Exhibit 10.8
[METOBOLIX LOGO] 00 Xxxx Xxxxxx
WHERE NATURE PERFORMS(TM) Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 XXX
Tel: 000.000.0000 - Fax: 000-000-0000
Web: xxx.xxxxxxxxx.xxx
September 18, 2006
Xxxxx X. Xxxxxx
c/o Metabolix, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Dear Xxx:
This letter is to confirm our understanding with respect to your employment
by Metabolix, Inc. (the "Company"). The terms and conditions agreed to in this
letter are hereinafter referred to as the "Agreement". In consideration of the
mutual promises and covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, we have agreed as follows:
1. EMPLOYMENT.
(a) GENERAL. The Company will employ you, and you will be employed by
the Company, as the President and Chief Executive Officer of the Company,
reporting to and serving on the Board of Directors (the "Board"), and you
shall have the responsibilities, duty and authority commensurate with that
position. You will also perform such other and/or different services for
the Company as may be assigned to you from time to time by the Board. You
agree that if your employment hereunder ends for any reason, you will
tender your resignation to the Board.
(b) DEVOTION TO DUTIES. While you are employed hereunder, you will
use your best efforts, skills and abilities to perform faithfully all
duties assigned to you pursuant to this Agreement and will devote your full
business time and energies to the business and affairs of the Company.
While you are employed hereunder, you will not undertake any other
employment from any person or entity without the prior written consent of
the Company.
2. EMPLOYMENT AT WILL. Your employment hereunder will be on an "at-will"
basis and may be terminated by the Company or by you at any time for any reason
or for no reason.
3. COMPENSATION.
(a) BASE SALARY. While you are employed hereunder, the Company will
pay you a base salary at the annual rate of $19,583.00 per month
(annualized at $235,000.00) (the "Base Salary"). This Base Salary is
effective January 1, 2005, and may be subject to
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September 18, 2006
Page 2
upward (but not downward) adjustment from time to time in the discretion of
the Company and will be adjusted higher by the Board to levels comparable
for similar companies as determined by the Board in its sole discretion in
the event that there is a public offering. The Company will deduct from
each monthly salary payment all amounts required to be deducted or withheld
under applicable law or under any employee benefit plan in which you
participate.
(b) BONUSES. In addition to the foregoing, the Company on or before
December 31, 2006, will establish a formalized bonus scheme and pay you an
annual bonus (a "Bonus") in an amount to be determined by the Company's
Compensation Committee. The amount will be based on several criteria,
including the financial condition of the Company and its overall
performance for the year, but will be strongly influenced by your
contributions toward the achievement of established corporate goals and
objectives, as well as other contributions that add recognizable value to
the Company. The present target for executive bonuses is 50% of Base Salary
(the "Target Bonus"). This Target Bonus will be subject to revision from
time to time by the Compensation Committee. In order to receive an annual
bonus, you must be employed at the time of a timely payment, which will be
paid on or before March 15 of the year following the year in which it is
earned.
(c) EQUITY COMPENSATION. The Company has granted to you pursuant to
the Metabolix, Inc. 2005 Stock Plan the following Options:1/
(i) Grant of 243,235 incentive stock options at the exercise
price of $1.50, the fair market value at the date of grant. 44,000 of
such shares shall vest as of the grant date. Subject to your continued
employment and Section 4 of this Agreement, the remainder will vest in
equal increments on a quarterly basis over a four year period as
though vesting had begun on January 1, 2005.
(ii) Grant of 51,333 options at the exercise price of $1.50,
the fair market value at the date of grant. Vesting of this option
shall occur only if:
(A) the Company, prior to June 30, 2006: (I) completes
an initial public offering with proceeds of at least $40 million
and a price per share of at least $8.00 (an "IPO"), or (II) signs
a definitive agreement for the merger or sale of the Company that
provides for liquidity in the form of cash or readily-marketable
securities in exchange for all of the Company's outstanding
shares, provided that in the event the IPO is delayed by the
Company's Board of Directors so that it can negotiate a merger or
sale of the Company, the Board will make an appropriate extension
of such date; and
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(1) Options granted prior to the execution of this Agreement and not identified
here shall continue to vest in accordance with their terms.
