EXHIBIT 10.36
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of October 1, 1997, between Innovir
Laboratories, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx
(the "Employee"). VIMRX Pharmaceuticals, Inc. ("VIMRX"), a Delaware corporation
and the majority owner of the Company, is also a party to and guarantor of this
Agreement.
The Company desires to employ the Employee as President and CEO of the
Company and the Employee desires to accept such employment by the Company, on
the terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual convenants and obligations
set forth in this Agreement, the Company and the Employee agree as follows:
1. Employment. The Company hereby employs the Employee, and the Employee
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hereby accepts employment by the Company, upon the terms and conditions
hereinafter set forth.
2. Term. Subject to the provisions for earlier termination set forth in
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this Agreement, the employment of the Employee hereunder shall initially be for
the period commencing on October 1, 1997 (the "Effective Date") and ending on
the second anniversary thereof (the "Initial Term"). The term of this Agreement
shall automatically be extended annually on the anniversary date of this
Agreement for additional successive two-year periods (each a "Renewal Term")
unless either the Company or the Employee notifies the other party in writing of
its election not to extend this Agreement, such notice to be provided on or
prior to the date 60 days before commencement of any Renewal Term. The Initial
Term and any Renewal Term are referred to herein collectively as the "Employment
Period".
3. Duties.
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(a) The Employee shall be employed in an executive management capacity
as the President and CEO of the Company. The Employee shall perform such
duties and services, consistent with his position as the President and CEO
of the Company, as may be assigned to him from time to time by the Board of
Directors of the Company or its designee. In furtherance of the foregoing,
the Employee hereby agrees to perform well and faithfully the aforesaid
duties and responsibilities and the other reasonable duties and
responsibilities consistent with his position as the President and CEO of
the Company assigned to him from time to time by the Board of Directors of
the Company or its designee.
(b) The Company shall use its best efforts to cause the Employee to be
elected to the Board of Directors and the Executive Committee of the Board
of Directors of the Company.
3. Time to be Devoted to Employment.
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(a) Except for reasonable vacations (consistent with Company policies)
and absences due to temporary illness, during the Employment Period the Employee
shall devote his full time and energy to the business of the Company.
(b) During the Employment Period the Employee shall not be engaged in
any other business activity which, in the reasonable judgment of the Company,
conflicts with the duties of the Employee hereunder, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
4. Compensation; Benefits.
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(a) During the Initial Term, the Company shall pay to the Employee an
annual base salary (the "Base Salary") of not less than $162,000, payable in
such installments as is the policy of the Company with respect to the employees
of the Company at substantially the same employment level as the Employee. Said
Base Salary shall be reviewed at the conclusion of each fiscal year and shall be
subject to increase at the option and in the sole discretion of the Board of
Directors of the company, said increase shall be made effective at the time that
annual merit increases for other employees of the Company at substantially the
same employment level as the Employee shall be made effective.
(b) The Employee may also receive an annual cash bonus based on the
Company's achievement of performance objectives established by the Board of
Directors for each fiscal year. Such performance objectives, as adopted by the
Board form time to time, shall be incorporated by reference in this Agreement.
For the Initial Term, such bonus shall be an amount in the range of 0% to 50% of
the Base Salary, as determined by the Board of Directors in its sole discretion.
For subsequent years the bonus a amount shall be determined by the Board of
Directors in its sole discretion. Any such cash bonus shall be paid promptly
after the end of the fiscal year, at the time that cash bonuses for other
employees of the Company at substantially the same employment level as the
Employee shall be paid.
(c) During the Employment Period, the Employee shall be entitled to
such insurance and other fringe benefits, including medical, life and disability
insurance as are made available form time to time to the employees of the
Company at substantially the same employment level as the Employee.
5. Reimbursements; Other Expenses.
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(a) The Company shall reimburse the Employee, in accordance with the
practice from time to time for other officers of the Company, for all reasonable
and necessary traveling expenses, disbursements and other reasonable and
necessary incidental expenses incurred by him for or on behalf of the Company on
or after the Effective Date and in the performance of his duties hereunder upon
presentation by the Employee to the Company of appropriate vouchers.
(b) If the Employee vacates his corporate apartment at 0000 Xxxx
Xxxxxx, #00X, Xxx Xxxx, Xxx Xxxx 00000 for any reason, the Company, VIMRX or the
acquiring entity of either or both will assume all responsibility for all
payments required for the balance of the apartment and furniture leases in
effect at that time.
