise relating to the business of the Company or of any
customer or supplier of the Company shall not be published, disclosed or made
accessible by him to any other person, firm or corporation either during or
after the termination of his employment or used by him except during the
Employment Period in the business and for the benefit of the Company, in each
case without the prior written permission of the Company. Employee shall return
all tangible evidence of such confidential information to the Company prior to
or at the termination of his employment. As used in this Section 8,
"confidential information" shall mean any information except that information
which is or comes into the public domain through no fault of Employee or which
Employee obtains
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after the termination of his employment by the Company under this Agreement or
otherwise from a third party who has the right to disclose such information.
9. Life Insurance. If requested by the Company, Employee shall submit
to such physical examinations and otherwise take such actions and execute and
deliver such documents as may be reasonably necessary to enable the Company, at
its expense and for its own benefit, to obtain life insurance on the life of
Employee. Subject to its ability to do so under the terms of such policy, if
any, insuring the life of Employee, upon the termination of Employee's
employment hereunder, the Company will assign to Employee its rights under such
insurance policy, provided that, concurrently with such assignment, Employee
shall reimburse the Company for any premium payments made by the Company in
respect of time periods subsequent to such date of termination. Nothing herein
contained shall obligate the Company to obtain such insurance.
10. Termination.
(a) Employee's employment and the Employment Period shall terminate on
the first of the following to occur:
(i) the Company provides written notice to Employee of a
termination for Cause; such written notice shall be provided to
Employee not less than ten (10) days prior to the date of termination.
"Cause" shall mean: (A) Employee's conviction of a crime involving
moral turpitude or a felony, (B) Employee's acts or omissions taken in
bad faith and to the detriment of the Company after a written demand
for cessation of such conduct is delivered to Employee by the Company,
which demand specifically identifies the manner in which the Company
believes that Employee has engaged in such conduct and the injury to
the Company, and after Employee's failure to correct such act or
omission within ten (10) days following such written demand, or (C)
Employee's breach of any material term of this Agreement after written
demand for substantial performance is delivered to Employee by the
Company, which demand specifically identifies the manner in which the
Company believes Employee has breached this Agreement, and after
Employee's failure to correct such breach within ten (10) days
following such written demand.
(ii) Employee's death, in which case, this Agreement shall
terminate on the date of Employee's death, whereupon Employee or his
estate, as the case may be, shall be entitled to receive a lump sum
payment in an amount equal to Employee's annual base salary (at the
rate in effect, or required to be in effect, immediately prior to the
date of Employee's death) and the portion of Employee's annual target
bonus (as provided in Section 3(b)) pro-rated up to Employee's date of
death (assuming the target has been met).
(iii) Nothing contained in this Section 10(a) shall be deemed
to limit any other right the Company may have to terminate Employee's
employment hereunder upon any ground permitted by law.
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(iv) If Employee's employment is terminated by the Company as
a result of the disability or incapacitation of Employee or for any
reason other than pursuant to the provisions of paragraphs (i) or (ii)
of this Section 10(a) or the provisions of Section 10(b), upon
termination by the Company of Employee's employment, whether during the
Employment Period or thereafter, Employee shall be entitled to receive
a lump sum payment in an amount equal to Employee's annual base salary
(at the rate in effect, or required to be in effect, immediately prior
to the date of Employee's termination) and the portion of Employee's
annual target bonus (as provided in Section 3(b)) pro-rated up to
Employee's date of disability, incapacitation or termination (assuming
the target has been met).
(v) In the event of the Employee's termination for any reason
under this Agreement or otherwise, the Company shall pay and provide to
Employee (in addition to any other payments or benefits payable under
this Agreement): (A) any incurred but reimbursed business expenses for
the period prior to the termination payable in accordance with the
Company's policies; (B) any base salary, bonus, vacation pay or other
deferred compensation accrued or earned under law or in accordance with
the Company's policies applicable to Employee but not yet paid; and (C)
any other amounts or benefits due under the terms of the then
applicable employee benefit, equity or incentive plans of the Company
applicable to Employee (the "Accrued Benefits").
(vi) Payments of any amounts or benefits hereunder shall be
made no later than ten (10) days after Employee's termination date,
other than benefits under a plan with the terms which do not require or
permit payment within such ten (10) day period.
