EXHIBIT 10.74
HYBRIDON, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Stephen R. Seiler ("Executive") and Hybridon, Inc., a Delaware corporation (the
"Company"), and is effective as of the 25th day of July, 2001.
WHEREAS, the Company desires to establish its right to the services of
the Executive, in the capacity described below, on the terms and conditions
hereinafter set forth, and Executive is willing to accept such employment on
such terms and conditions;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, Executive and the Company have agreed and do hereby agree as follows:
1. DEFINITIONS. The capitalized terms in this Agreement shall have the
meanings set forth in this Agreement or Appendix A attached hereto.
2. ENGAGEMENT. The Company hereby agrees to employ the Executive as its
Chief Executive Officer and the Executive hereby accepts such employment on the
terms and conditions hereinafter set forth. Furthermore, Executive shall be
appointed to the Board of Directors of the Company ("Board") as of September 1,
2001.
3. EMPLOYMENT PERIOD. The Executive's employment with the Company shall
commence on September 1, 2001 and shall continue through September 1, 2006,
unless such employment is sooner terminated or subsequently extended as
hereinafter provided. The Company and the Executive may agree to extend the
period during which this agreement is in effect beyond the initial effective
period upon the terms and conditions of this Agreement or upon other terms, but
neither the Company nor the Executive is under any obligation to do so. The
period during which this Agreement is in effect shall constitute the "Employment
Period."
4. DUTIES AND RESPONSIBILITIES.
(a) RESPONSIBILITIES. During the Employment Period, the Executive
shall perform his duties and responsibilities fully and faithfully as Chief
Executive Officer, subject to the control of the Board and the terms and
conditions of this Agreement. During such period, the Executive shall report
solely to the Board, with the Executive acknowledging that the President and
Chief Scientific Officer also is a member of the Board and is free to discuss
all matters with other members of the Board. Executive shall have the duties and
responsibilities customarily assigned to the Chief Executive Officer with such
other duties not inconsistent therewith as may from time to time be assigned to
the Executive by the Board and all employees of the Company shall report to the
Chief Executive Officer, subject to the Board's ultimate control. During the
Employment Period, the Executive shall perform all services and acts necessary
or advisable to fulfill the duties and responsibilities that are commensurate
and consistent
SEILER EMPLOYMENT AGREEMENT
with the Executive's position. Executive agrees he shall devote
substantially his full business time and attention to, and exert his best
efforts in, the performance of his duties hereunder, so as to promote the
business and best interests of the Company and to comply with the Company's
policies as in effect from time to time.
(b) EXCLUSIVITY. Executive shall devote substantially his full time
to his duties hereunder and agrees that, during the Employment Period, the
Executive shall not provide consulting services to, or become an employee of,
any other firm, company, corporation, or person engaged in a business.
(c) LOCATION. The Executive's principal place of business shall be
in Cambridge, Massachusetts, within thirty (30) miles therefrom ("Cambridge
Area") or within ten miles east of Worcester, MA, although travel could be part
of Executive's responsibilities. Executive shall perform services for the
Company in the Cambridge Area and at such other locations where Executive's
services might be required to be performed from time to time. Notwithstanding
the preceding sentence, Executive shall not be required to perform services at a
location other than the Cambridge Area for a period in excess of thirty (30)
consecutive days without the Executive's prior written consent, except in the
event of a change in location of the headquarters of the Company to a site
within the continental United States following a Change of Control.
5. COMPENSATION. For all services rendered by Executive pursuant to
this Agreement, the Company shall pay Executive, and Executive agrees to accept,
the salary, stock options, bonuses, and other benefits described below in this
Section 5.
(a) BASE SALARY. During the Employment Period, the Company shall pay
Executive an annual base salary of $ 360,000.00 ("Base Salary") and such Base
Salary shall be payable at periodic intervals in accordance with the Company's
payroll practices for salaried employees. In accordance with Section 5(d),
below, the amount of Base Salary shall be reviewed and approved, if applicable,
by the Board on at least an annual basis, and any increases in the amount of
Base Salary shall be effective as of the date determined by the Board.
Executive's Base Salary may be increased for any reason, including to reflect
inflation or such other adjustments as the Board may deem appropriate; provided,
however, that Executive's Base Salary, as in effect on the date hereof or as
increased in accordance with the terms of this Agreement, may not be
subsequently decreased, except with the prior written consent of the Executive.
