1
EXHIBIT 10-V
EMPLOYMENT AGREEMENT
This Agreement is made as of February 4, 1999, between Unimed
Pharmaceuticals, Inc., a Delaware corporation with offices located at 0000 X.
Xxxx Xxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000 (the "Company") and Xxxxx X.
Xxxxx, residing at 0000 X.X.X., Xxxx Xxxxx, XX 00000 (the "Employee").
WHEREAS, the Company desires to employ the Employee and retain his
services, experience and abilities which it regards as important to its
corporate growth and success; and
WHEREAS, the Employee desires to accept such employment upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein, it is agreed as follows:
1. Employment. The Company hereby employs the Employee and the Employee hereby
accepts such employment under all of the terms and conditions of this Agreement.
The Employee shall be an officer of the Company, and shall hold the office of
Senior Vice President, Secretary, Treasurer, and Chief Financial Officer
("CFO"), reporting to the President of the Company.
1. Term. The Employee's employment under this Agreement shall commence
February 4, 1999 (the "Employment Date") and shall continue until termination in
accordance with the terms of this Agreement.
2. Duties. During the term of this Agreement, the Employee shall perform
diligently the duties of CFO as may be directed by the Board of Directors and
commensurate with such position and in accordance with the Company's By-laws.
The Employee shall devote all of his time and attention to the
business of the Company during business hours normal for the position. The
Employee agrees not to be directly or indirectly engaged in or concerned with
any other duties or pursuits which interfere with performance of his duties
except those duties or pursuits specifically authorized by the Board of
Directors.
3. Compensation. In consideration of the services to be rendered by the
Employee, the Company agrees to compensate and to provide benefits to the
Employee as follows:
A. Base Salary. The Employee shall be paid a base salary of $175,000
per year, payable semi-monthly. The Board of Directors shall review
Employee's base salary annually to consider whether an increase is
warranted.
B. Bonus. Employee shall receive an annual bonus in an amount up to
thirty percent (30%) of his base salary (the "Bonus Amount") based upon
his attainment of goals established for each calendar year by the Board
of Directors. The Board of Directors agrees to consider the suggestions
of the Employee in establishing each year's goals. For
2
the period commencing on January 1, 1999, and ending on December 31,
1999, the Employee shall be awarded all or a portion of the Bonus
Amount as specified below, for attaining the following goals:
(1) The Employee shall receive fifty percent (50%) of the Bonus
Amount if the Company achieves a net profit for such period, as
reported in the Company's year-end financial statements, subject to
adjustment based upon the Company's audited annual financial
statement prepared by its outside auditors in accordance with
generally accepted accounting principles.
(2) The Employee shall receive fifty percent (50%) of the Bonus
Amount if the Company achieves a year-end cash balance in excess of
$8 million for such period, also as reported in the Company's
year-end financial statements, subject to adjustment based upon the
Company's audited annual financial statement prepared by its outside
auditors in accordance with generally accepted accounting
principles.
(3) The Employee shall receive the full Bonus Amount, regardless
of his success in achieving the goals set forth above, if the
Company successfully completes a merger, acquisition or business
consolidation during such period.
(4) The Board retains the discretion to award the Employee a
bonus in excess of the Bonus Amount.
C. Automobile Allowance. The Employee shall be paid an automobile
allowance equal to $10,800 per year, payable monthly.
D. Benefits. The Employee shall be entitled to participate in and
receive any other benefits customarily provided by the Company to
senior management personnel, including, without limitation, profit
sharing, pension, 401(k), short and long term disability insurance,
hospital, major medical and dental insurance plans, all in accordance
with the terms of such benefit plans.
E. Life Insurance. The Company will provide to the Employee a term
life insurance policy with coverage of at least $1 million in the event
of death, payable to the Employee's estate.
F. Vacation. The Employee shall earn four (4) weeks of vacation per
year; provided, however, that the accrual of unused vacation time shall
be capped at six (6) weeks.
4. Stock Options. The Employee shall be granted, at the next meeting of
the Board of Directors following the Employment Date (i.e., February 19, 1999),
an option contract to purchase 35,000 shares of Company common stock subject to
the terms and conditions of the Company's 1991 Stock Option Plan. Such options
shall vest and become exercisable evenly over
2
3
three years, 33 1/3% per year on each of the first three anniversaries of the
Employee's employment as CFO, and shall be exercisable at an exercise price
equal to the fair market value of the Company's shares on the date of grant.