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September 18, 2006
Page 3
(B) in the period prior to the occurrence of such
contingency event the Company has not raised capital: (I) through
a sale of shares on terms that are less favorable to the Company
than the terms of the 2004 offering, or (II) through an offering
solely to existing investors.
The foregoing conditions were not met and, accordingly, the options
described in this clause (ii) have expired.
(iii) Grant of 51,333 options at the exercise price of $1.50,
fair market value at the date of grant. Vesting of this option shall
occur only if
(A) the Company, prior to December 31, 2007: (I)
completes an IPO, or (II) signs a definitive agreement for the
merger or sale of the Company that provides for liquidity in the
form of cash or readily-marketable securities in exchange for all
of the Company's outstanding shares, and
(B) in the period prior to the occurrence of such
contingency event the Company has not raised capital: (I) through
a sale of shares on terms that are less favorable to the Company
than the terms of the 2004 offering, or (II) through an offering
solely to existing investors.
For avoidance of doubt, if the option described in Section 3(c)(ii)
above vests, this option shall vest as well. If vesting occurs, it
shall occur as follows: 50% of such shares will vest upon occurrence
of the contingency event, and, subject to your continued employment
and Section 4 of this Agreement, the remainder will vest in equal
increments on a quarterly basis over a four year period as if the
vesting had commenced January 1, 2005.
(iv) Grant of 51,334 options at the exercise price of $1.50,
the fair market value at the time of grant. Vesting of this option
shall occur only if
(A) ADM Polymer Corporation, or an affiliate, exercises
the Option as defined in the Technology Alliance and Option
Agreement by and between ADM Polymer Corporation and Metabolix,
Inc., and
(B) in the period prior to the occurrence of such
contingency event the Company has not raised capital: (I) through
a sale of shares on terms that are less favorable to the Company
than the terms of the 2004 offering, or (II) through an offering
solely to existing investors.
If vesting occurs, it shall occur as follows: 50% of such shares will
vest upon occurrence of the contingency event, and, subject to your
continued employment and Section 4 of this Agreement, the remainder
will vest in equal increments on a
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September 18, 2006
Page 4
quarterly basis over a four year period as if the vesting had
commenced January 1, 2005.
The parties acknowledge and agree that the foregoing contingency event
has occurred.
(v) The Company, in the Board's sole discretion, may from time
to time grant to you stock options, restricted stock or other forms of
equity compensation pursuant to the Metabolix, Inc. 2005 Stock Plan or any
other authorized stock plan in effect at the time.
(d) VACATION. You will be entitled to paid vacation and paid
holidays, accrued and used in accordance with the Company's policies as
currently in effect. All vacation days will be taken at times mutually
agreed by you and the Company and will be subject to the business needs of
the Company.
(e) FRINGE BENEFITS. You will be entitled to participate in employee
benefit plans which the Company provides or may establish for the benefit
of its senior executives generally (for example, group life, disability,
medical, dental and other insurance, retirement, pension, profit-sharing
and similar plans) (collectively, the "Fringe Benefits"). Your eligibility
to participate in the Fringe Benefits and receive benefits thereunder will
be subject to the plan documents governing such Fringe Benefits. Nothing
contained herein will require the Company to establish or maintain any
Fringe Benefits.
(f) LOAN FORGIVENESS. Pursuant to your prior employment agreement
with the Company dated November 28, 1999, the Company provided you with a
loan of $75,000. In exchange for your covenants hereunder, the Company has
forgiven that loan, effective as of December 14, 2005.
4. TERMINATION.
(a) GENERAL. As an at-will employee, your employment may be
terminated at any time for any reason or for no reason. Upon termination,
unless otherwise specifically provided herein, you shall be eligible only
to receive (i) the portion of your Base Salary as has accrued prior to such
termination and has not yet been paid, (ii) an amount equal to the value of
your accrued unused vacation days, and (iii) reimbursement for expenses
properly incurred by you on behalf of the Company prior to such termination
if such expenses are properly documented in accordance with Company policy
and practice and submitted for reimbursement within thirty (30) days of the
termination date (collectively, the "Accrued Obligations"). Such amounts
will be paid promptly after termination in accordance with applicable law.
