EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered into by and between
Apollo Genetics, Incorporated (the "Company"), a Delaware corporation with
its principal place of business at 222 Third Street, Suite 3121, Cambridge,
Massachusetts, and Katherine Gordon (the "Executive"), who resides at 395
Broadway Street, Cambridge, Massachusetts, effective as of the 1st day of
November, 1993 (the "Effective Date").
WHEREAS, the operations of the Company and its Affiliates are a complex
matter requiring direction and leadership in a variety of arenas, including
financial, strategic planning, regulatory, community relations and others;
WHEREAS, the Executive is possessed of certain experience and expertise
that qualify her to provide the direction and leadership required by the
Company and its Affiliates; and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company therefore wishes to employ the Executive as its President and Chief
Executive Officer and the Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts
employment.
2. TERM. Subject to earlier termination as hereafter provided, this
Agreement shall have an original term of three (3) years commencing on the
effective date hereof and shall be automatically extended thereafter for
successive terms of two (2) years each, unless either party provides notice
to the other at least ninety (90) days prior to the expiration of the
original or any extension term that the Agreement is not to be extended. The
term of this Agreement, as from time to time extended or renewed, is
hereafter referred to as "the term of this Agreement" or "the term hereof".
3. CAPACITY AND PERFORMANCE.
a. During the term hereof, the Executive shall serve the Company as its
President, Chief Executive Officer and a Director
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of the corporation.
b. During the term hereof, the Executive shall be employed by the Company
on a full-time basis and shall have all powers and duties consistent with
such positions, subject to the direction of the Board.
c. During the term hereof, the Executive shall devote her full business
time and her best efforts, business judgment, skill and knowledge exclusively
to the advancement of the business and interests of the Company and its
Affiliates and to the discharge of her duties and responsibilities hereunder.
4. COMPENSATION AND BENEFITS.
a. BASE SALARY. During the term hereof, the Company shall pay the
Executive a base salary at the annual rate of $100,000 plus such other
amounts, if any, as the Board of Directors of the Company, in its sole
discretion, may from time to time determine. The Executive's base salary
shall be reviewed annually; provided, however, that in no event shall
Executive's base salary be reduced below an annual rate of $100,000.
Executive's salary shall be payable in bi-weekly installments or at such
other frequency as the Company may from time to time determine for its senior
executive officers as a group.
b. BONUS COMPENSATION. In addition to her base salary, the Executive
shall receive a cash bonus to be awarded at the discretion of the Board of
Directors. Issuance of the bonus shall be evaluated by the Board of Directors
at least on an annual basis. c. STOCK OPTIONS. Executive shall be
eligible to receive stock options as the Board of Directors shall determine
at its sole discretion.
d. BUSINESS EXPENSES. The Company shall pay or reimburse the Executive
for all reasonable business expenses incurred or paid by the Executive in the
performance of her duties and responsibilities hereunder, subject to any
maximum annual limit and other restrictions on such expenses set by the Board
and to such reasonable substantiation and documentation as may be specified
by the Company from time to time.
e. INSURANCE. The Company shall provide the Executive with, and pay the
cost of, health, dental, life, and disability insurance as is generally made
available to employees at levels similar to Executive's.
f. VACATIONS. During the term hereof, the Executive shall be entitled to
four (4) weeks of vacation per annum, to be taken at such times and intervals
as shall be determined by the Executive, subject to the reasonable business
needs of the Company. One week of non-utilized vacation time may be carried
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over into the next year. The Executive shall be entitled to cash
compensation for one week of vacation time not taken during a given year.
g. OTHER BENEFITS. All other benefits offered to employees of the
Company, including but not excluded to, paid vacations at designated
holidays, shall be provided to the Executive.
