Change in Control

 

 

 

 

 

 

 

 

 

 

Exhibit 10.1

May 9, 2009

Mr. Daniel L. Peters
6 Whitesell Lane
Newtown, PA 18940

Dear Dan:

On behalf of the Board of Directors (the “Board”) of Molecular Insight Pharmaceuticals, Inc. (the “Company”), we are pleased to offer to you the position of Chief Executive Officer (“CEO”) of the Company reporting to the Board. Effective upon your acceptance of this offer, you will also be elected to serve as a member of the Board. The following sets out the terms that will govern your employment relationship with the Company.

During your employment, you will devote your full business efforts and time to the Company, and will not engage in any other business activities except the continuation of your position as Board Chair of Phadia AB. You will perform your duties and responsibilities based in the Company’s headquarters in Cambridge, Massachusetts.

Salary: Your employment with the Company will be for no specified period of time and will be on an at-will basis. Your base salary will be $20,833.34 for each semi-monthly pay period, which is equivalent to $500,000 per year, payable in accordance with Company’s normal payroll policies and subject to legally required and authorized deductions and withholdings. The Compensation Committee of the Board (the “Committee”) will review your compensation package annually.

Bonus: You will also be eligible to receive an annual fiscal year incentive bonus each year with a target annual amount equal to 50% of your base salary on a per annum basis. The annual bonus payment, if any, will be subject to the approval of the Compensation Committee and will be based upon your meeting or exceeding performance objectives set by the Board from time to time. The applicable performance objectives for your fiscal year 2009 bonus will be established by the Board within the first 60 days of employment. Your bonus for 2009, if any, will reflect the fact that you were not employed for the full fiscal year. Any bonus awarded to you will be payable after conclusion of the applicable calendar year (typically in February or March) and in a manner consistent with the Company’s payment of bonuses to executives generally and will be subject to legally required and authorized deductions and withholdings.

Benefits: You will be entitled to participate in the insurance and other benefit plans that are offered by the Company to its employees generally, subject to the terms of the plans. Currently, the Company offers health and dental insurance, short and long term disability insurance, life insurance and a 401(k) plan. Details about the existing benefit plans are

Molecular Insight Pharmaceuticals, Inc. 160 Second Street Cambridge, MA 02142
Tel: 617.492.5554 Fax: 617.492.5664 www.molecularinsight.com

 


 

(MOLECULARINSIGHT PHARMACEUTICALS LOGO)

available for your review, but you should note that these plans may change over time at the sole discretion of the Company. You will also be entitled to four weeks of vacation per year, subject to the Company’s normal policies, and coverage under the Company’s existing D&O insurance policy.

Equity: You will be granted non-statutory stock options pursuant to the Company’s Amended and Restated 2006 Equity Incentive Plan (as amended, the “Option Plan”) to purchase up to 500,000 shares of the Company’s Common Stock, which options will vest at the rate of 25% a year over four years. The exercise price for these options will be equal to the fair market value per share as determined by the Company’s Compensation Committee pursuant to the Option Plan, with such options to be subject further to the terms and conditions of the Option Plan and a separate option agreement.

In addition to the foregoing and subject to approval by the Compensation Committee, you will be granted non-statutory stock options to purchase up to 125,000 shares of the Company’s Common Stock, which options will vest based upon your achievement of certain milestones to be determined by the Company’s Compensation Committee. The milestones will be based on value creating events, will reflect clear, measurable goals based on performance and, upon successful completion of each milestone, a portion of these options will vest immediately. Additionally, these options will reflect an exercise price equal to the fair market value per share as determined by the Company’s Compensation Committee pursuant to the Option Plan, but will be options granted outside of the Option Plan. The Compensation Committee will, in consultation with you, develop the appropriate milestones after you commence your employment with the Company, with the intention of granting these performance-based options at the next regularly scheduled quarterly meeting of the Compensation Committee.

Your options will be subject to acceleration of vesting upon a Change of Control (as defined in the Option Plan) and will be exercisable until the earlier of the first anniversary date of such Change of Control or the expiration date of such options.

Expenses: The Company will reimburse you for normal business expenses incurred by you in accordance with the Company’s customary policies. Additionally, the Company will reimburse you for the state income tax differential (currently 3.07% versus 5.3%) that you incur by reason of becoming a Massachusetts resident of approximately $60,000 in 2009, approximately $20,000 in 2010 and approximately $30,000 in 2011 within 60 days after you deliver to the Company such written documentation reasonably requested by the Company demonstrating that you incurred such tax liability. This tax reimbursement is for the 2009, 2010 and 2011 tax years only.

