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EXHIBIT 10.42
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective
as of the ______ day of August, 1996, between Xxxxx X. Xxxx ("Employee"), a
resident of Ambler, Pennsylvania, and ILEX Oncology, Inc., a Delaware
corporation (the "Company"), whose principal executive offices are located in
San Antonio, Texas.
WHEREAS, the Company desires to employ Employee, and Employee desires to
be employed by the Company, on terms hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DUTIES
1.1 Employment. During the term of this Agreement, the Company
agrees to employ Employee, and Employee accepts such employment, on the terms
and conditions set forth in this Agreement.
1.2 Extent of Service. During the term of this Agreement, Employee
shall devote his or her full-time business time, energy and skill to the
affairs of the Company and its affiliated companies, and Employee shall not be
engaged in any other business or consulting activities pursued for gain, profit
or other pecuniary advantage, without the prior written consent of the Company.
The foregoing shall not prevent Employee from making monetary investments in
businesses which do not involve any services on the part of Employee in the
operation or affairs of such businesses.
1.3 Duties. Employee's duties hereunder shall include acting as a
Vice President and the Chief Financial Officer of the Company. In this
capacity Employee will provide services with regard to directing the Company's
financial operations, planning and controlling corporate growth, evaluating
performance against objectives or such other duties as may be prescribed from
time by Employee's supervisor or the Board of Directors of the Company (the
"Board"). Such duties include, without limitation, the development of
Proprietary Information (defined in Article 5 hereof) for the Company.
Employee shall also perform, without additional compensation, related services
for the Company's subsidiaries and joint ventures.
1.4 Access to and Use of Proprietary Information. Employee
recognizes and the Company agrees that, to assist Employee in the performance
of his or her duties hereunder, Employee will be provided access to and limited
use of proprietary and confidential information of the Company. Employee
further recognizes that, as a part of his or her employment with the Company,
Employee will benefit from and Employee's qualifications will be enhanced by
additional training, education and experience which will be provided to
Employee by the Company directly and/or as a result of work projects assigned
by the Company in which proprietary and confidential information of the Company
is utilized by Employee.
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ARTICLE 2
TERM OF EMPLOYMENT
The term of this Agreement shall commence on the date hereof and
continue until terminated pursuant to Article 4 hereof.
ARTICLE 3
COMPENSATION
3.1 Monthly Base Salary. As compensation for services rendered under
this Agreement, Employee shall be entitled to receive from the Company a
monthly base salary (before standard deductions) equal to $10,416.66, subject
to periodic review and adjustment by Employee's supervisor or the Board.
Employee's monthly base salary shall be payable at regular intervals (at least
semi-monthly) in accordance with the prevailing practice and policy of the
Company.
3.2 Performance Bonus. As additional compensation for services
rendered under this Agreement, Employee shall also be eligible to receive (a) a
performance bonus equal to up to 10% of the sum of all payments of monthly base
salary (before standard deductions) paid to Employee during the 1996 calendar
year based upon the Company and the Employee achieving (as determined by the
Board) certain 1996 goals to be established by the Board and (b) a performance
bonus equal to up to an additional 10% of the sum of all payments of monthly
base salary (before standard deductions) paid to Employee during the 1996
calendar year if the Company and the Employee greatly exceed (as determined by
the Board) the 1996 goals established by the Board. For subsequent calendar
years, Employee shall be eligible to receive a discretionary performance bonus
if, as and when declared by the Board.
3.3 Stock Options. Employee shall also be granted an incentive
option to purchase 60,000 shares of Common Stock of the Company at a per-share
price of $4.00 under the Company's Stock Option Plan. The options will vest
over a 4-year period at a rate of 25% per year. The terms of such stock option
grant will be set forth in a separate stock option agreement.
3.4 Benefits. Employee shall, in addition to the compensation
provided for herein, be entitled to the following additional benefits:
(a) Medical, Health and Disability Benefits. Employee shall
be entitled to receive all medical, health and disability benefits that
may, from time to time, be provided by the Company to all employees of
the Company as a group.
(b) Other Benefits. Employee shall also be entitled to
receive any other benefits that may, from time to time, be provided by
the Company to all employees of Company as a group.
(c) Vacation. Employee shall be entitled to an annual
vacation determined in accordance with the prevailing practice and
policy of the Company (initially 3 weeks per year).
