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EXHIBIT 10.37
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of December 15, 2000 between
ARIAD Pharmaceuticals, Inc. (the "Company") a Delaware corporation, and Lee C.
Steele (the "Employee").
1. Employment, Duties and Acceptance.
1.1 The Company hereby employs the Employee, for the Term (as
hereinafter defined), to render full-time services to the Company,
and to perform such duties as he shall reasonably be directed by
the Chief Executive Officer of the Company to perform. The
Employee's title shall be designated by the Chief Executive
Officer and initially shall be Chief Financial Officer and Senior
Vice President.
1.2 The Employee hereby accepts such employment and agrees to render
the services described above.
1.3 The principal place of employment of the Employee hereunder shall
be in the greater Boston, Massachusetts area, or other locations
reasonably acceptable to the Employee. The Employee acknowledges
that for limited periods of time he may be required to provide
services to the Company outside of the Boston, Massachusetts area.
1.4 Notwithstanding anything to the contrary herein, although the
Employee shall provide services as a full-time employee, it is
understood that the Employee may (a) have an academic appointment
and (b) participate in professional activities (collectively,
"Permitted Activities'); provided, however, that such Permitted
Activities do not interfere with the Employee's duties to the
Company.
2. Term of Employment.
The term of the Employee's employment under this Agreement (the "Term")
shall commence on January 15, 2001 (the "Effective Date"), or such other
date mutually agreed upon by the parties, and shall end on December 31,
2003, unless sooner terminated pursuant to Section 4 or 5 of this
Agreement; provided that this Agreement shall automatically be renewed
for successive one-year terms (the Term and, if the period of employment
is so renewed, such additional period(s) of employment are collectively
referred to herein as the "Term") unless terminated by written notice
given by either party to the other at least ninety days prior to the end
of the applicable Term.
3. Compensation.
3.1 As full compensation for all services to be rendered pursuant to
this Agreement, the Company agrees to pay the Employee, during the
Term, a salary at the fixed rate of $210,000 per annum during the
first year of the Term and increased each year thereafter, by
amounts, if any, to be determined by the Board of Directors of the
Company (the "Board"), in its sole discretion, payable in equal
biweekly installments, less such deductions or amounts to be
withheld as shall be required by applicable law and regulations.
3.2 Each year, the Company shall pay the Employee a discretionary
bonus of up to 30% of base salary, which bonus shall be determined
annually by the Board. The bonus, if any, may be paid in the form
of stock options, stock awards, deferred compensation or cash, as
determined by the Board.
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3.3 The Company shall pay or reimburse the Employee for all reasonable
expenses actually incurred or paid by him during the Term in the
performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other
supporting information as it may require.
3.4 The Employee shall be eligible under any incentive plan, stock
award plan, bonus, deferred or extra compensation plan, pension,
group health, disability and life insurance or other so-called
"fringe" benefits which the Company provides for its executives at
the comparable level. All stock options and stock awards granted
to the Employee shall be subject to a vesting schedule which shall
be determined by the Compensation and Stock Option Committee of
the Board. The stock options and stock awards, if any, to be
granted to the Employee shall also be subject to the terms of a
stock option plan and certificate and stock award plan and
certificate, respectively. Any unvested options shall be forfeited
to the Company in the event (a) this Agreement is terminated by
the Company for Cause pursuant to Section 4 herein, or (b) either
party elects not to renew this Agreement pursuant to Section 2
herein.
3.5 The Company shall grant the Employee an option to purchase 110,000
shares of the Company's Common Stock at the fair market value on
the date of the Board's approval, in accordance with the Company's
1991 Stock Option Plan for Employees, as amended. The Employee
agrees that all such options shall be subject to a four-year
vesting schedule, vesting in equal increments of 25% on each
anniversary of their issuance. Any unvested options shall be
forfeited to the Company in the event (a) this Agreement is
terminated by the Company for Cause pursuant to Section 4 herein,
or (b) either party elects not to renew this Agreement pursuant to
Section 2 herein.
4. Termination by the Company.
The Company may terminate this Agreement, if any one or more of the
following shall occur:
(a) The Employee shall die during the Term; provided, however, the
Employee's legal representatives shall be entitled to receive the
compensation provided for hereunder to the last day of the month
in which his death occurs.
(b) The Employee shall become physically or mentally disabled, whether
totally or partially, so that he is unable substantially to
perform his services hereunder for (i) a period of 180 consecutive
days, or (ii) for shorter periods aggregating 180 days during any
twelve month period.
