Exhibit 10.7
DYAX CORP
One Kendall Square
Building 600, 5th Floor
Cambridge, MA 02139
May 21, 1999
Mr. Scott Chappel, Ph.D.
125 Canton Avenue
Milton, MA 02186
Dear Scott:
This letter sets forth our understanding of your employment by Dyax Corp. in the
position of Senior Vice President, Research. You will be reporting directly to
the President of the Therapeutics and Diagnostics Division, who is Ed Cannon.
I understand that you will begin working with us full-time on June 14, 1999 (the
"Effective Date"). This agreement will be for a term of 3 years from the
Effective Date, unless earlier terminated as herein provided.
Dyax will pay you a base salary of $200,000 per year ($16,666.67 per month),
which is subject to review on an annual basis by the Compensation Committee of
the Board of Directors (the "Committee"), but it shall in no event be reduced
below the initial base salary. In addition, for the 1999 calendar year, you will
be eligible for a bonus of $50,000 based on specific individual and corporate
objectives set by the Chief Executive Officer, with the Committee to determine
achievement of the bonus at the end of the year. The bonus for which you will be
eligible in subsequent calendar years will be reasonably adjusted by the
Committee to reflect Company performance but it shall in no event be reduced
below $50,000 per year. All payments shall be made to you in accordance with
Dyax's standard payroll practices.
Subject to approval by the Committee, Dyax agrees to grant you two options to
purchase shares of Dyax Common Stock. The first option will be for 75,000 shares
vesting monthly in equal installments over 48 months beginning with the date of
your employment. The second option for 75,000 shares will vest on the fourth
anniversary of the date of grant; provided, however, that vesting shall
accelerate as to equal thirds of the option shares upon the occurrence of any of
the following three events (and as to all option shares upon the occurrence of
all such events), as determined in good faith by the Committee: (i) the signing
of an agreement for a new corporate colloboration, or an expansion of an
existing corporate collaboration, for development of a therapeutic or diagnostic
product candidate, either of which agreement has been negotiated with
substantial participation by you and which provides for at least $500,000 of
additional funding for research to be performed by the Company and at least
$3,000,000 of other milestone
1
payments to the Company; (ii) delivery of a lead therapeutic or diagnostic
product candidate that is ready for preclinical testing without further
evaluation or modification; and (iii) delivery of a lead affinity separations
product candidate that has been developed using the Company's phage display
technology and that is ready for testing in the Company's separations
products. Such options shall be granted at the fair market value price on the
date of grant, as determined by the Committee, and shall be subject to Dyax's
1995 Equity Incentive Plan and the standard terms and conditions of its stock
options, except that all options exercisable as of the date of termination
shall continue to be exercisable from that date until twelve months
thereafter. All options shall be treated as incentive stock options, except
as may be required by law to be treated as nonstatutory stock options upon
grant or upon exercise, including treatment as nonstatutory stock options if
they are exercised more than 90 days after termination of employment.
Management will also recommend to the Committee that on or before the Effective
Date the Company make a loan to you of up to $100,000 to refinance an existing
loan from your former employer. The loan, which shall be evidenced by a
promissory note from you to the Company, will bear interest at the prime rate
(as published from time to time in The Wall Street Journal) plus one percent
(1.0%), and shall become due and payable immediately upon termination of your
employment for cause and within 30 days after termination of your employment
with the Company for any other reason. You agree to apply such the proceeds of
the Company loan as are required to pay off the existing loan, and you agree to
enter into a pledge and security agreement (on such terms as the Company may
reasonably require) to pledge, as collateral for the loan, securities having a
combined market value of at least 125% of the outstanding principal balance of
the loan, which securities may include any existing marketable securities owned
by you and any shares of capital stock of the Company (valued at the fair market
value thereof most recently determined by the Committee) that you may acquire
hereafter, whether through the exercise of options or otherwise. At the end of
each year of your employment with the Company, $20,000 of the principal amount
of the loan , plus all accrued interest to date, will be forgiven; and upon your
death or permanent disability the loan's remaining balance of principal and
interest shall be forgiven in full. You understand that such forgiven amounts
will be deemed to be taxable income to you, for which additional tax withholding
by the Company may be required.
You will be eligible to participate in the Company's employee benefits, in the
same manner provided generally to the Company's senior executives, including
health and dental insurance, paid vacation time, 401(k) Savings Plan, disability
insurance and life insurance. Dyax requires that you execute the Company's
standard Employee Confidentiality Agreement (copy attached), and comply with
federal and state employment laws and regulations. Notwithstanding the Employee
Confidentiality Agreement, it is also understood and agreed that you shall
retain ownership, and that you neither relinquish nor waive any rights to,
manuscripts, treatises and other copyrightable material generated prior to your
employment with the Company.
In the event your employment is terminated by the Company without cause, Dyax
agrees to continue to pay you your monthly base salary for a period of six
months as severance, and to continue such payments from month-to-month (or any
pay period during the month) thereafter, for up to an additional six months, for
so long as you have not obtained employment in compensable work in any capacity
{in which your aggregate cash compensation is not materially less than the
salary and bonus provided to you hereunder. All earned but unpaid bonuses and
2
accrued vacation time shall also be paid upon termination. However, payment of
such severance and all other amounts then due you shall be subject to set-off
against amounts then due you under your Company loan, and all other benefits and
vesting of your options will terminate as of the date of termination. If your
employment is terminated for cause by the Company or is terminated by you for
any reason, your compensation, benefits and stock option vesting shall cease as
of the termination date and your loan shall be due as provided above. For
purposes of this offer, "cause" shall mean the gross neglect in the performance
of your duties or the commission of an act of dishonesty or moral turpitude in
connection with your employment, as determined by the Board of Directors.
