Exhibit 10.7
[Letterhead of Regeneron Pharmaceuticals, Inc.]
December 31, 1998
P. Roy Vagelos, M.D.
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Dear Roy:
I am pleased to confirm Regeneron Pharmaceuticals, Inc.'s offer to employ
you as a part-time employee. This letter sets forth the terms of your employment
which, if acceptable, will commence effective January 1, 1999.
1. Duties. Consistent with your election by the Board of Directors of
Regeneron Pharmaceuticals, Inc. (the "Company"), you will continue to serve as
Chairman of the Board of Directors of the Company in accordance with our
By-Laws. In addition, however, you will also provide services considerably
beyond those set forth in the By-Laws that describe the duties of the Chairman
of the Board. As an employee, you will attend and participate in meetings with
senior management and other employees and, when appropriate, third parties, to
review the operations and potential operations of the Company; assist senior
management in developing operational and research strategies and plans for the
Company and provide advice about implementing such strategies and plans; assist
and advise in hiring and retaining senior personnel of the Company; and such
other and further activities as may be reasonably required by the Company. Your
activities may take place in the facilities of the Company or elsewhere, as
required and reasonable. The level of effort required for these activities will
approximate 30 to 50 hours per month.
2. Compensation. As an employee, you will receive an initial annual salary
of $100,000. Your salary will be paid in accordance with the Company's customary
payroll practices. Subject to any legal requirements or approvals, as an
additional incentive, the Company will recommend to the Compensation Committee
that you will be granted an option under the terms of the Company's Amended and
Restated 1990 Long-Term Incentive Plan giving you the right to purchase up to
162,500 shares of the Company's Common Stock at an exercise price of the fair
market value on the date of grant, with a five-year vesting schedule. In
addition, the Company will annually recommend to the Compensation Committee that
you be granted additional grants ("Additional Grants") on or about the first,
second, third, and fourth anniversaries of the
date of grant of the option award described in the second sentence of this
paragraph (the "Dates of Grant") in the amount of the greater of (a) 125,000
additional options (adjusted, as necessary, for recapitalizations or similar
changes in the Company's equity structure) or (b) 125% of the highest annual
grant made to an officer of the Company at the time of each respective year's
annual grant to officers. Such Additional Grants are subject to compliance with
legal requirements, your continued employment by the Company pursuant to this
Agreement (or an amendment or amendments thereto) on the respective Date of
Grant, and the existence of an appropriate option plan pursuant to which options
and other awards are broadly available to employees and pursuant to which shares
underlying such options or other awards have been duly authorized and are
actually available for grant. You agree that the determination of the number of
shares underlying the Additional Grants shall not consider extraordinary grants
made to any officers (for example, as an inducement to join the Company or in
connection with a promotion) and will be based on the actual grants made during
the year of grant.
The Company will further recommend that the Additional Grants vest on the
following schedule:
Year of Grant Vesting
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2000 4 Years
2001 3 Years
2002 2 Years
2003 1 Year
In the event of your death or disability while you are an employee
of the Company, all options granted to you by the Company, whether exercisable
or nonexercisable at the time of your death or disability, shall immediately
become exercisable and shall immediately be subject to the terms and conditions
of the appropriate option plan that govern the exercise of options by employees
who die while employed by the Company (unless otherwise agreed by you and the
Company).
Our Human Resources group will review with you other employment
benefits for which you may be eligible.
As an employee, you will no longer be eligible to receive
compensation as a member of the Board of Directors or Scientific Advisory Board,
nor will you be eligible, under the current terms of Section 21 of the Company's
Long-Term Incentive Plan, to receive automatic stock option grants made to
nonemployee directors.
3. Proprietary Information and Confidentiality.
You understand that the Company will possess information created,
discovered, or developed by, or otherwise becomes known to, the Company or in
which property rights have been or may be assigned or otherwise conveyed to the
Company (whether or not the information has commercial value in the business in
which the
Company is or proposes to be engaged) and is treated by the Company as
confidential. All such information is hereinafter called "Proprietary
Information" and includes, but is not limited to, systems, processes, formulae,
data, functional specifications, computer software, programs and displays, know
how, improvements, discoveries, developments, designs, inventions, techniques,
marketing plans, strategies, forecasts, new products, unpublished financial
statements, budgets, projection, licenses, prices, costs, and customer and
supplier lists, and any and all other intellectual property.
