Exhibit 10.26
AURORA BIOSCIENCES CORPORATION
00000 Xxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Stuart X.X. Xxxxxxxxx, Ph.D.
0000 Xxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Re: Employment Terms
Dear Stuart:
This letter ("Agreement") sets forth the agreement between you and Aurora
Biosciences Corporation (the "Company") regarding the terms of your service with
the Company. Subject to the closing of that certain Merger Agreement between the
Company and Vertex Pharmaceuticals, Inc. ("Vertex") of even date herewith (the
"Merger") (except as otherwise provided in Paragraph 15 herein), you and the
Company hereby agree as follows:
1. Effective as of and conditional upon the closing of the Merger, you shall and
hereby do resign your title and position as President and Chief Executive
Officer of the Company. During the Integration Period, which is defined as the
period of time beginning on the date of the Effective Time, as defined in the
Merger Agreement, and ending at midnight on the date six months after the date
of the Effective Time, you shall be employed as a full-time employee of the
Company. In that regard, you will use reasonable efforts to support Vertex's
Chief Executive in promoting and facilitating the integration of Vertex and the
Company following the Merger. It is understood that, during the Integration
Period, you may pursue activities relating to your personal transition out of
your operating role at the Company. You shall work out of the Company's
principal offices in San Diego, and shall be required to travel, as reasonably
related to your employment duties. During the Integration Period, the Company
shall (at its expense) provide you with suitable office facilities and
administrative support, including an administrative assistant and office
facilities in San Diego County of comparable quality and location as those
provided by the Company to you to date.
2. During your employment with the Company in the Integration Period, the
Company shall: (a) pay you a base salary at a rate equal to your current annual
base salary rate of three hundred eighty five thousand dollars ($385,000),
payable in regular periodic payments in accordance with Company policy, less
required payroll deductions and withholdings; (b) provide you with benefits
comparable in the aggregate to those provided to you to date by the Company; (c)
provide you with 20 days of vacation per annum on a pro rated basis (provided
that nothing shall reduce any vacation you have accrued as an employee of the
Company prior to the closing of the Merger); and (d) reimburse your reasonable
travel, entertainment, business, and other expenses incurred in the course of
your employment in accordance with Company policy.
3. Promptly following the closing of the Merger, you shall be considered for the
grant of an option to purchase shares of Vertex's common stock pursuant to
Vertex's 1996 Stock and Option Plan, as amended (the "Vertex Plan"), at a level
commensurate with similarly situated executive employees of Vertex. Vertex shall
cause its Compensation Committee of its Board of Directors to meet promptly
following the closing of the Merger to consider such grant.
Your existing stock options granted by the Company prior to the Merger
(the "Aurora Options") shall remain subject to the terms of the Company's 1996
Stock Plan, as amended (the "Aurora Plan"). In accordance with the Aurora Plan,
Vertex and the Company acknowledge and agree that the Aurora Options shall
continue to vest (subject to paragraph 6 below) and shall remain exercisable for
(i) so long as you continue to serve as either as a member of the Vertex Board
of Directors or as an employee of or consultant to Vertex and/or the Company,
and (ii) any longer periods set forth in the Aurora Options. You acknowledge and
agree that (i) your employment pursuant to this agreement shall not be deemed to
be a "Constructive Termination" for purposes of Section 2(i) of the Aurora Plan,
and (ii) notwithstanding any provision of such plan to the contrary, nothing in
this Agreement shall be deemed to extend or enlarge your rights under such plan,
including, without limitation, nothing shall be deemed to extend the thirteen
month post-closing period referred to in Section 13 of such plan.
4. In consideration of your commitments to the Company under this Agreement, and
provided that your employment with the Company is not earlier terminated by you
other than for Good Reason, or by the Company for Cause, you shall be entitled
to a retention bonus in an amount equal to your year 2000 cash bonus, I.E., one
hundred sixty nine thousand, four hundred eighty six dollars ($169,486), payable
on the last day of the Integration Period, or the first business day thereafter
(or, if earlier, on the effective date of termination of your employment by you
for Good Reason) (notwithstanding your continued service to the Company or
Vertex as a director or a consultant). No portion of such retention bonus shall
be earned until the last day of the Integration Period.