(b) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Except as provided
in Section 4(c) hereof, in the event that your employment is terminated by
the Company without Cause or by you with Good Reason (each, as defined
below), in addition to the
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September 18, 2006
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Accrued Obligations, and contingent on your provision of a timely and
complete release of claims against the Company, you shall be entitled to
receive continuation of your Base Salary in effect at the time of
termination for the period of twelve (12) months following the termination.
To the extent required by Section 409A of the Internal Revenue Code of
1986, as amended (the "Code"), the first installment of such Base Salary in
the amount of six (6) months' Base Salary shall be payable on the first
business day following the six (6) month anniversary of the effective date
of termination, and the remainder shall be payable in accordance with the
Company's regular payroll procedures thereafter. If Section 409A of the
Code is not then applicable, such Base Salary continuation shall commence
immediately from the date of termination. In addition, should the award of
a Bonus have become customary, you shall be entitled to a payment equal to
the average of the Bonuses paid to you (if any) in the two years preceding
the termination, to be paid (A) on the first business day following the six
(6) month anniversary of the effective date of termination, to the extent
required by Section 409A of the Code, or (B) if Section 409A of the Code is
not then applicable, within thirty (30) days following the termination. In
addition to the foregoing, you shall be entitled to receive payment of
COBRA premiums to maintain medical and dental benefits, if any, in effect
at the time of termination for the period of twelve (12) months following
the termination.
(c) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON BEFORE OR AFTER A
CHANGE OF CONTROL.
(i) In the event that your employment is terminated by the
Company without Cause or by you for Good Reason (each, as defined below)
within the twenty-four (24) month period immediately following or the two
month period immediately prior to a Change of Control (as defined below),
in addition to the Accrued Obligations, and contingent on your provision of
a timely release of claims against the Company, you shall be entitled to
receive:
(A) continuation of your Base Salary in effect at the
time of termination for the period of twelve (12) months following the
termination. To the extent required by Section 409A of the Code, the first
installment of such Base Salary in the amount of six (6) months' Base
Salary shall be payable on the first business day following the six (6)
month anniversary of the effective date of termination, and the remainder
shall be payable in accordance with the Company's regular payroll
procedures thereafter. If Section 409A of the Code is not then applicable,
such Base Salary continuation shall commence immediately from the date of
termination.
(B) In addition, should the award of a Bonus have become
customary, you shall be entitled to a payment equal to the average of the
Bonuses paid to you (if any) in the two years preceding the termination, to
be paid (A) on the first business day following the six (6) month
anniversary of the effective date of termination, to the extent required by
Section 409A of the Code, or (B) if Section 409A of the Code is not then
applicable, within thirty (30) days following the termination.
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September 18, 2006
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(C) continued payment of COBRA premiums to maintain
medical and dental benefits, if any, in effect at the time of termination
for the period of twelve (12) months following the termination; and
(D) full vesting of all options and restricted stock
granted to you under the Metabolix Inc. 1995 Stock Plan, the Metabolix Inc.
2005 Stock Plan or any authorized successor stock plan provided that the
conditions to vesting other than the passage of time have been satisfied.
(ii) You agree that the payments and benefits hereunder, and
under all other contracts, arrangements or programs that apply to you (the
"Company Payments"), shall be reduced to an amount that is one dollar less
than the amount that would trigger an excise tax under Section 4999 of the
Code, as determined in good faith by the Company's independent public
accountants, PROVIDED, HOWEVER, that the reduction shall occur only if the
reduced Company Payments received by you (after taking into account further
reductions for applicable federal, state and local income, social security
and other taxes) would be greater than the unreduced Company Payments to be
received by you minus (i) the excise tax payable with respect to such
Company Payments under Section 4999 of the Code; and (ii) all applicable
federal, state and local income, social security and other taxes on such
Company Payments. You and the Company agree to cooperate in good faith with
each other in connection with any administrative or judicial proceedings
concerning the existence or amount of golden parachute penalties with
respect to payments or benefits that you receive.
