Exhibit 10.1
This Employment Agreement (the "Agreement") is made as of October 10, 2001
Among:
GENETRONICS, INC., a California corporation having its principal
place of business at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxx, X.X.X., 00000 (the "Company")
And:
GENETRONICS BIOMEDICAL CORPORATION, a Delaware corporation
having its principal place of business at 00000 Xxxxxxxx Xxxxxx
Xxxx, Xxx Xxxxx, Xxxxxxxxxx, X.X.X., 00000 (the "ParentCo")
And:
XX. XXXXX XXXXXXX, an individual residing at 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, Xxxxxx (the
"Employee")
WHEREAS:
A. the Employee is considered by the Board of Directors of the Company (the
"Board") to be of great value to the Company and has acquired outstanding and
special skills and abilities and an extensive background in and knowledge of the
Company's business and the industry in which it is engaged;
B. the Company recognizes that it is essential and in the best interests of
the Company that the Company ensure the dedication of the Employee to the
Company; and
C. the Company wishes to retain and the Employee has agreed to supply his
service in the capacity of President and Chief Executive Officer on the terms
and conditions set out in this Agreement, which shall supersede and replace all
prior agreements, if any, between the parties;
THEREFORE, in consideration of the recitals, the following covenants and the
payment of one dollar made by each party to the other, the receipt and
sufficiency of which is acknowledged by each party, the parties agree on the
following terms:
ARTICLE 1. EMPLOYMENT
1.1. EMPLOYMENT: The Company hereby employs the Employee as President and
Chief Executive Officer or in such other capacity as may be requested by the
Board, and the Employee accepts such employment, upon the terms and subject to
the conditions set forth in this Agreement.
1.2. DUTIES: The Employee shall perform such duties as are customarily
associated with his
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then current title or titles, consistent with the Bylaws of the Company and as
required by the Board. Said duties shall be performed at such place or places as
the Company shall reasonably designate or as shall be reasonably appropriate and
necessary to the discharge of the Employee's duties in connection with his
employment.
1.3. HOURS: During the term of the Employee's employment with Company, the
Employee will devote his best efforts and substantially all of his business time
and attention to the performance of his duties hereunder and to the business and
affairs of the Company, except for vacation periods as set forth herein and
reasonable periods of illness or other incapacities permitted by Company's
general employment policies. The Employee will duly, punctually and faithfully
observe the Company's general employment policies and practices, including,
without limitation, any and all rules, regulations, policies and/or procedures
which the Company may now or hereafter establish governing the conduct of its
business.
1.4. CHANGE OF CONTROL: In the event of a Change of Control (as defined
below), the Company shall continue to engage, and the Employee shall continue to
serve the Company in the same capacity and have the same authority,
responsibilities and status as he had as of the date immediately prior to the
change of control. Following a Change of Control, the Employee's services shall
be performed at such location as may be mutually agreed upon between the Company
and the Employee. For the purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred when:
1.4.1. a majority of the directors elected at any annual or special
general meeting of shareholders of the Company are not individuals nominated by
the Company's then incumbent Board;
1.4.2. there is occurrence of an event whereby any person or entity
becomes the beneficial owner of shares representing 50% or more of the combined
voting power of the voting securities of the Company; or
1.4.3. there is a merger of consolidation of the Company with one or
more corporations as a result of which, immediately following such merger or
consolidation, the shareholders of the Company as a group will hold less than a
majority of the outstanding capital stock of the surviving corporation.
ARTICLE 2. COMPENSATION
2.1. SALARY: Subject to subsection 2.2, for his services hereunder, the
Employee shall receive a salary, payable in such regular intervals as shall be
determined by the Company, which shall be at the rate of U.S. $200,000 per year
("Salary").
2.2. SALARY INCREASES: The rate of Salary provided for in Section 2.1 shall
be reviewed by the Board not less often than annually and shall be increased
from time to time and in such amount as the Board, in its discretion, may
determine, provided that in no event shall the increase, in percentage terms be
less than the percentage increase in the cost of living in the San Diego Area in
the United States, over the previous fiscal year.
