EXHIBIT 10.18
NON-COMPETITION AND SEVERANCE AGREEMENT
This Non-Competition and Severance Agreement (the "Agreement")
is dated as of November 21, 2001, and is entered into between Pharmion
Corporation, a Delaware corporation (the "Company"), and Xxxxxx Xxxxxxxxx (the
"Employee").
WHEREAS, the Employee is currently employed by the Company;
and
WHEREAS, the Employee and the Company desire to embody in this
Agreement the terms, conditions and benefits to be provided to the Employee in
the event of the Employee's termination of employment with the Company; and
WHEREAS, this Agreement shall supersede all prior oral and
written agreements, arrangements and understandings relating to the terms and
conditions of severance pay in the event of Employee's employment termination
without Just Cause (as defined herein).
NOW, THEREFORE, the parties hereby agree:
Section 1. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Just Cause" shall mean (with regard to the
Employee's termination of employment with the Company): (i) Employee has
committed or engaged in negligent or willful conduct that is likely to be
detrimental to the Company; (ii) Employee has engaged in acts which constitute
theft, fraud, or other illegal or dishonest conduct which are considered to be
harmful to the Company as determined by the majority vote of the Board; (iii)
Employee has willfully disobeyed the reasonable and lawful directives of the
Company' Chief Executive Officer or the Company's President or Board; (iv)
Employee has refused or is unwilling to perform his/her job duties; (v) Employee
has failed adequately to perform his/her job duties, provided, however, that the
Company shall provide Employee with written notice of the deficiencies in
his/her performance and Employee shall be given 45 days to remedy such
deficiencies. (vi) Employee has demonstrated habitual absenteeism; (vii)
Employee is substantially dependent on alcohol or any controlled substance or
violates any general Company policy with regard to alcohol or controlled
substances; (viii) Employee has engaged in acts which constitute sexual or other
forms of illegal harassment or discrimination; (ix) Employee makes public
remarks that disparage the Company, its Board, officers, directors, advisors,
Employees, affiliates or subsidiaries; (x) Employee violates his/her fiduciary
duty to the Company, or his/her duty of loyalty to the Company; or (xi) Employee
breaches any term of this Agreement or any other material agreement between
Employee and the Company or any of its subsidiaries.
(c) "Salary" shall mean, at any relevant time, the
Employee's regular annual salary from the Company, excluding shift premiums,
overtime, bonuses or any other allowance.
Section 2. BENEFITS.
(a) Severance Benefit. In the event that the Employee's
employment is terminated by the Company without Just Cause (other than by reason
of death or disability), the Employee shall continue to receive the Salary at
the rate in effect hereunder on the date of such termination (the "Termination
Date") periodically, in accordance with the Company's prevailing payroll
practices, for a period of twelve (12) months following the Termination Date
(the "Severance Benefit"); provided, however, that the payment of the Severance
Benefit shall immediately terminate, and the Company shall have no further
obligations to the Employee with respect thereto, in the event that the Employee
violates any of the provisions contained in Section 3 hereof. Payment of any
amounts pursuant to this Section 2(a) shall be expressly conditioned upon the
Employee's execution of a general waiver and release of claims against the
Company and its officers, directors, agents, and affiliates in a form acceptable
to the Company.
(b) Continuation of Benefits in the Event of Death. In
the event the Employee dies prior to receipt of the Employee's entire Severance
Benefit, the remaining portion of such Severance Benefit shall continue to be
paid, in the same form and at the same time as described in Section 2(a) above
to the Employee's spouse, or, if the Employee is not married on the date of
death, to the Employee's estate.
(c) Mitigation/Set Off. (i) The Employee shall not be
required to seek other employment or to attempt in any way to reduce amounts
payable to the Employee pursuant to this Agreement.
Section 3. RESTRICTIVE COVENANTS. The Employee
acknowledges and agrees that the agreements and covenants contained in this
Section 3 are (i) reasonable and valid in geographical and temporal scope and
in all other respects, and (ii) essential to protect the value of the Company's
business and assets, and by his employment with the Company, the Employee will
obtain knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. For purposes of this
Section 3, references to the Company shall be deemed to include its
subsidiaries.
(a) Non-Competition. The Employee covenants and agrees
that during the Employee's employment with the Company (the "Employment Period")
and for a period extending to the first anniversary of the Employee's
termination of employment for any reason (the "Restricted Period"), with respect
to any State or foreign country in which the Company is engaged in business at
the time of such termination, the Employee shall not, directly or indirectly,
individually or jointly, own any interest in, operate, join, control or
participate as a partner, director, principal, officer, or agent of, enter into
the employment of, act as a consultant to, or perform any services for any
entity which competes to a material extent with the business activities in which
the Company is engaged at the time of such termination or in which business
activities the Company has documented plans to become engaged in and as to which
Employee has knowledge at the time of Employee's termination of employment, or
any entity in which any such relationship with the Employee would result in the
inevitable use or disclosure of Confidential Information. Notwithstanding
anything herein to the contrary, this Section 3(a)
-2-
shall not prevent the Employee from acquiring as an investment securities
representing not more than one percent (1%) of the outstanding voting securities
of any publicly-held corporation.