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(d) Holidays. Employee shall be entitled to holidays in
accordance with the prevailing practice and policy of the Company.
(e) Reimbursement of Business Expenses. The Company shall
reimburse Employee for all expenses reasonably incurred by Employee in
conjunction with the rendering of services at the Company's request,
provided that such expenses are incurred in accordance with the
prevailing practice and policy of the Company and are properly
deductible by the Company for federal income tax purposes. As a
condition to such reimbursement, Employee shall submit an itemized
accounting of such expenses in reasonable detail, including receipts
where required under federal income tax laws.
(f) Reimbursement of Relocation Expenses. Promptly following
the full execution of this Agreement, the Company shall pay to Employee
the sum of $20,000 (before standard deductions) to partially reimburse
Employee for incidental expenses of relocating and taxes associated with
certain reimbursed relocation expenses. Additionally, the Company shall
reimburse Employee for (i) reasonable relocation expenses incurred by
Employee in connection with a maximum of 2 house-hunting trips by
Employee and his spouse to San Antonio, Texas from Employee's current
residence, (ii) reasonable relocation expenses incurred by Employee in
connection with the moving of Employee's household goods from Employee's
current residence to San Antonio, Texas (including temporary storage, if
necessary) and (iii) such other reasonable relocation expenses as may be
approved by the Company. As a condition to such reimbursement, Employee
shall submit an itemized accounting of such expenses in reasonable
detail, including receipts. In the event Employee's employment with the
Company is terminated (howsoever such termination may occur) on or
before the first anniversary of the date of this Agreement, Employee
shall immediately pay to the Company an amount equal to 50% of all
amounts paid to Employee by the Company pursuant to this Section 3.4(f)
(which amounts owing, if any, may be offset by the Company against any
amounts then owing by the Company to Employee under this Agreement).
3.5 Commencement of Compensation. Compensation under this Agreement
shall be payable to Employee commencing on upon Employee's commencement of
full-time service to the Company.
ARTICLE 4
TERMINATION
4.1 Termination With Notice. This Agreement may be terminated by the
Company or Employee, without cause, upon 30 days prior written notice thereof
given by one party to the other party. In the event of termination pursuant to
this Section 4.1, the Company shall pay Employee his or her monthly base salary
(subject to standard deductions) earned pro rata to the date of such
termination and the Company shall have no further obligations to Employee
hereunder. Notwithstanding the foregoing:
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(a) in lieu of continuing the employment of Employee for a period
of 30 days after notice of termination is given under this Section 4.1,
the Company may, in its sole discretion, elect to terminate this
Agreement immediately and pay Employee a lump-sum equal to (i)
Employee's monthly base salary (subject to standard deductions) earned
pro rata to the date of such notification of termination plus (ii) 30
days of Employee's then effective base salary (subject to standard
deductions), whereupon the Company shall no further obligations to
Employee hereunder; and
(b) in the event of a termination by the Company pursuant to this
Section 4.1 within 3 years of the date hereof, the Company shall pay,
within 15 days after the Determination Date (defined below), to Employee
an additional amount equal to postive amount, if any, resulting from (x)
Employee's current base monthly salary (before standard deductions)
multiplied by 12 minus (y) an amount equal to the Option Appreciation as
of the Determination Date.
"Determination Date" means the earlier to occur of (i)
three months after the date of termination and (ii) delivery by
Employee to the Company of a waiver letter, in form reasonably
acceptable to the Company, pursuant to which Employee waives his
right to exercise any unexercised portion of Employee's then
existing options to purchase the Company's Common Stock.
"Option Appreciation" means, as of the Determination Date,
the number of Exercised Option Shares as of such date multiplied
by an amount equal to the positive difference, if any, resulting
from (i) the Fair Market Value Per Share of the Company's Common
Stock as of such date minus (ii) the exercise price per share
paid with respect to the Exercised Option Shares.
"Exercised Option Shares" means, as of the Determination
Date, the shares of Common Stock issued or issuable by the
Company as a result of Employee's proper exercise of options to
purchase the Company's Common Stock.
"Fair Market Value Per Share" means, as to the Company's
Common Stock, (i) the average closing price per share of such
stock for the 5 trading days prior to the termination, if such
stock is publicly traded or (ii) the fair market value per share
of such stock as determined in good faith by the Board, if such
stock is not publicly traded.
