EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 1st day of January, 1995, by and between MedChem Products, Inc., a
Massachusetts corporation (the "Company"), and James F. Marten ("Marten").
WHEREAS, the Company desires to employ Marten, and Marten desires to
be employed by the Company, as Chairman of the Board and an employee of the
Company; and
WHEREAS, Marten and the Company are desirous that they enter into an
Employment Agreement reflecting such employment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and in consideration of Marten's being
employed by the Company, the parties agree as follows:
1. Employment. The Company agrees to employ Marten and Marten agrees
to serve the Company, upon the terms and conditions set forth in this Agreement.
2. Term. The employment of Marten under this Agreement shall be for
a term of five (5) years, commencing as of January 1, 1995, and ending on
December 31, 1999 (the "Employment Term"), unless extended or terminated earlier
as provided in this Agreement. The Employment Term may be extended upon the
mutual written consent of Marten and the Company.
3. Duties and Extent of Service.
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(a) Duties. Marten's employment hereunder will be his primary
business activity and he will devote to the business of the Company that much of
his time as is required to discharge his duties under this Agreement during the
Employment Term. In the course of Marten's employment, Marten shall be an
employee and shall perform the duties of the Chairman of the Board of Directors
of the Company.
(b) Extent of Service. Marten shall devote a significant portion of
his time, attention and energies to the business of the Company and shall not
during the term of this Agreement be engaged (whether or not during normal
business hours), to any significant extent, in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage, provided that Marten shall not be prevented from
(i) investing his personal assets in businesses which do not compete with the
Company in such form or manner as will not require any significant services on
the part of Marten in the operation or the affairs of the companies in which
such investments are made and in which his participation is solely that of an
investor, (ii) engaging in professional, civic, charitable or religious
activities or from serving on the board of directors of other entities, as long
as such activities and service do not interfere or conflict with Marten's
responsibilities to the Company and Marten's obligations under Sections 9(c) and
11, and (iii) purchasing, acquiring and/or investing in stock or other
securities of any corporation whose stock or securities are regularly traded on
the New York Stock Exchange, American Stock Exchange, or those which are
reported on the Nasdaq National Market, provided that such purchases shall not
result in Marten collectively owning beneficially at any time five percent or
more of the equity securities of any corporation engaged in a business
competitive to that of the Company.
4. Compensation.
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(a) Salary. As compensation for services rendered by Marten under
this Agreement, the Company shall pay to Marten a base salary of initially
$250,000 per year, payable to him during the Employment Term after withholding
and other required deductions, in equal semi-monthly installments or otherwise
in accordance with the Company's standard payroll policies as such policies
shall exist from time to time. Marten's base salary shall be subject to annual
review by the Company's Board of Directors and may be increased (in the sole
discretion of the Board), but shall not be decreased, at any such annual review;
provided, however, that Marten's base salary shall (at a minimum) be increased
annually in the same percentage as the increase in the Consumer Price Index, All
Urban Consumers (Boston, Massachusetts) for the prior calendar year (or a
similar index if such index shall not then be in effect).
(b) Reimbursement of Business Expenses. During the Employment Term,
the Company shall reimburse Marten for reasonable authorized business expenses
incurred on behalf of the Company in accordance with Company policy. Any
reimbursements pursuant to this Section 4(b) shall be made upon presentation of
written receipts or other such evidence, reasonably satisfactory to the Company.
5. Employee Benefits. Marten shall have the right to participate in
any retirement plan, profit-sharing plan, group life insurance plan, health or
accident insurance plan or other employee benefit plan which may now be in
effect or hereafter adopted by the Company for its employees, subject to the
eligibility requirements of each such plan. Participation in any such plans
shall be consistent with Marten's rate of compensation to the extent that
compensation is a determinative factor with respect to coverage under any such
plans. Marten shall be entitled to the holidays and annual vacation leave in
accordance with the Company's policy as it exists from time to time.
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6. Bonus. The Company shall pay to Marten such bonuses and other
incentive compensation as the Company's Board of Directors may, in its sole
discretion, from time to time determine.
7. Disability. If, during the term of this Agreement, Marten should
fail to perform his duties under this Agreement on account of illness or other
incapacity which an independent physician satisfactory to both the Company and
Marten shall determine renders Marten incapable of performing his duties under
this Agreement, and such illness or other incapacity shall continue for a period
of more than 90 days, the Company shall have the right, upon written notice to
Marten, to terminate this Agreement. In the event of such termination, Marten
shall be entitled to continue to receive (a) 60% of his base salary (as in
effect on the date of such termination), in semi-monthly installments (after
withholding and other required deductions) or otherwise in accordance with the
Company's standard payroll policies as such policies shall exist from time to
time, for the remainder of the Employment Term (without taking into account such
termination) and (b) disability payments and coverage upon the basis available
to Company employees under, and subject to the terms and provisions of,
disability benefit plans of the Company which may from time to time be in effect
and applicable to employees of the Company. Upon the cessation of salary
payments pursuant to the preceding clause (a), Marten shall then be entitled to
receive Post Employment Benefits (as defined in, and as provided in, Section
12).