As used in this Agreement, "Cause" shall be limited to the occurrence
of any of the following events: (i) your personally engaging in illegal conduct
which causes material harm to the reputation of the Company, (ii) your being
convicted or found liable for a felony, misdemeanor or gross misconduct relating
to an act of dishonesty or fraud against, or a material misappropriation of
property belonging to the Company, (iii) your refusal to substantially perform
your material duties under this Agreement as set forth in a specific resolution
by the Board of Directors of the Company, or (iv) your incurable breach of any
material element of the Non-Compete Agreement described in Paragraph 9, below.
As used in this Agreement, "Good Reason" shall mean shall mean (i) a
reduction in your base salary from that specified in the first sentence of
Paragraph 2 of this Agreement or any material reduction in benefits; (ii) the
relocation of your full-time office to a location other than in San Diego
County; (iii) a material breach by the Company or Vertex of any of the
provisions of this Agreement or (iv) a substantial reduction in your duties
inconsistent with your duties under this Agreement.
5. Effective as of and conditional upon the closing of the Merger, Vertex shall
cause you to be appointed to Vertex's Board of Directors (the "Vertex Board") in
the class of directors whose terms expire as of, and who will be considered for
re-election at, the 2002 Vertex Annual Meeting of Stockholders.
Vertex further agrees that you shall be nominated by Vertex and the
Vertex Board, at and in connection with the 2002 annual meeting of stockholders
of Vertex at which the term of your membership on the Vertex Board pursuant to
the immediately preceding sentence would otherwise expire, for election to the
Vertex Board to serve in the class of directors whose term expires three (3)
years following such annual meeting. Vertex agrees to take all such further
actions as may be necessary or appropriate to carry out the intent of the
parties pursuant to this paragraph. Without limiting the generality of the
foregoing, Vertex shall:
(a) cause the Vertex Board or any nominating committee of the
Vertex Board (or any other committee of the Vertex Board with
similar responsibilities) to nominate you for election to the
Vertex Board as required above;
(b) include in the notice of annual meeting and proxy statement
for such meeting a proposal for your election to the Vertex
Board for an additional three (3) year term;
(c) recommend to Vertex's stockholders that you be elected to the
Board in the applicable proxy statement, proxy card, ballot,
meeting script and other applicable materials relating to such
annual meeting;
(d) include your election to the Vertex Board as aforesaid with
each of the other proposals, if any, with respect to which any
proxy solicitation firm engaged by Vertex solicits stockholder
proxies to be voted at such annual meeting; and
(e) vote any and all proxies obtained from Vertex stockholders for
your election to the Vertex Board as aforesaid, to the extent
such proxies grant Vertex or its employees or agents authority
or discretionary authority to vote shares owned by the persons
delivering such proxies for your election.
Following termination of your employment, then for so long as you
remain a member of the Vertex Board, and subject to the terms of the Vertex
Plan, you shall be entitled to the payments, benefits, and other consideration
customarily provided by Vertex to non-employee members of the Vertex Board;
provided that you acknowledge and agree that because you will not be a
Non-Employee Director on the date of your initial election to the Vertex Board,
you shall not be entitled to receive the initial option to purchase 20,000
shares that is granted pursuant to Section 6.3 of the Vertex Plan to persons who
are Non-Employee Directors on the date of their election to the Vertex Board.
Following the expiration of your service on the Vertex Board after
election at such annual meeting as aforesaid, Vertex shall have no further
obligation to renew your appointment as a director serving on the Vertex Board.
Vertex and the Company agree and acknowledge that your rights and
obligations set forth in this paragraph 5 are of a unique and special nature and
that you are, therefore, without an
adequate legal remedy if Vertex or the Company violate any of their respective
obligations under this paragraph 5. Vertex and the Company agree, therefore,
that the covenants made by them in this paragraph 5 shall be specifically
enforceable in equity, in addition to all other rights and remedies, at law or
in equity or otherwise that may be available to you.
6. Effective immediately following the Integration Period, and unless earlier
terminated by you for any reason or by the Company for Cause, your employment
with the Company shall automatically terminate, without Cause. Upon termination
of your employment, you will be paid your then current accrued base salary to
and including the date of termination, any accrued vacation pay and any
reimbursement of expenses due to you for which you have not been previously
reimbursed.
