Exhibit 10.13
EMPLOYEE RETENTION AGREEMENT
AGREEMENT by and between Enzon, Inc., a Delaware corporation (the
"Company"), and [ ](the "Employee"), dated as of the 3rd day of
August, 2001 (the "Effective Date").
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued services and dedication of the
Employee, notwithstanding the change in the chief executive officer of the
Company which occurred on May 31, 2001 ("Change in CEO"). The Board believes it
is imperative to diminish the inevitable distraction of the Employee by virtue
of the personal uncertainties and risks created by the Change in CEO and to
encourage the Employee's full attention and dedication to the Company and to
provide the Employee with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Employee will be
satisfied and are competitive with those of other corporations. Therefore, in
order to accomplish these objectives, the Board has caused the Company to enter
into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS
(a) Annual Base Salary. "Annual Base Salary" shall mean the salary which is
paid as consideration for the Employee's service during the calendar year,
excluding any special form of compensation, cash or otherwise, such as
incentives, commissions, bonuses, stock options or other stock based forms of
compensation or any type of fringe benefit.
(b) Cause. "Cause" shall mean:
(i) a material breach by the Employee of the Employee's duties (other
than as a result of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Employee's part, which is
committed in bad faith or without reasonable belief that such breach is in
the best interests of the Company;
(ii) the Employee's conviction of any crime involving moral turpitude
or any felony; or
(iii) the willful engaging by the Employee in conduct that is
demonstrably and materially injurious to the Company.
(c) Compensation Committee. "Compensation Committee" shall mean the
Compensation Committee of the Board or such other Committee of the Board as
shall administer the Company's option plans.
(d) Date of Termination. "Date of Termination" means (i) if the Employee's
Full-Time Employment with the Company is terminated by the Company for Cause, or
by the Employee for Good Reason, the date of receipt of the Notice of
Termination or any later date
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specified therein, as the case may be, and (ii) if the Employee's Full-Time
Employment with the Company is terminated by the Company other than for Cause,
the Date of Termination shall be the date on which the Company notifies the
Employee of such termination.
(e) Employment Period. "Employment Period" began as of May 31, 2001 and
ends as of the close of business on May 30, 2002.
(f) Full-Time Employment. "Full-Time Employment" shall mean employment for
at least 37.5 hours per week.
(g) Good Reason. "Good Reason" shall mean:
(i) a diminution in the Employee's position (including status,
offices, title and reporting requirements), authority, duties or
responsibilities or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Employee;
(ii) the Company's requiring the Employee to be based at any office or
location other than (A) the office located at 20 Kingsbridge Road,
Piscataway, New Jersey, or (B) any office which is less than twenty (20)
miles from such location;
(iii) a reduction by the Company in the Employee's Annual Base Salary
below the Annual Base Salary payable to by Employee as of the date the
Employment Period began; or
(iv) the failure by the Company to provide employee benefit plans,
programs, policies and practices (including, without limitation, retirement
plans and medical, dental, life and disability insurance coverage) to the
Employee and the Employee's family and dependents (if applicable) that
provide substantially similar benefits, in terms of aggregate monetary
value, to the Employee and the Employee's family and dependents (if
applicable) at substantially similar costs to the Employee as the benefits
provided by those plans, programs, policies and practices in effect as of
the date the Employment Period began.
For purposes of this Section 1(g), any good faith determination of "Good Reason"
made by the Employee shall be conclusive.
(h) Notice of Termination. Any termination by the Company for Cause or by
the Employee for Good Reason during the Employment Period shall be communicated
by Notice of Termination to the other party hereby given in accordance with
Section 8(b). For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Employee's employment under the provision so indicated and (iii) if the Date
of Termination is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than 15 days after the giving of
such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Employee or the Company
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hereunder or preclude the Employee or the Company from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
2. OBLIGATIONS OF THE COMPANY UPON TERMINATION
(a) If, during the Employment Period, the Company shall terminate the
Employee's Full-Time Employment with the Company other than for Cause or the
Employee shall terminate his Full-Time Employment with the Company for Good
Reason:
(i) The Company shall pay to the Employee, as severance, Employee's
Annual Base Salary in effect as of the Date of Termination. Such severance
payment shall be made during the twelve (12) months following the Date of
Termination in accordance with the Company's standard payroll and
withholding practice.
(ii) As severance, Employee will be entitled to participate in the
bonus pool which may be awarded to the officers of the Company for the year
in which such termination occurs (and any prior year with respect to which
a bonus was awarded to Employee but not paid) to the same extent as if
Employee's Full-Time Employment with the Company had not terminated during
the year for which the bonus is awarded; provided that the amount of the
bonus awarded to Employee will be pro rated based on the number of days
during such year on which Employee was employed with the Company on a
Full-Time basis. For example, if Employee's Full-Time Employment with the
Company covers six months of the year for which the bonus is awarded he
would receive 50% of the bonus he would have been entitled to receive if
his Full-Time Employment with the Company had covered the entire year.