8. Termination Due to Death. If Marten shall die during the
Employment Term, the employment of Marten shall thereupon terminate. In the
event of such termination, the estate of Marten shall be entitled to (a) Post
Employment Benefits (as defined in, and only upon the terms provided in, Section
12(b) hereof), and (b) such payments and coverage available to Company employees
under, and for the remainder of the Employment Term subject to the terms and
provisions of, group life insurance or other employee benefit plans of the
Company which may from time to time be in effect and applicable to employees of
the Company.
9. Termination by the Company.
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(a) Termination For Cause. Except as otherwise provided in this
Agreement, the Company may terminate the employment of Marten "for cause" at any
time upon written notice to Marten specifying the cause of termination. For
purposes of this Agreement, "for cause" shall mean the discharge resulting from
a determination by a vote of the Board of Directors that Marten (i) has been
convicted of a felony involving dishonesty, fraud, theft or embezzlement or any
other felony, (ii) has willfully and persistently failed to attend to material
duties or obligations imposed on him under this Agreement, which failure
continues for thirty (30) days following notice thereof to Marten,
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or (iii) has performed or failed to act, which if he were prosecuted and
convicted, would constitute a crime or offense involving money or property of
the Company (in either case in an amount or at a value in excess of $5,000), or
which would constitute a felony in the jurisdiction involved. In the event of
Marten's termination by the Company under this Section 9(a), Marten shall be
subject to the obligations set forth in Section 9(c) but shall in no event be
entitled to receive (A) any base salary, bonus or other amounts for any period
beyond the date of termination or (B) any Post Employment Benefits (as defined
in Section 12). A termination by the Company under this Section 9(a) shall not
prejudice any remedy to which the Company may be entitled at law, in equity or
under this Agreement.
(b) No Termination Without Cause. Marten's employment under this
Agreement may only be terminated by the Company for disability (pursuant to
Section 7), death (pursuant to Section 8) or "for cause" (pursuant to Section
9(a)).
(c) Covenant Not to Compete. During the Employment Term (as it may be
extended or sooner terminated) and for a period of five (5) years thereafter,
Marten will not (i) induce or encourage any employee of the Company to become
employed by him or by any Competitor (defined below); (ii) own, directly or
indirectly, over 5% of the total equity interest in any Competitor; (iii) serve
as a consultant to, or an officer, director, employee, agent or partner of any
Competitor; or (iv) intentionally or actively interfere with, disrupt or attempt
to disrupt the relationships, contractual or otherwise, between the Company and
any significant customer, client, supplier, consultant, employee or stockholder
of the Company. For purposes of this Section 9(c), a Competitor shall be any
individual, partnership, corporation or other business organization engaged in
the development, manufacturing, marketing or distribution of products and/or
technology (whether patented or otherwise) involving (A) topical hemostasis
products, skin deficit wound treating devices or intravenous catheters for the
neonatal, pediatric or adult intravenous drug therapy market (to the extent that
the Company is engaged in any of such businesses as of the date on which Marten
is terminated) or (B) any other business in which the Company is engaged as of
the date on which Marten is terminated. Marten's obligations under this Section
9(c) are an express condition precedent to the Company's obligation, if any, to
provide Marten with Post Employment Benefits under Section 12. If Marten
proposes to take any action which might be considered to violate this Section
9(c), Marten may provide written notice by certified mail to the Company with
copies to the Company's Board of Directors, and Philip P. Rossetti, Esq., Hale
and Dorr, 60 State Street, Boston, Massachusetts 02109, describing such proposed
action in reasonable detail. If the Company shall not have objected to such
proposed action by written notice to Marten within thirty (30) days of such
written notice from Marten, then
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Marten may take such proposed action and shall conclusively be deemed not to
have violated this Section 9(c) by reason of such proposed action. If the
Company shall have objected to the proposed action and the Company and Marten
cannot reach a resolution as to the matter, the Company shall submit the matter
to binding arbitration in Boston, Massachusetts in accordance with the rules of
the American Arbitration Association relating to commercial disputes and
reasonable expenses (including legal fees) with respect to such arbitration
shall be paid by the unsuccessful party to the arbitration. It is the parties'
intent that the provisions of this Section 9(c) shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Section 9(c) shall be adjudicated to be invalid or
unenforceable, this Section 9(c) shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of this Section 9(c) in the particular
jurisdiction in which such adjudication is made. Nothing in this Section 9(c)
shall reduce or abrogate Marten's obligations under Section 3 during the term of
this Agreement.