In addition, upon the earlier of either (i) the automatic termination
of your employment without Cause following the Integration Period pursuant to
the first sentence of this paragraph 6 or (ii) the effective date of termination
of your employment by you for Good Reason (notwithstanding your continued
service to the Company or Vertex as a director or a consultant), the following
shall occur on the last day of the Integration Period, or the first business day
thereafter (or, if earlier, on the effective date of termination of your
employment by you for Good Reason) (except as provided in clause (5) below):
(1) the Company shall pay you the bonus provided for in paragraph
4;
(2) the Company shall pay you a lump sum equal to one (1) year of
your base salary while serving as President and Chief
Executive Officer of the Company as in effect immediately
prior to the closing of the Merger, plus an amount equal to
one (1) times your 2000 annual bonus while employed by the
Company;
(3) pursuant to the Prior Agreement (defined below), to the extent
any Aurora Options then held by you are unvested, the vesting
of such options and stock shall be accelerated and such
options shall become fully vested and immediately exercisable;
(4) the Company will reimburse you for actual and reasonable
expenses incurred by you in connection with relocation of your
principal residence to the United Kingdom during the twelve
(12) months following such termination (items that are
eligible for reimbursement include the actual and reasonable
costs of moving household goods (packing and moving expenses),
storage, home sale and home purchase closing costs). Such
reimbursement shall be paid by the Company within thirty (30)
days upon your written request therefor including a reasonably
detailed itemization of such expenses; and
(5) The Housing Loan (defined in paragraph 16) will be forgiven
such that the principal and accrued interest due on such loan
will be zero as of the date of such termination.
7. Upon termination of your employment, subject to your timely election of
coverage in the manner required by COBRA, and so long as your employment shall
not have been terminated by the Company for Cause or you shall not have resigned
other than for Good Reason, the Company shall pay COBRA premiums to continue
medical and dental insurance coverage for you (and
your qualified beneficiaries) until the earlier of 18 months following
termination of your employment or the date on which you become eligible for
comparable coverage under another employer's group medical and dental insurance
plan.
8. The Company shall retain you as a part-time consultant for a term beginning
on the first day following the Integration Period and ending on the fourth
anniversary of such date. As a consultant, you shall consult with and advise
management of the Company and Vertex with respect to the effective integration
of the two companies following the Merger. You shall provide consulting services
as reasonably requested by the Company, with advance notice, at times and in a
location mutually agreeable to you and the Company. You shall be an independent
contractor and not an employee of the Company. In return for your faithful
performance of your consulting services as aforesaid, you shall be paid an
annual Consulting Fee of eighty thousand dollars ($80,000) per year, payable in
equal monthly installments on the first day of each month or the first business
day thereafter. The Company shall not withhold any taxes on such amounts, and
you shall be responsible for paying any and all taxes thereon. You shall receive
no other benefits or compensation in return for your consulting services.
Subject to the provisions of the Non-Compete Agreement (defined below),
following the Integration Period you will be entitled to engage in other
business activities of your own choosing notwithstanding your role as a
consultant hereunder. You shall be entitled to terminate your services as a
consultant under this paragraph at any time upon written notice to the Company,
whereupon the obligations of both parties under this paragraph 8 shall cease.
9. Contemporaneously herewith, and as a condition of the effectiveness of this
Agreement, you will execute and deliver to the Company the Non-Disclosure,
Non-Competition, and Inventions Agreement attached hereto as "Exhibit A" (the
"Non-Compete Agreement"). In consideration of your execution and delivery of the
Non-Compete Agreement, the Company shall pay you eight hundred thousand dollars
($800,000) in cash, payable as follows: three hundred thousand dollars
($300,000) on the closing of the Merger; two hundred thousand dollars ($200,000)
on January 1, 2002, or the first business day thereafter; and three hundred
thousand dollars ($300,000) on January 1, 2003, or the first business day
thereafter. Your obligations under the Non-Compete Agreement shall survive any
breach by you or termination of this Agreement.
10. Any notices to be given hereunder by either party to the other may be
effectuated either by personal delivery in writing or by mail, postage prepaid,
with return receipt requested. Notices shall be addressed to the parties as
follows:
If to the Company: Aurora Biosciences Corporation
Attn: President
00000 Xxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
with a copy to: Vertex Pharmaceuticals Incorporated
Attn: Office of the General Counsel
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to you: Stuart X.X. Xxxxxxxxx
Address on file at the Company
or to such other addresses as either the Company or you may designate by written
notice to each other. Notices delivered personally shall be deemed duly given on
the date of actual receipt; mailed notices shall be deemed duly given as of the
fifth day after the date so mailed. Notices hereunder may be delivered by
electronic facsimile transmission (fax) if confirmation by sender is made within
three business days by mail or personal delivery.
