Exhibit 10.1
IDERA PHARMACEUTICALS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into by and between
Sudhir Agrawal ("Executive") and Idera Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and is effective as of the 19th day of October,
2005 (the "Effective Date"). Executive and the Company are referred to herein
individually as a "Party", and collectively as the "Parties".
WHEREAS, the Company and Executive are a party to an Employment Agreement
dated April 1, 2002 (the "Original Employment Agreement");
WHEREAS, Executive became the Company's Chief Executive Officer on August
30, 2004;
WHEREAS, the Company desires to establish its right to the services of
Executive, in his capacity as Chief Executive Officer, on the terms and
conditions hereinafter set forth, and Executive is willing to accept such
employment on such terms and conditions; and
WHEREAS, the Company and Executive desire to enter into this Agreement, as
an amendment and restatement of the Original Employment Agreement and to
terminate the Original Employment Agreement, effective as of the Effective Date.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, Executive and the Company have agreed and do hereby agree as follows:
1. Definitions. The capitalized terms in this Agreement shall have the
meanings set forth in this Agreement or Appendix A attached hereto.
2. Engagement. The Company hereby agrees to employ Executive as its Chief
Executive Officer and Chief Scientific Officer, and Executive hereby accepts
such employment on the terms and conditions hereinafter set forth.
3. Employment Period. Executive's employment with the Company under this
Agreement shall commence on the Effective Date and shall continue until the
third anniversary of the Effective Date (as such period may be extended as set
forth below, the "Employment Period"), unless such employment is sooner
terminated as hereinafter provided. The Employment Period shall automatically be
extended for an additional year on each anniversary of the Effective Date;
provided however, that the
Employment Period shall not be extended if prior to any such anniversary of the
Effective Date either Party provides written notice to the other Party that the
then-current Employment Period shall not be extended.
4. Duties and Responsibilities.
(a) Responsibilities. During the Employment Period, Executive shall
perform his duties and responsibilities fully and faithfully as Chief Executive
Officer and Chief Scientific Officer, subject to the direction and supervision
of the Board of Directors of the Company (the "Board") and the terms and
conditions of this Agreement. During such period, Executive shall report solely
to the Board. Executive shall have the duties and responsibilities customarily
assigned to the Chief Executive Officer and Chief Scientific Officer with such
other duties not inconsistent therewith as may from time to time be assigned to
Executive by the Board. Executive agrees he shall devote substantially his full
business time and attention to, and exert his best efforts in, the performance
of his duties hereunder, so as to promote the business and best interests of the
Company and to comply with the Company's policies as in effect from time to
time. Notwithstanding the foregoing, Executive may engage in ordinary and
customary interactions with the scientific and academic communities, including
writing and reviewing articles and grants, editing books and attending
conferences.
(b) Location. Executive's principal place of business shall be in
Cambridge, Massachusetts, within 30 miles of Cambridge, Massachusetts or within
10 miles east of Worcester, Massachusetts (the "Permitted Area").
Notwithstanding the foregoing, Executive shall perform services for the Company
at such other locations where Executive's services might be required to be
performed from time to time, provided that Executive shall not be required to
perform services at a location other than in the Permitted Area for a period in
excess of 30 consecutive days without Executive's prior written consent, except
in the event of a change in location of the headquarters of the Company to a
site within the continental United States following a Change of Control.
5. Compensation. For all services rendered by Executive pursuant to this
Agreement, the Company shall pay Executive, and Executive agrees to accept, the
salary, bonuses and other benefits described below in this Section 5.
(a) Base Salary. During the Employment Period, the Company shall pay
Executive an annual base salary of $ 425,000.00 ("Base Salary") and such Base
Salary shall be payable at periodic intervals in accordance with the Company's
payroll practices for salaried employees. In accordance with Section 5(c) below,
the amount of Base Salary shall be reviewed and approved, if applicable, by the
Board or the Compensation
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Committee of the Board (the "Compensation Committee"; it being agreed that, for
purposes of this Agreement, any action that may be taken by the Board under this
Agreement may be taken by the Compensation Committee instead of the Board,
whether or not expressly provided in this Agreement) on at least an annual
basis, and any increases in the amount of Base Salary shall be effective as of
the date determined by the Board or the Compensation Committee. Executive's Base
Salary may be increased for any reason, including to reflect inflation or such
other adjustments as the Board or the Compensation Committee may deem
appropriate; provided, however, that Executive's Base Salary, as in effect on
the date hereof or as increased in accordance with the terms of this Agreement,
may not be subsequently decreased, except with the prior written consent of
Executive.
