Employment Agreement - Human Genome Sciences Inc. and William A. Haseltine
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated the 25th day of February, 1997 (the "Effective
Date") between HUMAN GENOME SCIENCES, INC., a Delaware corporation (the
"Corporation") and William A. Haseltine, Ph.D. (the "Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee as its Chairman
and Chief Executive Officer; and
WHEREAS, the Employee desires to accept such employment upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto agree as follows:
1. Employment. The Corporation hereby employs the Employee, and the
Employee hereby accepts continued employment by the Corporation as the Chairman
and Chief Executive Officer of the Corporation upon the terms and conditions set
forth herein.
2. Term. Except as provided below, the term of this Agreement shall
commence "Effective Date" and end on the third anniversary of the Effective Date
of this Agreement (the "Initial Term"). The Agreement shall be automatically
extended for successive one year periods, unless four (4) months prior to the
end of the applicable term either party notifies the other in writing that it
elects to terminate the Agreement. The Initial Term and any one year term
extensions thereafter are hereinafter referred to as the "Term of Employment."
3. Duties. The Employee shall be employed in an executive capacity as
the Chairman and Chief Executive Officer of the Corporation. The Employee shall
perform such duties and services, consistent with his position, as may be
assigned to him from time to time by the Board of Directors of the Corporation.
In furtherance of the foregoing, the Employee hereby agrees to perform the
aforesaid duties and responsibilities and the other reasonable senior executive
duties and responsibilities assigned to him from time to time. The office of the
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Corporation to which Employee shall be assigned shall be the
Corporation's present office in Rockville, Maryland or any other office the
Corporation may establish in its discretion within thirty (30) miles of
Rockville, Maryland.
The Corporation shall also recommend to the shareholders of the
Corporation that Employee be named as a Director of the Corporation and a member
of the Executive Committee during the Term of Employment.
4. Time to be Devoted to Employment.
(a) Except for reasonable vacations (to consist of four (4) weeks per
year) and absences due to temporary illness, during the Term of Employment, the
Employee shall devote substantially his full business time and energy to the
business of the Corporation.
(b) During the Term of Employment, the Employee shall not be engaged in
any other business activity which, in the reasonable judgment of the
Corporation, conflicts with the duties of the Employee hereunder, whether or not
such activity is pursued for gain, profit or other pecuniary advantage. Subject
to Section 14 hereof, the Corporation agrees that Employee may be a member of
and/or consultant to Healthcare Investment Corporation, Scientific Advisory
Board; Goddard College, Vermont; University of Maryland Biotechnology Institute,
Board of Visitors; National Museum of American History, Board of Directors;
Institute of Human Virology at the University of Maryland, Baltimore, Board of
Visitors; AIDS Crisis Trust, Medical Adviser; numerous editorial boards and
professional societies, plus any others approved by the Board of Directors
(collectively the "Permitted Relationships") provided that the Permitted
Relationships do not materially interfere with the performance of his duties and
obligations with respect to the Corporation.
(c) Notwithstanding Paragraphs 4(a) and 4(b), and subject to the
obligations of confidentiality set forth in this Agreement, the Employee shall
not be prevented from (i) writing and publishing books, treatises, articles and
other publications, or (ii) teaching, lecturing, conducting seminars, or
engaging in similar activities for not-for-profit entities; provided, however,
that the activities of the Employee described in (i) and (ii) above do not
materially interfere with the performance of his duties and obligations with
respect to the Corporation.
5. Compensation; Reimbursement.
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(a) During the Term of Employment, the Corporation (or at the
Corporation's option, any subsidiary or affiliate thereof) shall pay to the
Employee an annual base salary ("Base Salary") of Three Hundred Fifty Thousand
Dollars ($350,000), payable in installments as is the policy of the Corporation
with respect to employees of the Corporation at substantially the same
employment level as the Employee, but in no event less frequently than once per
month. Thereafter, the Base Salary shall be subject to increase at the option
and in the sole discretion of the Board of Directors of the Corporation based on
the performance of Employee.
(b) As of December of each calendar year during the Term of Employment,
Employee shall be entitled to an annual bonus as determined by the Board of
Directors of the Corporation based on Employee's performance.
(c) (i) During the Term of Employment, the Employee shall be entitled
to medical insurance coverage (the cost of which shall be paid by the
Corporation) and to such other fringe benefits as are made available from time
to time to the employees of the Corporation at substantially the same employment
level as the Employee, including, without limitation, four weeks paid vacation.
