Exhibit 10.1
[Millennium logo]
Millennium Pharmaceuticals, Inc.
40 Landsdowne Street
Cambridge, Massachusetts 02139
www.millennium.com
June 21, 2005
By Federal Express
Deborah Dunsire, M.D.
15 Meadow Brook Road
Randolph, NJ 07869
Dear Deborah,
On behalf of the Board of Directors of Millennium Pharmaceuticals, Inc. (the
"Company"), we are pleased to offer you the position of President and Chief
Executive Officer, reporting to the Board of Directors (the "Board"). Effective
upon your acceptance of this offer you will also be elected to serve as a member
of the Board.
1. EFFECTIVE DATE: The effective date ("Effective Date") of your full-time
employment with the Company will commence on or before August 1, 2005.
2. SALARY: Your base salary will initially be $800,000 per annum. Your salary
will be paid periodically in accordance with the Company's payroll
procedures. In addition, in accordance with the Company's compensation
practices, you will receive, approximately annually, a salary review which
will be based on your performance, the Company's performance and such other
factors as may be determined by the Board.
3. SUCCESS SHARING: You will be eligible to participate in the 2005 Millennium
Success Sharing cash bonus program and in future year's programs, which
includes a fixed percentage of salary target for each position.
Bonus payments will be made to eligible and active employees in March of
2006 for the 2005 Success Sharing Plan. The funding of the overall plan is
based on the Company meeting overall goals established at the beginning of
each calendar year. In the event of Company performance below or above
target, your actual bonus payment may vary. Your individual bonus payment
will also vary based on your individual performance. The target for your
position as President and Chief Executive Officer will be 80% of your
annual salary, prorated based on service during the calendar year. The
Board will work with you to establish your individual goals.
4. BENEFITS: You and your dependents will be eligible for the Company's
standard medical, dental, life insurance, disability benefits and
Section 125 cafeteria plan. You will also be eligible to participate in the
Company's 401(k) and Employee Stock Purchase plans. The Company's standard
vacation policy provides for vacation accrual at the rate of 1.66 days per
month of full-time employment; the Board recognizes that based on your
position, you will take vacation commensurate with your schedule and your
family's needs. Standard paid holidays will be observed. Subsidized parking
or public transportation benefits are also available. The Company, however,
reserves the right to modify its employee benefit programs from
time-to-time. The Board agrees to consider, in good faith, the adoption of
an executive deferred compensation plan that is compliant with section 409A
of the Internal Revenue Code ("Section 409A").
5. EQUITY COMPENSATION: (a) You will be granted stock options under the
Company's 2000 Stock Incentive Plan (the "Stock Plan") exercisable for
450,000 shares of the Company's Common Stock. One third (1/3) of the total
number of stock options will be granted on the Effective Date, and one
third (1/3) will be granted on each of the last days of August and
September, 2005. The exercise price of these stock options will be equal to
the fair market value of the Company's Common Stock on the date of each
grant. All options will vest as to one fourth (1/4) of the shares on the
first anniversary of your commencement of full-time employment with the
Company and as to one forty-eighth (1/48) of the shares monthly thereafter
until all shares are vested (i.e., 100% vesting after the fourth
anniversary of your employment commencement), provided that you
remain employed by the Company. In the event of your death while employed
by the Company, all options and other equity awards will vest immediately
as to all shares, and the options will remain exercisable until the earlier
of three years following your termination of employment, or ten years after
the date of grant. In the event of termination of your employment for any
reason (except as set forth in the preceding sentence and in Paragraph 15
below), vesting as to all shares shall cease; provided that if you are
terminated by the Company other than for Justifiable Cause
(as defined below) or voluntarily terminate your employment with Good
Reason (as defined below), all options and other equity awards that would
have vested within the one-year period following your termination will
accelerate and immediately become fully vested. In such event, the period
during which you may exercise all vested options (including any accelerated
options) shall be extended until one year after the expiration of the
Severance Period (as defined below), or until ten years after the date of
grant, whichever is earlier. Provided that you remain employed by the
Company, these stock options will be exercisable (as to the vested portion)
for 10 years from the date of each grant. A complete description of the
terms and conditions of these stock options are contained in the Company's
2000 Stock Incentive Plan (the "Stock Plan") or will be contained in your
stock option grant forms. In the event of any inconsistency between this
Agreement and the terms of such stock option grant forms, the terms of this
Agreement shall prevail.