11. You shall not knowingly at any time make any untrue or disparaging statement
in relation to the Company, and in particular shall not after the termination of
your employment or consulting services hereunder wrongfully represent yourself
as being employed by or connected with the Company. The officers, directors, and
senior executives of the Company shall not knowingly at any time make any untrue
or disparaging statement in relation to you, nor shall they permit the Company
through any authorized communication (irrespective of the media) to make any
untrue or disparaging statement in relation to you, provided, however, that
nothing herein shall prohibit statements by any such persons among or between
themselves with respect to your performance of your duties to the Company or its
affiliates.
12. You and the Company acknowledge and agree that this Agreement has been
reviewed and negotiated by each party and its or his counsel, and the normal
rule of construction, to the effect that ambiguities are construed against the
drafter, shall not be employed in the interpretation of it. You acknowledge that
Xxxxxx Godward LLP has not represented you, and that you have been provided with
an opportunity to consult with your own legal counsel, in connection with the
subject matter of this Agreement.
13. (a) If any payment or benefit you would receive pursuant to this Agreement
or otherwise in connection with the Merger (hereinafter, a "Payment") would (i)
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then such Payment shall be reduced to the Reduced Amount. The
"Reduced Amount" shall be either (x) the largest portion of the Payment that
would result in no portion of the Payment being subject to the Excise Tax or (y)
the largest portion, up to and including the total, of the Payment, whichever
amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in your receipt, on an after-tax basis, of
the greater amount of the Payment. If a reduction in payments or benefits
constituting "parachute payments" is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the order you elect. In the event that
acceleration of vesting of stock award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the order you elect.
(b) You shall not be required to mitigate the amount of the severance payment or
any other benefit provided under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by you as the result of other
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by you to Vertex or otherwise.
(c) This Agreement shall be governed by California law as applied to contracts
entered into and performed entirely in California by California residents. You
and the Company hereby irrevocably waive any right to a trial by jury in any
action related to this Agreement, the Non-Compete Agreement, or any action
arising out of your service to the Company as an officer, director, employee, or
consultant.
14. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their successors, permitted assigns, legal representatives,
and heirs. You may not assign your obligations under this Agreement. You agree
that the Company may assign its obligations under this Agreement upon a sale,
transfer, or reorganization of the Company, and you shall perform all services
required pursuant to this Agreement for any such assignee company.
15. Except as provided for in the Aurora Plan with respect to your Aurora
Options (but subject to paragraph 3 of this Agreement), neither the execution of
this Agreement, nor the consummation of the Merger, itself or in conjunction
with any other event, shall invoke, trigger, cause or be the basis for any
obligation of the Company, Ahab Acquisition Sub, Inc., or Vertex to make any
payment or provide any benefit or other consideration (except as expressly
provided herein), including, without limitation, any vesting or acceleration of
vesting or any lapsing of any restrictions on any security, to you under any
change of control, parachute, acceleration or other provision of any other
agreement, plan or arrangement. Effective as of the date on which this Agreement
is signed, you expressly agree to rescission of the Change in Control Incentive
Plan dated March 26, 2001, and acknowledge that such Plan has been rescinded,
effective as of the date this Agreement is signed, and that you have no rights
pursuant to such Plan.
16. This Agreement, except provided herein, supersedes any other agreements or
promises made to you by anyone, whether oral or written, and, together with the
Non-Compete Agreement, comprises the final, complete, and exclusive agreement
between you and the Company, provided, however, that this Agreement shall not
extinguish any debt you owe to the Company, including, without limitation, any
indebtedness pursuant to that certain promissory note, secured by a deed of
Trust with Assignment of Rents dated as of May 12, 2000 (the "Housing Loan").
Without limiting the foregoing, this Agreement supersedes the letter agreement
dated December 7, 1999, between the Company and you (the "Prior Agreement"), as
well as the Retention Bonus Plan offered to you and dated May 12, 2000, each of
which, except as provided in Paragraph 6 of this Agreement, is hereby terminated
and of no further force or effect.
17. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN PARAGRAPH 15 OF THIS AGREEMENT,
NEITHER THIS AGREEMENT NOR ANY PROVISION HEREOF SHALL BE OF ANY FORCE OR EFFECT
UNLESS AND UNTIL SUCH TIME AS THE EFFECTIVE TIME (AS DEFINED IN THAT CERTAIN
AGREEMENT AND PLAN OF MERGER OF EVEN DATE HEREWITH AMONG VERTEX, AHAB
ACQUISITION SUB, INC., AND AURORA) SHALL HAVE OCCURRED AND FURTHER SHALL NOT BE
EFFECTIVE UNLESS YOU REMAIN IN THE CONTINUOUS EMPLOY OF THE COMPANY THROUGH THE
DATE OF CLOSING.
18. Vertex acknowledges the foregoing and agrees that your acceptance of
employment and your other covenants contained herein will directly and
indirectly benefit Vertex. In consideration for your acceptance of employment
and your other covenants contained herein, Vertex, intending to be legally and
equitably bound, hereby agrees in full to each of the provisions of this
Agreement and hereby agrees to guaranty and guarantees performance in full of
all terms and provisions of this Agreement by the Company. This agreement and
guaranty of Vertex shall be absolute and unconditional, and without limiting the
foregoing Vertex's obligations hereunder shall not in any way be diminished,
limited or otherwise affected by (i) the liquidation or dissolution of the
Company; (ii) any adverse change in the condition (financial or otherwise) of
the Company; or (3) the discharge or release of the Company from its obligations
hereunder for any reason, including, without limitation, as a result of
bankruptcy, receivership or similar proceedings. Vertex agrees that you will not
be required to take any action against the Company as a condition to Vertex's
liability and obligations under this Section 18. The signature of its authorized
representatives below shall be confirmation of such agreement and guaranty by
Vertex.
Please sign and date this Agreement and return it to me as soon as possible if
you wish to accept the terms described above.
Sincerely,
AURORA BIOSCIENCES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------
Title: COO
-----------------------
AGREED AND ACCEPTED:
/s/ Stuart X.X. Xxxxxxxxx, Ph.D.
-------------------------------
Stuart X.X. Xxxxxxxxx, Ph.D.
Date: April 29, 2001
AGREED AND ACCEPTED:
Vertex Pharmaceuticals Incorporated
By: /s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
------------------------
Title: Chairman and CEO
-----------------------
Date: April 29, 2001
EXHIBIT A
NON-DISCLOSURE, NON-COMPETITION, AND INVENTIONS AGREEMENT
1. NON-DISCLOSURE OF INFORMATION. I agree that, at all times during or
subsequent to my service as an employee or consultant, I will keep in strictest
trust and confidence all Confidential Information (as defined below) of Aurora
Biosciences Corporation and its parents, subsidiaries and affiliated companies
(together, "Aurora") that is disclosed to me or created by me or to which I have
access. I will not use or disclose such Confidential Information without the
written consent of Aurora, except as may be necessary in the ordinary course of
performing my duties as an employee or consultant of Aurora.
2. SURRENDER OF CONFIDENTIAL INFORMATION. Upon termination of my
service as an employee or consultant, for whatever reason, I will promptly
surrender to Aurora all copies, in whatever form, of Aurora's Confidential
Information in my possession, custody or control, and I will not take with me
any of Aurora's Confidential Information that is embodied in a tangible medium
of expression.
3. DISCLOSURE OF INVENTIONS. I will promptly and fully disclose to
Aurora (or any persons designated by it) all Inventions made, developed,
created, generated, conceived or reduced to practice by me, either alone or
jointly with others, whether during or after the period of my service as an
employee or consultant.
4. ASSIGNMENT OF RIGHTS / EXCEPTION FOR NONASSIGNABLE INVENTIONS.
4.1. ASSIGNMENT OF RIGHTS - I agree that all Confidential
Information and Inventions shall be the sole property of Aurora and its assigns,
and Aurora and its assigns shall be the sole owner of all patents, copyrights,
trademarks, trade secrets, and other rights and protection in connection
therewith. I hereby assign to Aurora any rights I may have or acquire in such
Confidential Information and Inventions. I further agree to assist Aurora in
every proper way (but at Aurora's expense) to obtain and from time to time
enforce patents, copyrights, trademarks, trade secrets, and other rights and
protection relating to said Confidential Information and Inventions in any and
all countries, and to that end I will execute all documents for use in applying
for, obtaining and enforcing such patents, copyrights, trademarks, trade secrets
and other rights and protection on such Confidential Information and Inventions,
as Aurora may reasonably request, together with any assignments thereof to
Aurora or persons designated by it. The foregoing obligation to assist Aurora
shall continue after the termination of my service as an employee or consultant,
but Aurora shall compensate me at a reasonable rate for time actually spent by
me on such assistance at Aurora's request after my termination.