4.2 Termination For Cause. This Agreement may be terminated by the
Company for "Cause" (hereinafter defined) upon written notice thereof given by
the Company to Employee. In the event of termination pursuant to this Section
4.2, the Company shall pay Employee his or her monthly base salary (subject to
standard deductions) earned pro rata to the date of such termination and the
Company shall have no further obligations to Employee hereunder. The term
"Cause" shall include, without limitation, the following, as determined by the
Board in its sole judgment: (i)
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Employee breaches any of the terms of this Agreement; (ii) Employee is
convicted of a felony; (iii) Employee fails, after at least one warning, to
satisfactorily perform duties assigned under this Agreement as determined by
the Chief Executive Officer or the Board (other than a failure due to death or
physical or mental disability); (iv) Employee intentionally engages in conduct
which is demonstrably and materially injurious to the Company; (v) Employee
commits fraud or theft of personal or Company property from Company premises;
(vi) Employee falsifies Company documents or records; (vii) Employee engages in
acts of gross carelessness or willful negligence to endanger life or property
on Company premises; (viii) Employee engages in sexual harassment; (ix)
Employee uses, distributes, possesses or is under the influence of illegal
drugs, alcohol or any other intoxicant on Company premises; or (x) Employee
intentionally violates state, federal or local laws and regulations.
4.3 Termination Upon Death or Disability. In the event that Employee
dies, this Agreement shall terminate upon Employee's death. Likewise, if
Employee becomes "disabled" as determined in accordance with the Company's
disability insurance policies and plans, the Company may, upon notice to
Employee, terminate this Agreement. In the event of termination pursuant to
this Section 4.3, Employee (or his or her legal representatives) shall be
entitled only to his or her monthly base salary earned pro rata for services
actually rendered prior to the date of such termination; provided, however,
Employee shall not be entitled to his or her monthly base salary for any period
with respect to which Employee has received short-term or long-term disability
benefits under employee benefit plans maintained from time to time by the
Company.
4.4 Survival of Provisions. The covenants and provisions of Articles
5, 6 and 7 hereof shall survive any termination of this Agreement and continue
for the periods indicated, regardless of how such termination may be brought
about.
ARTICLE 5
PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION
5.1 Duties. Employee understands and agrees that during the term of
this Agreement Employee's duties will include involvement with the conception
of improvements and inventions (whether or not ultimately issuing as Letters
Patent in any country), the creation of confidential information protected by
the Company as trade secrets and the authoring of "works" as defined under the
copyright laws of the United Xxxxxx xx Xxxxxxx xxxxx xx 00 Xxxxxx Xxxxxx Code.
Such information is collectively referred to in this Agreement as "Proprietary
Information".
5.2 Ownership. Employee understands and agrees that for all
Proprietary Information created within the scope of Employee's employment, the
Company shall own all right, title and interest thereto. In the case of works
authored or created by Employee, such works are considered a "work made for
hire" under 00 Xxxxxx Xxxxxx Code Section 101 - the copyright laws. All
Proprietary Information, if any, created by Employee prior to his or her
employment with the Company, and in which Employee claims ownership, is shown
in Schedule 5.2 attached hereto.
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5.3 Notice and Assistance. Employee shall give adequate written
notice to the Company as soon as practicable of all Proprietary Information
created by Employee during Employee's employment with the Company, assist the
Company in evaluating the Proprietary Information for trade secret and
copyright protection and sign all documents and do all things necessary at the
expense of the Company to assist the Company in the protection, development,
marketing or transfer of such Proprietary Information.
5.4 Assignment. Employee hereby assigns and agrees to assign all
right, title and interest into such Proprietary Information to the Company or
its nominee. At the request of the Company, whether during or after the
termination of Employee's employment, Employee shall timely execute or join in
executing all papers or documents required for the filing of patent
applications and copyright registrations in the United States of America and
such foreign countries as the Company may in its sole discretion select, and
shall assign all such patent applications and copyrights to the Company or its
nominee, and shall provide the Company or its agent or attorneys with all
reasonable assistance in the preparation and prosecution of patent applications
and copyright registrations, including drawings, specifications, and the like,
all at the expense of the Company, and shall do all that may be necessary to
establish, protect or maintain the rights of the Company or its nominee in the
inventions, patent applications, Letters Patent and copyrights in accordance
with the spirit of this Agreement.
