Contract
EXHIBIT 10.1
This
Employment Agreement (this “Agreement”) is made
and entered into as of May 4, 2009 (the “Effective Date”) by
and between CytRx Corporation, a Delaware corporation (“Employer”), and
Xxxxxx Xxxx, an individual and resident of the State of California (“Employee”).
WHEREAS,
Employer desires to employ Employee, and Employee is willing to be employed by
Employer, on the terms set forth in this Agreement.
NOW,
THEREFORE, upon the above premises, and in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as
follows.
1. Employment. Effective
as of the Effective Date, Employer shall employ Employee, and Employee shall
serve, as Employer’s Chief Business Officer and Senior Vice President-Business
Development on the terms set forth herein.
2. Duties; Place of
Employment. Employee shall perform in a professional and
business-like manner, and to the best of his ability, the duties described on
Schedule 1
to this Agreement and such other duties as are assigned to him from time to time
by Employer’s President and Chief Executive Officer. Employee
understands and agrees that his duties, title and authority may be changed from
time to time in the discretion of Employer’s President and Chief Executive
Officer. Subject to the next succeeding sentence, Employee’s services
hereunder shall be rendered at Employer’s corporate offices in Los Angeles,
California, except for travel when and as required in the performance of
Employee’s duties hereunder. Employee generally shall be required to
be physically present, and to perform his services hereunder, at Employee’s
corporate headquarters not less than five consecutive business days per
month. Employee and Employer shall consult with each other from time
to time regarding the optimal scheduling of Employee’s time at Employer’s
corporate offices. Except as provided above, Employee may work
remotely from his residence. When not present at Employer’s corporate
offices, Employee shall make himself readily accessible to Employer by
telephone, via the Internet or other remote access, as Employer deems reasonably
necessary for the performance of Employee’s services
hereunder. Employer shall make available to Employee remote computer
access to Employer’s computerized systems.
3. Time and
Efforts. Employee shall devote all of his business time,
efforts, attention and energies to Employer’s business and to discharge his
duties hereunder, except that he shall be permitted to continue to serve on the
board of directors of up to two (2) other companies for whom he currently serves
as of the date of this Agreement; provided that such position(s) do not pose any
direct conflict of interest and that he does not spend more than 5% of his
business time serving on those boards.
4. Term. The
term (the “Term”) of Employee’s
employment hereunder shall commence on the Effective Date and shall expire on
December 31, 2010, unless sooner
terminated
in accordance with Section 6. Neither Employer nor Employee shall
have any obligation to extend or renew this Agreement, except that Employer
agrees to provide notice of non-renewal no later than December 1,
2010. In the event that Employer does not offer to extend or renew
the Agreement, Employer shall continue to pay Employee his salary as provided
for in Section 5.1 during the period commencing on the final date of the
Term and ending on (a) June 30, 2011 or (b) the date of
Employee’s re-employment with another employer, whichever is earlier; provided
that, as a condition to Employer’s obligations under this sentence, Employee
shall have executed and delivered to Employer a Separation Agreement and General
Release in the form
attached hereto as Exhibit A. Employee
shall notify Employer immediately in the event Employee accepts such employment
with another employer.
5. Compensation. As
the total consideration for Employee’s services rendered hereunder, Employer
shall pay or provide Employee the following compensation and
benefits:
5.1. Salary. Employee
shall be entitled to receive an annual salary of Three Hundred Thousand Dollars
($300,000), payable in accordance with Employer’s normal payroll policies and
procedures.