(b) STOCK OPTIONS. The Executive shall be granted, effective as of
the date of this Agreement, a nonqualified stock option with respect to
3,150,000 shares of common stock of the Company ("Shares") and a nonqualified
stock option with respect to 490,000 Shares, each such option subject to an
agreement with terms and conditions substantially similar to those described in
the Hybridon, Inc. Amended and Restated 1997 Stock Incentive Plan (the "Plan"),
excluding Section 4(b) of the Plan and such other provisions of the Plan as are
inconsistent with the terms of Exhibit A, attached hereto.
(c) BONUS. In addition to Base Salary and stock options, and to the
extent a bonus program is established by the Board, the Executive shall receive,
for each
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SEILER EMPLOYMENT AGREEMENT
fiscal year of the Company ending with or within the Employment Period, an
annual bonus ("Bonus") whether pursuant to a formal bonus or incentive plan
or program of the Company or otherwise. Subject to this Section 5(c) and Section
5(d), below, such Bonus shall be based on criteria determined by the Board, in
its discretion. Any Bonus earned by the Executive for service or performance
rendered in any fiscal year within the Employment Period shall be paid to the
Executive in accordance with the applicable plan or program and the Company's
policies governing such matters. In the event of Executive's termination of
employment because of the Executive's death or Disability during the Employment
Period, the Company shall pay to Executive or Executive's estate, as applicable,
the pro rata portion of the Bonus that Executive would have earned in respect of
the portion of the year preceding Executive's death or commencement of
Disability.
(d) ANNUAL COMPENSATION REVIEW. Executive's compensation,
consisting of salary, stock option grants, and bonuses, shall be reviewed
annually by the Board.
(e) MEDICAL, DENTAL AND OTHER HEALTHCARE BENEFITS. During the
Employment Period, Executive shall be eligible to participate in and receive
benefits under the Company's medical, dental, or other healthcare plans, as in
effect from time to time, that are available to officers or employees of the
Company.
(f) RETIREMENT PLAN BENEFITS. Executive shall be entitled to
participate in the Company's tax-qualified and nonqualified retirement plans, as
in effect from time to time, that are available to officers and employees of the
Company and shall be entitled to receive the benefit of contributions to be
made, if any, by the Company for the benefit of Executive under the terms of the
applicable tax-qualified or nonqualified retirement plan.
(g) INCENTIVE PLANS. During the Employment Period, Executive
shall be eligible to receive all benefits, including those under equity
participation or bonus programs, to which key employees are or become eligible
under such plans or programs as may be established by the Company from time to
time.
(h) RELOCATION BENEFITS. Executive shall be entitled to
reimbursement for reasonable and customary moving expenses incurred in
connection with relocating to Cambridge, Massachusetts or the surrounding area,
provided that to the extent the amount payable under this Section 5(h) is
subject to federal, state or local taxation the Company shall pay to the
Executive an amount necessary to place the Executive in the same after-tax
position as the Executive would have been had no such taxes been imposed.
Amounts paid by the Company to the Executive as reimbursement for moving
expenses under this Section 5(h) and amounts paid by the Company to, or on
behalf of, the Executive as payment or reimbursement for legal fees under
Section 14(f) of this Agreement shall not, in the aggregate, exceed $80,000.00.
(i) OTHER BENEFITS. During the Employment Period, Executive
shall be entitled to participate in and receive benefits under such other
employee benefit plans,
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programs, or arrangements as the Company may from time
to time establish and that are available to officers or employees of the
Company, provided that the Executive shall be entitled to an aggregate of at
least four (4) weeks of paid vacation each year.
6. INVESTMENT BY THE EXECUTIVE. As of the date of this Agreement,
Executive shall purchase 510,000 Shares at $0.84 per Share.
7. TERMINATION OF EMPLOYMENT. The remedies described in this Section 7
are the exclusive remedies of the parties in connection with the termination of
Executive's employment under this Agreement
(a) If the Executive's employment with the Company terminates for
any reason, except in connection with a Change of Control as provided for in
Section 7(b), below, then the Executive or his beneficiary, as applicable, shall
be entitled to receive the following severance benefits:
(i) DEATH. In the event Executive's employment hereunder is
terminated by reason of Executive's death, the Company shall pay Executive's
designated beneficiary or beneficiaries any Accrued Obligations; provided that
such amount shall be paid in a lump sum cash payment within thirty (30) days
after the Company's receipt of notification of Executive's death. Additionally,
any stock options previously granted to the Executive by the Company and held by
the Executive on the date of his death shall vest as of such date to the extent
such options would have vested (had Executive's employment not been terminated)
during the portion of the Employment Period that ends on the last day of the
second calendar quarter of the year following the calendar year in which
Executive's death occurred. For this purpose, Executive's Base Salary shall be
his Base Salary in effect immediately before his employment terminated and the
Employment Period shall be the Employment Period in effect immediately before
his termination date.
