Exhibit 10.3

 

June 27, 2003

 

Dr. Clive Wood
2 Hawthorne Place
Apt. #17R
Boston, MA  02114

 

Dear Clive,

 

This will confirm our offer of employment for the position of Senior Vice
President, Discovery Research and Chief Scientific Officer reporting to Henry
Blair, President and CEO.  In this position, you will be responsible for the
strategy and operations of all Dyax Discovery Research.

 

Dyax will pay you a base salary of $225,000 per year ($8,653.85 bi-weekly),
which is subject to review by the Compensation Committee of the Board of
Directors on an annual basis.  You will be eligible for your first salary
review, on a pro-rated basis, on January 1, 2004, and annually thereafter.  In
addition, you will receive a targeted bonus up to 25% of your base compensation
subject to attainment of specific individual and corporate objectives that will
be determined and agreed to by you and Henry Blair.  You will receive pro-rata
participation in this bonus for the remainder of the year 2003.  These
bonus-related objectives for 2003 will be decided upon within 30 days of your
first day of employment, and in the future years will be decided upon annually
on or no later than January 31 of each year.

 

Subject to approval by the Compensation Committee, Dyax agrees to grant you an
Incentive Stock Option for the purchase of 50,000 shares of Dyax common stock. 
These options will be granted under the Dyax 1995 Equity Incentive Plan, which
states in relevant part that the option will:  1) be granted at fair market
value at the close of business on the day before your first day of employment;
2) vesting equally over forty-eight months; 3) expire in 10 years; and
4) provide exercisability of the vested portion of your options for ninety (90)
days after the termination of your employment.

 

You will receive four (4) weeks paid vacation and will participate in the
Company’s employee benefit program in the same manner provided generally to the
Company’s senior executives, including health and dental insurance, 401(k)
savings plan, disability insurance and life insurance.  A package describing
these benefits is enclosed.  Additionally, Dyax requires that you execute the
Company’s standard Employee Confidentiality Agreement and comply with Federal
and state employment laws and regulations.

 

You will be an employee at will.  However, in the event your employment is
terminated by the Company without cause, Dyax agrees to pay you your monthly
base salary for a minimum of six (6) months as severance.  All earned but unpaid
bonuses and accrued vacation time shall be paid upon termination.  Medical and
dental benefits shall continue during the period when you are receiving
severance.  Other than your rights under COBRA, all other benefits and vesting
of your stock options will terminate as of your date of termination.  If your
employment is

 

--------------------------------------------------------------------------------

 

terminated for cause by the Company or is terminated by you for any reason not
enumerated above, your compensation, benefits, and stock option vesting shall
cease as of the termination date.  For purposes of this offer, “cause” shall
mean gross neglect in the performance of your duties or the commission of an act
of dishonesty or moral turpitude in connection with your employment, as
determined by the Board of Directors.  Subject to the foregoing, either party
may terminate this agreement at any time.

 

Additionally, this letter agreement (this “Agreement”) sets forth those benefits
which the Company will provide to you in the event your employment within the
Company is terminated after a “Change in Control” (as defined in Paragraph 2(i))
of the Company under the circumstances described below.

 

1.             TERM.

 

If a Change in Control should occur while you are still an employee of the
Company, then this Agreement shall continue in effect from the date of such
Change in Control for so long as you remain an employee of the Company, but in
no event for more than 12 months following such Change in Control.  If your
employment is terminated by the Company without Cause (as defined in Paragraph
3(ii)) prior to a Change in Control, this Agreement shall expire 90 days after
the date that your employment is terminated.  In addition, this Agreement may be
terminated by the Company at any time upon 120 days written notice to you.  The
termination or expiration of the term of this Agreement shall not adversely
affect your rights under this Agreement that have accrued prior to any such
termination or expiration.

 

2.             CHANGE IN CONTROL

 

(i)            For purposes of this Agreement, a Change in Control of the
Company (a “Change in Control”) shall be deemed to have occurred only if any of
the following events occur:

 

(a)  the acquisition of 50% or more of the Common Stock of the Company
(including shares convertible into Common Stock) by any “person” (as such term
is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (as
amended, the “Exchange Act”));

 

(b)  a merger or similar combination after which 50% or more of the voting stock
of the Company or any other surviving corporation that is the successor to the
Company is not held by the persons having beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of the Company immediately prior
to such merger or combination; or

 

(c)  the sale, lease, or exchange of all or substantially all of the Company’s
property or assets, or the dissolution or liquidation of the Company;

 

provided, however, that a spin-off transaction in which the property or assets
of the Company are transferred to a subsidiary of the Company and ownership of
the stock of the subsidiary is merely transferred pro-rata to the stockholders
of the Company or its successor shall not be deemed to be a Change in Control of
the Company.

