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EXHIBIT 10.18
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT is dated as of November 30, 2000
between Cell Pathways, Inc. (together with its successors or assigns as
permitted under this Agreement, the "Company") and Xxxxxx X. Xxxxxxx
("Executive").
W I T N E S S E T H:
WHEREAS, the Company considers it essential to the best interest of its
stockholders to xxxxxx the continuous employment of key management personnel:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control may exist and that such possibility, and the uncertainty and
questions which it may give rise to among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders;
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
certain members of the Company's management, including Executive, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company, although no such change is now contemplated; and
WHEREAS, in order to induce Executive to remain in the employ of the
Company and in consideration of Executive's undertakings set forth herein, the
Company agrees that Executive shall receive the severance benefits set forth in
this Agreement under the circumstances as described below.
WHEREAS, the Company and Executive are parties to an Employment
Agreement dated October 12, 2000 (the "Employment Agreement"), and the Company
and Executive intend that the Employment Agreement shall continue in effect
except as specifically provided herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
Executive agree as follows:
1. DEFINITIONS.
(a) "Base Salary" shall mean Executive's annual base salary payable
by the Company.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" shall mean any of the following grounds for termination
of Executive's employment:
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(i) Executive is convicted of a crime involving moral
turpitude.
(ii) Executive willfully refuses or fails to perform his
or her material duties for the Company (other than a failure
resulting from Executive's incapacity due to physical or mental
illness), which refusal or failure has continued for a period of at
least 30 days after a written notice of demand for substantial
performance, signed by a duly authorized officer of the Company, has
been delivered to Executive specifying the manner in which Executive
has refused or failed substantially to perform.
(iii) Executive engages in gross misconduct in the
performance of his or her duties that is materially injurious to the
Company.
For purposes of clauses (ii) and (iii) of this definition, (x) no act or failure
to act on Executive's part shall constitute grounds for termination for Cause
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive's act, or failure to act, was in the best
interest of the Company and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.
(d) "Change in Control" shall mean the occurrence of one of the
following:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company or any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, any person acquiring securities from
the Company solely pursuant to written agreement with the Company,
or any corporation owned, directly or indirectly by the stockholders
of the Company in substantially the same proportions as their
ownership of stock in the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more
of the combined voting power or the Company's then outstanding
securities,
(ii) during any period of two consecutive years
commencing the day after the date of this Agreement, individuals who
at the beginning of such period constitute the Board and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in clauses (i), (iii) or (iv) of this Section 1(d)) whose
election by the board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority of the Board,
(iii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other
than a merger or
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consolidation where no person within the meaning of subsection (i)
above becomes the "beneficial owner" (as defined above) of 20% or
more of the resulting voting power and where the voting securities
of the Company outstanding immediately prior thereto continue to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or controlling entity) more
than 50% of the combined voting power of the voting securities of
the Company or such surviving or controlling entity outstanding
immediately after such merger or consolidation, or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(g) "Good Reason" shall mean any of the following events, except in
connection with the termination of Executive's employment for Cause, as a result
of death or by Executive other than for Good Reason and except as provided in
the last sentence of this subsection (g):
(i) The assignment to Executive of any duties inconsistent with
Executive's status as an executive officer of the Company or a change in
Executive's position and responsibilities that represents a substantial
diminution of Executive's position and responsibilities.
(ii) A decrease in Executive's Base Salary or a decrease
in the aggregate level of target incentive compensation and benefits
payable to Executive.
(iii) The failure of the Company to obtain an agreement
from any successor to assume and agree to perform this Agreement, as
required by Section 11 hereof.
(iv) The relocation of the offices of the Company at
which Executive is principally employed to a location more than 50
miles from the location of such offices immediately prior to the
date that is six months before the Change in Control, or the
Company's requiring Executive to be based anywhere other than such
offices, except for required travel on the Company's business to any
extent substantially consistent with Executive's business travel
obligations as of the date of this Agreement.