Severance Benefits: Your employment with the Company will be on an “at will” basis. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate

Molecular Insight Pharmaceuticals, Inc. 160 Second Street Cambridge, MA 02142
Tel: 617.492.5554 Fax: 617.492.5664 www.molecularinsight.com

 


 

(MOLECULARINSIGHT PHARMACEUTICALS LOGO)

your employment at any time and for any reason whatsoever, with or without cause or advance notice. This at-will employment relationship cannot be changed except in writing signed by an authorized Company officer. Notwithstanding your at-will employment relationship with the Company, if the Company terminates your employment without “cause” at any time prior to a Change of Control, then upon your furnishing to the Company an executed Separation Agreement and Release in substantially the form attached hereto as Exhibit A, you shall be entitled to receive a severance package of 12 months of base salary, payable in regular periodic payments in accordance with Company’s normal payroll practices and subject to standard deductions and withholdings, and the continuation of health insurance benefits for such 12 month period in a manner consistent with COBRA (with the premium cost shared in the same proportion by you and the Company as exists as of your termination). If you are terminated without cause, all options that have not vested, but are due to vest in the then-current year, will automatically vest upon the date of termination. Additionally, if you have delivered an executed Separation Agreement and Release and are otherwise entitled to receive the severance benefits set forth above, the Compensation Committee will review the bonus criteria applicable to you for the fiscal year in which your employment terminated and make a good faith determination of whether or not any of the bonus objectives were met by you prior to termination and may award a bonus based upon such achievements, if any. If upon termination you are entitled to the foregoing severance benefits and you are a “specified employee” of the Company (within the meaning of Section 409A of the Internal Revenue Code and the related regulations), and if the severance payments would be subject to excise tax under Section 409A because such payments are made within the 6-month period commencing with your effective date of termination, then the severance payments shall be delayed for 6 months following such termination. If you resign your employment or the Company terminates your employment for “cause”, all compensation and benefits will cease immediately and you will only receive your base salary and accrued but unused vacation earned through the date of your termination. If you resign your employment and propose to become an employee, consultant or board member (“Relationship”) of any business (“Business”) that may fall within the non-competition covenants (Section 2(a)(ii)) of the Change of Control Agreement referenced below, the Company will use all reasonable efforts to identify whether such Relationship or such Business would in fact constitute direct competition within the scope of the applicable covenants.

As CEO, you will also receive a Change of Control Agreement in substantially the form attached hereto as Exhibit B to provide severance benefits to you in connection with a Change of Control by the Company. This Change of Control Agreement includes certain non-competition obligations in favor of the Company and the execution of this Change of Control Agreement is a condition to your employment.

For purposes of your severance benefits, “Change of Control” is defined in the Change of Control Agreement and “Cause” shall mean a vote of the Board of Directors of the

Molecular Insight Pharmaceuticals, Inc. 160 Second Street Cambridge, MA 02142
Tel: 617.492.5554 Fax: 617.492.5664 www.molecularinsight.com

 


 

(MOLECULARINSIGHT PHARMACEUTICALS LOGO)

Company resolving that you should be dismissed as a result of (i) the commission of any act constituting financial dishonesty against the Company (which act would be chargeable as a crime under applicable law); (ii) engaging in any other act of dishonesty, fraud, intentional misrepresentation, moral turpitude, illegality or harassment which, as determined in good faith by the Board, would materially adversely affect the business or the reputation of the Company with its customers, suppliers, lenders and/or other third parties with whom the Company does business; (iii) the repeated failure to follow the written directives of the Board, which failure has not been corrected within 30 days after written notice from the Board, or (iv) any material violation of the Company’s written policies, or willful and deliberate non-performance of duty in connection with the business affairs of the Company, after written warning of such violation from the Board and failure to remedy the same within 30 days after such notice.

As a Company employee, you will be expected to abide by all of the Company’s rules and regulations. Like all Company employees, you will be required, as a condition of employment, to sign the Company’s Confidentiality Agreement in the form attached hereto as Exhibit C.

In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality. You agree that you will not bring onto Company premises any unpublished documents or property belongings to any former employer or other person to whom you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.

The employment terms in this letter supersede any other agreements or promises made to you by anyone, whether oral or written, and cannot be modified or amended except in writing by an authorized officer of the Company. As required by law, this offer is subject to satisfactory proof of your right to work in the United States. The Company also reserves the right to conduct background investigations and/or reference checks on all potential employees. Your job offer, therefore, is contingent upon a clearance of such background investigation and/or reference check to the Company’s satisfaction.

Molecular Insight Pharmaceuticals, Inc. 160 Second Street Cambridge, MA 02142
Tel: 617.492.5554 Fax: 617.492.5664 www.molecularinsight.com

 


 

(MOLECULARINSIGHT PHARMACEUTICALS LOGO)

Please sign and date this letter, and return it to me by Tuesday, May 12, 2009, if you wish to accept employment with the Company under the terms described above. If you accept our offer, we would like you to start on or before May 26, 2009.