(b) Bonus. In addition to Base Salary, Executive shall be eligible to
receive, for each fiscal year of the Company ending with or within the
Employment Period, an annual bonus ("Bonus") equal to between 20% and 70% of
Executive's Base Salary on the last day of such fiscal year, whether pursuant to
a formal bonus or incentive plan or program of the Company or otherwise. Subject
to this Section 5(b) and Section 5(c) below, such Bonus shall be based on
criteria, and subject to the achievement of milestones, determined by the Board
or the Compensation Committee, in its discretion. Any Bonus earned by Executive
for service or performance rendered in any fiscal year within the Employment
Period shall be paid to Executive in accordance with the applicable plan or
program, if any, and the Company's policies governing such matters.
(c) Annual Compensation Review. Executive's compensation, consisting
of salary, equity incentive awards and bonuses, shall be reviewed annually by
the Board or the Compensation Committee.
(d) Medical, Dental and Other Healthcare Benefits. During the
Employment Period, Executive shall be eligible to participate in and receive
benefits under the Company's medical, dental or other healthcare plans, as in
effect from time to time, that are available to officers and employees of the
Company.
(e) Retirement Plan Benefits. Executive shall be entitled to
participate in the Company's tax-qualified and nonqualified retirement plans, as
in effect from time to time, that are available to officers and employees of the
Company and shall be entitled to receive the benefit of contributions to be
made, if any, by the Company for the benefit of Executive under the terms of the
applicable tax-qualified or nonqualified retirement plan.
(f) Incentive Plans. During the Employment Period, Executive shall be
eligible to receive all benefits, including those under stock option, equity
participation or bonus programs, to which key employees are or
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become eligible under such plans or programs as may be established by the
Company from time to time.
(g) Other Benefits. During the Employment Period, in addition to the
benefit plans contemplated by Sections 5(d), 5(e) and 5(f), Executive shall be
entitled to participate in the other benefit and fringe benefit programs
afforded by the Company to its executives from time to time. Executive shall be
entitled to paid vacation in accordance with the Company's standard vacation
policies in effect from time to time.
(h) Options. The Company has agreed to grant Executive from and after
the date hereof stock options to purchase shares of common stock as set forth
below if and when the milestones set forth below are achieved, to the extent
such milestones are achieved during the Employment Period. These stock options
shall not be granted until the achievement of the applicable milestones. The
exercise price of stock options granted hereunder shall equal the closing price
of the Company's common stock on the principal trading market on which the
Company's common stock is then traded on the date of the option grant or, if the
common stock is not then traded, the fair market value of one share of common
stock on the date of the option grant as determined in good faith by the Board
in its sole discretion. Options granted hereunder shall vest quarterly over a
three-year period with the first installment vesting upon the end of the first
quarterly period after the date of the option grant. These options shall be
evidenced by an option agreement that is consistent with the form of option
agreement generally used by the Company at the time of the grant and the terms
of this Agreement. The achievement of the milestones shall be determined by the
Board of Directors of the Company in its sole discretion.
(i) The Company shall grant stock options to purchase 200,000
shares of common stock upon full enrollment on or prior to December 31, 2005 of
the Company's ongoing phase 2 clinical trial of IMOxine in patients with
metastatic or recurrent clear cell renal carcinoma.
(ii) The Company shall grant stock options to purchase 200,000
shares of common stock upon the Company having cash and cash equivalents on or
prior to May 1, 2006 in excess of $30.0 million.
(iii) The Company shall grant stock options to purchase 200,000
shares of common stock upon the Company executing on or prior to a date to be
determined by the Board of Directors in its sole discretion a collaboration
agreement that includes specified minimum terms to be determined by the Board of
Directors in its sole discretion.
The number of shares of common stock issuable upon exercise of the options to be
granted hereunder shall be subject to appropriate adjustment for stock
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splits, stock dividends, combinations, recapitalizations and other similar
events affecting the common stock.
6. Termination of Employment. The remedies described in this Section 6 are
the exclusive remedies of the Executive in connection with the termination of
Executive's employment under this Agreement.
(a) Death. If Executive's employment hereunder is terminated by reason
of Executive's death, the Company shall pay Executive's designated beneficiary
or beneficiaries any Unpaid Obligations, plus the Termination Bonus Obligations;
provided that such amounts shall be paid in a lump sum cash payment within 30
days after the Company's receipt of notification of Executive's death.