In lieu of participation in any corporate sponsored medical insurance plan of
the Corporation, and whether or not the Corporation provides such a plan,
Employee shall have the right to convert his current medical insurance coverage
to an individual policy and to maintain such policy or one essentially
equivalent thereto and to have the Corporation pay the premium therefor (up to a
maximum annual premium of $7,500) during the Term of Employment it being agreed
and understood that Employee may elect to terminate any such individual policy
and participate in a corporate sponsored medical insurance plan at any time
during the Term of Employment at the Corporation's expense and without regard to
the premium therefor.
(ii) Upon the termination of the Employee's employment
hereunder pursuant to a Constructive Termination or a Termination Without Cause,
Employee shall have the right to continue his current individual medical
insurance policy, or convert his current corporate sponsored medical insurance
coverage to an individual policy, and to maintain such policy or one essentially
equivalent thereto and to have the Corporation pay the premium therefor (up to a
maximum annual premium of $7,500) for a period of twenty-four months after the
termination of
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employment.
(d) The Corporation shall reimburse Employee, in accordance with the
practice from time to time for other officers of the Corporation, for all
reasonable and necessary traveling expenses, disbursements and other reasonable
and necessary incidental expenses incurred by him for or on behalf of the
Corporation in the performance of his duties hereunder upon presentation by the
Employee to the Corporation of appropriate vouchers.
(e) During the Term of Employment, the Corporation shall provide
Employee with a monthly automobile allowance (or an automobile leased in the
Corporation's name with the rental payment paid by the Corporation) not to
exceed Eight Hundred and Fifty Dollars ($850.00) per month, to cover the cost of
Employee's purchase or lease of a car. The Corporation shall reimburse Employee
for federal, state and local income taxes (but not penalties or interest) due
and payable to Employee as a result of receipt of said automobile allowance or
use of the Corporation's leased automobile hereunder.
6. Involuntary Termination.
(a) If the Employee is incapacitated or disabled by accident, sickness
or otherwise so as to render him mentally or physically incapable of performing
the services required to be performed by him under this Agreement for a period
of one hundred twenty (120) days (with at least sixty (60) of such days being
consecutive) during any ten-month period, the Corporation may, at that time or
within a reasonable time thereafter, at its option, with the approval of a
majority of the Board of Directors of the Corporation, terminate the employment
of the Employee and the Term of Employment under this Agreement immediately upon
giving him notice to that effect (such termination, as well as a termination
under Section 6(b) hereof, being hereinafter called an "Involuntary
Termination"). Until the Corporation shall have terminated the Employee's
employment hereunder in accordance with the foregoing, the Employee shall be
entitled to receive his compensation, notwithstanding any such physical or
mental disability.
(b) If the Employee dies during the Term of Employment, his employment
hereunder and the Term of Employment shall be deemed to cease as of the date of
his death.
7. Termination For Cause. The Corporation may, with the approval of a
majority of the Board of Directors of the Corporation, terminate the employment
of the
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Employee hereunder and the Term of Employment at any time during the Term of
Employment for "cause" (such termination being hereinafter called a "Termination
For Cause") by giving the Employee notice of such termination, upon the giving
of which such termination shall take effect immediately. For the purposes of
this Section 7, "cause" shall mean (i) the Employee's willful misconduct with
respect to the business and affairs of the Corporation or any subsidiary or
affiliate thereof, which action materially and adversely affects the business or
affairs of the Corporation or any subsidiary or affiliate thereof, (ii) the
Employee fails in any material respect to observe and perform his obligations
and duties hereunder and such failure shall not be cured by the Employee within
thirty (30) days of written notice thereof from the Corporation, (iii) the
commission by the Employee of an act involving embezzlement or fraud against the
Corporation or commission or conviction of a felony or (iv) the repeated use by
the Employee of alcohol in a manner which impairs his duties or the repeated use
of an illegal substance other than under a physician's prescription.
8. Constructive Termination. A "constructive termination" shall occur
when Employee resigns within six months of any one or more of the following
events: (i) any reduction in his level of Base Salary, (ii) a relocation of his
place of employment to a location more than thirty (30) miles from Rockville,
Maryland, or (iii) any significant change in his responsibilities. Upon a
Constructive Termination, Employee shall be entitled to receive, in addition to
the amounts payable pursuant to Section 11 upon a Constructive Termination,
severance pay for a period of twenty-four months at the rate of Base Salary
prior to any reduction which caused a Constructive Termination. The severance
pay shall be paid in the same installments as salary is paid.
