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Exhibit 10.19
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 20th day of November, 1996, by and between PHARMACIA
BIOTECH INC., a Delaware corporation maintaining its principal offices at
800 Centennial Avenue, Piscataway, New Jersey 08854 (the "Employer" or the
"Company"), and ANDREW D. RACKEAR, an individual with an address of 105 Lincoln
Road, Westfield, N.J. 07090 (the "Employee").
W-I-T-N-E-S-S-E-T-H
WHEREAS, the Employer desires to continue to retain the Employee's services
and the Employee desires to continue in the employ of Employer upon the terms
and conditions set forth in this Agreement; and
WHEREAS, Employer and Employee desire to provide in this Agreement for
certain severance compensation to be paid to Employee in the event his
employment is terminated;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants contained herein, the Employer and Employee mutually agree as follows:
1. EMPLOYMENT
(a) The Employer hereby employs the Employee to serve as a corporate
officer in a senior management position, with the current title of
General Counsel and Employee does hereby accept such employment upon
the terms and conditions set forth herein. Unless otherwise advised by
Employer, the Employee shall report and be responsible to the Vice
President, Legal of Pharmacia Biotech AB. The parties acknowledge that
such employment is "at will".
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(b) Employee shall devote his entire time, attention and energies to the
business of Employer or companies affiliated with the Employer.
Employee shall not during the term of this Agreement be engaged in any
other business activities (except as otherwise agreed upon in writing
by the parties) whether or not such business activity is pursued for
gain, profit or other pecuniary advantage; however this shall not be
construed as preventing the Employee from investing his assets in such
form or manner as will not require any services on the part of the
Employee in the operation of the affairs of the companies in which
such investments are made nor result in a conflict of interest as to
Employee's duties and obligations to Employer.
2. COMPENSATION AND EMPLOYMENT BENEFITS
(a) Base Salary. As compensation for services rendered to the Employer
during the term of this Agreement, the Employer shall pay the Employee
in each then-current year an annual base salary ("Base Salary") of no
less than his current annual salary of One Hundred Twenty Six Thousand
Six Hundred Twenty Dollars ($126,620), payable in accordance with the
standard payroll practices of the Employer (less all necessary
withholdings and deductions for Social Security, federal and state
income taxes).
(b) Annual Bonus. In addition to the Base Salary compensation, Employee
shall be given an opportunity to earn an annual bonus in an amount to
be determined at Employer's sole discretion, depending upon
performance and objectives to be set by the Employer. The actual
amount of each year's annual bonus shall be dependent on the extent to
which the Employee attains one or more performance objectives annually
set and agreed upon by the Employer. If no such objectives are agreed
upon or none is attained, then no bonus shall be payable.
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(c) Commencing on January 1, 1997, and January 1st of each calendar year
during which this Agreement is in effect, Employer shall review
Employee's Base Salary and bonus potential for possible increases. Any
such increases shall be at the sole discretion of the Employer.
(d) Employer shall provide Employee with an automobile in accordance
with the policies of the Employer.
(e) Employer will reimburse Employee for all reasonable and anticipated
business expenses incurred by Employee in promoting the business of
Employer upon presentation by Employee, from time to time, of an
itemized account of such expenditures.
(f) Employee shall be entitled to all other fringe benefits as may be
provided from time to time generally to employees of the Employer,
including, without limitation, participation in Employer's pension,
401(k), disability, medical insurance and life insurance plans.
3. TERM OF AGREEMENT
(a) This Agreement shall be effective as of the date first above written
and shall continue until terminated by:
(i) mutual written agreement of the parties;
(ii) the Employee's resignation of employment, death or disability
which extends beyond six (6) months;
(iii) termination of Employee's employment by Employer for Cause as
defined in Section 3(c) below; or
(iv) termination of Employee's employment by Employer without Cause.
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(b) If Employee is terminated without Cause by Employer, then Employee
shall be entitled to receive the severance benefits which are
specified in Article 4 below. The parties agree that said severance
benefits are agreed upon as liquidated damages for any and all claims
concerning Employee's employment and its termination by Employer,
except claims to any right to vested pension and 401(k) benefits.
(c) For purposes of this Agreement, the term "Cause" for termination
purposes shall include the following:
(i) any acts of gross misconduct on the part of the Employee with
respect to his duties;
(ii) any flagrant act by the Employee in violation of the reasonable
directions of Employee's superiors;
(iii) conviction of Employee for theft, embezzlement or any other
felony or misdemeanor relating to fraud, dishonesty,
embezzlement or other misappropriation of property;
(iv) the willful and continued failure by Employee to substantially
perform his duties with the Employer after written notice is
given to Employee of such failure, if for thirty (30) days after
receipt of such notice Employee continues to fail to perform;
or
(v) the willful engaging by Employee of conduct which is
demonstrably and materially injurious to the Employer.
(d) For purposes of this section "Willful" shall not include acts or
omissions done in good faith and in reasonable belief that such acts
or omissions were in the best interests of the Employer.
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(e) In the event that the Employee is both (i) removed from his position
within the Company, and (ii) not given a different position at a
similar level with the Company or any of its affiliates or
subsidiaries, then Employee may elect to treat such event as a
"Constructive Termination" and receive the severance benefits as are
provided for in Article 4 below; provided, however, that the Employee
must first notify the Employer of the specific event(s) upon which he
is claiming this "Constructive Termination" election and such event(s)
must remain unchanged for thirty (30) days from the date the Employee
has provided such notice to the Employer. If the event remains
unchanged, the Employee shall be deemed to have received written
notice of termination at the expiration of the thirty (30) day period,
as required by paragraph 4(g). The Employee may elect to treat any
relocation to a facility more than thirty-five (35) miles from the
Employee's principal office as a Constructive Termination.
