Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and effective as of March 31,
2003, by and between Bioenvision, Inc, a Delaware Corporation (the "Company"),
and Xxxxx X. Xxxx, C.P.A., X.X. (the "Executive").
WHEREAS, the Company desires to continue to retain the Executive in its
employ as the Director of Finance, General Counsel and Corporate Secretary of
the Company for the period provided in this Agreement, and the Executive has
agreed to continued employment with the Company in accordance with the
contractual terms and conditions set forth below; and
WHEREAS, this Agreement is intended to, and shall, set forth the
definitive agreement of the parties.
NOW, THEREFORE, for and in consideration of these recitals and
premises, and the respective promises, covenants and agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
Section 1. Employment. The Company hereby employs the Executive, and
the Executive hereby accepts such employment with the Company, for the term of
employment set forth in Section 2 hereof, all upon the terms and conditions
hereafter set forth.
Section 2. Term. Employment shall be for a term commencing on March 31,
2003 and, subject to prior termination under Section 8, Section 9, Section 10,
Section 12 or Section 13 hereof expiring on the one-year anniversary of such
date (March 31, 2004). Notwithstanding the previous sentence, the term of this
Agreement automatically shall be extended for additional one-year terms upon the
terms and conditions set forth herein, unless either party to this Agreement
gives the other party written notice (delivered in accordance with Section 21
hereof and at least 90 days prior to March 31, 2004 or such later termination
date or dates as may be applicable to any extended term) of such party's
intention not to further extend the term of this Agreement. For purposes of this
Agreement, any reference to the "term" of this Agreement shall include the
original term and any extension thereof.
Section 3. Duties of the Executive. The Executive shall serve as the
Director of Finance, General Counsel and Corporate Secretary of the Company. The
Executive shall perform such executive duties as a Director of Finance, General
Counsel and Corporate Secretary would normally perform or as otherwise specified
in the By-Laws of the Company as in effect on the date of this Agreement, and
shall perform in addition thereto, such other reasonable duties as the Board of
Directors of the Company (together with any applicable sub-committee or
sub-committees thereof, the "Board") may request consistent with Executive's
position and title. Except as may otherwise be approved in advance by the Board
and except during vacation periods and periods of absence due to sickness,
personal injury or other disability, the Executive shall devote all of his
working time and his best efforts to the performance of his duties hereunder.
Notwithstanding the foregoing, nothing contained herein shall preclude the
Executive from (a) serving on the boards of directors of other companies or
organizations with the approval of the Board (not to be unreasonably withheld)
or serving on the boards of directors of not-for-profit companies or
organizations without the approval of the Board, (b) investing in and managing
passive investments, or (c) pursuing his personal, financial and legal affairs
provided that such activity does not materially interfere with the performance
of the Executive's obligations hereunder.
Section 4. Compensation.
(a) For the period commencing on the date of this Agreement, the
Executive's base salary shall be $205,200 (and during the term of this
Agreement, not less than $205,200) on an annualized basis. During the term of
the Agreement, the Executive's salary shall be reviewed at least annually by the
Board to determine whether any further increase is warranted and appropriate.
Except as set forth in this Section 4, such compensation shall be payable at the
times and in the manner consistent with the Company's general policies regarding
compensation of executive employees, but in no event less frequently than twice
each calendar month.
(b) The Company hereby grants and issues to the Executive, incentive
stock options (subject to stockholder approval of the related option plan,
otherwise such options shall be non-qualified stock options under the Internal
Revenue Code) with terms commensurate with the terms of options previously
issued to the Company's management to purchase 380,000 shares of common stock at
an exercise price equal to $.735 (the average of the high and low bid price of
shares of the Company's common stock on the date hereof (the "Grant Date"));
50,000 of which options shall vest immediately on the date hereof and 110,000 of
which options vest on each of the first, second and third anniversaries of the
date hereof (March 31, 2003), or earlier upon Executive's departure for good
reason (pursuant to one or more of the events
set forth in Sections 9(i) or 9(ii)), a Change of Control (as defined in Section
9) or termination other than for Cause (as defined in Section 8). In addition to
the foregoing, the Company hereby grants and issues to the Executive, incentive
stock options (subject to stockholder approval of the related option plan,
otherwise such options shall be non-qualified stock options under the Internal
Revenue Code) with terms commensurate with the terms of options previously
issued to the Company's management to purchase 120,000 shares of common stock at
an exercise price equal to $.735 (the average of the high and low bid price of
shares of the Company's common stock on the date hereof), which options shall
vest immediately on the date hereof. If Executive resigns other than for good
reason, Executive shall forfeit all unvested stock options issuable hereunder as
of the effective date of such resignation. If Executive is terminated for Cause,
Executive shall forfeit all vested and unvested stock options issued or issuabe
hereunder as of the effective date of such termination. If Executive is
terminated other than for Cause, all of Executive's vested options shall remain
vested and all unvested options shall immediately vest. If a Change of Control
(as defined under Section 9) occurs which prevents any incentive stock options
of Executive from receiving favorable tax treatment under Section 422 of the
Internal Revenue Code of 1986, Executive shall be held harmless from any loss of
such favorable tax treatment.
