Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made as of the 30 day of September
2008 between Alkermes, Inc., a Pennsylvania corporation (the “Company”), and
Iain M. Brown (“Vice President”).

 

WHEREAS, the Company has previously entered into a letter agreement with Vice
President dated May 29, 2003 (the “Letter Agreement”);

 

WHEREAS, the Company and Vice President wish to replace the Letter Agreement
with the provisions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1.Employment.  The term of this Agreement shall extend from September 30, 2008
(the “Commencement Date”) until this Agreement is terminated by either the Vice
President or the Company pursuant to Paragraph 4.  The term of this Agreement
may be referred to herein as the “Period of Employment.”

 

2.Position and Duties.  During the Period of Employment, Vice President shall
serve as Vice President, Finance of the Company, and shall have supervision and
control over and responsibility for the day to day business and affairs of those
functions and operations of the Company and shall have such other powers and
duties as may from time to time be prescribed by the Board of Directors of the
Company (the “Board”), the Chief Executive Officer of the Company (the “CEO”) or
other authorized executives, provided that such duties are consistent with Vice
President’s position or other positions that he may hold from time to
time.  Vice President shall devote his full working time and efforts to the
business and affairs of the Company. 

 

3.Compensation and Related Matters.

 

(a)Base Salary.  Vice President’s initial annual base salary shall be his annual
base salary on the Commencement Date.  Vice President’s base salary shall be
redetermined annually by the CEO.  The base salary in effect at any given time
is referred to herein as “Base Salary.”  The Base Salary shall be payable in
substantially equal bi-weekly installments.

 

(b)Incentive Compensation.  Vice President shall be eligible to receive cash
incentive compensation as determined by the Compensation Committee of the Board
(the “Compensation Committee”) and the CEO from time to time, and shall also be
eligible to participate in such incentive compensation plans as the Compensation
Committee shall determine from time to time.

 

(c)Expenses.  Vice President shall be entitled to receive prompt reimbursement
for all reasonable business expenses incurred by him in performing services

 

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hereunder during the Period of Employment, in accordance with the policies and
procedures then in effect and established by the Company.

 

(d)Other Benefits.  During the Period of Employment, Vice President shall be
entitled to continue to participate in or receive benefits under all of the
Company’s Employee Benefit Plans in effect on the date hereof, as these plans or
arrangements may thereafter be amended from time to time.  As used herein, the
term “Employee Benefit Plans” includes, without limitation, each pension and
retirement plan; supplemental pension, retirement and deferred compensation
plan; savings and profit-sharing plan; stock ownership plan; stock purchase
plan; stock option plan; life insurance plan; medical insurance plan; disability
plan; and health and accident plan or arrangement established and maintained by
the Company on the date hereof for employees of the same status within the
hierarchy of the Company.  Vice President shall have the right in accordance
with applicable law and the Company’s long-term disability plan to elect to pay
the premiums for his disability coverage with after-tax dollars.  During the
Period of Employment, Vice President shall be entitled to participate in or
receive benefits under any Employee Benefit Plan or arrangement which may, in
the future, be made available by the Company to its Vice Presidents, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plan or arrangement.  Any payments or benefits payable to Vice President
under a plan or arrangement referred to in this Subparagraph 3(d) in respect of
any calendar year during which Vice President is employed by the Company for
less than the whole of such year shall, unless otherwise provided in the
applicable plan or arrangement, be prorated in accordance with the number of
days in such calendar year during which he is so employed.  Should any such
payments or benefits accrue on a fiscal year (rather than calendar year) basis,
then the proration in the preceding sentence shall be on the basis of a fiscal
year rather than calendar year.

 

(e)Vacations.  Vice President shall be entitled to the number of paid vacation
days in each calendar year to which he is entitled on the Commencement Date,
which vacation days shall be accrued ratably during the calendar year and the
number of which may be increased in accordance with Company policies.  Vice
President shall also be entitled to all paid holidays given by the Company to
its Vice Presidents.

 

4.Termination.  Vice President’s employment hereunder may be terminated without
any breach of this Agreement under the following circumstances:

 

(a)Death.  Vice President’s employment hereunder shall terminate upon his death.

 

(b)Disability.  If Vice President is prevented from performing his duties
hereunder by reason of any physical or mental incapacity that results in Vice
President’s satisfaction of all requirements necessary to receive benefits under
the Company’s long-term disability plan due to a total disability, then, to the
extent permitted by law, Company may terminate the employment of Vice President
at or after such time.  Nothing in this Subparagraph 4(b) shall be construed to
waive Vice President’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq. 

