Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 2002 (the
"Effective Date"), by and between Univec, INC., a Delaware corporation with
offices at 00 Xxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 (the "Company"), and Dr. Xxxxx
Xxxxxx, an individual with an address at 38 Stags Leap Court, Pikesville, Md.
21202 (the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to appoint the Executive as Chief
Executive Officer and President of the Company and the Executive desires to be
employed by the Company pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter contained, the parties hereto agree as follows:
1. Employment.
The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept employment with the Company, for the Term (as
defined in Section 2 below), in the position and with the duties and
responsibilities set forth in Section 3 below, and upon the other terms and
conditions hereinafter stated.
2. Term.
Except in the event of earlier termination as herein provided,
the term of the Executive's employment with the Company hereunder shall commence
on the date hereof and shall end on the later of (a) January 1, 2005, or (b) 3
years following the date of the last extension of this Agreement. On each
January 1 following the date of this Agreement, the unexpired term of this
Agreement shall be extended automatically by one (1) year(s), it being the
intention of the parties that the unexpired term of this Agreement shall at all
times be not less than two years and that following each such extension, the
unexpired term immediately thereafter shall be three years. For purposes of this
Agreement, the "Term" of this Agreement shall mean the full term of the
Agreement, including extensions, and not just the initial period hereunder.
3. Position, Duties and Responsibilities.
3.1 Appointment as Chief Executive Officer and
President.
(a) During the Term, the Executive shall serve,
and the Company shall employ the Executive, as the Chief Executive Officer and
President of the Company, subject to the general supervision of the Board of
Directors of the Company. The Executive's duties shall include, but not be
limited to, the general executive supervision over the property, business and
affairs of the Company and the hiring and supervision of executives of, and
consultants and advisors to, the Company. The Executive shall have such other
duties and responsibilities with the Company consistent with the Executive's
positions as Chief Executive Officer and President. The Executive shall report
directly to the Board of Directors (the "Board"). The Executive shall serve as a
member of the Board so long as the Executive serves as Chief Executive Officer
of the Company. The Board agrees to use its best efforts to cause the Executive
and the Xxxxxx Appointees (as such term is defined in the Voting Agreement,
dated as of December 31, 2001, among the Company, the U Stockholders, PPSI and
the PPSI Stockholders (as such terms are defined therein)) to be elected to the
Board of Directors by the Company's stockholders at the Company's annual
meeting, or otherwise, and at all other meetings held for such purpose. The
Board agrees to use its best efforts to cause the composition of each of the
Board's subcommittees to include at least the percentage of Xxxxxx Appointees as
that percentage of Xxxxxx Appointees included on the Board.
The Company agrees to use its best efforts to
effectuate the foregoing intention, subject to any required vote, consent or
other approval of the stockholders of the Company.
(b) During the Term, the Executive shall devote
the appropriate amount of his working time, attention and energies to the
business and affairs of the Company, required to fulfill his duties described
herein. Nothing in the Agreement shall preclude the Executive from managing his
other business affairs, engaging in charitable and community affairs, serving on
the boards of directors of a reasonable number of other corporations, trade
associations or charitable organizations or giving attention to his personal
investments; provided, such activities do not materially conflict with the
regular performance of his duties and responsibilities under the Agreement.
3.2 Representations and Warranties by the
Executive and the Company.
(a) The Executive hereby represents and warrants
to the Company as follows: In order to induce the Company to enter into the
Agreement on the terms and conditions set forth herein, the Executive hereby
represents and warrants to the Company that his execution of the Agreement and
the performance of his duties and responsibilities hereunder will not violate or
result in a breach of, or in any manner be prohibited or restricted by, the
terms of any agreement, arrangement, understanding (written or otherwise), order
or decree to which he is a party or by which he is bound.
(b) The Company hereby represents and warrants
to the Executive as follows: (i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with all requisite power and authority to own its properties and conduct its
business in the manner presently contemplated; (ii) The Company has the
requisite power and authority to enter into this Agreement; (iii) The execution,
delivery and performance by the Company of this Agreement do not violate or
conflict with or result in a breach or violation of or constitute a default
under (whether immediately, upon the giving of notice or lapse of time or both)
the Company's charter documents, or any material agreement or instrument to
which the Company is a party or by which the Company or any of its properties
are bound or affected.
