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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into
this 25th day of October, 1999, by and between ZONAGEN, INC., a Delaware
corporation (hereinafter referred to as the "COMPANY," which term shall for all
purposes be deemed to include its successors and assigns), and Xxxxx X. Xxxxxx
(the "EXECUTIVE").
WITNESSETH
WHEREAS, the Company desires to employ the Executive as its Vice
President of Operations on the terms and subject to the conditions set forth
herein, and the Executive desires to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive and the
Executive hereby accepts employment as Vice President
of Operations of the Company, subject to the
direction of the Board of Directors and the Company's
officers designated by the Board of Directors, and
shall perform and discharge well and faithfully the
duties and responsibilities that are assigned to him
by the Board of Directors. The Executive agrees to
devote such of his time, attention and energy to the
business of the Company, and any of its subsidiaries
or affiliates, as may be required to perform the
duties and responsibilities assigned to him by the
Board of Directors to the best of his ability and
with requisite diligence. If the Executive is
appointed a director or elected to another executive
officer position of the Company or any subsidiary
thereof during the term of this Agreement, the
Executive will serve in such capacity without further
compensation.
(b) The Executive agrees to comply in all material
respects, at all times during the Executive Period
(as defined in Section 2 hereof), with all applicable
policies, rules and regulations of the Company.
2. TERM. Subject to the terms hereof, this Agreement shall
commence on the date hereof (the "EXECUTION DATE") and shall
terminate on the second anniversary of the Execution Date;
provided, that this Agreement will automatically renew for
successive one-year periods unless written notice of
termination is given to the Executive by the Company not less
than sixty (60) days before the expiration of the term hereof
or any renewal period then in effect. The term of this
Agreement shall include any such renewal periods and shall be
referred to herein as the "EXECUTIVE PERIOD."
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3. COMPENSATION. For all services rendered under this Agreement,
the Company agrees to pay to Executive during the Executive
Period:
(i) A base monthly salary of 8,750.00, payable in equal
semi-monthly installments or on any other periodic
basis consistent with the Company's payroll procedures,
subject only to such payroll and withholding deductions
as are required by applicable federal and state laws.
4. FRINGE BENEFITS: EXPENSES.
(a) So long as the Executive is employed by the Company,
the Executive shall participate in all employee
benefit plans sponsored by the Company for its
executive employees, including, but not limited to,
vacation policy, health insurance, dental insurance
and pension or profit-sharing plans; provided,
however, that the nature, amount and limitations of
such plans shall be determined from time to time by
the Board of Directors of the Company.
(b) The Company agrees to reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in
the performance of his duties, subject to the
submission of appropriate documentation in accordance
with the Company's expense reimbursement policy as in
existence from time to time.
5. CONFIDENTIAL INFORMATION AND NON- COMPETITION. The Executive
shall execute and comply with the Proprietary Information and
Inventions and Non-Competition Agreement in the form attached
as Exhibit A hereto and incorporated herein by reference.
6. TERMINATION.
(a) At any time during the Executive Period, the Company
may, at its sole discretion, discharge the Executive,
with or without "cause". Such termination shall be
effective on delivery of written notice to the
Employee of the Company's election to terminate this
Agreement under this Section 6. For purposes of this
Agreement, the following events shall constitute
"CAUSE": (i) the conviction of the Executive by a
court of competent jurisdiction of a crime involving
moral turpitude; (ii) the commission, or attempted
commission, by the Executive of an act of fraud on
the Company; (iii) the misappropriation, or
attempted misappropriation, by the Executive of any
funds or property of the Company; (iv) the continued
and unreasonable failure by the Executive to
perform in any material respect his obligations under
the terms of this Agreement; (v) the knowing
engagement by the Executive, without
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EMPLOYMENT AGREEMENT
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the written approval of the Board of Directors, in
any direct, material conflict of interest with the
Company without compliance with the Company's
conflict of interest policy; (vi) the knowing
engagement by the Executive, without the written
approval of the Board of Directors, in any activity
which competes with the business of the Company or
which would result in a material injury to the
Company; or (vii) the knowing engagement by the
Executive in any activity that would constitute a
material violation of the provisions of the Company's
Xxxxxxx Xxxxxxx Policy or Business Ethics Policy, if
any, then in effect.
If the Company terminates the Executive's employment
under this Agreement for reasons other than Cause,
then the Company shall, subject to the terms of this
Section 6, pay to the Employee (or his estate or
representative, as appropriate) an amount equal to
six (6) months compensation at his then current
salary, payable bi-monthly or in accordance with the
Company's payroll procedures, and shall continue to
provide benefits in the kind and amounts provided up
to the date of termination for the 6-month period,
including, without limitation, continuation of any
Company-paid benefits as described in Section 5 of
this Agreement for the Executive and his family.