5. TERMINATION. Notwithstanding the provisions of Section 2 hereof, the
Executive's employment hereunder shall terminate prior to the expiration of
the term under the following circumstances:
a. DEATH. In the event of the Executive's death during the term hereof,
the Executive's employment hereunder shall immediately and automatically
terminate. In the event of the Executive's death during the term hereof, the
Company shall pay to the Executive's designated beneficiary any earned and
unpaid Base Salary, pro-rated through the date of her death.
b. DISABILITY.
i. The Company may terminate the Executive's employment hereunder
through any illness, injury, accident or condition of either a physical or
psychological nature and, as a result, is unable to perform substantially all
of her duties and responsibilities hereunder for ninety (90) consecutive days
during any period of three hundred and sixty-five (365) calendar days.
Severance provisions of Section 5.d shall apply.
ii. The Board may designate another employee to act in the
Executive's place during any period of the Executive's disability.
Notwithstanding any such designation, the Executive shall continue to receive
the Base Salary in accordance with Section 4.a and benefits in accordance
with Section 4.b - 4.g, to the extent permitted by the then-current terms of
the applicable benefit plans, until the Executive becomes eligible for
disability income benefits under the Company's disability income plan or
until the termination of her employment, whichever shall first occur.
iii. While receiving disability income payments under the Company's
disability income plan, the Executive shall not be entitled to receive any
Base Salary under Section 4.a hereof, but shall continue to participate in
Company benefit plans in accordance with Section 4.b - 4.g and the terms of
such plans, until the termination of her employment.
iv. While receiving disability income payments under the Company's
disability income plan and for as long as the Executive remains employed by
the Company, the Company shall pay to the Executive the difference between
60% of her Base Salary at the time the disability is incurred and the
disability income
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benefits. This shall continue for the duration of the disability payments or
until such time as employment is terminated.
c. BY THE COMPANY FOR CAUSE. The Company may terminate the Executive's
employment hereunder for Cause at any time upon notice to the Executive
setting forth in reasonable detail the nature of such Cause. The following,
as determined by the Board in its reasonable judgment, shall constitute Cause
for termination:
i. Willful failure to perform, or gross negligence in the
performance of, the Executive's duties and responsibilities to the Company
and its Affiliates;
ii. Fraud, embezzlement or other material dishonesty with respect to
the Company or any of its Affiliates;
iii. Conviction of, or plea or nolo contendere to, a felony or other
crime involving moral turpitude.
Upon the giving of notice of termination of the Executive's employment
hereunder for Cause, the Company shall have no further obligation of
liability to the Executive, other than for Based Salary and other benefits
under this Agreement earned and unpaid at the date of termination.
d. BY THE COMPANY OTHER THAN FOR CAUSE. The Company may terminate the
Executive's employment hereunder other than for Cause at any time upon notice
to the Executive. In the event of such termination, the Company shall
continue to pay the Executive the Base Salary at the rate in effect on the
date of termination for a period of one year and shall continue to contribute
to the cost of the Executive's participation in the Company's health, dental,
life and disability insurance plans, provided that the Executive is entitled
to continue such participation under applicable law and plan terms. Notice
by the Company that the Agreement is not to be extended as per Section 2
shall constitute termination by the Company other than for cause.
e. BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate her
employment hereunder for Good Reason, upon notice to the Company setting
forth in reasonable detail the nature of such Good Reason. The following
shall constitute Good Reason for termination by the Executive:
i. Failure of the Company to continue the Executive in the position
of President and Chief Executive Officer;
ii. Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority;
iii. Material failure of the Company to provide the Executive the
Based Salary and benefits in accordance with the terms of Section 4 hereof.
