EXHIBIT 10.3
OSI PHARMACEUTICALS
December 21, 2001
REVISED
Xx. Xxxxxx Xxxxxx, MD
Dear Xxxxxx:
This letter is to confirm our understanding with respect to your
employment with OSI Pharmaceuticals, Inc., its subsidiaries or affiliates (the
"Company").
1. Employment. The Company will employ you, and you agree to be employed
by the Company as Executive Vice President, Oncology Division Head reporting to
Xxxxx Xxxxxxx, Ph.D. The principal location at which you shall perform such
services shall be the Company's facility located in Boulder, CO. Your employment
hereunder shall commence on or about January 1, 2002 (the "Commencement Date")
and shall continue on an "at-will" basis, meaning that either you or the Company
may terminate your employment at any time and for any reason.
2. Compensation.
(a) Base Salary; Incentive Bonus. The Company shall pay you as your
compensation for your services and agreements hereunder a base salary payable at
the bi-weekly rate of $12,692, which annualized is $330,000 per year (the "Base
Salary"), less any amounts required to be withheld under applicable law.
Beginning with calendar year 2002, you will also be eligible to participate in
the Company's annual performance-based incentive bonus plan as approved by the
Board solely in its discretion. You expressly acknowledge that you will not be
eligible to receive any bonus from the Company in respect of calendar year 2001,
which bonus, if any, shall be paid to you by Gilead Sciences, Inc.
(b) Signing Bonus. You shall receive a $325,000 bonus (the "Signing
Bonus"), payable in one lump sum payment, less any amounts required to be
withheld under applicable law, upon the commencement of your employment with the
Company. If you voluntarily terminate your employment or the Company terminates
your employment for cause within one year of the Commencement Date, you shall be
required to reimburse the Company for $50,000; the amount you shall be required
to repay the Company shall be reduced 1/12th for each full month of service you
have completed as of the termination date.
(c) Equity Compensation. Subject to approval by the Board, you shall
receive stock options to purchase 100,000 shares of the Company's common stock,
at an exercise price to be determined based on the date of board approval,
subject to, and in accordance with, the provisions of the Company's 1999
Incentive and Non-Qualified Stock Option Plan.
(d) Benefits. You shall be entitled to participate in such employee
benefit plans as are generally made available for employees of the Company in
positions at a level comparable to you.
(e) Automobile. You will be entitled to a Company sponsored
automobile.
3. Severance Compensation.
(a) In the event that your employment hereunder is terminated by the
Company without "cause", and in exchange for your execution of a general release
of all claims against the Company:
(i) The Company will continue to pay you your Base Salary for
a period of twelve (12) months commencing on the effective date of such
termination.
(b) In the event that the Company is sold or merged with another
Company resulting in a change of control (a "Change of Control"), and you
voluntarily terminate your employment for a "Good Reason" (as defined below) at
any time within six (6) months following a Change of Control transaction, you
will be entitled to receive from the controlling company in lieu of any further
salary and bonus payments to you for periods subsequent to the date of
termination, the salary described in subparagraph (a) above. In addition, your
stock options will vest immediately upon such event.
(c) For purposes of this Section 3(b), "Good Reason" means (i)
decrease in your total compensation package, (ii) the assignment of duties or
responsibilities which are not commensurate with your position immediately prior
to the sale or Change of Control, or (iii) you are required to relocate to an
office or facility more than forty (40) miles from your present location or
forty (40) miles from your home.
(d) If your employment with OSI is terminated within one year
(except for "cause") from the date of transaction between XXX and Gilead, you
will be entitled to a lump sum severance payment equal to your annual salary for
a period of twelve (12) months.
4. Prohibited Competition. NOTE: Colorado statutes limit non-competes to
situations involving (i) protection of trade secrets or (ii) "executive and
management personnel," or "professional staff to executive and management
personnel."
(a) Covenants Not to Compete. During the period in which you perform
services for or at the request of the Company (the "Term") and for a period of
two (2) years following the expiration or termination of the Term, whether such
termination is voluntary or involuntary, you shall not, without the prior
written consent of the Company:
(i) For yourself or on behalf of any other person or entity,
directly or indirectly, either as principal, agent, stockholder, employee,
consultant, representative or in any other capacity, own, manage, operate or
control, or be concerned, connected or employed by, or otherwise associate in
any manner with, engage in or have a financial interest in any business which
creates or develops products which are directly competitive with the products of
the Company in any geographic location in which the Company is then operating
(the "Restricted Territory"), except that nothing contained herein shall
preclude you from purchasing or owning securities of any such business if such
securities are publicly traded, and provided that your holdings do not exceed
three (3%) percent of the issued and outstanding securities of any class of
securities of such business; or
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(ii) Either individually or on behalf of or through any third
party, solicit, diver or appropriate or attempt to solicit, divert or
appropriate, for the purpose of competing with the Company or any present or
future parent, subsidiary or other affiliate of the Company which is engaged in
a similar business as the Company, any customers or patrons of the Company, or
any prospective customers or patrons with respect to which the Company has
developed or made a sales presentation (or similar offering of services),
located within the Restricted Territory; or
(iii) Either individually or on behalf of or through any third
party, directly or indirectly, solicit, entice or persuade or attempt to
solicit, entice or persuade any other employees of or consultants to the company
or any present or future parent, subsidiary or affiliate of the Company to leave
the services or the Company or any such parent, subsidiary or affiliate for any
reason.