(c) In addition to the base salary provided by Section 4(a) hereof and
the incentive stock options provided in Section 4(b) hereof, the Executive shall
be eligible annually to receive any incentive bonus (the "Bonus") that the Board
may grant to him based on the Company's executive compensation plan then in
effect, based on the Board's assessment of the Executive's individual
performance, which decision shall be made by the Board in its sole discretion.
The Board shall give written notice to the Executive of the grant of any such
Bonus and the amount thereof upon direction of the Board. Such Bonus shall be
payable on the next date on which the Executive is entitled to receive a payment
of his base compensation. The Board may from time to time authorize such
additional compensation to the Executive, in cash, property, options or warrants
as the Board may determine in its sore discretion to be appropriate. Payment of
any bonus, if any, is in the sole and absolute discretion of the Board.
Section 5. Executive Benefits.
(a) In addition to the compensation described in Section 4, the Company
shall make available to the Executive and his eligible dependants such benefits
which are comparable to those provided to other executive and management
employees of the Company, including without limitation, any medical, group
hospitalization, health, dental care or sick leave plan, life or other insurance
or death benefit plan, travel or accident insurance or other present or future
group employee benefit plan or program of the Company for which key executives
are or shall become eligible.
(b) The Executive shall be entitled to 4 weeks paid vacation per year,
which shall be pro-rated for partial years. The Executive may carry over from
year to year up to 1 month of unused vacation time. Notwithstanding anything
herein to the contrary, the Executive may not take more than two (2) weeks
vacation during any twelve (12) week period without the prior written permission
of the Board, which shall not be unreasonably withheld. Upon a Change of Control
(as defined in Section 9), Executive promptly shall receive a one-time cash
payment for accrued vacation time at his then-current base salary for up to 1
month of unused vacation time.
Section 6. Expenses. The Company shall also pay or reimburse the
Executive for all reasonable and necessary expenses incurred by the Executive in
connection with his duties on behalf of the company in accordance with the
general policies of the Company and his employment by the Company pursuant to
this Agreement.
Section 7. Place of Performance. In connection with his employment by
the Company, unless otherwise agreed by the Executive, the Executive shall be
based at the principal executive offices of the Company in New York City, except
for travel reasonably required for Company business (the "Place of
Performance").
Section 8. Termination. (a) The Company may terminate Executive's
employment hereunder for "Cause" which shall mean:
(1) The Executive is indicted for any crime involving moral turpitude
or punishment by imprisonment;
(2) Executive's commission of an act of fraud;
(3) Executive's continuing repeated willful failure or refusal to
perform his duties as required by this Agreement, provided, that
termination of Executive's employment pursuant to this subparagraph (c)
shall not constitute valid termination for Cause unless Executive shall
have first
received written notice from the Board stating with reasonable
specificity the nature of such failure or refusal and affording
Executive at least fifteen (15) days to correct the act or omission
complained of;
(4) Gross negligence, insubordination, or material violation by
Executive of any duty of loyalty to the Company or any other material
misconduct on the part of Executive; or
(5) A material breach of this Agreement by the Executive.
(b) In addition, the Company may terminate Executive's employment hereunder
without "Cause" (as defined in Section 8(a) above).
