Employment Agreement - Ron Richards

EXHIBIT 10


EMPLOYMENT AGREEMENT


THIS AGREEMENT (this "Agreement"), dated as of February 12, 2003, is made by and between Biopure Corporation, a Delaware corporation, having its principal place of business at 11 Hurley Street, Cambridge, MA 02141 (the "Company"), and Mr. Ronald F. Richards (the "Executive").


Recitals


1. The Company wishes to employ the Executive as the Chief Financial Officer and Senior Vice President, Business Development of the Company.


2. The Company has determined that it is essential to enter into an employment agreement having the compensation and benefits herein to induce the Executive to be so employed.


3. The Executive agrees to accept such employment by the Company on the terms set forth herein.


Agreement


NOW, THEREFORE, in consideration of the mutual covenants and premises herein contained, and other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive hereby agree as follows.


1. CERTAIN DEFINITIONS.


1.1 "Effective Date" shall mean the first day of Executive's employment, which shall be February 12, 2003.


1.2 "Employment Period" shall mean the period of time beginning on the Effective Date and ending on the second anniversary of the Effective Date or as further extended in accordance with the provisions of this Section 1.2. The Employment Period (as it may have been extended pursuant to the provisions of this sentence and subject to the provisions of Section 5 below) shall be extended or further extended, as the case may be, without any action by the Company or the Executive, on the second anniversary of the Effective Date and on each subsequent anniversary thereof for an additional period of one year, unless and until either party gives written notice to the other party at least sixty (60) days in advance of any such anniversary that the Employment Period in effect when such notice is given is not to be extended or further extended, as the case may be.


1.3 "Board" shall mean the Board of Directors of the Company.


2. EMPLOYMENT. Subject to the terms and conditions provided herein, the Company hereby agrees, during the Employment Period, to employ the Executive as its Chief Financial Officer and Senior Vice President, Business Development. The Executive hereby agrees to accept such employment during the Employment Period.


3. EMPLOYMENT DUTIES. During the Employment Period, the Executive shall have such duties and responsibilities as are assigned to the Executive by the Board or the Chief Executive Officer and shall not be required to do anything inconsistent with the normal and customary responsibilities and duties of a Chief Financial Officer and Senior Vice President, Business Development in comparable companies. Executive shall take direction from and report to the Chief Executive Officer. During the Employment Period, the Executive agrees to devote substantially all of his business attention and time to the business and affairs of the Company and its subsidiaries, and to use the Executive's reasonable best efforts to perform faithfully the duties and responsibilities assigned to the Executive under this Section 3. Notwithstanding the foregoing, it is expressly understood that (a) the Executive may devote a reasonable amount of time to the management of his investments and affairs and to such industry associations, charitable and civic endeavors as shall not materially interfere significantly with the obligations set forth in the preceding sentence, and (b) with the prior approval of the Board (which shall not be unreasonably withheld and subject to the non-competition provision in Section 9), the Executive may serve as a member of one or more boards of directors of companies that are not affiliated with the Company; the Executive shall have the right during the Employment Period to continue to serve as a director of Nolo, Inc. and fulfill all of the duties and responsibilities associated with that position.


4. COMPENSATION.


4.1 Base Salary. Beginning February 26, 2003 and during the balance of the Employment Period, the Company shall pay the Executive a base salary (the "Base Salary") of no less than $250,000 per annum, payable in accordance with the Company's normal payroll practices for senior executives. The Base Salary shall be reviewed at least once each year. When the Base Salary is reviewed, it may be increased (but not decreased) in accordance with the Company's regular review of senior executive salaries, and if increased, then such increased amount shall become the Base Salary.


4.2 Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be eligible to participate in all bonus, short- or long-term incentive plans and programs established by the Board from time to time and in existence on or after the Effective Date for the benefit of senior executives of the Company. It is understood that the Executive's target bonus opportunity under the Company's bonus plan shall be approximately 50% of his Base Salary. During the Employment Period, the Executive shall be eligible to participate in all savings and retirement plans and programs (as the plan terms allow) maintained by the Company from time to time on or after the Effective Date for the benefit of employees and/or senior executives or employees of the Company. In addition, the Executive shall be eligible to receive annual or periodic awards under the Company's 2002 Omnibus Securities and Incentive Plan ("Plan") or any other such plan in which senior executives may become eligible to participate from time to time; provided, however, that such awards shall be granted in the sole discretion of the Company.