 

2

--------------------------------------------------------------------------------

 

3.             TERMINATION FOLLOWING CHANGE IN CONTROL.

 

If a Change in Control shall have occurred while you are still an employee of
the Company, you shall be entitled to the payments and benefits provided in
Paragraph 4 hereof upon the subsequent termination of your employment within
twelve (12) months of such Change in Control, by you or by the Company unless
such termination is (a) because of your death or “Disability” (as defined
below), (b) by the Company for “Cause” (as defined below), or (c) by you other
than for “Good Reason” (as defined below), in any of which events you shall not
be entitled to receive benefits under this Agreement.

 

(i)                                     “Disability”.  If, as a result of your
incapacity due to physical or mental illness, you shall have been deemed
“disabled” by the institution appointed by the Company to administer the
Company’s Long-Term Disability Plan (or successor plan) because you shall have
been absent from your duties with the Company on a full-time basis for such
months and shall not have returned to full-time performance of your duties
within thirty days after written notice is given you, the Company may terminate
your employment for Disability.

 

(ii)                                  “Cause”.  For the purpose of this
Agreement, the Company shall have “Cause” to terminate your employment upon

 

(a)           The willful and continued failure by you substantially to perform
your duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness or any failure resulting from your
terminating your employment with the Company for “Good Reason” (as defined
below)) after a written demand for substantial performance is delivered to you
by the Company which specifically identifies the manner in which the Company
believes that you have not substantially performed your duties,

 

(b)           Willful gross misconduct or dishonesty; or

 

(c)           Conviction of a felony or a crime involving moral turpitude.

 

(iii)                               “Good Reason”.  You may terminate your
employment for Good Reason.  For purpose of this Agreement, “Good Reason” shall
mean:

 

(a)           The material diminution of your duties with the Company from that
immediately prior to the Change in Control;

 

(b)           A reduction by the Company in your base salary in effect
immediately prior to the Change in Control;

 

(c)           Any requirement by the Company that the location at which you
perform your principal duties for the Company be changed to a new location that
is more than 50 miles from the location at which you perform your principal
duties for the Company immediately prior to the Change in Control.

 

(iv)                              Notice of Termination.  Any termination by the
Company pursuant to subparagraphs (i) or (ii) above or by you pursuant to
subparagraph (iii) above

 

3

--------------------------------------------------------------------------------

 

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 and shall set forth in reasonable detail the facts and circumstances
claimed  to provide a basis of your termination under the provision so
indicated.

 

(v)           Date of Termination.  “Date of Termination” shall mean:

 

(a)           If this Agreement is terminated for Disability, thirty days after
Notice of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time basis during such thirty-day period),

 

(b)           If your employment is terminated pursuant to subparagraph (iii)
above, the date specified in the Notice of Termination, and

 

(c)           If your employment is terminated for any other reason, the date on
which a Notice of Termination is given (or, if a Notice of Termination is not
given, the date of such termination).

 

(vi)                              Termination in Anticipation of a Change in
Control.  If your employment is terminated by the Company without Cause within
90 days prior to a Change of Control and such termination (i) was at the request
of a third party who had indicated an intention or had taken steps reasonably
calculated to effect a Change of Control and who subsequently effectuates a
Change of Control (a “Third Party”) or (ii) otherwise occurred as a condition
to, or in anticipation of, a Change of Control which actually occurs, then for
all purposes of this Agreement, the date of a Change of Control for purposes of
this Agreement shall mean the date immediately prior to the date of such
termination of your employment and shall entitle you to the benefits provided
under Section 4 of this Agreement as though it were a termination without Cause
after a Change in Control.

 

4.             COMPENSATION UPON TERMINATION AFTER A CHANGE IN CONTROL.

 

(i)                                     If, after a Change in Control, your
employment shall be terminated for Cause, the Company shall pay you your full
base salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given and the Company shall have no further obligations
to you under this Agreement.