(b) Reasonableness of Restrictions. You further recognize and
acknowledge that (i) the types of employment which are prohibited by this
Section 4 are narrow and reasonable in relation to the skills which represent
your principal salable asset both to the Company and to your other prospective
employers, and (ii) the specific but broad geographical scope of the provisions
of this Section 4 is reasonable, legitimate and fair to you in light of the
Company's need to market its services and sell its products in a large
geographic area in order to have a sufficient customer base to make the
Company's business profitable and in light of the limited restrictions on the
type of employment prohibited herein compared to the types of employment for
which you are qualified to earn your livelihood.
(c) Survival of Acknowledgements and Agreements. Your
acknowledgements and agreements set forth in this shall survive the expiration
or termination of this Agreement and the termination of your employment with the
Company for any reason.
5. Protected Information. You shall at all times, both during and after
any termination of this Agreement by either you or the Company, maintain in
confidence and shall not, without the prior written consent of the Company, use,
except in the course of performance of your duties for the Company, disclose or
give to others any Confidential and Proprietary Information. For purposes of
this Agreement, "Confidential and Proprietary Information" means confidential
and proprietary information of the Company which was disclosed to or developed
by you during the course of performing services for, or receiving training from,
the Company, and is not available to the public, including but not limited to
information and facts concerning business plans, customers, future customers,
suppliers, licensors, licensees, partners, investors, affiliates or others,
training methods and materials, financial information, sales prospects, client
lists, inventions, or any other scientific, technical, trade or business secret
of the Company or any third party provided to you or the Company under a
condition of confidentiality, provided that Confidential and Proprietary
Information shall not include information that is (1) in the public domain other
than through any fault or act by you, (2) known to you prior to its disclosure
to you in the course of your employment by the Company, or (3) lawfully
disclosed to you by a source other than the Company which source has the legal
right to disclose such information.
6. Ownership of Ideas, Copyrights and Patents. You agree that all ideas,
discoveries, creations, manuscripts and properties, innovations, improvements,
know-how,
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inventions, designs, developments, apparatus, techniques, methods, biological
processes, cell lines, laboratory notebooks and formulae which may be used in
the business of the Company, whether patentable, copyrightable or not, which you
may conceive, reduce to practice or develop during your employment with the
Company (collectively, the "Inventions"), alone or in conjunction with another,
or others and whether at the request or upon the suggestion of the Company, or
otherwise, shall be the sole and exclusive property of the Company, and that you
shall not publish any of the Inventions without the prior written consent of the
Company. You hereby assign to the Company all of your right, title and interest
in and to all of the foregoing. You further represent and agree that to the best
of your knowledge and belief none of the Inventions will violate or infringe
upon any right, patent, copyright, trademark or right of privacy, or any
constitute libel or slander against or violate any other rights of any person,
firm or corporation and that you will use your best efforts to prevent any such
violation. You agree that you will fully cooperate with the Company, its
attorneys and agents in the preparation and filing of all papers and other
documents as may be required to perfect the Company's rights in and to any of
such Inventions.
7. Disclosure to Future Employers. You agree that you will provide, and
that the Company may similarly provide in its discretion, a copy of the
covenants contained in Sections 4, 5 and 6 of this Agreement to any business or
enterprise which you may directly, or indirectly, own, manage, operate, finance,
join, control or in which you participate in the ownership, management,
operation, financing or control, or with which you may be connected as an
officer, director, employee, partner, principal, agent, representative,
consultant or otherwise.
8. Records. Upon termination of your relationship with the Company, you
shall deliver to the Company any property of the Company which may be in your
possession including products, materials, memoranda, notes, records, reports, or
other documents or photocopies of the same.
9. No Conflicting Agreements. You hereby represent and warrant that you
have no commitments or obligations inconsistent with this Agreement and you
hereby agree to indemnify and hold the Company harmless against loss, damage,
liability or expense arising from any claim based upon circumstances alleged to
be inconsistent with such representation and warranty.
10. Other. Based upon financial evaluation of the value in your unvested
Gilead options, OSI will be granting you 50,000 options of OSI common stock. In
this regard, you will also receive 10,000 shares of OSI common stock, redeemable
upon registration. Please note that a proportion of your sign-on bonus is
designed to address any personal income tax liabilities associated with the
grant of this stock.
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If the foregoing accurately sets forth our agreement, please so indicate
by signing and returning to us the enclosed copy of this letter.
Very truly yours,
OSI PHARMACEUTICALS, INC.
By: /s/ XXXXX X. XXXXX, PH.D.
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Name: Xxxxx X. Xxxxx, Ph.D.
Title: Vice President, Human Resources
and Administration
Accepted and Approved
/s/ XXXXXX XXXXXX 10/21/2001
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Print Name Date
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