Additionally, any stock options or other equity incentive awards previously
granted to Executive by the Company and held by Executive on the date of his
death shall vest as of such date to the extent such options or equity incentive
awards, as applicable, would have vested had Executive continued to be an
employee of the Company for a period ending on the final day of the Employment
Period in effect immediately prior to Executive's death. Executive's designated
beneficiary or beneficiaries shall be permitted to exercise such stock options
until the second anniversary of Executive's death; provided that such provision
shall not affect and shall be subject to (i) the provisions of the applicable
stock option agreement and/or equity incentive plan relating to the termination
of such stock options in connection with an Acquisition Event, a Change of
Control or a similar transaction involving the Company or (ii) the maximum term
of any such stock option (the "Option Limitation Provisions").
(b) Disability. The Company may terminate Executive's employment at
any time upon at least 30 days' prior written notice due to the Disability of
Executive. If Executive's employment hereunder is terminated due to Disability,
the Company shall pay Executive any Unpaid Obligations plus the Termination
Bonus Obligations; provided that such amounts shall be paid in a lump sum cash
payment within 30 days after the termination date. Additionally, any stock
options or other equity incentive awards previously granted to Executive by the
Company and held by Executive on the termination date shall vest as of such date
to the extent such options or equity incentive awards, as applicable, would have
vested had Executive continued to be an employee of the Company for a period
ending on the final day of the Employment Period in effect immediately prior to
such termination date. Executive shall be permitted to exercise such stock
options until the second anniversary of the termination date; provided that such
provision shall not affect and shall be subject to the Option Limitation
Provisions.
(c) Termination by the Company for Cause. The Company may terminate
Executive's employment under this Agreement for Cause at
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any time. If Executive's employment hereunder is terminated by the Company for
Cause, the Company shall pay Executive any Unpaid Obligations, provided that
such amounts shall be paid in a lump sum cash payment within 30 days after such
termination date. All options or other equity incentive awards, whether vested
or unvested on the termination date, shall expire and terminate on that date.
(d) Termination by the Company Other than for Death, Disability or
Cause. The Company may, at its option and upon 30 days' prior written notice,
terminate Executive's employment under this Agreement without Cause at any time.
If Executive's employment is terminated by the Company other than on account of
Executive's death, Disability, or for Cause, then the Company shall pay
Executive any Unpaid Obligations plus the Termination Bonus Obligations;
provided that such amounts shall be paid in a lump sum cash payment within 30
days after the termination date. In addition, subject to Section 6(h)(i) below,
the Company shall pay Executive (i) on the date six months and one day after the
termination date a lump sum payment in cash equal to six months of Executive's
Base Salary as in effect immediately prior to such termination and (ii) in
accordance with the Company's payroll practices applicable to salaried
executives, Executive's Base Salary as in effect immediately prior to such
termination for a period commencing on the date six months and one day after the
termination date and ending on the earlier of (x) the final day of the
Employment Period in effect immediately prior to such termination and (y) the
second anniversary of the termination date. Additionally, any stock options or
other equity incentive awards previously granted to Executive by the Company and
held by Executive on the termination date shall vest as of such date to the
extent such options or equity incentive awards, as applicable, would have vested
had Executive continued to be an employee of the Company for a period ending on
the final day of the Employment Period in effect immediately prior to such
termination. Executive shall be permitted to exercise such stock options until
the second anniversary of the termination date; provided that such provision
shall not affect and shall be subject to the Option Limitation Provisions.
(e) Termination by Executive for Good Reason. Executive may, for Good
Reason, terminate this Agreement upon 30 days' prior written notice to the
Company. If Executive's employment is terminated by Executive for Good Reason,
the Company shall pay Executive any Unpaid Obligations plus the Termination
Bonus Obligations; provided that such amounts shall be paid in a lump sum cash
payment within 30 days after the termination date. In addition, subject to
Section 6(h)(i) below, the Company shall pay Executive (i) on the date six
months and one day after the termination date a lump sum payment in cash equal
to six months of Executive's Base Salary as in effect immediately prior to such
termination
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and (ii) in accordance with the Company's payroll practices applicable to
salaried executives, Executive's Base Salary in effect immediately prior to such
termination for a period commencing on the date six months and one day after the
termination date and ending on the earlier of (x) the final day of the
Employment Period in effect immediately prior to such termination and (y) the
second anniversary of the termination date. Additionally, any stock options or
other equity incentive awards previously granted to Executive by the Company and
held by Executive on the termination date shall vest as of such date to the
extent such options or equity incentive awards, as applicable, would have vested
had Executive continued to be an employee of the Company for a period ending on
the final day of the Employment Period in effect immediately prior to such
termination. Executive shall be permitted to exercise such stock options until
the second anniversary of the termination date; provided that such provision
shall not affect and shall be subject to the Option Limitation Provisions.
