Exhibit 10.2
EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement") is made as of March 27, 2007 (the
"Effective Date"), by and between EPIX Pharmaceuticals, Inc. (the "Employer"),
and Xxxxxxx X. Xxxxxxxx (the "Executive"). In consideration of the mutual
covenants contained in this Agreement, the Employer and the Executive agree as
follows:
1. Employment. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.
2. Capacity. The Executive shall initially serve the Employer as Chief
Executive Officer, subject to election by the Board of Directors of the Employer
(the "Board of Directors"), and as a member of the Board of Directors, subject
to election by the shareholders of the Employer. The Executive shall also serve
the Employer in such other or additional offices as the Executive may be
requested to serve by the Board of Directors. In such capacity or capacities,
the Executive shall perform such services and duties in connection with the
business, affairs and operations of the Employer as may be assigned or delegated
to the Executive from time to time by or under the authority of the Board of
Directors. The Executive shall work at the Employer's Lexington, Massachusetts
office.
3. Term. Subject to the provisions of Section 6, the term of employment
pursuant to this Agreement (the "Term") shall be one (1) year from the Effective
Date and shall be renewed automatically for periods of one (1) year commencing
at the first anniversary of the Effective Date and on each subsequent
anniversary thereafter, unless either the Executive or the Employer gives
written notice to the other not less than sixty (60) days prior to the date of
any such anniversary of such party's election not to extend the Term. For the
purposes of this Agreement, the "Term" shall include the initial year of this
Agreement and any renewal period.
4. Compensation and Benefits. The regular compensation and benefits payable
to the Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Executive under this
Agreement, the Employer shall pay the Executive a salary (the "Salary") at the
annual rate of Three Hundred Eighty Six Thousand and Sixty Three Dollars
($386,063), subject to increase from time to time in the discretion of the Board
of Directors or the Compensation Committee of the Board of Directors (the
"Compensation Committee"). The Salary shall be payable in periodic installments
in accordance with the Employer's usual practice for its senior executives.
(b) Bonus. Beginning with the fiscal year ending 2007, the Executive
shall be eligible for an annual bonus under terms established by the Board of
Directors or the Compensation Committee with such terms as may be established in
the sole discretion of the Board of Directors or Compensation Committee.
(c) Stock Options. In consideration of the covenants contained in this
Agreement, the Executive has received a grant of stock options in accordance
with the Employer's Stock Option Plan and will continue to be eligible to
receive stock option grants
annually. That grant is subject to the terms and conditions of the Employer's
Stock Option Plan, and any relevant grant agreement.
(d) Legal Fees. The Employer shall reimburse the Executive for up to
$5000 in legal fees incurred in connection with the negotiation and drafting of
this Agreement.
(e) Regular Benefits. The Executive shall also be entitled to
participate in any employee benefit plans, medical insurance plans, life
insurance plans, disability income plans, retirement plans, vacation plans,
expense reimbursement plans and other benefit plans which the Employer may from
time to time have in effect for all or most of its senior executives. Such
participation shall be subject to the terms of the applicable plan documents,
generally applicable policies of the Employer, applicable law and the discretion
of the Board of Directors, the Compensation Committee or any administrative or
other committee provided for in or contemplated by any such plan. Nothing
contained in this Agreement shall be construed to create any obligation on the
part of the Employer to establish any such plan or to maintain the effectiveness
of any such plan which may be in effect from time to time.
(f) Taxation of Payments and Benefits. The Employer shall undertake to
make deductions, withholdings and tax reports with respect to payments and
benefits under this Agreement to the extent that it reasonably and in good faith
believes that it is required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net of any such
deductions or withholdings. Nothing in this Agreement shall be construed to
require the Employer to make any payments to compensate the Executive for any
adverse tax effect associated with any payments or benefits or for any deduction
or withholding from any payment or benefit.
5. Extent of Service. During the Executive's employment under this
Agreement, the Executive shall, subject to the direction and supervision of the
Board of Directors, devote the Executive's full business time, best efforts and
business judgment, skill and knowledge to the advancement of the Employer's
interests and to the discharge of the Executive's duties and responsibilities
under this Agreement. The Executive shall not engage in any other business
activity, including service as a director, board member or consultant to any
other entity, except as may be approved in advance, in writing, by the Board of
Directors; provided that nothing in this Agreement shall be construed as
preventing the Executive from:
(a) investing the Executive's assets in any company or other entity in
a manner not prohibited by Section 7(d) and in such form or manner as shall not
require any material activities on the Executive's part in connection with the
operations or affairs of the companies or other entities in which such
investments are made; or
(b) engaging in religious, charitable or other community or non-profit
activities that do not impair the Executive's ability to fulfill the Executive's
duties and responsibilities under this Agreement.
