SEVERANCE BENEFITS AGREEMENT
Exhibit
10.3
This
SEVERANCE BENEFITS AGREEMENT (the “Agreement”)
is
made and entered into as of this 8th
day of
August, 2006, by and between Xxxxx Xxxx, an individual resident of the State
of
New Jersey (the “Executive”)
and
VioQuest Pharmaceuticals, Inc., a Delaware corporation (the “Company”).
RECITALS
WHEREAS,
Executive is currently employed as an executive officer of the
Company;
WHEREAS,
the Board of Directors of the Company (the “Board”)
has
determined that it is in the best interests of the Company to reinforce and
encourage the continuity of management personnel in the event of any potential
Change in Control (as hereinafter defined); and
WHEREAS,
the Board believes this objective can best be served by providing for a
compensation arrangement for the Executive upon the Executive’s termination of
employment under certain circumstances in the event of a Change of
Control.
NOW,
THEREFORE, in consideration of the mutual promises and covenants and the
respective undertakings of the Company and Executive set forth below, the
Company and Executive agree as follows:
AGREEMENT
1.
Certain
Definitions.
(a) Annual
Compensation.
For the
purposes of this Agreement, “Annual
Compensation”
shall
mean Executive’s annual base salary, as adjusted from time to time by the Board
of Directors of the Company.
(b) Change
of Control.
For the
purposes of this Agreement, the term “Change
of Control”
shall
have the meaning ascribed to it in the Company’s 2003 Stock Option Plan.
(c) Termination
Without Cause.
For the
purposes of this Agreement, “Termination
Without Cause”
shall
mean termination of the Executive by the Company for reasons other
than:
(i) the
conviction of a felony;
(ii) the
conviction of theft or embezzlement of Company property, or the commission
of an
act involving moral turpitude that materially and adversely affects the
Company’s reputation and business prospects; or
(iii) the
failure of Executive to substantially perform his material duties and
responsibilities of his employment (excluding nonperformance resulting from
Executive’s disability) which failure is not cured within thirty (30) days after
written notice from the Company specifying the act of nonperformance or within
such longer period (but no longer than 90 days in any event) as is reasonably
required to cure such nonperformance.
(d) Constructive
Termination.
For the
purposes of this Agreement, “Constructive
Termination”
shall
mean:
(i) Executive
has been demoted or has otherwise incurred a material reduction in his authority
or responsibility;
(ii) an
adverse change in Executive’s annual compensation or benefits; or
(iii) in
the
course and scope of Executive’s employment with the Company, Executive has been
subjected to any conduct that constitutes prohibited employment discrimination
under the provisions of Title VII of the federal Civil Rights Act of 1964,
as
amended, or other federal, state or local law.
For
the
purposes of this definition, Executive’s responsibilities, authority, status,
position, offices, titles, duties and reporting requirements are to be
determined as of the date of this Agreement.
2. Severance
Benefits.
(a) Termination
Following Change of Control. In
the
event that Executive’s employment is terminated within one (1) year following a
Change of Control and such termination is either (i) Without Cause, or (ii)
is a
Constructive Termination, then (A) Executive shall be entitled to receive,
in
addition to all compensation due and payable to or accrued (which includes
milestone based bonus achievements) for the benefit of Executive as of the
date
of termination, his Annual Compensation, payable in semi-monthly installments
over a period of twelve (12) months in accordance with the Company’s normal
payroll practices in effect at such time, and (B) any and all outstanding
options to purchase shares of stock in the Company granted to Executive shall
immediately vest and become immediately exercisable (whether entered into before
or after the date of this Agreement), in addition to the Company’s healthcare
and insurance benefits program over a period of twelve (12) months.
The
provisions of this Section 2(a), including without limitation the acceleration
of all outstanding options to purchase shares of stock in the Company, shall
apply following any Change of Control notwithstanding any provision otherwise
in
any stock option agreement between the Company and the Executive which provides
for the grant to Executive of the right to purchase shares of stock of the
Company.
(b) Other
Termination.
