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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of April 19,
2001, and effective as of February 2, 2001 (the "Effective Date"), is made and
entered into by and between Northwest Biotherapeutics, Inc., a Delaware
corporation, (the "Company"), and Xxxxxx X. Xxxxx (the "Executive").
The Company and Executive hereby agree as follows:
1. EMPLOYMENT
The Company will employ Executive and Executive will accept employment by the
Company as President and Chief Executive Officer. During Executive's employment,
Executive shall serve the Company faithfully and to the best of his ability,
devoting substantially all his working time, attention and energies to the
business of the Company, unless otherwise approved in writing by the Board of
Directors of the Company (the "Board"). Subject to the direction of the Board,
Executive will have such reasonable duties, responsibilities, powers and
authority as are prescribed by the Board or the bylaws of the Company. Executive
shall not engage in any other business activity (except the management of
personal investments, charitable and civic activities, and, upon completion of
an initial public offering of the Company's Common Stock, participation as a
director for companies that do not compete with the Company, that in the
aggregate do not interfere with the performance of Executive's duties) without
first obtaining the written consent of the Board, but such consent shall not
unreasonably be withheld.
2. TERM OF AGREEMENT
The term of this Agreement ("Term") shall commence on February 2, 2001 and will
continue in effect until January 31, 2004, unless otherwise terminated as set
forth herein.
3. COMPENSATION
(a) BASE SALARY. Company shall pay Executive a base salary at an annual
rate of Three Hundred Thousand Dollars ($300,000) payable in accordance with
Company's regular pay schedule for senior management. The Board shall review
Executive's salary and performance annually, and Executive shall be eligible for
an increase in his base salary based on such review. Upon the successful
completion of the Company's first firm commitment underwritten public offering
of its Common Stock registered under the Securities Act, Executive's
then-current base salary shall increase by 25%.
(b) INCENTIVE COMPENSATION. Company shall establish an incentive
compensation plan and Executive shall participate in that plan. Within the first
90 days of each fiscal year, the Board and Executive shall discuss and agree on
financial and other performance objectives for Executive and Company for the
fiscal year. Executive shall receive an incentive compensation opportunity of up
to a maximum of 45% of his base salary based on his ability to meet these
objectives and as approved by the Board.
(c) STOCK OPTIONS. The Company shall cause the Board to authorize the
issuance of non-qualified options to Executive to acquire shares of the
Company's common stock ("Shares"), under the following terms and conditions:
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(1) Executive is granted an option to purchase Seventy-Nine
Thousand Three Hundred (79,300) Shares at an exercise price of $1.25 per Share.
(2) Executive may, at his or the Company's option, pay for all
or any portion of the aggregate exercise price by delivering a combination of
any or all of the following:
(i) By delivering shares of the Company's common stock
previously held by Executive which have a fair market value at the date
of exercise equal to the aggregate exercise price to be paid by
Executive upon such exercise. For purposes of this clause, the fair
market value such shares is to be determined by the Board and shall be
final and binding, provided that if the shares are publicly traded, the
shares' fair market value shall be their average opening and closing
prices on the date of exercise;
(ii) By delivering a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver
to the Company the amount of sale or loan proceeds to pay the exercise
price; or
(iii) By delivering a full recourse promissory note for
all or part of the aggregate exercise price, payable on such terms and
bearing such interest rate as determined by the Board (but in no event
less than the minimum interest rate specified under the Internal Revenue
Code at which no additional interest would be imputed and in no event
more than the maximum interest rate allowed under applicable usury
laws), which promissory note may be either secured or unsecured in such
manner as the Board shall approve (including, without limitation, by a
security interest in shares of the Company's stock).
(3) The options shall vest in equal amounts monthly over 36
months; provided that, in the event the Company undergoes a change of control
("Change of Control") by virtue of a sale or exchange of shares in a transaction
or series of transactions occurring in any twelve-month period resulting in the
Company's stockholders as of the beginning of such twelve-month period holding
less than 50% of the outstanding equity and underlying options and warrants at
the end of such period, all of Executive's options shall become immediately
vested and fully exercisable upon such Change of Control.
(4) The option term of Executive's vested options shall
terminate upon the first to occur of: (i) Executive's termination of employment
with the Company by Company for Cause (as such term is defined in Section 5(f))
or by Executive without Good Reason (as such term is defined in Section 5(g));
or (ii) ten years from the date the options are issued.
