Exhibit 10(u)
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of January 1,
1998, between SIGA PHARMACEUTICALS, INC., a Delaware corporation (with its
successors and assigns, referred to as the "Corporation"), and Xx. Xxxxxx Xxxxx
(referred to as "Xxxxx").
Preliminary Statement
Xxxxx is currently employed by the Corporation pursuant to an employment
agreement, dated April 1, 1997 (the "Prior Agreement"). The Corporation and
Xxxxx wish to enter into a new agreement, as of January 1, 1998, regarding
Xxxxx'x employment by the Corporation on a full-time basis and containing the
other agreements set forth in this Agreement, all of which are related to
Xxxxx'x employment under this Agreement.
Agreement
Xxxxx and the Corporation therefore agree as follows:
1. Termination of Prior Agreement. The Prior Agreement shall terminate as of
January 1, 1998 and shall be replaced by this Agreement.
2. Employment for Term. The Corporation hereby employs Xxxxx and Xxxxx hereby
accepts employment with the Corporation for the period beginning on the date of
this Agreement and ending on January 1, 2000 (the "Initial Term), or upon the
earlier termination of the Term pursuant to Section 6. This Agreement shall be
automatically renewed for additional one-year periods (the "Renewal Terms;"
together with the Initial Term, the "Term") unless either party notifies the
other in writing of its intention not to so renew this Agreement no less than 60
days prior to the expiration of the Initial Term or a Renewal Term. The
termination of Xxxxx'x employment under this Agreement shall end the Term but
shall not terminate Xxxxx'x or the Corporation's other agreements in this
Agreement, except as otherwise provided in this Agreement.
3. Position and Duties. During the Term, Xxxxx shall serve as the Vice President
of Research of the Corporation. During the Term, Xxxxx shall also hold such
additional positions and titles as the Board of Directors of the Corporation
(the "Board") may determine from time to time. The Corporation agrees that prior
to hiring a Vice President of Development, the Corporation will discuss such
additional position with Xxxxx. During the Term, Xxxxx shall devote his full
time and efforts to his duties as an employee of the Corporation (aside from his
commitment to Oregon State University to oversee research funded by, or of
interest to, the Corporation).
4. Compensation.
(a) Base Salary. The Corporation shall pay Xxxxx a base salary, beginning
on the first day of the Term and ending on the last day of the Term, of not less
than $170,000 per annum, payable at least monthly on the Corporation's regular
pay cycle for professional employees.
(b) Additional Payment. Following the execution of this Agreement, Xxxxx
shall receive a one-time payment of $14,145 in consideration for his work done
on behalf of the Corporation from September through December 1997.
(c) Stock Options. Pursuant to the Corporation's stock option plan, the
Corporation shall grant to Xxxxx options to purchase 40,000 shares of the
Corporation's Common Stock at an exercise price equal to closing bid price of
the Common Stock of the Corporation on the date hereof. The options shall vest
on a pro rata basis (10,000 shares each) on April 1, 1999, April 1, 2000, April
1, 2001 and April 1, 2002. The options shall expire on January 1, 2008.
(d) Other and Additional Compensation. The preceding sections establish the
minimum compensation during the Term and shall not preclude the Board from
awarding Xxxxx a higher salary or any bonuses or stock options in the discretion
of the Board during the Term at any time. The Company intends to adopt a
performance based bonus plan for 1998 and subsequent years and Xxxxx will be
eligible to participate in such plan.
5. Employee Benefits. During the Term, Xxxxx shall be entitled to the employee
benefits, including vacation, 401(k) plan, health plan and other insurance
benefits made available by the Corporation to any other employee of the
Corporation.
6. Expenses. The Corporation shall reimburse Xxxxx for actual out-of-pocket
expenses incurred by him in the performance of his services for the Corporation
upon the receipt of appropriate documentation of such expenses.
7. Termination.
(a) General. The Term shall end immediately upon Xxxxx'x death. The Term
may also end for Cause or Disability, as defined in Section 8.
(b) Notice of Termination. Promptly after it ends the Term, the Corporation
shall give Xxxxx notice of the termination, including a statement of whether the
termination was for Cause or Disability (as defined in Section 8(a) and 8(b)
below). The Corporation's failure to give notice under this Section 7(b) shall
not, however, affect the validity of the Corporation's termination of the Term.
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(c) Effective Termination by Corporation. If the Corporation materially
reduces Xxxxx'x duties during the term, including replacing Xxxxx as Vice
President of Research, then, at his option, Xxxxx may treat such reduction in
duties as a termination of the Term without Cause by the Corporation.