(b) In addition to the stock options described above, 200,000 shares of
restricted stock in the Company will be issued to you under the Stock Plan
as part of your new hire grant, which shares will vest as follows, provided
you remain employed by the Company:
o 20% will vest on the second anniversary of your commencement of
employment with the Company;
o 30 % will vest on the third anniversary of the commencement of your
employment;
o 50% will vest on the fourth anniversary of the commencement of your
employment.
(c) For 2006 and future years, you will be eligible to participate in
long-term incentive opportunities on a basis consistent with your status as
the Company's highest ranking executive, your performance as President and
Chief Executive Officer and the Company's performance.
6. BUY-OUT OF NOVARTIS STOCK: The Company agrees to pay you approximately
$2,500,000 related to the unvested value of your Novartis stock options and
restricted stock shares. Of this, $1,000,000 (taxable) will be paid to you
in cash within two weeks of the start of your employment at the Company.
The remaining value will be paid to you upon the Effective Date in the form
of 200,000 shares of restricted stock in the Company. These shares will be
issued to you under the Stock Plan and will vest as follows, provided you
remain employed by the Company.
o 20% will vest on the second anniversary of your commencement of
employment with the Company;
o 30 % will vest on the third anniversary of the commencement of your
employment;
o 50% will vest on the fourth anniversary of the commencement of your
employment.
In the event of your death or disability while employed by the Company, or
if you are terminated by the Company other than for Justifiable Cause or
voluntarily terminate your employment with Good Reason, all unvested
restricted stock granted pursuant to this Paragraph 6 will immediately
become fully vested. Except as set forth in the preceding sentence and in
Paragraphs 5(a) above and 15 below, in the event of termination of your
employment for any reason, all unvested restricted stock shall be
forfeited.
7. RETIREMENT BENEFITS: On the Effective Date, the Company will credit
$500,000 to a tax-deferred bookkeeping account (the "Account") maintained
by the Company on your behalf. You will be entitled to direct the
investment of such Account in a manner consistent with the investment
opportunities provided under the Company's 401(k) program, as amended from
time to time. The Account will be adjusted, on a daily basis, by the
income, gain or loss (realized and unrealized) resulting from such
investment. You will become 40% vested in the Account on the fourth
anniversary of the Effective Date and will become vested in an additional
10% of the Account on each anniversary thereafter (i.e., 100% vesting after
ten years), assuming in each case that you have remained employed with the
Company. Six months following your termination of employment with the
Company for any reason, you (or, in the event of your death, your
designated beneficiary) will commence receiving ten annual installment
payments equal to the vested portion of the Account (1/10, 1/9, 1/8, etc.),
as adjusted to reflect the investment returns during such deferral period.
You acknowledge that your rights to the Account will be no greater than
those of a general unsecured creditor of the Company.
8. SIGNING BONUS: The Company will provide you with a one-time sign-on
bonus in the amount of $300,000 (taxable) within two weeks of your start
date. In the event of your voluntary resignation other than for Good Reason
or termination for Justifiable Cause from the Company at any time prior to
the first anniversary of such payment, you will be obligated to pay to the
Company within sixty (60) days after such termination $200,000 of such
sign-on bonus amount. In the event of your voluntary resignation other than
for Good Reason or termination for Justifiable Cause from the Company at
any time after the first anniversary but prior to the second anniversary of
such payment, then you will be obligated to pay to the Company within sixty
(60) days after such termination $100,000 of such sign-on bonus amount.
9. RELOCATION EXPENSES: Upon your acceptance of this offer, you are eligible
for reimbursement of the following expenses associated with your
relocation. Specific relocation information will follow from MSI, the
Company's relocation company.
- Reimbursement for expenses associated with direct-route transportation to
Cambridge.
- The cost of packing, moving, 120 days' temporary storage, and unloading
of your household goods and effects using a certified carrier of the
Company's choice.
- Two house-hunting trips for the purpose of locating suitable housing.
- The reasonable cost of temporary housing for up to 120 days upon your
arrival in the Boston area or $10,000 (grossed up) lump sum if housing is
not used.
- Destination services provided by Corporate Real Estate Services, a
division of Hunneman Coldwell Banker.
- Closing costs (excluding points) on the purchase of a new home, up to 3%
of the purchase price, if purchased within 12 months of your date of
hire.
- The Company will reimburse you for reasonable and customary closing
costs, including real estate commission not to exceed 6%, legal and
recording fees, title charges, transfer taxes, documentary stamps,
etc., on the sale of your existing home.
- The Company will provide a lump sum allowance of $10,000 (grossed up)
to cover additional relocation related expenses. This sum will be paid
to you by MSI once you submit a request for payment.
