EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of January 17, 1998 (the
"Commencement Date") by and between Aquila Biopharmaceuticals,
Inc., a Delaware Corporation, having a principal place of
business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
("Aquila") and Xxxxx X. Xxxxxx, of 00 Xxxxxx Xxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx ("Executive").
WHEREAS, Aquila desires to employ Executive upon the terms
and conditions provided in this Agreement; and
WHEREAS, Executive desires to serve in the employ of Aquila
on a full-time basis upon the terms and conditions hereinafter
provided.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Employment. Aquila hereby employs Executive, and
Executive hereby accepts employment by Aquila upon the terms and
conditions herein provided.
2. Position and Responsibilities; Principal Location.
(a) During the term of this Agreement, Executive will serve
as Vice President, Chief Financial Officer and Treasurer, subject
to election by the Board of Directors, reporting to the Chief
Executive Officer ("CEO"). Executive shall devote his primary
energies, attention and abilities to the business of Aquila and
shall perform such duties as shall be assigned to him by the CEO.
Executive may not serve as a director of other companies without
the prior approval of the CEO.
(b) The principal location at which Executive will perform
his duties will be at Aquila's principal offices in Worcester,
Massachusetts or in a location not more than fifty (50) miles
distant from Boston, Massachusetts.
3. Compensation and Benefits. For all services rendered
by Executive during his employment hereunder, Aquila shall
compensate Executive as follows:
(a) Salary. Aquila shall pay Executive a base salary of
$165,000 per year, subject to increase from time to time in
accordance with the usual practice of Aquila with respect to
review of compensation of its senior executives. Executive's
salary shall be payable in periodic installments in accordance
with Aquila's usual practice for its senior executives.
(b) Regular Benefits. Executive shall be entitled to
participate in any and all employee benefit plans, medical
insurance plans, life insurance plans, disability income plans,
retirement plans, bonus incentive plans and other benefit plans
from time to time in effect for senior executives of Aquila.
Such participation shall be subject to: (i) the terms of the
applicable plan documents; (ii) generally applicable policies of
Aquila; and (iii) the discretion of the Board or any
administrative or other committee provided for in or contemplated
by such plan.
(c) Business Expenses. Aquila shall reimburse Executive
for all reasonable travel and other business expenses incurred by
him in the performance of his duties and responsibilities,
subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by Aquila.
(d) Vacation. Executive shall be entitled to paid vacation
in accordance with the policies of Aquila (but in no event less
than four weeks per year), to be taken at such times and
intervals as shall be determined by Executive with the approval
of Aquila, which approval shall not be unreasonably withheld.
(e) Bonus. Executive shall be eligible to receive an
annual bonus based upon achievement of corporate and individual
objectives; the award of any bonus shall lie solely in the
discretion of the Board of Directors.
4. Termination and Termination Benefits. Executive's
employment hereunder shall terminate under the following
circumstances:
(a) Death. In the event of Executive's death during his
employment hereunder, Aquila shall continue to pay an amount
equal to Executive's base salary to Executive's beneficiary
designated in writing to Aquila prior to his death (or to his
estate if he fails to make such designation) for a period of six
(6) months after the date of Executive's death, at the salary
rate in effect on the date of his death, said payments to be made
on the same periodic dates as base salary payments would have
been made to Executive had he not died.
(b) Termination by Aquila for Cause. Executive's
employment hereunder may be terminated by Aquila for cause,
without further liability on the part of Aquila, effective
immediately by notice to Executive stating the nature of such
cause. The following shall constitute "cause" for such
termination:
(i) Deliberate dishonesty of Executive with respect to
Aquila or any subsidiary or affiliate thereof; or
(ii) Conviction of Executive of a crime involving moral
turpitude; or
(iii) The material failure by Executive to perform
Executive's duties hereunder (other than any such failure
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resulting from the incapacity of Executive due to physical or
mental illness) which failure continues for thirty (30) days
after notice to Executive setting forth in reasonable detail
the manner in which Executive has not performed Executive's
duties; or
(iv) Unlawful conduct pertaining to Aquila or any of
its affiliates or shareholders or involving a criminal act;
material and conscious falsification or unauthorized
disclosure of important records or reports; embezzlement or
unauthorized conversion of property; violation of conflict of
interest or vendor relations policies; or willful disclosure
of significant trade secrets or other information likely to be
used to the detriment of Aquila.
(c) Termination by Executive for Cause. Executive may
terminate his employment hereunder without liability effective
after thirty (30) days notice by Executive to Aquila in the event
of the material breach by Aquila of this Agreement if such breach
shall continue for more than thirty (30) days after notice to
Aquila setting forth in reasonable detail the nature of such
breach.
(d) Termination by Aquila Without Cause. Executive's
employment may be terminated without cause by Aquila by thirty (30)
days written notice to Executive.
(e) Certain Termination Benefits. In the event of
termination pursuant to Paragraphs 4(c) or 4(d), Executive shall be
entitled to the following:
(i) Base Salary. For one hundred eighty (180) days
after the date of termination, Aquila shall continue to pay
Executive his base salary at the rate in effect on the date of
termination.