(f) Voluntary Termination by Executive. Executive may, without Good
Reason, terminate Executive's employment upon 30 days' prior written notice to
the Company. If Executive's employment is terminated by Executive without Good
Reason, the Company shall pay Executive any Unpaid Obligations, provided that
such amounts shall be paid in a lump sum cash payment within 30 days after such
termination date. All options that remain unvested on such termination date
shall expire and terminate as of that date. Executive shall be permitted to
exercise such stock options until the first anniversary of the termination date;
provided that such provision shall not affect and shall be subject to the Option
Limitation Provisions.
(g) No Offset. Any compensation derived by Executive from any
subsequent employment or self-employment shall not be offset against or reduce
any amounts to which Executive is entitled under this Agreement.
(h) Change of Control.
(i) Continuation of Salary. If Executive's employment with the
Company is terminated by Executive for Good Reason or by the Company other than
for death, Disability or Cause in connection with, or within one year after the
effective date of, a Change of Control, in lieu of the severance payments
provided for in the third sentence of Section 6(d) or the third sentence of
Section 6(e), as applicable, the Company shall pay Executive a lump sum cash
payment in an amount equal to Executive's Base Salary as in effect immediately
prior to the termination date multiplied by the lesser of (x) the aggregate
number of years (or any portion thereof, calculated on a daily basis) remaining
in the Employment Period in effect immediately prior to such termination and (y)
two years. Such amounts shall be paid to Executive within 10 days after the
termination date.
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(ii) Parachute Payments. If all or any portion of the amounts
payable to Executive under this Agreement or otherwise are subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended or
a similar state tax or assessment, the Company shall pay to Executive an amount
necessary to place Executive in the same after-tax position as Executive would
have been had no such excise tax or assessment been imposed. The amount payable
pursuant to the preceding sentence shall be increased to the extent necessary to
pay income and excise taxes on such amounts. The determination of any amounts
payable under this Section 6(h)(ii) shall be made by an independent accounting
firm employed by the Company and such determination shall be final, binding and
conclusion on the Parties.
(iii) Acceleration of Vesting. Any provisions of this Agreement
regarding vesting of stock options notwithstanding, the vesting of all stock
options held by Executive shall be accelerated in full and such stock options
shall become fully exercisable upon the execution by the Company of an agreement
to effect an Acquisition Event or, if not previously accelerated in full, upon
the consummation of a Change of Control.
(i) Continuation of Benefits. If Executive's employment with the
Company is terminated pursuant to Section 6(d) or 6(e) (irrespective of whether
such termination follows a Change of Control), the Company shall provide, for
the period ending on the earlier of (i) the final day of the Employment Period
in effect immediately prior to such termination and (ii) the second anniversary
of the termination date, and at its sole cost and expense, Executive and his
eligible dependents (if any) with healthcare, disability, and life insurance
benefits substantially similar to those benefits Executive and his eligible
dependents (if any) were receiving immediately prior to the termination date;
provided, however, that
(A) the Company shall not be required to provide medical
coverage to the extent another employer of the Executive provides comparable
coverage,
(B) with respect to death and disability coverage, the
Company shall not be required to provide coverage to the extent another employer
of Executive provides comparable coverage; and shall pay the cost of
supplemental coverage if a new employer provides less than comparable coverage,
to allow Executive to purchase coverage to make total coverage comparable, and
(C) the coverage provided by the Company pursuant to this
Section 6(i) shall be in lieu of any other continued coverage for which
Executive or his dependents, if any, would otherwise be eligible pursuant to
COBRA.
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7. Proprietary Information; Company Documents and Materials.
(a) Proprietary Information. Executive acknowledges that during his
employment with the Company, Executive has occupied and will occupy a position
of trust and confidence with respect to Proprietary Information of the Company.