5. Expenses. The Company shall reimburse the Employee for all
reasonable expenses incurred in the performance of his duties on behalf of the
Company.
6. Termination by the Company. Notwithstanding any other provision of
this Agreement, the Company may terminate this Agreement as follows:
A. Cause. For Cause, as defined herein, upon written notice to the
Employee setting forth in reasonable detail the facts and circumstances
upon which the Board of Directors shall have determined, following
reasonable inquiry, that the Employee: (1) has been convicted of (or
plead guilty or nolo contendere to) a felony; or (2) has engaged in
embezzlement; provided that in the event of a termination for Cause,
the Company shall not be obligated to provide the Employee any
compensation or benefits after the effective date of such termination
except as required by law.
B. Without Cause. Without Cause, at any time upon thirty (30) days
written notice to the Employee from the Board of Directors of the
Company; provided that in the event of a termination without Cause, the
Employee shall be entitled to receive, without any duty to mitigate, a
severance package consisting of (1) a lump-sum payment equal to 12
months of severance based upon the Employee's then current annual base
salary; (2) a pro rata bonus, based upon the amount of bonus awarded to
the Employee the prior year, multiplied by the ratio of the number of
days employed in the then current calendar year divided by 365; (3)
continuation (until the end of the COBRA coverage period) of the
Company's payment of health insurance benefits, provided the Employee
elects and is eligible for continued insurance coverage pursuant to
COBRA; (4) outplacement assistance for one (1) year at a cost of no
more than $25,000; and (5) an extended nine-month period, in addition
to the 90-day period provided in the Company's 1991 Stock Option Plan
(as amended through May 2, 1994), within which to exercise all vested
stock options. As a condition to receipt of the above severance
package, the Employee agrees to execute a general release satisfactory
to the Board of Directors.
C. Incapacity. For incapacity, upon written notice to the Employee
if the Board of Directors shall have determined following reasonable
inquiry, that the Employee has been unable due to illness, disability
or incapacity to perform the essential functions of his job, with or
without reasonable accommodation, for a continuous period exceeding six
(6) months; provided that the Employee shall be paid his then current
annual base salary during at least the first three (3) months of any
such incapacity and shall be entitled to receive short-term and
long-term disability benefits in accordance with the Company's plans.
The death of the Employee shall automatically terminate this Agreement,
in which event, the Company shall pay to the Employee's estate all
accrued unpaid salary, pro rata bonus and other amounts and benefits
required by law.
3
4
D. Termination Without Cause Following Change of Control. In the
event the Employee is terminated without Cause, upon thirty (30) days
written notice from the Board of Directors, within twelve (12) months
following a Change of Control, as defined in Paragraph 10.E of the
Company's 1991 Stock Option Plan (as amended through May 2, 1994), the
Employee shall be entitled to receive, without any duty to mitigate, a
severance package consisting of: (1) a lump-sum payment equal to two
times the Employee's then current annual base salary; (2) a bonus equal
to the amount of bonus awarded to the Employee the prior year; and (3)
continuation (until the end of the COBRA coverage period) of the
company's payment of health insurance benefits, provided the Employee
elects and is eligible for continued insurance coverage pursuant to
COBRA. As a condition to receipt of the above severance package, the
Employee agrees to execute a general release satisfactory to the Board
of Directors.
7. Termination by the Employee. Notwithstanding any other provision of
this Agreement, the Employee may terminate this Agreement as follows:
A. Without Reason. Without reason, at any time upon providing thirty
(30) days prior written notice to the Company, in which event the
Company shall not be obligated to provide to the Employee any
compensation or benefits after the effective date of such termination
except as required by law.
B. Good Reason. For Good Reason, defined as the Company's material
breach of the terms of this Agreement and the Company's failure to cure
said breach, if curable, following thirty (30) days written notice by
the Employee describing in reasonable detail the facts and
circumstances of said breach; provided that in the event the Employee
terminates this agreement for Good Reason, he shall be entitled to
receive the severance package described in Paragraph 7.B of this
Agreement under the same terms and conditions as described therein.
8. Covenant Not to Compete/Confidentiality/Inventions/Discoveries.
A. During the term hereof, Employee agrees that he shall not,
without written authorization of the Board of Directors of the Company,
directly or indirectly, engage, individually or as an officer,
director, employee, consultant, advisor, partner, or as a controlling
stockholder or proprietor of any entity, in the business of
development, production, distribution or sale of any products or
services competitive with those manufactured or sold by the Company.
