Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of June __, 2002,
is made by and between Biopure Corporation, a Delaware corporation, having its
principal place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
"Company"), and Xx. Xxxxxx X. Xxxxx, residing at 000 Xxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 (the "Executive").
RECITALS
1. The Company wishes to employ the Executive as the President
and Chief Executive Officer of the Company.
2. The Company has determined that it is essential to enter into
an employment agreement having the compensation and benefits herein to induce
the Executive to be so employed.
3. The Executive agrees to accept such employment by the Company
on the terms set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
premises herein contained, and other good and valuable consideration, the
receipt of which is mutually acknowledged, the Company and the Executive hereby
agree as follows.
1. CERTAIN DEFINITIONS.
1.1 "EFFECTIVE DATE" shall mean the first day of Executive's
employment, which shall be at his option, but in no event later than 30 days
from the date of this Agreement.
1.2 "EMPLOYMENT PERIOD" shall mean the period commencing on
the Effective Date and ending on the third anniversary of the Effective Date, as
further extended in accordance with the provisions of this Section 1.2. The
Employment Period (as it may have been extended pursuant to the provisions of
this sentence and subject to the provisions of Section 5 below) shall be
extended or further extended, as the case may be, without any action by the
Company or the Executive, on the third anniversary of the Effective Date and on
each subsequent anniversary thereof for an additional period of one year, unless
and until either party gives written notice to the other party at least sixty
(60) days in advance of any such anniversary that the Employment Period in
effect when such notice is given is not to be extended or further extended, as
the case may be.
1.3 "BOARD" shall mean the Board of Directors of the Company.
2. EMPLOYMENT. Subject to the terms and conditions provided
herein, the Company hereby agrees, during the Employment Period, to employ the
Executive as its President and Chief Executive Officer. The Executive hereby
agrees to accept such employment during the Employment Period. The Company
agrees to nominate the Executive to be a member of the Board and to use its best
efforts to cause him to be elected and reelected a member of the Board
throughout the Employment Period.
3. EMPLOYMENT DUTIES. During the Employment Period, the Executive
shall have such duties and responsibilities as are assigned to the Executive by
the Board and are consistent with his status as President and Chief Executive
Officer and shall take direction from and report to the Board. During the
Employment Period, the Executive agrees to devote substantially all of his
business attention and time to the business and affairs of the Company and its
subsidiaries, and to use the Executive's best efforts to perform faithfully the
duties and responsibilities assigned to the Executive under this Section 3. It
is expressly understood that (a) the Executive may devote a reasonable amount of
time to the management of his investments and affairs and to such industry
associations, charitable and civic endeavors as shall not materially interfere
with the obligations set forth in the preceding sentence, and (b) with the prior
approval of the Board (which shall not be unreasonably withheld and subject to
the non-competition provision in Section 9), the Executive may serve as a member
of one or more boards of directors of companies that are not affiliated with the
Company. The Executive shall have the right during the Employment Period to
serve as a director of Alteon, Inc.
4. COMPENSATION.
4.1 BASE SALARY. During the Employment Period, the Company
shall pay the Executive a base salary (the "Base Salary") of no less than
$350,000 per annum, payable in accordance with the Company's normal payroll
practices for senior executives. The Base Salary shall be reviewed at least once
each year for increase (but not decrease) in accordance with the Company's
regular review of senior executive salaries, and if so increased, then such
increased amount shall become the Base Salary.
4.2 INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, the Executive shall be eligible to participate in all bonus,
short- or long-term incentive plans and programs established by the Board from
time to time and in existence on or after the Effective Date for the benefit of
senior executives of the Company. The Company and the Executive shall design and
implement an annual bonus plan during the 3-month period following the Effective
Date, and it is understood that the Executive's target bonus opportunity under
such plan shall be approximately 50% of his Base Salary or in accordance with
market practices. During the Employment Period, the Executive shall be eligible
to participate in all savings and retirement plans and programs as the plan
terms allow maintained by the Company from time to time on or after the
Effective Date for the benefit of employees and/or senior executives or
employees of the Company. In addition, the Executive shall be eligible to
receive annual or periodic awards under the Company's 2002 Omnibus Securities
and Incentive Plan or any other such plan in which senior executives may become
eligible to participate from time to time; provided, however, that such awards
shall be granted in the sole discretion of the Company, but further provided,
that in determining whether the Executive should receive any such annual or
periodic awards, the fact that the Executive's stock option granted under
Section 4.5 or any other stock-
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based award granted to the Executive after the Effective Date that was subject
to any dilution shall be given great weight by the Company.