(d) "CAUSE". As used herein, "Cause" shall be defined as (i) your
conviction for, or plea of nolo contendere, to a felony or a crime
involving moral turpitude, (ii) your commission of a material act of
personal dishonesty or a breach of fiduciary duty involving personal profit
in connection with your employment by the Company, (iii) your commission of
an act which the Board of Directors shall reasonably have found to have
involved willful misconduct or gross negligence on your part in the conduct
of your duties under this Agreement, (iv) your habitual absenteeism, (v)
your material breach of any material provision of this Agreement continuing
for thirty days after your receipt of written notice thereof from the
Company, or (vi) the willful and continued failure by you to perform
substantially your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness).
(e) "CHANGE OF CONTROL". As used herein, a "Change of Control" shall
occur or be deemed to have occurred only upon any one or more of the
following events:
(i) a merger or consolidation of the Company other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or the parent of such
corporation) at least fifty percent (50%) of
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September 18, 2006
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the total voting power represented by the voting securities of the
Company or such surviving entity or parent of such corporation
outstanding immediately after such merger or consolidation;
(ii) the sale or disposition by the Company of all or
substantially all of the Company' s assets; or
(iii) any one person, entity or group, who is not a shareholder
at time of execution of this Agreement, acquires ownership of capital
stock of the Company that, together with the capital stock of the
Company already held by such person, entity or group, constitutes more
than 50% of the total fair market value or total voting power of the
capital stock of the Company; provided, however, if any one person,
entity or group is considered to own more than 50% of the total fair
market value or total voting power of the capital stock of the
Company, the acquisition of additional capital stock by the same
person, entity or group shall not be deemed to be a Change of Control,
and further provided that the foregoing shall not be deemed a Change
of Control if the average stock price paid for each share of stock
held by the person, entity or group is less than $8.00/share (provided
that such price shall be adjusted as appropriate to reflect any stock
dividend, stock split, or recapitalization of the Company after the
date of this agreement).
(f) "Good Reason" shall be defined as, in the absence of a cure by
the Company within 30 days after written notice by you to the Board, a (i)
a change in title of President and Chief Executive Officer, (ii) a material
diminution of responsibilities, duties or powers, (iii) a reduction in Base
Salary, Target Bonus, vacation or other benefits, except that benefits need
only be substantially equivalent, or (iv) a requirement that you relocate
your principal place of employment to (or that you travel more than 50 days
in any calendar year to the Company's principal place of business in) a
location more than 50 miles from its current location in Cambridge,
Massachusetts, PROVIDED THAT you must provide the Company with at least
thirty (30) days advance written notice of your intent to terminate your
employment hereunder and an opportunity to cure.
5. NONCOMPETITION, NONDISCLOSURE AND INVENTIONS OBLIGATIONS. Your
Employee Noncompetition, Nondisclosure and Inventions Agreement dated November
28, 1999, shall continue in full force and effect in accordance with its terms.
6. DISCLOSURE TO FUTURE EMPLOYERS. You will provide, and the Company, in
its discretion, may similarly provide, a copy of the covenants contained in The
Employee Noncompetition, Nondisclosure and Inventions Agreement to any business
or enterprise which you may, directly or indirectly, own, manage, operate,
finance, join, control or in which you may 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.
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September 18, 2006
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7. REPRESENTATIONS. You hereby represent and warrant to the Company that
you understand this Agreement, that you enter into this Agreement voluntarily
and that your employment under this Agreement will not conflict with any legal
duty owed by you to any other party.
8. GENERAL.
(a) NOTICES. All notices, requests, consents and other communications
hereunder which are required to be provided, or which the sender elects to
provide, in writing, will be addressed to the receiving party's address set
forth above or to such other address as a party may designate by notice
hereunder, and will be either (i) delivered by hand, (ii) sent by overnight
courier, or (iii) sent by registered or certified mail, return receipt
requested, postage prepaid. All notices, requests, consents and other
communications hereunder will be deemed to have been given either (i) if by
hand, at the time of the delivery thereof to the receiving party at the
address of such party set forth above, (ii) if sent by overnight courier,
on the next business day following the day such notice is delivered to the
courier service, or (iii) if sent by registered or certified mail, on the
fifth business day following the day such mailing is made.