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In the event of termination in accordance with this Section 5.e, the Company
shall continue to pay the Executive the Base Salary at the rate in effect of
the date of termination for a period of one year and shall continue to
contribute to the cost of the Executive's participation in the Company's
health, dental, life and disability insurance plans, provided that the
Executive is entitled to continue such participation under applicable law and
plan terms.
g. UPON CHANGE OF CONTROL.
iv. If a Change of Control occurs (as defined in Section 5.g.ii)
and, within two years following such Change of Control, the Company
terminates the Executive's employment other than for Cause, or the Executive
terminates her employment for Good Reason, then, in lieu of any payments to
or on behalf of the Executive under Section 5.d or 5.e hereof, the Company
(A) shall pay the Executive, within ten business days of such termination, a
lump sum payment equal to two and a half (2.5) times the sum of the Base
Salary in effect at the date of such termination; and (B) shall pay the full
cost of the Executive's continued participation in the Company's health,
dental, life, and disability insurance plans for two and a half (2.5) years
so long as the Executive remains entitled to continue such participation
under applicable law.
v. A change of control ("Change of Control") shall be deemed to take
place if hereafter (A) any Person or "group", other than the Company or any
of its Affiliates, becomes a beneficial owner, directly or indirectly, of
securities representing fifty percent (50%) or more of the total number of
votes that may be cast for the election of directors of the Company; or (B)
any merger or consolidation takes place involving the Company or any sale of
all or substantially all of the assets of the Company or any combination of
the foregoing in which the Company is not the surviving entity.
vi. The Company shall promptly reimburse the Executive for the
amount of all reasonable attorneys' fees and expenses incurred by the
Executive in seeking to obtain or enforce any right or benefit provided the
Executive under this Section 5.g.
6. CONFIDENTIALITY .
a. Beginning on the Effective Date, and at any time hereafter, the
Executive shall treat as confidential any proprietary, confidential or secret
information relating to the business or interests of the Company or any
Affiliate of the Company, including, without limitation, the organizational
structure, operations, business plans or technical projects of the Company or
any subsidiary or Affiliate of the Company, and any research data or result,
invention, trade secret, customer list, process or other work product
developed by or for the
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Company or any subsidiary or Affiliate of the Company, whether on the
premises of the Company or elsewhere ("Confidential Information"). Beginning
on the Effective Date, and at any time hereafter, the Executive shall not
disclose, utilize or make accessible in any manner or in any form any
Confidential Information other than in connection with performing the
services required of her under this Agreement, without the prior written
consent of the Company. Notwithstanding the foregoing, the provisions of
this Section 6.a shall not apply to any proprietary, confidential or secret
information or other research data or result, invention, trade secret,
customer list or work product which is, at the commencement of this Agreement
or at some later date, publically known under circumstances involving no
breach of this Agreement or is lawfully and in good faith made available to
Executive by a third party under no obligation of confidentiality with
respect thereto.
b. All documents, records, apparatus, equipment and other physical
property furnished to Executive by the Company or produced by Executive or
others in connection with her employment shall be and remain the sole
property of the Company. Executive shall return and deliver such property to
the Company as and when requested by the Company.
c. Executive agrees that the provisions of this Section 6 shall survive
the termination of this employment and of this Agreement.
7. ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY. Executive hereby
agrees that any and all information, inventions and discoveries, whether or
not patentable, that she conceives and/or creates using the term hereof and
any extensions thereof, and which are a direct or indirect result of work
performed hereunder, shall be the sole and exclusive property of the Company.
Executive hereby assigns to the Company any and all right, title and
interest which she has or may acquire in the same. Executive further agrees
that she will promptly execute any and all applications, assignments or other
instruments which any officer of the Company or the Board of Directors of the
Company shall deem necessary or useful in order to apply for and obtain
Letters Patent in the United States and all foreign countries for said
information, inventions and discoveries and in order to assign and convey to
the Company the sole and exclusive right, title, and interest in and to said
information, inventions, discoveries, patent applications and patents
thereon. The Company shall bear the cost of preparation of all such patent
applications and assignments, and the cost of prosecution of all such patent
applications in the United States patent office and in the patent offices of
foreign countries.