4.3 WELFARE BENEFIT PLANS. During the Employment Period
and as of the Effective Date, the Executive and/or the Executive's family as the
terms allow shall participate in all welfare benefit plans, programs and
arrangements maintained by the Company from time to time on or after the
Effective Date for the benefit of senior executives or employees of the Company.
4.4 VACATION; FRINGE BENEFITS. During the Employment
Period, the Executive shall be entitled to five (5) weeks of vacation annually,
and any accrued and unused vacation shall be carried over to the next year
without any reduction; provided, however, that the maximum carryover on a
year-to-year basis shall be five weeks. During the Employment Period, the
Executive shall receive such perquisites and fringe benefits as are generally
provided to senior executives of the Company. During the Employment Period, the
Company shall reimburse Executive's reasonable travel expenses for round trips,
up to one round trip weekly, from the Company's headquarters to Princeton, New
Jersey. During the Employment Period, the Company shall reimburse the Executive
for reasonable travel expenses for his wife to accompany him on extended
business trips required to be taken in carrying out his duties and
responsibilities. Air travel shall be business class, and if business class is
not available, then the Executive may travel first class if the flight is
outside of the contiguous United States. During the Employment Period, the
Company shall annually pay all fees and membership dues necessary to permit the
Executive to become a member of one dining club. The Executive shall also be
reimbursed for reasonable business expenses in accordance with Company policy.
Any benefit received by the Executive under this Section 4.4 that is taxed as
compensation (other than vacation pay, if any) will be "grossed up" by the
Company for all applicable taxes.
4.5 STOCK OPTION GRANT.
(a) On the Effective Date, the Executive shall be
granted stock options entitling the Executive to acquire 800,000 shares of the
Company's class A common stock at an exercise price equal to the Fair Market
Value on the date of grant. Such options shall be for a term of 10 years from
the Effective Date, and upon death or termination of employment, shall provide
for continued exercisability of options vested prior to death or termination for
the balance of the term. The options shall be governed by one or more stock
option agreements, the terms of which shall not be inconsistent with this
Section 4.5 and otherwise shall be consistent with the terms of the Company's
2002 Omnibus Securities and Incentive Plan ("Plan"). Shares, if any, issuable
upon exercise of options not granted under the Plan shall be requested promptly
following the Effective Date under the Securities Act of 1933 on Form S-8. The
options shall be or become exercisable, i.e., shall vest, in respect of the
shares underlying such options as follows:
1. 200,000 shares on the Effective Date;
2. 100,000 shares on the first anniversary
of the Effective Date;
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3. 100,000 shares on the second anniversary
of the Effective Date;
4. 100,000 shares on the third anniversary
of the Effective Date;
5. 100,000 shares on the earlier of four
years from the date of
grant or the First
Performance Date;
6. 100,000 shares on the earlier of four
years from the date of
grant or the Second
Performance Date;
7. 100,000 shares on the earlier of four
years from the date of
grant or the Third
Performance Date.
(b) The "First Performance Date" shall be the
first trading day after the Fair Market Value of the Class A common stock has
been at least $14.00 per share on each of the immediately preceding forty-five
(45) consecutive trading days.
(c) The "Second Performance Date" shall be the
first trading day after the Fair Market Value of the class A common stock has
been at least $21.00 per share on each of the immediately preceding forty-five
(45) consecutive trading days.
(d) The "Third Performance Date" shall be the
first trading day after the Fair Market Value of the class A common stock has
been at least $28.00 per share on each of the immediately preceding forty-five
(45) consecutive trading days.
(e) A "trading day" shall mean a day when
(i) trading generally occurs during normal business hours on or by the New York
Stock Exchange and the NASDAQ Stock Market and (ii) trading of any securities of
the Company shall not have been suspended on any exchange or in any
over-the-counter market.
(f) The Executive shall forfeit any unvested
options upon termination of employment with the Company for any reason, except
as otherwise specifically provided in this Agreement.
(g) If there is a Change in Control (as defined
in the Plan as in effect as of the date of this Agreement), then all outstanding
unvested stock options held by the Executive as of the date of such Change in
Control shall immediately vest as of the date of such Change in Control and
shall remain exercisable until the earlier of (i) the end of the 90-day period
following the date of the termination of the Executive's employment with the
Company or (ii) the tenth anniversary of the date of grant of such option.