B. During the term hereof and after termination of this Agreement,
Employee shall not, without written authorization by the Board of
Directors of the Company, publish or disclose any confidential
information or trade secrets relating to the business of the Company.
C. In the event of a breach or threatened breach of either of the
foregoing subsections, the Company shall be entitled to an injunction
restraining the Employee from
4
5
such breach. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedy for such breach.
D. The Employee shall promptly and fully disclose to the Company,
and with all necessary detail for a complete understanding of the same,
all developments, know-how, discoveries, inventions, improvements,
concepts, ideas, writings, formulae, processes and methods of a
financial or other nature (whether copyrightable, patentable or
otherwise) made, received, conceived, acquired or written during
working hours, or otherwise, by Employee (whether or not at the request
or upon the suggestion of the Company) during the period of his
employment with, or rendering of advisory or consulting services to,
the Company or any of its subsidiaries, solely or jointly with others,
in or relating to any activities of the Company or its subsidiaries
known to him as a consequence of his employment or the rendering of
advisory and consulting services hereunder (collectively the "Subject
Matter").
E. The Employee hereby assigns and transfers, and agrees to assign
and transfer, to the Company, all his rights, title and interest in and
to the Subject Matter, and Employee further agrees to deliver to the
Company any and all drawings, notes, specifications and data relating
to the Subject Matter, and to execute, acknowledge and deliver all such
further papers, including applications for copyrights or patents, as
may be necessary to obtain copyrights and patents for any thereof in
any and all countries and to vest title thereto to the Company.
F. The Employee shall assist the Company in obtaining such
copyrights or patents during the term of this Agreement, and any time
thereafter on reasonable notice and at mutually convenient time, and
the Employee agrees to testify in any prosecution or litigation
involving any of the Subject Matter; provided, however, that the
Employee shall be compensated in a timely manner at the rate of $75.00
per hour, plus out-of-pocket expenses incurred in rendering such
assistance or giving or preparing to give such testimony if it is
required after termination of his employment hereunder.
9. Indemnification of the Employee. The Company agrees to fully
indemnify on a current basis the Employee for claims arising out of the
Employee's performance of his duties under this Agreement to the full
extent permitted by law and as permitted by the Company's articles of
incorporation and by-laws and further agrees to pay all fees and costs
associated with the Executive's defense of any indemnifiable claim
hereunder as such fees and costs are incurred.
10. Mitigation of Excise Tax. Except as otherwise provided in option
agreement or plan, if any payment or right accruing to the Employee
under this Agreement (without the application of this Section 11),
either alone or together with other payments or rights accruing to the
Employee from the Company would constitute a "parachute payment" (as
defined in Section 280G of the Code and regulations thereunder), such
payment or right shall be reduced to the largest amount or greatest
right that will result in no portion of the amount payable or right
accruing under this Agreement being subject to an excise tax under
Section 4999 of the Code or being disallowed as
5
6
a deduction under Section 280G of the Code. The determination of the
amount of any potential reduction in the rights or payments shall be
made by the Company in good faith after consultation with the Employee.
The Employee shall cooperate in good faith with the Company in making
such determination and providing the necessary information for this
purpose.
11. Successors. This Agreement shall be binding upon the successors and
assigns of the Company.
12. Miscellaneous.
A. All notices, requests, demands and other communications which are
required or permitted hereunder shall be in writing and shall be deemed
to have been duly given when delivered personally or when mailed by
registered or certified mail, postage prepaid, return receipt
requested, sent to the address Given the uncertain nature of
litigation, we cannot predict the outcome of this matter above or to
such address as either party may hereafter designate by written notice
to the other party in accordance herewith.
B. This Agreement shall be governed and construed in accordance with
the laws of the State of Illinois without regard to principles of
choice of law.
C. This Agreement supersedes any and all oral or written agreements
heretofore made relating to the subject matter hereof and constitutes
the entire agreement of the parties relating to the subject matter
hereof.
D. The invalidity, illegality or unenforceability of any
provision of this Agreement shall not in any way affect, impair or
render unenforceable any other provision hereof, all of which shall
remain in full force and effect.
E. This Agreement may not be amended or modified in any manner
except by an instrument in writing signed by each of the parties
hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Agreement to be executed on its behalf as of the day and year
first above written.
Unimed Pharmaceuticals, Inc. EMPLOYEE
For the Board of Directors
By: --------------------------------
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxx
Director and Chairman,
Compensation Committee
Date: Date:
--------------------------------
6
