EXHIBIT 10.34
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 XXXXXXX XXXXXXX, an individual residing at 0000 Xxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxx 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 President and Chief
Executive Operating 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 Board of
Directors of the Company. The Executive shall report directly to the Board of
Directors of the Corporation. 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 Three Hundred Thirty Thousand
($330,000) 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 Company'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
(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.
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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) a majority of the members of the
Board of Directors of the Corporation, exclusive of the Executive, vote to
determine 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 Company 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 Company 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
of the Executive's employment for an additional one (1) year period and the
Executive chooses not to continue in
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the employ of the Company, 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 chief operating 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
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
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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 exceeding five percent
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(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
instrument in writing executed by the party to be charged. The invalidity or
partial invalidity of one or more provisions of
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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. Executive represents, warrants and agrees
that effective as of the date first set forth above, Executive relinquishes any
right or claim he has to employment by Xechem International, Inc. ("Xechem"),
that all obligations of Xechem to him have been paid in full, and that Xechem
may rely upon the foregoing representative, warranty and agreement as a third
party beneficiary in causing the Corporation to enter into this Agreement.
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
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XXXXXXX XXXXXXX
By:
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Its:
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