(b) During the ninety (90) day period prior to Change in Control or
during the one (1) year period following a Change in Control, Employee may
terminate his employment by written notice to the Company within thirty (30)
calendar days after he has obtained actual knowledge of the occurrence of a Good
Reason event. For purposes of this Agreement, Good Reason shall mean the
occurrence of any of the following events without Employee's express written
consent:
(i) failure to elect or appoint, or reelect or reappoint,
Employee to, or removal of Employee from, his position with the Company
as Chief Executive Officer or Chairman of the Board, except in
connection with the termination of Employee's employment pursuant to
Section 10(a);
(ii) a significant change in the nature or scope of the
authorities, powers, functions, duties or responsibilities normally
attached to Employee's position as Chief Executive Officer or Chairman
of the Board, except in each case in connection with the termination of
Employee's employment for Cause or as a result of Employee's death, or
temporarily as a result of Employee's illness or other absence;
(iii) a determination by Employee made in good faith that, as
a result of a Change in Control, he is unable effectively to carry out
the authorities, powers, functions, duties or responsibilities attached
to his position as Chief Executive Officer or
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Chairman of the Board and the situation is not remedied within 30
calendar days after receipt by the Company of written notice from
Employee of such determination;
(iv) a breach by the Company of any material provision of this
Agreement (not covered by clause (i), (ii) or (iii) of this Section
10(b)) or of any other agreement, which is not remedied within 30
calendar days after receipt by the Company of written notice from
Employee of such breach;
(v) a reduction in Employee's annual base salary;
(vi) a fifty (50) mile or greater relocation of the Company's
principal office;
(vii) failure of the Company to continue in effect any health
or welfare plan, employee benefit plan, pension plan, fringe benefit
plan or compensation plan in which Employee (and eligible dependents)
are participating immediately prior to a Change in Control, unless
Employee (and eligible dependents) are permitted to participate in
other plans providing Employee (and eligible dependents) with
substantially comparable benefits at no greater after-tax cost to
Employee (and eligible dependents), or the taking of any action by the
Company which would adversely affect the Employee's (and eligible
dependents) participation in or reduce Employee's (and eligible
dependents) benefits under any such plan; or
(viii) failure of a successor to assume this Agreement.
An election by Employee to terminate his employment under the
provisions of this Section 10(b) shall not constitute a breach by Employee of
this Agreement and shall not be deemed a voluntary termination of employment by
Employee for the purpose of interpreting the provisions of any of the Company's
employee benefit plans, programs or policies.
(c) Upon the occurrence of a Change in Control and thereafter: (A) if
Employee's employment with the Company is terminated by the Company without
Cause or as a result of the disability or incapacitation of Employee, or by
Employee with Good Reason at any time during the period beginning on the date of
the Change in Control and ending one (1) year after the date of such Change in
Control, or (B) if Employee's employment with the Company is terminated by the
Company without Cause or by Employee for Good Reason within ninety (90) days
prior to the occurrence of a Change in Control, then Employee shall be entitled
to receive from the Company:
(i) a lump sum amount, payable within ten (10) days after such
termination (or, if such termination occurred prior to a Change in
Control, within ten (10) days after the Change in Control) equal to (A)
three (3) times Employee's base salary in effect, or required to be in
effect, immediately prior to the Change in Control, and (B) three (3)
times the highest annual bonus paid or payable to Employee within three
(3) years prior to the Change in Control;
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(ii) within ten (10) days after such termination (or, if such
termination occurred prior to a Change in Control, within ten (10) days
after the Change in Control) equal to the Accrued Benefits;
(iii) payment by the Company of the premiums for Employee
(except in the case of Employee's death) and Employee's and dependents'
health and welfare coverage (including, without limitation, medical,
dental, life insurance and disability coverage) for three (3) years
from the later of the occurrence of a Change in Control or the date of
termination of Employee's employment, under the Company's health and
welfare plans which cover the senior executives of the Company or
materially similar benefits ("Continuation Coverage"), subject to
Employee's payment of customary premiums (if any) in effect prior to
the Change in Control;
(iv) upon the occurrence of a Change in Control, full and
immediate vesting of all stock options and equity awards held by
Employee.
Payments under (iii) above may, at the discretion of the Company, be
made by continuing Employee's participation in the plan as a terminee or by
covering Employee and Employee's dependents under substitute arrangements,
provided that, notwithstanding anything herein to the contrary, to the extent
Employee incurs tax that Employee would not have incurred as an active employee
as a result of the aforementioned coverage or the benefits provided thereunder,
Employee shall receive from the Company an additional grossed up payment in the
amount necessary so that Employee will have no additional cost for receiving
such items or any additional payment. Notwithstanding anything herein to the
contrary, Employee (and his eligible dependents) shall retain all rights under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA")
and such COBRA continuation coverage shall be available to Employee (and his
eligible dependents) at the expiration of the Continuation Coverage described
herein.