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(c) If the Employee's position as President and CEO of Innovir is
terminated for any reason except for cause, the Company or VIMRX or the
acquiring entity of either or both will pay the Employee's moving expenses from
New York to Wilmington, Delaware if the Employee so requests.
(d) Upon initiation of employment, Innovir will pay the Employee a
signing bonus of $20,000.
(e) Upon completion of one year of employment, Employee will be
eligible for payment of a bonus based on his and the Company's performance
during the prior year, the amount of which is to be determined at the sole
discretion of the Company's Board of Directors, except that in no case will the
amount of the bonus in the first year of employment be less than $18,000 unless
during said first year of employment the Employee has been terminated for cause.
6. Involuntary Termination.
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(a) If the Employee is incapacitated or disabled by accident, sickness
or otherwise so as to render him mentally or physically incapable of performing
the services required to be performed by him under this Agreement for a period
of ninety (90) consecutive days or longer or for ninety (90) days during any six
(6) month period (such condition being herein referred to as "Disability"), the
company may, at that time or any time thereafter, at its option, with the
approval of a majority of the Board of Directors of the Company, terminate the
employment of the Employee under this Agreement immediately upon giving him
notice to that effect (such termination as well as a termination under Section
7(b) hereof, being hereinafter called an "Involuntary Termination"). until the
Company shall have terminated the Employee's employment hereunder in accordance
with the foregoing, the Employee shall be entitled to receive his compensation
notwithstanding any such physical or mental disability.
(b) If the Employee dies during the Employment Period, his employment
hereunder shall be deemed to cease as of the date of his death.
8. Termination for Cause. The Company may, with the approval of a
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majority of the Board of Directors of the Company, terminate the employment of
the Employee hereunder at any time during the Employment Period for "cause"
(such termination being hereinafter called a "Termination for Cause") by giving
the Employee notice of such termination, upon the giving of which such
termination shall take effect immediately. For the purposes of this Section 8,
"cause" shall mean (a) the Employee's willful misconduct with respect to the
business and affairs of the Company or any subsidiary or affiliate thereof, (b)
the Employee's neglect of duties or failure to act which can reasonably be
expected to materially and adversely affect the business or affairs of the
Company or any subsidiary or affiliate thereof, (c) the Employee's breach of
this Agreement or of his confidentiality obligation to the Company or its
majority owner, VIMRX, (d) the commission by the Employee of an act involving
embezzlement or fraud or (e) the Employee's indictment for any crime; provided,
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however, that (i) in the event of a Termination for Cause, solely pursuant to
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clause (e) hereof, and such indictment is subsequently withdrawn or the Employee
is subsequently acquitted of such crime (and has not at such time been convicted
of any other crime), then upon such withdrawal or acquittal the Employee shall
be entitled to the payments provided for pursuant to Section 11(c) hereof, and
(ii) in the event of a Termination for Cause, solely pursuant to clauses (a) or
(b) hereof, the Company shall first provide written notice
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to the Employee specifying the manner in which Employee has engaged in willful
misconduct or has neglected or failed to act, and Employee shall have 30 days
after receipt of such notice to cure such specified matters, and if a cure is
effected, in the reasonable determination of the Board of Directors, within such
30-day period, the Company shall not have the right to effect a Termination for
Cause relating to the matters specified in such notice.
9. Termination without Cause. The Company may, with the approval of
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a majority of the Board of Directors of the Company, terminate the employment of
the Employee hereunder at any time during the Employment Period without "cause"
(such termination being hereinafter called a "Termination without Cause") by
giving the Employee notice of such termination, upon the giving of which such
termination shall take effect immediately.
10. Voluntary Termination. Any termination of the employment of the
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Employee hereunder otherwise than as a result of an Involuntary Termination, a
Termination for Cause or a Termination without Cause shall be deemed to be a
"Voluntary Termination". A Voluntary Termination shall be deemed to be
effective immediately upon such termination.
11. Effect of Termination of Employment.
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(a) Upon the termination of the Employee's employment hereunder
pursuant to a Voluntary Termination or a Termination for Cause, neither the
Employee nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement except to receive:
(i) any unpaid portion of the Base Salary provided for in Section
5(a), computed on a pro rata basis to the date of termination;
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(ii) reimbursement for any expenses for which the Employee shall not
have theretofore been reimbursed as provided in Section 6; and
(iii) payment for any accrued but unused vacation.