Section 9. Resignation. (a) In the event that during the term of this
Agreement:
(i) the Company shall (A) fail to continue the Executive as Director of
Finance, General Counsel and Corporate Secretary of the Company; (B) reduce the
Executive's base salary below the minimum amount specified in Section 4(a)
without the Executive's prior written consent; (C) materially violate any
material term of this Agreement (each, a "Permitted Resignation"); or
(ii) there shall occur a "Change of Control," which shall mean the
occurrence during the term of this Agreement of any of the following events:
(A) the Company is merged, consolidated or reorganized into or with another
corporation or other legal persona, and as a result of such merger,
consolidation or reorganization less than fifty percent (50%) of the combined
voting power of the then outstanding securities entitled to vote generally in
the election of directors ("Voting Stock") of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such transaction, or
(B) The Company sells or otherwise transfers all or substantially all of its
assets to another corporation or other legal person, and as a result of such
sale or transfer less than fifty percent (50%) of the combined voting power of
the then outstanding Voting Stock of such corporation or person immediately
after such sale or transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or transfer, or
(C) Any change in the constitution of the Board of Directors of the Company in
conjunction with a transaction contemplated by Sections 9(ii)(A) or 9(ii)(B)
above;
then, in each case outlined above in this Section 9, the Executive, at his sole
option, may give notice to the Company at any time within ten (10) days after
the occurrence of any such event of his election to resign and terminate this
Agreement effective immediately upon receipt of such notice (delivered in
accordance with Section 21 hereof), or effective upon such other date (not later
than ten (10) days following such notice) that the Executive may designate in
such notice (the "Effective Date") and Executive shall receive the payments and
other compensation provided in Section 4(b) and Section 11.
In addition to the foregoing, Executive shall have the right to resign
other than such resignation as would constitute a Permitted Resignation or other
than upon a Change of Control.
Section 10. Death. The term of this Agreement shall terminate on the
death of Executive.
Section 11. Termination Payment. If the Executive's employment
hereunder is terminated by the Executive by Permitted Resignation, upon a Change
of Control or by the Company other than for Cause, prior to the end of the term
of this Agreement then the Company shall be obligated to pay to the Executive
certain termination payments and make available certain benefits, as follows:
(a) Termination Payment. The Company shall pay to the
Executive a lump sum in cash, payable within ten (10) business days
after the effective date of such event, equal to 1.50 multiplied by the
sum of Executive's base salary plus the average of his last two annual
bonuses (or last one annual bonus, if only one annual bonus has been
paid to date at the time of such applicable event), in each case,
pursuant to Section 4.
(b) Options. Notwithstanding any provision to the contrary in
any option agreement or other agreement or in any plan, except for a
termination for Cause pursuant to Section 8 or a resignation by
Executive under
Section 9 which does not constitute a Permitted Resignation or does not
occur upon a Change of Control, all of the Executive's outstanding
stock options shall immediately vest and become exercisable and the
Executive shall have the full term of the option to exercise any of the
Executive's stock options.
Section 12. No other Termination Compensation. Except as specifically
provided above, upon termination of this Agreement for any reason the Executive
shall not be entitled to any severance pay or to any other compensation or
payments (by way of salary, damages or otherwise) of any nature relating to this
Agreement or otherwise relating to or arising out of his employment by the
Company.
Section 13. Mitigation Obligation. The Executive shall mitigate damages
by seeking other employment or otherwise; provided, however, that the Executive
is under no obligation to mitigate any amount provided for by insurance policies
under this Agreement.
Section 14. Forum Selection. Any disputes related to the subject matter
hereof shall be litigated in New York courts located within the Southern
District of New York in Manhattan.
Section 15. Indemnification. To the maximum extent permitted under the
corporate Laws of the State of Delaware, By-Laws and Certificate of
Incorporation of the Company as in effect from time to time:
(a) the Executive shall be indemnified and held harmless by the
Company, as provided under such corporate laws or such By-Laws, as applicable,
for any and all actions taken or matters undertaken, directly or indirectly, in
the performance of his duties and responsibilities under this Agreement or
otherwise on behalf of the Company, and
(b) without limiting clause (a), the Company shall indemnify and hold
harmless the Executive from and against (i) any claim, loss, liability,
obligation, damage, cost, expense, action, suit, proceeding or cause of action
(collectively, "Claims".) arising from or out of or relating to the Executive's
performance as an officer, director, employee or agent of the Company or any of
its affiliates or in any other capacity, including, without limitation, any
fiduciary capacity, in which the Executive serves at the request of the Company,
and (ii) any cost or expense (including, without limitation, fees and
disbursements of counsel) (collectively, "Expenses") incurred by the Executive
in connection with the defense or investigation thereof. If any Claim is
asserted or other matter arises with respect to which the Executive believes in
good faith the Executive is entitled to indemnification as contemplated hereby,
the Company shall pay the Expenses incurred by the Executive in connection with
the defense or investigation of such Claim or matter (or cause such Expenses to
be paid) on a monthly basis, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the then current prime
rate as reported in the Wall Street Journal as in effect from time to time,
compounded annually, if the Executive shall be found, as finally judicially
determined by a court of competent jurisdiction not to have been entitled to
Indemnification hereunder. Notwithstanding the foregoing, the Company's
obligation to indemnify Executive hereunder shall be subject to (i) timely
notification by Executive hereunder of any claims that are subject to
indemnification under this Section 15 (and any failure of Executive to so notify
the Company which shall cause the Company to compromise any defense to such
claim will cause the Company not to be obligated to indemnify Executive
hereunder) and (ii) the Company will have the right to undertake the defense of
and compromise, settle or otherwise dispose of any claim for which it may be
subject to indemnify Executive hereunder.
