Exhibit 10.15
EMPLOYMENT AGREEMENT
Employment Agreement dated as of April 5, 1997, between Enzon, Inc., a
Delaware Corporation (the "Company"), having an address at 00 Xxxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000, and Xxxxx Xxxxxxx ("Executive"), having an address
at 000 Xxxxxxx Xxxx, Xxx Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, the Company is a biopharmaceutical company engaged in developing
advanced therapeutics for life threatening diseases; and
WHEREAS, Executive has extensive experience as an executive of a
pharmaceutical company and a biopharmaceutical company; and
WHEREAS, the Company desires to continue the employment of the Executive
and the Executive desires to continue such employment on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the employment of Executive by the
Company, the above premises and the mutual agreements hereinafter set forth, the
parties hereto agree as follows:
1. Duties.
(a) The Company employs the Executive as its President and Chief Executive
Officer and Executive accepts such employment subject to the terms and
conditions hereof. As President and Chief Executive Officer, Executive shall
have the
E-5
authority and duty generally to supervise and direct the business of the
Company, subject to the control of the Board of Directors (the "Board") of the
Company and of any duly authorized Committees of the Board.
(b) Executive agrees to devote substantially all of his time, during
regular business hours, to the affairs of the Company and shall at all times act
with due regard to the best interests of the Company.
2. Noncompetition and Confidentiality.
(a) The "Noncompete Period" shall be (i) the term of this Agreement and,
(ii) (A) the two (2) year period immediately following termination of
Executive's employment with the Company in the event Executive voluntarily
terminates his employment, other than pursuant to Section 4(b)(i) hereof, or the
Company terminates Executive's employment pursuant to Section 4(b)(ii) hereof,
or (B) any period of time for which the Executive receives base salary payments
from the Company pursuant to Section 3(d) hereof in the event Executive's
employment with the Company is terminated for any reason which would entitle
Executive to base salary payments under Section 3(d) hereof in the event
Executive's employment is Terminated for any reason which would entitle
Executive to base salary payment under Section 3(d) hereof. During the
Noncompete Period, Executive will not directly, or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, employee,
consultant, representative or otherwise, become or be interested in, or
associated with any
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other person, corporation, firm, partnership or entity engaged to a significant
degree in (x) modifying enzymes, protein-based biopharmaceuticals or other
pharmaceuticals in a manner similar to that described in U.S. Patent No.
4,179,337, or U.S. Patent No. 4,946,778, (y) developing single-chain
antigen-binding proteins or (z) any technology or area of business in which the
Company becomes involved to a significant degree during the term of this
Agreement. For purposes of the preceding sentence to determine whether any
entity is engaged in such activities to a "significant degree" comparison will
be made to the Company's operations at that time. In other words, an entity will
be deemed to be engaged in an activity to a significant degree if the number of
employees and/or amount of funds devoted by such entity to such activity would
be material to the Company's operations at that time. Executive is hereby
prohibited from ever using any of the Company's proprietary information or trade
secrets to conduct any business. The provision contained in the preceding
sentence shall survive the termination of Executive's employment pursuant to
Section 4 hereof or otherwise. In the event Executive breaches any of the
covenants set forth in this Section 2(a), the running of the period of
restriction set forth herein shall recommence upon Executive's compliance with
the terms of this Section 2(a).
(b) Executive recognizes and acknowledges that information relating to the
Company's business, including, but not limited to, information relating to
patent applications filed or to be filed by the Company, trade secrets relating
to the
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Company's products or services, and information relating to the Company's
research and development activities, shall be and remain the sole and exclusive
property of the Company and is a valuable, special and unique asset of the
Company's business. The Executive will not, during or after the term of his
employment by the Company, disclose any such information to any person,
corporation, firm, partnership or other entity; provided, however, that,
notwithstanding the foregoing, during the term of Executive's employment with
the Company, Executive may make such disclosure if such disclosure is in the
Company's best interests, is made in order to promote and enhance the Company's
business, and sufficient arrangements are made with the person or entity to whom
such disclosure is made to ensure the confidentiality of such disclosure. The
provisions of this Section 2(b) shall survive the termination of Executive's
employment pursuant to Section 4 hereof or otherwise.
