EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), made this 4th day of
November, 1996, by and between ANTIVIRALS INC., an Oregon
corporation, with its principle office at 0 XX Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, XX 00000 ("Company"), and XXXXX XXXXXXXXX, PH.D.
0 XX Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000 ("Employee").
RECITALS:
A. Employee has been a valued employee of the Company since 1980 and has
served in the capacities of Founder, President, Chief Executive Officer and
Chief Scientific Officer.
B. The terms of Employee's employment with the Company have been as set
forth in an Employment Contract entered into by and between Employee and Company
dated June 17, 1992.
C. The Company desires to continue Employee's employment with the Company
as President and Chief Scientific Officer under the terms stated in this
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual benefits contained herein,
the sufficiency of which the parties acknowledge, the parties hereby agree as
follows:
1. EMPLOYMENT TERM. The term ("Term") of this Agreement shall commence
on the date written above, and shall continue until terminated in accordance
with Section 12.
2. DUTIES. Employee shall be responsible to perform such duties as
assigned to him from time to time by the Board of Directors of the Company
("Board"). Employee shall be employed by the Company and shall devote his best
efforts to the service of the Company throughout the Term. Employee shall
devote at least for (40) hours per week to the affairs of the Company. Employee
and Company acknowledge and agree that (i) Employee may hold certain offices
within certain entities as set forth on Exhibit A to this Agreement, (ii)
Employee's devotion of reasonable amounts of time in such capacities, so long as
it does not interfere with his performance of services hereunder, shall not
conflict with the terms of this Agreement, and (iii) Exhibit A may be amended
from time to time by agreement of the parties.
3. COMPENSATION. For his services from the date of this Agreement until
January 1, 1997 the Company shall compensate Employee at his current salary.
Commencing January 1, 1997, the Company shall compensate Employee with an annual
salary of $150,000, payable in accordance with Company's payroll practices in
effect from time to time, and less amounts required to be withheld under
applicable law and requested to be withheld by Employee. Employee's annual
salary shall be subject to review on an annual basis. The Company may but shall
not be required to pay bonus compensation to Employee. Except as otherwise
provided in this Agreement, the base salary shall be prorated for any period of
service less than a full month.
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4. EXPENSES. The Company will reimburse Employee for all expenses
reasonably incurred by him in discharging his duties for the Company,
conditioned upon Employee's submission of written documentation in support of
claimed reimbursement of such expenses, and consistent with the Company's
expense reimbursement policies in effect from time to time.
5. BENEFITS. Subject to eligibility requirements, Employee shall be
entitled to participate in such benefits plans and programs as adopted by the
Company from time to time.
6. CONFIDENTIALITY.
(a) In the course of his employment with the Company, it is
anticipated that Employee may acquire knowledge (both orally and in writing)
regarding confidential affairs of the Company and confidential or proprietary
information including: (a) matters of a technical nature, such as know-how,
inventions, processes, products, designs, chemicals, compounds, materials,
drawings, concepts, formulas, trade secrets, secret processes or machines,
inventions or research projects; (b) matters of a business nature, such as
information about costs, profits, pricing policies, markets, sales, suppliers,
customers, plans for future development, plans for future products, marketing
plans or strategies; and (c) other information of a similar nature which is not
generally disclosed by the Company to the public, referred to collectively
hereafter as "Confidential Information." "Confidential Information" shall not
include information generally available to the public. Employee agrees that
during the term of this Agreement and thereafter, he (i) will keep secret and
retain in the strictest confidence all Confidential Information, (ii) not
disclose Confidential Information to anyone except employees of the Company
authorized to receive it and third parties to whom such disclosure is
specifically authorized, and (iii) not use any Confidential Information for any
purpose other than performance of services under this Agreement without prior
written permission from the Company. Notwithstanding the foregoing, Employee as
General Partner of ANTI-GENE DEVELOPMENT GROUP ("AGDG") is authorized to
disclose and use Confidential Information, to the extent permitted under the
terms of the Technology Transfer Agreement between the Company and AGDG, and any
amendments to that Technology Transfer Agreement.
(b) If Employee is served with any subpoena or other compulsory
judicial or administrative process calling for production or disclosure of
Confidential Information or if Employee is otherwise required by law or
regulation to disclose Confidential Information, Employee will immediately, and
prior to production or disclosure, notify the Company and provide it with such
information as may be necessary in order that the Company may take such action
as it deems necessary to protect its interest.
(c) The provisions of this paragraph 6 shall survive termination of
this Agreement.