(ii) DISABILITY. If Executive is unable to perform substantially
all of his duties hereunder due to a Disability and the Executive does not
return to the full-time performance of the Executive's duties within thirty (30)
days after written notice from the Company, the Executive's employment under
this Agreement may be terminated by the Company for Disability. If Executive's
employment hereunder is terminated due to Disability, the Company shall pay
Executive any Accrued Obligations (such payment to be made within thirty (30)
days after such termination in the form of a lump sum cash payment).
Additionally, any stock options previously granted to the Executive by the
Company and held by the Executive on the date of termination of employment under
this subparagraph (ii) shall vest as of such date to the extent such options
would have vested (had Executive's employment not been terminated) during the
portion of the Employment Period that ends on the last day of the second
calendar quarter of the year following the calendar year in which Executive's
employment was terminated under this Section 7(a)(ii). For this purpose,
Executive's Base Salary shall be his Base Salary in effect immediately before
his employment terminated and the Employment Period shall be the Employment
Period in effect immediately before his termination date.
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SEILER EMPLOYMENT AGREEMENT
(iii) TERMINATION BY THE COMPANY FOR CAUSE. The
Company may terminate Executive's employment under this Agreement for Cause at
any time. If Executive's employment hereunder is terminated by the Company for
Cause, the Company shall pay Executive any Accrued Obligations, provided that
such amount shall be paid in a lump sum cash payment within thirty (30) days
after such termination date. Executive shall remain subject to the provisions of
this Agreement that, by their terms, survive the termination of the Executive's
employment with the Company.
(iv) TERMINATION BY THE COMPANY OTHER THAN FOR
DEATH, DISABILITY, OR CAUSE. The Company may, at its option and with thirty
(30) days' written notice, terminate the Executive's employment under this
Agreement without Cause at any time. If the Executive's employment is terminated
by the Company other than on account of Executive's death, Disability, or for
Cause, then, the Company shall pay Executive (A) the lesser of (I) Executive's
Base Salary for the twenty-four (24) consecutive calendar months following the
termination of Executive's employment (such payments to be made under the
Company's payroll practices applicable to salaried executives) and (II) an
amount equal to Executive's Base Salary for the period from the time of
termination until September 1, 2006, and (B) any Accrued Obligations (such
payment to be made within thirty (30) days after Executive's termination date in
the form of a lump sum cash payment). Additionally, any stock options previously
granted to the Executive by the Company and held by the Executive on the date of
termination shall vest as of such date to the extent such options would have
vested during the following thirty-six (36) months (or portion thereof)
remaining in the Employment Period had Executive's employment not been
terminated. For this purpose, Executive's Base Salary shall be his Base Salary
in effect immediately before his employment terminated and the Employment Period
shall be the Employment Period in effect immediately before his termination
date.
(v) TERMINATION BY THE EXECUTIVE FOR GOOD REASON.
Executive may, for Good Reason, terminate this Agreement upon thirty (30)
days' written notice to the Company. If the Executive's employment is terminated
by the Executive for Good Reason, then the Company shall pay the Executive (A)
the lesser of (I) Executive's Base Salary for the twenty-four (24) consecutive
calendar months following the termination of Executive's employment (such
payments to be made under the Company's payroll practices applicable to salaried
executives) and (II) an amount equal to Executive's Base Salary for the period
from the time of termination until September 1, 2006, and (B) any Accrued
Obligations incurred through the date of such termination (such payment to be
made within thirty (30) days after such termination in the form of a lump sum
cash payment). Additionally, any stock options previously granted to the
Executive by the Company and held by the Executive on the date of termination
shall vest as of such date to the extent such options would have vested during
the following thirty-six (36) months (or portion thereof) remaining in the
Employment Period had Executive's employment not been terminated. For this
purpose, Executive's Base Salary shall be his Base Salary in effect immediately
before his employment terminated and the Employment Period shall be the
Employment Period in effect immediately before his termination date.