(c) Executive agrees that the covenants and agreements contained in this
Section 2 are the essence of this Agreement; that each of such covenants is
reasonable and necessary to protect and preserve the Company's interests,
properties and business; that irreparable loss and damage will be suffered by
the Company should Executive breach any of such covenants and agreements; that
given the unique nature of the Company's business such loss and damage would be
suffered by the Company regardless of where a breach of such covenants and
agreements occur, thus, making the absence of a geographical limitation
reasonable; that
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each of such covenants and agreements is separate, distinct and severable not
only from the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; that the unenforceability or breach of
any such covenant or agreement shall not affect the validity or enforceability
of any other such covenant or agreement or any other provision of this
Agreement; and that, in addition to other remedies available to it, the Company
shall be entitled to both temporary and permanent injunctions and any other
rights or remedies it may have, at law or in equity, to prevent a breach or
contemplated breach by Executive of any such covenants or agreements.
Notwithstanding anything herein to the contrary, if a period of time or other
restriction specified in this Section 2 should be determined to be unreasonable
in a judicial proceeding, then the period of time or other restriction shall be
revised so that the covenants contained in this Section 2 may be enforced during
such period of time and in accordance with such other restrictions as may be
determined to be reasonable.
(d) Executive agrees to assign and does hereby assign to the Company all
tangible and intangible property, including, but not limited to, inventions,
developments or discoveries conceived, made or discovered by Executive solely or
in collaboration with others during the term of Executive's employment with the
Company, which relate in any manner to the Company's business.
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3. Compensation and Other Benefits.
For all services rendered by Executive and all covenants undertaken by him
pursuant to this Agreement, the Company shall pay, and Executive shall accept,
the compensation set forth in this Section 3.
(a) Executive shall receive an annual base salary of Three Hundred
Thirty-Six Thousand Dollars ($336,000.00) during the term of employment
hereunder, payable in accordance with the Company's normal payroll practices for
its senior management. The Company may, at any time, in the discretion of the
Board, increase, but not decrease, Executive's base salary in response to
increases in the cost of living or based upon merit as a result of a positive
review of Executive's performance by the Board. Executive shall be entitled to
begin receiving his salary hereunder on the Effective Date.
(b) Executive shall be entitled to participate in the Senior Management
Performance Incentive Program, as approved by the Board or Compensation
Committee and any other incentive program hereafter established and available to
executive officers of the Company (the "Program"). There shall be no guarantee
that any payment or grant of options shall be made under the Program, and a
payment or grant of options in one year does not imply that a similar payment or
grant, or any payment or grant, will be made in subsequent years.
(c) In addition to any options which may be granted to Executive pursuant
to Section 3(b) hereof, Executive is
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hereby granted options to purchase an aggregate of 300,000 shares of the
Company's common stock, $.01 par value (the "Common Stock") under the Company's
Non-Qualified Stock Option Plan, as amended (the "Non-Qualified Plan") at the
per share exercise price equal to the closing price of the Common Stock on April
15, 1997. Such options shall vest and become exercisable as to such 300,000
shares of Common Stock on April 5, 2002, if, except as otherwise provided in
Section 3(d), Executive shall then be employed by the Company; provided,
however, that such options immediately shall vest and become exercisable upon
the occurrence of each of the respective events described below, provided that,
except as otherwise provided in Section 3(d), Executive is then employed by the
Company, in which case such options will vest as to the number of shares set
forth opposite each such event (the "Accelerated Vesting Schedule"). In any
event such options shall be exercisable as to each tranche of shares in the
event of accelerated vesting pursuant to the Accelerated Vesting Schedule or as
to the entire 300,000 shares in the event there is no such accelerated vesting
for a term of five (5) years from the respective date of vesting (the
"Expiration Date"). Such options shall be represented by a NonQualified Stock
Option Certificate (the "Option Certificate") in the form attached hereto as
Exhibit A.