(d) For purposes of this Agreement, a Change in Control shall mean the
occurrence of the following:
(i) any person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as
used in Sections 13(d) and 14(d) thereof), excluding the Company, any
subsidiary of the Company and any employee benefit plan sponsored or
maintained by the Company or any subsidiary of the Company (including
any trustee of any such plan acting in his capacity as trustee),
becoming the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing thirty percent
(30%) of the total combined voting power of the Company's then
outstanding securities;
(ii) the merger, consolidation or other business combination
of the Company (a "Transaction"), other than (A) a Transaction
involving only the Company and one or more of its subsidiaries, or (B)
a Transaction immediately following which the stockholders of the
Company immediately prior to the Transaction continue to have a
majority of the voting power in the resulting entity and no person
(other than those covered by the exceptions in (a) above) becomes the
beneficial owner of securities of the
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resulting entity representing more than twenty-five percent (25%) of
the voting power in the resulting entity;
(iii) during any period of two (2) consecutive years beginning
on or after the date hereof, the persons who were members of the Board
immediately before the beginning of such period (the "Incumbent
Directors") ceasing (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of any
successor to the Company, provided that, any director who was not a
director as of the date hereof shall be deemed to be an Incumbent
Director if such director was elected to the board of directors by, or
on the recommendation of or with the approval of, at least two-thirds
of the directors who then qualified as Incumbent Directors either
actually or by prior operation of the foregoing unless such election,
recommendation or approval occurs as a result of an actual or
threatened election contest (as such terms are used in Rule 14a- 11 of
Regulation 14A promulgated under the Exchange Act or any successor
provision) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board;
or
(iv) the approval by the stockholders of the Company of any
plan of complete liquidation of the Company or an agreement for the
sale of all or substantially all of the Company's assets other than the
sale of all or substantially all of the assets of the Company to a
person or persons who beneficially own, directly or indirectly, at
least fifty percent (50%) or more of the combined voting power of the
outstanding voting securities of the Company at the time of such sale.
(v) To the extent that Employee is entitled to payment under
Section 10(c) upon a Change in Control due to Employee's termination
without Cause or for Good Reason within ninety (90) days prior to a
Change in Control, any such payments under Section 10(c) shall be
reduced by any payments made to Employee prior to a Change in Control
under Sections 10(a)(iv) and 10(a)(v).
11. Limitation on Payments.
(a) In the event that Employee shall become entitled to the payments
and/or benefits provided by Section 10(c) or any other amounts (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement with
the Company, any person whose actions result in a change of ownership covered by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")
or any person affiliated with the Company or such person) as a result of a
Change of Control (collectively the "Company Payments"), and such Company
Payments will be subject to the tax (the "Excise Tax") imposed by Section 4999
of the Code (and any similar tax that may hereafter be imposed) the Company
shall pay to Employee at the time specified in subsection (d) below an
additional amount (the "Gross-up Payment") such that the net amount retained by
Employee, after deduction of any Excise Tax on the Company Payments and any
federal, state, and local income or payroll tax upon the Gross-up Payment
provided for by this paragraph (a), but before deduction for any federal, state,
and local income or payroll tax on the Company Payments, shall be equal to the
Company Payments. Notwithstanding the foregoing provisions of this Section 11 to
the contrary, if it shall be determined that Employee is entitled to a Gross-up
Payment, but the Company Payments do not
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exceed one hundred five percent (105%) of the greatest amount that could be paid
to Employee such that the receipt of Company Payments would not give rise to any
Excise Tax (the "Reduced Amount"), then no Gross-up Payment shall be made to
Employee and the Company Payments, in the aggregate, shall be reduced to the
Reduced Amount.
(b) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and determining the amount of such Excise Tax: (i) the Total Payments
shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "parachute payments" in excess of the "base
amount" (as defined under Code Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, unless and except to the extent that, in the
opinion of the Company's independent certified public accountants appointed
prior to any change in ownership (as defined under Code Section 280G(b)(2)) or
tax counsel selected by such accountants (the "Accountants") such Total Payments
(in whole or in part), (A) do not constitute "parachute payments," (B) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code or (C) are otherwise not subject to the Excise
Tax; and (ii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.