9. Termination Without Cause.The Corporation may, with the approval of
a majority of the Board of Directors of the Corporation, terminate the
employment of the Employee hereunder and the Term of Employment at any time
during the Term of Employment without "cause" upon thirty (30) days prior
written notice (such termination being hereinafter called a "Termination Without
Cause"). If the Corporation fails in any material respect to observe and perform
its obligations and duties under this Agreement and such failure shall not be
cured by the Corporation within thirty (30) days of written notice thereof from
the Employee, the
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Employee may terminate the employment of the Employee and the Term of Employment
under this Agreement immediately upon giving the Corporation notice to that
effect (such termination being hereinafter also called a "Termination Without
Cause"). Upon a Termination Without Cause, Employee shall be entitled to
receive, in addition to the amounts payable pursuant to Section 11 upon a
Termination Without Cause, severance pay for a period of twenty-four months at
the rate of the Base Salary. The severance pay shall be paid in the same
installments as salary is paid.
10. Voluntary Termination. Any termination of the employment of the
Employee hereunder otherwise than as a result of an Involuntary Termination, a
Termination For Cause, a Constructive Termination, or a Termination Without
Cause shall be deemed to be a "Voluntary Termination". A Voluntary Termination
shall be deemed to be effective immediately upon such termination.
11. Effect of Termination of Employment.
(a) Upon the termination of the Employee's employment hereunder
pursuant to a Voluntary Termination, Involuntary Termination or a Termination
For Cause, neither the Employee nor his beneficiary or estate shall have any
further rights or claims against the Corporation under this Agreement except to
receive vested stock options and stock as set forth in separate contracts and:
(i) the unpaid portion of the Base Salary provided for in Section
5.1(a), computed on a pro rata basis to the date of termination,
plus any accrued and unpaid bonus with respect to any prior year;
(ii) reimbursement for any expenses for which the Employee shall
not have theretofore been reimbursed as provided in Section
5.1(d);
(iii) payment of all accrued and unused vacation time;
(iv) any and all vested benefits under retirement plans or other
qualified or non-qualified plans in which Employee is a
participant at the time of termination, subject to applicable law
and such plans; and
(v) in the event of a termination other than a Termination For
Cause or a Voluntary Termination, a pro rata share of the bonus
determined pursuant to
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paragraph 5.1(b) for the year of termination.
(b) Upon the termination of the Employee's employment hereunder
pursuant to a Constructive Termination or a Termination Without Cause, neither
the Employee nor his beneficiary or estate shall have any further rights or
claims against the Corporation under this Agreement except to receive the
termination payments equal to those provided for in the Section 11(a) hereof,
plus the amounts set forth in Section 8 or 9, as appropriate, plus the vested
stock options and stock as provided in separate contracts.
12. General Provisions.
(a) This Agreement and any or all terms hereof may not be changed,
waived, discharged, or terminated orally, but only by way of an instrument in
writing signed by the parties.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland, without reference to the conflicts of
laws of the State of Maryland or any other jurisdiction.
(c) If any portion of this Agreement shall be found to be invalid or
contrary to public policy, the same may be modified or stricken by a court of
competent jurisdiction, to the extent necessary to allow the court to enforce
such provision in a manner which is as consistent with the original intent of
the provision as possible. The striking or modification by the court of any
provision shall not have the effect of invalidating the Agreement as a whole.
(d) This Agreement constitutes the entire and exclusive agreement
between Employee and Corporation pertaining to the subject matter thereof, and
supersedes and replaces any and all earlier agreements.
(e) The obligations of Sections 9, 11, 12, 13, 14 and 15 shall survive
termination of this Agreement.
13. Corporation Rights to Intellectual Property. The Employee shall
promptly disclose, grant and assign ownership to the Corporation for its sole
use and benefit any and all inventions, improvements, information and copyrights
(whether patentable or not), which he may develop, acquire, conceive or reduce
to practice while employed by the Corporation (whether or not during usual
working hours), together with all patent applications, letters patent,
copyrights
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and reissues thereof that may at any time be granted for or upon any such
invention, improvement or information; provided, however, that Employee shall
own any invention which Employee can demonstrate has no relationship to the
business of the Corporation and which was neither conceived nor made by use of
any of the time, facilities or materials of the Corporation. In connection
therewith:
(i) The Employee shall without charge, but at the expense of
the Corporation, promptly at all times hereafter execute and deliver
such applications, assignments, descriptions and other instruments as
may be reasonably necessary or proper in the opinion of the Corporation
to vest title to any such inventions, improvements, technical
information, patent applications, patents, copyrights or reissues
thereof in the Corporation and to enable it to obtain and maintain the
entire right and title thereto throughout the world; and
(ii) The Employee shall render to the Corporation at its
expense (including reimbursement to the Employee of reasonable
out-of-pocket expenses incurred by the Employee and a reasonable
payment for the Employee's time involved in case he is not then in its
employ) all such assistance as it may require in the prosecution of
applications for said patents, copyrights or reissues thereof, in the
prosecution or defense of interferences which may be declared involving
any said applications, patents or copyrights and in any litigation in
which the Corporation may be involved relating to any such patents,
inventions, improvements or technical information.
