SCHEDULE I
EMPLOYMENT AGREEMENT
This Employment Agreement made this ____ day of ___, ____
(hereinafter sometimes referred to as this "Agreement"), between Immtech
International, Inc., a Wisconsin corporation (the "Company"), and Mr. T. Xxxxxxx
Xxxxxxxx, an individual residing in Chicago, Illinois (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee as President and
Chief Executive Officer of the Company upon the terms and conditions set forth
herein; and
WHEREAS, Employee is willing to accept such employment upon the
terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Duties. The Company agrees that Employee shall be employed by the
Company during the Term of this Agreement (as hereinafter defined) as President
and Chief Executive Officer of the Company or in such other executive capacity
as the Board of Directors shall from time to time determine. Employee shall
perform such duties and shall have such responsibilities consistent with the
By-Laws of the Company and customary for the duties and position of his office,
in each instance subject to the direction of the Board of Directors. Employee
agrees to be so employed and shall devote his best efforts and substantially all
his business time to advance the interests of the Company.
2. Term. Subject to paragraphs 4, 5, 6 and 7 hereof, the term of the
Employee's employment hereunder shall be for a period of 12 months and
thereafter shall automatically renew for successive one year periods unless
notice of unrenewal shall be given by either party not less than 30 days prior
to each successive anniversary date of this Agreement while Employment is
employed, provided, however that should Employee be given less than nine (9)
months notice of nonrenewal, then the failure to renew shall be treated as a
Discharge Without Cause under Section 6 of this Agreement and Employee shall be
entitled to the salary, bonus, options and other benefits identified therein for
a period of nine (9) months.
3. Compensation.
(a) Base Salary. During the Term of this Agreement starting
after the completion of the successful financing of $5 million or more, Employee
shall be paid a salary at the per annum rate of $150,000. Employee shall receive
a salary increase for the following twelve months as determined by the Company's
Board of Directors. For purposes of this Agreement, "Base Salary" shall mean the
initial per annum rate of $150,000 and shall thereafter include increases
pursuant to the immediately preceding sentence. The Base Salary shall be payable
by the Company to Employee in accordance with the Company's regular payroll
practices.
(b) Bonus. Employee shall be eligible for an annual
performance bonus (the "Bonus") of up to 60% of the Base Salary as provided for
on Exhibit A attached hereto and made a part hereof ("Bonus Plan"). Any amounts
due Employee pursuant to the
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Bonus Plan shall be payable by the Company to Employee within 120 days after the
anniversary date of such year, though Employee need not be employed on such date
to receive said Bonus.
(c) Vacation, Sick Leave and Holidays. During the Term of this
Agreement Employee shall be entitled to 30 days paid vacation on an annual
basis, and shall be entitled to sick leave and holidays at full pay in
accordance with the Company's policies established and in effect from time to
time.
(d) Fringe Benefits. During The Term of this Agreement the
Employee shall be entitled to participate in all insurance, retirement,
executive, employee benefits, pension and profit-sharing plans and other fringe
benefit programs established by the Company during the Term of this Agreement
including health insurance.
(e) Reimbursement of Expenses. During The Term of this
Agreement the Employee shall be reimbursed for all items of travel and
entertainment and miscellaneous expenses reasonably incurred by him on behalf of
the Company. Employee shall, as a condition of such reimbursement, provide
sufficient documentation in such detail as will allow Company to deduct such
expenses. Reimbursement of expenses not claimed within ninety (90) days after
incurred shall be deemed waived.
(f) Insurance. Subject to insurability of employee. The
Company shall provide Employee with disability insurance during the Term of this
Agreement in the amount equal to all of the Employee Base Salary and that would
have been payable pursuant to the terms of this Agreement and it had been
terminated prior to the expiration of its
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term due to Employee's Total Disability (as hereinafter defined). In addition,
the Company shall provide Employee with term life insurance naming Employee's
spouse as named beneficiary providing the benefits set forth on Exhibit B
attached hereto and made a part hereof.
(g) Stock Option. On the date hereof the Company shall provide
Employee a stock option exercisable into shares of Common Stock of the Company,
as described in Exhibit C attached hereto and made a part hereof.
4. Death or Total Disability of Employee.
(a) Death. In the event of the death of the Employee during
the Term of this Agreement, this Agreement shall terminate effective as of the
date of the Employee's death and the Company shall have no further obligations
or liability hereunder, except (i) the Company shall pay to the Employee's
estate the remaining portion, if any, of the Employee's Base Salary and a
prorata share of bonus for the period up to the Employee's date of death; and
(ii) the Employee's estate shall be entitled to all amounts due pursuant to
fringe benefit programs and plans and insurance in which the Employee is a
participant or covered.