5.2. Performance
Bonus. Employee shall be entitled to a performance bonus from
time to time in an amount equal to one percent (1%) of all up-front monies
received by Employer pursuant to each strategic partnership, sale of assets and
out-license arrangement consummated by Employer during the Term, or within six
months thereafter, in which Employee was significantly involved on Employer’s
behalf. Such performance bonus shall be payable by Employer within
thirty (30) days
following Employer’s receipt of such monies. For clarity, Employer’s
obligations under this Section 5.2 are conditioned upon its actual receipt
of monies pursuant to such a transaction. No bonus shall be paid with
respect to any milestone payments, royalty payments, expense sharing or expense
advancements received by Employer. Notwithstanding anything to the
contrary herein, Employer’s obligations under this Section 5.2 shall not apply
to financing transactions involving the sale of Employer’s securities, or any
sale of all or substantially all of Employer’s assets. Any bonus
payable hereunder shall be reduced by any amounts paid by Employer for third
party investment banking services for the respective transaction.
5.3. Discretionary
Bonus. Employee also may be eligible for a bonus from time to
time for his services during the Term. Employee’s eligibility to
receive a bonus, any determination to award Employee such a bonus and, if
awarded, the amount thereof, shall be in Employer’s sole
discretion. For 2009, any discretionary bonus shall not be prorated,
and instead shall be commensurate to a full year of service.
5.4. Stock
Options. Employer shall grant Employee as of the Effective
Date a nonqualified stock option under Employer’s 2000 Long-Term Incentive Plan
(the “Plan”) to
purchase 150,000 shares of Employer’s common stock (the “Option”). The
Option shall vest and become exercisable in 36 equal monthly installments
beginning on the one-month anniversary of the Effective Date and continuing on
each succeeding
monthly
anniversary of the Effective Date until the Option shall have become fully
vested, provided, in each case, that Employee remains in the continuous employ
of Employer through such anniversary dates. The Option shall (a) be
exercisable at an exercise price equal to $0.41 per share, (b) have a term of
ten years, and (c) be on such other terms as shall be determined by Employer’s
Board of Directors (or the Compensation Committee of the Board) and set forth in
a customary form of stock option agreement under the Plan evidencing the
Option. Notwithstanding anything to the contrary in Section 6.2
or other provision of this Agreement or of the stock option agreement evidencing
the Option, upon the occurrence of a “Change in Control” (as defined in the
Plan), the Option shall thereupon vest and become exercisable as to all of the
shares covered thereby in accordance with the terms of the Plan.
5.5. Expense
Reimbursement. Employer shall reimburse Employee for
reasonable and necessary business expenses incurred by Employee in connection
with the performance of Employee’s duties in accordance with Employer’s usual
practices and policies in effect from time to time. When Employee
travels to Employer’s corporate offices, Employer shall pay for reasonable
lodging and transportation (including flights), but shall not pay for food or
other incidentals.
5.6. Vacation. Employee
shall be entitled to twenty business days of
vacation each year during the Term in accordance with Employer’s vacation policy
in effect from time to time.
5.7. Employee
Benefits. Employee shall be eligible to participate in any
medical insurance and other employee benefits made available generally by
Employer to all of its employees under its group plans and employment policies
in effect during the Term. Schedule 2
hereto sets forth a summary of such plans and policies as currently in
effect. Employee acknowledges and agrees that, any such plans or
policies now or hereafter in effect may be modified or terminated by Employer at
any time in its discretion.
5.8. Payroll
Taxes. Employer shall have the right to deduct from the
compensation and benefits due to Employee hereunder any and all sums required
for social security and withholding taxes and for any other federal, state, or
local tax or charge which may be in effect or hereafter enacted or required as a
charge on the compensation or benefits of Employee.
6. Termination. This
Agreement may be terminated as set forth in this Section 6.