8. NON-COMPETITION.
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a. Executive agrees that, during the period she is employed by the
Company or any Affiliate of the Company, under this Agreement or otherwise,
she will not engage in, or otherwise directly or indirectly be employed by,
or act as a consultant, advisor or lender to, or be a director, officer,
employee, stockholder, owner or partner of, any other business or
organization, whether or not such business or organization now is or shall
then be competing with the Company or Affiliate of the Company; provided,
however, that Executive shall not be prohibited either from managing her own
personal investments on her own personal time or from serving on up to two
(2) outside boards of directors or advisory boards, so long as such
activities do not (i) involve a business or organization which competes with
the Company or any Affiliate of the Company, (ii) interfere or conflict with
the performance of her duties as an employee of the Company or any subsidiary
or Affiliate of the Company, (iii) otherwise result in a breach of any of the
provisions of this Agreement, or (iv) in the case of serving as a director or
advisory board member of other-companies, such activities for all such
companies do not require, in the aggregate, more than ten (10) days per year,
including travel time.
Executive further agrees that if her employment with the Company is
terminated by the Company pursuant to Section 5 hereof, or resigns or
otherwise fails or refuses to perform the services required of her under this
Agreement other than as a result of a breach of this Agreement by the Company
(which breach is not cured within thirty (30) days after receiving notice
thereof), then during the two-year period commencing on the date she ceases
to be employed by the Company or any Affiliate of the Company, under this
Agreement or otherwise, Executive shall not directly or indirectly compete
with or be engaged in the same business as the Company its Affiliates, or be
employed by, or act as consultant, advisor or lender to, or be a director,
officer, employee, stockholder, owner or partner of, any business or
organization which, at the time of such cessation, directly or indirectly
competes with or is engaged in the same business as the Company or any
subsidiary or Affiliate of the Company; PROVIDED, HOWEVER, that if
Executive's employment with the Company is terminated pursuant to Section 5
hereof, Executive's obligations pursuant to this sentence shall continue only
so long as the Company pays Executive compensation at the same rate
compensation was being paid to her pursuant to Section 4.a of this Agreement
at the time of such termination.
b. Executive agrees that for a period of three years from the termination
of this Agreement she will not, directly or indirectly, employ or solicit the
employment or engagement by others of any employees of, or consultants hired
by, the Company, or any subsidiary or Affiliate of the Company, without the
prior written consent of the Company, unless such person ceased to be
employed or engaged by the Company or its subsidiary or Affiliate at least
four (4) months prior to the solicitation.
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9. REPRESENTATIONS AND WARRANTIES. Executive represents and warrants to
the Company that (i) Executive is under no contractual or other restriction
or obligation which is inconsistent with the execution of this Agreement, the
performance of her duties hereunder or the other rights of the Company and
any subsidiary or Affiliate of the Company hereunder, and (ii) Executive is
under no physical or mental disability that would hinder the performance by
her of her duties under this Agreement.
10. ASSIGNMENT. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of the Executive Clothe event that the Company shall
hereafter affect a reorganization, consolidate with, or merge into, any other
Person or transfer all or substantially all of its properties or assets to
any other Person. This Agreement shall inure to the benefit of and be binding
upon the Company and the administrators, heirs and permitted assigns.
11. SEVERABILITY. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of
such portion or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
12. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach.
13. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall
be effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at
her last known address on the books of the Company or, in the case of the s
Company, at its principal place of business, or to such other address as
either party may specify by notice to the other.
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14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of
the Executive's employment.
15. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a expressly authorized
representative of the Company.
16. HEADINGS. The headings and captions in-this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together
shall constitute one and the same instrument.
18. GOVERNING LAW. This is a Massachusetts contract and shall be
construed and enforced under and be governed in all respects by the laws of
the Commonwealth of Massachusetts, without regard to the conflict of laws
principles thereof.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Executive, as of the date first above written.
THE EXECUTIVE: THE COMPANY:
/s/ Katherine Gordon By: /S/ Alan Gelband
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Title: Chief Financial Officer
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