4.2. EXCEPTION OF NONASSIGNABLE INVENTIONS - This Agreement
does not apply to an Invention which qualifies fully as a nonassignable
Invention under Section 2870 of the California Labor Code (hereinafter "Section
2870"). I have reviewed the notification on ATTACHMENT 1 (Limited Exclusion
Notification) and agree that my signature acknowledges receipt of the
notification.
5. NO CONFLICTING OBLIGATIONS. I represent and warrant to Aurora that I
have no interest or obligation, including without limitation any obligation to
keep in confidence any information acquired from previous employers or other
persons, which is inconsistent with or in conflict with this Agreement or which
would prevent, limit or impair my performance of any part of this Agreement or
the performance of my duties as an employee or consultant of Aurora. I agree to
notify Aurora immediately if any such interest or obligation arises.
6. COVENANT NOT TO COMPETE. I acknowledge the unique nature of the
business of Aurora and the need of Aurora to maintain its competitive advantage
in its industry through the protection of its trade secrets and proprietary
information. Accordingly, I agree that during the term of my service as an
employee with Aurora and through the later of (A) December 31, 2002 or (B) the
later of the termination of my service as an employee (the "Noncompete Period"),
I will not:
(i) solicit or induce any person who is then a director, officer or employee of
Aurora to terminate his or her directorial or employment relationship with
Aurora (provided that the publication of "help wanted" or similar notices in
media of general circulation shall not be deemed to be a solicitation or
inducement for purposes of this clause); or
(ii) solicit or induce any party who is a customer or supplier of Aurora with
respect to the Business (defined below) to terminate or significantly diminish
its relationship with Aurora; or
(iii) market or sell any product or service that directly competes with any
product or service manufactured, sold or under development by Aurora in the
Business; or
(iv) research, develop or manufacture any product or service that directly
competes with any product or service manufactured, sold or under development by
Aurora in the Business.
In order to assure that I do not breach any of the foregoing
provisions, I agree that during the Noncompete Period, I will not accept
employment with, advise, or provide consulting services to any department or
functional area of any business, which department or functional area primarily
engages in the Business, nor will I acquire any interest in (except an equity
interest of less than 5% of the total outstanding shares of a publicly traded
company) any business whose core business is substantially similar to the
Business, without first obtaining the written consent of Aurora. Aurora shall be
permitted to withhold such consent in its sole discretion unless my prospective
employer and I are able to provide Aurora with assurances reasonably
satisfactory to Aurora that I will not be assisting the prospective employer in
any of the prohibited activities listed above.
7. DEFINITIONS. For the purposes of this Agreement:
7.1. "BUSINESS" means Aurora's business as of the date hereof
of the development and commercialization of cell-based assays and miniaturized
instrumentation the primary function of which is ultra-high throughput screening
using cell-based assays.
7.2 "CONFIDENTIAL INFORMATION" includes any and all versions
of any of the following: (i) data or information concerning Aurora's business
and technologies; (ii) Aurora's proprietary pharmaceutical compounds, processes,
data and documentation; (iii) Aurora's proprietary computer software, firmware,
data, documentation and information; (iv) confidential, proprietary or trade
secret information received from or otherwise relating to Aurora's customers,
suppliers, consultants, collaborators or other third parties, including without
limitation the names of such persons or entities and the nature of Aurora's
relationships with them; (v) information concerning the employees of Aurora that
is considered confidential within Aurora; and (vi) any other information
(including information about Aurora's operations, personnel, products or
services) which, if misused or disclosed, could have a reasonable possibility of
materially and adversely affecting the business of Aurora (including, without
limitation, any such data, documentation and information created, developed,
produced, or made by me during the period of or arising out of my service as an
employee or consultant by Aurora); PROVIDED, HOWEVER, that "Confidential
Information" shall not include any information (a) which is now in the public
domain or which becomes part of the public domain by publication or otherwise,
except by your breach of this Agreement, (b) which is already in your possession
free of any obligation of confidence at the time it is communicated to you as
Confidential Information (it is understood that the Proprietary Information and
Inventions Agreement entered into between you and Aurora is not superseded by
the Prior Agreement); (c) that is rightfully communicated to you free of any
obligation of confidence subsequent to the time it was communicated to you as
Confidential Information; (d) that is developed by you or others independently
of and without reference to any information communicated to you as Confidential
Information; or (e) that is communicated by Aurora or any of its employees,
consultants or other agents (other than you) to an unaffiliated third party free
of any obligation of confidence.