(h) "Fair Market Value" shall mean, as of any
specified date, the average of the reported high and low sales prices of the
class A common stock on the stock exchange composite tape on that date, or if no
sales prices are reported on that date, on the last preceding date on which such
prices of the class A common stock are so reported. If the class A common stock
is traded over the counter at the time a determination of its fair market value
is
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required to be made hereunder, its fair market value shall be deemed to be
equal to the average between the reported high and low or closing bid and asked
prices of class A common stock on the most recent date on which the class A
common stock was publicly traded. In the event class A common stock is not
publicly traded at the time a determination of this value is required to be made
hereunder, the determination of its fair market value shall be made by the Board
in such manner as it deems appropriate.
4.6 RELOCATION. The Company shall reimburse Executive up
to a total of $50,000 for (i) his reasonable moving expenses in connection with
his relocation from Princeton, New Jersey to the Boston area and (ii) expenses
incurred in finding and securing a residence in the Boston area, all subject to
presentation of appropriate receipts. These expenses may include travel expenses
for the Executive and his spouse between Princeton, New Jersey and Boston, hotel
or temporary housing costs, costs associated with home furnishings rental and/or
purchase, real estate brokerage fees and other similar expenses.
4.7 POWER OF BOARD UNIMPAIRED. Nothing in this Section 4
shall impair the ability of the Board in its discretion to amend or eliminate
any plan or policy described or referred to in this Section 4, provided,
however, that any such amendment or elimination shall not adversely affect,
impair or impact any outstanding stock-based award held by the Executive as of
the date of such amendment or elimination.
5. TERMINATION.
5.1 DEATH OR DISABILITY. The Employment Period shall
terminate automatically upon the Executive's death. If, during the Employment
Period, the Disability (as defined below) of the Executive has occurred, the
Company may give to the Executive written notice of its intention to terminate
the Executive's employment due to such Disability. The Executive's employment
with the Company shall be terminated by the Company on the 30th day after
receipt by the Executive of such notice (the "Disability Effective Date"), if,
within such thirty (30) day period, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" means a physical or mental disability resulting in the inability of
the Executive to substantially perform his duties full-time under this
Agreement, as set forth in Section 3, during any consecutive six-month period,
as determined by a licensed physician mutually selected by the Company and the
Executive or his legal representative. If the Company and the Executive cannot
agree as to the selection of a licensed physician for purposes of making such
determination, then each party shall select a licensed physician and these two
licensed physicians shall select a third licensed physician who shall make such
determination. Nothing in this Section 5.1 is intended to be inconsistent with
applicable federal or state law regarding disabilities, if any.
5.2 CAUSE.
(a) The Company may terminate the employment of
the Executive for Cause by written notice to the Executive. Upon receipt of such
written notice, the Executive shall have the right to seek (within ten (10)
business days) an opportunity to be heard by the Board, which opportunity the
Board shall arrange as promptly and in such format as directors'
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schedules permit. For purposes of this Agreement, "Cause" shall have the meaning
set forth in the Plan in effect as of the date of this Agreement.
(b) In the event the Company wishes to terminate
the Executive for breach of this Agreement pursuant to Section 5.2(a), and such
breach is capable of being cured, the Company shall provide the Executive with
written notice specifying in reasonable detail the services or matters which it
contends the Executive has not adequately performed, or the material provisions
of this Agreement of which the Executive is in violation and the acts
constituting such violation, why the Company has Cause to terminate this
Agreement and what the Executive should do to adequately perform his obligations
hereunder. If within ten (10) days of receipt of the notice the Company
reasonably believes that the Executive has performed the required services or
has modified his performance to correct the matters complained of, the
Executive's breach will be deemed cured, and the Executive shall not be
terminated. However, if the nature of the service not performed by the Executive
or the matters complained of are such that more than ten (10) days are
reasonably required to perform the required service or to correct the matters
complained of, then his breach will be deemed cured if the Executive commences
to perform such service or to correct such matters within the ten (10) day
period and thereafter diligently prosecutes such performance or correction to
completion in a time frame established by the Company, in its reasonable
judgment. If the Executive does not perform the required services or modify his
performance to correct the matter complained of within the ten (10) day period
or the Company-approved extension thereof, the Company shall have the right to
terminate this Agreement at the end of the ten (10) day period or extension
thereof. If the Company, in its reasonable judgment, determines that the
Executive's breach of this Agreement pursuant to Section 5.2(a) is not capable
of being cured, and in the event of any breach of Section 9 or of any of
Sections 1 through 5 of the Protection of Company Property Agreement
(hereinafter defined in Section 8), the Company may terminate the Executive
immediately for Cause by written notice to the Executive.