(c) The Employee acts, or fails to act, in a manner that provides
Cause for termination. For purposes of this Agreement, the term
"Cause" means (i) the failure by the Employee to perform any of
his material duties hereunder, (ii) the conviction of the Employee
of any felony involving moral turpitude, (iii) any acts of fraud
or embezzlement by the Employee involving the Company or any of
its Affiliates, (iv) violation of any federal, state or local law,
or administrative regulation related to the business of the
Company, (v) a conflict of interest, (vi) conduct that could
result in publicity reflecting unfavorably on the Company in a
material way, (vii) failure to comply with the written policies of
the Company, or (viii) a breach of the terms of this Agreement by
the Employee. The Company shall provide the Employee written
notice of termination pursuant to this Section 4, and Employee
shall have 30 days to cure or remedy such failure or breach, in
which case this Agreement shall not be terminated.
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5. Termination by the Employee.
5.1 The Employee may terminate this Agreement, if any one or more of
the following shall occur:
(a) a material breach of the terms of this Agreement by the
Company and such breach continues for 30 days after the
Employee gives the Company written notice of such breach;
(b) the Company shall make a general assignment for benefit of
creditors; or any proceeding shall be instituted by the
Company seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition
of it or its debts under law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking entry of an order for relief or the appointment of
a receiver, trustee, or other similar official for it or
for any substantial part of its property or the Company
shall take any corporate action to authorize any of the
actions set forth above in this subsection 5(b);
(c) an involuntary petition shall be filed or an action or
proceeding otherwise commenced against the Company seeking
reorganization, arrangement or readjustment of the
Company's debts or for any other relief under the Federal
Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency act or law, state or federal, now or
hereafter existing and remain undismissed or unstayed for a
period of 30 days; or
(d) a receiver, assignee, liquidator, trustee or similar
officer for the Company or for all or any part of its
property shall be appointed involuntarily a Change in
Control as defined in Section 14.
6. Severance.
6.1 If (i) the Company terminates this Agreement without Cause or (ii)
the Employee terminates this Agreement pursuant to Section 5.1(a),
then: (1) except in the case of death or disability, the Company
shall continue to pay Employee his current salary for the
remaining period of the applicable Term; (2) all stock options and
Bonus Options (as hereinafter defined) granted pursuant to this
Agreement that would have vested during the Term shall vest
immediately prior to such termination; and (3) the Company shall
continue to provide all benefits subject to COBRA at its expense
for up to one year.
6.2 In the event of a consummation of a Change in Control of the
Company, and if the Employee gives notice of termination within 90
days after such occurrence, then (i) all stock, stock options,
stock awards, similar equity rights, and Bonus Options granted to
the Employee shall immediately vest and remain fully exercisable
through their original term with all rights; and (ii) the Company
shall continue to pay the Employee his then-current salary for the
shorter of (a) six months, or (b) the remaining period of the
applicable Term.
7. Other Benefits.
In addition to all other benefits contained herein, the Employee shall be
entitled to:
(a) Vacation time of four weeks per year taken in accordance with the
vacation policy of the Company.
(b) After six years of employment, one three-month period of fully
paid leave of absence in accordance with Company policies in place
at that time; it being understood that such
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policies may restrict the Employee from taking such leave of
absence until a time that is acceptable to the Company and may
(c) Group health, disability and life insurance.
(d) The Company shall provide the Employee with an automobile
allowance of $750 per month and standard tax preparation and
planning services.
(e) The Company will provide the Employee with a deferred compensation
option award (the "Option") under the Company's 1997 Executive
Compensation Plan (the "Plan") in the amount of $35,000. The
Option shall be subject to a four-year vesting schedule, vesting
in equal increments of 25% on each anniversary of their issuance,
and the other terms and provisions of the Plan. The Option,
whether vested or not, and not previously exercised, shall be
forfeited to the Company in the event (a) this Agreement is
terminated by the Company for Cause pursuant to Section 4 herein
or (b) violation of the non-competition and non-solicitation
provisions of Section 10 herein.
8. Confidentiality.
8.1 The Employee acknowledges that, during the course of performing
his services hereunder, the Company shall be disclosing
information to the Employee related to the Company's Field of
Interest, Inventions, projects and business plans, as well as
other information (collectively, "Confidential Information"). The
Employee acknowledges that the Company's business is extremely
competitive, dependent in part upon the maintenance of secrecy,
and that any disclosure of the Confidential Information would
result in serious harm to the Company.
