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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 11, 1997 between Digene Corporation, a
Delaware corporation, 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx, 00000 (the "Company"), and Xxxxxxx X. Xxxxx, Xx., Ph.D., 00000 Xx.
Xxxxxx Xxxx, Xx. Xxxxx, XX 00000 (the "Executive").
WITNESSETH
WHEREAS, the Company desires to employ Executive on the terms and conditions
herein contained; and
WHEREAS, Executive is willing to enter into this Agreement for employment with
the duties outlined herein on a full-time basis;
NOW, THEREFORE, in consideration of the premises, representations and mutual
covenants and agreements herein contained, the parties agree as follows:
1. Employment. The Company hereby employs the Executive and
Executive hereby accepts employment with the Company for the period beginning
July 21, 1997 and ending July 21, 2001, (the "Term"), subject to the terms and
conditions hereinafter contained. Such employment may be renewed upon the
mutual agreement of, and in consideration of such compensation as shall be
established by, the Company and the Executive.
2. Duties. Executive shall perform such duties and functions as
the Board of Directors of the Company (the "Board") may from time to time
determine which are consistent with the position of Vice President,
Development, shall comply with the policies and reasonable directions of the
Board, and shall discharge his responsibilities in a competent and faithful
manner, consistent with sound business practices.
During the Term of this Agreement, the Executive shall devote his
entire business time, attention and energies to the performance of his duties
for the business of the Company except to the extent that the Board may
specifically approve any outside interests. The Executive shall not, directly
or indirectly, without the consent of a majority of the Board, as owner,
partner, joint venturer, shareholder, employee, corporate officer or director,
engage or become financially interested in, be employed by, or render
consulting services to any business in competition with any business engaged in
during the Term by the Company or its subsidiaries; provided however, that (i)
the Executive may own securities of any corporation which is engaged in any
such business and which is publicly owned and traded, but in an amount not to
exceed at any one time two percent (2.0%) of any class of stock or securities
of such company and (ii) the foregoing shall not be deemed to prohibit the
Executive from conducting and continuing to conduct any business with respect
to which the Executive is engaged as of the date hereof (which businesses are
listed in Exhibit I attached hereto), whether said business is conducted
individually or through an entity in which the Executive has a legal or
beneficial interest.
3. Compensation.
a. Salary. During the Term, Executive shall receive a base
salary for services rendered hereunder of $145,000 per year, subject to such
increases as may be approved by the Board, payable not less frequently than
monthly consistent with the regular practices of the Company.
b. Bonus. The Executive shall be entitled to receive, as
additional compensation, on September 1 of each year, an annual cash bonus as
set forth in the Company's Executive Bonus Plan and approved by the Board of
Directors of the Company in its sole discretion.
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c. Additional compensation. Executive shall receive, subject to
the approval of the Compensation Committee of the Board of Directors of the
Company at the next regularly scheduled Compensation Committee meeting, or as
promptly thereafter as practicable, options to purchase 75,000 shares of common
stock of the Company which will vest in three annual installments of 45,000,
15,000, and 15,000 shares on the third, fourth and fifth anniversaries,
respectively. The exercise price for such options will be the fair market value
of a share of common stock of the Company on the grant date.
d. It is contemplated that Executive, in the performance of his
duties will be required to relocate to the Silver Spring, Maryland,
metropolitan area. For any such required relocation, the Company agrees to
reimburse Executive for up to an aggregate of $60,000 of bona fide moving
expenses, travel expenses en route, two pre-moving house trips, temporary
quarters (up to 90 days) and closing costs associated with the sale of
Executive's current home and/or purchase of a new home. Amounts reimbursed by
the Company are subject to immediate repayment by the Executive as follows: if
Executive resigns or is terminated for justifiable cause (as hereinafter
defined) within six months of moving, $45,000 will be repaid to the Company;
between six and twelve months, $30,000 will be repaid to the Company; and
between twelve and eighteen months, $15,000 will be repaid to the Company. If
Executive is terminated without justifiable cause, Executive will not be
required to repay the Company any of the above amounts.
e. Reimbursement for expenses. The Company agrees to reimburse
Executive in a manner consistent with the regular practices of the Company, for
any and all reasonable business expenses incurred by Executive in connection
with the performance of his duties, upon presentation of proper vouchers by
Executive to support said expenses. This shall include, but not be limited to,
all items of travel, entertainment, business expenses, and other items of
expense while away on business from the principal office of the Company or
engaged in other business activity.
f. Vacation. Executive shall be entitled to four (4) weeks'
paid vacation in each calendar year in addition to the regularly scheduled
Company holidays. No more than four (4) weeks' vacation can be accumulated and
carried forward from year to year.
g. Other benefits. The Executive shall, in addition, be
entitled to participate in and receive any other fringe benefits customarily
provided by the Company to its employees of comparable standing with the
Executive (including, but not limited to, any profit-sharing, pension,
hospital, major medical insurance and group life insurance plans in accordance
with the terms of such plans), all as determined from time to time by the
Board. To the extent available at reasonable cost, the Company will use its
best efforts to promptly obtain and maintain appropriate directors and officers
liability insurance ("D&O"); if the Company cannot obtain appropriate D&O, it
will notify the Executive in writing within sixty (60) days of the signing of
this Agreement.