2.3. DISCRETIONARY BONUS: The Company will, within 120 days of the end of
each fiscal
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year, pay to the Employee an annual bonus, based on the Company's achievement of
milestones agreed to by the Compensation Committee of the Board (the
"Committee") and the Employee at the beginning of that fiscal year. Within 30
days of the beginning of each fiscal year, the Committee and the Employee shall
agree to milestones of the Company and the percentage bonus, which will be
awarded to the Employee if one or more milestones are achieved.
2.4. WITHHOLDING: All payments of salary, bonuses and other compensation
pursuant to this Agreement shall be subject to the customary withholding taxes
as required by law.
2.5. STOCK OPTIONS: Subject to regulatory approval, ParentCo will grant the
Employee an option to purchase up to 400,000 common shares in the capital of
ParentCo. The options will vest to the Employee over three years, with 100,000
shares vesting immediately, 37,500 shares vesting quarterly during the first
year of this Agreement, 25,000 shares vesting quarterly during the second year
of this Agreement, and 12,500 shares vesting quarterly during the third year of
this Agreement, subject to the terms and conditions set out in ParentCo's
Amended 2000 Stock Option Plan including the provision that all options will
vest immediately upon the sale or other disposition of the assets of ParentCo or
a merger of ParentCo with one or more corporations where ParentCo is not the
surviving entity.
2.6. LIVING EXPENSES: The Company shall reimburse the Employee for all
reasonable living and accommodation expenses incurred by him during the six
months following the date of this Agreement at a cost of up to U.S.$2,000 per
month provided that the Employee provides the Company with written receipts
detailing such expenses at the end of each calendar month.
2.7. RELOCATION EXPENSE: The Company shall reimburse the Employee or his
spouse for one roundtrip ticket per week to and from Vancouver and all
associated reasonable travel expenses, including taxi fares, until the earlier
of six months from the date of this Agreement or the date both the Employee and
his spouse have relocated to San Diego, provided that the Employee provides the
Company with written receipts detailing such expenses at the end of each
calendar month. The Company also shall reimburse the Employee for all reasonable
expenses associated with transferring the assets and possessions of the Employee
and his spouse from Vancouver to San Diego, provided that the Employee provides
the Company with written receipts detailing such expenses at the end of each
calendar month. Employee understands and agrees that the provisions of 2.6 and
2.7 will result in taxable income for which Employee will be responsible. Such
tax shall be deducted from Employee's salary.
ARTICLE 3. FRINGE BENEFITS
3.1. PARTICIPATION IN PLANS: The Employee shall be entitled to all additional
fringe benefits, including, but not limited to, life and health insurance
programs that may be generally available to other employees of the Company. All
matters of eligibility for coverage of benefits under any plan or plans of
health, hospitalization, life or other insurance provided by the Company shall
be determined in accordance with the provisions of the insurance policies. The
Company shall not be liable to the Employee, or his beneficiaries or successors,
for any amount payable or claimed to be payable under any plan of insurance,
which is not paid to any of the Company's other employees.
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3.2. HOLIDAYS AND SICK LEAVE: The Employee shall be entitled to such paid
holidays and sick leave, and other benefit programs, as and to the extent that
the Company generally provides from time to time to other executive employees.
3.3. VACATION AND PROFESSIONAL LEAVE: The Employee shall be entitled to
vacation and additional leave to attend conventions and professional meetings
each year during this Agreement as permitted under the employment practices of
the Company in effect at such time. Notwithstanding the foregoing, at a minimum
the Employee shall be entitled to four weeks paid vacation for each fiscal year
of the Company. The Employee may take in a fiscal year any of the four weeks
paid vacation earned but not taken in previous fiscal years, even if this would
result in the Employee taking more than four weeks paid vacation in the fiscal
year.
3.4. BUSINESS EXPENSES: The parties acknowledge that the Employee shall
incur, from time to time, for the benefit of the Company and in furtherance of
the Company's business, various business expenses. The Company agrees that it
shall either pay such expenses directly, advance sums to the Employee to be used
for payment of such expenses, or reimburse the Employee for such expenses
incurred by him. The Employee agrees to submit to the Company such documentation
as may be reasonably necessary to substantiate that all expenses paid or
reimbursed hereunder were reasonably related to the performance of his duties.