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Options Event
------- -----
100,000 shares Such options shall vest and become exercisable
when the closing price of the Common Stock is at
least four dollars ($4.00) as reported on the
NASDAQ National Market for at least twenty (20)
consecutive trading days.
100,000 shares Such options shall vest and become exercisable
when the closing price of the Common Stock is at
least five dollars ($5.00) as reported on the
NASDAQ National Market for at least twenty (20)
consecutive trading days.
100,000 shares Such options shall vest and become exercisable as
when the closing price of the Common Stock is at
least six dollars ($6.00) as reported on the
NASDAQ National Market for at least twenty (20)
consecutive trading days.
The prices and number of shares set forth above shall be adjusted for stock
splits, stock dividends and other similar recapitalization events.
(d) In the event the Company terminates Executive's employment hereunder
for any reason, except "For Cause" pursuant to Section 4(b)(ii) hereof or due to
Executive's Disability or Death pursuant to Sections 4(b)(iii) or 4(b)(iv)
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hereof, respectively, or Executive terminates his employment hereunder pursuant
to Section 4(b)(i) hereof, prior to the second anniversary of the Effective Date
(the "Second Anniversary Date"), Executive shall receive either (A) the
remainder of his base salary hereunder payable through the Second Anniversary
Date or (B) his base salary hereunder payable for one year immediately following
such termination, whichever shall be greater. In the event the Company
terminates Executive's employment for any reason, except "For Cause" pursuant to
Section 4(b)(ii) hereof or due to Executive's Disability or Death pursuant to
Sections 4(b)(iii) or 4(b)(iv) hereof, respectively, or Executive terminates his
employment hereunder pursuant to Section 4(b)(i) hereof, subsequent to the
Second Anniversary Date, Executive shall receive his base salary hereunder
payable for one year immediately following such termination or until Executive
becomes otherwise employed on a full-time basis, whichever is sooner. In the
event the Executive's employment with the Company is terminated for any reason,
except for Employee's voluntary resignation or pursuant to Section 4(b)(ii),
(iii) or (iv) hereof, the options granted pursuant to Section 3(c) hereof which
are exercisable at the time of such termination (the "Vested Options") shall
remain exercisable during the relevant exercise period or periods set forth in
Section 3(c) hereof and those options granted pursuant to Section 3(c) hereof
which are not exercisable at the time of such termination (the "Non-Vested
Options") shall become exercisable in accordance with the Accelerated Vesting
Schedule provisions of
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Section 3(c) in the same manner as if the Executive's employment had not been
terminated; provided that all such Non-Vested Options will terminate and be of
no further force and effect to the extent such options have not vested in
accordance with the Accelerated Vesting Schedule on or prior to April 5, 2002.
In the event the Company terminates Executive's employment "For Cause" pursuant
to Section 4(b)(ii) hereof or Executive terminates his employment hereunder for
any reason other than as provided in Section 4(b)(i) hereof, Executive shall
receive no further payments from the Company, all Vested Options at the time of
such termination shall remain exercisable during the relevant exercise period or
periods set forth in Section 3(c) and those options granted pursuant to Section
3(c) hereof which are Non-Vested Options at the time of such termination shall
terminate immediately as of the date of such termination. All salary and
severance payments made to Executive hereunder shall be made in accordance with
the Company's normal payroll practices for senior management.