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SEILER EMPLOYMENT AGREEMENT
(vi) NO DUTY TO MITIGATE; NO OFFSET. In the event of the
termination of the Executive's employment with the Company (other than events of
termination which are the subject of subsections 7(a)(i), 7(a)(ii), 7(a)(iii),
7(b)(ii), 7(b)(iv), 7(b)(v) and 7(b)(vii) to which the doctrine of mitigation by
Executive would not apply), Executive shall have no duty to mitigate damages or
seek employment, and any compensation derived by the Executive from any
subsequent employment or self-employment shall not be offset against or reduce
any amounts to which the Executive is entitled under this Agreement.
(vii) CONTINUATION OF COVERAGE. If the Executive's
employment with the Company is terminated, Executive (and his dependents,
if any) shall be permitted to continue to participate in the Company's benefit
plans, programs, or arrangements to the extent the Company is required by law,
including Part 6 of Title I of the Employee Retirement Income Security Act of
1974, as amended ("COBRA"), to offer such coverage.
(b) TERMINATION AFTER A CHANGE OF CONTROL. If Executive's
employment with the Company is terminated after the effective date of a Change
of Control, Executive shall be entitled to receive severance benefits as
follows:
(i) PARACHUTE PAYMENTS. If all or any portion of the
amounts payable to the Executive under this Agreement or otherwise are subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended ("Code") or a similar state tax or assessment, the Company shall pay
to the Executive an amount necessary to place the Executive in the same
after-tax position as Executive would have been had no such excise tax or
assessment been imposed. The amount payable pursuant to the preceding sentence
shall be increased to the extent necessary to pay income and excise taxes on
such amount. The determination of any amounts payable under this Section 7(b)(i)
shall be made by an independent accounting firm employed by the Company and such
determination shall be final, binding and conclusion on the parties hereto.
(ii) VOLUNTARY RESIGNATION. If Executive's employment
with the Company is terminated by the Executive by reason of his voluntary
resignation within thirty (30) days after the anniversary date of the effective
date of a Change in Control, the Company shall pay or otherwise provide to the
Executive the following severance benefits:
(A) a lump sum cash payment in an amount equal to
the lesser of two (2) times the Executive's current Base Salary at the time of
termination, or the Executive's current Base Salary at the time of termination
multiplied by the aggregate number of years (or any portion thereof, calculated
on a daily basis) remaining in the Employment Period had the Executive's
employment not been terminated, provided that such amount shall be paid to the
Executive within ten (10) days after the date of termination;
(B) until the earlier of the date the Employment
Period
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would otherwise have terminated had Executive's employment not been terminated,
or the expiration of the twenty-four (24) month period measured from the
date of the Executive's termination of employment, the Company shall, at its
sole cost and expense provide Executive and his eligible dependents (if any)
with healthcare, disability, and life insurance benefits substantially similar
to those benefits the Executive and his eligible dependents (if any) were
receiving immediately prior to the Executive's termination of employment;
provided, however,
(1) the Company shall not be
required to provide medical coverage to the extent another employer provides
comparable coverage,
(2) with respect to death and
disability coverage, the Company shall not be required to provide coverage to
the extent another employer provides comparable coverage; and shall pay the cost
of supplemental coverage if a new employer provides less than comparable
coverage, to allow the Executive to purchase coverage to make total coverage
comparable, and
(3) that the coverage provided by
the Company pursuant to this subsection 7(b)(ii)(B) shall be in lieu of
any other continued coverage for which the Executive or his dependents, if any,
would otherwise be eligible pursuant to COBRA.
(iii) TERMINATION BY THE EXECUTIVE FOR GOOD REASON.
If, after the effective date of a Change of Control, Executive terminates
his employment with the Company for Good Reason, the Company shall pay or
otherwise provide to the Executive the severance benefits described in Section
7(a)(v) hereof.
(iv) TERMINATION BY REASON OF DEATH. If, after the
effective date of a Change of Control, Executive's employment with the
Company is terminated by reason of Executive's death, the Company shall pay or
otherwise provide to Executive's designated beneficiary or beneficiaries the
severance benefits described in Section 7(a)(i) hereof.
(v) TERMINATION BY REASON OF DISABILITY. If, after
the effective date of a Change of Control, Executive's employment with
the Company is terminated by the Company by reason of Disability as described in
Section 7(a)(ii) hereof, the Company shall pay or otherwise provide to Executive
the severance benefits described in that section.