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4. Compensation and Stock Options.
4.1 Compensation.
Commencing as of January 1, 2002, whether or not the
Term has then commenced, the Executive shall be paid (i) a base salary (the
"Base Salary") at an annual rate determined by the mutual agreement of the
Executive and the Compensation Committee of the Board of Directors of the
Company (the "Compensation Committee"), payable on a monthly basis plus (ii) a
bonus (the "Bonus") at a rate determined by the mutual agreement of the
Executive and the Compensation Committee. On each January 1st during the Term,
beginning January 1, 2003, the Base Salary shall be increased by an amount to be
agreed upon by the mutual agreement of the Executive and the Compensation
Committee. Upon the closing of a merger with another company, or a similar
transaction, the Executive's Base Salary shall be renegotiated. In no event
shall such renegotiated Base Salary be less than the highest annual Base Salary
during the Term. The foregoing compensation may, in the good faith agreement of
the Executive and the Compensation Committee, be accrued on a mutually-agreed
basis.
4.2 Stock Options.
The Executive's compensation shall include options
(the "Options") to purchase equity of the Company in the form of shares of
common stock, $.001 par value per share (the "Company Common Stock"), equivalent
to an amount, when exercised, of 2,000,000 shares of Company Common Stock (as
such number of shares may be adjusted pursuant to clause (v) below). The
material terms of the Options will include the following: (i) The date of grant
of the Options will be the Effective Date; (ii) On the one (1) year anniversary
of the Effective Date (the "Initial Vesting Date"), provided that the Executive
has not been terminated for Due Cause (as defined below) by the Company, the
Executive will acquire a vested interest with respect to twenty-five percent
(25%) of the Options, or Options to purchase 500,000 shares of Company Common
Stock (as such number of shares may be adjusted pursuant to clause (v) below);
(iii) Every subsequent monthly period following the Initial Vesting Date,
provided that the Executive has not been terminated for Due Cause by the
Company, the Executive will acquire a vested interest with respect to Options to
purchase an additional 41,667 shares of Company Common Stock (as such number of
shares may be adjusted pursuant to clause (v) below), until the 48th month
following the Effective Date or until such time as the Executive has received
Options to purchase 2,000,000 shares of Company Common Stock (as such number of
shares may be adjusted pursuant to clause (v) below); (iv) If the Executive is
no longer employed by the Company due to termination of his employment for Due
Cause, the Executive is only entitled to those options in which the Executive
has acquired a vested interest as of the date of termination for Due Cause;
provided, that if the Executive's employment with the Company is terminated for
any other reason than Due Cause, the Executive shall acquire a vested interest
in all remaining Options to be vested so that the Executive has received Options
to purchase 2,000,000 shares of Company Common Stock (as such number of shares
may be adjusted pursuant to clause (v) below); (v) The Executive shall receive
customary anti-dilution protection for any mechanical adjustments to the equity
securities of the Company including stock splits, stock dividends or similar
adjustments. In addition, if the Company issues any equity securities or any
securities convertible into equity securities, except in any case pursuant to
outstanding options, a restricted stock plan, stock option plan, executive
benefit plan or any other similar plan for executives and consultants duly
adopted by the Company, for less than the exercise price per share paid by the
Executive, then the Executive shall receive full ratchet anti-dilution
protection; (vi) The exercise price for the Options will be the closing market
price on the Closing Date (as such term is defined in the Stock Purchase
Agreement, dated as of December 31, 2001, among the Company, PPSI and the PPSI
Stockholders (as such terms are defined therein)) as such prices are reported in
the Wall Street Journal or by any market maker; (vii) The Options shall be
Incentive Stock Options, as such term is defined in the Internal Revenue Code of
1986, as amended (the "Code"); and (ix) Each Option shall have an exercise
period of ten (10) years. U covenants and agrees that it shall take all steps
necessary or desirable to ensure that shares of Company Common Stock received by
Executive upon the exercise of Options are freely tradeable, including by
registering such shares of Company Common Stock pursuant to applicable Federal
and state securities laws.