(b) Upon the termination of the Employee's employment hereunder
pursuant to an Involuntary Termination, neither the Employee nor his beneficiary
or estate shall have any further rights or claims against the Company under this
Agreement except to receive a termination payment equal to that provided for in
Section 11(a) hereof.
(c) Upon termination of the Employee's employment hereunder pursuant
to a Termination Without Cause, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except to receive a termination payment equal to that provided for in
Section 11(a) hereof, PLUS an amount equal to $100,000 payable in six (6) equal
monthly installments.
12. Change of Control. In the event that, within twelve (12) months
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following a Change of Control (as defined below), the Employee terminates his
employment for Good Reason (as defined below), the Employee shall be entitled to
the payments set forth in Section 11(c), treating such termination for purposes
of this Agreement as a Termination without Cause. The term "Change of Control"
means the sale of substantially all of the assets of the Company to, or the
merger of the Company into, another corporation or entity, or the acquisition of
more
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than 50% of the voting securities of the Company by an entity which is not
a majority stockholder of the Company as of the Effective Date. The term "Good
Reason" means: (a) any significant diminution in the Employee's position,
duties, responsibilities, power, title or office as in effect immediately prior
to a Change in Control; (b) any reduction in the Employee's annual base salary,
or material reduction in the benefits made available to the Employee, as in
effect on the Effective Date or as may be increased from time to time; or (c)
any requirement by the Company that the location at which the Employee performs
his principal duties for the Company be changed to a new location outside a
radius of fifty (50) miles from the Employee's principal residence at the time
of the Change of Control.
13. Liquidation. In the event that the Company is dissolved,
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liquidated or otherwise ceases to do business, the Employee will be deemed to
have been subject to a Termination without Cause, and shall be entitled to the
payments set forth in Section 11(c).
14. Remedies and Survival. The Employee acknowledges and understands
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that the provisions of this Agreement are of a special and unique nature, the
loss of which cannot be accurately compensated for in damages by an action at
law, and that the breach or threatened breach of the provisions of this
Agreement would cause the Company irreparable harm. In the event of a breach or
threatened breach by the Employee, the Company shall be entitled to an
injunction restraining him from such breach. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
for any breach or threatened breach of this Agreement.
15. Notices. All notices and other communications which are required
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or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by aid courier or first class certified or registered mail,
return receipt requested and postage prepaid, addressed as follows:
If to the Employee: Xxxxxx X. Xxxxxx
0000 Xxxx Xxxxxx, Xxx 00X
Xxx Xxxx, XX 00000
If to the Company: Xxxxx X. Xxxxxxx, Chairman
Innovir Laboratories, Inc.
c/o VIMRX Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxx, Esquire
Fulbright & Xxxxxxxx, L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
or to such other address as the party to whom notice is given may have furnished
to the other party in writing in accordance herewith. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the fifth business day after the date when sent if sent by
mail, in
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each case addressed to such party as provided in this Section or in
accordance with the latest unrevoked direction from such party.
16. Binding Agreement; Benefit. The provisions of this Agreement
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will be binding upon, and will inure to the benefit of, the respective heirs,
legal representatives and successors of the parties hereto.
17. Governing Law. This Agreement shall be governed by, and
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construed and enforced in accordance with, the laws of the State of Delaware.
18. Waiver of Breach. The waiver by either party of a breach of any
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provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
19. Entire Agreement; Amendments. This Agreement contains the entire
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agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements or understandings among the parties with respect
thereto. This Agreement may be amended only by an agreement in writing signed
by the parties hereto.
20. Headings. The section headings contained in this Agreement are
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for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
21. Severability. Any provision of this agreement that is prohibited
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or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
22. Assignment. This Agreement is personal in its nature and the
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parties hereto shall not, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that
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the provisions hereof shall inure to the benefit of, and be binding upon (i)
each successor of the Company, whether by merger, consolidation, transfer of all
or substantially all assets, or otherwise and (ii) the heirs and legal
representatives of the Employee.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
INNOVIR LABORATORIES, INC. VIMRX PHARMACEUTICALS, INC.
_____________________________ __________________________________
By: Xxxxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxxx
Chairman President and CEO
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ACCEPTED:
_______________________________
Xxxxxx X. Xxxxxx