ARTICLE 4. TERM AND TERMINATION OF EMPLOYMENT
4.1. CONDITION PRECEDENT: The obligations of the Company under this Agreement
are subject to the fulfillment of the condition that the Employee execute an
agreement with the Company governing intellectual property in the form attached
hereto as Exhibit "A". This condition is solely for the benefit of the Company
and may be waived at any time, in whole or in part by notice in writing executed
by the Company.
4.2. INITIAL TERM: The initial term of this Agreement shall be ten (10) years
commencing on the date of this Agreement, unless terminated prior to such date
in accordance with the terms of this Agreement.
4.3. TERMINATION:
4.3.1. THE EMPLOYEE'S RIGHT TO TERMINATE: The Employee may terminate his
obligations under this Agreement:
4.3.1.1. at any time upon providing six weeks notice in
writing to the Company;
4.3.1.2. upon a material breach or default of any term of
this Agreement by the Company if such material
breach or default has not been remedied within 30
days after written notice of the material breach
or default has been delivered by the Employee to
the Company; or
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4.3.1.3. at any time within 180 days of the date on which
there is a Change of Control.
4.3.2. COMPANY'S RIGHT TO TERMINATE: The Company may terminate the
Employee's employment under this Agreement at any time upon the occurrence of
any of the following events:
4.3.2.1. the Employee acting unlawfully, dishonestly, in
bad faith or negligently with respect to the
business of the Company to the extent that it has
a material and adverse effect on the Company;
4.3.2.2. the conviction of Employee of any crime or fraud
against the Company or its property or any felony
offense or crime reasonably likely to bring
discredit upon the Employee or the Company;
4.3.2.3. a material breach or default of any term of this
Agreement by the Employee if such material breach
or default has not been remedied within 30 days
after written notice of the material breach or
default has been delivered by the Company to the
Employee; or
4.3.2.4. the Employee dying or becoming permanently
disabled or disabled for a period exceeding 180
consecutive days or 180 days calculated on a
cumulative basis over any two year period during
the term of this Agreement.
4.3.2.5. at the discretion of the Company without cause.
4.3.3. SEVERANCE PAYMENT: In the event of
4.3.3.1. the termination of the Employee's employment
pursuant to paragraph 4.3.1.2 , 4.3.1.3 or 4.3.2.5
of this Agreement; or
4.3.3.2. the termination of the Employee's employment by
the Company in breach of this Agreement;
the Company shall pay to the Employee within 10 days of such
termination a severance payment equal to the compensation paid to the Employee
under subsections 2.1, 2.2 and 2.3 of this Agreement, as follows:
(i) if terminated after three months from the date
of this Agreement, but prior to six months, then
three months severance shall be paid,
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(ii) if terminated after six months from the date of
this Agreement, but prior to one year, then six
months severance shall be paid,
(iii) if terminated after one year from the date of
this Agreement, but prior to two years, then one
year severance shall be paid,
(iv) and, if terminated after two years from the date
of this Agreement, then two years severance
shall be paid.
plus all expenses incurred by the Employee up to the date of
termination pursuant to subsection 3.4 of this Agreement. Health care benefits
shall continue for one year from the date of termination. The Company shall
either continue Employee on the Company's healthcare plan or otherwise secure
healthcare benefits for Employee for the one-year period. No other benefits
shall be continued.
4.3.4. COMPENSATION OTHERWISE DUE TO THE EMPLOYEE ON TERMINATION: In the
event of the termination of the Employee's employment under this Agreement in
circumstances other than those set out in subsection 4.3.3 of this Agreement,
the Company shall pay the following amount to the Employee within ten days of
the termination:
4.3.4.1. if terminated pursuant to paragraphs 4.3.1.1,
4.3.2.2 or 4.3.2.4 of this Agreement, the Company
shall pay to the Employee the full amount of
compensation accrued pursuant to subsection 2.1 of
this Agreement as of the date of termination;
4.3.4.2. if terminated pursuant to paragraph 4.3.2.4 of
this Agreement, the Company shall pay to the
Employee:
(i) the amount of compensation accrued pursuant to
subsection 2.1 of this Agreement as of the date
of termination;
(ii) the amount of compensation payable under
subsection 2.1 of this Agreement for one year
after the date of termination; and
(iii) an amount equal to the annual bonus most
recently paid to the Employee pursuant to
subsection 2.3 of this Agreement multiplied by
the fraction of which the number of days between
the fiscal year end of the Company related to
the bonus and the date of
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termination is the numerator, and 365 is the
denominator.