(vi) TERMINATION BY THE COMPANY OTHER THAN FOR
DEATH, DISABILITY, OR CAUSE. If, after the effective date of a Change of
Control, Executive's employment with the Company is terminated by the Company
other than for Death, Disability, or Cause, the Company shall pay or otherwise
provide to the Executive the severance benefits described in Section 7(a)(iv)
hereof.
(vii) TERMINATION BY THE COMPANY FOR CAUSE. If,
after the effective date of a Change of Control, Executive's employment with
the Company is
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SEILER EMPLOYMENT AGREEMENT
terminated by the Company for Cause, the Company shall pay Executive the
amounts described in Section 7(a)(iii) hereof.
8. PROPRIETARY INFORMATION; COMPANY DOCUMENTS AND MATERIALS.
(a) PROPRIETARY INFORMATION. Executive acknowledges that
during the Employment Period, Executive will occupy a position of trust and
confidence with respect to Proprietary Information of the Company. Executive
understands that he possesses or will possess Proprietary Information that is
important to the Company's business and operation. Executive acknowledges that
such Proprietary Information is specialized, unique in nature and of great value
to the Company and its Affiliates, and that such information gives the Company
and its Affiliates a competitive advantage. Executive acknowledges that all
Proprietary Information is and shall remain the sole property of the Company or
any of its Affiliates. Executive shall not, without limitation in time or until
such information shall have become public other than by Executive's unauthorized
disclosure (except in connection with the performance of Executive's duties
hereunder) disclose to others or use, whether directly or indirectly, any
Proprietary Information, or anything relating to such information, regarding the
Company or any of its Affiliates.
(b) COMPANY DOCUMENTS AND MATERIALS. Executive agrees that
during Executive's employment by the Company, Executive will not remove any
Company documents or materials, including Proprietary Information, from the
business premises of the Company or deliver any such Company documents or
materials to any person or entity outside the Company, except as Executive is
required to do in connection with performing the duties of Executive's
employment. Executive agrees that, immediately upon the termination of
Executive's employment by Executive or by the Company for any reason, or during
Executive's employment if so requested by the Company, Executive will return all
Company documents and materials, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information, apparatus, equipment and other
physical property, or any reproduction of such property, excepting only (i)
Executive's personal copies of records relating to Executive's compensation;
(ii) Executive's personal copies of any materials previously distributed
generally to stockholders of the Company; and (iii) Executive's copy of this
Agreement.
9. NON-SOLICITATION AND NON-COMPETITION.
(a) NON-SOLICITATION. Executive agrees that during his
employment with the Company and for a period of one (1) year following the
termination of his employment with the Company, the Executive shall not hire,
attempt to hire, or assist in or facilitate in any way the hiring of any person
who, at the time of any such action by the Executive, is an employee of the
Company (or any of its Affiliates).
(b) NON-COMPETITION. Executive agrees that if his employment
with the Company is terminated for any reason, including upon the expiration of
the Employment Period, for a period of one (1) year from the date of such
termination of employment, the Executive shall not, directly or indirectly, own,
manage, operate,
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control, be employed by, participate in, or be connected in any manner
with the ownership, management, operation or control of any company, or any
subsidiary or division of a company, more than 50% of whose annual revenues,
annual research and development expense (including the cost of research and
laboratory personnel) or income is attributable to the business of developing,
marketing or selling antisense therapeutics or oligonucleotide-based
immunostimulatory/immunoregulatory therapeutics or oligonucleotide-based
diagnostics.
10. ASSIGNMENT OF RIGHTS. All Executive Developments shall be made for
hire by Executive for the Company and Executive waives all moral rights. All
Executive Developments shall remain the sole property of the Company. Executive
shall acquire no proprietary interest in any Executive Developments developed or
acquired during the Employment Period. To the extent Executive may, by operation
of law or otherwise, acquire any right, title, or interest in or to any
Executive Development, Executive hereby assigns to the Company all such
proprietary rights. Executive shall, upon the Company's request, whether during
or after the Employment Period, promptly execute and deliver to the Company all
such assignments, certificates and instruments, and shall promptly perform such
other acts, as the Company may from time to time in its discretion deem
necessary or desirable to evidence, establish, maintain, perfect, enforce or
defend the Company's rights in Executive Developments.