(5) The Board will qualify the options for an exemption from
registration under the applicable federal and Washington State securities laws.
(d) BENEFITS.
(1) Executive shall be entitled to receive four weeks paid
vacation and all benefits (such as medical, dental, sick leave, disability, and
retirement benefits) as are generally
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available from time to time to employed senior executives of Company. For
purposes of this section, benefits offered to employees leased to Company are
not benefits under this section.
(2) Company will maintain a reasonable policy of insurance for
directors and officers liability as determined by the Board. Executive will be
included within that policy of insurance with the premiums paid by Company.
4. TERMINATION
Employment of Executive pursuant to this Agreement may be terminated as follows:
(a) BY EXECUTIVE. Executive may terminate his employment at any time,
for any reason.
(b) BY THE COMPANY. The Company may terminate the employment of
Executive at any time, for any reason, with or without cause.
(c) AUTOMATIC TERMINATION. This Agreement and Executive's employment
shall terminate automatically upon the death or total disability of Executive.
The term "total disability" as used in this Agreement shall mean Executive's
inability to perform the duties set forth in Section 1 for a period or periods
aggregating one-hundred twenty (120) calendar days in any 12-month period as a
result of physical or mental illness, loss of legal capacity or any other cause
beyond Executive's control, unless Executive is granted a leave of absence by
the Board. Executive and the Company acknowledge that Executive's ability to
perform the duties specified in Section 1 is of the essence of this Agreement.
5. TERMINATION PAYMENTS
In the event of termination of the employment of Executive, all compensation and
benefits set forth in this Agreement shall terminate, except as specifically
provided in this Section 5. For purposes of this Agreement, the effective date
of termination shall be thirty (30) days after the Executive or the Company
gives written notice of termination.
(a) TERMINATION BY THE COMPANY WITH CAUSE. Upon termination by the
Company with Cause (as defined below), the Company shall pay Executive any
unpaid annual base salary, earned but unused vacation, and bonuses due (if any),
for services already performed (subject to normal withholding and other
deductions) to the effective date of termination of employment.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE. Upon termination by the
Company without Cause (as defined below), the Company shall pay Executive any
unpaid annual base salary, any amount due but not paid under the Company's
Incentive Compensation Plan, earned but unused vacation and bonuses due (if any)
for services already performed (subject to normal withholding and other
deductions) to the effective date of termination of employment; and monthly
severance payments equivalent to six (6) months base salary and six (6) months
at one-half (1/2) base salary. These payments will be made in accordance with
the Company's customary payroll schedule, minus deductions required by law. The
Company will issue and file appropriate tax documents in connection with any
severance payments. Payment of the above-described severance compensation and
benefits is conditioned on Executive executing a
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full mutual release of all claims related to his employment with or termination
from Company in substantially the form attached hereto as Exhibit A. Such a
release will not include accrued and unpaid wages and benefits, claims to
industrial insurance, vested pension benefits or indemnification rights.
Executive will have the duty to mitigate the costs of Company by attempting to
obtain other employment within a reasonable time after termination; Executive's
compensation from such other employment will be credited against the amounts due
from Company to the extent the combined compensation from Executive's new
position and Company's payments under this Section 5(b) would otherwise exceed
Executive's base salary (or one-half (1/2) base salary, as the case may be) with
Company at the date of termination.
(c) TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. Upon termination by
Executive without Good Reason (as defined below), Executive shall be paid the
compensation as set forth in Section 5(a) and shall not be entitled to any other
benefits or payments.
(d) TERMINATION BY EXECUTIVE WITH GOOD REASON. Upon termination by
Executive with Good Reason (as defined below), Executive shall receive the
compensation as set forth in Section 5(b) and shall not be entitled to any other
benefits or payments.
(e) TERMINATION AS A RESULT OF DEATH OR TOTAL DISABILITY. In the event
of termination of Executive's employment pursuant to Section 4(c), Executive or
his estate shall be paid the compensation set forth in Section 5(a) and shall
not be entitled to any other benefits or payments.