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(c)Termination by Company for Cause.  At any time during the Period of
Employment, the Company may terminate Vice President’s employment hereunder for
Cause.  For purposes of this Agreement, “Cause” shall mean:  (i) conduct by Vice
President constituting a material act of willful misconduct in connection with
the performance of his duties, including, without limitation, misappropriation
of funds or property of the Company or any of its affiliates other than the
occasional, customary and de minimis use of Company property for personal
purposes; (ii) the commission by Vice President of a felony or any misdemeanor
involving moral turpitude, deceit, dishonesty or fraud, or conduct by Vice
President that would reasonably be expected to result in material injury to the
Company if he were retained in his position; (iii) continued, willful and
deliberate non-performance by Vice President of his duties hereunder (other than
by reason of Vice President’s physical or mental illness, incapacity or
disability) which has continued for more than thirty (30) days following written
notice of such non-performance from the Company; (iv) a breach by Vice President
of any of the provisions contained in Paragraph 6 of this Agreement; (v) a
violation by Vice President of the Company’s employment policies which has
continued following written notice of such violation from the Company; or (vi)
willful failure to cooperate with a bona fide internal investigation or an
investigation by regulatory or law enforcement authorities, after being
instructed by the Company to cooperate, or the willful destruction or failure to
preserve documents or other materials known to be relevant to such investigation
or the willful inducement of others to fail to cooperate or to produce documents
or other materials.

 

(d)Termination Without Cause.  At any time during the Period of Employment, the
Company may terminate Vice President’s employment hereunder without Cause.  Any
termination by the Company of Vice President’s employment under this Agreement
which does not constitute a termination for Cause under Subparagraph 4(c) or
result from the death or disability of Vice President under Subparagraph 4(a) or
(b) shall be deemed a termination without Cause.

 

(e)Termination by Vice President.  At any time during the Period of Employment,
Vice President may terminate his employment hereunder for any reason, including
but not limited to Good Reason.  For purposes of this Agreement, “Good Reason”
shall mean that Vice President has complied with the “Good Reason Process”
(hereinafter defined) following the occurrence of any of the following
events:  (i) a substantial diminution or other substantive adverse change, not
consented to by Vice President, in the nature or scope of Vice President’s
responsibilities, authorities, powers, functions or duties; (ii) an involuntary
material reduction in Vice President’s Base Salary except for across-the-board
reductions similarly affecting all or substantially all management employees;
(iii) a breach by the Company of any of its other material obligations under
this Agreement, or (iv) a material change in the geographic location at which
Vice President must perform his services.  “Good Reason Process” shall mean that
(A) Vice President reasonably determines in good faith that a “Good Reason”
event has occurred; (B) Vice President notifies the Company in writing of the
occurrence of the Good Reason event within ninety (90) days of the occurrence of
such event; (C) Vice President cooperates in good faith with the Company’s
efforts, for a period not less than thirty (30) days following such notice, to
modify Vice President’s employment situation in a manner acceptable to Vice
President and Company; (D) notwithstanding such efforts, one or more of the Good

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Reason events continues to exist and has not been modified in a manner
acceptable to Vice President; and (E) Vice President terminates his employment
no later than sixty (60) days after the end of the thirty-day cure period.  If
the Company cures the Good Reason event in a manner acceptable to Vice President
during the thirty-day period, Good Reason shall be deemed not to have occurred.

 

(f)Notice of Termination.  Except for termination as specified in Subparagraph
4(a), any termination of Vice President’s employment by the Company or any such
termination by Vice President shall be communicated by written Notice of
Termination to the other party hereto.  For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.

 

(g)Date of Termination.  “Date of Termination” shall mean:  (i) if Vice
President’s employment is terminated by his death, the date of his death; (ii)
if Vice President’s employment is terminated on account of disability under
Subparagraph 4(b) or by the Company for Cause under Subparagraph 4(c), the date
on which Notice of Termination is given; (iii) if Vice President’s employment is
terminated by the Company under Subparagraph 4(d), thirty (30) days after the
date on which a Notice of Termination is given; and (iv) if Vice President’s
employment is terminated by Vice President under Subparagraph 4(e), thirty (30)
days after the date on which a Notice of Termination is given.

 

5.Compensation Upon Termination.

 

(a)Termination Generally.  If Vice President’s employment with the Company is
terminated for any reason during the Period of Employment, the Company shall pay
or provide to Vice President (or to his authorized representative or estate) any
earned but unpaid Base Salary, incentive compensation earned but not yet paid,
unpaid expense reimbursements, accrued but unused vacation and any vested
benefits Vice President may have under any Employee Benefit Plan of the Company,
including without limitation any benefits that may accrue on Vice President’s
retirement from the Company, to the extent applicable (the “Accrued Benefit”).

