EXHIBIT 10.6

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of February 7,
2006 by and between Advanced Magnetics, Inc., a Delaware corporation with
offices at 61 Mooney Street, Cambridge, MA 02138 (“AMI”) and Jerome Goldstein,
of 282 Buckminster Road, Brookline, MA 02445 (“you”).

 

Whereas, AMI desires to continue to employ you, and you desire to continue your
employment with AMI on and subject to the terms and conditions set forth in this
Agreement;

 

Now therefore, AMI and you agree as follows:

 

1.             Position; Duties.

 

a)            Position. You shall serve as Chief Executive Officer and Treasurer
of AMI.

 

b)            Duties. You shall perform for AMI the duties customarily
associated with the offices of Chief Executive Officer and Treasurer and such
other duties as may be assigned to you from time to time by AMI’s Board of
Directors (the “Board”) that are consistent with the duties normally performed
by the most senior executives of similar entities. You shall devote
substantially your full business time and best efforts to the performance of
your duties hereunder and the business and affairs of AMI and will not undertake
or engage in any other employment, occupation or business enterprise; provided,
however, that you may participate as a member of the board of directors or
advisory board of other entities and in professional organizations and civic and
charitable organizations. You shall be based in AMI’s principal offices, which
currently are in Cambridge, Massachusetts.

 

2.            Term. The term of this Agreement shall be for a three (3) year
period commencing on the date hereof unless terminated earlier pursuant to
Section 4 below (the “Term”). You may continue to be employed by AMI beyond the
Term of this Agreement, but such employment shall be on such terms and
conditions as you and AMI then may agree.

 

3.            Compensation and Benefits. AMI shall pay you the following
compensation and benefits for all services rendered by you under this Agreement:

 

a)            Base Salary. AMI will pay you an initial Base Salary at the
annualized rate of $345,560.00, minus withholdings as required by law and other
deductions authorized by you, which amount shall be paid in equal installments
at AMI’s regular payroll intervals, but not less often than monthly. Your base
salary may be increased or decreased annually by the Board or the Compensation
Committee of the Board in their discretion.

 

b)            Bonus. No bonus shall be payable to you unless the Board or the
Compensation Committee otherwise approves such bonus (which approval shall be in
the sole discretion of the Board or Compensation Committee).

 

 

 

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c)            Options. You shall be eligible to receive stock options or other
equity compensation under AMI’s equity incentive plans as determined by the
Board or the Compensation Committee from time to time.

 

d)            Vacation. You will continue to accrue vacation days in accordance
with the policies and procedures of AMI as in effect from time to time.

 

e)            Benefits. You will be eligible to participate in all group health,
dental, 401(k), and other insurance and/or benefit plans that AMI may offer to
similarly situated executives of AMI from time to time on the same terms as
offered to such other executives.

 

f)            Business Expenses. AMI will reimburse you for all reasonable and
usual business expenses incurred by you in the performance of your duties
hereunder in accordance with AMI’s expense reimbursement policy.

 

4.            Termination. Your employment with AMI may be terminated prior to
the expiration of the Term as follows:

 

a)             Death. This Agreement shall terminate automatically upon your
death.

 

b)            Disability. AMI may terminate your employment in the event that
you shall be prevented, by illness, accident, disability or any other physical
or mental condition (to be determined by means of a written opinion of a
competent medical doctor chosen by mutual agreement of AMI and you or your
personal representative(s)) from substantially performing your duties and
responsibilities hereunder for one or more periods totaling one hundred and
twenty (120) days in any twelve (12) month period.

 

c)            By AMI for Cause. AMI may terminate your employment for “Cause”
upon written notice to you. For purposes of this Agreement, “Cause” shall mean
any of (i) fraud, embezzlement or theft against AMI or any of its affiliates;
(ii) you are convicted of, or plead guilty or no contest to, a felony; (iii)
willful nonperformance by you (other than by reason of illness) of your material
duties hereunder and failure to remedy such nonperformance within ten (10)
business days following written notice from the Board identifying the
nonperformance and the actions required to cure it; or (iv) you commit an act of
gross negligence, engage in willful misconduct or otherwise act with willful
disregard for AMI’s best interests, and you fail to remedy such conduct within
ten (10) business days following written notice from the Board identifying the
gross negligence, willful misconduct or willful disregard and the actions
required to cure it (if such conduct can be cured).