Executive understands that he possesses or will possess Proprietary Information
that is important to the Company's business and operation. Executive
acknowledges that such Proprietary Information is specialized, unique in nature
and of great value to the Company and its Affiliates, and that such information
gives the Company and its Affiliates a competitive advantage. Executive
acknowledges that all Proprietary Information is and shall remain the sole
property of the Company or any of its Affiliates. Executive shall not disclose
to others or use, whether directly or indirectly, any Proprietary Information,
or anything relating to such information, regarding the Company or any of its
Affiliates; provided, however that Executive's obligations under this Section 7
shall not apply to any information that (i) is or becomes known to the general
public under circumstances involving no breach by Executive of the terms of this
Section 7, (ii) is generally disclosed to third parties by the Company without
restriction on such third parties, (iii) is approved for release by written
authorization of the Board or an authorized employee of the Company, (iv) is
communicated to Executive by a third party under no duty of confidentiality with
respect to such information to the Company or another party, or (v) is required
to be disclosed by Executive to comply with applicable laws, governmental
regulations, or court order, provided that Executive provides prior written
notice of such disclosure to the Company and an opportunity for the Company to
object to such disclosure and further provided that Executive cooperates with
the Company and takes reasonable and lawful actions requested by the Company
(the out-of-pocket costs of which shall be paid by the Company) to avoid and/or
minimize the extent of such disclosure.
(b) Company Documents and Materials. Executive agrees that during
Executive's employment by the Company, Executive will not remove any Company
documents or materials, including Proprietary Information, from the business
premises of the Company or deliver any such Company documents or materials to
any person or entity outside the Company, except as Executive is required to do
in connection with performing the duties of Executive's employment. Executive
agrees that, immediately upon the termination of Executive's employment by
Executive or by the Company for any reason, or during Executive's employment if
so requested by the Company, Executive will return all Company documents and
materials, computer tapes and disks, records, lists, data, drawings, prints,
notes and written information, apparatus, equipment and other physical property,
or any reproduction of such property, excepting only (i) Executive's personal
copies of records relating to Executive's compensation;
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(ii) Executive's personal copies of any materials previously distributed
generally to stockholders of the Company; and (iii) Executive's copy of this
Agreement. Provided that the Company has copies and the matters covered therein
do not contain Proprietary Information, Executive may keep copies of
correspondence or publications relating to scientific or academic matters.
8. Non-solicitation and Non-competition.
(a) Non-solicitation. Executive agrees that during his employment with
the Company and for a period of one year following the termination of his
employment with the Company, Executive shall not hire, attempt to hire, or
assist in or facilitate in any way the hiring of any person who, at the time of
any such action by Executive, is an employee of the Company (or any of its
Affiliates).
(b) Non-competition. Executive agrees that if his employment with the
Company is terminated for any reason, including upon the expiration of the
Employment Period, for a period of one year from the date of such termination of
employment, Executive shall not, directly or indirectly, engage in any business
or enterprise (whether as owner, partner, officer, director, employee,
consultant, investor, lender or otherwise, except as the holder of not more than
1% of the outstanding stock of a publicly-held company) that develops,
manufactures, markets, licenses or sells any products developed using antisense
therapeutics or oligonucleotide-based immunostimulatory therapeutics or any
other technology or product developed, manufactured, marketed, licensed or sold
by the Company while the Executive is employed by the Company (the "Restricted
Business").
(c) Notwithstanding the foregoing, Section 8(b) shall not preclude
Executive from becoming an employee of, or from otherwise providing services to,
a separate division or operating unit of a multi-divisional pharmaceutical
business or enterprise (a "Division") if: (i) the Division by which Executive is
employed, or to which the Employee provides services, is not competitive with
the Restricted Business, (ii) Executive does not provide services, directly or
indirectly, to any other division or operating unit of such multi-divisional
pharmaceutical business or enterprise that is competitive with the Restricted
Business (individually, a "Competitive Division" and collectively, the
"Competitive Divisions") and (iii) the Competitive Divisions, in the aggregate,
accounted for less than one-third of the multi-divisional pharmaceutical
business or enterprises' consolidated revenues for the fiscal year, and each
subsequent quarterly period, prior to the Executive's commencement of employment
with the Division.