 

(b)Termination by the Company Without Cause or by Vice President with Good
Reason.  If Vice President’s employment is terminated by the Company without
Cause as provided in Subparagraph 4(d), or Vice President terminates his
employment for Good Reason as provided in Subparagraph 4(e), then the Company
shall, through the Date of Termination, pay Vice President his Accrued
Benefit.  The Company shall within seven (7) days of the Date of Termination
provide to Vice President a general release of claims in a form and manner
satisfactory to the Company (the “Release”).  If Vice President signs the
Release and delivers it to Company within twenty-one (21) days of Vice
President’s receipt of the Release and does not revoke it within seven (7) days
thereafter:

 

(i)Company shall pay Vice President an amount equal to fifty percent (50%) of
the sum of Vice President’s Base Salary and his Average Incentive Compensation
(the “Severance Amount”).  The Severance Amount shall be paid out in
substantially equal bi-weekly installments over six (6) months, in arrears
beginning on the first payroll date that begins after

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thirty-five (35) days from the Date of Termination.  For purposes of this
Agreement, “Average Incentive Compensation” shall mean the average of the annual
cash incentive compensation under Subparagraph 3(b) received by Vice President
for the two (2) immediately preceding fiscal years.  In no event shall “Average
Incentive Compensation” include any sign-on bonus, retention bonus or any other
special bonus.  Solely for purposes of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), each bi-weekly installment payment shall be
considered a separate payment.  Notwithstanding the foregoing, if Vice President
breaches any of the provisions contained in Paragraph 6 of this Agreement, all
payments of the Severance Amount shall immediately cease.

 

(ii)Subject to Vice President’s copayment of premium amounts at the active
employees’ rate, continued participation in the Company’s group health, dental
and vision program for six (6) months; provided, however, that the continuation
of health benefits under this Subparagraph shall reduce and count against Vice
President’s rights under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”).

 

(iii)Anything in this Agreement to the contrary notwithstanding, if at the time
of Vice President’s termination of employment, Vice President is considered a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
and if any payment or benefit that Vice President becomes entitled to under this
Agreement is considered deferred compensation subject to interest, penalties and
additional tax imposed pursuant to Section 409A(a) of the Code as a result of
the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment
shall be payable or benefit shall be provided prior to the date that is the
earlier of (A) six months after Vice President’s separation from service, or (B)
Vice President’s death, and the initial payment shall include a catch-up amount
covering amounts that would otherwise have been paid during the first six-month
period but for the application of this Subparagraph 5(b)(iii).  The parties
intend that this Agreement will be administered in accordance with Section 409A
of the Code.  The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.

 

6.Confidential Information, Nonsolicitation and Cooperation.

 

(a)Confidential Information.  As used in this Agreement, “Confidential
Information” means information belonging to the Company which is of value to the
Company in the course of conducting its business and the disclosure of which
could result in a competitive or other disadvantage to the
Company.  Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other
intellectual property; trade secrets; know-how; designs, processes or formulae;
software; market or sales information or plans; customer lists; and business
plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Company.  Confidential Information includes
information developed by Vice President in the course of Vice President’s
employment by the Company, as well as other information to which Vice President
may have access in connection with Vice President’s employment.  Confidential
Information also includes the confidential information of others with which the
Company has a business relationship.  Notwithstanding the foregoing,

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Confidential Information does not include information in the public domain,
unless due to breach of Vice President’s duties under Subparagraph 6(b).

 

(b)Confidentiality.  Vice President understands and agrees that Vice President’s
employment creates a relationship of confidence and trust between Vice President
and the Company with respect to all Confidential Information.  At all times,
both during Vice President’s employment with the Company and after its
termination, Vice President will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Company, except as may be
necessary in the ordinary course of performing Vice President’s duties to the
Company.

 

(c)Documents, Records, etc.  All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, which are furnished to Vice President by the Company or are
produced by Vice President in connection with Vice President’s employment will
be and remain the sole property of the Company.  Vice President will return to
the Company all such materials and property as and when requested by the
Company.  In any event, Vice President will return all such materials and
property immediately upon termination of Vice President’s employment for any
reason.  Vice President will not retain with Vice President any such material or
property or any copies thereof after such termination.

 

(d)Nonsolicitation.  During the Period of Employment and for six (6) months
thereafter, Vice President (i) will refrain from directly or indirectly
recruiting or otherwise soliciting, inducing or influencing any person to leave
employment with the Company (other than terminations of employment of
subordinate employees undertaken in the course of Vice President’s employment
with the Company); and (ii) will refrain from soliciting or encouraging any
customer or supplier to terminate or otherwise modify adversely its business
relationship with the Company.  However, nothing in this Subparagraph 6(d) will
prohibit Vice President from indirectly recruiting, soliciting, inducing or
influencing a person to leave employment with the Company through the use of
advertisements in trade journals and the like or from discussing employment
opportunities with such employees to the extent such employees contact Vice
President first.  Vice President understands that the restrictions set forth in
this Subparagraph 6(d) are intended to protect the Company’s interest in its
Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable and
appropriate for this purpose. 

