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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
January 1, 2000, by and between ZymeTx, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Xxxxxx").
WITNESSETH
WHEREAS, the Company and Xxxxxx entered into that certain Employment
Agreement dated and effective October 1, 1999, which terminated December 31,
1999;
WHEREAS, the Company and Xxxxxx desire to enter into this Agreement in
connection with Xxxxxx'x continued service to the Company;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained, and other good and valuable consideration, the adequacy of
which is hereby acknowledged, the parties hereby agree as follows:
1. ENGAGEMENT; DUTIES AND ACCEPTANCE.
1.1. Engagement by the Company. During the Term (as hereinafter defined)
Xxxxxx shall serve as the Company's President and Chief Executive Officer, and
in such other executive position with the Company as may determined by the
Company's Board of Directors. It is intended that, throughout the Term, Xxxxxx
shall serve as a member of the Board of Directors of the Company.
1.2. Duties. As an executive of the Company, Xxxxxx shall render such
duties as previously rendered and as he shall be directed to render and perform
by the Company's Board of Directors consistent with his position as Chief
Executive Officer.
1.3. Acceptance of Engagement by Xxxxxx. Xxxxxx hereby accepts such
engagement and agrees to devote his best efforts to the Company during the Term
to render the services described above. It is understood that Xxxxxx shall also
serve as the Chief Executive Officer of Gynetics, Inc. and that his time shall
be divided between the Company and Gynetics, as he and the Board of Directors of
the Company shall mutually determine reasonably and in good faith.
2. TERM OF SERVICE. The term of Xxxxxx'x service under this Agreement (the
"Term") shall commence as of the date of this Agreement (the "Commencement
Date"), and, unless earlier terminated as herein provided, shall continue
through June 30, 2001, provided that on June 30, 2000, and each anniversary
thereof, the Agreement shall automatically be extended for one additional year
unless either party shall have given the other prior written notice to the
contrary.
3. EMPLOYEE BENEFIT PLANS. During the Term, so long as Xxxxxx participates
in health, medical and other benefit plans offered by Xxxxxxx Xxxxx (i) the
Company shall reimburse Xxxxxxx Xxxxx for the cost of such benefits, and (ii)
Xxxxxx shall not participate in any group life, hospitalization or disability
insurance plan, health program, pension plan, similar benefit plan or other
so-called "fringe benefits" of the Company. If Xxxxxx ceases to participate in
plans offered by Xxxxxxx Xxxxx he shall participate in the correlative plan or
plans of the Company, to the extent that such plans exist, and the Company shall
cease to reimburse Xxxxxxx Xxxxx for the cost of such benefits. When in Oklahoma
City Xxxxxx shall be entitled to the use of a Company automobile and Company
apartment, both of which shall be of a size and quality similar to those
available to Xxxxxx at the time of this Agreement. Xxxxxx shall be entitled to
four weeks' vacation annually.
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4. STOCK OPTIONS. In addition, the Company shall grant to Xxxxxx an option
(the "Option") to acquire up to Two Hundred Thousand (200,000) shares of Common
Stock at an exercise price of $2.625 per share. The Option shall become
exercisable with respect to One Hundred Thousand (100,000) shares of Common
Stock on December 31, 2000 and with respect to the balance of such shares of
Common Stock on December 31, 2001, provided that the entire Option shall become
exercisable as of the date immediately prior to a "Change in Control" as defined
in the applicable stock option agreement described below. The exercise price of
the Option per share of Common Stock shall be equal to the fair market value of
a share of Common Stock on February 1, 2000. Subject to the foregoing
exercisability schedule, the Option may be exercised in whole or in part. All
other terms of the Option shall be detailed in a Stock Option Agreement between
the Company and Xxxxxx, a copy of which is attached hereto as Annex B.
5. COMPENSATION.
5.1. Annual Salary. During the Term the Company shall pay Xxxxxx salary
at the rate of One Hundred Twenty-five Thousand Dollars ($125,000) per year.