6. Termination and Termination Benefits. Notwithstanding the provisions of
Section 3, the Executive's employment under this Agreement shall terminate under
the following circumstances set forth in this Section 6.
(a) Termination by the Employer for Cause. The Executive's employment
under this Agreement may be terminated for cause without further liability on
the part of the Employer effective immediately upon a vote of the Board of
Directors and written notice to the Executive. Only the following shall
constitute "Cause" for such termination:
(i) dishonesty of the Executive that is material to the business
of the Employer;
(ii) the commission or indictment of the Executive for (A) a
felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty
or fraud;
(iii) material failure to perform to the reasonable satisfaction
of the Board of Directors a substantial portion of the Executive's duties
and responsibilities assigned or delegated under this Agreement, which
failure continues, in the reasonable judgment of the Board of Directors,
for at least thirty (30) days after written notice given to the Executive
by the Board of Directors;
(iv) gross negligence, willful misconduct or insubordination of
the Executive with respect to the Employer or any affiliate of the
Employer; or
(v) material breach by the Executive of any of the Executive's
obligations under this Agreement.
(b) Termination by the Executive. The Executive's employment under
this Agreement may be terminated by the Executive without Good Reason (as
defined below) by written notice to the Board of Directors at least sixty (60)
days prior to such termination. The Executive's employment under this Agreement
may be terminated by the Executive with Good Reason at any time. For the
purposes of this Agreement, Good Reason shall mean (i) a material reduction of
the Executive's title or level of responsibility, such that he is no longer
serving as chief executive officer of the Employer, reporting to the Board of
Directors (ii) a reduction in the Executive's Salary, or (iii) the relocation of
the Executive's primary place of employment to a location more than 100 miles
from Lexington, Massachusetts.
(c) Termination by the Employer Without Cause. Subject to the payment
of Termination Benefits pursuant to Section 6(d), the Executive's employment
under this Agreement may be terminated by the Employer without Cause upon
written notice to the Executive by a vote of the Board of Directors.
(d) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or the Merger Agreement between the Employer and
Predix Pharmaceuticals dated July 10, 2006 (the "Merger Agreement") (which
provides severance benefits to the Executive in certain circumstances) or
otherwise required by law, all compensation and benefits payable to the
Executive under this Agreement shall terminate on the date of termination of the
Executive's employment under this Agreement , Notwithstanding the foregoing, in
the event of termination of the Executive's employment with the Employer
pursuant to Section 6(c) above or termination by the Executive with Good Reason
pursuant to Section 6(b) above, the Employer shall provide to the Executive the
following termination benefits ("Termination Benefits"),
provided that the Executive executes a valid and enforceable separation
agreement and release of claims in a form (the "Release") as determined by the
Employer
(i) a lump sum equal to twelve months Salary (at the rate then in
effect pursuant to Section 4(a)); and
(ii) continuation of group health plan benefits to the extent
authorized by and consistent with 29 U.S.C. Section 1161 et seq. (commonly
known as "COBRA"), with the cost of the regular premium for such benefits
shared in the same relative proportion by the Employer and the Executive as
in effect on the date of termination until the earlier of (A) the
expiration of the Term (assuming, for this purpose, that the Term expires
at the next anniversary hereof, whether or not a notice of non-renewal has
been delivered) or (B) 12 months after the date of termination.; and
(iii) that portion of his or her bonus as had been accrued by the
Employer in accordance with generally accepted accounting principles as of
the end of the fiscal quarter immediately preceding such termination. This
portion of the bonus will be paid to the Executive at the time the Employer
pays bonuses to other senior employees, provided that it shall be paid no
later than March 15 of the calendar year immediately following the fiscal
year during which termination of employment occurs.
(e) Payment of Termination Benefits. The lump sum payment set forth in
subsection (i) above shall be paid no earlier than six months and one day after
the date of termination of the Executive's employment but no later than six
months and fifteen days after the date of termination of the Executive's
employment. The Employer's liability for the lump sum payment pursuant to
Section 6(d)(i) shall be reduced by the amount of any severance pay due or
otherwise paid to the Executive pursuant to any severance pay plan or stay bonus
plan of the Employer. Notwithstanding the foregoing, nothing in this Section
6(d) shall be construed to affect the Executive's right to receive COBRA
continuation entirely at the Executive's own cost to the extent that the
Executive may continue to be entitled to COBRA continuation after the
Executive's right to cost sharing under Section 6(d)(ii) ceases. The Release
must be executed (without revocation) within six (6) months of the end of the
Executive's employment with the Employer (the "Execution Period"). If the
Release is not executed (without revocation) within the Execution Period, the
Employee shall forfeit all rights to any Termination Benefits under this
Agreement.