(e) In the event the Company terminates Executive's employment due to
Executive's Disability pursuant to Section 4(b)(iii) of this Agreement, the
Company shall pay to Executive, during the six-month period following such
termination, an amount equal to the difference between Executive's base salary
hereunder for such six months (exclusive of benefits) and the amount received by
Executive during such six-month period under any employee disability policy
maintained by the Company for the benefit of Executive. The Company shall
calculate and pay any
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amounts due herein no less frequently than semi-monthly. The options granted
pursuant to Section 3(c) hereof which are Vested Options at the time of such
termination shall remain exercisable during the relevant exercise period or
periods set forth in Section 3(c) hereof and a pro rata portion (based upon the
number of days which have elapsed at the time of such termination in the five
(5) year period commencing on the Effective Date and ending on May 5, 2002 (the
"Vesting Period")) of the options which are Non-Vested Options at the time of
such termination shall become exercisable immediately upon such termination. For
example, if such termination occurs 50% of the way through the Vesting Period,
50% of the total number of Non-Vested Options shall vest and become exercisable.
It is acknowledged and agreed that the immediately preceding sentence shall be
deemed a waiver and modification of the restrictions imposed on the exercise of
options in the event of disability under Section H of the Non-Qualified Plan and
that such waiver and modification was authorized and approved by the
Compensation Committee of the Board (the "Committee") as permitted by Section H
of the Non-Qualified Plan.
(f) In the event Executive's employment is terminated due to his death
pursuant to Section 4(b)(iv) of this Agreement, the Company shall pay to
Executive's estate, during the six-month period following such termination,
Executive's base salary hereunder for such six months (exclusive of benefits).
The options granted pursuant to Section 3(c) hereof which are Vested
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Options at the time of such termination shall remain exercisable during the
relevant exercise period or periods set forth in Section 3(c) hereof and a pro
rata portion (based upon the number of days which have elapsed at the time of
such termination in the Vesting Period) of the options which are Non-Vested
Options at the time of such termination shall become exercisable immediately
upon such termination and shall remain exercisable for the five (5) year period
commencing on such date of termination. For example, if such termination occurs
50% of the way through the Vesting Period, 50% of the total number of Non-Vested
Options shall vest and become exercisable. It is acknowledged and agreed that
the immediately preceding sentence shall be deemed to be a waiver and
modification of the restrictions imposed on the exercise of options in the event
of death under Section I of the Non-Qualified Plan and that such waiver and
modification was authorized and approved by the Committee as permitted by
Section I of the Non-Qualified Plan.
(g) In the event of a Change of Control, the Change of Control Agreement
dated as of January 20, 1995, between Executive and Company shall govern, except
as specifically set forth herein with respect to the options granted to
Executive pursuant to Section 3(c) hereof. For purposes hereof "Change of
Control" shall mean: (i) A "Board Change" which, for purposes of this Agreement,
shall have occurred if a majority of the seats (other than vacant seats) on the
Company's Board were to be occupied by individuals who were neither (A)
nominated by a majority of the Incumbent Directors nor (B) appointed by
directors so nominated. An "Incumbent Director" is a member of the Board who has
been either (A) nominated by a
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majority of the directors of the Company then in office or (B) appointed by
directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as defined herein) other than the Board;
or (ii) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of a majority of the then outstanding voting securities of the Company (the
"Outstanding Company Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (A) any acquisition by
the Company, or (B) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (C) any public offering or private placement by the Company of
its voting securities; or (iii) a merger or consolidation of the Company with
another entity in which neither the Company nor a corporation that, prior to the
merger or consolidation, was a subsidiary of the Company, shall be
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the surviving entity; or (iv) a merger or consolidation of the Company following
which either the Company or a corporation that, prior to the merger or
consolidation, was a subsidiary of the Company, shall be the surviving entity