(f) DEFINITION OF "CAUSE." "Cause" as used in this Agreement shall mean
a determination by the Board that one or more of the following has occurred:
willful misconduct, or dishonesty in the performance of
Executive's duties that results in a material adverse effect on
the Company;
conviction of Executive of a felony involving an act of
dishonesty, moral turpitude, deceit or fraud; or
current use by the Executive of illegal substances.
(g) DEFINITION OF "GOOD REASON." "Good reason" shall mean the occurrence
of any of the following events, without the consent of the Executive:
a demotion or other material reduction in the nature or status
of Executive's responsibilities; or"
a material reduction in Executive's annual base salary or any
failure by the Company to satisfy its duty to compensate the
Executive as required under this Agreement.
6. INTELLECTUAL PROPERTY
Company shall own all right, title and interest (including patent rights,
copyrights, trade secret rights, mask work rights, sui generis database rights
and all other intellectual rights of any sort throughout the world) relating to
any and all inventions (whether or not patentable), works of
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authorship, mask works, designs, know-how, ideas and information made or
conceived or reduced to practice, in whole or in part, by Executive during the
term of Executive's employment with Company to and only to the fullest extent
allowed by Washington Revised Code Annotated Section 49.44.140 (which is
attached as Exhibit B) (collectively "Inventions") and Executive will promptly
disclose all Inventions to Company. Executive will also disclose anything
Executive believes is excluded by Section 49.44.140 so that Company can make an
independent assessment. Executive hereby makes all assignments necessary to
accomplish the foregoing. Executive shall further assist Company, at Company's
expense, to further evidence, record and perfect such assignments, and to
perfect, obtain, maintain, enforce, and defend any rights specified to be so
owned or assigned. Executive hereby irrevocably designates and appoints Company
as its agents and attorneys-in-fact to act for and in Executive's behalf to
execute and file any document and to do all other lawfully permitted acts to
further the purposes of the foregoing with the same legal force and effect as if
executed by Executive. If Executive wishes to clarify that something created by
Executive prior to Executive's employment that relates to Company's actual or
proposed business is not within the scope of this Agreement, Executive has
listed it on Exhibit C. If Executive uses or (except where disclosed pursuant to
this Section 6 as a claimed exclusion to RCW 49.44.140 or in Exhibit C)
discloses Executive's own or any third party's confidential information or
intellectual property when acting within the scope of Executive's employment or
otherwise on behalf of Company, Company will have and Executive hereby grants
Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive,
sublicensable right and license to exploit and exercise all such confidential
information and intellectual property rights. To the extent allowed by law, this
section includes all rights of paternity, integrity, disclosure and withdrawal
and any other rights that may be known as or referred to as "moral rights,"
"artist's rights," "droit moral," or the like (collectively "Moral Rights"). To
the extent Executive retains any such Moral Rights under applicable law,
Executive hereby ratifies and consents to any action that may be taken with
respect to such Moral Rights by or authorized by Company and agree not to assert
any Moral Rights with respect thereto. Executive will confirm any such
ratifications, consents and agreements from time to time as requested by
Company.
7. PRIVACY
Executive recognizes and agrees that Executive has no expectation of privacy
with respect to Company's telecommunications, networking or information
processing systems (including, without limitation, stored computer files, email
messages and voice messages) and that Executive's activity and any files or
messages on or using any of those systems may be monitored at any time without
notice.