4. SEVERANCE BENEFITS
(a) In the event (i) the Employee terminates this Agreement due to a
"Constructive Termination" event as provided for in Section 3(e)
above, or (ii) the Employer terminates the employment of Employee at
any time without Cause, then the Employee's sole and exclusive relief
and the agreed upon liquidated damages for such termination in lieu of
any other severance or termination benefits or payments of any kind
whatsoever, which are hereby expressly waived, shall be that the
Employer shall be required to pay the Employee the following:
(i) his Senior Total Salary (as defined in Section 4(c) below) for a
period of eighteen (18) months from the Employee's date of
termination; and
(ii) one hundred percent (100%) of the Employee's then-current annual
bonus potential for any month the Employee works up to the
effective date of termination. For example, if the Employee's
effective date of termination is at the end of February, he will
be entitled to receive
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two-twelfths (2/12) of the entire bonus he could have earned for
that year. The Employee will be deemed to have worked for a
particular month if his effective date of termination is after
the fifteenth date of any month.
(b) The parties acknowledge and specifically agree that these liquidated
damages shall not be deemed or construed to be a penalty of any sort
whatsoever. Additionally, the Employee acknowledges and agrees that such
liquidated damages have been voluntarily and mutually agreed upon as
sufficient consideration for any and all claims and damages of any nature
whatsoever relating to his employment and its termination (including,
without limitation, any and all claims concerning any manner of wrongful
discharge, breach of contract, discrimination, or any other claim
concerning the means, methods and purposes of Employee's termination), all
of which are hereby expressly waived.
(c) For purposes of this Article 4, the term "Senior Total Salary" shall mean
the highest annual rate of Base Salary and Annual Bonus paid to the
Employee in any year during the two (2) year period of time immediately
prior to the Employee's date of termination.
(d) During the 18-month period that the Employee is receiving any severance
payments pursuant to Section 4(a) above, the Employee shall also be
entitled to receive the following additional severance benefits:
(i) participation in the Employer's then-current life insurance and
medical and dental insurance plans to the extent the Employee is
not receiving any similar respective benefits from any
subsequent employment;
(ii) reasonable executive outplacement services (e.g., secretarial
service, employment consults, etc.), at Employer's expense for
up to one (1) year from the date of termination or until
Employee commences new employment. Alternatively, upon
termination Employee may elect to
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receive fifteen percent (15%) of his final annual Base Salary, in
lieu of receiving any outplacement services;
(iii) $15,000 in cash or, alternatively at Employee's option, a $15,000
credit against the purchase of the Employee's then-current
company car. The Employee may elect to purchase his company car
at either fair market value or book value. The Employee must
exercise his purchase option prior to the effective date of his
termination. Any part of the $15,000 credit not used to purchase
the car will be paid to Employee. If the Employee elects not to
purchase his company car, he will return it to the Employer on or
before his date of termination.
(e) All payments and benefits paid under this Article 4 shall be made be in
accordance with Employer's then-current standard policies and practices.
Appropriate and required withholding and deductions for social security,
federal and state income taxes, together with any other deductions
authorized by Employee or required by law or court order shall be made and
will reduce any gross amounts to be paid under this Agreement.
(f) Other than as specifically set forth in Article 4(d)(i) and (ii), there
shall be no offset or reduction for any salary or other compensation
received by Employee from subsequent employment.
(g) Employer shall provide Employee with at least sixty (60) days prior written
notice of any Constructive Termination or termination without Cause. With
respect to any Constructive Termination, the sixty (60) day notice period
will be deemed to begin thirty (30) days after the Employee has provided
notice to the Employer of an event which is claimed to constitute a
Constructive Termination, if the event remains unchanged as set forth in
Article 3(e). The Employee may request that his termination become
effective before the sixty day period ends. In such event, the Employee
shall be paid as if he were employed for the sixty day period.
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(h) The Employee will receive a lump sum payment for any unused vacation.
5. CONFIDENTIAL INFORMATION
The confidentiality agreement signed by Employee at the commencement of the
Employee's employment remains in effect and is incorporated herein and made
a part of this Agreement. If requested by the Company, the Employee will
execute any similar agreement prior to the termination of employment to
protect against future disclosures of the Employer's confidential
information.
6. MISCELLANEOUS
(a) The invalidity or unenforceability of any particular provisions of
this Agreement shall not affect the other provisions hereof, and
the Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
(b) Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing to the respective party at the
address indicated below, or at some other designated address, and if
sent by (i) personal delivery, (ii) registered or certified mail,
return receipt requested, or (iii) Federal Express or other similar
nationally known overnight delivery service:
(1) To Employee, at the address indicated above, and
(2) To the Employer, (Attention: President) at its principal
office, with a copy to the Pharmacia Biotech Inc. Law
Department (Attn: General Counsel) at the same address.
(c) The rights and obligations of Employee under this Agreement shall
inure to the benefit and shall be binding upon the successors and
assigns of the Employer.
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including any successors by merger, purchase or otherwise. The
Agreement may not be assigned by Employee. Any such attempted
assignment shall be null and void.
(d) This Agreement has been made in the State of New Jersey. It shall be
governed by the laws of the State of New Jersey and all disputes
shall be resolved in the State or Federal Courts located in the State
of New Jersey.
(e) This instrument contains the entire agreement of the parties with
respect to the employment and termination of Employee and supersedes
all prior agreements or arrangements between the parties concerning
such subject matters. This Agreement cannot be changed orally but
only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or
discharge is sought.
The parties hereto have executed this Agreement as of the day and year first
above written.
EMPLOYEE PHARMACIA BIOTECH INC.
/s/ Andrew D. Rackear /s/ Michael Woehler
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Andrew D. Rackear Michael Woehler
President
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