and a majority of the Outstanding Company Voting Securities is owned by a Person
or Persons who were not "beneficial owners" of a majority of the Outstanding
Company Voting Securities immediately prior to such merger or consolidation; or
(v) a voluntary or involuntary liquidation of the Company; or (vi) a sale or
disposition by the Company of at least 80% of its assets in a single transaction
or a series of transactions (other than a sale or disposition of assets to a
subsidiary of the Company in a transaction not involving a Change of Control or
a change in control of such subsidiary). If any of the Change in Control events
specified in (iii), (v) or (vi) above occur, any options granted pursuant to
Section 3(c) hereof which are Non-Vested Options as of the effective date of
such Change in Control event shall vest immediately prior to such effective date
(and Employee will be provided a reasonable opportunity to exercise such options
prior to such effective date) to the extent provided in the Accelerated Vesting
Schedule to the extent the shareholders of the Company receive a payment for
their shares of Common Stock in connection with such Change in Control event
which is equal to the closing price levels set forth in the Accelerated Vesting
Schedule. In the event any of the Change in Control events specified in (iii),
(v) or (vi) above occur, all Vested Options and Non-Vested Options granted under
Section 3(c)
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shall terminate as of the effective date of such Change in Control event to the
extent not previously exercised. If any of the Change in Control events
specified in (i), (ii) or (iv) above occur, the options granted pursuant to
Section 3(c) hereof which are Vested Options as of the effective date of such
Change in Control event shall remain exercisable during the relevant exercise
period or periods set forth in Section 3(c) hereof and those options granted
under Section 3(c) hereof which are Non-Vested Options as of the effective date
of such Change in Control shall become exercisable and remain exercisable in
accordance with the Accelerated Vesting Schedule provisions of Section 3(c) in
the same manner as if such Change in Control event had not occurred.
Notwithstanding any provisions contained in Section L of the Non-Qualified Plan
or in the Option Certificate pertaining to the exercise of the options granted
pursuant to Section 3(c) hereof, if any of the events specified in (iii), (v) or
(vi) above occur the provisions contained herein shall apply.
(h) Executive shall be entitled to vacations in accordance with the policy
of the Company with respect to its senior management, in effect from time to
time and shall be eligible to participate in any pension, profit sharing or
similar plan and any health, hospitalization, medical, accident, disability,
sick leave, supplementary income benefit, life insurance or other similar
benefit plan or program of the Company now existing or hereafter established and
available to the Company's employees generally or to key employees as a group,
in
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all cases to the extent his age, health and other qualifications make him
eligible to participate. Executive also shall be entitled to such additional
benefits as may be granted to him from time to time by the Board. Upon the
termination of Executive's employment for any reason, the Company shall pay
Executive for any unused accrued vacation time.
(i) Executive shall be reimbursed for reasonable travel, entertainment and
other expenses associated with the performance of his duties hereunder, promptly
upon his delivery of appropriate receipts and other documentation evidencing the
incurrence of such expenses.
(j) All compensation payable and other benefits provided under this Section
3 shall be subject to customary withholding for income, F.I.C.A. and other
employment taxes.
(k) All options granted pursuant to this Section 3 shall be issued in
accordance with and be subject to the terms and conditions of the Non-Qualified
Plan. Except as otherwise specifically set forth herein, if there exists a
conflict between the terms of the Non-Qualified Plan and the terms of this
Agreement, the terms of the Non-Qualified Plan shall govern. If there exists a
conflict between the terms of this Agreement and the Option Certificate, the
Option Certificate shall govern. Executive has reviewed the Non-Qualified Plan
and the form of the Option Certificate prior to executing this Agreement.
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(l) All options and terms and conditions pertaining thereto granted
pursuant to this Section 3 shall extend beyond the Termination Date of this
Agreement.
4. Term and Termination of this Agreement
(a) The term of employment pursuant to this Agreement shall commence as of
April 5, 1997 (the "Effective Date") and will terminate at the close of business
on April 4, 2000 (the "Termination Date") unless earlier terminated as provided
herein.