8. Severance Benefits.
(a) "Cause" Defined. "Cause" means (i) willful malfeasance or willful
misconduct by Xxxxx in connection with his employment; (ii) Xxxxx'x gross
negligence in performing any of his duties under this Agreement; (iii) Xxxxx'x
conviction of, or entry of a plea of guilty to, or entry of a plea of nolo
contendere with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Xxxxx'x material breach of any written
policy applicable to all employees adopted by the Corporation which is not cured
to the reasonable satisfaction of the Corporation within fifteen (15) business
days after notice thereof; or (v) material breach by Xxxxx of any of his
agreements in this Agreement which is not cured to the reasonable satisfaction
of the Corporation within fifteen business days after notice thereof.
(b) Disability Defined. "Disability" shall mean Xxxxx'x incapacity due to
physical or mental illness that results in his being unable to substantially
perform his duties hereunder for six consecutive months (or for six months out
of any nine month period). During a period of Disability, Xxxxx shall continue
to receive his base salary hereunder, provided that if the Corporation provides
Xxxxx with disability insurance coverage, payments of Xxxxx'x base salary shall
be reduced by the amount of any disability insurance payments received by Xxxxx
due to such coverage. The Corporation shall give Xxxxx written notice of
termination which shall take effect sixty (60) days after the date it is sent to
Xxxxx unless Xxxxx shall have returned to the performance of his duties
hereunder during such sixty (60) day period (whereupon such notice shall become
void).
(c) Termination. If the Corporation ends the Term for Cause or Disability,
or if Xxxxx resigns as an employee of the Corporation for reasons other than a
material breach by the Corporation of its obligations under this Agreement or a
material reduction of Xxxxx'x duties as provided in Section 7(c), or if Xxxxx
dies, then the Corporation shall have no obligation to pay Xxxxx any amount,
whether for salary, benefits, bonuses, or other compensation or expense
reimbursements of any kind, accruing after the end of the Term, and such rights
shall, except as otherwise required by law, be forfeited immediately upon the
end of the Term. If the Corporation ends the Term without Cause, then the
Corporation will be obligated to pay Xxxxx'x salary for the remainder of the
Term. In addition, in the event of a change in the ownership of greater than
fifty percent (50%) of the Corporation's outstanding voting stock or any
transaction described in Section 10(b), Xxxxx may elect to terminate this
Agreement as if it were a termination by the Corporation without Cause, except
that the Corporation shall not be obligated to pay Xxxxx'x salary for the
remainder of the Term.
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9. Confidentiality, Ownership, and Covenants.
(a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters). "Inventions"
collectively refers to any and all inventions, trade secrets, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship,
know-how, improvements, research, discoveries, developments, designs, and
techniques regarding any of the foregoing.
(b) Confidentiality. (i) Xxxxx hereby recognizes that the value of all
trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation may be attributable substantially to the
fact that such confidential information is maintained by the Corporation in
strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Xxxxx therefore, except as
provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during the Term
and for the five (5) year period after the end of the Term and shall not be used
or divulged by him outside the scope of his employment as contemplated by this
Agreement, except as the Corporation may otherwise expressly authorize by action
of the Board. In the event that Xxxxx is requested in a judicial, administrative
or governmental proceeding to disclose any of the Corporation Information, Xxxxx
will promptly so notify the Corporation so that the Corporation may seek a
protective order or other appropriate remedy and/or waive compliance with this
Agreement. If disclosure of any of the Corporation Information is required,
Xxxxx may furnish the material so required to be furnished, but Xxxxx will
furnish only that portion of the Corporation Information that legally is
required.
(ii) Xxxxx also hereby agrees to keep the terms of this Agreement
confidential.
(c) Ownership of Inventions, Patents and Technology.
(i) In General. Subject to Section 9(c)(ii) below, Xxxxx hereby
assigns to the Corporation all of Xxxxx'x right (including patent rights,
copyrights, trade secret rights, and all other rights throughout the
world), title and interest in and to Inventions, whether or not patentable
or registrable under copyright or similar statutes, made or conceived or
reduced to practice or learned by Xxxxx, either alone or jointly with
others, during the course of the performance of services for the
Corporation. Xxxxx shall also assign to, or as directed by, the
Corporation, all of Xxxxx'x right, title and interest in and to any and all
Inventions, the full title to which is required to be in the United States
government by a contract between the Corporation and the United States
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government or any of its agencies. The Corporation shall have all right,
title and interest in all research and work product produced by Xxxxx as an
employee of the Corporation, including, but not limited to, all research
materials and lab books.
