Exhibit 10.4
EMPLOYMENT AGREEMENT
This Agreement, dated November 26, 2001, by and between Keryx
Biopharmaceuticals, Inc. ("Keryx"), a Delaware corporation having an address at
101 Main Street, Cambridge, Massachusetts, United States of America, and
Benjamin Corn, an individual residing at 1 Zelda Street, Jerusalem, Israel (the
"Employee")
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee as Chief
Executive Officer and President of Keryx and the Employee desires to be employed
by the Keryx as Chief Executive Officer and President of Keryx, all pursuant to
the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, it is agreed as follows:
1. EMPLOYMENT DUTIES
(a) Keryx hereby engages and employs the Employee, and the Employee accepts
engagement and employment, as Chief Executive Officer and President of Keryx, to
direct, supervise and have responsibilities for the daily operations of Keryx,
including, but not limited to: (i) directing and supervising the business and
research and development efforts of Keryx; (ii) managing the other executives
and personnel of Keryx and (iii) evaluating, negotiating, structuring and
implementing business transactions with Keryx's customers, partners and
suppliers, and to perform such other services and duties as the Board of
Directors of Keryx shall determine. The Employee acknowledges and agrees that
the performance by the Employee of his duties hereunder may require significant
domestic and international travel by the Employee. In addition, the Employee
realizes that he may be required to spend a substantial amount of time in
Jerusalem, Israel.
(b) The Employee shall devote substantially all of his gainful time to the
discharge of his duties and responsibilities under this Agreement.
2. TERM
The Employee's employment hereunder shall commence on the Effective Date
and continue thereafter unless sooner terminated as hereinafter provided.
3. COMPENSATION
(a) As compensation for the performance of his duties on behalf of Keryx,
the Employee shall be compensated as follows:
(i) Keryx will grant the Employee options (the "Options") to purchase
150,000 shares of the Common Stock of the Corporation at an exercise price
equal to $5.31 per share (the "Exercise Price"), which options shall be
exercisable for a period of 10 years from the date of issuance. Should any
change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the total number and/or class of securities subject to such
options and (ii) the Exercise Price in order to reflect such change and
thereby preclude a dilution or enlargement under such options.
(ii) One-twelfth of the stock options shall vest each quarter over
three years following the actual date of grant.
1
(iii) At the discretion of the Board of Directors, the Employee shall
be entitled to an annual grant of subsequent stock options each of which
shall have the same antidilution protection as described in Section 3
paragraph (a)(i) above.
(b) Keryx shall reimburse the Employee for all normal, usual and necessary
expenses incurred by the Employee in furtherance of the business and affairs of
Keryx, including travel and entertainment, against receipt by Keryx of
appropriate vouchers or other proof of the Employee's expenditures and otherwise
in accordance with such Expense Reimbursement Policy as may from time to time be
adopted by the Board of Directors of Keryx.
(c) The Employee shall be, during the term of this Agreement, entitled to
thirty (30) working days of vacation per year.
(d) During the Term of his employment, the Employee shall be entitled to
participate in all employee and fringe benefit plans and programs generally
offered to other members of the Corporation's management who are similarly
situated, including, without limitation, any pension, profit sharing, incentive,
retirement, insurance, health and disability benefits and plans. Keryx reserves
its right to modify or terminate any of its employee and fringe benefit plans
and programs at any time.
(e) Keryx shall maintain as part of the its Bylaws a broad form indemnity
of all actions taken in good faith by its officers and directors.
(f) Subject to Section 10(b) below, the Employee must be an employee of
Keryx at the time any compensation is due in order to receive such compensation.
In addition, no options shall vest after the termination of this Agreement.
4. REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE AND KERYX
(a) The Employee hereby represents and warrants to Keryx as follows:
(i) Neither the execution and delivery of this Agreement nor the
performance by the Employee of his duties and other obligations hereunder
violate any statute, law, determination or award, or conflict with or
constitute a default under (whether immediately, upon the giving of notice
or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the Employee is a party or by which he is bound.
(ii) The Employee has the full right, power and legal capacity to
enter and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid and
binding obligation of the Employee enforceable against him in accordance
with its terms. No approvals or consents of any persons or entities are
required for the Employee to execute and deliver this Agreement or perform
his duties and other obligations hereunder.
(b) Keryx hereby represents and warrants to the Employee as follows:
(i) Keryx is duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite corporate power
and authority to own its properties and conduct its business in the manner
presently described.