(b) ENTIRE AGREEMENT. This Agreement, together with any Stock Option
Agreements executed by you and the Company (either prior to or in
conjunction with this Agreement), the Employee Noncompetition,
Nondisclosure and Inventions Agreement and the other agreements
specifically referred to herein, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof, including without
limitation the Employment Agreement between you and the Company dated
December 14, 2005. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement will
affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
(c) MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
Agreement may be modified or amended only by written agreement executed by
the parties hereto.
(d) WAIVERS AND CONSENTS. The terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such
terms or provisions. No such waiver or consent will be deemed to be or will
constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent will be effective only in the specific instance and for the purpose
for which it was given, and will not constitute a continuing waiver or
consent.
(e) ASSIGNMENT. The Company may assign its rights and obligations
hereunder to any person or entity that succeeds to all or substantially all
of the Company's business or that aspect of the Company's business in which
you are principally involved or to any
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September 18, 2006
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Company Affiliate. You may not assign your rights and obligations under
this Agreement without the prior written consent of the Company and any
such attempted assignment by you without the prior written consent of the
Company will be void.
(f) GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder will be construed in accordance with and governed by
the law of Massachusetts, without giving effect to the conflict of law
principles thereof.
(g) JURISDICTION, VENUE AND SERVICE OF PROCESS. Any legal action or
proceeding with respect to this Agreement will be brought in the courts of
Massachusetts or of the United States of America for THE District of
Massachusetts. By execution and delivery of this Agreement, each of the
parties hereto accepts for itself and in respect of its property, generally
and unconditionally, the exclusive jurisdiction of the aforesaid courts.
(h) SEVERABILITY. The parties intend this Agreement to be enforced as
written. However, if any portion or provision of this Agreement is to any
extent declared illegal or unenforceable by a duly authorized court having
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, will not be affected thereby, and
each portion and provision of this Agreement will be valid and enforceable
to the fullest extent permitted by law.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and
will in no way modify or affect the meaning or construction of any of the
terms or provisions hereof.
(j) ACKNOWLEDGMENTS. You hereby acknowledge and recognize that the
enforcement of any of the provisions in this Agreement and the
Noncompetition, Nondisclosure and Inventions Agreement may potentially
interfere with your ability to pursue a proper livelihood. You represent
that you are knowledgeable about the business of the Company and further
represent that you are capable of pursuing a career in other industries
other than the field of noncompetition as set forth in the Noncompetition,
Nondisclosure and Inventions Agreement to earn a proper livelihood. You
recognize and agree that the enforcement of the Noncompetition,
Nondisclosure and Inventions Agreement is necessary to ensure the
preservation, protection and continuity of the business, trade secrets and
goodwill of the Company. You agree that, due to the proprietary nature of
the Company's business, the restrictions set forth in the Noncompetition,
Nondisclosure and Inventions Agreement are reasonable as to time and scope.
(k) TAXES. All payments required to be made by the Company to you
under this Agreement shall be subject to the withholding of such amounts
for taxes and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
To the extent applicable, it is intended that this Agreement comply with
the provisions of Section 409A of the Code, and this Agreement shall be
construed and applied in a manner consistent with this intent. In the
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September 18, 2006
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event that any severance payments or benefits hereunder are determined by
the Company to be in the nature of nonqualified deferred compensation
payments, you and the Company hereby agree to take such actions as may be
mutually agreed to ensure that such payments or benefits comply with the
applicable provisions of Section 409A of the Code and the official guidance
issued thereunder. Notwithstanding the foregoing, the Company does not
guarantee the tax treatment or tax consequences associated with any payment
or benefit arising under this Agreement.
(l) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and by different parties hereto on separate counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
If the foregoing accurately sets forth our agreement, please so indicate by
signing and returning to us the enclosed copy of this Agreement.
Very truly yours,
Metabolix, Inc.
By:. /s/ Xxxxxx X. Xxxxxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
Title: CFO
ACCEPTED AND APPROVED:
/s/ Xxxxx X. Xxxxxx 9/19/06
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Xxxxx X. Xxxxxx Date