6.1. Termination by Employer for
Cause. Employer may terminate Employee’s employment hereunder
for “Cause” upon notice to Employee. “Cause” for this
purpose shall mean any of the following:
(a) Employee’s
breach of any material term of this Agreement; provided that the first occasion
of any particular breach shall not constitute such Cause
unless
Employee shall have previously received written notice from Employer stating the
nature of such breach and affording Employee at least ten days to correct such
breach;
(b) Employee’s
conviction of, or plea of guilty or nolo contendere to, any misdemeanor, felony
or other crime of moral turpitude;
(c) Employee’s
act of fraud or dishonesty injurious to Employer or its reputation;
(d) Employee’s
continual failure or refusal to perform his material duties as required under
this Agreement after written notice from Employer stating the nature of such
failure or refusal and affording Employee at least ten days to correct the
same;
(e) Employee’s
act or omission that, in the reasonable determination of Employer’s Board of
Directors (or a Committee of the Board), indicates alcohol or drug abuse by
Employee; or
(f) Employee’s
act or personal conduct that, in the reasonable judgment of Employer’s Board of
Directors (or a Committee of the Board), gives rise to a material risk of
liability of Employee or Employer under federal or applicable state law for
discrimination, or sexual or other forms of harassment, or other similar
liabilities to subordinate employees.
Upon
termination of Employee’s employment by Employer for Cause, all compensation and
benefits to Employee hereunder shall cease and Employee shall be entitled only
to payment, not later than the date of termination, of any accrued but unpaid
salary and unused vacation as provided in Sections 5.1 and 5.6 as of the date of
such termination and any unpaid bonus that may have been earned or awarded
Employee as provided in Section 5.2 and Section 5.3 prior to such
date. Notwithstanding anything to the contrary herein, any bonus
pursuant to Section 5.2 shall be payable only with respect to transactions
completed prior to Employee’s termination for Cause, and shall be payable at the
time set forth in Section 5.2.
6.2. Termination by Employer
without Cause. Employer may also terminate Employee’s
employment without Cause upon ten days notice to Employee. Upon
termination of Employee’s employment by Employer without Cause, all compensation
and benefits to Employee hereunder shall cease and Employee shall be entitled to
(a) payment of (1) any accrued but unpaid salary and unused vacation as of the
date of such termination as required by California law, which shall be due and
payable upon the effective date of such termination, and (2) an amount, which
shall be due and payable within ten days following the effective date of such
termination, equal to six months’ salary as provided in Section 5.1, and
(b) continued participation, at Employer’s cost and expense, for a period of six
months following such termination, in any Employer-sponsored group benefit plans
in which Employee was participating as of the date of termination, provided
that, as a condition to Employer’s obligations under
Section 6.2(a)(2)
and 6.2(b), Employee shall have executed and delivered to Employer a Separation
Agreement and General Release in the form attached
hereto as Exhibit A.
6.3. Death or
Disability. Employee’s employment will terminate automatically
in the event of Employee’s death or upon notice from Employer in event of his
permanent disability. Employee’s “permanent disability”
shall have the meaning ascribed to such term in any policy of disability
insurance maintained by Employer (or by Employee, as the case may be) with
respect to Employee or, if no such policy is then in effect, shall mean
Employee’s inability to fully perform his duties hereunder for any period of at
least 75 consecutive days or for a total of 90 days, whether or not
consecutive. Upon termination of Employee’s employment as aforesaid,
all compensation and benefits to Employee hereunder shall cease and Employer
shall pay to the Employee’s heirs or personal representatives, not later than
ten days after the date of termination, any accrued but unpaid salary and unused
vacation as of the date of such termination as required by California
law.
7. Confidentiality. While
this Agreement is in effect and for a period of five years thereafter, Employee
shall hold and keep secret and confidential all “trade secrets” (within the
meaning of applicable law) and other confidential or proprietary information of
Employer and shall use such information only in the course of performing
Employee’s duties hereunder; provided, however, that with respect to trade
secrets, Employee shall hold and keep secret and confidential such trade secrets
for so long as they remain trade secrets under applicable
law. Employee shall maintain in trust all such trade secrets or other
confidential or proprietary information, as Employer’s property, including, but
not limited to, all documents concerning Employer’s business, including
Employee’s work papers, telephone directories, customer information and notes,
and any and all copies thereof in Employee’s possession or under Employee’s
control. Upon the expiration or earlier termination of Employee’s
employment with Employer, or upon request by Employer, Employee shall deliver to
Employer all such documents belonging to Employer, including any and all copies
in Employee’s possession or under Employee’s control.