5.3 WITHOUT CAUSE. During the Employment Period, upon
written notice given to the Executive, the Company may terminate the Executive's
employment hereunder other than for Cause.
5.4 TERMINATION BY EXECUTIVE FOR GOOD REASON. During the
Employment Period, the Executive may terminate his employment hereunder by
written notice for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean: (a) the reduction of the Executive's Base Salary or target bonus
opportunity without the Executive's prior written consent; (b) the diminution,
without his consent, of the Executive's title, authority, duties or
responsibilities as specified in Section 3, or the assignment of duties and
responsibilities that are inconsistent with his position as President and Chief
Executive Officer of the Company, or if the Executive reports to anyone other
than the Board; (c) the Company requiring the Executive, without his consent, to
be based in any office or location other than the Company's headquarters office,
and such headquarters shall not be located during the Employment Period outside
of (i) a 00-xxxx xxxxxx xx Xxxxxxxxx, Xxxxxxxxxxxxx or (ii) a 60-mile radius of
Princeton, New Jersey; (d) the material breach by the Company of any provision
of this Agreement which has not been cured within thirty (30) days after a
notice of termination has been given by the Executive to the Company; (e)
failure by the Board to have elected the Executive Chairman of the Board on or
before July 1, 2005, or the removal of the Executive as Chairman of the Board
during the
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Employment Term; or (f) failure of the Company to obtain the assumption in
writing of its obligations under this Agreement by any successor within 30 days
of such succession.
5.5 TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. During
the Employment Period the Executive may terminate employment hereunder by
written notice without Good Reason, and such termination shall not be deemed to
be a breach of this Agreement.
5.6 DATE OF TERMINATION. "Date of Termination" shall
mean:
(a) if the Executive's employment is terminated
by the Company, other than for Cause or Disability, the Date of Termination
shall be the date on which the Company notifies the Executive in writing of such
termination under Section 5.3;
(b) if the Executive's employment is terminated
by the Company for Cause, the Date of Termination shall be at the end of the
10-day period or any extension given under Section 5.2;
(c) if the Executive's employment is terminated
for Good Reason, the Date of Termination shall be the thirtieth day after
written notice of termination is given (provided that the Company has not cured
its breach of this Agreement prior to such thirtieth day);
(d) if the Executive's employment is terminated
voluntarily by the Executive other than for Good Reason, the date of termination
shall be the date on which the Executive notifies the Company of such
termination (or the date on which the Company otherwise first learns of such
voluntary termination);
(e) if the Executive's employment is terminated
by reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be; and
(f) if the Executive's employment is terminated
by reason of the fact that the Company has not extended the Employment Period
under Section 1.2, the Date of Termination shall be the date the Employment
Period ends.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
6.1 CAUSE, DEATH, DISABILITY OR VOLUNTARILY BY THE
EXECUTIVE. If the Executive's employment is terminated by reason of the
Executive's death, the Executive's Disability, for Cause by the Company or by
the Executive voluntarily (other than for Good Reason), the Executive, or the
Executive's legal representative, as the case may be, shall be entitled to
receive (a) the Executive's Base Salary through the Date of Termination; (b) any
compensation previously deferred by the Executive (together with any accrued
interest thereon through the Date of Termination) and not yet paid by the
Company, and any bonus earned in the previous year and not yet paid by the
Company; (c) any accrued vacation pay through the Date of Termination not yet
paid by the Company; and (d) a pro rata bonus for the year of termination
calculated and payable after year-end, if any, provided, however that no such
pro rata bonus shall be paid to the Executive if his employment is terminated
for Cause or voluntarily by the
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Executive without Good Reason (such amounts specified in clauses (a), (b), (c)
and (d) are hereinafter referred to as the "Accrued Obligations"). Accrued
Obligations shall not include other compensation not described in the preceding
sentence accrued but not yet paid through the Date of Termination. All such
Accrued Obligations except for that specified in clause (d) shall be paid to the
Executive or to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within thirty (30) days after the Date of Termination. In addition
to the foregoing, if the Executive's employment is terminated by reason of the
Executive's death or Disability, unvested options granted to the Executive
during his employment which are not options specified in Section 4.5(a)(5)-(7)
of this Agreement ("Performance Options") shall immediately vest and remain
exercisable for one (1) year from the Date of Termination. In the case of death,
the Executive's family shall be entitled to receive any family death benefits
provided by the Company to surviving families of senior executives. In the case
of the Executive's Disability, the Executive shall be entitled as of the
Disability Effective Date to receive the disability benefits provided by the
Company to disabled senior executives.