Notwithstanding the foregoing, Executive's termination of employment for Good
Reason must occur within 90 days after Executive receives written notice of the
event that gives rise to Good Reason, or in the event no such written notice is
received, 90 days after the event that gives rise to Good Reason. Executive
shall not have Good Reason for termination if, within 30 days after the date on
which Executive gives Notice of Termination, as provided in Section 2(b), the
Company corrects
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the action or failure to act that constitutes the grounds for termination for
Good Reason as set forth in Executive's Notice of Termination.
(h) "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated.
(i) "Termination Upon a Change in Control" shall mean a termination
of Executive's employment described in Section 2(a) below.
(j) "Severance Period" shall mean the two-year period after
Executive's Termination Upon a Change in Control, with respect to which
Executive shall be entitled to receive severance benefits from the Company.
2. TERMINATION UPON A CHANGE IN CONTROL.
(a) Termination. If a Change in Control of the Company occurs and
the Change in Control transaction is consummated, Executive shall be entitled to
the benefits provided in Section 3 below (i) if Executive's employment is
terminated by the Company without Cause or if Executive terminates employment
for Good Reason, and the termination occurs upon or within two years following
the Change in Control, or (ii) if Executive's employment is terminated by the
Company without Cause within six months prior to the Change in Control upon the
direction or request of another party to the Change in Control.
(b) Notice of Termination. Any purported Termination Upon a Change
in Control shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 19 below. The Notice of Termination
shall specify an effective date for Executive's termination of employment, which
shall not be less than 15 days after the date of the Notice of Termination.
3. COMPENSATION PAYABLE IN THE EVENT OF TERMINATION UPON A CHANGE IN
CONTROL.
(a) If Executive's employment terminates upon a Termination Upon a
Change in Control, Executive shall be entitled to receive the following payments
and benefits from the Company promptly following the later of his or her
termination of employment or the consummation of the Change in Control:
(i) Executive shall receive a lump sum payment of his or
her unpaid Base Salary earned through his or her date of termination
and a pro-rated amount of the annual incentive bonus that Executive
would have received for the year of termination. The pro-rated bonus
shall be computed as the target annual bonus in effect for Executive
for the year in which his or her termination of employment occurs,
multiplied by a fraction (i) the
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numerator of which is the number of the days in such year preceding
Executive's termination date and (ii) the denominator of which is
365.
(ii) Executive shall receive a lump-sum payment equal to
two times Executive's Base Salary and annual incentive bonus.
Executive's Base Salary shall be based on Executive's Base Salary in
effect at Executive's termination date or the date of the Change in
Control, whichever is higher. The annual incentive bonus shall be
based on Executive's target annual bonus in effect at Executive's
termination date or the date of the Change in Control, whichever is
higher.
(iii) The Company shall pay Executive an amount equal to
the after-tax cost to Executive of continuing the Company's medical
and dental coverage in effect for Executive, and, where applicable,
his or her spouse and dependents, for the Severance Period as if
Executive had continued in employment during the Severance Period.
The COBRA health care continuation coverage period under Section
4980B of the Code shall run concurrently with the period described
in the preceding sentence.
(iv) Executive shall receive a lump sum payment equal to
the matching contributions that the Company would have made for
Executive under the Company's 401(k) plan and any supplemental
defined contribution plan applicable to Executive, as in effect
immediately before Executive's termination of employment, had
Executive continued in employment for the Severance Period receiving
Executive's compensation and making the same level of contributions
to the applicable plans as in effect immediately before Executive's
termination date.
(v) All stock options and restricted stock with respect
to stock of the Company that are then held by Executive shall become
fully vested and exercisable as of Executive's termination date (if
not already vested and exercisable pursuant to the terms of the
applicable plan). All stock options granted on or after the date of
this Agreement, and all nonqualified stock options granted before
the date of this Agreement, shall remain exercisable until the later
of (A) the end of the post-termination exercise period provided
under the applicable option agreement or (B) one year after
Executive's termination date (but not later than the expiration of
the option term).