8. Equitable Remedies;
Injunctive Relief. Employee hereby acknowledges and agrees
that monetary damages are inadequate to fully compensate Employer for the
damages that would result from a breach or threatened breach of Section 7 of
this Agreement and, accordingly, that Employer shall be entitled to equitable
remedies, including, without limitation, specific performance, temporary
restraining orders, and preliminary injunctions and permanent injunctions, to
enforce such Section without the necessity of proving actual damages in
connection therewith. This provision shall not, however, diminish
Employer’s right to claim and recover damages or enforce any other of its legal
or equitable rights or defenses.
9. Indemnification;
Insurance. Employer and Employee acknowledge that, as the
Chief Business Officer and Senior Vice President-Business Development of the
Employer, Employee shall be a corporate officer of Employer and, as such,
Employee shall be entitled to indemnification to the full extent provided by
Employer to its officers,
directors
and agents under the Employer’s Certificate of Incorporation and Bylaws as in
effect as of the date of this Agreement. Subject to his insurability
thereunder, effective the Effective Date, Employer shall add Employee as an
additional insured under its current policy of directors and officers liability
insurance and shall use commercially reasonable efforts to continue to insure
Employee thereunder, or under any replacement policies in effect from time to
time, during the Term.
10. Severable
Provisions. The provisions of this Agreement are severable and
if any one or more provisions is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.
11. Successors and
Assigns. This Agreement shall inure to the benefit of and
shall be binding upon Employer, its successors and assigns and Employee and his
heirs and representatives; provided, however, that neither party may assign this
Agreement without the prior written consent of the other party.
12. Entire
Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This
Agreement supersedes any and all prior or contemporaneous agreements, written or
oral, between Employee and Employer relating to the subject matter
hereof. Any such prior or contemporaneous agreements are hereby
terminated and of no further effect, and Employee, by the execution hereof,
agrees that any compensation provided for under any such agreements is
specifically superseded and replaced by the provisions of this
Agreement.
13. Amendment. No
modification of this Agreement shall be valid unless made in writing and signed
by the parties hereto and unless such writing is made by an executive officer of
Employer (other than Employee). The parties hereto agree that in no
event shall an oral modification of this Agreement be enforceable or
valid.
14. Governing
Law. This Agreement is and shall be governed and construed in
accordance with the laws of the State of California without giving effect to
California’s choice-of-law rules.
15. Notice. All
notices and other communications under this Agreement shall be in writing and
mailed, telecopied (in case of notice to Employer only) or delivered by hand or
by a nationally recognized courier service guaranteeing overnight delivery to a
party at the following address (or to such other address as such party may have
specified by notice given to the other party pursuant to this
provision):
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If to
Employer:
CytRx
Corporation
00000
Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention: Chief
Executive Officer
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If to
Employee:
Xxxxxx
Xxxx
__________________
__________________
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16. Survival. Sections
7 through 16 and 18 shall survive the expiration or termination of this
Agreement.
17. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement. A counterpart executed and transmitted by facsimile shall
have the same force and effect as an originally executed
counterpart.
18. Attorney’s
Fees. In any action or proceeding to construe or enforce any
provision of this Agreement the prevailing party shall be entitled to recover
its or his reasonable attorneys’ fees and other costs of suit (up to a maximum
of $50,000) in addition to any other recoveries.
IN
WITNESS WHEREOF, this Agreement is executed as of the day and year first above
written.
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“EMPLOYER”
CytRx
Corporation
By:
/s/ XXXXXX X.
XXXXXXXXX
Xxxxxx X.
Xxxxxxxxx
President & Chief Executive
Officer
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“EMPLOYEE”
/s/
XXXXXX
XXXX
Xxxxxx
Xxxx
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