EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), is made and entered into
this 15th day of December 2005, by and between Archemix Corp. (which, together
with any parent companies, subsidiaries, affiliates, successors and assigns
shall be referred to as "Archemix" or the "Company"), with its principal offices
located at One Hampshire Street, Cambridge, MA 02139 and John Duncan Higgons
(the "Employee").
WITNESSETH
WHEREAS, the Company has a need for the Employee's professional and
personal services in an executive capacity; and
WHEREAS, the Employee and the Company desire to enter into a formal
Employment Agreement to fully recognize the anticipated contributions of the
Employee to the Company and to assure continuous, harmonious conduct of the
Company's business.
NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions, and conditions contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the parties agree as follows:
1. POSITION. Subject to the terms and conditions of this Agreement, the
Company will employ the Employee, and the Employee will be employed by
the Company as Executive Vice President, Business Operations ("EVP").
The Employee's responsibilities shall include any responsibilities
normally associated with such position and any other responsibilities
assigned reasonably by the Board of Directors (the "Board"). The
Employee's position and assignments are subject to change.
2. DEVOTION TO DUTIES. Except for vacations and absences due to temporary
illness in accordance with the policies of the Company, while the
Employee is employed hereunder, the Employee will use best efforts to
perform faithfully all duties assigned to the Employee pursuant to
this Agreement and to devote the Employee's full business time and
energies to the business and affairs of the Company; provided,
however, that the Employee may, with the prior written consent of the
Board, engage in other business activities which do not conflict with
the Employee's duties hereunder, whether or not such activity is
pursued for gain, profit or other pecuniary advantage. While the
Employee is employed hereunder, the Employee will not serve as an
employee, consultant, director or advisor to any person or entity
without the prior written consent of the Company.
3. TERM AND TERMINATION. The Employee's employment with Archemix shall
commence on February 1, 2006 (the "Employee's Starting Date") and
shall be considered at-will employment, which may be terminated by the
Employee or Archemix at any time for any reason. In the event that the
Employee is terminated, the Employee shall be entitled to severance
pay equal to nine (9) months Base Salary and a pro-rata Annual Bonus
with the respect to the year in which the termination of employment
occurred (calculated by multiplying the target Annual Bonus by a
fraction, the numerator of which shall be the
number of days worked in the current calendar year of the termination
of employment and the denominator of which shall be 365) plus
continued vesting of the Option for this 9-month period (collectively
the "Severance Package"). The foregoing notwithstanding the Employee
shall not be entitled to receive the Severance Package if the Employee
is terminated for Cause. For purposed of this Agreement "Cause" shall
mean any of the following (each of which shall be determined in the
sole discretion of the Company): (a) a continuing failure by the
Employee to render services to the Company in accordance with the
Employee's assigned duties (other than such a failure as a result of
the Employee's death or disability); (b) any act or omission by the
Employee involving misconduct or negligence which results in material
harm to the Company; (c) the Employee's commission of any felony or
any fraud, financial wrongdoing, disloyalty, dishonesty or breach of
fiduciary duty in connection with the performance of the Employee's
obligations to the Company and which adversely affects the business
activities, reputation or goodwill of the Company; (d) the Employee's
deliberate disregard of a Company rule or policy which materially and
adversely affects the business activities, reputation, or goodwill of
the Company; or (e) the Employee's material breach of this Agreement.
In the event of a termination for Cause, the Employee shall receive a
written termination notice from the Company stating that the
termination of employment is "for Cause." Such written notice shall
specify the particular act or acts, or failure to act, which is or are
the basis for the decision to so terminate the Employee's employment
for Cause. The Employee shall be given the opportunity within fifteen
(15) calendar days of the receipt of such notice to meet with the
Board or its appropriate designee to defend such act or acts, or
failure to act, and the Employee shall be given fifteen (15) calendar
days after such meeting (the "Cure Period") to cure such act (or
failure to act) to the Board's or its appropriate designee's
reasonable satisfaction. Upon failure of the Employee, within such
Cure Period, to so cure such act or failure to act, the Employee's
employment by the Company shall be deemed terminated for Cause.