Nothing contained herein shall guarantee that any bonus will be paid to
Employee and Employee will only receive a bonus as determined hereunder if
the other officers of the Company are awarded a bonus.
(iii) Effective as of the Date of Termination, the Company agrees to
provide Employee, and any spouse and/or dependents receiving medical and
dental coverage on the Date of Termination under a group health plan
sponsored by the Company ("Family Members"), with continued group health
coverage, including medical and dental coverage, as otherwise required
under applicable state continuation law and the Consolidated Omnibus Budget
Reconciliation Act of 1986, 29 U.S.C. ss.ss. 1161-1168; 26 U.S.C. ss.
4980B(f), as amended, and all applicable regulations (referred to
collectively as "COBRA"). The Company will reimburse Employee for the total
applicable premium cost for the medical and dental COBRA continuation
coverage elected for Employee and his or her Family Members for a period of
up to twelve (12) months commencing on the Date of Termination. Such
reimbursements shall be subject to all applicable taxes, including but not
limited to state and federal income and employment taxes.
(iv) In the event Employee obtains Full-Time Employment within twelve
(12) months of the Date of Termination with an entity other than the
Company, and Employee and his or her Family Members become eligible for a
group health plan of such entity providing medical and/or dental coverage,
the Company's obligation to reimburse Employee for the total applicable
premium cost of medical and dental continuation coverage elected shall
cease as of the date such coverage for Employee and his or her Family
Members under such group health plan becomes effective.
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(v) For purposes of the Company's Non-Qualified Stock Option Plan and
determining the vesting of options granted to Employee under such Plan, the
Compensation Committee has determined that Employee will continue to be
deemed to be an employee of the Company during the period in which he works
for the Company as a part-time employee or makes himself available to work
for the Company as a part-time employee pursuant to Section 3 hereof,
provided that if Employee refuses or fails to provide such part-time
services, or if Employee accepts Full-Time Employment with any other
employer during such period, or if Employee dies during such period, he
will no longer be deemed to be an employee of the Company for such purposes
as of the date he refuses or fails to provide such part-time services, or
the date he commences such Full-Time Employment, or the date he dies.
(vi) In the event that Employee dies after becoming fully entitled to
the severance payments provided in section 2(a)(i) hereof but before the
Employee actually receives all of such payments, any remaining unpaid
payments will be made first to the Employee's surviving spouse, if any, and
if there is no surviving spouse, to the Employee's estate. In the event
Employee dies after becoming entitled to the benefits provided in section
2(a)(iii) hereof, the Company shall continue to reimburse Employee's Family
Members for the premium cost for COBRA continuation coverage through the
date which is twelve (12) months from the Date of Termination.
(vii) [Hardman only: The Company shall waive, in writing, the
obligation of Employee pursuant to the letter dated ________, from the
Company to Employee, to reimburse the Company for relocation costs paid by
the Company on behalf of Employee in the amount of [_____________.]
(b) This Agreement is unfunded. No fund is being set aside or allocated
specifically for the purpose of this Agreement. All severance payments shall be
paid out of the general assets of the Company. Employee shall not have any
secured or preferred interest by way of a trust, escrow, lien or otherwise in
any specific asset of the Company for unpaid severance payments.
(c) No compensation or benefits shall be payable to Employer hereunder in
the event Employee's employment with the Company is terminated for any reason
after the Employment Period or in the event Employee's employment with the
Company is terminated for Cause during the Employment Period or in the event
Employee voluntarily terminates his employment with the Company other than for
Good Reason during the Employment Period. In the event Employee accepts
Full-Time Employment with an employer other than the Company during the twelve
(12) months following the Date of Termination, Employee shall promptly notify
the Company that he has accepted such Full-Time Employment and advise the
Company of the anticipated commencement date for such Full-Time Employment.
Employee shall no longer be entitled to receive compensation payable under
section 2(a)(i) hereof as of the date Employee commences Full-Time Employment
with such new employer.
3. OBLIGATIONS OF THE EMPLOYEE UPON TERMINATION
(a) In the event the Company terminates Employee's Full-Time Employment
other than for Cause during the Employment Period or Employee terminates his
Full-Time Employment with the Company for Good Reason during the Employment
Period, Employee will
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continue to work up to five (5) hours per month for the Company as a part-time
employee as requested by the Company for a period of one (1) year following the
Date of Termination.
