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EXHIBIT 10(iii)
(iii) Employment Agreement between the Company and
Xxxxxx X. Xxxxxx dated October 6, 1995.
EMPLOYMENT AGREEMENT
AGREEMENT dated as of October 6, 1995 (the "Effective Date") by and
between VIRAGEN, INC., a Delaware corporation ("Employer or the "Company"), and
XXXXXX X. XXXXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ the Employee upon the terms and
conditions hereinafter set forth and Employee desires to accept employment upon
such terms and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings with respect to
Employee's employment by Employer.
NOW, THEREFORE, Employer hereby employs Employee and Employee hereby
accepts employment under the following terms and conditions:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon all the terms and conditions hereinafter set
forth.
2. TERM
Subject to the provisions for earlier termination set forth in
Section 9 hereof, this Agreement shall commence on the Effective Date and shall
end as of the close of business on September 30, 1997 (the "Employment Term").
The term "first year", as used herein, means the period commencing on the
Effective Date and ending as of the close of business on September 30, 1996,
the term "second year", as used herein, means the period commencing on October
1, 1996 and ending as of the close of business on September 30, 1997, and the
term "year", as used herein, means, as the context requires, the first year or
the second year. Notwithstanding any of the foregoing to the contrary, if this
Employment Agreement is terminated prior to the expiration of the Employment
Term, a year shall mean, with
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respect to the year during which termination occurs, the period commencing on
the first day of such year and ending as of the close of business of the day of
termination of Employee's employment, and "Employment Term" shall mean the
period commencing on the Effective Date and ending as of the close of business
of the day of termination of Employee's employment.
3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that he is free
to accept employment with Employer as contemplated herein and has no other
written or oral obligations or commitments of any kind or nature which would in
any way interfere with his acceptance of employment pursuant to the terms
hereof or the full performance of his obligations hereunder or the exercise of
his best efforts in his employment hereunder.
4. DUTIES AND EXTENT OF SERVICES
Employee shall be employed as Employer's Executive Vice
President and Chief Financial Officer and, as such, shall, subject to the
direction of Employer's President, supervise the conduct the Employer's
operations and affairs as assigned by the President, and perform such other
duties and responsibilities as may be assigned to Employee from time to time
consistent with such title by Employer's President. Employee agrees to devote
sufficient time, skill, attention and energy diligently and competently to
perform the duties and responsibilities reasonably assigned to him hereunder or
pursuant hereto to the best of his abilities. Employee shall use his best
efforts to be loyal and faithful at all times and constantly endeavor to
improve his ability and his knowledge of the business of Employer in an effort
to increase the value of his services for the mutual benefit of Employer and
Employee. Employer acknowledges that Employee is also employed by Medicore,
Inc. and its subsidiaries. Employee represents and warrants that his duties
for Medicore, Inc. and its subsidiaries will not interfere with the
satisfactory performance of his obligations under this Agreement. Employee
agrees not to enter into any other employment agreement, other than with
subsidiaries and/or affiliates of the Company as may be approved by the
Company's Board of Directors, during the term hereof.
5. COMPENSATION
Employee shall receive an annual salary during the Employment
Term as follows: $80,000 for the period October 1, 1995 to September 30, 1996,
and $85,000 for the period October 1, 1996 to September 30, 1997. Employee's
salary shall be payable in accordance with the Company's normal payroll
process, currently bi-weekly. Additional consideration payable to Employee
hereunder consists of (a) the grant to Employee of options to
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acquire 400,000 shares of common stock of Employer (as further described
herein), and (b) fringe benefits, if any, that shall be made available to
Employee further described herein.
6. FRINGE BENEFITS AND EXPENSES
A. Employee Plans. Employee shall be eligible (subject
to the terms and conditions of particular plans and programs) to participate in
such medical, hospitalization, group health, accident, disability and life
insurance programs and plans, such pension, profit sharing, stock option,
incentive compensation and stock purchase plans and such other employee benefit
programs to the same extent such plans and programs are made generally
available from time to time by Employer to all of its other similarly-situated
employees; provided, however, Employer shall be under no obligation to make any
of such plans or programs available to its employees or continue any which
currently or in the future exist, except as otherwise required by law.