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5. Executive Benefits.
The Company shall provide Executive with the
following benefits: (a) payment by the Company of the annual premiums on a term
life insurance policy with a face amount of $2 million (it being understood that
notwithstanding such payment all benefits, including accrued cash value, of such
policy shall inure to the benefit of the Executive and/or his designated
beneficiary(ies)); provided that, in the reasonable determination of the
Executive and the Company, at such time as a whole life insurance policy with a
face amount of $2 million is available at a commercially reasonable premium,
payments of premiums with respect to the foregoing term life insurance policy
shall be applied to a whole life insurance policy, (b) annual vacations
consistent with the Executive's position with the Company, but in any event at
least four weeks per annum, and sick leave and paid holidays, (c) health and
dental insurance providing coverage for 100% of such expenses for the Executive
and his immediate family, (d) disability insurance providing for payment of
one-half of the Executive's then current Base Salary, (e) an automobile lease
and automobile insurance allowance equal to $12,000 per year and (f) such other
benefits as are customary and appropriate for a similarly situated executive
officer of comparable standing in a comparable company in the same industry.
6. Expense Reimbursement.
During the Term, the Company shall reimburse the Executive for
all reasonable travel and other out-of-pocket expenses incurred by him (in
accordance with the policies and procedures established by the Company for its
senior executive officers) in carrying out his duties and responsibilities
hereunder.
7. Death or Disability of the Executive.
7.1 Death.
In the event of the death of the Executive during the
Term, the Agreement automatically shall be terminated as of the date of his
death and the Executive's designated beneficiary, or, in the absence of such
designation, the estate or other legal representative of the Executive shall be
paid the Executive's Base Salary, at a rate equal to the Executive's highest
annual Base Salary during the Term, through the end of the Term. The Executive's
beneficiary or estate or legal representative, as the case may be, shall be
reimbursed for all business expenses incurred by the Executive prior to such
termination and shall be entitled to other death benefits in accordance with the
terms of the Company's benefit programs and plans.
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7.2 Disability.
In the event of the Disability (as hereinafter
defined) of the Executive during the Term, the Company shall be entitled to
terminate the Agreement. Upon such termination, the Executive shall be paid his
Base Salary, at a rate equal to the Executive's highest annual Base Salary
during the Term, through the end of the Term. The Executive shall be reimbursed
for all business expenses incurred by the Executive prior to such termination
and shall be entitled to other disability compensation in accordance with the
Company's benefit programs and plans. "Disability," for purposes of this
Agreement, shall mean the Executive has failed as a result of his illness,
physical or mental disability or other incapacity, for a period of six
consecutive months or 270 days during any 12-month period of the Term, to render
services as provided in this Agreement. In the event the parties hereto disagree
as to whether the Executive is suffering from a Disability, a physician shall
perform a medical exam in order to make such a determination. Such physician
shall be selected by the Company and be reasonably acceptable to the Executive.
The Executive hereby agrees to consent to such an examination. The Executive
shall continue to participate in all executive benefit plans in which he was
participating on the date of termination until the earliest to occur of (a) the
Executive's death, (b) the cessation of the Executive's disability or (c) the
end of the Term.
8. Termination by the Company for Due Cause.
Except as set forth in Sections 7.1 and 7.2 of this Agreement,
the Company shall not terminate the Executive's employment without Due Cause (as
hereinafter defined). Upon any Due Cause termination, the Executive shall
continue to receive his Base Salary for the period ending with the date of such
termination and the obligation of the Company to make any further payments, or
to provide any benefits specified herein, to the Executive shall thereupon cease
and terminate. "Due Cause," for purposes of this Agreement, shall mean the
Executive's willful and continued failure substantially to perform his duties as
described in Section 3 herein, which continues after written notice and a
reasonable opportunity to cure.
9. Termination of Agreement.
9.1 Termination.
The Agreement may be terminated (a) by the Company
pursuant to Section 7 or 8) or (b) by the Executive at any time and for any
reason.