4. Termination. Executive's employment by the Company hereunder
shall terminate on the occurrence of:
a. Disability or Death. In the event of Executive's disability
or death during the Term of the Executive's employment, Executive, or his
estate, shall receive one (1) year's base salary. For the purpose hereof, the
term "disability" shall mean Executive's physical or mental inability to
perform his essential duties and responsibilities hereunder, with reasonable
accommodation, for a period of six (6) consecutive months during the term of
this Agreement, it being understood that notwithstanding any such inability to
perform his duties, Executive shall be entitled to receive his compensation as
provided herein until the termination of his employment hereunder. If the
Executive is entitled to long-term disability, the Company will supplement such
long-term disability payments such that payments, in the aggregate, to the
Executive shall not exceed one year's base salary.
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b. Justifiable cause. The obligations and liabilities of the
Company to the Executive shall cease as of the date of termination for
"justifiable cause," and Executive shall not be entitled to any further
compensation except for compensation accrued through the date of the
termination and except as otherwise provided herein. Executive will be entitled
to all stock, incentive stock options or equivalents vested as of the date of
the Board's termination action. For the purposes hereof, the term "justifiable
cause" shall mean and be limited to any termination by action of a majority of
the Board because of: Executive's conviction of a felony (which, through lapse
of time or otherwise, is not subject to appeal) or willful refusal without
proper cause to perform his obligations under this Agreement; except in the
normal course of business in the performance of his duties, any material
disclosure by Executive to any person, firm or corporation other than the
Company, its subsidiaries and its and their directors, officers and employees,
of any confidential information or trade secret of the Company or any of its
subsidiaries; Executive's pursuit of activities inimical, or contrary, to the
best interests of the Company; or the engaging by Executive in any business
other than the business of the Company and its subsidiaries which interferes
with the performance of his duties hereunder.
c. Without justifiable cause. In the event the Company
terminates this Agreement without justifiable cause (as defined in Section 4.b.
hereof), the parties hereto agree that damages to the Executive shall be
difficult to ascertain in any such event, but in order to limit the liability
of the Company the Executive shall be entitled to receive as liquidated damages
and not as penalty in any such event the following: (i) the amount of the base
salary (excluding bonus) of the Executive remaining due and payable from any
such date of termination for a period of twelve (12) months, which amount shall
be accelerated and immediately due upon any such termination; (ii) subject to
limitations imposed under the applicable option and incentive plans and grants
thereunder, any outstanding stock, incentive stock options or equivalents that
would have vested in the ordinary course of events until termination plus an
additional three months after the date of termination shall be accelerated and
vest immediately upon such termination; (iii) any bonus accrued to date pro
rata over the course of the year; (iv) all other benefits accruing to the
Executive on or prior to the expiration date of this Agreement as provided
hereunder.
d. Resignation. In the event the Executive resigns during the
term of this Agreement, he shall be entitled to: (i) the pro rata amount of the
annual bonus accrued to the date of resignation: (ii) all stock, incentive
stock options or equivalents vested as of the date of the resignation, subject
to the terms of the appropriate stock purchase agreement (s); (iii) all other
benefits accruing to the Executive on or prior to the expiration date of this
Agreement as provided hereunder.
5. Non-Competition. Executive agrees that for a period of twelve
(12) months after termination of his employment (the "Non-Competitive Period"),
Executive shall not, directly or indirectly, as owner, partner, joint venturer,
stockholder, employee, broker, agent, principal, trustee, corporate officer,
director, licensor, or in any capacity whatsoever engage in, become financially
interested in, be employed by, render any consultation or business advice with
respect to, or have any connection with, any business engaged in the research,
development, testing, design, manufacture, sale, lease, marketing, utilization
or exploitation of any products or services which are designed for the same
purpose as, are generically the same as, or are otherwise competitive with,
products or services of the Company, in existence or under development, in any
geographic area where, at the time of termination of his employment hereunder,
the business of the Company was being conducted in any manner whatsoever;
provided, however, that Executive may own any securities of any corporation
which is engaged in such business and is publicly owned and traded but in an
amount not to exceed at any one time two percent (2.0%) of any class of stock
or securities of such corporation. In addition, Executive shall not, during the
Non-Competitive Period, request or cause any customers of the Company to cancel
or terminate any business relationship with the Company. The Executive further
agrees that, during the Non-Competitive Period, the Executive and any
individual or entity controlled by or under common control with Executive,
shall not, without the
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Company's prior written consent, solicit, directly or
indirectly, for himself, themselves, or for any other person or entity, any
employee or consultant of the Company or any of its affiliates, or request or
cause any employee or consultant of the Company or any of its affiliates to
terminate his employment or services with the Company or any of its affiliates.
