Given the significant overlap in fields of endeavor between New Merck and Celgene, I thought it a good idea to set out the non-compete Carrie Cox signed — back in 2003, when she joined Schering-Plough (from Pharmacia):
(a) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its Affiliated Companies and their respective businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company or any of its Affiliated Companies and which shall not be or become public knowledge or generally known within the pharmaceutical industry (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than to the Executive’s attorneys or to the Company and to those designated by the Company.
(b) During the Noncompetition Period (as defined below), the Executive shall not, without the prior written consent of the Board (which consent shall not be unreasonably withheld), engage in or become associated with a Competitive Activity. For purposes of this Section 9(b): (i) the “Noncompetition Period” means (A) the period during which the Executive is employed by the Company, plus (B) one year following the termination of such employment only (I) in a Specified Termination as defined in the last sentence of this Section 9(b), or (II) if by the Company for Cause; (ii) a “Competitive Activity” means any venture, enterprise, company, business or endeavor which is in competition with the Company or any of its Affiliated Companies in fields in which the Company and its Affiliated Companies have annual sales of more than $10,000,000; and (iii) the Executive shall be considered to have become “associated with a Competitive Activity” if the Executive becomes directly or indirectly involved as an owner, principal, employee, officer, director, independent contractor, representative, stockholder, financial backer, agent, partner, advisor, lender, or in any other individual or representative capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. . . . the Executive shall not be considered to violate this Section 9(b) as a result of her complying with law or legal process or as a result of her cooperating with any of her prior employers in connection with litigation relating to matters in which she was substantially involved, provided that (A) the Executive does not receive any compensation for such cooperation, other than reimbursement of her expenses, (B) neither the Company nor any of its Affiliated Companies is a party adverse to such prior employer in such litigation, and (C) the Executive notifies the CEO and the General Counsel of the Company before beginning such cooperation and provides them with any information they may reasonably request, from time to time, regarding such cooperation. A “Specified Termination” means a termination of the Executive’s employment by the Executive without Good Reason that occurs before the earlier of a Change of Control or the second anniversary of the Commencement Date (a “Specified Termination”), but only if, within fifteen days after the date that the Company receives the Executive’s Notice of Termination, the Company notifies the Executive that it elects for this Section 9(b) to continue to be applicable and that it agrees to pay the Executive, within 30 days after the Date of Termination, in addition to any other amounts or benefits to which she may be entitled under Section 5(c), the amount determined under Section 5(a)(i)(C) assuming the Multiple equals one, and to continue providing benefits to the Executive as described in Section 5(a)(ii) assuming the Multiple equals one. . . .
(e) In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amount otherwise payable to the Executive under this Agreement. . . .
To cut to the chase, here — Celgene likely has annual sales in excess of $10 million, in each of these overlapping areas (cancer and inflammatory diseases), and we know New Merck does.
So — just as I asked with regard to Ex-CFO Bob Bertolini’s board of directors seat at Genzyme, what exactly did Carrie Cox’s perhaps $52 million in ‘chute payments, all-in, actually buy for the New Merck shareholders — in the way of reasonable protections?
Apparently, a large tract of beachfront property in Florida (for Carrie Cox, personally) — that’s about all.