4.3.5. MITIGATION: The Employee need not mitigate any payments provided
in this Agreement by seeking other employment or otherwise, nor shall the amount
of any payment created by this clause be reduced by any compensation earned by
the Employee through employment permitted by this Agreement with another
employer after the date of termination or otherwise.
ARTICLE 5. CONFIDENTIAL INFORMATION
5.1. CONFIDENTIAL INFORMATION DEFINED: "Confidential Information" shall mean
information disclosed to the Employee, known by the Employee, or developed by
the Employee (alone or with others) as a consequence of or through his
employment by the Company or his relationship with the Company's subsidiaries,
which information is not generally known in the industry in which the Company or
of any of its subsidiaries are or may become engaged, about the business of the
Company or of any of its subsidiaries, including but not limited to information
relating to trade secrets of the Company or its subsidiaries, existing or
potential customers, business plans and strategies, research methods and
products, pricing and billing methods and marketing methods. Without regard to
whether any of such matters would be deemed confidential, proprietary or
material as a matter of law, the parties hereto stipulate that, as between them,
such matters are confidential, proprietary, and material and unauthorized
disclosure, use, or dissemination would seriously affect the effective and
successful conduct of the business and interests of the Company or its
subsidiaries, and its goodwill, and that any breach of the terms of this
paragraph is a material breach of this Agreement.
5.2. PROHIBITION ON DISCLOSURE: Except as required in his duties to the
Company, the Employee shall not, directly or indirectly use, disseminate or
disclose any Confidential Information.
5.3. RETURN OF CONFIDENTIAL INFORMATION UPON TERMINATION: Upon termination of
his employment with the Company, the Employee shall return to the Company all
documents, records, notebooks and electronic media containing Confidential
Information, including all copies thereof, whether prepared by the Employee or
others.
5.4. COOPERATION IN PROTECTING CONFIDENTIALITY: The Employee shall provide
all reasonable assistance to the Company and its subsidiaries to protect the
confidentiality of any such Confidential Information that Employee may have
directly or indirectly disclosed, published or made available to third parties
in breach of this Agreement. The Employee shall take all reasonable steps
requested by the Company to prevent the recurrence of such unauthorized access,
use, possession or knowledge. If, at any time, the Employee becomes aware of any
unauthorized access, use, possession, or knowledge of any Confidential
Information by any third party, the Employee shall immediately notify the
Company.
5.5. NON-SOLICITATION OF CUSTOMERS: During the term of this Agreement and for
a period of 12 months after the termination of the Employee's employment, the
Employee shall not, either directly or indirectly and either alone or with
others, canvass or solicit orders for any product
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or service or both which is or has been developed, manufactured, produced,
provided, marketed, distributed or otherwise dealt in by the Company from any
person, firm or company which has been at any time within the previous 24 month
period a customer or supplier of the Company or a prospective customer or
supplier of the Company with which the Employee is or was actively concerned
during his employment.
5.6. NON-SOLICITATION OF EMPLOYEES: During the term of this Agreement and for
a period of 12 months after the termination of the Employee's employment, the
Employee shall not, either directly or indirectly and either alone or with
others canvass or solicit any person who is an employee of the Company to leave
or terminate such employment for the purpose of establishing a business to offer
any product or service or both which is of a type similar to any product or
service which is or has been developed, manufactured, produced, provided,
marketed, distributed or otherwise dealt in by the Company.
5.7. COVENANTS REASONABLE: The Employee confirms that the provisions in this
Article 5 are reasonable and valid based upon the businesses that are carried on
by the Company, and based on the fiduciary and sensitive position the Employee
will occupy with the Company. The Employee waives all defenses to the strict
enforcement or validity of the sections in this Article 5. The Employee further
acknowledges that any covenant contained in this Article 5 may be enforced by
injunction issued in any court having jurisdiction, and by the award of damages
and any and all other relief allowed by law.