B. Automobile. For the term of this Agreement, Employer
shall provide to Employee an automobile, acceptable to the Employer's
President, and shall pay all gas, maintenance, insurance and other expenses
related thereto, for performance of Employee's duties on behalf of Employer as
specified herein.
C. Other Expenses. Employer shall promptly pay directly
or reimburse Employee for his reasonable out-of-pocket costs and expenses
incurred in connection with the performance of his duties and responsibilities
hereunder subject to the submission by Employee of appropriate invoices,
receipts and other supporting documentation, consistent with Employer's
customary reimbursement policies and procedures.
7. VACATIONS
Employee shall be entitled to normal vacation (of not less
than two weeks) taken by other members of senior management during each
twelve-month period of the Employment Term. Employee shall not be entitled to
be compensated for any unused vacation upon termination of this Agreement. The
periods during which Employee will be absent from work shall be determined by
Employee taking into account the needs of Employer's business.
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8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as it
reasonably determines is adequate for Employee's performance of his duties and
responsibilities under this Agreement.
9. TERMINATION OF EMPLOYMENT
A. Termination Events. Notwithstanding any provisions
of this Agreement to the contrary, Employee's employment may be terminated by
Employer with Cause (as hereinafter defined) effective upon the delivery of
written notice to Employee. In addition, Employee's employment shall terminate
(i) upon Employee's death or (ii) upon Employee becoming Disabled (as
hereinafter defined).
B. Definition of Disabled. For purposes of this
Agreement, Employee shall be deemed to be "Disabled" when, by reason of
physical or mental illness or of injury, he is unable to perform substantially
all of the duties and responsibilities required of him in connection with his
employment hereunder. No disability shall be deemed to exist until after
Employee shall be unable to perform his duties hereunder for ninety (90)
consecutive days (the "Disability Period"). If Employee shall have been under
a disability but shall have returned to work prior to the end of the Disability
Period, any new disability commencing within thirty (30) days of the
termination of the prior disability shall be a continuation of the prior
disability, and the period of all such disabilities shall be added together to
determine whether, or how much of, the Disability Period has elapsed.
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C. Definition of Cause. For purposes of this Agreement,
"Cause" shall be: include, but not be limited to: (a) conviction for fraud or
criminal conduct (other than conviction of, or a plea of guilty to, a traffic
violation), from which no appeal can be taken; (b) habitual drunkenness or drug
addiction; (c) embezzlement; (d) material sanctions against Employee in his
capacity as an employee of Employer by regulatory agencies governing Employer
or against Employer because of wrongful acts or conduct of Employee which have
a material adverse affect upon the Employer and its business; (e) material
breach or default by Employee of any of the material terms or conditions of
this Agreement, and the continuation of such material breach or default by
Employee for a period of seven (7) days following the date of receipt of
written notice from Employer specifying the breach or default of Employee; or
(f) the resignation or quitting of Employee prior to the end of the Employment
Term (in this last event, Employee's employment shall be deemed terminated with
Cause on the date that he resigns or quits).
If Employee's employment is terminated by Employer without
Cause as defined in this Section, Employee shall be given sixty (60) days
written notice of termination by Employer and be entitled to receive the
greater of (i) two years compensation and fringe benefits/expenses as provided
for in Sections 5 & 6 hereof or (ii) compensation and fringe benefits/expenses
as provided for in sections 5 & 6 payable through the remainder of the
Employment Term as provided for in Section 2 hereof. Additionally, in the
event of termination without Cause, or non-renewal of this Agreement at the end
of the Employment Term, any outstanding but unexercised stock options or
warrants granted to Employee shall continue to be fully exercisable through
their stated respective Exercise Period(s).