In the
event that Executive’s employment is terminated (i) at a time other than a
1-year period following a Change of Control, and (ii) Without Cause, then
Executive shall be entitled to receive, in addition to all compensation due
and
payable to or accrued (which includes milestone based bonus achievements) for
the benefit of Executive as of the date of termination, one-half of his Annual
Compensation, payable in semi-monthly installments over a period of six (6)
months in accordance with the Company’s normal payroll practices in effect at
such time, in addition to the Company’s healthcare and insurance benefits
program over a period of six (6) months.
(c) Notwithstanding
anything to the contrary contained in this Section 2, the Company shall have
no
obligation to pay, and Executive shall have no obligation to receive, any of
the
benefits provided for in paragraphs (a) and (b) of this Section 2 upon
termination of Executive’s employment unless Executive executes a separate
agreement releasing the Company from any and all liability in connection with
the termination of Executive’s employment.
3. Resolution
of Disputes.
If
there
shall be any dispute between the Company and the Executive (i) in the event
of
any termination of Executive’s employment by the Company, whether such
termination was Without Cause, or (ii) in the event of a Constructive
Termination of employment by the Company, then, unless and until there is a
final, nonappealable judgment by a court of competent jurisdiction declaring
that such termination was not Without Cause or that the determination by the
Executive of the existence of a Constructive Termination was not made in good
faith, the Company shall pay, and provide all benefits to Executive and/or
Executive’s family or other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Section 2 hereof, as the case
may be, as though such termination were by the Company Without Cause or was
a
Constructive Termination by the Company; provided,
however,
that the
Company shall not be required to pay any disputed amounts pursuant to this
Section except upon receipt of an undertaking by or on behalf of Executive
to
repay all such amounts to which Executive is ultimately adjudged by such court
not to be entitled.
4. Withholding.
The
Company may withhold from any amounts payable under this Agreement the minimum
Federal, state and local taxes as shall be required to be withheld pursuant
to
any applicable law, statute or regulation.
5. Successors
and Assigns.
This
Agreement is binding upon, and shall inure to the benefit of the Company and
all
successors and assigns of the Company. This Agreement shall be binding upon
and
inure to the benefit of the Executive and his heirs and personal
representatives. The Company will require any successor (whether direct or
indirect, by purchase, merger or consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such agreement, prior to
the
effectiveness of any such succession shall be a material breach of this
Agreement and shall entitle the Executive to any Severance Payment payable
pursuant to Section 2 hereof.
6. Miscellaneous.
(a) Governing
Law; Amendment.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New Jersey, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified except
by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.
2
(b) Notice.
All
notices and other communications under this Agreement shall be in writing and
shall be given by hand to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
IF
TO THE
EXECUTIVE:
Xxxxx
Xxxx
0
Xxxxxxx
Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
IF
TO THE
COMPANY:
Attn:
Chief Executive Officer
000
Xxxxx
Xxxx Xxxx, Xxxxx 000
Xxxxxxx
Xxxxx, Xxx Xxxxxx 00000
or
to
such other address as either party furnishes to the other in writing in
accordance with paragraph (b) of this Section 6. Notices and communications
shall be effective when actually received by the addressee.
(c) Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
If any provision of this Agreement shall be held invalid or unenforceable in
part, the remaining portion of such provision, together with all other
provisions of this Agreement, shall remain valid and enforceable and continue
in
full force and effect to the fullest extent consistent with the
law.
(d) Waiver.
The
Executive's or the Company's failure to insist upon strict compliance with
any
provision of, or to assert any right under, this Agreement shall not be deemed
to be a waiver of such provision or right or of any other provision of or right
under this Agreement.
(e) Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, and said counterparts shall constitute but one and the same
instrument.
(f) Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties, and shall
supersede all prior agreements and understandings between the parties with
respect to the subject matter hereof and may not be modified or terminated
orally. No modification, termination or attempted waiver of this Agreement
shall
be valid unless in writing and signed by the party against whom the same is
sought to be enforced.
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and
pursuant to the due authorization of its Board, the Company has caused this
Agreement to be executed in its name and on its behalf, all as of the day and
year first written above.
|
EXECUTIVE:
|
|
|
By:
/s/
Xxxxxx X.
Xxxxxxxxx
Xxxxxx
X. Xxxxxxxxx
President
& Chief Executive Officer
|
/s/
Xxxxx
Xxxx
Xxxxx
Xxxx
Chief
Financial Officer
|
3
