EXHIBIT 10(b)
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EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND
XX. XXXXXX X. XXXXXX, DATED AS OF JANUARY 1, 1996
EMPLOYMENT AGREEMENT
Employment Agreement effective as of January 1, 1996 between VIROLOGIX
CORPORATION, a Delaware corporation (with its successors and assigns, referred
to as the "Corporation"), and Xx. Xxxxxx X. Xxxxxx (referred to as "Schein").
Preliminary Statement
Schein is now employed as the President of the Corporation.
The Corporation desires to continue to employ Schein, and Schein wishes to
continue to be employed by the Corporation, upon the terms and subject to the
conditions set forth in this Agreement. The Corporation and Schein also wish to
enter into the other agreements set forth in this Agreement, all of which are
related to Schein's employment under this Agreement.
Agreement
Schein and the Corporation therefore agree as follows:
1. Employment for Term. The Corporation hereby employs Schein and Schein
hereby accepts employment with the Corporation for the period (the "Term")
beginning on the date of this Agreement and ending on December 31, 1997, or upon
the earlier termination of the Term pursuant to Section 6. The Term will
automatically be extended for an additional year upon the completion of
additional private financing(s) of at least an aggregate of $500,000 following
the completion of the Corporation's initial private financing. The termination
of the Term for any reason shall end Schein's employment under this Agreement,
but shall not terminate Schein's or the Corporation's other agreements in this
Agreement.
2. Position and Duties. During the Term, Schein shall serve as the
President of the Corporation. During the Term, Schein shall also hold such
additional positions and titles as the Board of Directors of the Corporation
(the "Board") may determine from time to time. During the Term, Schein shall
devote as much time as necessary to satisfactorily perform his duties as an
employee of the Corporation.
3. Compensation.
(a) Base Salary and Stock. The Corporation shall pay Schein a base
salary, beginning on the first day of the Term and ending on the last day of the
Term, of not less than $150,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees. Additionally, the
Corporation shall pay Schein $6,000 as a one time payment in consideration for
certain work on behalf of the Corporation. The Corporation shall grant to Schein
100,000 options to purchase Common Stock of the Corporation at an exercise price
of $0.25. The Corporation shall thereafter grant 100,000 stock options per annum
to Schein exercisable at the then current market price. The Corporation shall
pay Schein a monthly car allowance of $500.
(b) Other and Additional Compensation. Section 3(a) establishes the
minimum compensation during the Term and shall not preclude the Board from
awarding Schein a higher salary or any bonuses or stock options in the
discretion of the Board during the Term at any time.
4. Employee Benefits. During the Term, Schein shall be entitled to the
employee benefits, including vacation, health and other insurance benefits made
available by the Corporation to any other officers or key employees of the
Corporation.
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5. Expenses. The Corporation shall reimburse Schein for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Schein's death, and
upon a change of ownership of at least fifty percent (50%) of the outstanding
Common Stock of the Corporation (on a fully converted basis) by sale, merger,
consolidation or other means (a "Change in Ownership"). The Term may also end
for Cause or Disability, as defined in Section 7.
(b) Notice of Termination. Promptly after it ends the Term, the
Corporation shall give Schein notice of the termination, including a statement
of whether the termination was for Cause or Disability (as defined in Section
7(a) and 7(b) below). The Corporation's failure to give notice under this
Section 6(b) shall not, however, affect the validity of the Corporation's
termination of the Term.
(c) Termination upon Change in Ownership. Upon a Change in Ownership
of the Corporation, the Term shall end and all compensation due Schein under
this Agreement will become immediately due and payable.
7. Severance Benefits.
(a) "Cause" Defined. "Cause" means (i) willful malfeasance or
willful misconduct by Schein in connection with his employment; (ii) Schein's
gross negligence in performing any of his duties under this Agreement; (iii)
Schein's conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendere with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Schein's material breach of any written
policy applicable to all employees adopted by the Corporation; or (v) material
breach by Schein of any of his agreements in this Agreement.