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Confidential Information. Employee acknowledges that
Employee has been informed that it is the policy of Employer to maintain as
secret and confidential all information relating to (i) the financial
condition, businesses and interests of Employer and its affiliates, (ii) the
systems, know-how, products, services, costs, inventions, patents, patent
applications, formulae, research and development procedures, notes and results,
computer software programs, marketing and sales techniques and/or programs,
methods, methodologies, manuals, lists and other trade secrets heretofore or
hereafter acquired, sold, developed and/or used by Employer and its affiliates
and (iii) the nature and terms of Employer's and its affiliates' relationships
with their respective customers, clients, suppliers, lenders, vendors,
consultants, independent contractors and employees (all such information being
hereinafter collectively referred to
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as "Confidential Information"), and Employee further acknowledges that such
Confidential Information is of great value to Employer and its affiliates and,
in and by reason and as a result of Employee's employment by Employer, Employee
will be making use of, acquiring and/or adding to such Confidential
Information. Therefore, Employee understands that it is reasonably necessary
to protect Employer's and its affiliates' trade secrets, good will and business
interests that Employee agree and, accordingly, Employee does hereby agree,
that Employee will not directly or indirectly (except where authorized by the
Board of Directors of Employer for the benefit of Employer and/or its
affiliate(s) and/or as required in the course of his employment) at any time
hereafter divulge or disclose for any purpose whatsoever to any persons, firms,
corporations or other entities other than Employer or its affiliates
(hereinafter referred to collectively as "Third Parties"), or use or cause or
authorize any Third Parties to use, any such Confidential Information, except
as otherwise required by law.
B. Employer's Materials. In accordance with the
foregoing, Employee furthermore agrees that (i) Employee will at no time retain
or remove from the premises of Employer or its affiliates any research and
development materials, drawings, notebooks, notes, reports, formulae, software
programs or discs or other containers of software, manuals, data, books,
records, materials or documents of any kind or description for any purpose
unconnected with the strict performance of Employee's duties with Employer and
(ii) upon the cessation or termination of Employee's employment with Employer
for any reason, Employee shall forthwith deliver or cause to be delivered up to
Employer any and all research and development materials, drawings, notebooks,
notes, reports, formulae, software programs or discs or other containers of
software, manuals, data, books, records, materials and other documents and
materials in Employee's possession or under Employee's control relating to any
Confidential Information or any property or information which is otherwise the
property of Employer or its affiliates.
11. COVENANT-NOT-TO-COMPETE
In view of the Confidential Information to be obtained by or
disclosed to Employee, because of the know-how acquired and to be acquired by
Employee, and as a material inducement to Employer to enter into this
Agreement, issue the Options (as defined below) and continue to employ
Employee, Employee covenants and agrees that, so long as Employee is employed
by Employer and for a period of two (2) years after Employee ceases for any
reason to be employed by Employer, Employee shall not, directly or indirectly,
(i) divert business from, (ii) solicit or transact any business competitive
with Employer or its affiliates with, or (iii) sell any products
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or services sold or offered by Employer or its affiliates to, any customer or
former customer of Employer or its affiliates. In addition, Employee covenants
and agrees that, so long as Employee is employed by Employer and for a period
of two (2) years after Employee ceases for any reason to be employed by
Employer, Employee hereby agrees to refrain from, anywhere in the world (the
"Geographical Area"), directly or indirectly owning, managing, operating,
controlling or financing, or participating in the ownership, management,
control or financing of, or being connected with or having an interest in, or
otherwise taking any part as a stockholder, director, officer, employee, agent,
consultant, partner or otherwise in, any business competitive with that engaged
in or being developed by Employer or its affiliates during Employee's term of
employment. Without limitation of the foregoing, Employer's business is
acknowledged to include the development, manufacture and sale of human
leukocyte interferon therapy and products and other natural or recombinant
technologies aimed at enhancing the human immune system. Employee acknowledges
that Employer's business is anticipated to be international in scope, that a
similar business could effectively compete with Employer's and its affiliates
businesses from any location in the world, and that, therefore, the restricted
Geographical Area is reasonable in scope to protect Employer's and its
affiliates' trade secrets and legitimate business interests.
12. EMPLOYER'S REMEDIES FOR BREACH OF SECTIONS 10 & 11
Employee covenants and agrees that if Employee shall violate
or breach any of Employee's covenants or agreements provided for in Sections 10
or 11 hereof, Employer and/or its affiliates shall be entitled to an accounting
and repayment of all profits, compensation, commissions, remunerations or
benefits which Employee directly or indirectly has realized or realizes as a
result of, growing out of or in connection with any such violation or breach.