If any portion of the restrictions set forth in this Section 5
should, for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
Executive declares that the territorial, time limitations and scope
of activities restricted as set forth in this Section 5 are reasonable and
properly required for the adequate protection of the business of the Company.
In the event that any such territorial, time limitation and scope of activities
restricted is deemed to be unreasonable by a court of competent jurisdiction,
Executive agrees to the reduction of the territorial, time limitation or scope
to the area or period which such court shall have deemed reasonable.
The existence of any claim or cause of action by Executive against
the Company shall not constitute a defense to the enforcement by the Company of
the foregoing restrictive covenants, but such claim or cause of action shall be
litigated separately.
6. Confidentiality. Except in the normal course of business in the
performance of his duties, Executive shall not, during the Term of this
Agreement, or at any time following the end of the Term of this Agreement,
directly or indirectly, disclose or permit to be known, to any person, firm or
corporation, any confidential information acquired by him during the course of
, or as an incident to, his employment hereunder, relating to the Company, the
directors of the Company, or any client of the Company, including, but not
limited to, the business affairs of each of the foregoing. Such confidential
information shall include, but shall not be limited to, proprietary technology,
trade secrets, patented processes, research and development data, know-how,
formulae, pricing policies, the substance of agreements with customers and
others, and arrangements, customers lists and any other documents embodying
such confidential information.
All information and documents relating to the Company shall be the
exclusive property of the Company, and Executive shall use his best efforts to
prevent any publication or disclosure thereof. Upon termination of Executive's
employment with the Company, all documents, records, reports, writings and
other similar documents containing confidential information then in Executive's
possession or control shall be returned and left with the Company.
7. Representations and Agreements of Executive. Executive
represents and warrants that he is free to enter into this Agreement and to
perform the duties required hereunder, and that there are no employment
contracts or understandings, restrictive covenants or other restrictions,
whether written or oral, preventing the performance of his duties hereunder.
Executive agrees to submit to a medical examination (if job related and
consistent with business necessity) and to cooperate and supply such other
information and documents as may be required by any insurance company in
connection with the Company's obtaining life insurance on the life of the
Executive, and any other type of insurance or fringe benefit as the Company
shall determine from time to time to obtain.
8. Notices. Any notices required or permitted to be given
hereunder shall be sufficient if in writing, and if delivered by hand, or sent
by registered or certified mail, return receipt requested, to the Company of
the address set forth above and to Executive at the address set forth in the
personnel records of the Company, or such other address as either party may
from time to time designate in writing to the other, and shall be deemed given
as of the date of the delivery or mailing.
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9. Severability. If any of the covenants contained in this
Agreement, any part of any such covenant, are hereafter construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, or the remainder of the Agreement, which shall be given full effect,
without regard to the invalid portions.
10. Non-Waiver. The waiver or breach of any term or condition of
this Agreement shall not be deemed to constitute a waiver or breach of any other
term or condition.
11. Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to its subject matter, and no
modification or waiver of any provision hereof shall be valid unless it be in
writing and signed by all of the parties hereto.
12. Assignment. This Agreement and the rights and obligations of
the parties hereto shall bind and inure to the benefit of any successor or
successors by reorganization, merger or consolidation and any assignee of all
or substantially all of its business and properties, but, except as to any such
successor or assignee of the Company, neither this Agreement nor any rights or
benefits hereunder may be assigned or transferred by either party without the
prior written consent of the other party.
13. Binding Effect. This Agreement and all of the provisions hereof
shall be binding upon the legal representatives, heirs, distributees,
successors and assigns of the parties hereto.
14. Choice of Law . This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed therein.
15. Headings. The Section headings appearing in this Agreement are
for purposes of easy reference and shall not be considered a part of this
Agreement or in any way modify, amend, or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
By: /s/ XXXXXXX X. XXXXX, XX.
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Xxxxxxx X. Xxxxx, Xx., Ph.D.
EXECUTIVE
DIGENE CORPORATION
By: /s/ XXXX XXXXX
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Xxxx Xxxxx
President & CEO