9. Assignment of Rights. All inventions, discoveries, computer programs,
data, technology, designs, innovations and improvements (whether or not
patentable and whether or not copyrightable) related to the business of
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the Company that are or have been made, conceived, reduced to practice, created,
written, designed or developed by Executive, solely or jointly with others and
whether during normal business hours or otherwise, during his employment by the
Company pursuant to this Agreement ("Inventions") shall be the sole property of
the Company. Executive hereby assigns to the Company all such Inventions and any
and all related patents, copyrights, trademarks, trade names, and other
industrial and intellectual property rights and applications therefor, in the
United States and elsewhere and appoints any officer of the Company as his duly
authorized attorney, but without any out-of-pocket expenses to Executive, to
executive, file, prosecute and protect the same before any government agency,
court or authority. Executive hereby waives all claims to moral rights in any
Invention. Upon the request of the Company and at the Company's expense,
Executive shall execute such further assignments, documents and other
instruments as may be necessary or desirable to fully and completely assign all
such Inventions to the Company and to assist the Company in applying for,
obtaining and enforcing patents or copyrights or other rights in the United
States and in any foreign county with respect to any such Invention. Executive
shall promptly disclose to the Company all such Inventions and will maintain
adequate and current written records (in the form of notes, sketches, drawings
and as may be reasonably specified by the Company) to document the conception
and/or first actual reduction to practice of any such Invention. Such written
records shall be available to and remain the sole property of the Company at all
times. Executive shall, upon the Company's request, whether during or after the
Employment Period, promptly execute and deliver to the Company all such
assignments, certificates and instruments, and shall promptly perform such other
acts, as the Company may from time to time in its discretion deem necessary or
desirable to evidence, establish, maintain, perfect, enforce or defend the
Company's rights in the inventions. These services (the "IP Services"), shall be
rendered by Executive without additional compensation during the Employment
Period, and at any time when the Company is paying Executive his Base Salary
pursuant to Section 6(b), 6(d), 6(e), 6(f) or 6(h). Executive shall otherwise
render the IP Services at the rate of compensation provided in the last sentence
of this paragraph. In addition, Executive agrees, from time to time, and for as
long as reasonably required, to make himself available on a consulting basis to
assist the Company in the prosecution of patent applications or other filings or
proceedings before the Office of Patents and Trademarks and to advise with
respect to issues arising in the licensing of the Company's patents and the
pursuit or defense of infringement claims. The Company's requests under the
preceding sentence shall be made upon reasonable notice to Executive, and the
Company shall pay Executive for such services at the hourly rate of $300 per
hour plus reasonable expenses.
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10. Publications. Following the expiration or termination of the Employment
Period, Executive will have a continuing right, on the terms and conditions set
forth in this Section 10, to disclose in scientific journals or publications or
in presentations at scientific conferences the results of any research performed
by Executive while employed by the Company. Executive will provide the Company
with an advance copy of any proposed publication or presentation before
submission of such advance copy to any publisher or before the intended date of
presentation, as the case may be. If the Company informs Executive, within 30
days of receipt of such advance copy, that such publication or presentation
would have an adverse effect on the confidentiality of any Proprietary
Information of the Company or on the ability of the Company to obtain, enforce
or maintain any intellectual property rights in any Proprietary Information of
the Company, Executive will delay or prevent such publication or presentation as
proposed by the Company. In addition, Executive will incorporate in such
proposed publication or presentation prior to its submission such changes,
including without limitation deletions, as the Company believes are necessary to
preserve the confidentiality of any Proprietary Information, and Executive will
delay such proposed publication or presentation until such time as the Company
has filed a U.S. patent application covering any proprietary information.
11. Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
or to all or substantially all of the Company's business and/or assets shall
assume the obligations under this Agreement and shall perform the obligations
under this Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.
The Company may assign this Agreement without Executive's consent to any company
that acquires all or substantially all of the Company's stock or assets.
Executive may not assign this Agreement and no person other than Executive (or
his estate) may assert Executive's rights under this Agreement.
12. Notice. All notices, requests, consents and other communications
hereunder to any Party shall be contained in a written instrument addressed to
such Party at the address set forth below or such other address as may hereafter
be designated in writing by the addressee to the addressor listing all Parties
and shall be deemed given (a) when delivered in person or duly sent by fax
showing confirmation of receipt, (b) three days after being duly sent by first
class mail postage prepaid, or (c) two days after being duly sent by DHL,
Federal Express or other recognized express courier service:
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(a) if to the Company, to:
Idera Pharmaceuticals, Inc.
345 Vassar Street
Cambridge, MA 02139
fax: (617) 679-5582
(b) if to Executive, to:
Sudhir Agrawal
61 Lamplighter Drive
Shrewsbury, MA 01545
13. Company Plans. To the extent any provision of this Agreement conflicts
with or is inconsistent with any awards made to Executive under any Company
compensation or benefit plan, program, or arrangement, the provisions of this
Agreement shall govern. Except to the extent otherwise explicitly provided by
this Agreement, any awards made to Executive under any Company compensation or
benefit plan, program, or arrangement shall be governed by the terms of that
plan, program, or arrangement and any applicable award agreement thereunder, as
in effect from time to time.