 

(e)Litigation and Regulatory Cooperation.  During and after Vice President’s
employment, Vice President shall cooperate fully with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Vice President was employed by the
Company.  Vice President’s full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times.  During and after Vice President’s
employment, Vice President also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or

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occurrences that transpired while Vice President was employed by the
Company.  The Company shall reimburse Vice President for any reasonable
out-of-pocket expenses incurred in connection with Vice President’s performance
of obligations pursuant to this Subparagraph 6(e).

 

(f)Injunction.  Vice President agrees that it would be difficult to measure any
damages caused to the Company which might result from any breach by Vice
President of the promises set forth in this Paragraph 6, and that in any event
money damages would be an inadequate remedy for any such breach.  Accordingly,
subject to Paragraph 8 of this Agreement, Vice President agrees that if Vice
President breaches, or proposes to breach, any portion of this Agreement, the
Company shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage to the Company.

 

7.Arbitration of Disputes.   Any controversy or claim arising out of or relating
to this Agreement or the breach thereof or otherwise arising out of Vice
President’s employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
(“AAA”) in Boston, Massachusetts in accordance with the Employment Dispute
Resolution Rules of the AAA, including, but not limited to, the rules and
procedures applicable to the selection of arbitrators.  In the event that any
person or entity other than Vice President or the Company may be a party with
regard to any such controversy or claim, such controversy or claim shall be
submitted to arbitration subject to such other person or entity’s
agreement.  Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof.  This Paragraph 7 shall be specifically
enforceable.  Notwithstanding the foregoing, this Paragraph 7 shall not preclude
either party from pursuing a court action for the sole purpose of obtaining a
temporary restraining order or a preliminary injunction in circumstances in
which such relief is appropriate; provided that any other relief shall be
pursued through an arbitration proceeding pursuant to this Paragraph 7.

 

8.Consent to Jurisdiction.  To the extent that any court action is permitted
consistent with or to enforce Paragraphs 6 or 7 of this Agreement, the parties
hereby consent to the jurisdiction of the Superior Court of the Commonwealth of
Massachusetts and the United States District Court for the District of
Massachusetts.  Accordingly, with respect to any such court action, Vice
President (i) submits to the personal jurisdiction of such courts; (ii) consents
to service of process; and (iii) waives any other requirement (whether imposed
by statute, rule of court, or otherwise) with respect to personal jurisdiction
or service of process.

 

9.Integration.  This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter,
including without limitation the Letter Agreement.  Notwithstanding the
foregoing, except to the extent in conflict therewith, this Agreement does not
supersede the Employee Agreement with respect to Inventions and Proprietary
Information dated June 2, 2003 between Vice President and the Company.

 

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10.Assignment; Successors and Assigns.  Neither the Company nor Vice President
may make any assignment of this Agreement or any interest herein, by operation
of law or otherwise, without the prior written consent of the other party;
provided that the Company may assign its rights under this Agreement without the
consent of Vice President in the event that the Company shall effect a
reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity.  This Agreement shall inure to the benefit of and be binding
upon the Company and Vice President, their respective successors, executors,
administrators, heirs and permitted assigns.

 

11.Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

12.Waiver.  No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party.  The failure of any party to require
the performance of any term or obligation of this Agreement, or the waiver by
any party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

13.Notices.  Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in person
or sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to Vice President at
the last address Vice President has filed in writing with the Company or, in the
case of the Company, at its main offices, attention of the Chief Executive
Officer, and shall be effective on the date of delivery in person or by courier
or three (3) days after the date mailed.

 

14.Amendment.  This Agreement may be amended or modified only by a written
instrument referencing this Agreement signed by Vice President and by a duly
authorized representative of the Company.

 

15.Governing Law.  This is a Massachusetts contract and shall be construed under
and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth.  With respect to any disputes concerning Federal law, such
disputes shall be determined in accordance with the law as it would be
interpreted and applied by the United States Court of Appeals for the First
Circuit.

 

16.Counterparts.  This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.

 

 

 

 

 

 

 

 

ALKERMES, INC.

 

 

/s/ Madeline Coffin

 

By:

Madeline Coffin

 

Title:  

VP Human Resources

 

 

/s/ Iain M. Brown

 

 

Iain M. Brown

 

 

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