(vi) Executive shall receive outplacement assistance
services for a period of 12 months (for a cost not to exceed a total
of $10,000) provided by an outplacement agency selected by
Executive.
(vii) Reimbursement for out-of-pocket business expenses
properly incurred but not yet reimbursed by the Company.
(viii) Any other amounts earned, accrued or owing but
not yet paid and any other benefits in accordance with the terms of
any applicable plans and programs of the Company; provided, however,
that the severance benefits provided under this Section 3 shall
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be in lieu of and shall replace any severance benefits due under the
Employment Agreement or any severance plan or other agreement of the
Company.
(b) Notwithstanding the foregoing, if Executive's employment
terminates on account of disability, any benefits payable pursuant to this
Section 3 shall be reduced by any disability benefits received by Executive
under any long-term disability plan maintained by the Company that covers
Executive.
4. TERMINATION FOR CAUSE, DEATH OR BY EXECUTIVE WITHOUT GOOD REASON. Executive
shall not be entitled to the benefits provided in Section 3 if Executive's
employment terminates for Cause or death, or by Executive without Good Reason.
5. INCREASE IN PAYMENTS UPON A CHANGE IN CONTROL.
(a) Anything in this Agreement to the contrary notwithstanding, but
subject to subsection (b) below, in the event that it shall be determined that
any payment or distribution by the Company to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Code, the Company shall pay
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by Executive after deduction of any excise tax imposed under Section
4999 of the Code, and any federal, state and local income tax, employment tax
and excise tax imposed upon the Gross-Up Payment, shall be equal to the Payment.
(b) Notwithstanding subsection (a), and notwithstanding any other
provisions of this Agreement, if the net after-tax benefit to Executive of
receiving the Gross-Up Payment does not equal or exceed the greater of (i)
$50,000 or (ii) 110% of the Safe Harbor Amount (as defined below) (as compared
to the net-after tax proceeds to Executive resulting from elimination of the
Gross-Up Payment and reduction of the Payments to the Safe Harbor Amount), then
(i) the Company shall not pay Executive the Gross-Up Payment and (ii) the
Payments due to Executive under this Agreement shall be reduced so that the
Parachute Value (as defined below) of all Payments, in the aggregate, equals the
Safe Harbor Amount. Such reduction shall be carried out in such a manner as to
maximize the value of the Payments received by Executive while still reducing
them to the foregoing reduced amount. The term "Parachute Value" means the
present value as of the date of the Change in Control of the portion of such
Payment that constitutes a "parachute payment" under Section 280G(b)(2) of the
Code, as determined by the Accounting Firm (as defined below). The term "Safe
Harbor Amount" means 2.99 times the Executive's "base amount," within the
meaning of Section 280G(b)(3) of the Code.
(c) For purposes of determining the amount of the Gross-Up Payment,
unless Executive specifies that other rates apply, Executive shall be deemed to
pay federal income tax and employment taxes at the highest marginal rate of
federal income and employment taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes
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at the highest marginal rate of taxation in the state and locality of
Executive's residence on Executive's date of termination, net of the maximum
reduction in federal income taxes that may be obtained from the deduction of
such state and local taxes.
(d) All determinations to be made under this Section 5 shall be made
by the Company's independent public accountant immediately prior to the Change
in Control ("Accounting Firm"), which Accounting Firm shall provide its
determinations and any supporting calculations both to the Company and Executive
within 20 days after the Change in Control. Any such determination by the
Accounting Firm shall be binding upon the Company and Executive. Within ten days
after the Accounting Firm's determination, the Company shall pay the Gross-Up
Payment to Executive.
