Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 31st day of
March 2004, by and between CEPTOR CORPORATION, a Delaware corporation with
offices at 000 Xxxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxxx, Xxxxxxxx 00000
(the "Corporation"), and XXXXXX XXXXXX, an individual residing at 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000 (the "Executive"), under the following
circumstances:
RECITALS:
A. The Corporation desires to secure the services of the Executive upon the
terms and conditions hereinafter set forth; and
B. The Executive desires to render services to the Corporation upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. EMPLOYMENT. The Corporation hereby employs the Executive and the
Executive hereby accepts employment as an executive of the Corporation, subject
to the terms and conditions set forth in this Agreement.
Section 2. DUTIES. The Executive shall serve as the Senior Vice President,
Finance and Administration and Chief Financial Officer of the Corporation with
such duties, responsibilities and authority as are commensurate and consistent
with his position, as may be, from time to time, assigned to him by the Chairman
and CEO of the Corporation. The Executive shall report directly to the Chairman
and CEO. During the term of this Agreement, the Executive shall devote his full
business time and efforts to the performance of his duties hereunder unless
otherwise authorized by the Board of Directors. Notwithstanding the foregoing,
the expenditure of reasonable amounts of time by the Executive for the making of
passive personal investments, the conduct of private business affairs and
charitable and professional activities shall be allowed, provided such
activities do not materially interfere with the services required to be rendered
to the Corporation hereunder and do not violate the restrictive covenants set
forth in SECTION 9 below.
Section 3. TERM OF EMPLOYMENT. The term of the Executive's employment
hereunder, unless sooner terminated as provided herein (the "Initial Term"),
shall be for a period of two (2) years commencing on the date hereof (the
"Commencement Date"). The term of this Agreement shall automatically be extended
for additional terms of one year each (each a "Renewal Term") unless either
party gives prior written notice of non-renewal to the other party no later than
sixty (60) days prior to the expiration of the Initial Term ("Non-Renewal
Notice"), or the then current Renewal Term, as the case may be. For purposes of
this Agreement, the Initial Term and any Renewal Term are hereinafter
collectively referred to as the "Term."
Section 4. COMPENSATION OF EXECUTIVE.
4.1 BASE SALARY. The Corporation shall pay the Executive as compensation
for his services hereunder, in equal semi-monthly or bi-weekly installments
during the Term, the sum of One Hundred Seventy-Five Thousand ($175,000) Dollars
per annum (the "Base Salary"), less such deductions as shall be required to be
withheld by applicable law and regulations. The Corporation shall review the
Base Salary on an annual basis and has the right but not the obligation to
increase it, but has no right to decrease the Base Salary.
4.2 DISCRETIONARY BONUS. In addition to the Base Salary set forth in
SECTION 4.1 above, the Executive shall be entitled to such bonus compensation
(in cash, capital stock or other property) as a majority of the members of the
Board of Directors of the Corporation may determine from time to time in their
sole discretion.
4.3 EXPENSES. The Corporation shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred or paid by the Executive in
the course of his employment, consistent with the Corporation's policy for
reimbursement of expenses from time to time.
4.4 BENEFITS. The Executive shall be entitled to participate in such
pension, profit sharing, group insurance, hospitalization, and group health and
benefit plans and all other benefits and plans as the Corporation provides to
its senior executives (the "Benefit Plans").
Section 5. TERMINATION.
5.1 EVENTS OF TERMINATION. This Agreement and the Executive's employment
hereunder shall terminate upon the happening of any of the following events:
(a) upon the Executive's death;
(b) upon the Executive's "Total Disability" (as herein defined);
(c) upon the expiration of the Initial Term of this Agreement or any
Renewal Term thereof, if either party has provided a timely notice of
non-renewal in accordance with SECTION 3, above;
(d) at the Corporation's option, upon sixty (60) days prior written
notice to the Executive if without cause;
(e) at the Executive's option, upon thirty (30) days prior written
notice to the Corporation;
(f) at the Executive's option, in the event of an act by the
Corporation, defined in SECTION 5.3, below, as constituting "Good Reason"
for termination by the Executive; and
2
(g) at the Corporation's option, in the event of an act by the
Executive, defined in SECTION 5.4, below, as constituting "Cause" for
termination by the Corporation.