(ii) Keryx has the full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
2
(iii) The execution, delivery and performance by Keryx of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, or upon the giving of
notice or lapse of time or both) the certificate of incorporation or
by-laws of Keryx, or any agreement or instrument to which Keryx is a party
or by which Keryx or any of its properties may be bound or affected.
5. CONFIDENTIAL INFORMATION
(a) The Employee agrees that during the course of his employment and at any
time thereafter, he will not disclose or make accessible to any other person,
Keryx's products, services and technology, both current and under development,
promotion and marketing programs, lists, trade secrets and other confidential
and proprietary business information of Keryx or any of its clients. The
Employee agrees: (i) not to use any such information for himself or others; and
(ii) not to take any such material or reproductions thereof from Keryx's
facilities at any time during his employment by Keryx, except as required in the
Employee's duties to Keryx. The Employee agrees immediately to return all such
material and reproductions in his possession to Keryx upon request and in any
event upon termination of employment. Nothing in the foregoing shall be
construed to prevent the Employee from disclosing or using any information which
the Employee can show by written documentation was in the public domain or
enters into the public domain through no improper act on the Employee's part or
on the part of any of Keryx's employees or was in his possession prior to his
joining Keryx or disclosed properly to the Employee after leaving Keryx.
(b) Except with prior written authorization by Keryx, the Employee agrees
not to disclose or publish any of the confidential, technical or business
information or material of Keryx, its clients or any other party to whom Keryx
owes an obligation of confidence, at any time during or for a period of two
years after his employment with Keryx except in the event of involuntary no
cause termination by Keryx or a termination by the Employee for cause.
6. NON-COMPETITION
(a) The Employee understands and recognizes that his services to Keryx are
special and unique and agrees that, during the term of this Agreement, and for a
period of 12 months from the date of termination of his employment hereunder, he
shall not in any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other business entity
("Person"), enter into or engage in any business directly competitive with
Keryx's business, either as an individual for his own account, or as a partner,
joint venturer, Employee, agent, consultant, salesperson, officer, director or
shareholder of a Person operating or intending to operate within the area that
Keryx is, at the date of termination, conducting its business (the "Restricted
Businesses"); provided, however, that nothing herein will preclude the Employee
from holding one percent (1%) or less of the stock of any publicly traded
company or from holding a position with a Person who does not engage in a
business directly competitive with the Restrictive Businesses so long as the
Employee works in a division of such Person which carries on a bona fide
business which is not directly competitive with the Restricted Businesses.
(b) For a period of 12 months after the termination of this Agreement, the
Employee shall not interfere with or disrupt or attempt to disrupt Keryx's
business relationship with any of its customers, or solicit any of the employees
of Keryx.
(c) In the event that the Employee breaches any provisions of this Section
6 or there is a threatened breach, then, in addition to any other rights which
Keryx may have, Keryx shall be entitled, without the posting of a bond or other
security, to injunctive relief to enforce the restrictions contained herein. In
the event that an actual proceeding is brought in equity to enforce the
provisions of this Section 6, the Employee shall not argue as a defense that
there is an adequate remedy at law nor shall Keryx be prevented from seeking any
other remedies which may be available.
3
7. OWNERSHIP OF PROPRIETARY INFORMATION
(a) The Employee agrees that all information that has been created,
discovered or developed by Keryx, its subsidiaries, affiliates, successors or
assigns (collectively, the "Affiliates") (including, without limitation,
information relating to the development of Keryx's business created, discovered,
developed or made know to Keryx or the Affiliates by Employee during the Term
and information relating to Keryx's customers, suppliers, consultants, and
licensees) and/or in which property rights have been assigned or otherwise
conveyed to Keryx or the Affiliates, shall be the sole property of Keryx or the
Affiliates, as applicable, and Keryx or the Affiliates, as the case may be,
shall be the sole owner of all patents, copyrights and other rights in
connection therewith, including but not limited to the right to make application
for statutory protection. All of the aforementioned information is hereinafter
called "Proprietary Information." By way of illustration, but not limitation,
Proprietary Information includes trade secrets, processes, discoveries,
structures, inventions, designs, ideas, works of authorship, copyrightable
works, trademarks, copyrights, formulas, data, know-how, show-how, improvements,
inventions, product concepts, techniques, information or statistics contained
in, or relating to, marketing plans, strategies, forecasts, blueprints,
sketches, records, notes, devices, drawings, customer lists, patent
applications, continuation applications, continuation-in-part applications, file
wrapper continuation applications and divisional applications and information
about Keryx's or the Affiliates' employees and/or consultants (including,
without limitation, the compensation, job responsibility and job performance of
such employees and/or consultants).