(ii) Regular Benefits.
(A) For one hundred eighty (180) days subsequent
to the date of termination, Executive shall continue to
receive at Aquila's expense all benefits described in
Paragraph 3(b) existing on the date of termination (except for
any cash bonus plans which shall be pro-rated through the date
of termination), provided that Aquila's obligation to continue
such benefits shall cease on a benefit by benefit basis on
that date, if any, on which Executive is employed and
Executive receives in connection with such employment benefits
which are substantially equivalent to Aquila's benefits.
(B) For purpose of application of Aquila's
benefits, Executive shall be treated, to the extent that
applicable law pertaining to the particular Aquila benefit
plan permits Aquila to do so, as if he had remained in the
employ of Aquila, with a total annual salary at the rate in
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effect on the date of termination and service or similar
credits, if any, will continue to accrue during such period as
if Executive had remained in the employ of Aquila.
(C) If in spite of the provisions of this clause
(ii), benefits or service credits under any benefit plan shall
not be payable or provided under any such plan to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer deemed to be an employee of Aquila,
Aquila itself shall pay or provide payment of such benefits
and service credits for such benefits to Executive or to
Executive's dependents, beneficiaries or estate.
(D) To the extent that applicable law does not
permit any Aquila benefit referred to above to be provided,
paid, or funded through the applicable Aquila benefit plan,
then Aquila shall not be required to provide such benefit
through such plan and shall only be required to provide in the
case of a benefit the tax treatment of which is enhanced by
such plan an amount equal to what would have been Aquila's
initial contribution to such plan and not the equivalent
benefit.
(iii) Set-off. Aquila shall be entitled to set off
against any cash compensation to be provided to Executive
under this Paragraph 4(e) fifty percent (50%) of the amount of
any cash compensation received by Executive from other
employment during the period in which Executive received cash
compensation under Paragraph 4(e). Executive shall inform
Aquila of any such amounts of cash compensation and shall
refund to Aquila any amount which Aquila has paid which
exceeds the amounts due from Aquila after application of the
set-off provided for in this paragraph. Notwithstanding the
foregoing and any other provision of this Agreement, Executive
shall be under no obligation to seek or accept any employment
after termination of employment with Aquila for any reason.
5. Disability.
(a) If, due to physical or mental illness, Executive shall
be disabled so as to be unable to perform substantially all of
his duties and responsibilities hereunder, Aquila may designate
another executive to act in his place during the period of such
disability. Notwithstanding any such designation, Executive
shall continue to receive his full salary and benefits under
Paragraph 3 of this Agreement, unless his employment is
terminated as provided in this Paragraph 5.
(b) If Executive shall become totally and permanently
disabled, then Aquila may terminate Executive's employment
hereunder and shall continue to pay to Executive his full salary
and provide him with the benefits he was receiving immediately
prior to such termination for six months, provided that such
salary shall be reduced by the amount of any disability insurance
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proceeds actually paid to Executive or for his benefit with
respect to such period of time under any disability policy
provided by Aquila for Executive.
(c) The determination that by virtue of total and permanent
disability Executive is unable to perform his duties hereunder
shall be made by a physician chosen by Aquila and reasonably
satisfactory to Executive (or Executive's legal representative)
and such determination shall be conclusive. The cost of such
examination shall be borne by Aquila. Executive shall be
conclusively presumed to be totally and permanently disabled if
for reasons involving physical or mental illness or injury
Executive fails to perform his duties hereunder for a period of
one hundred twenty (120) consecutive calendar days or for any
periods aggregating one hundred twenty (120) days or more in any
six (6) consecutive month period. The date of termination of
Executive's employment hereunder in the event of total and
permanent disability shall be the earlier of such physicians's
examination pursuant to which such determination is made or the
first business day after which either such 120-day period or such
six-month period has expired.
6. Non-competition, Confidential Information, and
Non-Solicitation.
(a) Non-competition. Executive agrees that he will not at
any time during the term of this Agreement and for a period of
two (2) years following the termination of this Agreement for any
reason, directly or indirectly, as a partner, officer, director,
consultant, employee, stockholder or otherwise, engage in any
employment, pursuit or association in which he shall have
substantial responsibility with respect to products and/or
services which are in direct competition with products and/or
services of Aquila, provided however, in any event the holding by
Executive of any investment in any security shall not be deemed
to be a violation of this Paragraph 6 if such investment does not
constitute more than 5% of the outstanding issue of such
security.
(b) Confidential Information. Executive will not disclose
to any other person (except as required by applicable law or in
connection with the performance of his duties and
responsibilities hereunder), or use for his own benefit or gain,
any confidential information of Aquila obtained by his incident
to his employment with Aquila. The term "confidential
information" includes, without limitation, financial information,
business plans, prospects and opportunities (such as lending
relationships, financial product developments, possible
acquisitions or dispositions of businesses of facilities),
products, plans, intellectual property, analyses, projects,
processes, marketing, research of development activities, and all
technical or scientific information or know-how of Aquila which
have been discussed or considered by Aquila but does not include
any information which has become part of the public domain by
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means other than Executive's non-observance of his obligations
hereunder.