5.2 TOTAL DISABILITY. For purposes of this Agreement, the Executive shall
be deemed to be suffering from a "Total Disability" if the Executive has failed
to perform his regular and customary duties to the Corporation for a period of
180 days out of any 360-day period and if before the Executive has become
"Rehabilitated" (as herein defined) the CEO determines that the Executive is
mentally or physically incapable or unable to continue to perform such regular
and customary duties of employment. As used herein, the term "Rehabilitated"
shall mean such time as the Executive is willing, able and commences to devote
his time and energies to the affairs of the Corporation to the extent and in the
manner that he did so prior to his Disability.
5.3 GOOD REASON. For purposes of this Agreement, the term "Good Reason"
shall mean that the Executive has resigned due to the failure of the Corporation
to meet any of its obligations to the Executive hereunder, and failure to cure
the same within thirty (30) days following Executive's delivery of notice
specifying the breach(es) by the Corporation which failures by the Corporation
include: (i) failure to permit the Executive to exercise authority with respect
to the matters delegated to the Executive under EXHIBIT A hereto; or (ii) the
Corporation has failed to meet any of its obligations to the Executive under
this or any other agreement between the Corporation and the Executive.
5.4 CAUSE. For purposes of this Agreement, the term "Cause" shall mean
material, gross and willful misconduct on the part of the Executive in
connection with his employment duties hereunder or commission of a felony or act
of dishonesty resulting in material harm to the Corporation by the Executive.
Section 6. EFFECTS OF TERMINATION.
6.1 DEATH. Upon termination of the Executive's employment pursuant to
SECTION 5.1 (A), the Executive's estate or beneficiaries shall be entitled to
the following severance benefits: (i) three (3) months' Base Salary at the then
current rate, payable in a lump sum, less withholding of applicable taxes; and
(ii) continued provision for a period of one (1) year following the Executive's
death of benefits under Benefit Plans extended from time to time by the
Corporation to its senior executives.
6.2 TOTAL DISABILITY. Upon termination of the Executive's employment
pursuant to SECTION 5.1(B), the Executive shall be entitled to the following
severance benefits: (i) thirty-six (36) months' Base Salary at the then current
rate, to be paid from the date of termination until paid in full in accordance
with the Corporation's usual practices, including the withholding of all
applicable taxes; (ii) continued provision during said thirty-six (36) month
period of the benefits under Benefit Plans extended from time to time by the
Corporation to its senior executives; and (iii) payment on a prorated basis of
any bonus or other payments earned in connection with the Corporation's
then-existing bonus plan in place at the time of termination. The Corporation
may credit against such amounts any proceeds paid to Executive with respect to
any disability policy maintained for his benefit.
6.3 EXPIRATION OF TERM. Upon termination of the Executive's employment
pursuant to SECTION 5.1(C), where the Corporation has offered to renew the term
3
of the Executive's employment for an additional one (1) year period and the
Executive chooses not to continue in the employ of the Corporation, the
Executive shall be entitled to receive only the accrued but unpaid compensation
and vacation pay through the date of termination and any other benefits accrued
to him under any Benefit Plans outstanding at such time. In the event the
Corporation tenders Non-Renewal Notice to the Executive, then the Executive
shall be entitled to the same severance benefits as if the Executive's
employment were terminated pursuant to SECTION 5.1(D) or SECTION 5.1(F);
provided, however, if such Non-Renewal Notice was triggered due to the
Corporation's statement that the Executive's employment was terminated due to
SECTION 5.1(E) (for "Cause"), then payment of severance benefits will be
contingent upon a determination as to whether termination was properly for
"Cause."
6.4 BY CORPORATION WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON. Upon
termination of the Executive's employment pursuant to SECTION 5.1(D) OR (F), the
Executive shall be entitled to the following severance benefits: (i) twelve (12)
months' Base Salary at the then current rate, to be paid upon the date of
termination of employment in monthly installments, less withholding of all
applicable taxes; (ii) continued provision for a period of twelve (12) months
after the date of termination of the benefits under Benefit Plans extended from
time to time by the Corporation to its senior executives; and (iii) payment on a
prorated basis of any bonus or other payments earned in connection with any
bonus plan to which the Executive was a participant as of the date of the
Executive's termination of employment.
