EMPLOYMENT CONTRACT (this "Agreement"), dated as of September 30,
1997, between Celgene Corporation, a Delaware corporation with offices at 0
Xxxxxx Xxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), and Xxxx X.
Xxxxxxx, residing at 00 Xxxxxxx Xxxx, Xxxxxx, XX 00000 ("Employee"). The Company
and Employee agree as follows:
1. Term. The Company agrees to employ Employee, and Employee agrees
to serve, on the terms and conditions of this Agreement for a period commencing
on the date hereof and ending three years from the date hereof, or such other
period as may be provided for in Section 10 or 11. The period during which
Employee is employed hereunder is hereinafter referred to as the "Employment
Period." The Employment Period shall be automatically renewed for successive
one-year terms unless either party gives written notice to the other at least
one year prior to the expiration of the then Employment Period, of such party's
intention to terminate Executive's employment hereunder at the end of the then
current Employment Period.
2. Duties and Services. During the Employment Period, Employee shall
be employed in the business of the Company as Chief Executive Officer of the
Company. In addition, Employee shall serve as Chairman of the Board of Directors
of the Company. Employee shall perform such duties and services, within his
expertise and experience, as may be assigned to him by, and subject to the
direction of, the Board of Directors of the Company. Employee agrees to his
employment as described in this Section 2 and agrees to devote all of his
working time and efforts to the performance of his duties under this Agreement,
excepting disabilities, illness and vacation time as provided by Section 3(e).
In performing his duties hereunder, Employee shall be available for reasonable
travel as the needs of the business require.
3. Compensation and Other Benefits.
(a) As compensation for his services hereunder, the Company shall
pay Employee, during the Employment Period, a salary payable in equal
semi-monthly installments at an annual rate of $270,000, provided that such
salary shall be reviewed annually by the Company's Board of Directors, or a
committee thereof, which may, in its sole discretion, increase (but not
decrease) such salary.
(b) The Company shall also pay Employee, during the Employment
Period, an annual bonus, payable in January of each year for the preceding year,
in such amount as may be determined by the Company's Board of Directors, or a
committee thereof, in its sole discretion.
(c) Employee shall be entitled to participate in all group health
and insurance programs and all other fringe benefit or retirement plans which
the Company may, in its sole and absolute discretion, elect to make available to
its employees generally, provided Employee meets the qualifications therefor.
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(d) Employee shall be eligible to participate in the Company's 1992
Long-Term Incentive Plan and any other incentive plans of the Company.
(e) Employee shall be entitled to four weeks of paid vacation per
year during the Employment Period.
4. Expenses. Employee shall be entitled to reimbursement for all
reasonable travel and other out-of-pocket expenses necessarily incurred in the
performance of his duties hereunder, upon submission and approval of written
statements and bills in accordance with the then regular procedures of the
Company.
5. Representations and Warranties of Employee. Employee represents
and warrants to the Company that Employee is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder or the other rights of the
Company hereunder.
6. Non-Competition. In view of the unique and valuable services it
is expected Employee will render to the Company, Employee's knowledge of the
customers, trade secrets and other proprietary information relating to the
business of the Company and its customers and suppliers and similar knowledge
regarding the Company which it is expected that Employee will obtain, and in
consideration of the compensation to be received hereunder, Employee agrees
that, (a) during the period he is employed by the Company under this Agreement
or otherwise, he will not Participate In (as hereinafter defined in this Section
6) any other business or organization, whether or not such business or
organization now is or shall then be competing with or of a nature similar to
the business of the Company, without obtaining the prior written consent of the
Executive Committee of the Board of Directors of the Company, and (b) until the
first anniversary of the date of the termination of Employee's employment under
this Agreement or otherwise, he will not Participate In any business which is
engaged, directly or indirectly, in the same business as the Company with
respect to any specific product or specific service sold or activity in which
the Company engages up to the time of termination of employment in any
geographical area in which at the time of termination such product or service is
sold or activity is engaged in by the Company; provided, however, that Employee
may serve as a member of the Board of Directors of Elite Laboratories, Inc., for
so long as Elite Laboratories, Inc. is not engaged in the same business as, or
in competition with, the Company with respect to any specific product sold or
specific activity engaged in by the Company. For purposes of this Section 6 the
term "Participate In" shall mean: "directly or indirectly, for his own benefit
or for, with or through any other person, firm or corporation, own, manage,
operate, control, loan money to or participate in the ownership, management,
operation or control of, or be connected as a director, officer, employee,
partner, consultant, agent, independent contractor or otherwise with, or
acquiesce in the use of his name in." Employee further agrees that, during the
period he is employed by the Company under this Agreement or otherwise and until
the first anniversary of the date of the termination of Employee's employment
under this Agreement or otherwise, he will not directly or indirectly reveal the
name of, solicit or interfere with, or endeavor to entice away from the Company,
any of its suppliers, customers or employees.