(c) For purposes of determining the amount of the Gross-up Payment,
Employee shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Employee's residence for the
calendar year in which the Company Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, Employee shall repay
to the Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the prior Gross-up Payment attributable to
such reduction (plus the portion of the Gross-up Payment attributable to the
Excise Tax and federal, state and local income tax imposed on the portion of the
Gross-up Payment being repaid by Employee if such repayment results in a
reduction in Excise Tax or a federal, state and local income tax deduction),
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any
portion of the Gross-up Payment to be refunded to the Company has been paid to
any federal, state and local tax authority, repayment thereof (and related
amounts) shall not be required until actual refund or credit of such portion has
been made to Employee, and interest payable to the Company shall not exceed the
interest received or credited to Employee by such tax authority for the period
it held such portion. Employee and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expense
thereof) if Employee's claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the Accountants
or the Internal Revenue Service to exceed the amount taken into account
hereunder at the time the Gross-up Payment is made (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-up Payment), the Company shall make an
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additional Gross-up Payment in respect of such excess (plus any interest or
penalties payable with respect to such excess) at the time that the amount of
such excess is finally determined.
(d) The Gross-up Payment or portion thereof provided for in subsection
(c) above shall be paid not later than the thirtieth (30th) day following an
event occurring which subjects Employee to the Excise Tax; provided, however,
that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to Employee on such day
an estimate, as determined in good faith by the Accountants, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Code Section 1274(b)(2)(B) of the Code),
subject to further payments pursuant to subsection (c) hereof, as soon as the
amount thereof can reasonably be determined, but in no event later than the
ninetieth (90th) day after the occurrence of the event subjecting Employee to
the Excise Tax. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to Employee, payable on the fifth (5th) day
after demand by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).
(e) In the event of any controversy with the Internal Revenue Service
(or other taxing authority) under this Section 11, Employee shall permit the
Company to control issues related to this Section 11 (at its expense), provided
that such issues do not potentially materially adversely affect Employee, but
Employee shall control any other issues. In the event the issues are
interrelated, Employee and the Company shall in good faith cooperate so as not
to jeopardize resolution of either issue, but if the parties cannot agree,
Employee shall make the final determination with regard to the issues. In the
event of any conference with any taxing authority as to the Excise Tax or
associated income taxes, Employee shall permit the representative of the Company
to accompany him, and Employee and his representative shall cooperate with the
Company and its representative.
(f) The Company shall be responsible for all charges of the
Accountants.
12. Successors. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree in writing to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
13. Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment.
14. Entire Agreement; Modification. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter
(including, without limitation, the employment agreement in effect prior to the
date hereof) and may be modified only by a written instrument duly executed by
each party.
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15. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 15). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 15. Any notice or other communication given by certified mail shall be
deemed given three days after 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.
16. Waiver. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by the party giving such waiver.
17. Binding Effect. Employee's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of
Employee and his heirs and personal representatives, and shall be binding upon
and inure to the benefit of the Company and its successors and its assigns under
Section 12.
18. No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Sections 12 and 17).
19. Legal Fees. To the fullest extent permitted by law, the Company
shall promptly pay upon submission of statements all legal and other
professional fees, costs of litigation, prejudgment interest, and other expenses
incurred in connection with any dispute concerning payments, benefits and other
entitlements to which Employee may have under this Agreement; provided, however,
the Company shall be reimbursed by Employee for the fees and expenses advanced
in the event Employee's claim is, in a material manner, in bad faith or
frivolous and the arbitrator or court, as applicable, determines that the
reimbursement of such fees and expenses is appropriate.
20. No Duty to Mitigate/No Offset. The Company agrees that if
Employee's employment with the Company is terminated pursuant to this Agreement
during the term of this Agreement, Employee shall not be required to seek other
employment or to attempt in any way to reduce any amounts payable to Employee by
the Company pursuant to this Agreement. Further, the amount of any payment or
benefit provided for in this Agreement shall not be reduced by any compensation
earned by Employee or benefit provided to Employee as the result of employment
by another employer or otherwise. The Company's obligations to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, any set-off,
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counterclaim, recoupment, defense or other right which the Company may have
against Employee. Notwithstanding the foregoing, payments and benefits under the
Agreement will cease to be paid and may be recouped by the Company in the event
Employee breaches any of the terms of Section 6, 7 or 8 hereunder.
21. Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of New
Jersey, without giving effect to the conflict of laws.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
CELGENE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
Chairman of the
Compensation Committee
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇
President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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