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9.2 Severance.
(a) If the Agreement is terminated by the
Executive for Good Reason (as hereinafter defined), the Company shall pay the
Executive a severance payment equal to the highest annual Base Salary during the
Term for the remainder of the Term. Such severance payment shall be payable in
equal monthly installments (except in the case of payments made as a result of
the termination of the Agreement following a Change in Control of the Company
(as hereinafter defined), which payments shall be made in a lump sum as soon as
practicable, but in any event within 10 days, after the date of termination)
commencing on the first day of the month following termination. In addition, the
Company shall pay the Executive any bonuses awarded but not paid for any fiscal
year of the Company ending prior to the date of such termination. The Executive
shall be reimbursed for all business expenses incurred by the Executive prior to
such termination and shall be entitled to continue to participate in all
executive benefit plans in which he was participating on the date of his
termination, including, but not limited to, the continuation of all life,
disability, accident and medical insurance benefits available to him on such
date as long as he is entitled to receive the severance payment hereunder or
until the date he receives equivalent coverage and benefits under the plans and
programs of a subsequent employer. "Good Reason," for purposes of the Agreement,
shall mean (A) the Company shall have materially breached the provisions of the
Agreement, including, without limitation, Section 11, or (B) the assignment to
the Executive by the Board of duties materially inconsistent with the
Executive's position (including status, corporate office(s), title(s) or
reporting responsibility), authority, duties or responsibilities as contemplated
by Section 3 of the Agreement, or any action by the Board which results in a
material diminution of the position, authority, duties or responsibilities of
the Executive as contemplated by Section 3 of the Agreement. A "Change in
Control" of the Company shall be deemed to have occurred if (x) the Company
shall have merged or consolidated with an unaffiliated entity or the Company
shall have transferred or sold all or substantially all of its assets to an
unaffiliated entity, (y) the majority of the directors on the Board at any time
have not been nominated for election by the directors on the Board immediately
prior to any such election of directors or (z) any person or group shall have
acquired a majority of the voting securities of the Company.
(b) The Executive shall not be required to
mitigate his damages by seeking other employment or otherwise, and the Company
shall not be entitled to any offset for amounts earned by the Executive during
the Term or hereafter. In addition, in the event the Company becomes obligated
to make severance payments to the Executive pursuant to Section 9.2(a), as long
as the Company shall be required to make such payments it shall provide the
Executive with such office space and support services as are necessary to enable
the Executive to seek other employment and shall reimburse the Executive for all
reasonable out-of-pocket expenses incurred by the Executive in connection with
seeking other employment.
10. Principal Office.
The Company hereby covenants and agrees that during the Term
the Company will not, without the Executive's consent, move the location of the
Executive's principal office, which is 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. The sole remedy of the Executive for any breach of the
provisions of this Section 11 by the Company shall be the termination of this
Agreement by the Executive for Good Reason.
11. Indemnification.
The Company will indemnify the Executive (and his legal
representatives or other successors) to the fullest extent permitted by the laws
of the State of Delaware and the Certificate of Incorporation and By-Laws of the
Company as then in effect, and the Executive shall be entitled to the protection
of any insurance policies the Company may elect to maintain generally for the
benefit of its directors and officers, against all costs, charges, and expenses
whatsoever incurred or sustained by him or his legal representatives in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being
or having been a director or officer of the Company or any of its subsidiaries.
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12. Notices.
All notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
deemed duly to have been given when mailed by registered or certified mail,
return receipt requested, postage prepaid, sent by facsimile or personally
delivered by hand or overnight courier to the address stated below or to such
changed address as the addressee may have given by similar notice.
To the Company: Univec, Inc.
00 Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
With a copy to: Snow, Becker, Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
To the Executive: Dr. Xxxxx Xxxxxx
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000; or
00 Xxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxxxx Xxxxx & Deutsch LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Rory Deutsch, Esq.
Communications delivered by hand or overnight courier or by
facsimile shall be deemed received on the date of delivery, and communications
sent by registered or certified mail shall be deemed received three business
days after the sending thereof.
