EXECUTIVE RETENTION AGREEMENT
EXECUTIVE RETENTION AGREEMENT
This AGREEMENT is made as of July 26, 2013 (the “Effective Date”), by and between Novelos Therapeutics, Inc., a Delaware corporation (the “Company”), with its executive offices located at Xxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000, and Xx. Xxxxxxxxxxx X. Xxxxxxx (the “Employee”).
WITNESSETH
WHEREAS, the Company desires to retain the services of the Employee; and
WHEREAS, the Company and the Employee desire to set forth the terms and conditions on which, from and after the Effective Date, the Employee is willing to continue in the employ of the Company if the Company will agree to pay to the Employee certain amounts, in accordance with the provisions and conditions hereinafter set forth
NOW THEREFORE, in consideration of the mutual covenants contained herein, the Company and the Employee agree as follows:
1. Retention
1.1. Retention Benefit. On December 31, 2013, (the “Retention Date”) if the Employee is actively employed by the Company as of such date, the Company will pay to the Employee a lump sum retention payment in an aggregate amount equal to $79,560.001 (the “Retention Payment”). The Retention Payment shall be payable not later than the tenth day following the Retention Date.
2. Payments Upon Termination
2.1. Severance Benefit. Upon termination of the Employee’s employment by the Company without Cause or by the Employee for Good Reason at any time prior to June 30, 2014 (the “Expiration Date”), so long as the Employee is actively employed by the Company at the time of such termination, the Company will (i) pay to the Employee a lump sum severance payment in an aggregate amount of $132,600.002 (the “Severance Payment”), and (ii) for the six (6) month period subsequent to the date of termination, the Employee shall continue to receive the disability and medical benefits that he receives as of the date hereof at the same level in effect on, and at the same out-of-pocket cost to the Employee as of, the date hereof. The Severance Payment shall be payable not later than the tenth day following such termination upon delivery to the Company of a release of any and all claims against the Company, its officers, directors, stockholders, employees and agents in form reasonably satisfactory to the Company.
1Equal to 30% Base Salary as of the date hereof.
2Equal to six months’ Base Salary as of the date hereof.
2.2. Unavailability of Benefit. Other than benefits payable pursuant to this Agreement, no benefits will be paid under this Agreement (a) if the Employee is employed by the Company as of the Expiration Date or (b) in the event of termination of the Employee’s employment by the Company for Cause or by the Employee without Good Reason.
2.3. Cause. For purposes of this Agreement, termination for “Cause” shall mean any of the following:
(a) gross neglect of duties for which employed (other than on account of a medically determinable disability which renders the Employee incapable of performing such services);
(b) use of alcohol materially interfering with the performance of the Employee’s duties or use of illegal drugs;
(c) commission of any act constituting sexual or any other form of illegal harassment, discrimination or retaliation;
(d) commission of any fraud, misappropriation or embezzlement in the performance of the Employee’s duties;
(e) conviction or guilty or nolo plea of a felony or misdemeanor involving moral turpitude, dishonesty, theft, unethical or unlawful conduct; or
(f) willful action or failure to take action which is materially injurious to the Company.
2.4. Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any of the following:
(a) reduction of the Employee’s annual base salary and/or aggregate level of incentive compensation and employee benefits;
(b) material change by the Company to the Employee’s function, duties, authority, or responsibilities in effect on the date hereof or as set forth in this Agreement, which change would cause the Executive’s position with the Company to become one of lesser responsibility, importance, or scope from the position and attributes thereof in effect on the date hereof or as set forth in this Agreement; or
(c) relocation of the Employee’s principal place of employment to a location beyond 50 miles of Newton, Massachusetts.
3. Option Acceleration and Exercise.
3.1. Upon termination of the Employee prior to the Expiration Date, by the Company without Cause or by the Employee for Good Reason, all unvested options held by the Employee shall be credited with an additional six months vesting and all vested options held by the Employee shall remain exercisable for a period of eighteen months following the date of such termination. The Company shall file a registration statement on Form S-8 for the shares underlying Employee’s options within ninety days from the date of termination.
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4. Miscellaneous.
4.1. Term and Termination. The term of this Agreement shall commence on the Effective Date and shall continue until the earliest to occur of (a) the payment of all amounts that may become payable under this Agreement, (b) the Expiration Date, and (c) termination by the parties’ mutual written agreement.
4.2. Independence of Agreement. The benefits under this Agreement will be independent of, and in addition to, any other Agreement that may exist from time to time between the parties hereto, or any other compensation payable by the Company to the Employee, whether as salary, bonus or otherwise. This Agreement shall not be deemed to constitute a contract of employment between the parties hereto, nor will any provision hereof restrict the right of the Company to discharge the Employee, or restrict the right of the Employee to resign his employment.
4.3. Definition of “Person”. For purposes of this Agreement, the term “Person” shall mean an individual, a corporation, an association, a partnership, an estate, a trust and any other entity or organization.
4.4. Withholding. All payments made by the Company under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
4.5. Assignment; Successors and Assigns, etc. Neither the Company nor the Employee may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party and without such consent any attempted transfer or assignment shall be null and of no effect; provided, however, that the Company may assign its rights under this Agreement without the consent of the Employee in the event either Company shall hereafter effect a reorganization, consolidate with or merge into any other Person, or transfer all or substantially all of its properties or assets to any other Person. This Agreement shall inure to the benefit of and be binding upon the Company and the Employee, and their respective successors, executors, administrators, heirs and permitted assigns. In the event of the Employee’s death prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Employee’s beneficiary designated in writing to the Company prior to his death (or to his estate, if he or she fails to make such designation).
4.6. Enforceability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
4.7. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
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4.8. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by certified mail, postage prepaid, to the Company or the Employee at the last known address or such other address as either party may designate in writing by notice to the other.
4.9. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Employee and by a duly authorized representative of the Company.
4.10. Counterparts; Facsimile Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one such counterpart. A signature sent by telecopy or facsimile transmission shall be as valid and binding upon a party as an original signature of such party.
4.11. Governing Law. This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of The Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly authorized officer, and by the Employee, as of the date first above written.
| NOVELOS THERAPEUTICS, INC. | ||
| By: /s/ Xxxxx X. Xxxxxx | ||
| Name: Xxxxx X. Xxxxxx | ||
| Title: Chief Executive Officer | ||
| EMPLOYEE: | ||
| /s/ Xxxxxxxxxxx X. Xxxxxxx | ||
| Xx. Xxxxxxxxxxx X. Xxxxxxx | ||
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