8.2 The Employee agrees that the Confidential Information only shall
be used by the Employee in connection with his activities
hereunder as an employee of the Company, and shall not be used in
any way that is detrimental to the Company.
8.3 The Employee agrees not to disclose, directly or indirectly, the
Confidential Information to any third person or entity, other than
representatives or agents of the Company. The Employee shall treat
all such information as confidential and proprietary property of
the Company.
8.4 The term "Confidential Information" does not include information
that (a) is or becomes generally available to the public other
than by disclosure in violation of this Agreement, (b) was within
the Employee's possession prior to being furnished to such
Employee, (c) becomes available to the Employee on a
nonconfidential basis or (d) was independently developed by the
Employee without reference to the information provided by the
Company.
8.5 The Employee may disclose any Confidential Information that is
required to be disclosed by law, government regulation or court
order. If disclosure is required, the Employee shall give the
Company advance notice so that the Company may seek a protective
order or take other action reasonable in light of the
circumstances.
8.6 Upon termination of this Agreement, the Employee shall promptly
return to the Company all materials containing Confidential
Information, as well as data, records, reports and other property,
furnished by the Company to the Employee or produced by the
Employee in connection with services rendered hereunder.
Notwithstanding such return or any of the provisions of this
Agreement, the Employee shall continue to be bound by the terms of
the confidentiality provisions contained in this Section 8 for a
period of three years after the termination of this Agreement.
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8.7 In connection with his employment by the Company, the Employee
hereby acknowledges that he may enter into more than one agreement
with regard to (a) the confidentiality of certain books, records,
documents and business, (b) rights to certain inventions,
proprietary information, and writings, (c) publication of certain
materials, and (d) other related matters (the "Confidential
Matters") of the Company (the "Confidentiality Agreements"). In
order to clarify any potential conflicts between certain
respective provisions of such Confidentiality Agreements, the
Employee and the Company hereby agree that, as among such
Confidentiality Agreements, the provision (or part thereof) in any
such Confidentiality Agreement which affords the greatest
protection to the Company with respect to the Confidential Matters
shall control.
9. Inventions Discovered by the Employee While Performing Services
Hereunder.
During the Term, the Employee shall promptly disclose to the Company any
invention, improvement, discovery, process, formula, or method or other
intellectual property, whether or not patentable, whether or not
copyrightable (collectively, "Inventions") made, conceived or first
reduced to practice by the Employee, either alone or jointly with others,
while performing service hereunder. The Employee hereby assigns to the
Company all of his right, title and interest in and to any such
Inventions. During and after the Term, the Employee shall execute any
documents necessary to perfect the assignment of such Inventions to the
Company and to enable the Company to apply for, obtain, and enforce
patents and copyrights in any and all countries on such Inventions. The
Employee hereby irrevocably designates the Chief Patent Counsel to the
Company as his agent and attorney-in-fact to execute and file any such
document and to do all lawful acts necessary to apply for and obtain
patents and copyrights and to enforce the Company's rights under this
paragraph. This Section 9 shall survive the termination of this
Agreement.
10. Non-Competition and Non-Solicitation.
During the Term and for a period of one year following the date of
termination or nonrenewal for any reason (other than termination pursuant
to Section 5.1(a): (a) the Employee shall not in the United States or in
any country in which the Company shall then be doing business, directly
or indirectly, enter the employ of, or render any services to, any
person, firm or corporation engaged in any business competitive with the
business of the Company or of any of its subsidiaries or affiliates of
which the Employee may become an employee or officer during the Term; he
shall not engage in such business on his own account; and he shall not
become interested in any such business, directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent,
employee, trustee, consultant, or any other relationship or capacity;
provided, however, that nothing contained in this Section 10 shall be
deemed to prohibit the Employee from acquiring, solely as an investment,
shares of capital stock of any public corporation; (b) neither the
Employee nor any Affiliate of the Employee shall solicit or utilize, or
assist any person in any way to solicit or utilize, the services,
directly or indirectly, of any of the Company's directors, consultants,
members of the Board of Scientific and Medical Advisors, officers or
employees (collectively, "Associates of the Company"). This
nonsolicitation and nonutilization provision shall not apply to
Associates of the Company who have previously terminated their
relationship with the Company.
10.1 If the Employee commits a breach, or threatens to commit a breach,
of any of the provisions of this Section 10, the Company shall
have the following rights and remedies:
10.1.1 The right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any
such breach or threatened breach shall cause irreparable
injury to the Company and that money damages shall not
provide an adequate remedy to the Company; and
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10.1.2 The right and remedy to require the Employee to account for
and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits
(collectively "Benefits") derived or received by the
Employee as the result of any transactions constituting a
breach of any of the provisions of the preceding paragraph,
and the Employee hereby agrees to account for and pay over
such Benefits to the Company.