Dan, we are very enthusiastic about the prospect of you leading the Company to its next level of success and we look forward to your favorable reply.

 

 

 

 

 

Best Regards,
 

 

 

/s/ Anthony Martin  

 

 

Anthony Martin, 

 

 

Chairman of the Board of Directors of
Molecular Insight Pharmaceuticals, Inc. 

 

 

 

Accepted:
 

 

 

/s/ Daniel L. Peters  

 

 

Daniel L. Peters 

 

 

Dated: 5/12/09 

 

 

 

Molecular Insight Pharmaceuticals, Inc. 160 Second Street Cambridge, MA 02142
Tel: 617.492.5554 Fax: 617.492.5664 www.molecularinsight.com

 

 

 

 

EX-10.2 3 b75454miexv10w2.htm EX-10.2 CHANGE OF CONTROL AGREEMENT, BETWEEN MOLECULAR INSIGHT PHARMACEUTICALS, INC. AND DANIEL L. PETERS

Exhibit 10.2

CHANGE OF CONTROL AGREEMENT

          This Change of Control Agreement, made as of May 12, 2009, is by and between Molecular Insight Pharmaceuticals, Inc., a Massachusetts corporation (the “Company”), and Daniel L. Peters (the “Employee”). All references to the Company include all affiliated or subsidiary entities including, without limitation, a Buyer in a Change of Control (each as defined below).

          Whereas, the Company wants to provide to the Employee assurances of continued employment in the event of a Change of Control (as defined below); and

          Whereas, the Employee is a member of senior management of the Company.

          Now, therefore, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:

     1. Severance Payments

               (a) From and after the consummation of a Change of Control and subject to the other provisions of this Section 1, the Company shall pay to the Employee an amount equal to the Employee’s then-current base salary for a period of one year (the “Severance Payment”) if (x) the Employee is employed by the Company immediately prior to the consummation of a Change of Control and (y) (i) upon consummation of such Change of Control the Employee is not hired by the Buyer or retained by the Company on substantially similar terms of employment as those enjoyed by the Employee immediately prior to the consummation of such Change of Control, (ii) the Employee’s employment with the Company or the Buyer, as applicable, is terminated without Cause (as defined below) at any time prior to the first anniversary of the consummation of such Change of Control or (iii) the Employee resigns with Good Reason (as defined below) from employment with the Company or the Buyer, as applicable, at any time prior to the first anniversary of the consummation of such Change of Control. The Severance Payment shall be made in one lump sum upon the effective date of the termination of such Employee’s employment with the Company or the Buyer, as the case may be.

               (b) Notwithstanding anything else to the contrary herein, if upon termination, the Employee is a “specified employee” (within the meaning attributed thereto by Section 409A of the Code and the regulations thereunder) of Company, and if the payments would be subject to excise tax under Code Section 409A because such payments are made within the 6-month period commencing upon the Employee’s effective date of termination, then such payments shall be delayed for 6 months following such termination.

      2. Non-Competition Agreement

               (a) In consideration for entering into this Agreement and the promises set forth herein, the Employee agrees that, for a period of one (1) year after the termination of employment, whether in connection with a Change of Control or otherwise, the Employee will not, without the Company’s prior written approval, directly or indirectly:

 


 

                    (i) solicit, divert or take away, or attempt to divert or to take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company. For purposes of this Agreement, a prospective client, customer or account is any individual or entity whose business is solicited by the Company, proposed to be solicited by the Company, or who approaches the Company, with respect to possibly becoming a client, customer, or account during the Employee’s employment relationship; or

                    (ii) engage (whether for compensation or without compensation) as an individual proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender, or in any other capacity whatsoever (otherwise than as the holder of not more than 1% of the total outstanding stock of a publicly-held company), in any business activity which competes with the business of the Company, including, without limitation, the licensing, sale, distribution, development or research of radiotherapeutics and molecular imaging pharmaceuticals related to diagnostic imaging of the human cardio-vascular system or carcinogenic tumors; or

                    (iii) hire any employee or consultant of the Company or recruit, solicit or knowingly induce, or attempt to induce, any employee or consultant of the Company to terminate his employment or consulting relationship with, or otherwise cease his relationship with, the Company.

               (b) If any restriction set forth in this Section 2 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic areas to which it may be enforceable.

               (c) The Employee acknowledges and agrees that the restrictions contained in this Section 2 are reasonable in scope, duration and geographic area, are necessary for the protection of the business and goodwill of the Company, and provide a substantial inducement to a Buyer in order to consummate a Change of Control. The Employee agrees that any breach of this Section 2 will cause the Company substantial and irrevocable damage and, therefore, in the event of any such breach, in addition to such other remedies which may be available, the Company will have the right to seek specific performance and injunctive relief.

     3. Rights to Employment or as a Stockholder

          Nothing contained herein shall be construed or deemed by any person under any circumstances to bind the Company to continue the employment of the Employee.