In addition, in the event of a breach or violation or threatened or imminent
breach or violation of any provisions of Sections 10 or 11 hereof, Employer
and/or its affiliates shall be entitled to a temporary and permanent injunction
or any other appropriate decree of specific performance or equitable relief,
without posting of bond, from a court of competent jurisdiction in order to
prevent, prohibit or restrain any such breach or violation or threatened or
imminent breach or violation by Employee, by Employee's partners, agents,
representatives, servants, employers or employees and/or by any third parties.
Employer shall be entitled to such injunctive or other equitable relief in
addition to any damages which are suffered, and the prevailing party shall be
entitled to reasonable attorneys' and paralegals' fees and costs and other
costs incurred in connection with any such litigation, both before and at trial
and at all tribunal levels. Resort by Employer and/or its affiliates to such
injunctive or other equitable relief shall not be deemed to waive or to
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limit in any respect any other rights or remedies which Employer or its
affiliates may have with respect to such breach or violation.
13. REASONABLENESS OF RESTRICTIONS
A. Reasonableness. Employee acknowledges that any
breach or violation of Sections 10 or 11 hereof will cause irreparable injury
and damage and incalculable harm to Employer and its affiliates and that it
would be very difficult or impossible to measure the damages resulting from any
such breach or violation. Employee further acknowledges that Employee has
carefully read and considered the provisions of Sections 10, 11 and 12 hereof
and, having done so, agrees that the restrictions and remedies set forth in
such Sections (including, but not limited to, the time period, geographical and
types of restrictions imposed) are fair and reasonable and are reasonably
required for the protection of the business, trade secrets, interests and
goodwill of Employer and its affiliates.
B. Severability. Employee understands and intends that
each provision and restriction agreed to by Employee in Sections 10, 11 and 12
hereof shall be construed as separate and divisible from every other provision
and restriction and that, in the event that any one of the provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid
or unenforceable, the remaining provisions thereof and restrictions therein
shall nevertheless continue to be valid and enforceable as though the invalid
or unenforceable provisions or restrictions had not been included therein, and
any one or more of such valid provisions and restrictions may be enforced in
whole or in part as the circumstances warrant. In the event that any such
provision relating to time period and/or geographical and/or type of
restriction shall be declared by a court of competent jurisdiction to exceed
the maximum or permissible time period, geographical area or type of
restriction such court deems reasonable and enforceable, said time period
and/or geographical and/or type of restriction shall be deemed to become and
shall thereafter be the maximum time period and/or geographical restriction
and/or type of restriction which such court deems reasonable and enforceable.
C. Survivability. The restrictions, acknowledgments,
covenants and agreements of Employee set forth in Sections 10, 11, 12 and 13 of
this Agreement shall survive any termination of this Agreement or of Employee's
employment (for any reason, including expiration of the Employment Term).
D. Comparable Restrictions. Employer agrees that it
will use its best efforts to have other senior executives execute and observe
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agreements containing similar provisions as are contained in Sections 10, 11
and 12 hereof.
14. STOCK OPTIONS
Effective the Effective Date, Employer hereby grants to
Employee, pursuant to Employer's 1995 Stock Option Plan (the "Plan"), options
to acquire up to 400,000 shares of the Company's Common Stock (the "Options"),
for a period of five (5) years from the date hereof, in accordance with the
Stock Option Agreement attached hereto (Exhibit A) and made a part hereof.
Such Options shall vest in full upon execution of this Employment Agreement.
Employer represents and warrants that (i) all shares
underlying the Options will be issued from shares authorized by and subject to
the provisions of the Plan (ii) the Plan and the shares underlying the Options
have been registered under the applicable regulations of the Securities and
Exchange Commission on Form S-8 (iii) such registration is effective as of the
Effective Date, and (iv) such registration covering the shares underlying the
Options will be maintained as effective for the longer of (a) the Employment
Term or (b) the Exercise Period of the Options as defined in Exhibit A.