7. NONCOMPETITION.
(a) Employee acknowledges that the increased compensation reflected
in this Agreement amounts to a bona fide advancement for Employee. In
consideration of this advancement, Employee agrees that during the Term and for
a period of two (2) years following termination of employment with the Company
for any reason, he will not directly or indirectly engage in any activity
directed towards (i) the development of any uncharged sequence-specific nucleic
acid-binding agents or any nucleic acid purification and concentration or
detection system,
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or (ii) the development of drug delivery systems related to the "molecular
engine" as defined in patents or patent applications filed or Contemplated at
any time during the Term. Patents or patent applications "Contemplated" are
those included, recorded or discussed in the notebooks of researchers employed
by or performing services on behalf of the Company. Nothing contained here
shall preclude Employee's engaging in activities that are both (A) related only
to agents, compounds, techniques, processes or technologies licensed by the
Company to AGDG, and (B) performed on behalf of AGDG or for some other entity in
which Employee has a controlling interest. Nothing contained herein shall limit
the scope or operation of Section 6 of this Agreement.
(b) For a period of one (1) year, except with the express written
consent of the Company, Employee agrees to refrain from directly or indirectly
recruiting, hiring or assisting anyone else to hire, or otherwise counseling to
discontinue employment with the Company, any person then employed by the Company
or its subsidiaries or affiliates.
(c) The provisions of this paragraph 7 shall survive termination of
this Agreement and the term of employment.
8. COVERED WORK.
(a) All right, title and interest to any Covered Work that Employee
makes or conceives (whether alone or with others) while employed by the Company,
belong to the Company. This Agreement operates as an actual assignment of all
rights in Covered Work to the Company. "Covered Work" means products and
Inventions that relate to the actual or anticipated business of the Company or
any of its subsidiaries or affiliates, or that result from or are suggested by a
task assigned to Employee or work performed by Employee on behalf of the Company
or any of its subsidiaries or affiliates, or that were developed in whole or in
part on the Company time or using the Company's equipment, supplies or
facilities. The contents of Employee's notebooks prepared during the course of
his employment with the Company contain a comprehensive description of all of
Employee's Covered Work. "Inventions" mean ideas, improvements, designs,
computer software, technologies, techniques, processes, products, chemicals,
compounds, materials, concepts, drawings, authored works or discoveries, whether
or not patentable or copyrightable, as well as other newly discovered or newly
applied information or concepts. Attached hereto as Exhibit B is a description
of any product or Invention in which Employee had or has any right, title or
interest which is not included within the definition of "Covered Work".
(b) Employee shall promptly reveal all information relating to
Covered Work and Confidential Information via entry of such information into the
Company's notebooks and confirmation of such entry by an appropriate officer of
the Company via the witnessing and review of such notebooks and shall cooperate
with the Company, and execute such documents as may be necessary, in the event
that the Company desires to seek copyright, patent or trademark protection
thereafter relating to same.
(c) In the event that the Company requests that Employee assist in
efforts to defend any legal claims to patents or other right, the Company agrees
to reimburse Employee for any reasonable expenses Employee may incur in
connection with such assistance. This obligation to reimburse shall survive
termination of this Agreement and the term of employment.
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(d) The provisions of this paragraph 8 shall survive termination of
this Agreement and the term of employment.
9. RETURN OF INVENTIONS, PRODUCTS AND DOCUMENTS. Employee acknowledges
and agrees that all Inventions, all products of the Company and all originals
and copies of records, reports, documents, lists, drawings, memoranda, notes,
proposals, contracts and other documentation related to the business of the
Company or containing any information described in this paragraph shall be the
sole and exclusive property of the Company and shall be returned to the Company
immediately upon the termination of Employee's employment with the Company or
upon the written request of the Company. Notwithstanding the foregoing, in
recognition of the emotional and historical interest which the Employee's
notebooks have to Employee, the Company agrees that when the Employee leaves the
Company the Employee may have and own a true and accurate copy of those
notebooks in which he personally made entries during his employment with the
Company, and ten (10) years after Employee terminates employment with the
Company it is agreed that said original notebooks will be given to Employee to
have and own. The Company may retain a true, accurate and complete copy of said
notebooks. If the original notebooks are needed at any time in connection with
patent applications, patent litigation or other legitimate Company business,
Employee will immediately upon Company's request, make them available to the
Company for the period during with they are needed.