6.2 OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR BY THE
EXECUTIVE FOR GOOD REASON. If, during the Employment Period, the Company
terminates the Executive's employment (other than for Cause, death or
Disability), or the Company does not extend the Employment Period under Section
1.2, or the Executive terminates his employment for Good Reason, the Executive
shall be entitled to receive, within thirty (30) days after the Date of
Termination, the following:
(a) The Company shall pay to the Executive all
Accrued Obligations.
(b) The Company shall pay to the Executive in
cash a lump sum amount equal to the Executive's then current Base Salary for one
year provided, however, that if the Executive's employment terminates during the
2-year period beginning on the date of a Change in Control (as defined in the
Company's 2002 Omnibus Securities and Incentive Plan), then the Executive shall
receive a lump sum payment equal to 200% of the Executive's then current Base
Salary.
(c) The Company shall pay its proportionate
share of the cost of the Executive's COBRA continuation coverage for a period of
12 months or 24 months if the Executive's employment terminates during the
2-year period beginning on the date of Change in Control (as defined in the
Plan).
(d) Unvested options granted to the Executive
during his employment which are not Performance Options shall immediately vest
and remain exercisable for ninety (90) days from the Date of Termination.
(e) The parties recognize and agree that, if
the Company terminates the Executive's employment during the Employment Period
other than for Cause, death or Disability or if the Executive terminates his
employment during the Employment Period for Good Reason, the actual damages to
the Executive would be difficult if not impossible to ascertain and agree that
the Executive's sole remedy shall be a right to receive amounts determined and
paid in accordance with the provisions of this Section 6.2. The Executive shall
not be required to mitigate the amount of any payment provided for in this
Section 6.2 by
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seeking other employment or otherwise, nor shall any compensation earned by the
Executive in other employment or otherwise reduce the amount of any payment
provided for in this Section 6.2.
6.3 FULL SATISFACTION. The payments actually received,
accepted and retained by the Executive (or his legal representatives) under this
Agreement that are attributable to the termination of the Executive's employment
shall be in full and complete satisfaction of any and all claims the Executive
(or his legal representatives) may have against the Company which are, in any
way related to the employment relationship (including the Executive's hiring)
between the Executive and the Company or the termination of that relationship.
6.4 OTHER PAYMENTS. Notwithstanding anything to the contrary
contained herein (including without limitation Section 6.3), any compensation or
benefits, if any, which are vested in the Executive or which the Executive is
otherwise entitled to receive under any plan, program or arrangement of the
Company before, at or subsequent to the Date of Termination shall be payable in
accordance with the terms and provisions of such plan, program or arrangement.
Any incentive, savings, retirement, or welfare or fringe benefit plan or program
may be changed by the Company in its discretion, provided, however, that such
change shall not adversely affect, impair or impact the Executive (unless such
change is broad-based and applies to all current and former employees of the
Company).
7. TAXES. The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes or other withholdings as shall
be required or permitted to be withheld pursuant to any applicable law or
regulation, the operation of any incentive, savings, retirement, or welfare or
fringe benefit plan, or by written agreement with the Executive. In addition, if
any payment to the Executive would trigger "golden parachute" excise taxes
pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision, a gross-up payment will be provided in an
amount sufficient to make the Executive whole for applicable excise taxes and
all income, employment, additional excise taxes or any interest or penalties
with respect to such gross-up payment (the "Gross-Up Payment"). All
determinations concerning whether a Gross-Up Payment is due to the Executive and
the amount of such Gross-Up Payment will be made by a nationally recognized
certified public accounting firm (the "Accounting Firm") selected by the Company
and subject to the approval of the Executive, such approval not to be
unreasonably withheld. If the Accounting Firm determines that any Gross-Up
Payment is due to the Executive, the Company shall pay the required Gross-Up
Payment to the Executive or on the Executive's behalf within ten (10) business
days after receipt of such determination and calculations. If the Accounting
Firm determines that no "golden parachute" excise taxes would be triggered, it
will, at the same time as it makes such determination, furnish the Executive
with an opinion that the Executive has substantial authority not to report any
excise tax on the Executive's federal, state, local income or other tax return.