(b) Total Disability. In the event of the Total Disability (as
hereinafter defined) of the Employee for a period of 120 consecutive days during
the Ten of this Agreement, the Company shall have the right to terminate the
Employee's employment hereunder by giving the Employee ten (10) days' written
notice thereof, and upon expiration of such ten (10) day period, the Company
shall have no further obligations or liability under this
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Agreement, except (i) the Company shall pay to Employee the remaining portion,
if any, of the Employee's Base Salary and a prorata share of bonus for the
period to the date of termination and (ii) the Employee shall be entitled to all
amounts due pursuant to fringe benefit programs and plans and insurance in which
the Employee is a participant or covered.
The term "Total Disability", when used herein, shall mean a mental
or physical condition which, based upon competent medical evidence, renders the
Employee unable or incompetent to carry out substantially all of the material
job responsibilities he held or tasks to which he was assigned.
5. Discharge for Cause. The Company may discharge the Employee and
thereby terminate his employment hereunder for the following reasons (each of
which shall constitute "cause"); (a) habitual intoxication; (b) drug addiction;
(c) conviction of Employee of a felony or (d) a material breach by Employee of
any term or provision of this Agreement, which Employee fails to cure within 30
days after receipt of written notice from the Company advising Employee, in
reasonable detail, of the breach. In the event that the Company shall discharge
the Employee pursuant to this paragraph 5, the Company shall have no further
obligations or liability under this Agreement, except (i) the Company shall pay
to Employee the remaining portion, if any, of the Employee's Base Salary and a
prorata share of bonus for the period up to the date of termination; and (ii)
the Employee shall be entitled to all
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amounts due pursuant to fringe benefit programs and plans and insurance in which
the Employee is a participant or covered.
6. Discharge Without Cause. The Company may discharge the Employee
and thereby terminate his employment hereunder, for any or no reason, at any
time upon at least thirty (30) days prior written notice to the Employee. The
parties further agree that a willful breach by the Company of any of the
material terms and conditions of this Agreement shall constitute a discharge
without cause of this Agreement. In the event of a discharge by the Company
without cause pursuant to this Section 6, for the remaining period of the term
of this Agreement or for nine (9) months, whichever is greater, Employee shall
be entitled to receive: (1) all of the Employee Base Salary that would have been
payable pursuant to the terms of this agreement had it not been terminated; (2)
a bonus equivalent to the amount to which Employee would have been entitled had
he continued working for the period of the term of this agreement or for nine
(9) months from the termination, whichever yields a greater bonus; (3) all
options payable pursuant to the accelerated option schedule contained in Exhibit
C of this agreement; and (4) all, amounts due pursuant to fringe benefit
programs, plans and/or insurance in which the Employee is a participant or which
covered Employee on the date of termination, provided, however, that in the
event any fringe benefit program, plan and/or insurance refuses to treat
Employee as covered for the period specified in this section because of
Employee's status as a terminated employee or for any other reason, then the
Company shall pay to Employee an amount equivalent to that which the
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Employee must pay to obtain a comparable benefit, plan or insurance.
7. Change of Control. In the event of a Change of Control (as
defined below), Employee may terminate this Agreement at any time upon at least
five (5) days prior written notice to the Company. In the event that Employee
shall terminate this Agreement pursuant to this Section 7, such termination
shall be treated as a Discharge Without Cause pursuant to Section 6 of this
agreement and Employee shall be entitled to the salary, bonus, options and other
benefits identified therein for remaining period of the term of this agreement
or for nine (9) months, whichever is greater. A "Change of Control" shall mean
the sale or transfer of at least fifty percent (50%) of the shares of commons
stock of the Company to a third person or entity in a transaction or series of
transactions occurring within a twelve--month period, other than sale of stock
at a public offering.
8. Supersedes Other Agreements. This Agreement supersedes and is in
lieu of any and all other employment arrangements between Employee and the
Company.
9. Amendments. Any Amendment to this Agreement, excluding any
extension or renewal of the term of employment of Employee, shall be made in
writing and signed by the parties hereto.
10. Enforceability. If any provision of this Agreement shall be held
invalid or unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner necessary to
render the same valid and
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enforceable, or shall be deemed excised from this Agreement as the case may
require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law, as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be.
11. Governing Law. The validity and effect of this Agreement shall
be governed exclusively by the Laws of the State of Illinois, excluding the
"conflicts of laws" rules of that state.
12. Assignment.
(a) This Agreement and the obligations created hereunder may
not be assigned by the Company without the prior written consent of Employee.
For the purposes of this Agreement, a merger involving the Company shall
constitute an assignment of this Agreement, and said assignment shall require
the written consent of Employee.
(b) This Agreement and the obligations created hereunder may
not be assigned by the Employee.
13. Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when personally
delivered or mailed, by certified or registered mail, return receipt requested,
addressed to the intended recipient as follows:
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If to Employee:
T. Xxxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Company:
Immtech International, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Von der Ruhr
Any party may from time to time change its address for the purposes
of notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received by
the party sought to be charged with its contents.