14. Miscellaneous Provisions.
(a) Entire Agreement. This Agreement constitutes the entire agreement
between the Parties and terminates and supersedes any and all prior agreements
and understandings (whether written or oral) between the Parties with respect to
the subject matter of this Agreement, including the Original Employment
Agreement; provided that (i) the Parties acknowledge that Executive has served
as an employee of the Company since 1990 and (ii) the Employee hereby agrees
that any Proprietary Information disclosed to him or of which he otherwise
became aware during the course of his employment with the Company shall be
deemed Proprietary Information for all purposes under this Agreement, that any
Inventions made, conceived, reduced to practice, created, written, designed or
developed by the Executive in the course of his employment with the Company
shall be deemed Inventions for all purposes under this Agreement and that
notwithstanding any prior agreements the provisions of this Agreement shall
govern such Proprietary Information and Inventions. Executive acknowledges and
agrees that neither the Company, nor anyone acting on its behalf has made, and
in executing this Agreement Executive has not relied upon, any representations,
promises, or inducements except to the extent the same is expressly set forth
herein.
(b) Waiver. No provision of this Agreement shall be modified, waived,
or discharged unless the modification, waiver, or discharge is agreed
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to in writing and signed by Executive and by an authorized officer or
representative of the Company (other than Executive). No waiver by either Party
of any breach of, or of compliance with, any condition or provision of this
Agreement by the other Party shall be considered a waiver of any other condition
or provision or of the same condition or provision at a preceding or subsequent
time.
(c) Capacity. Executive represents and warrants to the Company that he
is not now under any obligation, of a contractual nature or otherwise, to any
person, firm, corporation, association or other entity that is inconsistent, or
in conflict, with this Agreement or that would prevent, limit or impair in any
way the performance by Executive of his obligations hereunder.
(d) Consulting. Executive and the Company may, but are not required
to, enter into an agreement pursuant to which Executive will provide consulting
services to the Company after the date of Executive's retirement or termination
of employment with the Company. Any consulting fees paid to Executive will be in
addition to any retirement or severance payments Executive is entitled to
receive from the Company or under any plans, programs, or arrangements
maintained by the Company.
(e) Severability. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any law or
public policy, only the portion of this Agreement that violates such law or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Agreement shall modify the
stricken terms as narrowly as possible to give effect to the intentions of the
Parties to this Agreement, as expressed herein.
(f) Survival of Provisions. The obligations contained in Sections 7,
8, 9, and 10 above shall survive the termination or expiration of the Employment
Period or this Agreement, as applicable, and shall be fully enforceable
thereafter in accordance with the terms of this Agreement.
(g) Withholding. Executive acknowledges that salary and all other
compensation payable under this Agreement shall be subject to withholding for
income and other applicable taxes to the extent required by law, as determined
by the Company in its sole discretion.
(h) Headings. The headings or other captions contained in this
Agreement are for convenience of reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this Agreement.
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(i) Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts without giving effect to any conflict of law rules
that would require the application of the laws of any jurisdiction other than
the internal laws of the Commonwealth of Massachusetts to the rights and duties
of the Parties, except to the extent the laws of the Commonwealth of
Massachusetts are preempted by federal law.
(j) Terms. Where appropriate in this Agreement, words used in the
singular shall include the plural, and words used in the masculine shall include
the feminine or neuter.
(k) Legal Fees. The Company shall pay or reimburse to Executive an
amount equal to reasonable fees for legal representation incurred by Executive
in connection with the preparation of this Agreement and the amendment of
existing options agreements in an amount not to exceed $8,000.
(l) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one agreement binding on the Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the date first mentioned above.
IDERA PHARMACEUTICALS, INC. SUDHIR AGRAWAL
BY: /s/ James B. Wyngaarden /s/ Sudhir Agrawal
--------------------------------- ----------------------------------------
James B. Wyngaarden
TITLE: Chairman
DATE: October 19, 2005 DATE: October 19, 2005
------------------------------- ----------------------------------
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APPENDIX A
DEFINITIONS
ACQUISITION EVENT means
(i) any merger or consolidation that results in the voting
securities of the Company outstanding immediately prior thereto representing
(either by remaining outstanding or by being converted into voting securities of
the surviving or acquiring entity) less than 60% of the combined voting power of
the voting securities of the Company or such surviving or acquiring entity
outstanding immediately after such merger or consolidation;
(ii) any sale of all or substantially all of the assets of the
Company;
(iii) the complete liquidation of the Company; or
(iv) the acquisition of "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act) of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
securities (other than through a merger or consolidation or an acquisition of
securities directly from the Company) by any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act, other than the Company, any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportion as their ownership of stock
of the Company.