(b) The Employee further agrees that at all times, both during the Term and
after the termination of this Agreement, he will keep in confidence and trust
all Proprietary Information, and he will not use or disclose any Proprietary
Information or anything directly relating to it without the written consent of
Keryx or the Affiliates, as appropriate, except as may be necessary in the
ordinary course of performing his duties hereunder and except for academic,
non-commercial research purposes with the prior written approval of the Board of
Directors. The Employee acknowledges that the Proprietary Information
constitutes a unique and valuable asset of Keryx and each Affiliate acquired at
great time and expense, which is secret and confidential and which will be
communicated to Employee, if at all, in confidence in the course of his
performance of his duties hereunder, and that any disclosure or other use of the
Proprietary Information other than for the sole benefit of Keryx or the
Affiliates would be wrongful and could cause irreparable harm to Keryx or the
Affiliates, as the case may be.
Notwithstanding the foregoing, the parties agree that, at all such times,
Employee is free to use (i) information in the public domain not as a result of
a breach of this Agreement, (ii) information lawfully received from a third
party and (iii) Employee's own skill, knowledge, know-how and experience to
whatever extent and in whatever way he wishes, in each case consistent with his
obligations as Employee and that, at all times, Employee is free to conduct any
non-commercial research not relating to Keryx's business.
8. DISCLOSURE AND OWNERSHIP OF INVENTIONS
(a) During the Term, Employee agrees that he will promptly disclose to
Keryx, or any persons designated by Keryx, all improvements, inventions,
designs, ideas, works of authorship, copyrightable works, discoveries,
trademarks, copyrights, trade secrets, formulas, processes, structures, product
concepts, marketing plans, strategies, customer lists, information about Keryx's
or the Affiliates' employees and/or consultants (including, without limitation,
job performance of such employees and/or consultants), techniques, blueprints,
sketches, records, notes, devices, drawings, know-how, data, whether or not
patentable, patent applications, continuation applications, continuation-in-part
applications, file wrapper continuation applications and divisional
applications, made or conceived or reduced to practice or learned by him, either
alone or jointly with others, during the Term (all said improvements,
inventions, designs, ideas, works of authorship, copyrightable works,
4
discoveries, trademarks, copyrights, trade secrets, formulas, processes,
structures, product concepts, marketing plans, strategies, customer lists,
information about Keryx's or the Affiliates' employees and/or consultants,
techniques, blueprints, sketches, records, notes, devices, drawings, know-how,
data, patent applications, continuation applications, continuation-in-part
applications, file wrtapper continuation applications and divisional
applications shall be collectively hereinafter called "Inventions").
(b) The Employee agrees that all Inventions shall be the sole property of
Keryx to the maximum extent permitted by applicable law and to the extent
permitted by law shall be "works made for hire" as that term is defined in the
United States Copyright Act (17 USCA, Section 101). Keryx shall be the sole
owner of all patents, copyrights, trade secret rights, and other intellectual
property or other rights in connection therewith. Employee hereby assigns to
Keryx all right, title and interest he may have or acquire in all Inventions.
Employee further agrees to assist Keryx in every proper way (but at Keryx's
expense) to obtain and from time to time enforce patents, copyrights or other
rights on said Inventions in any and all countries, and to that end the Employee
will execute all documents necessary:
(i) to apply for, obtain and vest in the name of Keryx alone (unless
Keryx otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications
for revocation of such letters patent, copyright or other analogous
protection.
(c) The Employee's obligation to assist Keryx in obtaining and enforcing
patents and copyrights for the Inventions in any and all countries shall
continue beyond the Term, but Keryx agrees to compensate the Employee at his
normal and usual rate after the expiration of the Term for time actually spent
by the Employee at Keryx's request on such assistance.
5
9. NON-SOLICITATION
During the Term, and for 12 months thereafter, Employee shall not, directly
or indirectly, without the prior written consent of Keryx:
(a) solicit or induce any employee of Keryx or any Affiliate to leave the
employ of Keryx or any Affiliate or hire for any purpose any employee of Keryx
or any Affiliate or any employee who has left the employment of Keryx or any
Affiliate within six months of the termination of said employee's employment
with Keryx; or
(b) solicit or accept employment or be retained by any party who, at any
time during the Term, was a customer or supplier of Keryx or any Affiliate where
his position will be related to the business of Keryx; or
(c) solicit or accept the business of any customer or supplier of Keryx or
any Affiliate with respect to products similar to those supplied by Keryx.