4. COMPENSATION AND BENEFITS.
a. Base Salary. The Employee's initial base pay shall be at a
gross rate of 23,750 per month (the "Base Salary"), minus
customary deductions for federal and state taxes plus any
elective benefits or deductions.
b. Bonus. In addition to the Base Salary, the Employee shall be
eligible to receive an annual bonus for each calendar year
that the Employee completes with the Company (the "Annual
Bonus"). The award, amount and composition (e.g. cash and/or
option to purchase common stock) of any Annual Bonus shall
be determined by and in the sole discretion of the Board or
its designee(s), with a target amount equal to twenty seven
percent (27%) of the Base Salary earned during the year to
which the Annual Bonus relates.
c. Options. Subject to approval by the Board of Directors (or
an appropriate Committee appointed by the Board of
Directors), and pursuant to a written stock option agreement
entered into by and between the Employee and the Company
(the "Option Agreement") pursuant to the Corporation's 2001
Employee, Director and Consultant Stock Plan, as amended
(the "2001 Plan"), Archemix will grant
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the Employee an option to purchase one million two hundred
thousand (1,200,000) shares of Archemix Common Stock (the
"Option"). The exercise price of the Option will be the fair
market value of the Company's Common Stock on the date the
Option is granted and such Option shall be subject to the
terms and conditions of the Option as set forth in the 2001
Plan and the Option Agreement. To the extent permissible
under applicable federal tax law, the Option will be an
incentive stock option with the Option vesting on the
following schedule: twenty-five percent (25%) of such shares
shall vest on the first (1st) anniversary of the date of the
Employee's option agreement; after the first (1st)
anniversary, the remaining seventy-five percent (75%) of
such shares shall vest ratably in three (3) month periods
until the fourth (4th) anniversary the Employee's option
agreement. Such vesting shall commence on the first
anniversary of February 1, 2006 and quarterly thereafter. In
the event of a Change of Control (as defined below) occurs
within twelve (12) months of Employee's Starting Date, a
portion of the Employee's Option shall accelerate in
accordance with the aforementioned schedule so as to vest
for a time period equal to the Employee's actual period of
employment plus an additional twelve (12) months (the
"Vesting Time"). For purposes of clarification, upon a
Change of Control the Employee shall be entitled to exercise
an option to purchase the number of shares he would have
otherwise been entitled to purchase had he remained employed
by the Company for the Vesting Time. If no Change of Control
occurs within twelve (12) months of Employee's Starting
Date, the Employee shall not be entitled to any acceleration
and vesting of the Option under the terms of this Agreement.
For purposes of this Agreement, "Change of Control" shall
mean the closing of a sale, merger, joint venture, tender
offer or otherwise, in which 50% or more of the outstanding
equity securities of the Company or 50% or more of the
voting power of the Company is acquired by a third party, or
all or substantially all of the Company's business or assets
are sold to, combined with, or transferred to a third party.
d. Vacation. The Employee will be entitled to three (3) weeks
paid vacation in each calendar year and paid holidays and
personal days in accordance with the Company's policies as
in effect from time to time. In addition, the Employee shall
be entitled to unpaid leave for the following dates:
February 20, 2006 through February 24, 2006; May 22, 2006
through June 9, 2006; and 15 working days to be taken in
August 2006 at the Employee's discretion and election.
e. Fringe Benefits. The Employee will be entitled to
participate in any employee benefit plans which the Company
provides or may establish for the benefit of its employees
generally (including, but not limited to, group life,
disability, medical, dental and other insurance, retirement,
pension, profit-sharing and similar plans) (collectively,
the "Fringe Benefits"), provided that the Fringe Benefits
will not include any stock option or similar plans relating
to the grant of equity securities of the Company except as
provided herein. The Employee's eligibility to participate
in the Fringe Benefits and receive benefits thereunder will
be subject to the plan documents governing such Fringe
Benefits. Nothing contained herein will require the Company
to establish or maintain Fringe Benefits.
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5. CONFIDENTIALITY, NON-COMPETITION AND INVENTIONS. The Company considers
the protection of its confidential information, proprietary materials
and goodwill to be extremely important. As such the Employee may not
discuss the fact or terms of this Agreement with anyone other than the
executive officers of the Company and members of the Employee's
immediate family (and, if relevant, the Employee's recruiting firm,
financial advisor or lawyer). In addition the Employee will be
required to sign an agreement relating to confidentiality,
non-competition, non-solicitation and work product prior to
commencement of employment. Such agreement shall be considered
integrated with and part of this Agreement.