AFFILIATE. "Affiliate" shall mean any person or entity that directly or
indirectly controls, is controlled by or is under common control with the
Company, including any entity directly or indirectly controlled by the Company
through the Company's ownership of 50% or more of the voting interests of such
entity.
CAUSE. "Cause" shall mean Executive's (i) material breach of any material
term of this Agreement, (ii) plea of guilty or nolo contendre to, or conviction
of, the commission of a felony offense, (iii) repeated unexplained or
unjustified absence, or refusals to carry out the lawful directions of the Board
or (iv) material breach of a fiduciary duty owed to the Company under this
Agreement, provided that any action or inaction described by (i), (iii) or (iv),
above, shall not be the basis of a termination of Executive's employment with
the Company for "Cause" unless the Company provided Executive with at least 20
days advance written notice specifying in reasonable detail the
conduct in need of being cured and such conduct was not cured within the notice
period.
CHANGE OF CONTROL. "Change of Control" shall mean the occurrence of any of
the following events:
(i) a change in the composition of the Board over a period of thirty-six
consecutive months or less such that a majority of the members of the Board
ceases to be comprised of individuals who are Continuing Members; for such
purpose, a "Continuing Member" shall mean an individual who is a member of the
Board on the date of this Agreement and any successor of a Continuing Member who
is elected to the Board or nominated for election by action of a majority of
Continuing Members then serving on the Board; or
(ii) the consummation of an Acquisition Event.
DISABILITY. "Disability" shall mean the inability of Executive to perform
all the material duties of Executive's position for a continuous period of at
least 90 days due to a permanent physical or mental impairment, as determined
and certified by a physician selected by Executive and with the concurrence of a
physician selected by the Company, provided that if the physician selected by
Executive and the physician selected by the Company do not agree regarding the
determination and certification, a determination and certification rendered by
an independent physician mutually agreed upon by Executive and the Company shall
be final and binding on the Parties with respect to this Agreement.
GOOD REASON. "Good Reason" shall mean the occurrence of one or more of the
following: (i) any action by the Company that results in a material diminution
of Executive's position, title, annual base salary, authority, duties or
responsibilities or reporting structure; (ii) any material breach of this
Agreement by the Company that is not remedied by the Company within 30 days
after receipt by the Company of notice thereof given by Executive specifying in
reasonable detail the alleged breach; (iii) failure to elect Executive to serve
on the Board during the Employment Period; or (iv) relocation of the Company's
headquarters outside the Permitted Area, except in the event of a change in the
location of the headquarters of the Company to a site within the continental
United States following a Change of Control.
PROPRIETARY INFORMATION. "Proprietary Information" shall mean information
that was developed, created, or discovered by or on behalf of the Company, or
that became or will become known by, or was or is conveyed to the Company;
including, but not limited to, trade secrets, designs, technology, know-how,
processes, data, ideas, techniques, inventions (whether patentable or not),
works of authorship, formulae, business and development plans,
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client or customer lists, software programs and subroutines, source and object
code, algorithms, terms of compensation and performance levels of Company
employees, information about the Company or any of its Affiliates, and their
clients and customers that is not disclosed by the Company or any of its
Affiliates for financial reporting purposes and that was learned by Executive in
the course of employment by the Company or any of its Affiliates, other
information concerning the Company's actual or anticipated business, research or
development, or that is received in confidence by or for the Company from any
other person, and all papers, resumes, and records (including electronic or
computer-generated records) of the documents containing such Proprietary
Information. Proprietary Information shall not include information that is
publicly available or available through third party sources so long as it has
not become available through a breach of this Agreement by Executive.
TERMINATION BONUS OBLIGATIONS. "Termination Bonus Obligations" shall mean
the pro rata portion (based on the total number of days in the calendar year
prior to and including the termination date divided by 365) of the Bonus, if
any, that Executive earned in respect of the year preceding the termination of
Executive's employment with the Company.
UNPAID OBLIGATIONS. "Unpaid Obligations" shall mean the sum of (i) any
salary earned but unpaid through the date of termination of employment, and (ii)
reimbursement of any reimbursable expense incurred by Executive through the date
of termination of employment.
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