(f) Disability. If the Executive shall be disabled so as to be unable
to perform the essential functions of the Executive's then existing position or
positions under this Agreement with reasonable accommodation, the Board of
Directors may remove the Executive from any responsibilities and/or reassign the
Executive to another position with the Employer for the remainder of the Term or
during the period of such disability. Notwithstanding any such removal or
reassignment, the Executive shall continue to receive the Executive's full
Salary (less any disability pay or sick pay benefits to which the Executive may
be entitled under the Employer's policies) and benefits under Section 4 of this
Agreement (except to the extent that the Executive may be ineligible for one or
more such benefits under applicable plan terms) for six (6) months (subject to
the payment schedule specified in the following sentence) and shall receive a
pro rata share of his or her bonus for the fiscal year in which such disability
occurs
pursuant to Section 4(b) above. If any question shall arise as to whether during
any period the Executive is disabled so as to be unable to perform the essential
functions of the Executive's then existing position or positions with or without
reasonable accommodation, the Executive may, and at the request of the Employer
shall, submit to the Employer a certification in reasonable detail by a
physician selected by the Employer to whom the Executive or the Executive's
guardian has no reasonable objection as to whether the Executive is so disabled
or how long such disability is expected to continue, and such certification
shall for the purposes of this Agreement be conclusive of the issue. The
Executive shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise and the
Executive shall fail to submit such certification, the Employer's determination
of such issue shall be binding on the Executive. Nothing in this Section 6(e)
shall be construed to waive the Executive's rights, if any, under existing law
including, without limitation, the Family and Medical Leave Act of 1993, 29
U.S.C. Section 2601 et seq. and the Americans with Disabilities Act, 42 U.S.C.
Section 12101 et seq. Notwithstanding the foregoing, in the event that the
continuation of the Executive's Salary pursuant to this paragraph would result
in any Salary payments being made after the end of the Short-Term Deferral
Period (as defined below), the Employer shall (i) continue to pay the
Executive's Salary in the ordinary course until the end of the Short-Term
Deferral Period and (ii) before the end of the Short-Term Deferral Period, make
a lump-sum payment to the Executive in an amount equal to the difference between
six months' Salary and the amount of Salary continuation the Executive has been
paid in the ordinary course pursuant to this Section. For the purposes of this
Section, "Short-Term Deferral Period" shall mean the period beginning on the
date that the Executive becomes disabled and ending upon the later of (i) 2 1/2
months after the end of the calendar year during which the Executive becomes
disabled or (ii) 2 1/2 months after the end of the Employer's fiscal year during
which the Executive becomes disabled. The purpose of this payment schedule is to
comply with the requirements of Section 409A of the U.S. Internal Revenue Code
of 1986 (the "Code").
7. Confidential Information, Noncompetition and Cooperation.
(a) Confidential Information. As used in this Agreement, "Confidential
Information" means information belonging to the Employer which is of value to
the Employer in the course of conducting its business and the disclosure of
which could result in a competitive or other disadvantage to the Employer.
Confidential Information includes, without limitation, financial information,
reports, and forecasts; inventions, improvements and other intellectual
property; trade secrets; know-how; designs, processes or formulae; software;
market or sales information or plans; customer lists; and business plans,
prospects and opportunities (such as possible acquisitions or dispositions of
businesses or facilities) which have been discussed or considered by the
management of the Employer. Confidential Information includes information
developed by the Executive in the course of the Executive's employment by the
Employer, as well as other information to which the Executive may have access in
connection with the Executive's employment. Confidential Information also
includes the confidential information of others with which the Employer has a
business relationship. Notwithstanding the foregoing, Confidential Information
does not include information in the public domain, unless due to breach of the
Executive's duties under Section 7(b).
(b) Confidentiality. The Executive understands and agrees that the
Executive's employment creates a relationship of confidence and trust between
the Executive and the Employer with respect to all Confidential Information. At
all times, both during the Executive's employment with the Employer and after
its termination, the Executive will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Employer, except as may be
necessary in the ordinary course of performing the Executive's duties to the
Employer.
(c) Documents, Records, etc. All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by the Employer or are
produced by the Executive in connection with the Executive's employment will be
and remain the sole property of the Employer. The Executive will return to the
Employer all such materials and property as and when requested by the Employer.
In any event, the Executive will return all such materials and property
immediately upon termination of the Executive's employment for any reason. The
Executive will not retain with the Executive any such material or property or
any copies thereof after such termination.