(c) Non-solicitation. Executive agrees that he will not at
any time during the term of this Agreement and for a period of
three (3) years following the termination of this Agreement for
any reason, directly or indirectly, solicit or recruit any
employee of Aquila to serve as an employee of, consultant to, or
partner of Executive or any entity.
(d) Relief; Interpretation. Executive agrees that Aquila
shall be entitled to injunctive relief for any breach by him of
the covenants contained in Paragraphs 6(a), (b), or (c). In the
event that any provision of this Paragraph 6 shall be determined
by any court of competent jurisdiction to be unenforceable by
reason of its being extended over too great a period of time, too
large a geographic area, or too great a range of activities, it
shall be interpreted to extend only over the maximum period of
time, geographic areas, or range of activities as to which it may
be enforceable. For purposes of this Paragraph 6, the term
"Aquila" shall mean Aquila and any of its subsidiaries.
(e) Survival. Executive's obligations under this
Paragraph 6 shall survive termination of this Agreement.
7. Conflicting Agreements. Executive hereby represents
and warrants that the execution of this Agreement and the
performance of his obligations hereunder will not breach or be in
conflict with any other agreement to which he is a party or is
bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the
performance of his obligations hereunder.
8. Withholding. All payments made by Aquila under this
Agreement shall be net of any tax or other amounts required to be
withheld by Aquila under applicable law.
9. Arbitration of Disputes. Any controversy or claim
arising out of or relating to this Agreement or the breach
thereof shall be settled by arbitration in accordance with the
laws of the Commonwealth of Massachusetts by three arbitrators.
The party initiating arbitration shall nominate one arbitrator in
the request for arbitration and the other party shall nominate a
second in the answer thereto within thirty (30) days of receipt
of the request. The two arbitrators so named will then jointly
appoint the third arbitrator. If the answering party fails to
nominate its arbitrator within the thirty (30) day period, or if
the arbitrators named by the parties fail to agree on the third
arbitrator within sixty (60) days, then such arbitrator shall be
appointed by the American Arbitration Association in the City of
Boston. Such arbitration shall be conducted in the City of
Worcester, Massachusetts in accordance with the rules of the
American Arbitration Association, except with respect to the
selection of arbitrators which shall be provided in this
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Paragraph 9. Judgment upon the award entered by the arbitrators
may be entered in any court having jurisdiction thereof.
10. Assignment; Successors and Assigns, etc. Neither the
employer nor Executive may make any assignment of this Agreement
or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; provided, however,
that Aquila may assign its rights under this Agreement without
the consent of Executive in the event Aquila shall hereafter
consolidate with or merge into any other person, or transfer all
or substantially all of its properties or assets to any other
person. In the event of the Executive's death prior to the
completion by Aquila of all payments due him under this
Agreement, Aquila shall continue such payments to the Executive's
beneficiary designated in writing to Aquila prior to his death
(or to his estate, if he fails to make such designation). This
Agreement shall inure to the benefit of and be binding upon
Aquila and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
11. Enforceability. If any portion or provision of this
Agreement shall to any extent be declared illegal or
unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion
or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
12. Waiver. No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party.
The failure of any party to require the performance of any term
or obligation of this Agreement, or the waiver by any party of
any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
13. Notices. All notices and other communications required
or permitted hereunder shall be in writing and shall be
delivered, mailed by first-class mail, postage prepaid, or sent
by telex or facsimile with a mailed confirmation copy, addressed:
(a) If to Aquila:
Aquila Biopharmaceuticals, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No: 000-000-0000
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(b) If to Executive:
Xxxxx X. Xxxxxx
00 Xxxxxx Xxxx
Xxxxx Xxxxxxxxxx, XX 00000
or such other addresses or facsimile numbers as shall be
furnished in writing by either party and any such notice or
communication shall be deemed to have been given in the case of
notices or communications which have been delivered or sent by
facsimile or telex an the date of delivery or sending provided
such day is a business day and in the case of notices or
communications which have been mailed on the second business day
after the date mailed.
14. Amendment. This Agreement may be amended or modified
only by a written instrument signed by Executive and by a duly
authorized representative of Aquila.
15. Governing Law. This is a Massachusetts contract and
shall be construed under and be governed in all respects by the
laws of the Commonwealth of Massachusetts without reference to
its conflict of laws provisions.
16. Entire Agreement. Except for the Invention and Non-
Disclosure Agreement and the Employee Retention Agreement, both
executed as of even date herewith, this Agreement constitutes the
entire understanding between the parties with respect to the
subject matter hereunder and supersedes and replaces all prior
agreements, understandings, writings, and discussions between the
parties.
IN WITNESS WHEREOF, this Agreement has been executed as a
sealed instrument by Aquila, by its duly authorized officers, and
by the Executive, as of the date first above written.
AQUILA BIOPHARMACEUTICALS, INC.
/s/ Xxxxxx Xxxxxxx-Xxxxx
By:______________________________
Xxxxxx Xxxxxxx-Xxxxx
President and CEO
/s/ Xxxxx X. Xxxxxx
_____________________________
Xxxxx X. Xxxxxx
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