Under no circumstances shall the Executive be
entitled to any compensation or continuation of
benefits for any period of time following his
termination if his termination is for Cause. If the
Company terminates the Executive's employment under
this Agreement for reasons other than Cause, the
Executive agrees to accept, in full settlement of any
and all claims, losses, damages and other demands
that the Executive may have arising out of such
termination as liquidated damages and not as a
penalty, the six-month salary payments and
continuation of Company-paid benefits as set forth
above. The Executive hereby waives any and all rights
that he may have to bring any cause of action or
proceeding, as a result of such termination, except
to enforce the Company's obligation to pay amounts
owing pursuant to this Section 6.
(b) This Agreement will terminate automatically on the
earliest to occur of: (i) the death or disability of
the Executive; (ii) the voluntary retirement of the
Executive; or (iii) the expiration of the Executive
Period unless otherwise renewed.
(c) If at any time during the term of this Agreement, the
Executive is unable to perform effectively his duties
hereunder because of physical or mental disability,
the Company shall continue payment of compensation as
provided in Section 3 hereof during the first
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EMPLOYMENT AGREEMENT
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six-month period of such disability to the extent not
covered by the Company's disability insurance
policies. On the expiration of such six-month period,
the Company, at its sole discretion, may continue
payment of the Executive's salary for such additional
periods as the Company elects or may terminate this
Agreement without any further obligations thereunder.
If the Executive should die during the term of this
Agreement, the Executive's employment and the
Company's obligations hereunder shall terminate as of
the last day of the month in which the Executive's
death occurs.
(d) Notwithstanding the terms of Section 6(a) above, the
Executive shall be obligated to actively pursue
employment following termination of his employment to
be entitled to be paid the continuation of salary
provided in Section 6(a), and the Company's
obligation to pay any such continuation of salary
shall terminate at such time as the Executive
commences employment with another employer; provided,
however, that nothing herein shall obligate the
Executive to pursue or accept employment for a
position that is not commensurate with his current
position at the Company or otherwise acceptable to
him.
(e) At any time during the term of this Agreement, the
Executive may terminate this Agreement by giving at
least thirty days written notice to the Company of
his intent to terminate this Agreement, with the date
of termination to be specified in such notice.
(f) If this Agreement is terminated by the Executive
pursuant to Section 6(e) hereof, then the Company
will have no obligation to pay any amount to the
Executive other than amounts earned or accrued
pursuant to Section 3 hereof, but which have not yet
been paid, as of the date of termination.
7. ASSIGNMENT BY EXECUTIVE. Except as otherwise expressly
provided herein, the Executive agrees for himself, and on
behalf of his executors and administrators, heirs, legatees,
distributees and any other person or persons claiming any
benefits under him by virtue of this Agreement, that this
Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated
in any way by the Executive or any executor, administrator,
heir, legatee, distributee or person claiming under the
Executive by virtue of this Agreement and shall not be
subject to execution, attachment or similar process. Any
attempt at assignment, transfer, pledge or hypothecation or
other disposition of this Agreement or of such rights,
interests and benefits contrary to the foregoing provision,
or the levy of any attachment or similar process thereupon,
shall be null and void and without effect.
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8. SUCCESSORS OF THE COMPANY. This Agreement shall be binding
on and inure to the benefit of any Successor (as hereinafter
defined) of the Company and any such Successor shall be
deemed substituted for the Company under the terms of this
Agreement. As used in this Agreement, the term "SUCCESSOR"
shall include any person, firm, corporation or other
business entity which at any time, whether by merger,
purchase or otherwise, acquires all or substantially all of
the assets or businesses of the Company; but no such
substitution shall relieve such companies of their original
obligations hereunder. This Agreement may not otherwise be
assigned by the Company without the Executive's consent to
any person, firm, corporation, limited liability company,
trust or other entity.
9. NOTICES. All notices or other communications that are required
or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in
person, transmitted by telecopier or mailed by registered or
certified first class mail, postage prepaid, return receipt
requested, to the parties hereto at the address set forth
below (as the same may be changed from time to time by notice
similarly given) or the last known business or residence
address of such other person as may be designated by either
party hereto in writing.
If to the Company:
Zonagen, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-0
The Woodlands, Texas 77380
Attn: Xxxxxx X. Xxxxxxxx
If to the Executive:
Xxxxx X. Xxxxxx
0 Xxxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
10. WAIVER OF BREACH. A waiver by the Company or the Executive of
a breach of any provision of this Agreement by the other party
shall not operate or be construed as a waiver of any other
breach by the other party.
11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
12. SEVERABILITY. If any provision of this Agreement shall, for
any reason, be held to violate any applicable law, and so much
of said Agreement is held to be unenforceable, then the
invalidity of such specific provision herein
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shall not be held to invalidate any other provision herein
which shall remain in full force and effect.
13. AMENDMENT. This Agreement constitutes and contains the entire
agreement of the parties and supersedes any and all prior
negotiations, correspondence, understandings and agreements
between the parties respecting the subject matter hereof. This
Agreement may be modified only by an agreement in writing
executed by all the parties hereto.
14. HEADINGS. The section and subsection headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and
all of which together shall constitute one instrument.
16. CUMULATIVE REMEDIES. All rights and remedies hereunder are
cumulative and are in addition to all other rights and
remedies provided by law, agreement or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY:
ZONAGEN, INC.
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President and Chief
Executive Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