8. RESTRICTIVE COVENANTS
Executive acknowledges: (i) that Executive will have access during his
employment with Company to confidential information regarding all Inventions and
all other business, technical and financial information (including, without
limitation, the identity of and information relating to customers or employees)
Executive develops, learns or obtains during the term of Executive's employment
that relates to Company or the business or demonstrably anticipated business of
Company or that are received by or for Company in confidence, and that all such
information constitutes "Proprietary Information"; (ii) that information
regarding Proprietary Information constitutes a valuable asset and trade secret
of Company; and (iii) that it is reasonable for
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Company to protect itself from misappropriation of Proprietary Information by
Executive upon termination of employment or otherwise. Accordingly, in
consideration of employment hereunder, and other good and valuable
consideration, Executive agrees to the following nondisclosure, noninterference
and noncompetition covenants during the Term and for a period of twenty-four
(24) months after the Term:
(a) NONDISCLOSURE. Executive will not copy, remove, or disclose any
Proprietary Information, except as may be required by law or in the course of
performing services for Company, Executive will hold in confidence and not
disclose or, except within the scope of Executive's employment, use any
Proprietary Information at any time, even after Executive's employment with
Company ends for whatever reason. However, Executive shall not be obligated
under this paragraph with respect to information Executive can document by clear
and convincing evidence is or becomes readily publicly available without
restriction through no fault of Executive. Upon termination of Executive's
employment or if sooner requested, Executive will promptly return to Company all
items containing or embodying Proprietary Information (including all copies),
except that Executive may keep Executive's personal copies of (i) Executive's
compensation records, (ii) materials distributed to shareholders generally and
(iii) this Agreement;
(b) NONINTERFERENCE. Executive will not employ, solicit, or seek to
employ any person who is an employee of Company or its subsidiaries (i) as of
the date hereof; (ii) during the Term, or (iii) at the time of employment or
solicitation; and
(c) NONCOMPETITION AND NONSOLICITATION. Executive will not, directly or
indirectly, as principal, agent, employee, officer, shareholder, consultant or
otherwise, engage in any business that competes directly with Company or any of
its subsidiaries, and will not solicit or aid in soliciting, endeavor to obtain
as a customer or client, accept sales, marketing, financial, or consulting
business from, or perform sales, marketing, consulting or related business for
any person, firm, corporation, association or other entity: (i) that is or was a
Company customer for whom Executive performed any services or with whom
Executive had maintained substantial business contacts at any time during the
Term; or (ii) whose business Executive solicited, either alone or in conjunction
with others, on behalf of Company or any of its subsidiaries during the Term.
Executive acknowledges and agrees: (i) that a breach of any of the
covenants contained in this Section 8 would cause irreparable injury to Company
and its subsidiaries for which monetary damages alone would be inadequate to
compensate and protect Company and its subsidiaries; (ii) that Company and its
subsidiaries may therefore seek and obtain injunctive relief to enjoin any
breach of such restrictive covenants in addition to, and not in limitation of,
any other legal or equitable remedies that are available as a matter, of law or
equity; and (iii) that specific enforcement of this Agreement by way of an
injunction shall not prevent Executive from earning a reasonable livelihood.
EXECUTIVE FURTHER ACKNOWLEDGES AND AGREES THAT THE NONDISCLOSURE,
NONINTERFERENCE, NONCOMPETITION AND NONSOLICITATION COVENANTS CONTAINED HEREIN
ARE NECESSARY FOR THE PROTECTION OF COMPANY'S LEGITIMATE BUSINESS INTERESTS AND
ARE REASONABLE IN DURATION, GEOGRAPHIC SCOPE, AND OTHER CONTENT. However, in the
event a court of competent jurisdiction should decline to enforce any term of
the nondisclosure, noninterference, noncompetition or nonsolicitation covenants,
as written herein, such covenant
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shall be deemed to be modified to require confidentiality and restrict
Executive's interference, competition and solicitation with Company and its
subsidiaries to the maximum duration, geographic scope, and other content that
the court shall find enforceable.
9. ASSIGNMENT
This Agreement is personal to Executive and shall not be assignable by
Executive. If the Company changes it name or changes a limited liability
corporation to another corporate form, this Agreement will remain in effect
between the Executive and the Company's successor. All the terms and provisions
of this Agreement shall be binding on and shall inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
10. WAIVERS
No delay or failure by any party to this Agreement in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a
waiver. The express waiver by a party of any right, title, interest or remedy in
a particular instance or circumstance shall not constitute a waiver in any other
instance or circumstance. All rights and remedies shall be cumulative and not
exclusive of any other rights or remedies.
11. ARBITRATION
Any controversies or claims arising out of or relating to this Agreement shall
be fully and finally settled by arbitration in the city of Seattle, Washington
in accordance with the Employment Arbitration Rules of the American Arbitration
Association then in effect (the "AAA Rules"), conducted by one arbitrator either
mutually agreed upon by the Company and Executive or chosen in accordance with
the AAA Rules, except that the parties shall have any right to discovery as
would be permitted by the Federal Rules of Civil Procedure for a period of 90
days following the commencement of such arbitration, and the arbitrator shall
resolve any dispute that arises in connection with such discovery. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction.
12. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any provision of
this Employment Agreement, nor consent to any departure from any provision of
this Agreement by either party, shall in any event be effective unless the same
shall be in writing, specifically identifying this Agreement and the provision
intended to be amended, modified, waived, terminated or discharged and signed by
the Company and Executive, and each such amendment, modification, waiver,
termination or discharge shall be effective only in the specific instance and
for the specific purpose for which given. No provision of this Agreement shall
be varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and Executive.
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13. APPLICABLE LAW
This Agreement shall in all respects, including all matters of construction,
validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the state of Washington, without regard to any
rules governing conflicts of laws.
14. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions shall remain in full force and effect
in such jurisdiction and shall be liberally construed in order to carry out the
intent of the parties as nearly as may be possible, (b) such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision, and (c) any court or arbitrator having
jurisdiction shall have the power to reform such provision to the extent
necessary for such provision to be enforceable under applicable law.
15. HEADINGS
All headings used in this Agreement are for convenience only and shall not in
any way affect the construction of, or be taken into consideration in
interpreting, this Agreement.
16. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to
Section 12, may be executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute one and the same
instrument.
17. ENTIRE AGREEMENT
This Agreement and the Indemnification Agreement between Executive and the
Company (and any addenda, amendments or extensions to those agreements)
constitute the entire agreement between the Company and Executive with respect
to the subject matters of this Agreement and the Indemnification Agreement.
NORTHWEST BIOTHERAPEUTICS, INC. EXECUTIVE:
By:
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Xxxxxx Xxxxxxxxxx, Chairman Xxxxxx X. Xxxxx
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EXHIBIT A
WAIVER AND RELEASE
For and in consideration of the severance payments and benefits set out in the
Employment Agreement attached hereto, Executive, on behalf of himself and his
agents, heirs, successors and assigns, expressly waives any claims against
Company and releases Company (including its officers, directors, stockholders,
managers, agents and representatives) from any and all claims, demands,
liabilities, damages, obligations, actions or causes of action of any kind,
known or unknown, past or present, arising out of, relating to, or in connection
with Executive's employment, termination of employment, or the holding of any
office with Company or any other related entity. The claims released by
Executive include, but are not limited to, claims for defamation, libel,
invasion of privacy, intentional or negligent infliction of emotional distress,
wrongful termination, constructive discharge, breach of contract, breach of the
covenant of good faith and fair dealing, breach of fiduciary duty, fraud, or for
violation of any federal, state or other governmental statute or ordinance,
including, without limitation, Title VII of the Civil Rights Act of 1964, the
federal Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act, the Employment Retirement Income Security
Program or any other legal limitation on the employment relationship.
This waiver and release shall not waive or release claims (1) where the events
in dispute first arise after execution of this Release; (2) for rights or
benefits due under the Employment Agreement attached hereto; or (3) relating to
Executive's rights to indemnity as a corporate officer of Company.
Executive agrees he has been provided the opportunity to consider whether to
enter into this Release, and has voluntarily chosen to enter into it on this
date. This Release shall be effective when signed. Executive acknowledges that
he is voluntarily executing this Release, that he has carefully read and fully
understands all aspects of this Release and the attached Employment Agreement,
that he has not relied upon any representations or statements not set forth
herein or made by Company's agents or representatives, that he has been advised
to consult with an attorney prior to executing the Release, and that, in fact,
he has consulted with an attorney of his choice as to the subject matter and
effect of this Release.
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Date Executive
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EXHIBIT B
WASHINGTON REVISED CODE ANNOTATED SECTION 49.44.140
Washington Revised Code Annotated Section 49.44.140 provides as follows:
A provision in an employment agreement that provides that an employee
shall assign or offer to assign any of the employee's rights in an
invention to the employer does not apply to an invention for which no
equipment, supplies, facilities, or trade secret information of the
employer was used and that was developed entirely on the employee's own
time, unless:
(a) the invention relates (i) directly to the business of the employer,
or (ii) to the employer's actual or demonstrably anticipated research or
development, or
(b) the invention results from any work performed by the employee for
the employer.
Any provision that purports to apply to such an invention is to that
extent against the public policy of this state and is to that extent
unenforceable.
An employer shall not require a provision made void and unenforceable by
subsection (a) of this section as a condition of employment or
continuing employment.
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EXHIBIT C
None.