(b) Employee may perform the part-time employment required pursuant to
Section 3(a) hereof by phone, if acceptable to the Company, or at the Company's
offices in Piscataway, New Jersey. The Company will use its best efforts to
aggregate services requested in a month.
4. NONCOMPETITION AND CONFIDENTIALITY
(a) The "Noncompete Period" shall commence upon execution of this Agreement
and continue through the date which is one year following the date on which
Employee's Full-Time Employment with the Company terminates. In consideration
for the benefits provided to Employee under this Agreement, during the
Noncompete Period, Employee will not directly, or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, employee,
consultant, representative or otherwise, become, or be interested in or
associated with any other person, corporation, firm, partnership or entity,
engaged to a significant degree in (x) developing, marketing or selling enzymes,
protein-based biopharmaceuticals or other pharmaceuticals that are modified
using polyethylene glycol ("PEG"), (y) developing, marketing or selling
single-chain antigen-binding proteins or (z) any technology or area of business
in which the Company becomes involved to a significant degree during the term of
Employee's Full-Time Employment with the Company . For purposes of the preceding
sentence to determine whether any entity is engaged in such activities to a
"significant degree" comparison will be made to the Company's operations at that
time. In other words, an entity will be deemed to be engaged in an activity to a
significant degree if the number of employees and/or amount of funds devoted by
such entity to such activity would be material to the Company's operations at
that time. Notwithstanding anything to the contrary contained herein, Employee
shall be entitled to work with or for (i) an entity that is developing,
marketing or manufacturing monoclonal antibodies, (ii) a licensee of the Company
if the only activities conducted by such licensee that would be covered by the
restrictions in this Section 4(a) are conducted pursuant to, and covered by, the
license granted by the Company and (iii) an entity that is engaged in a research
project that would be covered by the restrictions in this Section 4(a) if such
research project is not material to such entity and Employee would have no
direct involvement in such research project; provided in the case of employment
covered by clauses (ii) and (iii) Employee shall have provided the Board with a
detailed description of the proposed employment and obtained the written consent
of the Board (which consent will not be unreasonably withheld) prior to
commencing any such employment. Employee is hereby prohibited from ever using
any of the Company's proprietary information or trade secrets to conduct any
business, except for the Company's business, while Employee is employed by the
Company. The provision contained in the preceding sentence shall survive the
termination of Employee's employment with the Company. In the event Employee
breaches any of the covenants set forth in this Section 4(a), the running of the
period of restriction set forth herein shall recommence upon Employee's
compliance with the terms of this Section 4(a). Notwithstanding the above,
ownership by the Employee, as a passive investment, of less than five percent of
the outstanding shares of capital stock of any corporation listed on a national
securities exchange or publicly traded on Nasdaq shall not constitute a breach
of this Section 4(a).
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(b) Employee recognizes and acknowledges that information relating to the
Company's business, including, but not limited to, information relating to
patent applications filed or to be filed by the Company, trade secrets relating
to the Company's products or services, and information relating to the Company's
research and development activities, shall be and remain the sole and exclusive
property of the Company and is a valuable, special and unique asset of the
Company's business. The Employee will not, during or after the term of his
employment by the Company, disclose any such information to any person,
corporation, firm, partnership or other entity; provided, however, that,
notwithstanding the foregoing, during the term of Employee's Full-Time
Employment with the Company, Employee may make such disclosure if such
disclosure is in the Company's best interests, is made in order to promote and
enhance the Company's business, and sufficient arrangements are made with the
person or entity to whom such disclosure is made to ensure the confidentiality
of such disclosure. The provisions of this Section 4(b) shall survive the
termination of Employee's employment with the Company.
(c) Employee agrees that the covenants and agreements contained in this
Section 4 are the essence of this Agreement; that each of such covenants is
reasonable and necessary to protect and preserve the Company's interests,
properties and business; that irreparable loss and damage will be suffered by
the Company should Employee breach any of such covenants and agreements; that
given the unique nature of the Company's business such loss and damage would be
suffered by the Company regardless of where a breach of such covenants and
agreements occur, thus, making the absence of a geographical limitation
reasonable; that each of such covenants and agreements is separate, distinct and
severable not only from the other of such covenants and agreements but also from
the other and remaining provisions of this Agreement; that the unenforceability
or breach of any such covenant or agreement shall not affect the validity or
enforceability of any other such covenant or agreement or any other provision of
this Agreement; and that, in addition to other remedies available to it, the
Company shall be entitled to both temporary and permanent injunctions and any
other rights or remedies it may have, at law or in equity, to prevent a breach
or contemplated breach by Employee of any such covenants or agreements.