In the event the Corporation gives written notice to Employee that the
Corporation elects not to apply for a patent in a jurisdiction for an item above
which is patentable, then Employee may, at his cost and expense, apply for a
patent therefor on his own name in such jurisdiction.
14. Protection of Information.
(a) Employee hereby covenants with Corporation that, throughout the
Term of Employment, Employee will serve Corporation's best interests loyally and
diligently. Throughout the course of employment by Corporation and thereafter,
Employee will not disclose or provide to any person, firm, corporation or entity
(except as appropriate in connection with his services to the Corporation) any
information, materials, fbiologics or animals which are owned by
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the Corporation or which come into the possession of the Corporation from a
third party under an obligation of confidentiality, including, without
limitation, information relating to trade secrets, business methods, products,
processes, procedures, development or experimental projects, suppliers, customer
lists or the needs of customers or prospective customers, clients, etc.
(collectively "Confidential Information"), which Confidential Information, comes
into his possession or knowledge during the Term of Employment, and he will not
use such Confidential Information for his own purposes or for the purpose of any
person, firm, corporation or entity other than the Corporation.
(b) The provisions of Section 14(a) shall not apply to the following
Confidential Information:
(i) Confidential Information which at the time of disclosure
is already in the public domain;
(ii) Confidential Information which the Employee can
demonstrate by written evidence was in his possession or known to him prior to
the effective date of initial employment by the Corporation which is not subject
to an obligation of confidentiality to the Corporation;
(iii) Confidential Information which subsequently becomes part
of the public domain through no fault of the Employee;
(iv) Confidential Information which becomes known to the
Employee through a third party who is under no obligation of confidentiality to
the Corporation; and
(v) Confidential Information which is required to be disclosed
by law or by judicial administrative proceedings.
15. Non-Compete. Employee agrees that during the Term of Employment and
(a) for a period of two years thereafter during which salary continuation
payments are made to Employee pursuant to Section 8 or 9, as appropriate or, (b)
for a period of twelve (12) months following his Voluntary Termination,
Involuntary Termination, or Termination for Cause he shall not directly or
indirectly be engaged in or assist others in engaging in any business or
activity which is predominantly involved in research for determining human and
non-human animal and/or plant gene sequences or which is researching,
developing, making or selling products, processes or services which compete with
any product, process or service which
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Corporation is researching, developing, making or selling at the time of such
termination whether his involvement shall be as an owner (except for passive
ownership of up to five percent (5%) of the securities of a company), officer,
director, employee, consultant, partner or agent; the parties acknowledge that
Employee may be employed by an educational institution or the Federal Government
or any of its agencies and may engage in any Permitted Relationship following
termination of the Term of Employment.
16. Notices. Notices and other communications hereunder shall be in
writing and shall be delivered personally or sent by air courier or first class
certified or registered mail, return receipt requested and postage prepaid,
addressed as follows;
If to the Employee: William A. Haseltine, Ph.D.
3053 P Street, NW
Washington, DC 20007
If to the Corporation: Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, Maryland 20850
All notices and other communications given to any party hereto in accordance
with the provision of this Agreement shall be deemed to have been given to the
date of delivery if personally delivered; on the business day after the date
when sent if sent by air courier; and on the third business day after the date
when sent if sent by mail, in each case addressed to such party as provided in
this Section or in accordance with the latest unrevoked direction from such
party.
17. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. Assignment. This agreement is personal in its nature and the
parties hereto shall not, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that
the provisions hereof shall inure to the benefit of, and be binding upon each
successor of the Corporation, whether by merger, consolidation, transfer of all
or substantially all assets, or otherwise and the heirs and legal
representatives of the employee.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
Corporation: HUMAN GENOME SCIENCES, INC.
By: /s/ Donald D. Johnston
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Title: Chairman, Comp. Committee
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By: /s/ Melvin D. Booth
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Title: President & COO
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Employee: /s/ William A. Haseltine, Ph.D.
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William A. Haseltine, Ph.D.