(b) Executive's employment by the Company hereunder may be terminated prior
to the Termination Date:
(i) By Executive at any time upon the breach by the Company of any
material term of this Agreement, provided that Executive shall have sent
written notice of such breach to the Chairman of the Board and the Company
shall have failed to correct such breach within thirty (30) days of its
receipt of such notice;
(ii) By the Company immediately For Cause. For purposes hereof "For
Cause" shall mean (A) any willful and knowing material breach of this
Agreement by Executive; (B) any attempt by Executive to secure any personal
profit in connection with the business of the Company not previously
disclosed to and approved by the Company and a majority of its Board of
Directors; (C) Executive's criminal conviction for fraud, embezzlement,
bribery or any felonious offense; or (D) Executive's commission of any
willful and intentional act of fraud or dishonesty against the
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Company. In the event the Company terminates Executive's employment "For
Cause" the Board shall provide Executive as soon as practicable (but not
later than seven (7) business days thereafter) with a written explanation
of the reasons for such termination;
(iii) By the Company upon Executive's Disability. For purposes hereof
"Disability" shall mean a physical or mental condition which prevents
Executive from performing his duties hereunder for a continuous six month
period or for a total of six months during any 18 month period;
(iv) Upon the death of Executive; or
(v) By the Company upon a unanimous determination by the Company's
Board of Directors (other than Executive if Executive is then a member of
the Board) that Executive has failed to meet the performance criteria which
would reasonably be expected of someone in his position. In the event the
Company terminates Executive's employment based upon such determination by
the Board, the Board shall provide Executive as soon as practicable (but
not later than seven (7) business days thereafter) with a written
explanation of the facts on which the termination is based.
(c) Except as otherwise provided herein, upon termination of Executive's
employment hereunder, the Company shall have no further obligation to Executive
or his personal representative with respect to remuneration due under this
Agreement.
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5. Notices.
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and shall be deemed to have been given when
delivered by hand and acknowledged by receipt or when mailed at any general or
branch United States Post Office enclosed in a registered or certified postpaid
envelope and addressed to the address of the respective party stated below or to
such changed address as the party may have fixed by notice:
To the Company: Enzon, Inc.
00 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Corporate Secretary
To Executive: Xxxxx Xxxxxxx
000 Xxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
6. Miscellaneous.
(a) This Agreement shall be construed, interpreted and governed by the laws
of the State of New Jersey, without regard to the conflicts of law provisions
thereof.
(b) This Agreement shall be binding upon and inure to the benefit of
Executive, his legal representatives, heirs and distributees, and shall be
binding upon and inure to the benefit of the Company, and its successors and
assigns; provided, however, that, because this Agreement is a personal service
contract, Executive shall not assign any of his employment duties or obligations
hereunder and any purported assignment shall be null and void ab initio.
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(c) Except as otherwise specifically provided herein, this Agreement
contains the entire agreement of the parties with respect to its subject matter,
and no waiver, modification or change of any of its provisions shall be valid
unless in writing and signed by the party against whom such claimed waiver,
modification or change is sought to be enforced.
(d) Except as otherwise specifically provided for hereunder, the waiver of
any breach of any duty, term or condition of this Agreement shall not be deemed
to constitute a waiver of any preceding or succeeding breach of the same or of
any other duty, term or condition of this Agreement.
(e) The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof.
(f) Executive represents and warrants that his performance of all of the
terms of this Agreement and of his obligations as an executive of the Company
does not and will not breach any non-competition agreement or agreement to keep
in confidence any proprietary information or knowledge acquired by him in
confidence or in trust from a third party prior to his employment with the
Company.
(g) Any claim or controversy arising out of or relating to this Agreement
or the breach hereof shall be settled by arbitration in accordance with the laws
of the State of New Jersey. Such arbitration shall be conducted in the State of
New
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Jersey in accordance with the rules then existing of the American Arbitration
Association. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. In the event of any dispute arising
under this Agreement, the prevailing party shall be entitled to reasonable legal
fees and disbursements incurred in connection therewith.
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(h) Whenever the context requires, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural forms and vice versa.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
EXECUTIVE
/s/XXXXX XXXXXXX
-------------------------
Xxxxx Xxxxxxx
ENZON, INC.
By:/s/XXXX X. XXXXXX
-----------------------
Xxxx X. Xxxxxx
Vice President, Business
Development, General Counsel
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