5.5 Confidential Information. Employee agrees to keep confidential
all information protected by the Company as trade secrets during the term of
this Agreement (including any leaves of absence) and will neither use nor
disclose the confidential information without written authorization by the
Company for ten years thereafter. For the purposes of this Agreement, such
confidential information shall include information set forth in any application
for Letters Patent unless and until such information is ultimately published.
The Company and Employee mutually agree that the following types of information
shall not be protected by this Agreement:
(a) Information already in the public domain at the time
Employee received it;
(b) Information which although disclosed in confidence to
Employee is later disseminated by the Company into the public domain;
(c) Information which although received in confidence by
Employee is subsequently disseminated into public domain by a third
party who has not breached any duty to any other party in disseminating
such information;
(d) Information given by the Company in confidence to Employee
which Employee is expressly authorized in writing by the Company to use
or disclose thereafter; and
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(e) Information required by law to be disclosed, provided that
Employee will promptly advise the Company of any such required
disclosure and cooperate fully with the Company to avoid such
disclosure, if legally possible, or to obtain confidential treatment of
such Information disclosed.
Employee also understands and agrees that he or she will maintain in confidence
all information known to him or her by reason of his or her employment even if
such information is included in a redacted deposit of a work filed with an
application for copyright registration, if such deposit has been abridged in
order to protect the confidentiality of the information deposited with the
Copyright Office. For purposes of this Agreement, a trade secret "...may
consist of any formula, pattern, device or compilation of information which is
used in one's business, and which gives him or her an opportunity to obtain an
advantage over competitors who do not know or use it. It may be a formula for
a chemical compound, a process of manufacturing, trading or preserving
materials, a pattern for machine or other device, or a list of customers..." as
commonly interpreted by the courts of the State of Texas. Upon the termination
of this Agreement, regardless of how such termination may be brought about,
Employee shall deliver to the Company any and all documents, instruments,
notes, papers or other expressions or embodiments of Proprietary Property or
confidential information which are in Employee's possession or control.
5.6 Publicity. During the term of this Agreement and for a period of
ten years thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public press or otherwise,
relating to this Agreement, to any amendment hereto, to Employee's employment
hereunder or to the Company, without the prior written approval of the Company.
5.7 Fiduciary Relationship. Employee, by virtue of his or her high
position of trust and reliance on him or her by the Company, understands that
Employee enjoys a fiduciary relationship with the Company in carrying out his
or her obligations under this Article 5. Accordingly, Employee agrees to honor
his or her obligations under this Agreement by conducting himself or herself
with the highest degree fairness and trust toward the Company.
ARTICLE 6
RESTRICTIVE COVENANTS
6.1 Non-Competition. In consideration of the benefits of this
Agreement, including Employee's access to and limited use of proprietary and
confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
covenants and agrees that during the term of this Agreement and for a period of
one year following termination of this Agreement, regardless of how such
termination may be brought about, Employee shall not, directly or indirectly,
as proprietor, partner, stockholder, director, officer, employee, consultant,
joint venturer, investor or in any other capacity, engage in, or own, manage,
operate or control, or participate in the ownership, management,
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operation or control, of any entity which engages, as its primary business,
anywhere in the United States in contract clinical testing of pharmaceuticals
for treatment of patients with cancer or any other business activity which the
Company participates during Employee's employment with the Company; provided,
however, the foregoing shall not prohibit Employee from purchasing and holding
as an investment not more than 1% of any class of publicly traded securities of
any entity which conducts a business in competition with the business of the
Company, so long as Employee does not participate in any way in the management,
operation or control of such entity.
6.2 Judicial Reformation. Employee acknowledges that, given the
nature of the Company's business, the covenants contained in Section 6.1
establish reasonable limitations as to time, geographic area and scope of
activity to be restrained and do not impose a greater restraint than is
reasonably necessary to protect and preserve the goodwill of the Company's
business and to protect its legitimate business interests. If, however,
Section 6.1 is determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too long a period of time or over
too large a geographic area or by reason of it being too extensive in any other
respect or for any other reason, it will be interpreted to extend only over the
longest period of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court.
6.3 Customer Lists; Non-Solicitation. In consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto,
Employee hereby further covenants and agrees that for a period of one year
following the termination of this Agreement, regardless of how such termination
may be brought about, Employee shall not, directly or indirectly, (a) use or
make known to any person or entity the names or addresses of any clients or
customers of the Company or any other information pertaining to them, other
than information that Employee can demonstrate was known to Employee prior to
his employment with the Company and with respect to which the Company has no
obligation of confidentiality, (b) call on, solicit, take away or attempt to
call on, solicit or take away any clients or customers of the Company on whom
Employee called or with whom he or she became acquainted during his or her
employment with the Company, nor (c) recruit, hire or attempt to recruit or
hire any employees of the Company.