10. Company's Insurance on Marten. The Company shall secure, at its
own expense, a term life insurance policy for the Employment Term in the face
amount of $1,000,000 for the benefit of such beneficiary or beneficiaries as
Marten shall designate. Marten agrees to assist the Company in procuring such
insurance by submitting to the usual and customary medical and other
examinations and other instruments in writing as may be reasonably required by
the insurance companies to which application is made for such insurance.
Notwithstanding the foregoing, the Company shall not be obligated to obtain such
insurance if after such medical examinations Marten is rated as a high risk and
this rating results in unreasonably high premium payments.
11. Confidentiality Agreement. Marten acknowledges that he has
executed an Employee Confidentiality Agreement with the Company (the "Employee
Confidentiality Agreement"). Marten acknowledges and understands that his
obligations under the Employee Confidentiality Agreement shall survive the
termination of this Agreement.
12. Post Employment Benefits. Subject to the proviso below, upon the
termination of the Employment Term under this Agreement, Marten shall be
entitled to receive from the Company, for a period of eight years, 50% of his
base salary (as in effect on the date of such termination), in semi-monthly
installments after withholding and other required deductions and in accordance
with the Company's standard payroll policies as such policies shall exist from
time to time (the "Post Employment Benefits"); provided, however, that such Post
Employment Benefits shall,
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(a) in the event of termination due to disability pursuant to Section
7, commence upon the cessation of salary payments pursuant to clause (a) of
Section 7;
(b) in the event of termination due to death pursuant to Section 8, be
payable to Marten's estate if and only if the Company shall not have maintained
$1,000,000 of term life insurance on Marten's life as provided in Section 10 and
such insurance shall not have been in effect as of the date of such death
(otherwise, no Post Employment Benefits shall be payable hereunder);
(c) in the event of termination for cause pursuant to Section 9(a),
under no circumstances be payable and shall be deemed waived by Marten; and
(d) in the event of voluntary termination by Marten pursuant to
Section 13, under no circumstances be payable and shall be deemed waived by
Marten.
13. Termination by Marten. Marten may voluntarily terminate the
Employment Term under this Agreement upon 90 days' advance written notice to the
Company to such effect. In the event of such termination, Marten shall be
entitled to receive payments of base salary to the date of such termination, but
shall not be entitled to receive any Post Employment Benefits pursuant to
Section 12.
14. Violation of Covenants. If Marten violates any of his covenants
under Sections 9(c) and 11, Marten agrees and acknowledges that such violation
or threatened violation will cause irreparable injury to the Company and the
Company will be entitled to injunctive relief without the necessity of proving
actual damages.
15. Miscellaneous.
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(a) Waiver. A waiver by either party of a breach of any provision of
this Agreement shall not be deemed or construed to be a waiver of any other
provision or any subsequent breach of the same provision.
(b) Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given five (5)
days after deposited in the United States mail, certified or registered mail,
postage prepaid and addressed as follows:
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To Marten:
James F. Marten
78 Nichols Road
Cohasset, MA 02025
To the Company:
MedChem Products, Inc.
232 West Cummings Park
Woburn, MA 01801
With a copy to:
Philip P. Rossetti, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
Either party may change by notice the address to which notices to it are to be
addressed.
(c) Assignment. Neither party may assign this Agreement or any rights
or duties hereunder without the other party's prior written consent.
(d) Expenses. Each party shall bear its own expenses in connection
with the preparation and entering into of this Agreement. In the event either
party initiates litigation to enforce any other party's obligations or such
party's rights hereunder, the prevailing party shall be entitled to
reimbursement of reasonable attorneys' fees and actual costs incurred in
connection therewith.
(e) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof. This Agreement cannot be changed, altered or amended except in
an instrument in writing signed by all parties.
(f) Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court to be void,
voidable or unenforceable, the same shall in no way affect any other provision
of this Agreement.
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(g) Applicable Law. This Agreement has been entered into and shall be
interpreted in accordance with the laws of the Commonwealth of Massachusetts.
(h) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, Marten and the Company have executed this
Agreement, effective as of the day and year first above written.
MEDCHEM PRODUCTS, INC.
By:/s/ Edward J. Quilty
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Edward J. Quilty
Chief Executive Officer
/s/ James F. Marten
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James F. Marten
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