5.2. Bonuses. In addition to the Annual Salary, the Company shall pay
Xxxxxx the following bonuses in the event the conditions to the respective
payment thereof are met:
5.2.1. A cash payment in an amount equaling 2.5% of the gross
revenues generated during each fiscal 2000 quarter by the Company's
current website, such amount to be paid quarterly within ten (10) days
following the filing of the Company's Quarterly Report on Form 10-QSB
with the Securities and Exchange Commission or such other date on which
the Company's quarterly financial statements are delivered to the
Company's stockholders. The parties agree that the revenues of the
website shall not include sales of the Company's diagnostic products.
5.2.2(a). A cash bonus of Fifty Thousand Dollars ($50,000) in the
event the Company achieves, as of June 30, 2000 (the "Target Date") the
cash flow budget established by the Board of Directors for the 12-month
period ending June 30, 2000. Such bonus, if earned, shall be paid on or
before July 10, 2000.
5.2.2(b). In addition, for each fiscal year commencing with fiscal
year ending June 30, 2001, Xxxxxx shall receive a bonus equal to fifty
percent (50%) of his annual salary for any such fiscal year, if the
Company achieves its budgeted cash flow, sales volumes or other relevant
objectives for such fiscal year. Such objectives shall be consistent
with the Company's financial forecasts for the fiscal year and
established by the Board of Directors prior to the commencement of the
applicable fiscal year. Such bonus, if earned, shall be paid no later
than one hundred and twenty (120) days after the end of the fiscal year
for which it was earned.
5.2.3. A cash bonus of Fifty Thousand Dollars ($50,000) in the
event the Company sells at least One Hundred Twenty Thousand (120,000)
diagnostic kits on or before June 30, 2000. Such bonus, if earned, shall
be paid within ten (10) days following the date such sales are
accomplished.
5.2.4. If, for any period of twenty (20) consecutive trading days
during the Term (a "Twenty Day Period"), the average of the daily
closing prices per share (the "Average Price") of Common Stock, as
published in the Wall Street Journal, is at least Four Dollars ($4.00)
per share, the Company shall pay Xxxxxx a cash bonus as determined below
based upon the whole dollar Average Price of the Common Stock during
such Twenty Day Period. Any bonus paid for achievement of a given
Average Price shall be credited toward the bonus due for achievement of
any higher Average Price, for any subsequent Twenty Day Period,
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with the result that, if there may be multiple Twenty Day Periods where
the Average Price may create a bonus payable hereunder, the aggregate
bonus payments for multiple Twenty Day Periods shall not exceed the
highest bonus payable for any one Twenty Day Period.
HIGHEST AVERAGE PRICE BONUS
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$4.00 $ 50,000
$5.00 $ 115,000
$6.00 $ 175,000
$7.00 $ 250,000
$8.00 $ 325,000
Any whole dollar amount above $8.00 $325,000 plus 1.5% of the Market Value
Spread, as defined below.
The Company shall pay any bonus thus determined within thirty five (35)
days following the end of the applicable Twenty Day Period, provided Xxxxxx
shall not be entitled to a bonus with respect to achievement of a given Stock
Price during a given Twenty Day Period unless the Average Price of the Common
Stock for the twenty (20) consecutive trading days immediately following such
Twenty Day Period is at least 80% of the Stock Price on which such bonus is
based.
The "Market Cap Value Spread" shall equal the positive difference between
(i) the Market Cap Value based on an Average Price of Eight ($8.00) Dollars and
(ii) the Market Cap Value based upon the actual highest Average Price for the
applicable Twenty Day Period. The "Market Cap Value" shall equal the product of
(A) the applicable Average Price per share of Common Stock, multiplied by (B)
the total shares of Common Stock outstanding, on the last day of the applicable
Twenty Day Period.