ARTICLE 7
ARBITRATION
Except for the provisions of Articles 5 and 6 of this Agreement dealing
with proprietary property, confidential information and restrictive covenants,
with respect to which the Company expressly reserves the right to petition a
court directly for injunctive and other relief, any claim, dispute or
controversy of any nature whatsoever, including but not limited to tort claims
or contract disputes, between the parties to this Agreement or their respective
heirs, executors, administrators, legal representatives,
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successors and assigns, as applicable, arising out of or relating to your
employment or the termination of your employment with the Company and/or the
terms and conditions of this Agreement, including the implementation,
applicability and interpretation thereof, shall be resolved as follows: upon
the written request of one party served upon the other, any such claim, dispute
or controversy shall be submitted to and settled by arbitration in accordance
with the provisions of the Federal Arbitration Act, 9 U.S.C. Sections 1-15, as
amended. If arbitration is requested, each of the parties to this Agreement
shall appoint one person as an arbitrator to hear and determine any such
disputes, and if they should be unable to agree, then the two arbitrators shall
choose a third arbitrator from a panel made up of experienced arbitrators
selected pursuant to the procedures of the American Arbitration Association
(the "AAA") and, once chosen, the third arbitrator's decision shall be final,
binding and conclusive upon the parties to this Agreement. Each party shall be
responsible for the fees and expenses of its arbitrator and the fees and
expenses of the third arbitrator shall be shared equally by the parties. The
terms of the commercial arbitration rules of AAA shall apply except to the
extent they conflict with the provisions of this paragraph. It is further
agreed that any of the parties hereto may petition the United States District
Court for the Western District of Texas, San Antonio Division, for a judgment
to be entered upon any award entered through such arbitration proceedings.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by an overnight
delivery service with tracking procedures or by facsimile to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice: If to Employee, at the address set forth below his or
her name on the signature page hereof; and if to the Company, at 00000 Xxxxxxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000-0000, Attention: President and Chief
Executive Officer.
8.2 Equitable Relief. In the event of a breach or a threatened
breach by Employee of any of the provisions contained in Article 5 or 6 of this
Agreement, Employee acknowledges that the Company will suffer irreparable
injury not fully compensable by money damages and, therefore, will not have an
adequate remedy available at law. Accordingly, the Company shall be entitled
to obtain such injunctive relief or other equitable remedy from any court of
competent jurisdiction as may be necessary or appropriate to prevent or curtail
any such breach, threatened or actual. The foregoing shall be in addition to
and without prejudice to any other rights that the Company may have under this
Agreement, at law or in equity, including, without limitation, the right to xxx
for damages.
8.3 Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company. Employee's rights under this Agreement
are not assignable and any attempted assignment thereof shall be null and void.
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8.4 Governing Law; Venue. This Agreement shall be subject to and
governed by the laws of the State of Texas. Non-exclusive venue for any action
permitted hereunder shall be proper in San Antonio, Bexar County, Texas, and
Employee hereby consents to such venue.
8.5 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties and supersedes all other agreements
between the parties which may relate to the subject matter contained in this
Agreement including, without limitation, the letter agreement dated July 25,
1996. This Agreement may not be amended or modified except by an agreement in
writing which refers to this Agreement and is signed by both parties.
8.6 Headings. The headings of sections and subsections of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any provision of this Agreement or of the Agreement itself.
8.7 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
8.8 Waiver. The waiver by any party of a breach of any provision
hereof shall not be deemed to constitute the waiver of any prior or subsequent
breach of the same provision or any other provisions hereof. Further, the
failure of any party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement unless such party expressly waives such
provision pursuant to a written instrument which refers to this Agreement and
is signed by such party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ILEX ONCOLOGY, INC.
By: /s/ XXXXXXX X. LOVE
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Xxxxxxx X. Love,
President and Chief Executive
Officer
EMPLOYEE:
/s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
Address:
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SCHEDULE 5.2
PROPRIETARY PROPERTY CLAIMED BY EMPLOYEE
Proprietary Property Claimed:*
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* None, if left blank