11. SUCCESSORS. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) or to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and shall perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. The Company may assign this Agreement without the Executive's
consent to any company that acquires all or substantially all of the Company's
stock or assets. Executive may not assign this Agreement and no person other
than the Executive (or his estate) may assert the Executive's rights under this
Agreement.
12. NOTICE. Any notice, consent, demand or communication required or
permitted to be given by the Company to the Executive under this Agreement shall
be in writing, signed by an officer or other authorized representative of the
Company, and addressed to the Executive's last known address, and shall be
deemed effective upon personal delivery or upon the deposit of same in the U.S.
mail with postage and fees prepaid. Any notice, consent, demand or communication
required or permitted to be given by the Executive to the Company under this
Agreement shall be in writing and signed by the Executive, and shall be deemed
effective only upon receipt of the same by the Secretary of the Company at the
Company's principal office.
13. COMPANY PLANS. Except to the extent otherwise explicitly provided
by this Agreement, any awards made to the Executive under any Company
compensation or benefit plan, program, or arrangement shall be governed by the
terms of that plan, program, or arrangement and any applicable award agreement
thereunder, as in effect from time to time. Notwithstanding the preceding
sentence, Executive shall not be
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SEILER EMPLOYMENT AGREEMENT
entitled to participate in any Company compensation or benefit plan, program
or arrangement that is established after his employment with the Company
terminates, and except as specifically provided in this Agreement, Executive
shall not be entitled to any additional grants or awards under any Company
compensation or benefit plan, program, or arrangement after his employment with
the Company terminates.
14. MISCELLANEOUS PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and terminates and supersedes any and all prior
agreements and understandings (whether written or oral) between the parties with
respect to the subject matter of this Agreement. Executive acknowledges and
agrees that neither the Company, nor anyone acting on its behalf has made, and
in executing this Agreement Executive has not relied upon, any representations,
promises, or inducements except to the extent the same is expressly set forth
herein.
(b) WAIVER. No provision of this Agreement shall be modified,
waived, or discharged unless the modification, waiver, or discharge is agreed to
in writing and signed by Executive and by an authorized officer or
representative of the Company (other than Executive). No waiver by either party
of any breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision at a preceding or subsequent
time.
(c) CAPACITY. The Executive represents and warrants to the
Company that he is not now under any obligation, of a contractual nature or
otherwise, to any person, firm, corporation, association or other entity that is
inconsistent, or in conflict, with this Agreement or which would prevent, limit
or impair in any way the performance by Executive of his obligations hereunder.
(d) CONSULTING. Executive and the Company may, but are not
required to, enter into an agreement pursuant to which Executive will provide
consulting services to the Company after the date of Executive's retirement or
termination of employment with the Company. Any consulting fees paid to the
Executive will be in addition to any retirement or severance payments the
Executive is entitled to receive from the Company or under any plans, programs,
or arrangements maintained by the Company.
(e) SEVERABILITY. In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in violation of
any law or public policy, only the portion of this Agreement that violates such
law or public policy shall be stricken. All portions of this Agreement that do
not violate any statute or public policy shall continue in full force and
effect. Further, any court order striking any portion of this Agreement shall
modify the stricken terms as narrowly as possible to give effect to the
intentions of the parties to this Agreement, as expressed herein.
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(f) LEGAL FEES. The Company shall pay or reimburse to the
Executive an amount equal to reasonable fees for legal representation incurred
by the Executive in connection with the preparation of this Agreement and the
preparation of additional documents and agreements in support of the terms of
this Agreement, including agreements representing the Company's grant of stock
options to the Executive under Section 5(b), above, and agreements representing
Executive's investment in the Company under Section 6, above. Amounts paid by
the Company to, or on behalf of, the Executive as payment or reimbursement for
legal fees under this Section 14(f) and amounts paid by the Company to the
Executive as reimbursement for moving expenses under Section 5(h) of this
Agreement shall not, in the aggregate, exceed $80,000.00.
(g) SURVIVAL OF PROVISIONS. The obligations contained in
Sections 8 and 9 above shall survive the termination or expiration of the
Employment Period or this Agreement, as applicable, and shall be fully
enforceable thereafter in accordance with the terms of this Agreement.
(h) WITHHOLDING. The Executive acknowledges that salary and
all other compensation payable under this Agreement shall be subject to
withholding for income and other applicable taxes to the extent required by law,
as determined by the Company in its sole discretion.