15. EMPLOYEE'S DISCLOSURES & REPRESENTATIONS & WARRANTIES.
Employee hereby acknowledges, represents and warrants to,
and/or agrees with, Employer as follows:
(a) Subject to Employee's right to designate
family members to own the stock acquired through exercise of the Options, that
Employee is acquiring the Options for his own account, for investment purposes
only, and not with a view to the public sale or distribution thereof, except as
applicable under the Form S-8 Registration filed by the Company covering the
Shares underlying the Options.
(b) That Employee has full right, power and
authority to perform all obligations under this Agreement.
(c) That Employee understands that the Options
are nonassignable, and that the Shares acquired through exercise of the Options
may be sold or transferred only pursuant to the Form S-8 Registration filed by
the Company covering the Shares underlying the Options.
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Employee hereby agrees to indemnify and hold harmless Employer
and its shareholders, directors, officers, employees and agents from and
against any and all loss, damage, liability, cost or expense (including
reasonable attorneys' and paralegals' fees and costs before and at trial and at
all appellate levels) due to or arising out of any material inaccuracy in, or
material breach of, any material representation, warranty or covenant of
Employee contained herein.
16. INDEPENDENT COUNSEL
Employer and Employee agree that each of them have been, or
were advised and fully understand that they are entitled to be represented by
independent legal counsel with respect to all matters contemplated herein from
the commencement of negotiations at all times through the execution hereof.
17. LAW APPLICABLE
This Agreement shall be governed by and construed pursuant to
the laws of the State of Florida, without giving effect to conflicts of laws
principles.
18. NOTICES
Any notices required or permitted to be given pursuant to this
Agreement shall be sufficient, if in writing, and if personally delivered or
sent by certified or registered mail, return receipt requested, to his
residence, in the case of Employee, or to its then principal office, in the
case of Employer.
19. SUCCESSION
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives, heirs,
assignees and/or successors in interest of any kind whatsoever; provided,
however, that Employee acknowledges and agrees that he cannot assign or
delegate any of his rights, duties, responsibilities or obligations hereunder
to any other person or entity.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire final agreement between
the parties with respect to, and supersedes any and all prior agreements, both
oral and written, between the parties hereto, except as related to rights of
the Employee and obligations related thereto of Employer regarding
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previously granted stock options and previously purchased stock, as may have
been modified from time to time. The subject matter hereof may not be amended,
modified or terminated except by a writing signed by the parties hereto.
21. SEVERABILITY
If any provision of this Agreement shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction,
such invalidity or unenforceability shall attach only to such provision and
shall not in any way affect or render invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision were not contained herein.
22. NO WAIVER
A waiver of any breach or violation of any term, provision or
covenant contained herein shall not be deemed a continuing waiver or a waiver
of any future or past breach or violation. No oral waiver shall be binding.
23. ATTORNEYS' FEES
In the event that either of the parties to this Agreement
institutes suit against the other party to this Agreement to enforce any of his
or its rights hereunder, the prevailing party in such action shall be entitled
to recover from the other party all reasonable costs thereof, including
reasonable attorneys' and paralegals' fees and costs incurred before and at
trial and at all tribunal levels.
24. COUNTERPARTS
This Agreement may be executed in counterparts, each of which
shall be an original, but both of which together shall constitute one and the
same instrument.
25. INDEMNITY OF EMPLOYEE
Employer shall indemnify and hold harmless Employee from and
against any and all claims, judgments, fines, penalties, liabilities, losses,
costs and expenses (including reasonable attorneys' fees and costs) asserted
against or incurred by Employee as a result of acts or omissions of Employee
taken or made in the course of performing his duties for Employer or by reason
of Employee acting or having acted as a director or officer of Employer, to the
maximum extent permitted by law, including Section
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607.0850, Florida Statutes (including the advancement of expense provisions
thereof); provided, however, that such indemnity shall not apply to acts or
omissions of Employee which constitute misconduct, gross negligence or which
were intended by Employee to personally benefit Employee, directly or
indirectly, at the expense of Employer, unless the matter which benefits
Employee was first fully disclosed to the Board of Directors of Employer and
approved by said Board.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the day and year first above written.
VIRAGEN, INC.
By:
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XXXXXX XXXXX
President
EMPLOYEE
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XXXXXX X. XXXXXX
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