EXHIBIT 10.30
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of the 29th day of
January, 1996 by and between Cygnus, Inc. a Delaware corporation (the
"COMPANY") and Xxxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, on January 29, 1992, Cygnus Therapeutic Systems, a California
corporation and the predecessor by merger to the COMPANY (California Cygnus)
and the Executive entered into an Employment Agreement (the "Prior
Agreement") providing for the employment of the executive as the President
and Chief Executive Officer of the COMPANY for a period of four (4) years
ending on January 29, 1996.
WHEREAS, pursuant to the terms of the Prior Agreement, the COMPANY and
California Cygnus have (i) paid the Executive a base salary of $208,846 in
1992, $237,500 in 1993 and $252,740 in 1994, (ii) paid certain bonuses to the
Executive in each such year, and (iii) granted the Executive a non-qualified
option to purchase an aggregate of Three Hundred and Fifty Thousand (350,000)
shares of Common Stock with an exercise price equal to 85% of the fair market
value of such shares as of the date of grant, vesting over a period of four
(4) years. The Executive has subsequently received additional grants of
options to purchase a total of 51,429 shares of Common Stock in 1993 and a
total of 225,000 shares of Common Stock in 1994.
WHEREAS, the COMPANY and the Executive desire that the Executive
continue to serve as the President and Chief Executive Officer of the COMPANY
for an additional four (4) year period beginning on January 30, 1996 and
ending on January 29, 2000, and to receive therefor the compensation provided
for herein; provided, further, that the Prior Agreement is hereby amended and
restated as set forth herein with respect to Executive's employment by the
Company for the period subsequent to January 29, 1996.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I. TERM OF EMPLOYMENT
Section 1.1. The COMPANY hereby employs the Executive and the Executive
hereby accepts employment with the COMPANY for a period of four (4) years
beginning on January 30, 1996 and extending through January 29, 2000.
ARTICLE II. DUTIES OF EXECUTIVE
Section 2.1. GENERAL. The Executive shall serve as President and Chief
Executive Officer of the COMPANY. Consistent with his position as President
and Chief Executive Officer, Executive shall perform all services and do all
things necessary or advisable to manage and conduct the operations and
business of the COMPANY, subject always to the authority of the Board of
Directors of the COMPANY (the "Board"). The COMPANY will use its best
efforts to ensure that Executive will remain a member of the Board during the
term of his employment, and shall use its best efforts to communicate with
its shareholders as necessary to ensure such result.
Section 2.2. FULL TIME. The Executive shall devote his full business
time, ability and attention to the business of the COMPANY during the
employment term. Executive shall not directly or indirectly actively engage
in or perform any duties which may interfere with Executive's performance
under this Agreement, provided that Executive may serve as a director of
other corporations with the prior approval of the Board. Executive
represents he is not presently an officer, director or employee of, or a
consultant to, any other person or entity.
Section 2.3. DUTIES. Executive will perform such duties as are
consistent with his position as the President and Chief Executive Officer of
the COMPANY and shall have the powers and authorities as may be needed to
carry out those duties as set forth in the COMPANY's Bylaws. In addition,
Executive shall perform such other duties and undertake responsibilities as
are reasonably assigned to him by the Board.
Section 2.4. VACATIONS. The Executive shall be entitled to three (3)
weeks paid vacation per annum, with such additional paid vacation time as a.
the Board (or the chairman thereof) may reasonably determine, or b. is
consistent with the COMPANY's vacation policy as it exists from time to time.
ARTICLE III. COMPENSATION
Section 3.1. SALARY. As compensation for his services hereunder
(including his services as a member of the Board), the Executive shall
receive a base salary (the "Base Salary") of at least $305,000 per annum.
The Base Salary shall be payable in periodic installments on the dates of the
COMPANY's usual payroll, which shall be at least once per calendar month.
The Executive's Base Salary may be increased, but not decreased, at the end
of each twelve (12) month period (or other more frequent intervals) by the
Board consistent with the Executive's performance and the COMPANY's policy
regarding increases in officer compensation established from time to time by
the Board.
Section 3.2. BONUS. The Executive shall participate in the COMPANY's
annual Incentive Bonus Plan and, pursuant to such plan, Executive shall be
entitled (upon
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satisfaction of the bonus criteria approved by the Compensation Committee of
the Board (the "Compensation Committee")) to receive annual cash bonuses in
an amount as determined by the Compensation Committee up to one hundred
percent (100%) of his Base Salary for the year in which he satisfied the
bonus criteria.