(e) Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive knows of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in order
to contest such claim effectively, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any excise tax, income tax or employment tax, including
interest and penalties, with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this subsection (e), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
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conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a termination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine. If the Company directs Executive to pay such claim and
xxx for a refund, the Company shall advance the amount of such payment to
Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any excise tax, income tax or employment
tax, including interest or penalties with respect thereto, imposed with respect
to such advance or with respect to any imputed income with respect to such
advance. Any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due shall be limited solely to such contested amount.
The Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(f) If, after the receipt by Executive of an amount advanced by the
Company pursuant to this Section, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of this Section 5) promptly pay to the Company
the amount of such refund, together with any interest paid or credited thereon
after taxes applicable thereto. If, after the receipt by Executive of an amount
advanced by the Company pursuant to this Section 5, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(g) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in this Section 5 shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm from any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to Section 5, except for claims, damages
or expenses resulting from the gross negligence or willful misconduct of the
Accounting Firm.
6. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that, by
reason of Executive's employment by and service to the Company during and, if
applicable, after the period of Executive's employment, Executive will continue
to have access to certain confidential and proprietary information relating to
the business of the Company, which may include, but is not limited to, trade
secrets, trade "know-how," customer information, supplier information, cost and
pricing information, marketing and sales techniques, strategies and programs,
computer programs and software and financial information (collectively referred
to as "Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment, use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm
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or corporation except in connection with the performance of Executive's duties
for the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, Executive will not use any Confidential
Information or divulge or disclose any Confidential Information to any person,
firm or corporation, unless such information is in the public domain through no
fault of Executive or except when required to do so by law or legal process, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least two business days prior to
disclosure. All written Confidential Information (including, without limitation,
in any computer or other electronic format) which comes into Executive's
possession during the course of Executive's employment shall remain the property
of the Company. Except as required in the performance of Executive's duties for
the Company, or unless expressly authorized in writing by the Board, Executive
shall not remove any written Confidential Information from the Company's
premises, except in connection with the performance of Executive's duties for
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of Executive's employment, Executive
agrees immediately to return to the Company all written Confidential Information
in Executive's possession. For the purposes of this Section 6, the term
"Company" shall be deemed to include the Company, its subsidiaries and their
successors.
7. NON-SOLICITATION.
(a) Executive covenants and agrees that during Executive's
employment by the Company and for a period of six months after Executive's
Termination Upon a Change in Control, if Executive receives the benefits set
forth in Section 3 hereof, Executive will not, except with the prior written
consent of the Board, directly or indirectly, solicit or hire, or encourage the
solicitation or hiring of, any person who was a managerial or higher level
employee of the Company at any time during the term of Executive's employment by
the Company by any employer other than the Company for any position as an
employee, independent contractor, consultant or otherwise. The foregoing
covenant of Executive shall not apply to any person after 12 months have elapsed
after the date on which such person's employment by the Company has terminated.
(b) For the purposes of this Section 7, the term "Company" shall be
deemed to include the Company, its subsidiaries and their successors.
8. EQUITABLE RELIEF.
(a) Executive acknowledges and agrees that the restrictions
contained in Sections 6 and 7 are reasonable and necessary to protect and
preserve the legitimate interests, properties, goodwill and business of the
Company, that the Company would not have entered into this Agreement in the
absence of such restrictions and that irreparable injury will be suffered by the
Company should Executive breach any of the provisions of those Sections.
Executive represents and acknowledges that (i) Executive has been advised by the
Company to consult Executive's own legal counsel in respect of this Agreement,
and (ii) Executive has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with Executive's counsel.
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(b) Executive further acknowledges and agrees that a breach of any
of the restrictions in Sections 6 and 7 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of Sections 6 or 7 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event that any of the provisions of
Sections 6 or 7 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the provision shall be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.
(c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Section 6 or 7 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in a United States District Court in Philadelphia or Xxxxxxxxxx County,
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Philadelphia or Xxxxxxxxxx
Country, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding, and (iii) waives any
objection which Executive may have to the laying of venue of any such suit,
action or proceeding in any such court. Executive also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 19
hereof.