 

(ii)                                  If, after a Change in Control, the Company
shall terminate your employment, other than pursuant to Paragraph 3(i) or (ii)
hereof or by reason of death, or you shall terminate your employment for Good
Reason:

 

(a)           The Company shall pay you as severance pay (and without regard to
the provisions of any benefit plan) six (6) months of salary continuation at the
base rate in effect at the time of termination (together with the payments
provided in paragraphs (b), (c) and (d) below, the “Severance Payments”);

 

4

--------------------------------------------------------------------------------

 

(b)           For a six (6) month period after such termination, the Company
shall arrange to provide you with life, dental, accident and group health
insurance benefits substantially similar to those that you were receiving
immediately prior to such termination to the extent that the Company’s plans
then permit the Company to provide you with such benefits.  Notwithstanding the
foregoing, the Company shall not provide any such benefits to you to the extent
that an equivalent benefit is received by you from another employer during such
period, and you shall report any such benefit actually received by you to the
Company;

 

(c)           The exercisability of all outstanding stock options and restricted
stock awards with respect to Common Stock of the Company then held by you shall
accelerate in full; and

 

(d)           You shall be entitled to full executive outplacement assistance
with an agency selected by the Company.

 

(iv)                              You shall not be required to mitigate the
amount of any payment provided for in this Paragraph 4 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this Paragraph 3 be reduced by any compensation earned by you as the result of
employment by another employer after the Date of Termination, or otherwise,
except to the extent provided in Section 4(ii)(b) above.

 

5.             LIMIT ON SEVERANCE PAYMENTS.

 

In the event that any payment or benefit received or to be received by you in
connection with a Change in Control or the termination of your employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) (collectively
with the Severance Payments, “Total Payments”) would not be deductible (in whole
or part) as a result of section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) by the Company, an affiliate or other person making such
payment or providing such benefit, the Severance Payments shall be reduced until
no portion of the Total Payments is not deductible, or the Severance Payments
are reduced to zero.  For purposes of this limitation (a) no portion of the
Total Payments the receipt or enjoyment of which you shall have effectively
waived in writing prior to the date of payment of the Severance Payments shall
be taken into account, (b) no portion of the Total Payments shall be taken into
account which in the opinion of tax counsel selected by the Company’s
independent auditors serving as such immediately prior to the Change in Control
does not constitute a “parachute payment” within the meaning of section
280G(b)(2) of the Code, (c) the Severance Payments shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (a) or (b)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of section 280G(b)(4) of the Code
or are otherwise not subject to disallowance as deductions, in the opinion of
the tax counsel referred to in clause (b); and (d) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by the Company’s independent auditors based on Sections 280G and
4999 of the Code and on proposed final regulations for applying those Code
Section, or on substantial authority within the meaning of Section 6662 of the
Code.

 

5

--------------------------------------------------------------------------------

 

6.             NOTICE.

 

For the purpose of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be delivered to each party
at each party’s respective address set forth on the first page of this
Agreement, and shall be deemed effectively given or delivered:  (i) upon
personal delivery to the party to be notified, (ii) three (3) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (iii) one (1) business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; provided that all notices to the Company should be
directed to the attention of the Chairman of the Board of the Company, with a
copy to the Chief Financial Officer of Dyax Corp., in each case at 300
Technology Square, Cambridge, MA  02139.

 

7.             ENTIRE AGREEMENT.

 

This Agreement represents the entire agreement of the parties with respect to
the subject matter hereof and supersedes any other agreement between the parties
with respect to such subject matter.

 

8.             COUNTERPARTS.

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one in the
same instrument.

 

9.             MISCELLANEOUS

 

(i)            No provision of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing signed by you and such officer as may be specifically designated by the
Board of Directors of the Company.

 

(ii)           No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any time prior
to subsequent time.

 

(iii)          The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.

 

(iv)          The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

(v)           The Company may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

 

6

--------------------------------------------------------------------------------

 

If this Agreement correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this subject.

 

 

Sincerely,

 

 

 

 

 

/s/ Stephen S. Galliker

 

Stephen S. Galliker

 

Executive Vice President

 

I acknowledge receipt and agree with the foregoing terms and conditions.

 

/s/ Clive Wood

 

7/8/03

 

Name:  Clive Wood

 

 

 

7

--------------------------------------------------------------------------------