Subject to the foregoing, either party may terminate this agreement at any time.
You represent and warrant to us that by entering into and performing this
agreement you will not be in breach of any previously existing agreement to
which you are a party or by which you are bound. The Company represents and
warrants to you that by entering into and performing this agreement it will not
be in breach of any previously existing agreement to which it is a party or by
which it is bound, and that this agreement has been duly approved by the
Committee, which is duly authorized to provide such approval, and that the
Committee has authorized me to execute and deliver this agreement and to carry
out the terms of this agreement.
If this agreement accurately sets forth our understanding of your employment by
Dyax, please sign both copies of this letter and return one copy to me by no
later than 5:00 p.m. on May 24, 1999. We very much look forward to having you
join Dyax, and believe that you can make significant contributions to the growth
of our operations.
AGREED to by and on behalf of DYAX CORP.
/s/ HENRY E. BLAIR
- ------------------------------------
Henry E. Blair
Chairman and Chief Executive Officer
AGREED TO:
/s/ SCOTT CHAPPEL
3
DYAX EMPLOYEE CONFIDENTIALITY AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 21st day of May, 1999.
BETWEEN
DYAX CORP., a Delaware corporation, having its principal place of
business at One Kendall Square, Bldg. 600, 5th Floor, Cambridge, MA
02139, and its affiliates, ("Dyax"), and
Scott Chappel, Ph.D.(the "Employee").
1. EMPLOYEE RESTRICTIONS.
In consideration of, and as a condition of the Employee's continued
employment with Dyax, the Employee agrees as follows:
(a) CONFIDENTIAL INFORMATION: As of the date of the Employee's employment by
Dyax and thereafter, the Employee shall treat as strictly confidential all
proprietary, secret, unpublished and confidential information and materials
which relate to the business or interests of Dyax, including, but not limited
to, the business plans, technical projects, trade secrets, know-how, operations,
customer lists, research datum or results, inventions, formulas, cell lines,
chemical and biological compounds, products and processes developed by or for
Dyax (the "Confidential Information"). The Employee shall not disclose or use
Confidential Information in any manner or form other than in performance of the
services required during his/her employment by Dyax.
(b) ASSIGNMENT OF RIGHTS: Any and all information, data, inventions,
discoveries, formulas, biological or chemical materials, notebooks and other
work product which the Employee conceives, develops or acquires during his/her
employment with Dyax, and for a period of six (6) months after the termination
date of his/her employment with Dyax, which directly or indirectly relates to
work performed for Dyax (the "Proprietary Property"), shall be the sole and
exclusive property of Dyax. The Employee shall promptly execute any and all
documents necessary to assign this property to Dyax.
(c) INTELLECTUAL PROPERTY: During the Employee's employment at Dyax, the
Employee shall promptly assist with and execute any and all applications,
assignments or other documents which an officer or director of Dyax shall deem
necessary or useful in order to obtain and maintain patent, trademark or other
intellectual property protection for Dyax's products or services. After the
termination date of his/her employment with Dyax the Employee shall use
reasonable efforts to assist Dyax on intellectual property matters as they
relate to his/her employment, and Dyax shall reasonably compensate the Employee
for his/her time and expense.
(d) DYAX PROPERTY: Upon termination of the Employee's employment with Dyax, the
Employee shall return and deliver to Dyax all copies of Confidential Information
(as defines in (a) above) and all Proprietary Property (as defined in (b) above
and all other property furnished to the Employee by Dyax, including, without
limitation, documents, records, notebooks and
3
equipment. The Employee shall not take with him/her any such property, except as
expressly authorized in writing by an officer or director of Dyax.
(e) NON-SOLICITATION: As of the date of the Employee's employment by Dyax and
for a period of one (1) year after the termination date of his/her employment at
Dyax, the Employee shall not directly or indirectly solicit on behalf of himself
or others (i) the employment of any employees or exclusive consultants of Dyax,
or (ii) any of the business being conducted by Dyax or being actively pursued by
Dyax with any customer or partner.
2. SCOPE OF THIS AGREEMENT
(a) The provisions of this Agreement shall survive the termination of the
Employee's employment with Dyax.
(b) The Employee acknowledges that the restrictions contained in this Agreement
are reasonable in view of the nature of the business in which Dyax is engaged
and the Employee's knowledge of Dyax business.
(c) Dyax is permitted to assign its rights and obligations under this Agreement.
(d) The Employee also acknowledges that any breach of this Agreement any cause
Dyax irreparable harm for which Dyax would be entitled to the issuance by a
court of competent jurisdiction of an injunction, restraining order or other
equitable relief in favor of restraining the Employee from committing or
continuing any violation of this Agreement. Any right to obtain such equitable
relief will not be deemed a waiver of any right to assert any other remedy or
request any other relief which Dyax may have under this Agreement or otherwise
at law or in equity.
(e) If in any jurisdiction any provision of this Agreement or its application to
any party or circumstance is restricted, prohibited or determined unenforceable,
the remaining provisions of this Agreement shall remain unaffected and
enforceable. In addition, if any provision of this Agreement shall be held to be
excessively broad as to time, duration, geographical scope, activity or subject,
the provision shall be construed so as to be enforceable to the extent
compatible with the applicable law.
5
(f) This Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Massachusetts.
AGREED:
EMPLOYEE DYAX CORP.
/s/ SCOTT CHAPPEL /s/ HENRY E. BLAIR
----------------------------- --------------------------
(signature) (signature)
SCOTT CHAPPEL CHAIRMAN & CEO
----------------------------- --------------------------
(name) (title)
6