     4. Notices

               All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:

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If to the Company:

 

101 Rogers Street,
Cambridge, MA 02142

Attn: General Counsel

 

 

 

If to the Employee:

 

To the address set forth below the signature of the Employee;

or to such other address as is specified in a notice complying with this Section 4. Any such notice is deemed given on the date delivered by hand or three days after the date of mailing.

     5. Definitions

          5.1 “Buyer” shall mean the Person or Persons acting as a group who has acquired ownership of the stock or assets of the Company pursuant to a transaction described in clauses (i) or (ii) of a Change of Control.

          5.2 “Cause” shall mean a vote of the Board of Directors of the Company resolving that the Employee should be dismissed as a result of (i) the commission of any act constituting financial dishonesty against the Company (which act would be chargeable as a crime under applicable law); (ii) engaging in any other act of dishonesty, fraud, intentional misrepresentation, moral turpitude, illegality or harassment which, as determined in good faith by the Board, would materially adversely affect the business or the reputation of the Company with its customers, suppliers, lenders and/or other third parties with whom the Company does business; (iii) the repeated failure to follow the written directives of the Board, which failure has not been corrected within 30 days after written notice from the Board, or (iv) any material misconduct, violation of the Company’s written policies, or willful and deliberate non-performance of duty in connection with the business affairs of the Company, after written warning of such violation from the Board.

          5.3 “Change of Control” shall mean the occurrence of any one of the following events:

                    (i) the date on which (1) any one Person, or more than one Person acting as a group, other than Excluded Persons, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of the Company possessing thirty-five percent (35%) or more of the total voting power of the stock of the Company; provided, however, that if any one Person or more than one Person acting as a group is already considered to own more than thirty-five percent (35%) of the total voting power of the stock of the Company, the acquisition of additional voting stock by the same Person or Persons is not considered to cause a Change of Control; or (2) a majority of the members of the Company’s Board of Directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date of the appointment or election.

                    (ii) the date on which any one Person, or more than one Person acting as a group, other than Excluded Persons, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from

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the Company that have a total Gross Fair Market Value equal to more than sixty percent (60%) of the total Gross Fair Market Value of all the assets of the Company immediately prior to such acquisition or acquisitions, other than an Excluded Transaction.

          5.4 “Excluded Persons” shall mean (a) the Company or any of its affiliates, (b) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (c) an underwriter temporarily holding securities pursuant to an offering of such securities, or (d) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company.

          5.5 “Excluded Transaction” shall mean any transaction in which assets are transferred to: (a) a shareholder of the Company (determined immediately before the asset transfer) in exchange for or with respect to its stock; (b) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company (determined after the asset transfer); (c) a Person, or more than one Person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company (determined after the asset transfer); or (d) an entity at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in clause (c) (determined after the asset transfer).

          5.6 “Good Reason” shall mean that the Employee has resigned within 30 days after the occurrence of one or more of the following events: (i) a material diminution in the Employee’s annual base salary other than reduction approved by the Employee, (ii) a material diminution of the Employee’s job responsibilities when compared to the Employee’s responsibilities as of the date hereof, or (ii) the relocation of the Employee’s principal office location to a facility or location that is more than 50 miles away from the Employee’s principal office location as of the consummation of the Change of Control, which relocation is not approved by the Employee.

          5.7 “Gross Fair Market Value” shall mean the value of the assets of the Company, or the value of the assets being disposed of, as applicable, determined without regard to any liabilities associated with such assets.

          5.8 “Person” has the meaning given in Section 3(a)(9) of the Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof.

      6. Miscellaneous

          6.1 Withholding. The Company may withhold from any distribution under this Agreement all federal, state, city and other taxes as shall be legally required.

          6.2 Modification. This Agreement constitutes the entire agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral. This Agreement may not be amended or revised except by a writing signed by the parties.

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          6.3 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any Buyer with which or into which the Company may be merged or which may succeed to the Company’s assets or business, although the obligations of the Employee are personal and may be performed only by him. Upon any assignment by the Company of this Agreement, all references to Company herein shall be deemed to be references to such assignee.

          6.4 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.

          6.5 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is unenforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.

          6.6 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts.

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          IN WITNESS WHEREOF, the parties have executed this Change of Control Agreement as of the date and year first above written.

 

 

 

 

 

 

MOLECULAR INSIGHT PHARMACEUTICALS, INC.:
 

 

 

By:  

/s/ Anthony Martin

 

 

 

Name:  

Anthony Martin

 

 

 

Title:  

Chairman of the Board of Directors of Molecular Insight Pharmaceuticals, Inc.,

 

 

 

EMPLOYEE:
 

 

 

/s/ Daniel L. Peters  

 

 

Address: 6 Whitesell LN 

 

 

               Newtown, PA 18940 

 

 

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