You agree that you will treat all Proprietary Information as
confidential and will not, without the prior written consent of the Company,
disclose or use the same other than in the course of employment. This obligation
shall continue until such Proprietary Information becomes public knowledge
through no fault on your part regardless of whether you continue to be employed
by the Company.
4. Disclosure and Ownership of Inventions. You agree that you will
promptly disclose to the Company all discoveries and inventions, whether or not
patentable or registrable under copyright or similar statues, made or conceived
or reduced to practice or learned by you, either alone or jointly with others,
during the term of and arising out of your employment by the Company. All such
discoveries and inventions are hereinafter called "Inventions". You agree that
you will, at all times during the term of employment by the Company, use
diligent, best efforts to avoid conflicts of interest involving potential rights
and claims of the Company and of third parties to Inventions and to maximize the
likelihood that any Inventions made, conceived, or developed or reduced to
practice by you during the term of and arising out of your employment by the
Company, will be and become the sole, unencumbered property of the Company and
no other third party will have any rights thereto and that any such conflicts of
interest be resolved in favor of the Company.
All Inventions shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all patents,
copyrights, trademarks, and other rights in connection therewith. You hereby
assign to the Company any rights you may have or acquire in such Inventions. If
the Company is unable, after reasonable effort, to secure your signature on any
document or documents needed to apply for or prosecute any patent, copyright, or
other right or protection relating to an Invention, for any other reason, you
hereby irrevocably designate and appoint the Company and its duty authorized
officers and agents as your agent and attorney-in-fact, to act for and on your
behalf to execute and file any such application or applications, and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights, or similar protections thereon with the same legal force
and effect as if executed by you, and you hereby ratify, affirm, and approve all
such lawfully permitted acts accordingly.
5. Other Agreements. You represent and warrant that, to the best of your
knowledge, your performance of all the terms of this Agreement does not and will
not breach any agreement to keep in confidence Proprietary Information acquired
by you in confidence or in trust, or any other agreement. To the best of your
knowledge, you have
not entered into and shall not enter into any agreement, either written or oral,
in material conflict with this Agreement.
The Company acknowledges that you serve as Chairman of the Board of
Advanced Medicine Inc. and agrees that, subject to your obligations under this
Agreement and as a director of the Company, you may consult for others in the
future.
6. Remedies. Your covenants under this Agreement will survive termination
of employment by the Company. You acknowledge that a remedy at law for any
breach or threatened breach of the provisions of this Agreement would be
inadequate and therefore agrees that the Company shall be entitled to injunctive
relief in addition to any other available rights and remedies in case of any
such breach; provided, however, that nothing contained herein shall be construed
as prohibiting the Company from pursuing any other remedies available for any
such breach or threatened breach.
7. EMPLOYMENT DEEMED "AT WILL". NEITHER THE EXECUTION OF THIS AGREEMENT
NOR ANY TERM CONTAINED HEREIN OR IN ANY OTHER DOCUMENT, PAMPHLET, OR OTHER
WRITING OR ORAL COMMUNICATION OF OR ON BEHALF OF THE COMPANY OR ANY OFFICER OR
REPRESENTATIVE THEREOF SHALL BE CONSTRUED AS GIVING YOU THE RIGHT TO ANY TERM OF
EMPLOYMENT WITH THE COMPANY AND THE COMPANY AND YOU AGREE THAT YOUR EMPLOYMENT
MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT CAUSE, BY EITHER THE COMPANY OR
YOU.
8. Governing Laws. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
REGENERON PHARMACEUTICALS, INC.
By: /s/Paul Lubetkin
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Paul Lubetkin
Vice President, General Counsel and
Secretary
AGREED AND ACCEPTED
/s/Roy Vagelos
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P. Roy Vagelos, M.D.