(i) HEADINGS. The headings or other captions contained in this
Agreement are for convenience of reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this Agreement.
(j) GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Massachusetts without giving effect to any conflict of law
rules that would require the application of the laws of any jurisdiction other
than the internal laws of the State of Massachusetts to the rights and duties of
the parties, except to the extent the laws of the State of Massachusetts are
preempted by federal law.
(k) TERMS. Where appropriate in this Agreement, words used in
the singular shall include the plural, and words used in the masculine shall
include the feminine or neuter.
(l) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one agreement binding on the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first mentioned above.
HYBRIDON, INC. EXECUTIVE
BY: /s/ James B. Wyngaarden BY: /s/ Stephen R. Seiler
--------------------------------- -----------------------------
Stephen R. Seiler
TITLE: Chairman, Hybridon, Inc. DATE: August 4, 2001
--------------------------------- -----------------------------
DATE: August 4, 2001
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APPENDIX A
DEFINITIONS
ACCRUED OBLIGATIONS. "Accrued Obligations" shall mean the sum
of (i) any portion of Executive's Bonus accrued as of the date of termination of
the Executive's employment for any reason, including by reason of his death,
which has not yet been paid, and (ii) reimbursement of any reimbursable expense
incurred by the Executive through the date of termination of employment.
AFFILIATE. "Affiliate" shall mean any person or entity which
directly or indirectly controls, is controlled by or is under common control
with the Company, including any entity directly or indirectly controlled by the
Company through the Company's ownership of fifty percent (50%) or more of the
voting interests of such entity.
CAUSE. "Cause" shall mean Executive's (i) material breach of
any material terms of the Agreement, (ii) plea of guilty or nolo contendre to,
or conviction of, the commission of a felony offense, (iii) repeated unexplained
or unjustified absence, or refusals to carry out the lawful directions of the
Board or (iv) material breach of a fiduciary duty owed to the Company under this
Agreement, provided that any action or inaction described by (i), (iii) or (iv),
above, shall not be the basis of a termination of the Executive's employment
with the Company for "Cause" unless the Company provided the Executive with at
least twenty (20) days advance written notice specifying in reasonable detail
the conduct in need of being cured and such conduct was not cured within the
notice period.
CHANGE OF CONTROL. "Change of Control" shall mean the
occurrence of any of the following events:
(i) a change in ownership or control of the Company effected
through either of the following transactions:
(A) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act")),
other than a current stockholder of the Company or a trustee or other fiduciary
holding securities of the Company under an employee benefit plan maintained by
the Company or any corporation owned, directly or indirectly, by the Company's
stockholders in substantially the same proportions as their ownership of the
Company's stock, becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total combined voting power of
the Company's then-outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders and which the Board does not
recommend such stockholders to accept; or
(B) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a majority of the
members of the Board ceases to be comprised of individuals who are Continuing
Members; for such
SEILER EMPLOYMENT AGREEMENT
APPENDIX A
purpose, a "Continuing Member" shall mean an individual who is a member of the
Board on the date of this Agreement and any successor of a Continuing Member who
is elected to the Board or nominated for election by action of a majority of
Continuing Members then serving on the Board; or
(ii) either of the following stockholder-approved
transactions to which the Company is a party:
(A) a merger or consolidation of the Company with any
other corporation other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or
(B) the sale, transfer or complete liquidation or
dissolution of the Company of all or substantially all of the Company's assets.
DISABILITY. "Disability" shall mean the inability of the
Executive to perform all the material duties of Executive's position for a
continuous period of at least ninety (90) days due to a permanent physical or
mental impairment, as determined and certified by a physician selected by the
Executive and with the concurrence of a physician selected by the Company,
provided that if the physician selected by the Executive and the physician
selected by the Company do not agree regarding the determination and
certification, a determination and certification rendered by an independent
physician mutually agreed upon by the Executive and the Company shall be final
and binding on the parties with respect to this Agreement.
EXECUTIVE DEVELOPMENTS. "Executive Developments" shall mean
any discovery, invention, design, method, technique, improvement, enhancement,
development, or other work of authorship that (i) relates to the business or
operation of the Company then conducted or part of the Company's business plan,
or (ii) results from or is suggested by any undertaking assigned to the
Executive or work performed by Executive for or on behalf of the Company,
whether or not during working hours.