 

d)            By AMI Other Than For Death, Disability or Cause. AMI may
terminate your employment other than for Cause, disability or death upon thirty
(30) days prior written notice to you.

 

 

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e)            By You For Any Reason. You may terminate your employment at any
time for any reason upon thirty (30) days prior written notice to AMI.

 

5.            Payment Upon Termination. In the event that your employment with
AMI terminates, you will be paid the following:

 

a)            Termination for Any Reason. In the event that your employment
terminates for any reason, AMI shall pay you for the following items that were
earned and accrued but unpaid as of the date of your termination: (i) your Base
Salary; (ii) a cash payment for all accrued, unused vacation calculated at your
then Base Salary rate; (iii) reimbursement for any unpaid business expenses; and
(iv) such other benefits and payments to which you may be entitled by law or
pursuant to the benefit plans of AMI then in effect.

 

b)            Termination Within One Year of a Change of Control. In addition to
the payments provided for in Section 5(a), in the event that (i) within one year
from the date a Change of Control (as defined below) of the Company is
consummated either (a) AMI (for purposes of this section, such term to include
its successor) terminates your employment other than for Cause pursuant to
Section 4(c) or (b) you terminate your employment with AMI for any reason; (ii)
you comply fully with all of your obligations under all agreements between AMI
and you; and (iii) you execute, deliver to AMI and do not revoke a general
release (in a form acceptable to AMI) releasing and waiving any and all claims
that you have or may have against AMI and its directors, officers, employees,
agents, successors and assigns with respect to your employment (other than any
obligation of AMI set forth herein which specifically survives the termination
of your employment), then AMI will pay you one (1) year of severance pay
(calculated at your last Base Salary rate). The severance shall be paid in equal
installments over the severance period in accordance with AMI’s usual payroll
schedule. For purposes of this Agreement, “Change of Control” shall mean the
first to occur of any of the following: (a) any “person” or “group” (as defined
in the Securities Exchange Act of 1934, as amended) becomes the beneficial owner
of a majority of the combined voting power of the then outstanding voting
securities with respect to the election of the Board of Directors of the
Company; (b) any merger, consolidation or similar transaction involving the
Company, other than a transaction in which the stockholders of the Company
immediately prior to the transaction hold immediately thereafter in the same
proportion as immediately prior to the transaction not less than 50% of the
combined voting power of the then voting securities with respect to the election
of the Board of Directors of the resulting entity; (c) any sale of all or
substantially all of the assets of the Company; or (d) any other acquisition by
a third party of all or substantially all of the business or assets of the
Company, as determined by the Board of Directors of the Company, in its sole
discretion the sale of AMI or its business, by merger, sale of substantially all
of its assets or otherwise.

 

6.            Nonsolicitation Covenant. In exchange for the consideration
provided by this Agreement, you shall not, for a period of one year following
the termination of your employment with AMI for any reason, directly or
indirectly, whether through your own efforts, or in any way assisting or
employing the assistance of any other person or entity (including, without
limitation, any consultant or any person employed by or associated with any
entity with which you are employed or associated), recruit, solicit or induce
(or in any way assist another in recruiting, soliciting or inducing) any
employee or consultant of AMI to terminate his or her employment or other
relationship with AMI.

 

7.            Assignment. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of any successor of AMI by
reorganization, merger or consolidation and any assignee of all or substantially
all of its business and properties. Neither this Agreement nor any rights or
benefits hereunder may be assigned by you, except that, upon your death, your
earned and unpaid economic benefits will be paid to your heirs or beneficiaries.