10. INJUNCTION. Employee agrees that it would be difficult to measure
damages to the Company from any breach by Employee of paragraph 6, 7, 8 and/or 9
of this Agreement, and that monetary damages would be an inadequate remedy for
any such breach. Accordingly, Employee agrees that if Employee shall breach
paragraph 6, 7, 8 and/or 9 of this Agreement, the Company shall be entitled, in
addition to all other remedies it may have at law or in equity, to an injunction
or other appropriate orders to restrain any such breach without showing or
proving any actual damage sustained by the Company.
11. OBLIGATIONS TO OTHERS. Except for items fully disclosed in writing to
the Company, Employee represents and warrants to the Company that (i) Employee's
employment by the Company does not violate any agreement with any prior employer
or other person or entity, and (ii) Employee is not subject to any existing
confidentiality or noncompetition agreement or obligation, or any agreement
relating to the assignment of Inventions except as has been fully disclosed in
writing to the Company.
12. TERMINATION.
(a) Employee may voluntarily terminate his employment with the
Company upon giving the Company sixty (60) days' written notice.
(b) The Company may terminate Employee's employment without Cause (as
defined below) upon giving Employee thirty (30) days written notice of
termination.
(c) Employee's employment with the Company shall terminate upon the
occurrence of any one of the following:
(1) Employee's death;
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(2) The effective date of a notice sent to Employee stating the
Board's determination made in good faith and after consultation with a qualified
physician selected by the Board, that Employee is incapable of performing his
duties under this Agreement, with or without reasonable accommodation, because
of a physical or mental incapacity that has prevented Employee from performing
such full-time duties for a period of ninety (90) consecutive calendar days and
the determination that such incapacity is likely to continue for a least another
ninety (90) such days; and
(3) The effective date of a notice sent to Employee terminating
Employee's employment for Cause.
(d) "Cause" means the occurrence of one or more of the following
events:
(1) Employee's willful and repeated failure or refusal to comply
in any material respect with the reasonable and lawful policies, standards or
regulations from time to time established by the Company, or to perform his
duties in accordance with this Agreement after notice to Employee of such
failure; and
(2) Employee engages in criminal conduct or engages in conduct
with respect to the Company that is dishonest, fraudulent or materially
detrimental to the reputation, character or standing of the Company.
13. TERMINATION COMPENSATION.
(a) Upon termination of Employee's employment for Cause, the Company
shall pay to Employee all compensation due to the date of termination, but shall
have no further obligation to Employee hereunder in respect of any period
following termination.
(b) Upon the death of Employee, the Company shall pay to Employee's
estate or such other party who shall be legally entitled thereto, all
compensation due to the date of death, and an additional amount equal to
compensation at the rate set forth in this Agreement from the date of death to
the final day of the month following the month in which the death occurs.
(c) Upon termination of Employee's employment by the Company other
than for Cause, and upon Employee's voluntary termination of employment after a
Change of Control, the Company shall pay to Employee an amount equal to twelve
(12) months' compensation calculated with reference to Employee's then current
annual compensation (exclusive of bonuses), which amount shall be due and
payable at termination.
(d) Amounts payable under this Section shall be net of amounts
required to be withheld under applicable law and amounts requested to be
withheld by Employee.
(e) Upon Termination of employment other than for Cause, all
outstanding options granted to Employee pursuant to the Company's 1992 Stock
Incentive Plan, which vest with the passage of time (and are not performance
related) shall be immediately fully vested.
(f) In recognition of the Employee's substantial contributions to the
Company and because many of the Employee's personal books and other information
sources, including Nucleic Acids Abstracts, have been made available for Company
use since 1980, it is agreed that upon
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termination of employment, Employee has the right to take and own the books,
papers, file cabinets, and such other items in his office as approved by the
Company, as well as the full set of Nucleic Acids Abstracts in the Company's
possession at the time of Employee's termination of employment. (In no event
shall employee be entitled to originals of patent records.) In addition,
Employee's original notebooks are to remain in the possession of the Company for
ten (10) years from the date of Employee's termination, after which they are to
be conveyed to Employee, subject to the provisions of Section 9.
(g) As used herein, "Change of Control" means the occurrence of any
one of the following events: (i) any Person becomes the beneficial owner of
twenty-five percent (25%) or more of the total number of voting shares of the
Company; (ii) any Person (other than the Persons named as proxies solicited on
behalf of the Board of Directors of the Company) holds revocable or irrevocable
proxies representing twenty-five percent (25%) or more of the total number of
voting shares of the Company; (iii) any Person has commenced a tender or
exchange offer, or entered into an agreement or received an option, to acquire
beneficial ownership of twenty-five percent (25%) or more of the total number of
voting shares of the Company; and (iv) as the result of, or in connection with,
any cash tender or exchange offer, merger, or other business combination, sale
of assets, or any combination of the foregoing transactions, the persons who
were directors of the Company before such transactions shall cease to constitute
at least two-thirds (2/3) of the Board of Directors of the Company or any
successor entity.