Section 16. Agreement. This Agreement supersedes any and all other
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof, and contains all of the covenants and agreements
between the parties with respect to such subject matter, and Executive has
received legal counsel regarding the entirety of the Agreement.
Section 17. Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all foreign, federal, state, city or other
taxes as the Company is required to withhold pursuant to any law or government
regulation or ruling.
Section 18. Successors and Binding Agreement.
(a) The Company will reasonably require any successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company by agreement
in form and substance satisfactory to the Executive acting reasonably, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place. This Agreement will he binding upon and inure to the benefit of the
Company and any successor
to the Company, including, without limitation any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such Successor shall thereafter be deemed the "Company" for the purposes of this
Agreement).
(b) This Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributes and legatees.
(c) The rights of the Company under this Agreement may without the
consent of Executive, be assigned by the Company in its sole and unfettered
discretion (i) to any person, firm, corporation1 or other business entity which
at any time, whether by purchase, merger, or otherwise, directly or indirectly,
acquires all or substantially all of the assets or business of the Company, or
(ii) to any subsidiary or affiliate of the Company (the "Company Group"), or any
transferee, whether by purchase, merger or otherwise, which directly or
indirectly acquires all or substantially all of the assets of the Company or any
other member of the Company Group.
Section 19. Notices. For all purposes of this Agreement, all
communications, including, without limitation, notices, consents, request or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof confirmed), or five
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three business days after
having been sent by a nationally recognized overnight courier service such as
Federal Express, UPS, or Purolator, addressed to the Company (to the attention
of the Secretary of the Company) at its principal executive offices and to the
Executive at his principal residence, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that
notices of changes of address shall be effective only upon receipt.
Section 20. Governing Law. The validity, interpretation, construction
and performance of this Agreement will be governed by and construed in
accordance with the substantive laws of the State of New York, without giving
effect to the principles of conflict of laws of such State.
Section 21. Severability and Reformation. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of the parties under this Agreement
would not be materially and adversely affected thereby, such provision shall be
fully separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance therefrom, and, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 21.
Section 22. Survival of Provisions. Notwithstanding any other provision
of this Agreement, the parties respective rights and obligations under Sections
4, 5, 11, 12, 13, 14, 15, 16, 17 and 19 hereof, and under any other Sections
that provide a party with rights (including without limitation, rights to
receive payments) that have not been fully satisfied as of such termination or
expiration, will survive any termination or expiration of this Agreement or the
termination of the Executive's employment for any reason whatsoever.
Section 23. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other xxxxx hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Unless otherwise
noted, references to "Sections" are to sections of this Agreement. The captions
used in this Agreement are designed for convenient reference only and are not to
be used for the purpose of interpreting any provision of this Agreement.
Section 24. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement. The delivery by facsimile
of an executed counterpart of this Agreement shal1 be deemed to be an original
and shall have the full force and effect of an original copy.
Section 25. Confidentiality.
(a) As used herein, the term "Confidential Information" with respect to
any person means all trade secrets and confidential information and know-how of
such person.
(b) Executive acknowledges that in the course of his employment by the
Company he will acquire Confidential Information of the Company and that such
information constitutes a valuable asset of the Company. Executive shall not,
without the prior written consent of the Company, while employed by the Company
or any time thereafter, use or disclose or enable anyone else to use or disclose
any Confidential Information of the Company (whether or not developed by
Executive), except in the normal course of performing his duties for the
Company.