 

8.            Interpretation and Severability. It is the express intent of the
parties that (a) in case any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, such provision

 

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shall be construed by limiting and reducing it as determined by a court of
competent jurisdiction, so as to be enforceable to the fullest extent compatible
with applicable law; and (b) in case any one or more of the provisions contained
in this Agreement cannot be so limited and reduced and for any reason is held to
be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

9.            Notices. Any notice that you or AMI are required to give the other
under this Agreement shall be given by personal delivery, recognized overnight
courier service, or registered or certified mail, return receipt requested,
addressed in your case to you at your last address of record with AMI, or at
such other place as you may from time to time designate in writing, and, in the
case of AMI, to AMI at its principal office, or at such other office as AMI may
from time to time designate in writing. The date of actual delivery of any
notice under this Section 9 shall be deemed to be the date of receipt thereof.

 

10.          Waiver. No consent to or waiver of any breach or default in the
performance of any obligation hereunder shall be deemed or construed to be a
consent to or waiver of any other breach or default in the performance of any of
the same or any other obligations hereunder. No waiver hereunder shall be
effective unless it is in writing and signed by the waiving party.

 

11.          Complete Agreement; Modification. This Agreement sets forth the
entire agreement of the parties with respect to the subject matter hereof, and
supersedes any previous oral or written communications, negotiations,
representations, understandings, or agreements between them. Any modification of
this Agreement shall be effective only if set forth in a written document signed
by you and a duly authorized officer of AMI.

 

12.          Headings. The headings of the Sections hereof are inserted for
convenience only and shall not be deemed to constitute a part, or affect the
meaning, of this Agreement.

 

13.          Counterparts. This Agreement may be signed in two (2) counterparts,
each of which shall be deemed an original and both of which shall together
constitute one agreement.

 

14.          Choice of Law; Jurisdiction. This Agreement shall be deemed to have
been made in the Commonwealth of Massachusetts, and the validity, interpretation
and performance of this Agreement shall be governed by, and construed in
accordance with, the laws of Massachusetts, without regard to conflict of law
principles. You hereby consent and submit without limitation to the jurisdiction
of courts in Massachusetts in connection with any action arising out of this
Agreement, and waive any right to object to any such forum as inconvenient or to
object to venue in Massachusetts. You agree that, in any action arising out of
this Agreement, you will accept service of process by registered mail or the
equivalent directed to your last known address or by such other means permitted
by such court.

 

15.          Advice of Counsel; No Representations. You acknowledge that you
have been advised to review this Agreement with your own legal counsel, that
prior to entering into this Agreement, you have had the opportunity to review
this Agreement with your attorney, and that

 

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AMI has not made any representations, warranties, promises or inducements to you
concerning the terms, enforceability or implications of this Agreement other
than as are contained in this Agreement.

 

16.          I.R.C. § 409A. All other provisions of this Agreement
notwithstanding, this Agreement shall be construed to avoid any adverse tax
consequences to you under Internal Revenue Code Section 409A, and the parties
agree to amend this Agreement from time to time as may be necessary to that end,
in a manner that best preserves the economic benefits to you. Further, for so
long AMI has a class of stock that is publicly traded on an established
securities market or otherwise, then AMI shall from time to time compile a list
of “Specified Employees” as defined in, and pursuant to, Prop. Treasury Reg. §
1.409A-1(i) or any successor regulation. If you are a Specified Employee on the
date of the termination of your employment with AMI, then, notwithstanding any
other provision herein, no payment shall be made to you pursuant to Section
5(b)(x) above during the period lasting six (6) months from the date of such
termination of employment unless AMI determines that there is no reasonable
basis for believing that making such payment would cause you to suffer any
adverse tax consequences pursuant to Section 409A. If any payment to you is
delayed pursuant to the provisions of this paragraph, such delayed payment shall
instead be made on the first business day following the expiration of the six
(6) month period referred to herein.

 

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IN WITNESS WHEREOF, AMI and you have executed this Agreement as of the day and
year first set forth above.

 

 

Advanced Magnetics, Inc.

 

By: /s/ Brian J.G. Pereira

Name: Brian J.G. Pereira

Title: President

 

 

/s/ Jerome Goldstein  

Jerome Goldstein

 

 

 

 

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