14. CONSULTING AGREEMENT. For a period of two (2) years following
termination of Employee's employment, Employee shall provide up to ten (10)
hours per week of consulting services to Company. As consideration for those
consulting services, Employee shall be compensated at the rate of $75,000 per
year, less amounts required to be withheld by law and requested to be withheld
by Employee. The first year of this arrangement is guaranteed, and the second
year is at the Company's option at the same compensation.
15. NOTICE. Unless otherwise provided herein, any notice, request,
certificate or instrument required or permitted under this Agreement shall be in
writing and shall be deemed "given" upon personal delivery to the party to be
notified or three business days after deposit with the United States Postal
Service, by registered or certified mail, addressed to the party to receive
notice at the address set forth above, postage prepaid. Either party may change
its address by notice to the other party given in the manner set forth in this
Section.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and contains all the agreements between them with respect to
the subject matter hereof. It also supersedes any and all other agreements or
contracts, either oral or written, between the parties with respect to the
subject matter hereof.
17. MODIFICATION. Except as otherwise specifically provided, the terms
and conditions of this Agreement may be amended at any time by mutual agreement
of the parties, provided that before any amendment shall be valid or effective,
it shall have been reduced to writing and signed by an authorized representative
of the Company and Employee.
18. NO WAIVER. The failure of any party hereto exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to
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insist upon compliance by any other party hereto with its obligations, shall not
be a waiver by such party of its right to exercise any such or other right,
power or remedy or to demand compliance.
19. SEVERABILITY. In the event that any paragraph or provision of this
Agreement shall be held to be illegal or unenforceable, such paragraph or
provision shall be severed from this Agreement and the entire Agreement shall
not fail as a result, but shall otherwise remain in full force and effect.
20. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and shall be binding upon
Employee, his administrators, executors, legatees, and heirs. In that this
Agreement is a personal services contract, it shall not be assigned by Employee.
21. DISPUTE RESOLUTION. Except as otherwise provided in Section 10, the
Company and Employee agree that any dispute between Employee and the Company or
its officers, directors, employees, or agents in their individual or Company
capacity of this Agreement, shall be submitted to a mediator for nonbinding,
confidential mediation. If the matter cannot be resolved with the aid of the
mediator, the Company and Employee mutually agree to arbitration of the dispute.
The arbitration shall be in accordance with the then-current Employment Dispute
Resolution Rules of the American Arbitration Association ("AAA") before an
arbitrator who is licensed to practice law in the State of Oregon. The
arbitration shall take place in or near Portland, Oregon. Employee and the
Company will share the cost of the arbitration equally, but each will bear their
own costs and legal fees associated with the arbitration. However, if any party
prevails on a statutory claim which affords the prevailing party attorneys'
fees, or if there is a written agreement providing for attorneys' fees, the
arbitrator may award reasonable attorneys' fees.
The Company and Employee agree that the procedures outlined in this
provision are the exclusive method of dispute resolution.
22. ATTORNEYS' FEES. In the event suit or action is instituted pursuant
to Section 10 of this Agreement, the prevailing party in such proceeding,
including any appeals thereon, shall be awarded reasonable attorneys' fees and
costs.
23. APPLICABLE LAW. This Agreement shall be construed and enforced under
and in accordance with the laws of the State of Oregon.
24. COUNTERPARTS. This Agreement may be signed in two counterparts, each
of which shall be deemed an original and both of which shall together constitute
one agreement.
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IN WITNESS WHEREOF, Antivirals Inc. has caused this Agreement to be
signed by its duly authorized representative, and Employee has hereunder set his
name as of the date of this Agreement.
COMPANY: ANTIVIRALS INC.
By: /s/ Xxxx X. Xxxxxxx
_________________________________________________
EMPLOYEE: /s/ Xxxxx Xxxxxxxxx
__________________________________________________
XXXXX XXXXXXXXX, PH.D.
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EXHIBIT A
LIST OF OFFICES HELD
ANTI-GENE DEVELOPMENT GROUP, or a licensee thereof
EXHIBIT B
INVENTIONS EXCLUDED FROM COVERED WORKS