13. Entire Agreement.
The Agreement contains the entire agreement between the
parties hereto with respect to the matters contemplated herein and supersedes
all prior agreements or understandings among the parties related to such
matters.
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14. Binding Effect; Assignment.
This Agreement shall be binding upon, and inure to the benefit
of, the Company and its permitted Successors and Assigns and upon the Executive
and his Successors and Assigns. "Successors and Assigns" shall mean, in the case
of the Company, any successor pursuant to a merger, consolidation, or a sale or
transfer of all or substantially all of the assets of the Company to a
transferee that assumes the Company's obligations under this Agreement and, in
the case of the Executive, his heirs and/or legal representatives as determined
by will or by operation of law. Neither the Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by the Executive
(except by will or by operation of law). The Company may assign the Agreement
and all of its rights hereunder to any of its permitted Successors and Assigns.
15. Amendment or Modification; Non-Waiver.
No provision of the Agreement may be amended or waived unless
agreed to in writing, signed by the parties hereto. The waiver of, or failure to
take action with regard to, any breach of any term or condition of the Agreement
shall not be deemed to constitute a continuing waiver or a waiver of any other
breach of the same or any other term or condition.
16. Beneficiaries; References.
The Executive shall be entitled to select (and change, to the
extent permitted under any applicable law) a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death, and may change such election by giving the Company written notice
thereof. In the event of the Executive's death, Disability or a judicial
determination of his incompetence, reference in the Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
17. Survivorship.
The respective rights and obligations of the parties hereunder
shall survive any termination of the Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section 18 are in addition to the survivorship provisions of any other section
of the Agreement.
18. Non-Waiver.
The failure of any party to insist upon the strict performance
of any of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party
shall be effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
19. Governing Law.
The validity, interpretation, construction, performance and
enforcement of the Agreement shall be governed by the laws of the State of New
York, without reference to rules relating to conflict of law.
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20. Severability.
If any provision of the Agreement shall be determined to be
invalid or unenforceable (in whole or in part) for any reason, the remaining
provisions of the Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law. The provisions of this
Section 20 are in addition to the severability provisions of any other section
of the Agreement.
21. Withholding.
The Company shall withhold from any payments due to the
Executive hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.
22. Headings.
The headings contained in the Agreement are intended solely
for convenience of reference and shall not affect in any way the meaning or
interpretation of the Agreement.
23. Counterparts.
The Agreement may be executed in one or more counterparts,
each of which for all purposes shall be deemed to be an original, and all of
which when taken together shall constitute but one and the same instrument.
24. Confidentiality.
The Executive agrees not to use, disclose or make accessible
to any other person, firm, partnership, corporation or any other entity any
Confidential Information (as hereinafter defined) pertaining to the business of
the Company except (i) while employed by the Company, in the business of and for
the benefit of the Company and (ii) when required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of the Company, or by any administrative body or legislative
body (including a committee thereof) with jurisdiction to order the Company to
divulge, disclose or make accessible such information. "Confidential
Information," for purposes of the Agreement, shall mean non-public information
concerning the Company's financial data, statistical data, strategic business
plans, product development (or other proprietary product data), customer and
supplier lists, customer and supplier information, information relating to
governmental relations, discoveries, practices, processes, methods, trade
secrets, marketing plans and other non-public, proprietary and confidential
information of the Company, that, in any case, is not otherwise generally
publicly available and has not been disclosed by the Company to others not
subject to confidentiality agreements; provided that such information already in
the possession of the Executive that relates to Physician and Pharmaceutical
Services, Inc. ("PPSI"), a corporation organized and existing under the laws of
the State of Pennsylvania, shall not be considered Confidential Information for
the purposes of this Section 24. In the event the Executive's employment is
terminated hereunder for any reason, he immediately shall return to the Company
all tangible evidence of such Confidential Information in his possession. The
provisions of this Section 24 shall survive the termination of the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed the
Agreement as of the day and year first above written.
EXECUTIVE:
s/Xxxxx Xxxxxx
-----------------------------------
Name: Dr. Xxxxx Xxxxxx
COMPANY:
UNIVEC, INC.
By: s/ Xxxx Xxxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chairman of the Board
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