14. Covenant Not to Compete. Employee agrees that he will not,
either directly or indirectly, at any time during his employment with the
Company, compete or interfere, or setup to compete or interfere, or aid others
to so compete or interfere or set up to compete or interfere with the Company in
the conduct or transaction of any business or enterprise in which the Company
(i) is presently engaged, or (ii) is planning to become engaged and has made
significant monetary investment in order to be engaged, or (iii) is engaged at
any time during Employee's employment by the Company.
Employee further agrees that, upon the termination of his
employment, with the Company, he will not, for a period of twelve (12) months
from the date of voluntary termination or termination for cause, as defined
herein, or for a period of nine (9) months from the date of involuntary
termination not for cause (collectively the "Restriction Period"), within any
geographic
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markets where the Company is then active, directly or indirectly compete with
the Company by engaging in a competitive business in the development,
manufacture, assembly, promotion, marketing or sale of biopharmaceutical
products made from CRP (C. reactive protein), modified CRP or other acute phase
proteins for the diagnosis or therapeutic treatment of AIDS, Cancer or Sepsis,
or other products developed or under development by the Company, or any
component or ingredient thereof, as an owner, partner, officer, director,
associate, employee, consultant, salesperson or stockholder or aid others,
directly or indirectly, in competing with the Company. For the purposes of this
Agreement, competition and/or engaging in a competitive business shall include,
but shall not be limited to, any disclosure of confidential, proprietary,
promotional or marketing information, trade secrets, names of the Company's
employees or research consultants, names of suppliers, names of customers or any
other information acquired prior to termination of employment which is not
already in the public domain.
Employee expressly agrees that, upon a breach or violation of the
provisions of this section, the Company shall be entitled, in addition to all
other remedies available to it, to appropriate injunctive relief in any court of
competent jurisdiction.
15. Confidentiality and Non-Disclosure. Employee covenants and
agrees:
(a) Not to use, publish or otherwise disclose, except in the course of
his duties as employee of the Company, any confidential,
proprietary, patentable or copyrightable
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information or materials generated by or disclosed to him in the
course of his duties as an employee of the Company, except for data
which:
(i) At the time of disclosure to Employee, was in the public
domain;
(ii) After the time of disclosure to Employee, is published or
becomes a part of the public domain through no fault of
Employee; or
(iii) Was in the possession of Employee prior to the time of
disclosure by the Company, which can be demonstrated by
Employee's written records or other competent evidence.
(b) Not to disclose or utilize, in connection with the performance of
his duties as an employee of the Company, any information that
Employee is under a duty not to disclose.
(c) Upon termination of his employment with the Company, to promptly
return to the Company all written and other information, data and
materials which are secret or confidential in nature of which relate
to patentable, copyrightable or proprietary information relating to
the business of the Company.
16. Waiver. No claim or right arising out of a breach or default
under this Agreement can be discharged in whole or in part by a waiver of that
claim or right unless the waiver is supported by consideration and is in writing
and executed by the aggrieved party hereto or its or his duly authorized agent.
A waiver by any party hereto of a breach of default by the other party hereto of
any provision of this Agreement shall not be deemed a waiver of any prior or
subsequent compliance herewith, and such provision shall remain in full force
and effect.
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IN WITNESS WHEREOF, this Employment Agreement has been executed by
the Company, by a duly authorized officer, and by the Employee on the date first
above written.
IMMTECH INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Von der Ruhr
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Title: Chairman
----------------------------
/s/ T. Xxxxxxx Xxxxxx
-----------------------------------
T. Xxxxxxx Xxxxxx
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EXHIBIT A
BONUS PLAN
Failure to meet the goals established herein shall not constitute a
material breach for purposes of Section 5 of this Agreement.
(To be Determined.)
EXHIBIT B
INSURANCE COVERAGE
(To be Determined.)
EXHIBIT C
T. Xxxxxxx Xxxxxxxx
Stock Option
for shares of
Immtech International Inc.
Common Stock
Amount: 375,000 stock options to acquire Immtech stock.
Exercise Price: $.15 per share.
Vesting: Options will vest over a four-year period
starting with the date of this Agreement (one-
quarter at the end of each year).
Accelerated
Vesting: Notwithstanding the foregoing vesting schedule,
the options will vest as follows:
(1) 100% upon termination by Immtech without
cause or in the event Immtech allows this
Employment Agreement to lapse before all
such options have vested.
(2) 100% in the event that due to a merger or
consolidation in which Intech is a party,
all or substantially all of Immtech's
assets and outstanding voting stock is
sold or acquired by an unaffiliated third
party.
(3) In the event of death or disability at
least one-third of the options will be
vested or will vest and the balance of the
options that would normally vest during
this year will vest on a prorated basis.
Exercise
Period: Options can be exercised over five (5) years.