4.3 Welfare Benefit Plans. During the Employment Period and as of the Effective Date, the Executive and/or the Executive's family as the terms allow shall participate in all welfare benefit plans, programs and arrangements maintained by the Company from time to


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time on or after the Effective Date for the benefit of senior executives or employees of the Company.


4.4 Vacation; Fringe Benefits. During the Employment Period, the Executive shall be entitled to four (4) weeks of vacation annually, and any accrued and unused vacation shall be carried over to the next year without any reduction; provided, however, that the maximum carryover on a year-to-year basis shall be four (4) weeks. During the Employment Period, the Executive shall receive such perquisites and fringe benefits as are generally provided to senior executives of the Company. The Executive shall be reimbursed for his reasonable business expenses in accordance with Company policy. During the Employment Period, the Company shall reimburse the Executive for reasonable travel expenses for his wife to accompany him on extended business trips required to be taken in carrying out his duties and responsibilities up to an annual limit of $15,000, without carryover of any unused amount. Air travel shall be business class, and if business class is not available, then the Executive may travel first class if the flight is outside of the contiguous United States. Any benefit received by the Executive under this Section 4.4 that is taxed as compensation (other than vacation pay, if any) will be "grossed up" by the Company for all applicable taxes.


4.5 Stock Option Grant.


(a) On the Effective Date, the Executive shall be granted stock options under the Plan entitling the Executive to acquire 150,000 shares of the Company's class A common stock at an exercise price equal to the Fair Market Value on the date of grant. Such options shall be for a term of 10 years from the Effective Date. The options shall be governed by one or more stock option agreements, the terms of which shall be consistent with this Section 4.5 and with the terms of the Plan. The options shall be or become exercisable, i.e., shall vest, in respect of the shares underlying such options as follows:


1. 30,000 shares on the Effective Date;


2. 120,000 shares 5,000 shares per month on the first of each
month over the next 24 months.


(b) The Executive shall forfeit any unvested options upon termination of employment with the Company for any reason, except as otherwise specifically provided in this Agreement.


(c) "Fair Market Value" shall have the meaning set forth in the Plan.


(d) If there is a Change in Control (as defined in the Plan as in effect as of the date of this Agreement), then all outstanding unvested stock options held by the Executive as of the date of such Change in Control shall immediately vest as of the date of such Change in Control and shall remain exercisable until the earlier of (i) the end of the 90-day period following the date of the termination of the Executive's employment with the Company or (ii) the tenth anniversary of the date of grant of such option


4.6 Relocation. The Company shall reimburse Executive up to a maximum of $50,000 for (i) his reasonable moving expenses in connection with his relocation from Tiburon,


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California to the Boston area and (ii) expenses incurred in finding and securing a residence in the Boston area, all subject to presentation of appropriate receipts. These expenses may include travel expenses for the Executive and his spouse between Tiburon, California and Boston, hotel or temporary housing costs. Any benefit received by the Executive under this Section 4.6 that is taxed as compensation will be "grossed up" by the Company for all applicable taxes. Real estate brokerage fees shall not be reimbursable under this section.


4.7 Signing Bonus. Executive will be paid a one-time, signing bonus of $80,000, to be paid 30 days after the Effective Date.


4.8 Power of Board Unimpaired. Nothing in this Section 4 shall impair the ability of the Board in its discretion to amend or eliminate any plan or policy described or referred to in this Section 4, provided, however, that any such amendment or elimination shall not adversely affect, impair or impact any outstanding stock-based award held by the Executive as of the date of such amendment or elimination.


5. TERMINATION.


5.1 Death or Disability. The Employment Period shall terminate automatically upon the Executive's death. If, during the Employment Period, the Disability (as defined below) of the Executive has occurred, the Company may give to the Executive written notice of its intention to terminate the Executive's employment due to such Disability. The Executive's employment with the Company shall be terminated by the Company on the 30th day after receipt by the Executive of such notice (the "Disability Effective Date"), if, within such thirty (30) day period, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means a physical or mental disability resulting in the inability of the Executive to substantially perform his duties full-time under this Agreement, as set forth in Section 3, during any consecutive six-month period, as determined by a licensed physician mutually selected by the Company and the Executive or his legal representative. If the Company and the Executive cannot agree as to the selection of a licensed physician for purposes of making such determination, then each party shall select a licensed physici ...