GOOD REASON. "Good Reason" shall mean the occurrence of one or
more of the following: (i) any action by the Company which results in a material
diminution of Executive's position, title, annual base salary, authority, duties
or responsibilities or reporting structure; (ii) any material breach of this
Agreement by the Company which is not remedied by the Company within thirty (30)
days after receipt by the Company of notice thereof given by Executive
specifying in reasonable detail the alleged breach; (iii) failure to elect
Executive to serve on the Board during the Employment Period; or (iv) relocation
of the Company's headquarters outside the Cambridge Area or 10 miles east of the
Worcester area, except in the event of a change in the location of the
headquarters of the Company to a site within the continental United States
following a Change of Control.
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SEILER EMPLOYMENT AGREEMENT
APPENDIX A
PROPRIETARY INFORMATION. "Proprietary Information" shall mean
information that was developed, created, or discovered by or on behalf of the
Company, or which became or will become known by, or was or is conveyed to the
Company; including, but not limited to, trade secrets, designs, technology,
know-how, processes, data, ideas, techniques, inventions (whether patentable or
not), works of authorship, formulae, business and development plans, client or
customer lists, software programs and subroutines, source and object code,
algorithms, terms of compensation and performance levels of Company employees,
information about the Company or any of its Affiliates, and their clients and
customers that is not disclosed by the Company or any of its Affiliates for
financial reporting purposes and that was learned by the Executive in the course
of employment by the Company or any of its Affiliates, other information
concerning the Company's actual or anticipated business, research or
development, or which is received in confidence by or for the Company from any
other person, and all papers, resumes, and records (including electronic or
computer-generated records) of the documents containing such Proprietary
Information. Proprietary Information shall not include information that is
publicly available or available through third-party sources so long as it has
not become available through a breach of this Agreement by Executive.
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SEILER EMPLOYMENT AGREEMENT
APPENDIX A
EXHIBIT A
NONQUALIFIED STOCK OPTION
SECTION 5(B) OF THE AGREEMENT
Effective as of the date of this Agreement, Executive is hereby granted
a nonqualified stock option with respect to 3,150,000 Shares ("Option 1") and a
nonqualified stock option with respect to 490,000 Shares ("Option 2")
(collectively, "Options"). The Options shall be evidenced by an agreement with
terms and conditions substantially similar to those described in the Hybridon,
Inc. Amended and Restated 1997 Stock Incentive Plan ("Plan"), provided that
neither the grant nor the exercise of the Options shall be conditioned on
approval of the Company's shareholders.
Option 1 is subject to terms which include the following:
EXERCISE PRICE: $0.84 per Share.
VESTING: Quarterly with respect to a pro rata portion of the
Shares subject to the Option, provided that vesting
shall commence on September 1, 2001 and the Option
shall vest in full not later than September 1, 2006.
OPTION TERM: 10 years.
CHANGE OF CONTROL The Option shall become fully vested and
nonforfeitable, to the extent the Option was not
previously vested or exercised, as of the date that
is ten (10) business days before the effective date
of a Change of Control.
TERMINATION OF
EMPLOYMENT To the extent the Option has vested, the Option shall
be exercisable for a period of six (6) months after
the effective date of a termination of Executive's
employment for any reason other than death or
Disability. If Executive's employment is terminated
by reason of death or Disability, the Option shall be
exercisable, by the Executive or his beneficiaries,
for a period of twelve (12) months after the
effective date of his termination of employment.
Option 2 is subject to terms which include the following:
EXERCISE PRICE: $0.71 per Share.
VESTING: Quarterly with respect to a pro rata portion of the
Shares subject to the Option, provided that vesting
shall commence on September 1, 2001 and the Option
shall vest in full not later than September 1, 2002.
SEILER EMPLOYMENT AGREEMENT
APPENDIX A
OPTION TERM: 10 years.
CHANGE OF CONTROL The Option shall become fully vested and
nonforfeitable, to the extent the Option was not
previously vested or exercised, as of the date that
is ten (10) business days before the effective date
of a Change of Control.
TERMINATION OF
EMPLOYMENT To the extent the Option has vested, the Option shall
be exercisable for a period of six (6) months after
the effective date of a termination of Executive's
employment for any reason other than death or
Disability. If Executive's employment is terminated
by reason of death or Disability, the Option shall be
exercisable, by the Executive or his beneficiaries,
for a period of twelve (12) months after the
effective date of his termination of employment.
2
SEILER EMPLOYMENT AGREEMENT
APPENDIX A