(b) Extension. If the Employee violates the provisions of
Section 3(a) above, the Employee shall continue to be bound by the restrictions
set forth in Section 3(a) until a period of one year has expired without any
violation of such provisions.
(c) Blue Pencil. If any court of competent jurisdiction
shall at any time deem the duration or the geographic scope of any of the
provisions of this Section 3 unenforceable, the other provisions of this
Section 3 shall nevertheless stand and the duration and/or geographic scope set
forth herein shall be deemed to be the longest period and/or greatest size
permissible by law under the circumstances, and the parties hereto agree that
such court shall reduce the time period and/or geographic scope to permissible
duration or size.
Section 4. INJUNCTIVE RELIEF. Without intending to
limit the remedies available to the Company, the Employee acknowledges that a
breach of any of the covenants contained in Section 3 hereof may result in
material irreparable injury to the Company or its subsidiaries or affiliates for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction, without the
necessity of proving irreparable harm or injury as a result of such breach or
threatened breach of Section 3 hereof, restraining the Employee from engaging
in activities prohibited by Section 3 hereof or such other relief as may be
required specifically to enforce any of the covenants in Section 3 hereof.
Notwithstanding any other provision to the contrary, the Restricted Period shall
be tolled during any period of violation of any of the covenants in Section
3(a) hereof and during any other period required for litigation during which the
Company seeks to enforce this covenant against the Employee if it is ultimately
determined that such person was in breach of such covenants.
Section 5. TAXES. The Company may withhold from any
payments made under this Agreement all applicable taxes, including but not
limited to income, employment and social insurance taxes, as shall be required
by law.
Section 6. SUCCESSORS AND ASSIGNS; NO THIRD-PARTY
BENEFICIARIES.
(a) The Company. This Agreement shall inure to the
benefit of and be enforceable by, and may be assigned by the Company to, any
purchaser of all or substantially all of the Company's business or assets, any
successor to the Company or any assignee thereof (whether direct or indirect, by
purchase, merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.
(b) The Employee. The Employee's rights and obligations
under this Agreement shall not be transferable by the Employee by assignment or
otherwise, without the prior written consent of the Company; provided, however,
that if the Employee shall die, all amounts then payable to the Employee
hereunder shall be paid in accordance with the terms of
-3-
this Agreement to the Employee's devisee, legatee or other designee or, if there
be no such designee, to the Employee's estate.
Section 7. WAIVER AND AMENDMENTS. Any waiver,
alteration, amendment or modification of any of the terms of this Agreement
shall be valid only if made in writing and signed by the parties hereto;
provided, however, that any such waiver, alteration, amendment or modification
is consented to on the Company's behalf by the Board. No waiver by either of the
parties hereto of their rights hereunder shall be deemed to constitute a waiver
with respect to any subsequent occurrences or transactions hereunder unless such
waiver specifically states that it is to be construed as a continuing waiver.
Section 8. SEVERABILITY AND GOVERNING LAW. If any
covenants or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction (a)
the remaining terms and provisions hereof shall be unimpaired and (b) the
invalid or unenforceable term or provision hereof shall be deemed replaced by a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision
hereof. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF COLORADO (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
Section 9. NOTICES.
(a) Every notice or other communication relating to this
Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom it is intended at such address as may from time to time be designated
by it in a notice mailed or delivered to the other party as herein provided,
provided that, unless and until some other address be so designated, all notices
or communications by the Employee to the Company shall be mailed or delivered to
the Company at its principal executive office, and all notices or communications
by the Company to the Employee may be given to the Employee personally or may be
mailed to Employee at the Employee's last known address, as reflected in the
Company's records.
(b) Any notice so addressed shall be deemed to be given:
(i) if delivered by hand, on the date of such delivery; (ii) if mailed by
courier, on the first business day following the date of such mailing; and (iii)
if mailed by registered or certified mail, on the third business day after the
date of such mailing.
-4-
Section 10. EFFECT OF AGREEMENT. This Agreement shall
not be construed as creating any contract of employment between the Company and
the Employee and nothing in this Agreement shall be construed to alter the
Employee's status as an "at-will" employee. The Employee shall not have any
right to be retained in the employ or service of the Company for any length of
time by reason of this Agreement, and this Agreement shall not affect the right
of the Company to deal with the Employee in all respects relating to the
Employee's employment, including the Employee's discharge, compensation, and
conditions of employment.
Section 11. SECTION HEADINGS. The headings of the
sections and subsections of this Agreement are inserted for convenience only and
shall not be deemed to constitute a part thereof, affect the meaning or
interpretation of this Agreement or of any term or provision hereof.
Section 12. ENTIRE AGREEMENT. This Agreement constitutes
the entire understanding and agreement of the parties hereto regarding the
employment of the Employee. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement.
Section 13. COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
[Signatures appear on next page]
-5-
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
PHARMION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
EMPLOYEE
/s/ Xxxxxx Xxxxxxxxx, PhD.
------------------------------------
-6-