6.5 BY CORPORATION FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON. Upon
termination of the Executive's employment pursuant to SECTION 5.1(E) OR (G), the
Executive shall be entitled to the following severance benefits: (i) accrued and
unpaid Base Salary and vacation pay through the date of termination, less
withholding of applicable taxes; and (ii) continued provision, for a period of
one (1) month after the date of the Executive's termination of employment, of
benefits under Benefit Plans extended to the Executive at the time of
termination.
6.6 DUTY TO MITIGATE. The Executive shall be obligated to seek other
employment in order to mitigate his damages resulting from his discharge
pursuant to SECTIONS 5.1(D), (E), (F) OR (g), provided that such employment need
not be taken at a level below senior vice president or chief financial officer
of a subsequent company. Any payments required to be made hereunder by the
Corporation to the Executive shall continue to the Executive's beneficiaries in
the event of his death until paid in full.
Section 7. VACATIONS. The Executive shall be entitled to a vacation of four
(4) weeks per year, during which period his salary shall be paid in full. The
Executive shall take his vacation at such time or times as the Executive and the
Corporation shall determine is mutually convenient. Any vacation not taken in
one (1) year shall not accrue, provided that if vacation is not taken due to the
Corporation's business necessities, up to two (2) weeks' vacation may carry over
to the subsequent year.
Section 8. DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive
recognizes, acknowledges and agrees that he has had and will continue to have
access to secret and confidential information regarding the Corporation,
including but not limited to, its products, formulae, patents, sources of
4
supply, customer dealings, data, know-how and business plans, provided such
information is not in or does not hereafter become part of the public domain, or
become known to others through no fault of the Executive. The Executive
acknowledges that such information is of great value to the Corporation, is the
sole property of the Corporation, and has been and will be acquired by him in
confidence. In consideration of the obligations undertaken by the Corporation
herein, the Executive will not, at any time, during or after his employment
hereunder, reveal, divulge or make known to any person, any information acquired
by the Executive during the course of his employment, which is treated as
confidential by the Corporation, and not otherwise in the public domain. The
provisions of this SECTION 8 shall survive the Executive's employment hereunder
except in the event of a termination of this Agreement pursuant to SECTION 5.1
(D) OR (F), hereof, or as detailed in the provision above. All references to the
Corporation in SECTION 8 and SECTION 9 hereof shall include any subsidiary of
the Corporation.
Section 9. COVENANT NOT TO COMPETE.
(a) The Executive recognizes that the services to be performed by him
hereunder are special, unique and extraordinary. The parties confirm that
it is reasonably necessary for the protection of the Corporation that the
Executive agree, and accordingly, the Executive does hereby agree, that he
shall not, directly or indirectly, at any time during the "Restricted
Period" within the "Restricted Area" (as those terms are defined in SECTION
9(E) below):
(i) except as provided in SUBSECTION (C) below, engage in the
business of acting as an executive of the Corporation engaged in the
research, development, production or sale of biotechnology products
(including in the areas of muscular dystrophy, sickle cell anemia, and
other specific indications) within any of the specific disease
indications and/or product categories in which the Corporation has
been actively involved during the period of Executive's employment
with the Corporation, either on his own behalf or as an officer,
director, stockholder, partner, consultant, associate, employee,
owner, agent, creditor, independent contractor, or co-venturer of any
third party; or (ii) not to solicit to employ or engage, for or on
behalf of himself or any third party, any employee or agent of the
Corporation.
(b) The Executive hereby agrees that he will not, directly or
indirectly, for or on behalf of himself or any third party, at any time
during the Term and during the Restricted Period solicit any customers of
the Corporation with respect to products competitive with products then
being sold by the Corporation.
(c) If any of the restrictions contained in this SECTION 9 shall be
deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form
this Section shall then be enforceable in the manner contemplated hereby.