(ii) Oregon State University. Specifically, Xxxxx shall promptly and
fully disclose to the Corporation any and all inventions, methods,
improvements, discoveries, original works of authorship, trade secrets, or
other intellectual property conceived, developed or reduced to practice by
Xxxxx or any of his employees, consultants or research assistants, during
the performance of the Term hereunder or derived from Confidential
Information, including without limitation, as relates to the Core
Technology, as defined in a research agreement (the "Research Agreement"),
dated as of January 31, 1996, by and between the Corporation and The State
Board of Higher Education on behalf of Oregon State University ("Oregon")
(collectively, "Work Product"). Xxxxx shall treat all Work Product as the
Confidential Information of the Corporation. Xxxxx agrees and does hereby
assign to the Corporation and its successors and assigns, without further
consideration, his entire right, title and interest in and to all Work
Product developed during the performance of the Term hereunder or derived
from any Confidential Information, whether or not patentable or
copyrightable, subject only to the provisions of the Research Agreement and
Oregon's rights thereunder and any other existing written agreement Xxxxx
may have with Oregon. Xxxxx further agrees to execute all applications for
patents and/or copyrights, domestic or foreign, assignments and other
papers necessary to secure and enforce rights relating to the Work Product.
The parties acknowledge that all original works of authorship that are made
by Xxxxx within the scope of the Term and that may be protected by
copyrighted are "works made for hire," as that time is defined in the
United States Copyright Act (17 USC Section 101).
(d) Non-Competition Period Defined. "Non-Competition Period" means the
period beginning at the end of the Term and ending one (1) year after the end of
the Term.
(e) Covenants Regarding the Term and Non-Competition Period. Xxxxx
acknowledges and agrees that his services pursuant to this Agreement are unique
and extraordinary; that the Corporation will be dependent upon Xxxxx for the
research of antibiotics, vaccines and anti-infectives; and that he will have
access to and control of confidential information of the Corporation. Xxxxx
further acknowledges that the business of the Corporation is international in
scope and cannot be confined to any particular geographic area. For the
foregoing reasons and to induce the Corporation to enter this Agreement, Xxxxx
covenants and agrees that, subject to Section 9(h), during the Term and the
Non-Competition Period Xxxxx shall not unless with written consent of the
Corporation:
(i) engage in the business of research of the Core Technology, as
defined in the Research Agreement, or any other products or processes in
which the Corporation is engaged in during the Term or in any other
business conducted
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by the Corporation during the Term (collectively the "Prohibited Activity")
in the World for his own account;
(ii) become interested in any individual, corporation, partnership or
other business entity (a "Person") engaged in any Prohibited Activity in
the World, directly or indirectly, as an individual, partner, shareholder,
officer, director, principal, agent, employee, trustee, consultant or in
any other relationship or capacity; provided, however, that Xxxxx may own
directly or indirectly, solely as an investment, securities of any Person
which are traded on any national securities exchange if Xxxxx (x) is not a
controlling person of, or a member of a group which controls, such person
or (y) does not, directly or indirectly, own 5% or more of any class of
securities of such person;
(iii) directly or indirectly hire, engage or retain any person which
at any time during the Term or Non-Competition Period was a supplier,
client or customer of the Corporation, or directly or indirectly solicit,
entice or induce any such person to become, a supplier, client or customer
of any other person engaged in any Prohibited Activity; or
(iv) directly or indirectly hire, employ or retain any person who at
any time was an employee of the Corporation or directly or indirectly
solicit, entice, induce or encourage any such person to become employed by
any other person.
(f) Remedies. Xxxxx hereby acknowledges that the covenants and agreements
contained in Section 9 are reasonable and valid in all respects and that the
Corporation is entering into this Agreement, inter alia, on such acknowledgment.
If Xxxxx breaches, or threatens to commit a breach, of any of the Restrictive
Covenants, the Corporation shall have the following rights and remedies, each of
which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Corporation under
law or in equity: (i) the right and remedy to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Corporation and that money damages will not provide an
adequate remedy to the Corporation; (ii) the right and remedy to require Xxxxx
to account for and pay over to the Corporation such damages as are recoverable
at law as the result of any transactions constituting a breach of any of the
Restrictive Covenants; (iii) if any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions; and (iv) if any court construes
any of the Restrictive Covenants, or any part thereof, to be unenforceable
because of the duration of such provision or the area covered thereby, such
court shall have the power to reduce the duration or area of such provision and,
in its reduced form, such provision shall then be enforceable and shall be
enforced.
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(g) Jurisdiction. The parties intend to and hereby confer jurisdiction to
enforce the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Covenants. If the courts of any one or more such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the parties that
such determination not bar or in any way affect the Corporation's right to the
relief provided above in the courts of any other jurisdiction, within the
geographical scope of such Covenants, as to breaches of such Covenants in such
other respective jurisdictions such Covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
(h) Xxxxx'x agreements and covenants under Section 9(e) shall automatically
terminate if the Corporation ends the Term without Cause or Xxxxx resigns due to
a material breach by the Corporation of its obligations under this Agreement or
a material reduction of Xxxxx'x duties as provided in Section 7(c).