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7. Patents, etc. Any interest in patents, patent applications,
inventions, technological innovations, copyrights, copyrightable works,
developments, discoveries, designs and processes ("Inventions") which Employee
during the period he is employed by the Company under this Agreement or
otherwise, and for six months thereafter, may conceive of or develop and either
relating to the specific fields in which the Company may then be engaged or
conceived of or developed utilizing the time, material, facilities or
information of the Company shall belong to the Company; as soon as Employee
conceives of or develops any Invention, he agrees immediately to communicate
such fact in writing to the Secretary of the Company, and without further
compensation, but at the Company's expense (except as noted in clause (a) of
this Section 7), forthwith upon request of the Company, Employee shall execute
all such assignments and other documents (including applications for patents,
copyrights, trademarks and assignments thereof) and take all such other action
as the Company may reasonably request in order (a) to vest in the Company all
Employee's right, title and interest in and to the Inventions, free and clear of
liens, mortgages, security interests, pledges, charges and encumbrances arising
from the acts of Employee ("Liens") (Employee to take such action, at his
expense, as is necessary to remove all such Liens) and (b) if patentable or
copyrightable, to obtain patents or copyrights (including extensions and
renewals) therefor in any and all countries in such name as the Company shall
determine.
8. Confidential Information. All confidential information which
Employee may now possess, may obtain during or after the Employment Period, or
may create prior to the end of the period he is employed by the Company under
this Agreement or otherwise relating to the business of the Company or of any
customer or supplier of the Company shall not be published, disclosed or made
accessible by him to any other person, firm or corporation either during or
after the termination of his employment or used by him except during the
Employment Period in the business and for the benefit of the Company, in each
case without the prior written permission of the Company. Employee shall return
all tangible evidence of such confidential information to the Company prior to
or at the termination of his employment. As used in this Section 8,
"confidential information" shall mean any information except that information
which is or comes into the public domain through no fault of Employee or which
Employee obtains after the termination of his employment by the Company under
this Agreement or otherwise from a third party who has the right to disclose
such information.
9. Life Insurance. If requested by the Company, Employee shall
submit to such physical examinations and otherwise take such actions and execute
and deliver such documents as may be reasonably necessary to enable the Company,
at its expense and for its own benefit, to obtain life insurance on the life of
Employee. Subject to its ability to do so under the terms of such policy, if
any, insuring the life of Employee, upon the termination of Employee's
employment hereunder, the Company will assign to Employee its rights under such
insurance policy, provided that, concurrently with such assignment, Employee
shall reimburse the Company for any premium payments made by the Company in
respect of time periods subsequent to such date of termination. Nothing herein
contained shall obligate the Company to obtain such insurance.
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10. Termination.
(a) If on or after the date hereof and prior to the end of the
Employment Period,
(i) either (A) Employee shall be convicted of a crime of moral
turpitude or a felony, (B) Employee shall commit any act or omit to take
any action in bad faith and to the detriment of the Company or (C)
Employee shall breach any material term of this Agreement and fail to
correct such breach within 10 days after notice by the Company to Employee
of his commission of the same then, and in each such case, the Company
shall have the right to give notice of termination of Employee's services
hereunder as of a date (not earlier than 10 days from such notice) to be
specified in such notice and this Agreement shall terminate on the date so
specified, or
(ii) Employee shall die, then this Agreement shall terminate
on the date of Employee's death, whereupon Employee or his estate, as the
case may be, shall be entitled to receive only his salary at the rate then
provided pursuant to Section 3(a) to the date on which termination shall
take effect; provided, however, that if this Agreement is terminated
pursuant to this Section 10(a)(ii), Employee's estate shall be entitled to
receive a lump-sum payment in the amount of three months' compensation at
the rate then provided in Section 3(a).
(iii) Nothing contained in this Section 10(a) shall be deemed
to limit any other right the Company may have to terminate Employee's
employment hereunder upon any ground permitted by law.
(iv) If Employee's employment is terminated by the Company as
a result of the disability or incapacitation of Employee or for any reason
other than pursuant to the provisions of paragraphs (i) or (ii) of this
Section 10(a) or the provisions of Section 11, upon termination by the
Company of Employee's employment, whether during the Employment Period or
thereafter, Employee shall be entitled to receive a lump-sum severance
payment in an amount equal to the greater of (A) twelve (12) months'
salary at the prevailing rate provided for by Section 3(a) on the date of
such termination, or (B) salary at such rate for the unexpired portion of
the Employment Period, if any.