Any bonus payable under this Section 5.2.4 shall not be paid if in the
reasonable determination of the Board of Directors the Highest Average Price
upon which such bonus is based was achieved primarily or exclusively by: (i)
statements or actions of Xxxxxx that were in violation of Federal or state
securities laws, or (ii) by a failure by Xxxxxx, after advice of counsel, to
cause the Company to make a statement or to correct or update any prior
statement, which failure would constitute a violation of Federal or state
securities laws. Such determination must be made within thirty (30) days
following the end of the applicable Twenty Day Period.
6. TERMINATION.
6.1. Termination upon Death. If Xxxxxx dies during the Term, this
Agreement shall terminate and Xxxxxx'x legal representatives shall be entitled
to receive the Annual Salary, accrued pro rata to the date of Xxxxxx'x death.
6.2. Termination for Cause. The Company has the right, at any time
during the Term, subject to all of the provisions hereof, exercisable by serving
notice, effective in accordance with its terms, to terminate Xxxxxx'x service
under this Agreement and to discharge Xxxxxx for "Cause" (as hereinafter
defined). As used in this Section 6.2, the term "Cause" shall mean the
occurrence of one or more of the following events: (i) Xxxxxx willfully and
repeatedly fails or refuses to perform his duties hereunder after written notice
to Xxxxxx of such failure and a reasonable opportunity for Xxxxxx to correct
such performance; or (ii) Xxxxxx is convicted or enters a plea of nolo
contendere to any felony charge or engages in gross insubordination or gross
misconduct.
6.3. Termination Without Cause. The Company may terminate Xxxxxx'x
service without Cause upon giving thirty (30) days written notice of
termination. In such event, or in the event of a termination or suspension of
employment due to death or disability (a) any stock options which were unvested
shall
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immediately vest and become exercisable under the Stock Option Agreement; and
(b) Xxxxxx shall remain eligible for the bonuses described in Section 5.2 on the
same basis as if he had continued to be employed by the Company until the
completion of the Term.
6.4. Suspension upon Disability. If during the Term Xxxxxx becomes
physically or mentally disabled, whether totally or partially, as evidenced by
the written statement of a competent physician licensed to practice medicine in
the United States, so that Xxxxxx is unable to substantially perform his
services hereunder for a period of sixty (60) consecutive days, the Company may
at any time after the last day of the sixty (60) consecutive days of disability,
by written notice to Xxxxxx, suspend the Term of Xxxxxx'x services hereunder and
discontinue payments of the Annual Salary. If at any time Xxxxxx shall no longer
be disabled, as evidenced by the written statement of a competent physician
licensed to practice medicine in the United States, the Company shall fully
reinstate the engagement of Xxxxxx pursuant to this Agreement and shall commence
payment of the Annual Salary and all of the terms of this Agreement shall resume
in full force for the balance of the Term. Nothing in this Section 6.4 shall be
deemed to extend the Term.
7. INSURANCE. The Company may, from time to time, apply for and take out,
in its own name and at its own expense, naming itself or others as the
designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Xxxxxx in any amount or
amounts that it may deem necessary or appropriate to protect its interest.
8. OTHER PROVISIONS.
8.1. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
certified, registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally or, if mailed, the date of receipt, as
follows:
(i) If to the Company, to: ZymeTx, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
(ii) If to Xxxxxx, to: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx & Associates, P.A.
00 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Any party may change its address for notice hereunder by notice to the
other party hereto.
8.2. Entire Agreement. This Agreement and the Annexes hereto contain the
entire agreement between the parties with respect to the subject matter hereof,
and supersede all prior agreements, written or oral, with respect thereto.
8.3. Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial
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exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
8.4. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma applicable to agreements made
and to be performed entirely within such state.
8.5. Assignment. Subject to Xxxxxx'x right to pledge the Shares as
described in Section 5.3, above, neither party hereto may assign any rights
hereunder without the written consent of the other party hereto.
8.6. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.7. Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY: ZYMETX, INC.
By: /s/ Xxxxx X. Xxxxxxx III
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Xxxxx X. Xxxxxxx III, Chairman
XXXXXX: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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