5.8. SURVIVAL: The parties agree that the obligations imposed by this Article
shall survive termination or expiration of this Agreement, and shall bind the
Employee for a period of 15 years after such termination or expiration.
ARTICLE 6. MISCELLANEOUS
6.1. IRREPARABLE INJURY: The Employee expressly recognizes and agrees that
his obligations under Article 5 of this Agreement are important and material and
seriously affect the effective and successful conduct of the business and
interests of the Company and its goodwill, and therefore the breach of any
obligations under such Articles will constitute an irreparable injury to the
Company, for which damages, although available, will not be an adequate remedy
at law. Accordingly, the Employee expressly consents to the issuance of
injunctive relief to enforce the obligations of this Agreement. The parties
agree that service of process may be made by certified mail at the address first
listed above. The provisions of this Article are not intended to limit the
remedies and relief otherwise available to the Company for breaches by the
Employee of Articles of this Agreement other than Article 5.
6.2. ASSIGNMENT PROHIBITED: This Agreement is personal to the Employee hereto
and he may not assign or delegate any of his rights or obligations hereunder
without first obtaining the written consent of the Company. The Company may not
assign this Agreement without the written consent of the Employee except in
connection with (i) a merger of consolidation of the Company (in which case the
merged or consolidated entity shall remain fully liable for its obligations as
the Company under this Agreement as specified above) or (ii) a transfer of this
Agreement.
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6.3. AMENDMENTS: No amendments or additions to this Agreement shall be
binding unless in writing and signed by the party against whom enforcement of
such amendment or addition is sought.
6.4. PARAGRAPH HEADINGS: The paragraph headings used in this Agreement are
included solely for convenience and shall not affect of be used in connection
with the interpretation of this Agreement.
6.5. LEGAL EXPENSES OF ENFORCEMENT: If either party commences a legal action
or other proceeding for enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and other costs incurred in connection with the
action or proceeding, in addition to any other relief to which it may be
entitled.
6.6. SEVERABILITY: If any provision of this Agreement is declared invalid by
any tribunal, then such provision shall be deemed automatically modified to
conform to the requirements for validity as declared at such time, and as so
modified, shall be deemed a provision of this Agreement as though originally
included herein. In the event that the provision invalidated is of such a nature
that it cannot be so modified, the provision shall be deemed deleted from this
Agreement as though the provision had never been included herein. In either
case, the remaining provisions of this Agreement shall remain in effect.
6.7. ARBITRATION: Any controversy, claim or dispute arising out of or
relating to this Agreement or its construction and interpretation shall be
settled by arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered in such arbitration may be
entered in any court having jurisdiction thereof. In addition, any controversy,
claim or dispute concerning the scope of this arbitration clause or whether a
particular dispute falls within this arbitration clause shall also be settled by
arbitration in accordance with the rules of the American Arbitration
Association.
6.8. CHOICE OF LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of California, as applied to agreements
executed and performed entirely in California by California residents.
6.9. ENTIRE AGREEMENT: This Agreement constitutes the entire, final and
complete and exclusive agreement between the parties and supersedes all previous
agreements or representations, written or oral, with respect to employment.
6.10. CHANGE, MODIFICATION, WAIVER: No change or modification of this
Agreement shall be valid unless it is in writing and signed by each of the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless it is in writing and signed by the party against whom the waiver is
sought to be enforced. The failure of a party of insist upon strict performance
of any provision of this Agreement in any one or more instances shall not be
construed as a waiver or relinquishment of the right to insist upon strict
compliance with such provision in the future.
6.11. NOTICES: All notices required or permitted hereunder shall be in writing
and shall be delivered in person or sent by certified or registered mail, return
receipt requested, postage
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prepaid to each party at the address first written above or at such other
address as provided in writing.
6.12. BINDING EFFECT: This Agreement shall be binding upon, and inure to the
benefit of, the parties, their heirs, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GENETRONICS, INC.
Per:
--------------------------------
Authorized Signatory
GENETRONICS BIOMEDICAL CORPORATION
Per:
--------------------------------
Authorized Signatory
--------------------------------
XX. XXXXX XXXXXXX
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Exhibit "A"