Notwithstanding anything herein to the contrary, if a period of time or other
restriction specified in this Section 4 should be determined to be unreasonable
in a judicial proceeding, then the period of time or other restriction shall be
revised so that the covenants contained in this Section 4 may be enforced during
such period of time and in accordance with such other restrictions as may be
determined to be reasonable.
(d) Employee agrees to assign and does hereby assign to the Company all
tangible and intangible property, including, but not limited to, inventions,
developments or discoveries conceived, made or discovered by Employee solely or
in collaboration with others during the term of Employee's employment with the
Company, which relate in any manner to the Company's business.
5. NONEXCLUSIVITY OF RIGHTS
Nothing in this Agreement shall prevent or limit the Employee's continuing
or future participation in any plan, program, policy or practice provided by the
Company and for which the Employee may qualify, nor shall anything herein limit
or otherwise affect such rights as the Employee may have under any contract or
agreement with the Company. Amounts which are vested benefits or which the
Employee is otherwise entitled to receive under any plan, policy,
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practice or program of or any contract or agreement with the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
6. FULL SETTLEMENT; DETERMINATIONS; RESOLUTION OF DISPUTES
(a) The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Employee or others. In no event
shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any of
the provisions of this Agreement and such amounts shall not be reduced whether
or not the Employee obtains other employment, except as otherwise provided in
this Agreement. The Company agrees to pay promptly upon invoice, to the full
extent permitted by law, all legal fees and expenses which the Employee may
incur as a result of any contest by the Company or the Employee of the validity
or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Employee concerning the amount of any payment pursuant to this Agreement) in the
event Employee shall prevail to a substantial extent in such contest action.
(b) The following claims procedure shall be the claims procedure for the
resolution of disputes and disposition of claims arising under this Agreement:
(i) The Employee or beneficiary of the Employee may file with the
Company a written request for benefits under this Agreement in a form and
manner prescribed by the Company. Within thirty (30) days after the filing
of such request, the Company shall notify the claimant in writing whether
the request is upheld or denied, in whole or in part. If the request is
denied, in whole or in part, the Company shall state in writing: (i) the
specific reasons for the denial; (ii) the specific references to the
pertinent provisions of this Agreement on which the denial is based; (iii)
a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and (iv) an explanation of the claims review
procedure set forth herein.
(ii) Within sixty (60) days after receipt of an initial benefit
determination in which benefits have been denied, in whole or in part, the
claimant may file with the Company a written request for a review and may,
in conjunction therewith, submit written issues and comments. Within thirty
(30) days after the request for review was filed, the Company shall make a
decision on the request for review and notify the claimant in writing of
the Company's decision.
(c) If there shall be any dispute between the Company and the Employee (i)
in the event of any termination of the Employee's Full-Time Employment by the
Company, whether such termination was for Cause, or (ii) in the event of any
termination of Full-Time Employment by the Employee, whether Good Reason
existed, then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was for Cause or
that the determination by the Employee of the existence of Good Reason was not
made in good faith, the Company shall pay all amounts, and provide all benefits,
to the
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Employee and/or the Employee's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section 2
hereof as though such termination were by the Company without Cause or by the
Employee with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amounts pursuant to this paragraph except upon
receipt of an undertaking satisfactory in form and substance to the Company by
or on behalf of the Employee to repay to the Company all such amounts to which
the Employee is ultimately adjudged by such court not to be entitled.
7. SUCCESSORS
(a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
8. MISCELLANEOUS
(a) This Agreement shall, except to the extent that federal law is
controlling, be governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have
no 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 and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
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If to the Company:
Enzon, Inc.
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20 Kingsbridge Road
Piscataway, New Jersey 08854
Attention: Corporate Secretary
with a copy to:
Dorsey & Whitney, LLP
250 Park Avenue
New York, NY 10177
Attention: Kevin Collins
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Employee or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) The Employee and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Employee and the
Company, the employment of the Employee by the Company is "at will" and, subject
to the terms of this Agreement, may be terminated by either the Employee or the
Company at any time.
(g) This Agreement contains the complete agreement between the parties and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way, including, without limitation, the Employee's Secrecy,
Invention Assignment, and Non-Competition Agreement, executed by the Employee on
__________.
(h) This Agreement may be executed in counterpart, each of which
counterpart shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Employee has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
ENZON, INC.
By:
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Name: Kenneth J. Zuerblis
Title: Vice President, Finance, Chief
Financial Officer and Secretary
EMPLOYEE
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Name: [ ]
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Schedule
The following individuals entered into an agreement with Enzon on August 3,
2001, substantially similar to the attached:
Norman Hardman
Josef Bossart
Kenneth Zuerblis
Jeffrey McGuire
Christopher Phillips
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