7.3. "INVENTIONS" means all inventions, discoveries,
developments, designs, improvements, formulae, processes, techniques, computer
programs, strategies, specific know-how, data, and intellectual property,
whether or not patentable or registrable under patent, copyright or similar
statutes (i) that are made, developed, created, generated, conceived or reduced
to practice by me, either alone or jointly with others, while I am employed by
Aurora or arising out of my consulting services for Aurora, or (ii) that result
from tasks assigned to me by Aurora or from the use of premises or property
(including equipment, supplies, facilities or Aurora's Confidential Information)
owned, leased, or contracted for by Aurora and that are made, developed,
created, generated, conceived or reduced to practice by me, either alone or
jointly with others, whether during or after my service as an employee or
consultant with Aurora.
8. ENFORCEMENT. I agree and acknowledge that the rights and obligations
set forth under this Agreement are of a unique and special nature and that
Aurora is, therefore, without an adequate legal remedy if I violate my
obligations under this Agreement. I agree, therefore, that the covenants made by
me under this Agreement shall be specifically enforceable in equity, in addition
to all other rights and remedies, at law or in equity or otherwise (including
termination of service as an employee or consultant) that may be available to
Aurora. If any provision of this Agreement shall, in whole or in part, prove to
be invalid for any reason, such invalidity shall affect only the portion of such
provision which shall be invalid, and in all other respects this Agreement shall
stand as if such invalid provisions, or the invalid portion thereof, had not
been a part hereof.
9. GENERAL. This Agreement does not constitute a contract of employment
or to provide consulting services. It shall survive the termination of my
service as an employee or consultant. It may be modified only by an agreement in
writing signed by me and by an authorized representative of Aurora. This
Agreement shall be effective as of the date of commencement of my service as an
employee or consultant by Aurora, whichever is earlier. This Agreement shall be
governed by the laws of the State of California without giving effect to
conflict of laws provisions thereof. This Agreement shall be binding upon me and
my heirs and personal representatives and shall inure to the benefit of Aurora
and its successors, assigns and nominees.
AGREED AND ACCEPTED:
/s/ Stuart X.X. Xxxxxxxxx, Ph.D.
--------------------------------
Stuart X.X. Xxxxxxxxx, Ph.D.
Date: April 29, 2001
AURORA BIOSCIENCES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------
Title: COO
-----------------------
Date: April 29, 2001
ATTACHMENT 1
LIMITED EXCLUSION NOTIFICATION
THIS IS TO NOTIFY you in accordance with Section 2870 of the California
Labor Code that the foregoing Agreement between you and Aurora Biosciences
Corporation ("Aurora") does not require you to assign or offer to assign to
Aurora any invention that you developed entirely on your own time without using
Aurora's equipment, supplies, facilities or trade secret information except for
those inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to Aurora's business, or actual or demonstrably
anticipated research or development of Aurora;
(2) Result from any work performed by you for Aurora.
To the extent a provision in the foregoing Agreement purports to
require you to assign an invention otherwise excluded from the preceding
paragraph, the provision is against the public policy of this state and is
unenforceable.
This limited exclusion does not apply to any patent or invention
covered by a contract between Aurora and the United States or any of its
agencies requiring full title to such patent or invention to be in the United
States.
I ACKNOWLEDGE RECEIPT of a copy of this notification.
By: /s/ Stuart X.X. Xxxxxxxxx, Ph.D.
--------------------------------
Stuart X.X. Xxxxxxxxx, Ph.D.
Date: April 29, 2001
--------------------------
WITNESSED BY:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Signature
Xxxxxx X. Xxxxxxx
--------------------------------
(Printed Name of Representative)
Aptil 29, 2001
--------------------------------
Date