(b) Disability Defined. "Disability" shall mean Schein's incapacity
due to physical or mental illness that results in his being unable to
substantially perform his duties hereunder for six consecutive months (or for
six months out of any nine month period). During a period of Disability, Schein
shall continue to receive his base salary hereunder, provided that if the
Corporation provides Schein with disability insurance coverage, payments of
Schein's base salary shall be reduced by the amount of any disability insurance
payments received by Schein due to such coverage. The Corporation shall give
Schein written notice of termination which shall take effect thirty (30) days
after the date it is sent to Schein unless Schein shall have returned to the
performance of his duties hereunder during such thirty (30) day period
(whereupon such notice shall become void).
8. Confidentiality.
(a) "Corporation Information" Defined. "Corporation Information"
means all information, knowledge or data of or pertaining to (i) the
Corporation, its employees and all work undertaken on behalf of the Corporation,
and (ii) any other person, firm, corporation or business organization with which
the Corporation may do business during the Term, that is not in the public
domain (and whether relating to methods, processes, techniques, discoveries,
pricing, marketing or any other matters).
(b) Confidentiality. Schein hereby recognizes that the value of all
trade secrets and other proprietary data and all other
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information of the Corporation not in the public domain disclosed by the
Corporation in the course of his employment with the Corporation is attributable
substantially to the fact that such confidential information is maintained by
the Corporation in strict confidentiality and secrecy and would be unavailable
to others without the expenditure of substantial time, effort or money. Schein
therefore, except as provided in the next two sentences, covenants and agrees
that all Corporation Information shall be kept secret and confidential at all
times during and after the end of the Term and shall not be used or divulged by
him outside the scope of his employment as contemplated by this Agreement,
except as the Corporation may otherwise expressly authorize by action of the
Board. In the event that Schein is requested in a judicial, administrative or
governmental proceeding to disclose any of the Corporation Information, Schein
will promptly so notify the Corporation so that the Corporation may seek a
protective order or other appropriate remedy and/or waive compliance with this
Agreement. If disclosure of any of the Corporation Information is required,
Schein may furnish the material so required to be furnished, but Schein will
furnish only that portion of the Corporation Information that legally is
required.
9. Successors and Assigns.
(a) Schein. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Schein may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. All rights and benefits
of Schein shall be for the sole personal benefit of Schein, and no other person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment, transfer, claim or judgment or bankruptcy proceedings against
Schein. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Schein and his personal representatives, distributees and
legatees.
(b) The Corporation. Subject to Section 6(c), this Agreement shall
be binding upon the Corporation and inure to the benefit of the Corporation and
of its successors and assigns.
10. Success Fee. Upon the successful completion of a transaction resulting
in a Change in Ownership of the Corporation, the Corporation shall pay to
Schein, in consideration of his work on behalf of the Corporation, a one time
cash payment equal to one and one-half percent (1.5%) of the total consideration
received by the Corporation.
11. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Schein's employment with the Corporation and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between Schein and the Corporation relating to the
subject matter of this Agreement.
12. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Schein and by a duly authorized officer of the Corporation. No waiver
by any party to this Agreement of any breach by another party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.
13. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
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If to Schein: Xx. Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
If to the Corporation: VIROLOGIX CORPORATION
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to: Xxxxxxxxxxx Xxxxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
14. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Schein that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
15. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
16. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
17. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Schein under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
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19. Applicable Law: Jurisdiction. The laws of the State of New York shall
govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. Any suit,
action or proceeding against Schein with respect to this Agreement, or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of New York, as the Corporation may elect in
its sole discretion, and Schein hereby submits to the nonexclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
/s/ Xxxxxx X. Xxxxxx
----------------------------
Xx. Xxxxxx X. Xxxxxx
VIROLOGIX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx, Vice President
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