10. Successors and Assigns.
(a) Xxxxx. This Agreement is a personal contract, and the rights and
interests that the Agreement accords to Xxxxx may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. All rights and benefits
of Xxxxx shall be for the sole personal benefit of Xxxxx, and no other person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment, transfer, claim or judgment or bankruptcy proceedings against
Xxxxx. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Xxxxx and his personal representatives, distributees and
legatees.
(b) The Corporation. This Agreement shall be binding upon the Corporation
and inure to the benefit of the Corporation and of its successors and assigns,
including (but not limited to) any corporation that may acquire all or
substantially all of the Corporation's assets or business or into or with which
the Corporation may be consolidated or merged. In the event that the Corporation
sells all or substantially all of its assets, merges or consolidates, otherwise
combines or affiliates with another business, dissolves and liquidates, or
otherwise sells or disposes of substantially all of its assets and Xxxxx does
not elect to treat any such transaction as a termination by the Corporation
without Cause pursuant to Section 8(c), then this Agreement shall continue in
full force and effect. The Corporation's obligations under this Agreement shall
cease, however, if the successor to, the purchaser or acquiror either of the
Corporation or of all or substantially all of its assets, or the entity with
which the Corporation has affiliated, shall assume in writing the Corporation's
obligations under this Agreement (and deliver an executed copy of such
assumption to Xxxxx), in which case such successor or purchaser, but not the
Corporation, shall thereafter be the only party obligated to perform the
obligations that remain to be performed on the part of the Corporation under
this Agreement.
11. Entire Agreement. This Agreement represents the entire agreement between the
parties concerning Xxxxx'x employment with the Corporation and supersedes all
prior
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negotiations, discussions, understandings and agreements, whether written or
oral, between Xxxxx and the Corporation relating to the subject matter of this
Agreement.
12. Amendment or Modification, Waiver. No provision of this Agreement may be
amended or waived unless such amendment or waiver is agreed to in writing signed
by Xxxxx and by a duly authorized officer of the Corporation. No waiver by any
party to this Agreement of any breach by another party of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same time, any
prior time or any subsequent time.
13. Notices. Any notice to be given under this Agreement shall be in writing and
delivered personally or sent by overnight courier or registered or certified
mail, postage prepaid, return receipt requested, addressed to the party
concerned at the address indicated below, or to such other address of which such
party subsequently may give notice in writing:
If to Xxxxx: Xx. Xxxxxx Xxxxx
0000 XX Xxxxxxxxx
Xxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
If to the Corporation: SIGA PHARMACEUTICALS, INC.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx X. xx Xxxxx
with a copy to: Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
14. Severability. If any provision of this Agreement or the application of any
such provision to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid and unenforceable to any extent, the
remainder of this Agreement or the application of such provision to such person
or circumstances other than those to which it is so determined to be invalid and
unenforceable shall not be affected, and each provision of this Agreement shall
be validated and shall be enforced to the fullest extent permitted by law. If
for any reason any provision of this Agreement containing restrictions is held
to cover an
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area or to be for a length of time that is unreasonable or in any other way is
construed to be too broad or to any extent invalid, such provision shall not be
determined to be entirely null, void and of no effect; instead, it is the
intention and desire of both the Corporation and Xxxxx that, to the extent that
the provision is or would be valid or enforceable under applicable law, any
court of competent jurisdiction shall construe and interpret or reform this
Agreement to provide for a restriction having the maximum enforceable area, time
period and such other constraints or conditions (although not greater than those
contained currently contained in this Agreement) as shall be valid and
enforceable under the applicable law.
15. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
16. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
17. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Xxxxx under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
18. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
constitute one and same instrument.
19. Applicable Law: Jurisdiction. The laws of the State of New York shall govern
the interpretation, validity and performance of the terms of this Agreement,
without reference to rules relating to conflicts of law. Any suit, action or
proceeding against Xxxxx with respect to this Agreement, or any judgment entered
by any court in respect thereof, may be brought in any court of competent
jurisdiction in the State of New York, as the Corporation may elect in its sole
discretion, and Xxxxx hereby submits to the nonexclusive jurisdiction of such
courts for the purpose of any such suit, action, proceeding or judgment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
SIGA PHARMACEUTICALS, INC.
By: /s/ Xxxxx xx Xxxxx
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Xxxxx X. xx Xxxxx, President
/s/ Xx. Xxxxxx X.Xxxxx
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Xx. Xxxxxx X. Xxxxx
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