(d) For the purposes of this Section 8 the term "Company" shall be
deemed to include the Company, its subsidiaries and their successors.
9. INDEMNIFICATION. The Company shall indemnify Executive with respect to his or
her actions in the performance of his or her duties to the Company to the
fullest extent permitted by the Company's bylaws as in effect from time to time.
10. NO MITIGATION: NO OFFSET. In the event of any termination of Executive's
employment under the Agreement, Executive shall be under no obligation to seek
other employment, and there shall be no offset against amounts due Executive
under the Agreement on account of any remuneration attributable to any
subsequent employment that Executive may obtain.
11. SUCCESSORS, BINDING AGREEMENT.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken
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place.
(b) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If Executive should die
after Executive's termination of employment under circumstances entitling
Executive to benefits hereunder and while any amount would still be payable to
Executive hereunder if Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the personal representative of Executive's estate.
12. REPRESENTATION. The Company and Executive respectively represent and warrant
to each other that, subject to any approval that may be necessary from any
pertinent regulatory authority, each respectively is fully authorized and
empowered to enter into the Agreement and that its or his or her entering into
this Agreement and the performance of its or his or her respective obligations
under the Agreement will not violate any agreement between the Company or
Executive respectively and any other person, firm or organization or any law or
governmental regulation.
13. ENTIRE AGREEMENT; EMPLOYMENT AGREEMENT. The Agreement (along with the
Employment Agreement) contains the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the parties with respect thereto. If Executive receives benefits
under Section 3 of this Agreement, (i) Executive shall not receive severance
benefits under the Employment Agreement, (ii) the provisions of Section 7 of
this Agreement shall supercede the non-solicitation covenant of the Employment
Agreement, and (iii) the Employment Agreement shall be deemed to be amended
accordingly.
14. AMENDMENT OR WAIVER. The Agreement cannot be changed, modified or amended
without the consent in writing of both Executive and the Company. No waiver by
either party at any time of any breach by the other party of any condition or
provision of the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent time. Any
waiver must be in writing and signed by Executive or an authorized officer of
the Company, as the case may be.
15. SEVERABILITY. In the event that any provision or portion of the Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of the Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
16. SURVIVORSHIP. The respective rights and obligations of the parties hereunder
shall survive any termination of the Agreement to the extent necessary to the
intended preservation of such rights and obligations. The Agreement shall
continue in effect until all amounts required to be paid under the Agreement
have been paid, or until Executive's employment with the Company terminates
under circumstances that do not entitle Executive to benefits under Section 3.
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17. GOVERNING LAW. The Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.
18. LEGAL FEES. It is the intent of the parties that Executive not be required
to incur any expenses associated with the enforcement of his or her rights under
this Agreement by litigation or other legal action. Accordingly, the Company
agrees to pay as incurred, to the full extent permitted by law, all expenses
(including all attorney's fees and legal expenses) which Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, Executive or others concerning the validity or enforceability
of, or liability under, any provision of this Agreement, regardless of whether
such contest is between the Company and Executive or between either of them and
a third party, including any contest regarding the amount of the Gross-Up
Payment pursuant to this Agreement.
19. NOTICES. Any notice given to either party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated below or to such changed address as
such party may subsequently give notice of:
If to the Company:
Cell Pathways, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
If to Executive:
Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxx.
Xxxxxx Xxxx, XX 00000
20. WITHHOLDING TAXES. All payments under this Agreement shall be made subject
to applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all such federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
21. HEADINGS. The headings of the Sections contained in the Agreement are for
convenience of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.
22. COUNTERPARTS. The Agreement may be executed in two or more counterparts.
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IN WITNESS WHEREOF, the undersigned have executed the Agreement as
of the date first above.
Cell Pathways, Inc.
By: ___________________
Xxxxxx X. Xxxxxxxxxx
As its: President and Chief Executive Officer
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Xxxxxx X. Xxxxxxx
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