10. TERMINATION
(a) This Employee's employment hereunder shall begin on the Effective Date
and shall continue for the period set forth in Section 2 hereof unless sooner
terminated upon the first to occur of the following events:
(i) (A) the death of the Employee; or
(B) the total disability of the Employee.
(ii) Termination by the Board of Directors of Keryx for just cause.
Any of the following actions by the Employee shall constitute just cause:
(A) Material breach by the Employee of
Sections 5, 6, 7, 8, or 9 of this Agreement;
or
(B) Material breach by the Employee of any
provision of this Agreement other than
Sections 5, 6, 7, 8 or 9 which is not cured
by the Employee within 30 days of notice from
Keryx; or in the event the breach is not
curable within 30 days; the commencement of
action(s) to cure within said 30 days and the
diligent pursuit of the cure thereafter,
provided such breach may be completely cured;
or
(C) Any action by the Employee constituting
gross negligence, recklessness or willful
misconduct in respect of the Employee's
obligation to Keryx which has or is likely to
result in material, economic damage to Keryx.
(iii) Termination by the Employee for just cause. Any of the following
actions or omissions by Keryx shall constitute just cause.
(A) Material breach by Keryx of any provision
of this Agreement which is not cured by Keryx
within 30 days of notice thereof from the
Employee; or
6
(B) A failure to elect or reelect the
Employee to the office of Employee of Keryx
or other change by Keryx of the Employee's
function, duties or responsibilities such
that the Employee is no longer the highest
ranking Officer of Keryx; or
(C) A "change in control," which shall mean a
merger or consolidation in which either more
than 50% of the voting power of Keryx is
transferred or Keryx is not the surviving
entity, or sale or other disposition of all
or substantially all the assets of Keryx; or
(D) Termination of the Employee's employment
other than for serious, willful misconduct in
respect of the Employee's obligations to the
Corporation, including, but not limited to,
final conviction for a felony or perpetration
of a common-law fraud which has or is likely
to result in material economic damage to the
Corporation; or
(E) Relocation to a geographic area without
the Employee's prior consent.
(iv) Termination by Keryx without cause. Notwithstanding anything in
this Agreement, Keryx may terminate the Employee's employment without cause
upon three (3) months prior notice.
(b) Upon termination by Keryx for any reason other than the reasons set
forth in subparagraph (i) or (ii) of paragraph (a) above, or upon termination by
the Employee for any reason set forth in subparagraph (iii) of paragraph (a)
above, then the Options shall immediately vest and become exercisable at the
option of the Employee.
11. NOTICES
Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given: when delivered personally against
receipt thereof; one (1) business day after being sent by Federal Express or
similar overnight delivery; or three (3) business days after being mailed
registered or certified mail, postage prepaid, return receipt requested, to
either party at the address set forth above, or to such other address as such
party shall give by notice hereunder to the other party.
7
12. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
13. ENTIRE AGREEMENT MODIFICATION
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
14. BINDING EFFECT
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, Keryx, its successors and assigns, and upon the
Employee and his legal representatives. This Agreement constitutes a personal
service agreement, and the performance of the Employee's obligations hereunder
may not be transferred or assigned by the Employee.
15. NON-WAIVER
The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
16. GOVERNING LAW
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law. Any litigation commenced pursuant to the terms
of the Agreement shall only be prosecuted and defended in the courts located in
Boston, Massachusetts. Additionally, the prevailing party in any litigation
shall be entitled to an additional award of the recoupment of its attorney fees,
cost and expenses.
17. REMEDIES FOR BREACH
The Employee understands and agrees that any breach of Sections 5, 6, 7, 8
or 9 of this Agreement by the Executive could cause irreparable damage to Keryx
and to the Affiliates, and that monetary damages alone would not be adequate
and, in the event of such breach, Keryx shall have, in addition to any and all
remedies of law, the right to an injunction, specific performance or other
equitable relief to prevent or redress the violation of Keryx's rights under
such Sections.
18. HEADINGS
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EMPLOYEE:
By: /s/ Benjamin Corn
----------------------------
Name: Benjamin Corn
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ Ira Weinstein
----------------------------
Name: Ira Weinstein
Title: Chief Operating Officer
9