(d) This SECTION 9 shall not be construed to prevent the Executive
from owning, directly or indirectly, in the aggregate, an amount not
5
exceeding five percent (5%) of the issued and outstanding voting securities
of any class of any corporation whose voting capital stock is traded or
listed on a national securities exchange or in the over-the-counter market.
(e) The term "Restricted Period," as used in this SECTION 9, shall
mean the period of the Executive's actual employment hereunder, plus twelve
(12) months after the date the Executive is actually no longer employed by
the Corporation. The term "Restricted Area" as used in this SECTION 9 shall
mean the continental United States.
(f) The provisions of this SECTION 9 shall survive the termination of
the Executive's employment hereunder and until the end of the Restricted
Period as provided in SECTION 9(E) hereof except in the event that this
Agreement is terminated pursuant to SECTION 5.1(D) OR (F), hereof, in which
case such provisions shall not survive termination of this Agreement. In no
event shall the terms of SECTION 9 be enforceable, should the Corporation
be in default of any of its obligations to the Executive at the time of his
termination of employment by the Corporation.
Section 10. MISCELLANEOUS.
10.1 INJUNCTIVE RELIEF. The Executive acknowledges that the services to be
rendered by him under the provisions of this Agreement are of a special, unique
and extraordinary character and that it would be difficult or impossible to
replace such services. Accordingly, the Executive agrees that any breach or
threatened breach by him of SECTIONS 8 OR 9 of this Agreement shall entitle the
Corporation, in addition to all other legal remedies available to it, to apply
to any court of competent jurisdiction to seek to enjoin such breach or
threatened breach. The parties understand and intend that each restriction
agreed to by the Executive hereinabove shall be construed as separable and
divisible from every other restriction, that the unenforceability of any
restriction shall not limit the enforceability, in whole or in part, of any
other restriction, and that one or more or all of such restrictions may be
enforced in whole or in part as the circumstances warrant. In the event that any
restriction in this Agreement is more restrictive than permitted by law in the
jurisdiction in which the Corporation seeks enforcement thereof, such
restriction shall be limited to the extent permitted by law. The remedy of
injunctive relief herein set forth shall be in addition to, and not in lieu of,
any other rights or remedies that the Corporation may have at law or in equity.
10.2 ASSIGNMENTS. Neither the Executive nor the Corporation may assign or
delegate any of their rights or duties under this Agreement without the express
written consent of the other; provided however that the Corporation shall have
the right to delegate its obligation of payment of all sums due to the Executive
hereunder, provided that such delegation shall not relieve the Corporation of
any of its obligations hereunder.
10.3 ENTIRE AGREEMENT. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to the
Executive's employment by the Corporation, supersedes all prior understandings
and agreements, whether oral or written, between the Executive and the
Corporation, and shall not be amended, modified or changed except by an
6
instrument in writing executed by the party to be charged. The invalidity or
partial invalidity of one or more provisions of this Agreement shall not
invalidate any other provision of this Agreement. No waiver by either party of
any provision or condition to be performed shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
10.4 BINDING EFFECT. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
10.5 HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
10.6 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth above or to such other address as either party may hereafter give notice
of in accordance with the provisions hereof. Notices shall be deemed given on
the sooner of the date actually received or the third business day after
sending.
10.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without giving effect to such
State's conflicts of laws provisions and each of the parties hereto irrevocably
consents to the jurisdiction and venue of the federal and state courts located
in the State of Maryland.
10.8 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument. The parties hereto have
executed this Agreement as of the date set forth above.
CORPORATION: EXECUTIVE:
CEPTOR CORPORATION Xxxxxx X. Xxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------- ------------------------------------
Signature
Title: Chief Executive Officer
------------------------
7
EXHIBIT A
The Senior Vice President, Finance and Administration/Chief Financial Officer is
the most senior executive responsible for overseeing the financial and
administrative functions of the Corporation. Responsibilities include financial
plans and policies, accounting practices and procedures and the Corporation's
relationship with the financial community. This position directs the functions
of controller, accounting, treasury, tax, planning, legal, human resources and
information systems. This position reports to the CEO.
8