(d) Noncompetition and Nonsolicitation. During the Term and for one
year thereafter (or during the Termination Benefits Period, if longer), the
Executive (i) will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage,
participate, assist or invest in any Competing Business (as hereinafter defined)
and (ii) will refrain (except on behalf of the Employer) from directly or
indirectly employing any person employed by the Employer as of the date of the
Executive's termination of employment with the Employer. During the Term and for
two years thereafter, the Executive (i) will refrain from attempting to employ,
recruiting or otherwise soliciting, inducing or influencing any person to leave
employment with the Employer (other than terminations of employment of
subordinate employees undertaken in the course of the Executive's employment
with the Employer); and (ii) will refrain from soliciting or encouraging any
customer or supplier to terminate or otherwise modify adversely its business
relationship with the Employer. The Executive understands that the restrictions
set forth in this Section 7(d) are intended to protect the Employer's interest
in its Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable and
appropriate for this purpose. For purposes of this Agreement, the term
"Competing Business" shall mean a business conducted anywhere which is
competitive with any business which the Employer or any of its affiliates
conducts or proposes to conduct at any time during the employment of the
Executive. Notwithstanding the foregoing, the Executive may own up to one
percent (1%) of the outstanding stock of a publicly held corporation which
constitutes or is affiliated with a Competing Business.
(e) Third-Party Agreements and Rights. The Executive hereby confirms
that the Executive is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way the Executive's use or
disclosure of information or the Executive's engagement in any business. The
Executive represents to the Employer that the Executive's execution of this
Agreement, the Executive's employment with the Employer and the performance of
the Executive's proposed duties for the Employer will not violate any
obligations the Executive may have to any such previous employer or other party.
In the
Executive's work for the Employer, the Executive will not disclose or make use
of any information in violation of any agreements with or rights of any such
previous employer or other party, and the Executive will not bring to the
premises of the Employer any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous employment or other
party.
(f) Litigation and Regulatory Cooperation. During and after the
Executive's employment, the Executive shall cooperate fully with the Employer in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Employer which relate
to events or occurrences that transpired while the Executive was employed by the
Employer. The Executive's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Employer at mutually convenient times. During and after the Executive's
employment, the Executive also shall cooperate fully with the Employer in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Employer.
The Employer shall reimburse the Executive for any reasonable out-of-pocket
expenses and time (at a mutually agreed upon rate) incurred in connection with
the Executive's performance of obligations pursuant to this Section 7(f).
(g) Injunction. The Executive agrees that it would be difficult to
measure any damages caused to the Employer which might result from any breach by
the Executive of the promises set forth in this Section 7, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
subject to Section 8 of this Agreement, the Executive agrees that if the
Executive breaches, or proposes to breach, any portion of this Agreement, the
Employer shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach, without showing or proving any actual damage to the Employer.
8. Arbitration of Disputes. Any controversy or claim arising out of this
Agreement or the breach thereof shall, to the fullest extent permitted by law,
be settled by arbitration in any forum and form agreed upon by the parties or,
in the absence of such an agreement, under the auspices of the American
Arbitration Association ("AAA") in Boston, Massachusetts in accordance with the
Employment Dispute Resolution Rules of the AAA, including, but not limited to,
the rules and procedures applicable to the selection of arbitrators. In the
event that any person or entity other than the Executive or the Employer may be
a party with regard to any such controversy or claim, such controversy or claim
shall be submitted to arbitration subject to such other person or entity's
agreement. Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. This Section 8 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude
either party from pursuing a court action for the sole purpose of obtaining a
temporary restraining order or a preliminary injunction in circumstances in
which such relief is appropriate; provided that any other relief shall be
pursued through an arbitration proceeding pursuant to this Section 8.
9. Consent to Jurisdiction. To the extent that any court action is
permitted consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of
the Superior Court of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts. Accordingly, with respect to
any such court action, the Executive (a) submits to the personal jurisdiction of
such courts; (b) consents to service of process; and (c) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
10. Integration. This Agreement, together with the Merger Agreement and any
stock option plans and grants, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter.
11. Assignment; Successors and Assigns. Neither the Employer nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
12. Enforceability. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
13. Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
14. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at its main offices, attention of the
Chief Executive Officer, (or, in the case of notices from Xxxxxxx Xxxxxxxx,
attention of the Chairman) and shall be effective on the date of delivery in
person or by courier or three (3) days after the date mailed.
15. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Employer.
16. Governing Law. This is a Massachusetts contract and shall be construed
under and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth. With respect to any disputes concerning federal law, such disputes
shall be determined in accordance with the law as it would be interpreted and
applied by the United States Court of Appeals for the First Circuit.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Employer, by its duly authorized officer, and by the Executive, as of the
Effective Date.
EPIX PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxxxxx F.O. Gabrieli
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/s/ Xxxxxxx X. Xxxxxxxx
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Employee