Section 3.3. EXPENSES. The COMPANY shall reimburse Executive, on a
monthly basis, for reasonable costs incurred by him with respect to monthly
and actual usage fees payable for his cellular phone (excluding usage fees
solely attributable to personal matters), his automobile operating expenses,
and insurance premiums for life, accidental death and dismemberment, salary
protection, disability and auto insurance.
ARTICLE IV. EXECUTIVE BENEFITS
Section 4.1. STOCK OPTIONS. The COMPANY will grant to the Executive
non-qualified options to purchase such number of shares of Common Stock of
the COMPANY as shall be determined from time to time by the Compensation
Committee, at such times and on such terms as shall be determined by the
Compensation Committee. All options granted to Executive shall terminate six
(6) months after Executive's employment with the COMPANY terminates.
Notwithstanding any ambiguity or inconsistency in any other agreement or
document, any options granted to the Executive prior to the date hereof shall
terminate six (6) months after Executive's employment and the COMPANY
terminates, and to the extent any other document or agreement between
Executive and the COMPANY provides otherwise, such agreement or document
shall be deemed amended hereby.
Section 4.2. VESTING OF STOCK OPTIONS. Any stock options granted to
Executive during the term of his employment by the COMPANY (including options
granted prior to the date hereof) shall vest in full over a four (4) year
period, with the commencement date of such vesting being specified in the
particular option agreement. In the event (i) COMPANY or its shareholders in
one or more related transactions dispose of all or substantially all of the
assets or outstanding capital stock of COMPANY by means of sale, merger,
reorganization or liquidation; (ii) any Person as Beneficial Owner, as
defined under Section 13 of the Securities Exchange Act of 1934, as amended,
directly or indirectly acquires securities of the COMPANY representing a
majority of the voting power represented by the COMPANY's then outstanding
voting securities; or (iii) of any change in the Executive's title or
reporting responsibility or any material reduction in his responsibilities
specified hereunder or which are otherwise performed by him; then, in any
such event, each such granted option shall automatically become fully vested
and immediately exercisable by Executive. All such options shall be subject
to such terms and conditions as are set forth in the particular stock option
agreement with the Executive, which agreements shall otherwise be in the
COMPANY's standard form as of the date of grant.
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Section 4.3. OTHER BENEFITS. The Executive shall be eligible to
participate in such other employee benefit programs (including medical,
dental, life and disability insurance, which shall be effective as of and
from the date of the Executive's employment hereunder) as the COMPANY shall
maintain from time to time for the benefit of employees in positions
comparable to the Executive's position under this Agreement. The Executive
may receive such other and additional benefits as the Board may determine
from time to time in its sole discretion.
ARTICLE V. BUSINESS EXPENSES
The COMPANY will promptly reimburse the Executive for all reasonable and
customary business expenses incurred during the employment term by the
Executive, provided that the Executive furnishes to the COMPANY reasonably
adequate records and other documentary evidence of such expenses.
ARTICLE VI. TERMINATION OF AGREEMENT
Section 6.1. COMPANY TERMINATION FOR CAUSE. Notwithstanding anything
to the contrary herein, the Executive's employment hereunder may be
terminated by the Board at any time for cause immediately upon written notice
to the Executive, if any of the following events occur:
(a) The Executive is physically or mentally incapacitated so that
he is unable to discharge his duties for a period of sixty (60) consecutive
days or a total of ninety (90) days in any twelve (12) month period.
(b) The Executive is found guilty of serious, criminal misconduct
(I.E., other than traffic violations and other minor infractions) by a court
of competent jurisdiction, or acts or omits to act in reckless or willful
disregard of lawful instructions given under authority of the Board, or
engages in acts of gross misconduct, or misuses corporate funds.
(c) The Executive materially breaches any of his obligations
under this Agreement and fails to correct the same within thirty (30) days
from written notice thereof by COMPANY.
The Executive shall be entitled to a full hearing before a quorum
of the Board at a Board meeting prior to any termination of his employment
under this Section 6.1.
Upon termination for cause under this Section 6.1, all compensation
and benefits (except the ability to exercise options, to the extent vested,
during the Exercise
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Period) shall immediately cease. Termination for cause under this Section
6.1 shall be without prejudice to any other remedy to which the COMPANY may
be entitled either at law or in equity or under this Agreement.
Section 6.2. UNCONDITIONAL TERMINATION.