Any determination by the Accounting Firm as to the amount of the Gross-Up
Payment will be binding upon the Company and the Executive.
8. CONFIDENTIAL INFORMATION. The Executive shall execute and
deliver to the Company on or prior to the Effective Date an Employee Agreement
Concerning Protection of Company Property and the Arbitration of Legal Disputes
("Protection of Company Property Agreement") in the form attached hereto, the
terms of which are incorporated herein by
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reference; provided, however, that to the extent that a term or provision of
this Agreement conflicts with any term or provision of the Protection of Company
Property Agreement, such term or provision of this Agreement shall prevail over
such term or provision of the Protection of Company Property Agreement.
9. NON-COMPETITION. During the Executive's employment with the
Company, and for two years thereafter, the Executive agrees that, without the
prior written consent of the Company, (a) the Executive shall not, directly or
indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee, or in any other capacity,
carry on or engage in, or advise or have any financial interest in any company
that carries on or engages in, business in North America which is in
competition, directly or indirectly, with the Business of the Company or its
subsidiaries; (b) the Executive shall not, on his own behalf or on behalf of any
person, firm or company, directly or indirectly, solicit for employment any
person that has been employed by the Company or any of its subsidiaries at any
time during the one (1) year period immediately preceding such solicitation,
provided, however, that this provision does not apply to (i) any employee hired
by the Company during the 90-day period following the Effective Date and who was
first presented to the Company by the Executive, and (ii) the Executive's
personal administrative assistant and/or secretary; and (c) the Executive shall
not, on his own behalf or on behalf of any competitor in the Business, directly
or indirectly, solicit or divert the business of any person or entity which was
a customer (or a prospective customer) of the Company or any of its subsidiaries
at any time during the Executive's employment with the Company or as of the
Executive's Date of Termination. The "Business" of the Company or its
subsidiaries shall mean the development, manufacture and marketing of oxygen
therapeutics for intravenous use in humans or animals. Anything in this Section
9 to the contrary notwithstanding, the Executive may invest in stock, bonds, or
other securities of any business in competition with the Business of the Company
(but without otherwise participating in such competition with the Company) if
(a) such stock, bonds, or other securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended, and (b) his investment does not
exceed, in the case of any class of the capital stock of any one issuer, three
percent (3%) of the issued and outstanding shares, or, in the case of other
securities, three percent (3%) of the aggregate principal amount thereof issued
and outstanding.
10. INDEMNIFICATION.
(a) During the Employment Period, the Company agrees that if
the Executive is made a party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he is or was a
director, officer or employee of the Company or is or was serving at the request
of the Company as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive's alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Company to the fullest extent legally
permitted or authorized by the Company's certificate of incorporation or bylaws
or resolutions of the Board or, if greater, by the laws of the State of
Delaware, against all cost, expense, liability and loss (including, without
limitation, attorney's fees, judgments, fines, ERISA excise taxes or penalties
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and amounts paid or to be paid in settlement) reasonably incurred or suffered by
the Executive in connection therewith, and such indemnification shall continue
as to the Executive even if he has ceased to be a director, member, employee or
agent of the Company or other entity and shall inure to the benefit of the
Executive's heirs, executors and administrators. The Company shall advance to
the Executive all reasonable costs and expenses incurred by him in connection
with a Proceeding within 20 days after receipt by the Company of a written
request for such advance. Such request shall include an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.
(b) Neither the failure of the Company (including its Board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any proceeding concerning payment of amounts claimed by the
Executive under Section 10(a) that indemnification of the Executive is proper
because he has met the applicable standard of conduct, nor a determination by
the Company (including its Board, independent legal counsel or stockholders)
that the Executive has not met such applicable standard of conduct, shall create
a presumption that the Executive has not met the applicable standard of conduct.
(c) The Company also agrees that if the Executive is made a
party, or is threatened to be made a party, to any action, suit or proceeding by
reason of the termination of his employment with his prior employer or his
accepting employment with the Company, he shall be indemnified and held harmless
by the Company against all cost, expense, liability and loss (including, without
limitation, attorney's fees) reasonably incurred or suffered by the Executive in
connection therewith.