- A dollar-based mortgage subsidy in the aggregate amount of $82,500
(taxable) to be paid over a period of four-years, to compensate you for
mortgage and/or cost of living expense in the Boston area.
Should you voluntarily resign other than for Good Reason or be terminated
for Justifiable Cause from the Company within one year of relocating, upon
request by the Company, you agree to return a prorata portion of all of the
above relocation amounts received by you or paid on your behalf.
10. FINANCIAL COUNSELING/TAX PREPARATION/OUTPLACEMENT. You shall be entitled to
receive up to $15,000 (grossed-up) in 2005 for financial counseling and tax
preparation services. In addition, the Company will assist your spouse in
obtaining suitable employment in the Boston area, including providing
reasonable outplacement services, if necessary, for up to six months.
11. EMPLOYMENT ELIGIBILITY VERIFICATION: Please note that all persons employed
in the United States are required to complete an Employment Eligibility
Verification Form on the first day of employment and submit an original
document or documents that establish identity and employment eligibility
within three business days of employment. For your convenience, we are
enclosing Form I-9 for your review. You will need to complete Section 1 and
present original document(s) of your choice as listed on the reverse side
of the form once you begin work. PLEASE NOTE: THE I-9 FORM AND VALID
IDENTIFICATION ARE LEGAL REQUIREMENTS AND MUST BE SUBMITTED WITHIN 3 DAYS
OF YOUR START DATE. IF YOU DO NOT SUBMIT THE REQUIRED DOCUMENTATION WITHIN
THE 3-DAY TIME FRAME, BY LAW WE CANNOT ALLOW YOU TO CONTINUE TO WORK.
12. PROPRIETARY INFORMATION, NO CONFLICTS: As a condition of your employment,
you agree to execute the enclosed Invention, Non-Disclosure and
Non-Competition Agreement and to be bound by all of the provisions thereof.
You hereby represent that you are not presently bound by any employment
agreement, confidential or proprietary information agreement or similar
agreement with any current or previous employer that would impose any
restriction on your acceptance of this offer or that would interfere with
your ability to fulfill the responsibilities of your position with the
Company.
13. MEDICAL SURVEILLANCE: As part of the Company's medical surveillance
program, employees are required to have an initial physical, provided by an
on-site registered Nurse Practitioner. You may refuse an exam if you sign a
release, in which case you should so advise the nurse practitioner. Your
initial examination will be scheduled to take place during the first week
of your employment.
14. SEVERANCE:
(a) In the event that your employment is terminated (1) by the Company
other than for Justifiable Cause or as a result of your disability (which
for purposes of this Agreement shall mean that you qualify for long-term
disability insurance under the Company's long-term disability coverage) or
(2) by you for Good Reason, you shall be entitled to each of the following
but only if you execute and allow to become binding a release of claims
prepared by the Company:
(i) A lump sum amount, payable within ten days following termination,
equal to 0.5 times your base salary at your rate of pay in effect
on the date of termination;
(ii) a severance payment (the "Severance Payment") to be paid in
periodic installments, consistent with the Company's payroll
procedures as then in effect, beginning six months after your
termination date and continuing for eighteen months thereafter,
equal to the sum of the following: (A) a pro rata share of your
target Success Sharing bonus for the period of your employment
during the year in which termination occurred; and (B) the sum of
1.5 times your base salary at your rate of pay in effect on the
date of termination, plus 2 times your then current target bonus;
(iii) as provided in Paragraph 5 above, all options (or other equity
awards) that would have vested within the one-year period
following your termination will accelerate and immediately become
fully vested and all vested options (including such accelerated
options) shall remain exercisable for one year after the
conclusion of the Severance Period;
(iv) continued participation under COBRA for 18 months in all medical
and health plans at the same benefit level provided to you and
funded by the Company on the date of termination of employment;
(v) any accrued but unpaid amounts or benefits due under the Company's
benefits plans then in effect, or to which you are entitled under
applicable law;
(vi) as used in this Agreement, "Severance Period" shall mean the
period beginning on the day following your termination of
employment and ending twenty-four months thereafter.
(b) In the event your employment is terminated by the Company for
Justifiable Cause or your disability or voluntarily by you without Good
Reason, you shall be entitled only to any accrued but unpaid amounts or
benefits due under the Company's benefits plans, or to which you are
entitled under applicable law; and you shall not be eligible to receive any
other severance pay or benefits.