(a) BY COMPANY. The COMPANY may terminate the employment of the
Executive hereunder, for any reason, or for no reason, by giving sixty (60)
days prior written notice thereof to the Executive; PROVIDED, THAT, upon any
such termination hereunder (other than for cause under Section 6.1 above),
the parties agree that the COMPANY shall continue to pay, on the COMPANY's
normal payroll schedule, an aggregate amount equal to the Executive's then
current annual Base Salary plus an amount equal to all bonus compensation
paid to the Executive for the full calendar year preceding the date of
termination until the earlier of (1) the Executive obtaining comparable
employment or (2) twelve (12) months after the date of termination. In
addition to the foregoing, the COMPANY shall:
(i) immediately vest the Executive in all options to purchase
shares of Common Stock, provided that the option shall terminate to
the extent unexercised at the end of the Exercise Period;
(ii) continue, at its sole expense, all medical, dental and life
insurance coverage until the earlier of (x) twelve (12) months from
the date of such termination or (y) such time as the Executive
receives similar paid coverage from another employer;
(iii) if so requested by the Executive, pay for reasonable
outplacement services engaged by the Executive in seeking new
employment, which services may include the provision to Executive of
appropriate office, telephone and secretarial services until the
earlier of (x) twelve (12) months from the date of such termination or
(y) such time as Executive obtains other employment; and
(iv) agree with the Executive on any and all statements which
will be issued relative to the reasons for such termination.
Any change in the Executive's title or reporting responsibility,
any material reduction by the COMPANY (or its successor) in the Executive's
responsibilities specified hereunder (or those otherwise assumed by Executive
in the ordinary course of the COMPANY's business) or any requirement that
Executive's place of employment be in other than the San Francisco Bay Area,
shall be deemed to be a termination under this subsection Section 6.2(a)
unless cured within thirty (30) days of receipt by the COMPANY of written
notice from the Executive specifying the notice of such change in title or
reporting responsibility or reduction in responsibility.
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The COMPANY's obligations in this Section 6.2(a) shall constitute
Executive's exclusive remedy for termination by COMPANY under this Section
6.2(a) during the term of Executive's employment.
(b) BY THE EXECUTIVE. A termination of his employment by the
Executive, other than as a result of the breach of this Agreement by the
COMPANY, shall be a breach of this Agreement and shall entitle the Executive
to no further salary or benefits except the ability to exercise options, to
the extent vested, during the Exercise Period.
ARTICLE VII. GENERAL PROVISIONS
Section 7.1. CONFIDENTIALITY AGREEMENT. The Executive agrees to adhere
to the COMPANY's standard form Employee Confidentiality Agreement, which he
has previously executed.
Section 7.2. SUCCESSORS. The COMPANY will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the COMPANY to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the COMPANY would be required to perform it if no
such succession had taken place.
Section 7.3. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with and be governed by the laws of the state of
California.
Section 7.4. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding between the Executive and the COMPANY, and
supersedes any other negotiations, agreements, understandings, oral
agreements, representations and past or future practices whether written or
oral.
Section 7.5. MODIFICATION. This Agreement may not be amended,
modified, changed or discharged in any respect except as agreed in writing
and signed by the Executive and the COMPANY.
Section 7.6. SEVERABILITY AND INTERPRETATION. In the event that any
provision or any portion of this Agreement is held invalid or unenforceable
by a court of competent jurisdiction, such provision or portion thereof shall
be considered separate and apart from the remainder of this Agreement and the
other provisions shall remain fully valid and enforceable. In the event that
any provision is held to be overly broad as written, such provision shall be
deemed amended to narrow its application to the extent necessary to make the
provision enforceable according to applicable law and enforced as amended.
6.
Section 7.7. NOTICES. All notices required by this Agreement shall be
given in writing either by personal delivery or by first class mail, return
receipt requested, to the then most current address of the parties notified
to the other. Notice given by mail shall be deemed given five (5) days
following the date of mailing.
Section 7.8. WAIVER. A waiver by either party of any of the terms or
conditions of this Agreement in any instance shall not be deemed or construed
to be a waiver of such term or condition for the future, or of any subsequent
breach thereof.
Section 7.9. ATTORNEYS' FEES. In the event either party shall bring
any action or legal proceeding of an alleged breach of any provision of this
Agreement or to enforce, protect or establish any term or covenant of this
Agreement or right of either party under this Agreement, the prevailing party
shall be entitled to recover as part of such action or proceeding, or in a
separate action brought for that purpose, reasonable attorneys' fees and
court costs as may be fixed by the court.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
CYGNUS, INC.
By /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Chairman
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, an individual
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