Each of the rights and remedies enumerated above shall be
independent of the other, and shall be severally
enforceable, and all of such rights and remedies shall be
in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
10.2 If any of the covenants contained in Section 8, 9 or 10, or any
part thereof, is hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect without
regard to the invalid portions.
10.3 If any of the covenants contained in Section 8, 9 or 10, or any
part thereof, is held to be unenforceable because of the duration
of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to
reduce the duration and/or area of such provision and, in its
reduced form, such provision shall then be enforceable.
10.4 The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 8, 9 and 10 upon the
courts of any state within the geographical scope of such
covenants. In the event that the courts of any one or more of such
states shall hold any such covenant wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of
the parties hereto that such determination not bar or in any way
affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such
covenants, as to breaches of such covenants in such other
respective jurisdictions, the above covenants as they relate to
each state being, for this purpose, severable into diverse and
independent covenants.
11. Indemnification.
The Company shall indemnify the Employee, to the maximum extent permitted
by applicable law, against all costs, charges and expenses incurred or
sustained by him in connection with any action, suit or proceeding to
which he may be made a party by reason of his being an officer, director
or employee of the Company or of any subsidiary or affiliate of the
Company. The Company shall provide, subject to its availability upon
reasonable terms (which determination shall be made by the Board) at its
expense, directors and officers insurance for the Employee in reasonable
amounts. Determination with respect to (a) the availability of insurance
upon reasonable terms and (b) the amount of such insurance coverage shall
be made by the Board in its sole discretion.
12. Notices.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given if sent by prepaid telegram (confirmed delivery
by the telegram service), private overnight mail service (delivery
confirmed by such service), registered or certified mail (return receipt
requested), or delivered personally, as follows (or to such other address
as either party shall designate by notice in writing to the other in
accordance herewith):
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If to the Company:
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, Massachusetts 02139
Attention: Chief Executive Officer
Telephone: (617) 494-0400
Fax: (617) 494-1828
If to the Employee:
Mr. Lee C. Steele
3 Durham Street, No. 2
Boston, Massachusetts 02115
13. General
13.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts
applicable to agreements made and to be performed entirely in
Massachusetts.
13.2 The Section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation
of this Agreement.
13.3 This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the subject matter hereof. No
representation, promise or inducement has been made by either
party that is not embodied in this Agreement, and neither party
shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
13.4 This Agreement and the Employee's rights and obligations hereunder
may not be assigned by the Employee or the Company; provided,
however, the Company may assign this Agreement to an Affiliate or
a successor-in interest.
13.5 This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be
waived, only by a written instrument executed by the parties
hereto, or in the case of a waiver, by the party waiving
compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. No waiver by a party of
the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
14. Definitions. As used herein the following terms have the following
meaning:
(a) "Affiliate" means and includes any corporation or other business
entity controlling, controlled by or under common control with the
corporation in question.
(b) The "Company's Field of Interest" is the discovery, development
and commercialization of pharmaceutical products based on (a)
intervention in signal transduction pathways and (b) gene and cell
therapy. The Company's Field of Interest may be changed at any
time at the sole discretion of the Company.
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(c) "Person" means any natural person, corporation, partnership, firm,
joint venture, association, joint stock company, trust,
unincorporated organization, governmental body or other entity.
(d) "Subsidiary" means any corporation or other business entity
directly or indirectly controlled by the corporation in question.
(e) "Change in Control" means the occurrence of any of the following
events (without the consent of the Employee):
(i) Any corporation, person or other entity makes a tender or
exchange offer for shares of the Company's Common Stock
pursuant to which such corporation, person or other entity
acquires more than 50% of the issued and outstanding shares
of the Company's Common Stock;
(ii) The stockholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into
another corporation or to sell or otherwise dispose of all
or substantially all of the Company's assets; or
(iii) Any person within the meaning of Section 3 (a) (9) or
Section 13 (d) of the Securities Exchange Act of 1934
acquires more than 50% of the combined voting power of
Company's issued and outstanding voting securities entitled
to vote in the election of the Board."
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ARIAD PHARMACEUTICALS, INC.
By /s/ Harvey J. Berger, M.D.
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Harvey J. Berger, M.D.
Chairman and Chief Executive Officer
EMPLOYEE
/s/ Lee C. Steele
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Lee C. Steele