(d) The Company agrees to continue and maintain a directors
and officers' liability insurance policy covering the Executive to the extent
the Company provides such coverage for its other executive officers.
11. PREPARATION OF AGREEMENT. The Company shall, upon the
submission of appropriate invoices by the Executive, pay all reasonable costs
(including attorneys' fees) incurred by the Executive in connection with the
preparation of this Agreement.
12. SURVIVAL; INJUNCTIVE RELIEF.
12.1 SURVIVAL. The Executive agrees that Sections 8, 9 and 10
of this Agreement shall survive the termination of (a) this Agreement, (b) the
Employment Period and/or (c) the Executive's employment with the Company. The
Executive acknowledges that the Company has no adequate remedy at law and would
be irreparably harmed if the Executive breaches or threatens to breach any of
the provisions of Section 8 or Section 9 of this Agreement, and, therefore,
agrees that the Company shall be entitled to seek injunctive relief to prevent
any such breach or threatened breach thereof, and to seek specific performance
of the terms of such sections (in addition to any other legal or equitable
remedy the Company may have). The Executive further agrees that he shall not, in
any equity proceeding relating to the enforcement of Section 8 or Section 9 of
this Agreement, raise the defense that the Company has an adequate remedy at
law. Nothing in this Agreement shall be construed as prohibiting the Company
from
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pursuing any other remedies at law or in equity that it may have under and in
respect of this Agreement or any other agreement or understanding.
12.2 REASONABLE RESTRICTIONS. All of the provisions of this
Agreement, including, without limitation, Sections 8 and 9, are intended by the
parties hereto as separate and divisible provisions and if, for any reason, any
one of them (or part thereof) is held to be invalid or unenforceable neither the
validity nor the enforceability of any other provision (or part thereof) shall
be affected thereby. The Executive agrees that the restrictions imposed by
Section 9 are reasonable in scope and duration. The Executive understands that
the provisions of Sections 8 and 9 of this Agreement may affect or limit the
Executive's ability to earn a livelihood in a business similar to the businesses
engaged in by the Company (or any of its subsidiaries), but the Executive
nevertheless believes and agrees that the Executive shall receive (or shall have
received) sufficient consideration, remuneration and other benefits from the
Company to make enforceable the restrictions and limitations contained in
Sections 8 and 9 of this Agreement.
13. JUDICIAL CONSTRUCTION. If for any reason any court of
competent jurisdiction shall find the provisions of Section 9 of this Agreement
unreasonable in scope or duration, the Executive and the Company agree that the
restrictions and limitations contained in Section 9 shall be construed by the
court so that they are effective and enforceable to the fullest extent allowed
or allowable under the applicable law of any such jurisdiction. It is further
agreed by the Executive and the Company that any judicial restraints ordered by
any such court in respect of the restrictions and limitations imposed by Section
9 of this Agreement shall be applicable and effective only with respect to the
particular jurisdiction in which such order is made.
14. SUCCESSORS. This Agreement is personal to the Executive and
may not be assigned by the Executive. This Agreement shall inure to the benefit
of, and be enforceable by, the Executive and the Executive's legal
representatives, as applicable. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns.
14. NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by facsimile transmission, hand delivery to the
other party or by registered or certified mail, return receipt requested,
postage prepaid, to the addresses set forth below:
If to the Company: BIOPURE CORPORATION
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
With a copy to: General Counsel
If to the Executive: Xx. Xxxxxx X. Xxxxx
000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
With a copy to: Xxxxxxx Xxxxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
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000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Any such notice and communications shall be
effective when actually received by the addressee.
15. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without reference to principles of conflict of laws thereunder. The captions of
this Agreement are not part of the provisions hereof and shall not have any
force or effect. This Agreement may not be amended or modified otherwise than by
a written agreement executed by the parties hereto or their respective
successors, assigns and legal representatives. This Agreement contains the
entire understanding of the Company and the Executive with respect to the
subject matter hereof and supersedes any prior oral or written agreement between
the Company and the Executive. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the Executive has signed this Agreement
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be signed in its name and on its behalf, all as of the
day and year first above written.
BIOPURE CORPORATION
By:
-------------------------------------
Title:
-------------------------------
Name:
-------------------------------
-------------------------------------
Xxxxxx X. Xxxxx
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