6. RECORDS. Upon termination of the Employee's employment hereunder or at
any other time as requested by the Company, the Employee will deliver
to the Company any property in the Employee's possession or control,
including but not limited to products, materials, memoranda,
electronic files, notes, records, reports or other documents or
photocopies of the same.
7. REPRESENTATIONS. The Employee hereby represents and warrants to the
Company that the Employee understands this Agreement, that the
Employee has entered into this Agreement voluntarily and that the
Employee has no commitments or obligations inconsistent with this
Agreement. The Employee agrees to indemnify and hold the Company
harmless against loss, damage, liability or expense arising from any
claim based upon circumstances alleged to be inconsistent with such
representations and warranties.
8. GENERAL.
a. Notices. All notices, requests, consents and other
communications hereunder will be deemed to have been given
either (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set
forth above, (ii) if sent by overnight courier, on the next
business day following the day such notice is delivered to
the courier service, or (iii) if sent by registered or
certified mail, on the fifth business day following the day
such mailing is made. Any notice from the Employee to the
Company must be explicitly directed to the attention of the
Board or such other designee.
b. Entire Agreement. This Agreement, together with the other
agreements specifically referred to herein, embodies the
entire agreement and understanding between the parties and
supersedes all prior oral or written agreements and
understandings. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in
this Agreement will affect, or be used to interpret, change
or restrict the express terms and provisions of this
Agreement.
c. Assignment. The Company may assign its rights and
obligations hereunder to any person or entity that succeeds
to all or substantially all of the Company's business or
that aspect of the Company's business in which the Employee
is substantially involved. The Employee may not assign any
rights and obligations under this Agreement without the
prior written consent of the Company.
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d. Benefit. All statements, representations, warranties,
covenants and agreements in this Agreement will be binding
on the parties and will inure to the benefit of the
respective successors and permitted assigns of each party.
Nothing in this Agreement will be construed to create any
rights or obligations except between the Company and the
Employee and no person or entity will be regarded as a
third-party beneficiary of this Agreement.
e. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed
an original.
f. Headings and Captions. The headings and captions used in
this Agreement are for ease of reference only and in no way
modify, or affect the meaning or construction of any of the
terms or provisions hereof.
g. Amendment; Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived,
only by a written instrument executed by each party or, in
the case of waiver, by the party or parties waiving
compliance. The delay or failure of either party at any time
or times to require performance of any provisions shall in
no manner affect the rights at a later time to enforce the
same. No waiver by either party of any condition or of the
breach of any term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall
be deemed to be, or considered as, a further or continuing
waiver of any such condition or of the breach of such term
or any other term of this Agreement.
h. Governing Law. This Agreement and the rights and obligations
of the parties hereunder will be construed in accordance
with and governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of law
principles thereof. Further, by accepting executing this
Agreement the Employee agrees that any action, demand, claim
or counterclaim in connection with any aspect of the
Employee's employment with the Company, or any separation of
employment (whether voluntary or involuntary) from the
Company, shall be resolved by a judge alone, and the
Employee waives and forever renounces the Employee's right
to a trial before a civil jury.
i. Interpretation. The parties acknowledge and agree that: (i)
each party and its counsel reviewed and negotiated the terms
and provisions of this Agreement and have contributed to its
revision; (ii) the rule of construction to the effect that
any ambiguities are resolved against the drafting party
shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to all parties hereto
and not in a favor of or against any party, regardless of
which party was generally responsible for the preparation of
this Agreement.
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If you are in agreement with the foregoing, please sign where indicated below,
whereupon this Agreement shall become effective as of the Effective Date.
JOHN DUNCAN HIGGONS ARCHEMIX CORP.
By: /s/ John Duncan Higgons By: /s/ Errol De Souza
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Print Name: JOHN DUNCAN HIGGONS Print Name: Errol De Souza
Title: President and Chief Executive
Officer
Date: 12.15.05 Date: 1/03/06
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