(b) Notwithstanding Section 11, after a Change in Control (as
hereinafter defined) has occurred, Employee may terminate his employment within
30 calendar days after he has obtained actual knowledge of the occurrence of any
of the following events (unless Employee consents in writing to such
occurrence):
(i) failure to elect or appoint, or reelect or reappoint,
Employee to, or removal of Employee from, his position with the Company as
Chief Executive Officer, except in connection with the termination of
Employee's employment pursuant to Section 10(a);
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(ii) a significant change in the nature or scope of the
authorities, powers, functions or duties normally attached to Employee's
position as Chief Executive Officer of the Company;
(iii) a determination by Employee made in good faith that, as
a result of a Change in Control, he is unable effectively to carry out the
authorities, powers, functions or duties attached to his position as Chief
Executive Officer of the Company and the situation is not remedied within
30 calendar days after receipt by the Company of written notice from
Employee of such determination; or
(iv) a breach by the Company of any material provision of this
Agreement not covered by clause (i), (ii) or (iii) of this Section 10(b),
which is not remedied within 30 calendar days after receipt by the Company
of written notice from Employee of such breach.
An election by Employee to terminate his employment under the
provisions of this Section 10(b) shall not constitute a breach by Employee of
this Agreement and shall not be deemed a voluntary termination of employment by
Employee for the purpose of interpreting the provisions of any of the Company's
employee benefit plans, programs or policies.
(c) After a Change in Control has occurred, if Employee terminates
his employment with the Company pursuant to Section 10(b) or if Employee's
employment is terminated by the Company as a result of the disability or
incapacitation of Employee or for any reason other than pursuant to the
provisions of paragraphs (i) or (ii) of Section 10(a), Employee (i) shall be
entitled to his normal salary, bonuses, awards, perquisites and benefits,
through the termination date of his employment and, in addition thereto, (ii)
shall be paid in a lump-sum, on such date of termination, an amount of cash, to
be computed at the expense of the Company by its independent certified public
accountants (whose computation shall be conclusive and binding upon Employee and
the Company), equal to 2.99 times Employee's "base amount," as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986.
(d) For purposes hereof, a Change in Control shall be deemed to have
occurred (i) if a person within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, other than the Company or any of its
subsidiaries, has become the beneficial owner within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, directly or indirectly, of securities
of the Company representing more than 50% of the Company's then outstanding
securities having the right to vote on the election of directors, (ii) when
individuals who are members of the Company's Board of Directors at any one time
shall immediately thereafter cease to constitute a majority of the Board of
Directors, (iii) when a majority of the directors elected at any special or
annual meeting of stockholders are not individuals nominated by the Company's
incumbent Board of Directors, or (iv) the merger or other business combination
of the Company, sale of all or substantially all of the Company's assets or
combination of the foregoing transactions (a "Transaction"), other than a
Transaction immediately following which the shareholders of the Company
immediately prior to the Transaction continue to have a majority of the voting
power in the resulting entity.
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11. Merger, etc. Subject to Section 10(b), in the event of a future
disposition of the properties and business of the Company substantially as an
entirety by merger, consolidation, sale of assets or otherwise, then the Company
may elect:
(a) to assign this Agreement and all of its rights and obligations
hereunder to the acquiring or surviving entity; provided that such entity shall
assume in writing all of the obligations of the Company hereunder; and provided,
further, that the Company (in the event and so long as it remains in existence)
shall remain liable for the performance of its obligations hereunder in the
event of a breach by the acquiring entity of this Agreement; or
(b) in addition to its other rights of termination, to terminate
this Agreement upon at least 90 days' written notice and by paying Employee in a
lump-sum on such date of termination, an amount of cash determined in accordance
with Section 10(c).
12. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment.
13. Entire Agreement; Modification. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter
and may be modified only by a written instrument duly executed by each party.
14. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 14). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 14. Any notice or other communication given by certified mail shall be
deemed given three days after the time of certification thereof, except for a
notice changing a party's address which shall be deemed given at the time of
receipt thereof.
15. Waiver. Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by the party giving such waiver.
16. Binding Effect. Employee's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of
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Employee and his heirs and personal representatives, and shall be binding upon
and inure to the benefit of the Company and its successors and its assigns under
Section 11.
17. No Third Party Beneficiaries. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement (except as provided in Sections 11 and 16).
18. Counterparts; Governing Law. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of New
Jersey, without giving effect to the conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
CELGENE CORPORATION
By:
--------------------------
Xxx X. Xxxxx
President
Xxxx X. Xxxxxxx
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