"Justifiable Cause" shall mean the occurrence of any of the following
events: (i) your conviction of, or plea of NOLO CONTENDERE with respect to
a felony or crime involving moral turpitude, (ii) your commission of an act
of personal dishonesty or breach of fiduciary duty involving personal
profit in connection with the Company, (iii) your commission of an act, or
failure to act, which the Board shall reasonably have found to have
involved willful misconduct or gross negligence on your part, in the
conduct of your duties as an employee of the Company, (iv) habitual
absenteeism, alcoholism or drug dependence on your part which interferes
with the performance of your duties as an employee of the Company, (v) your
willful and material failure or refusal to perform your services as an
employee of the Company, (vi) any material breach by you to fulfill the
terms and conditions under which you are employed by the Company, or (vii)
your willful and material failure or refusal to carry out a direct, lawful
written request of the Board. In the event that the Company terminates your
employment for Justifiable Cause, the Company will provide you with a
written statement of the basis for such termination and an opportunity to
cure such acts (or failure to acts) if curable, and an opportunity to
respond thereto at a special meeting of the Board held for such purpose.
This provision and definition, as well as the definition of "Good Reason"
below shall supersede any provision for or definition of "cause" or "good
reason" in any option, stock, employment, confidentiality, non-competition
or other document relating to your employment at the Company.
"Good Reason" shall mean any action by the Company without your prior
written consent which results in (i) any requirement by the Company that
you perform your principal duties outside a radius of 50 miles from the
Company's Cambridge location; (ii) any material diminution in your title,
position, duties, responsibilities or authority, including your ceasing to
serve as the Company's President and Chief Executive Officer or to serve as
a member of the Board; (iii) any breach by the Company of any material
provision contained herein not cured within thirty (30) days' of written
notice thereof; (iv) a reduction in your base salary (unless such reduction
is effected in connection with a general and proportionate reduction of
salaries for all members of the management team) or any reduction of your
target bonus amount to less than 80% of your annual salary; or (v) any
acquisition, merger or Change of Control (as defined in the Stock Plan)
involving the Company which results in your ceasing to serve as the Chief
Executive Officer for the surviving entity and for all direct and indirect
parent organizations thereof.
15. CHANGE OF CONTROL. In the event of a Change of Control (as defined in the
Stock Plan), and if within one month prior to or twelve months following
such Change of Control, your employment with the Company or its successor
is terminated other than for Justifiable Cause or terminated by you for
Good Reason, then pursuant to the Stock Plan, all of your outstanding
unvested stock options, restricted stock, restricted stock units and other
equity awards will immediately vest in full. Upon any such termination, the
severance benefits described in the preceding paragraph shall also apply.
In addition, in the event it shall be determined that any payment, benefit
or distribution (or combination thereof) by the Company, any of its
affiliates (including any successor or acquiring entity), or one or more
trusts established by the Company for the benefit of its employees, to you
or for your benefit (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement, or otherwise) (a
"Payment") is subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any interest or penalties are incurred by you with
respect to such excise tax (such excise tax, together with any such
interest and penalties, hereinafter collectively referred to as the "EXCISE
TAX"), you will be entitled to receive an additional payment (a "GROSS-UP
PAYMENT") in an amount such that after payment by you of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and the Excise Tax imposed upon the
Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 15, if it shall be determined that you are
entitled to a Gross-Up Payment, but that the Payment does not exceed 110%
of the greatest amount that could be paid to you without giving rise to any
Excise Tax (the "SAFE HARBOR AMOUNT"), then no Gross-Up Payment shall be
made to you and the amounts payable under this Agreement shall be reduced
so that the Payment, in the aggregate, is reduced to the Safe Harbor
Amount. Any such reduction shall be applied first to the payments that you
designate for that purpose.
Please indicate your acceptance of the foregoing by signing the enclosed copy of
this letter and returning it by confidential fax and mail or courier to Linda
Pine, 40 Landsdowne Street, Cambridge, MA 02139, Fax No. 617-621-0264 (please
call 617-679-7226 before faxing) no later than the close of business on June 23,
2005. After that date, the offer will lapse.
Deborah, we are very enthusiastic about the prospect of you leading the Company
to its next level of success and are highly confident that you will be an
outstanding Chief Executive Officer.
Very truly yours,
MILLENNIUM PHARMACEUTICALS, INC.
/s/ MARK LEVIN
Mark Levin
Chairman of the Board
I agree to and accept the terms of this letter as of the date written above:
/s/ DEBORAH DUNSIRE 6-23-05
Deborah Dunsire Date
cc: Grant Heidrich