(c) In the event that Executive shall at any time receive any
Confidential Information of any third party in connection with his employment by
the Company, he shall maintain such Confidential Information in confidence in
accordance with the Company's obligations to such third party.
(d) While employed by the Company, Executive shall not use, or disclose
to other employees of the Company, any Confidential Information of his former
employers, former business associates or any other third parties, unless (i)
written permission has been given by such third parties to Executive permitting
Executive to use and/or disclose such information and (ii) the Company approves
in writing of such use and /or disclosure.
Return of Materials. Upon termination of Executive's employment with the
Company for any reason (or prior thereto if requested by the Company),
Executive shall promptly deliver to the Company all documents and other
materials in his possession, custody or control (whether prepared by
Executive or others) that relate in any manner to the past, present or
anticipated business and affairs of the Company, including, without
limitation, any such documents and materials that contain or constitute
Confidential Information.
Section 27. Disclosure of Works and Inventions/Assignment of Patents.
Executive shall promptly disclose to the Company or its nominee any and all
works, inventions, discoveries and improvements that are authored, conceived or
made by Executive while employed by the Company and that relate to the business
or activities of the Company, and Executive hereby assigns and agrees to assign
all of his interest therein to the Company or its nominee. Whenever requested to
do so by the Company, Executive shall execute any and all applications,
assignments or other instruments which the Company shall deem necessary to apply
for and obtain Letters Patent or Copyrights of the United States or any foreign
country or to otherwise protect the Company's interest therein with respect to
such Letters of Patent or Copyrights which relate to the business or activities
of the Company. Such obligations shall continue after Executive's employment
with the Company terminates with respect to works, inventions, discoveries, and
improvements authored, conceived or made by Executive during the period of his
employment by the company, and shall be binding upon Executive's assigns,
executors, administrators and other legal representatives.
Section 28. Work Made for Hire. Executive acknowledges that his duties
at the Company may include the preparation of materials, including written or
graphic materials, and agrees that any such materials conceived or written by
him shall be done as "work made for hire" as defined and used in the copyright
Act of 1976, 17 U.S.C. 1 et seq. In the event of publication of such materials,
Executive understands that since work is a "work made for hire" the Company will
solely retain and own all rights in such materials, including right of
copyright.
Section 29. Non-Solicitation and Non-Competition. Executive shall not,
while employed by the Company and during the six month period following the date
on which Executive's employment with the Company terminates for any reason (the
"Specified Period"), directly or indirectly.
(i) solicit or induce, or attempt to solicit or induce, any
employee of the Company to leave the employ of the Company;
(ii) employ, or solicit for employment, on his behalf or on
behalf of any other person (other than the Company), any person that is
or was at any time an employee of the Company (excluding clerical
employees); (provided, however, that the foregoing restriction shall
cease to apply to a former employee of the Company months after he
ceases to be employed by the Company); or
(iii) take any other action detrimental to the relationship of
the Company with its employees, customers or suppliers.
In addition to the foregoing, while employed by the Company, Executive shall not
(A) solicit the trade of, or trade with, any customer or prospective customer of
the Company (except for the benefit of the Company) or (B) engage in
any business in the Specified Areas that is competitive with any aspect of the
business that is being conducted (or planned) by the Company.
Section 30. Other Restrictions on Competition. During the Specified
Period, Executive shall not, whether alone or in association with any other
person, directly or indirectly have any interest or association (including,
without limitation, as a shareholder partner, director, officer, employee,
consultant, sales representative, supplier, distributor, agent or lender) in or
with any person engaged in a business in the Specified Areas that is in
competition with the Company, provided, however, that the foregoing shall not
prohibit Executive from owning securities of any publicity traded company that
is engaged in any such business as long as Executive does not own at any time 5%
or more of any class of the equity securities of such company. For purposes of
the foregoing, the "Specified Areas" means (specify geographic area in which the
Company conducts business).
Section 31. Equitable Relief. Executive acknowledges that any remedy at
law for any breach of any of the covenants contained in Section 25, 26, 27, 28,
29, 30 hereof may be inadequate. Accordingly, the Company shall be entitled
(without the necessity of showing any actual damage or posting a bond or
furnishing other security) to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its rights under Sections or
any other relief a court might award, such rights to be cumulative with and not
exclusive of any other remedy.
IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of the
day and year first-above written.
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
BIOENVISION, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
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Name: Xxxxxxxxxxx X. Xxxx
Title: Chairman and Chief Executive Officer
