EMPLOYMENT AGREEMENT
By and Between
Endorex Corp. ("Endorex"), Orasomal Technologies, Inc. ("Orasomal") and
Xxxxxx Xxxx
Agreement made this 1st day of December, 1996, between Endorex Corp., a
Delaware Corporation and Orasomal Technologies, Inc., a subsidiary of Endorex
Corp., (herein Endorex and Orasomal, are jointly referred to as the "Company")
and XXXXXX XXXX (the "Employee").
The Company is desirous of employing the Employee as its Vice-President,
Vaccine Development of Endorex and Vice-President, Research and Development of
Orasomal, and the Employee is desirous of becoming employed by the Company in
those capacities.
The Company and the Employee desire to set forth in this Agreement the terms
and conditions on which the Employee will be employed by the Company as its
Vice-President, Vaccine Development of Endorex and Vice-President, Research
and Development of Orasomal.
Accordingly, in consideration of the promises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment
The Company hereby agrees to employ the Employee, and the Employee hereby
agrees to serve the Company, on the terms and conditions set forth herein.
2. Term
The employment of the Employee by the Company as provided in Section 1 will
commence on the date of this Agreement and end on November 30, 2000, unless
further extended or sooner terminated as hereinafter provided.
3. Position and Duties
The Employee shall serve as Vice-President, Vaccine Development of Endorex
and Vice-President, Research and Development of Orasomal and shall have such
responsibilities and authority consistent with those positions as may, from
time to time, be assigned to the Employee by the President or Board of
Directors of the Company. The Employee shall devote substantially all his
working time and efforts to the business and affairs of the Company.
4. Place of Performance
In connection with the Employee's employment by the Company, the Employee
shall be based at the principal offices of the Company located in Chicago,
Illinois, except for required travel on the Company's business.
5. Compensation and Related Matters
(A) Salary. During the period of the Employee's employment hereunder, the
Company shall pay to the Employee a salary at a rate of not less than
$100,000 per annum until such time as Employee relocates his residence and
family to the Chicago, Illinois area, and thereafter at the rate of not
less than $115,000 per annum payable in equal monthly or other install-
ments. The Employee's salary shall be subject to an annual review
commencing twelve (12) months following the commencement of the term of
the Employee's employment hereunder.
(B) Bonuses. At the end of each full year of employment, Employee shall
be entitled to a bonus of up to 25% of Employee's salary as provided in
Section 5(a) based upon meeting mutually agreed to pre-established
written objectives and overall performance of the Company.
(C) Expenses. The company shall reimburse Employee for all normal, usual
and necessary expenses incurred by Employee in furtherance of the business
and affairs of the Company (incuding up to $25,000 of reasonable
relocation expenses for Employee and his family, which may include moving
costs, hotel expenses, and real estate commissions and other costs of
Employee selling his current residence in Atlanta, Georgia and relocating
to the Chicago, Illinois area), against receipt by the company of
appropriate vouchers or other proof of the Employee's expenditures and
otherwise in accordance with such expense reimbursement policy as may,
from time to time, be adopted by the Board of Directors of the Company.
(D) Other Benefits. The Company shall provide to Employee paid medical
insurance (including for the benefit of the dependents of Employee). In
addition, the Company shall provide and maintain in full force and effect,
and the Employee shall be entitled to participate in, all of its employee
benefit plans and arrangements in effect on the date hereof or plans or
arrangements hereafter adopted providing the Employee with at least
equivalent benefits thereunder (including, without limitation, each pension
and retirement plan and arrangement, supplemental pension and retirement
plan and arrangement, stock option plan, life insurance and health and
accident plan and arrangement, medical insurance plan, disability plan,
survivor income plan, relocation plan and vacation plan). The Company
shall not make any changes in such plans or arrangements which would
adversely affect the Employee's rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all employees of the
Company and does not result in a proportionately greater reduction in the
rights of or benefits to the Employee as compared with any other employee
of the Company. The Employee shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made
available by the company in the future to its key management employees,
subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Nothing paid to
the Employee under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the salary payable
to the employee pursuant to paragraph (A) of this Section.
(E) Vacations. The Employee shall be entitled to three (3) weeks of
vacation in each year of his employment. The Employee shall also be
entitled to all paid holidays given by the Company to its Employees.
(F) Services Furnished. The Company shall furnish the Employee with
office space, stenographic assistance and such other facilities and
services as shall be suitable to the Employee's position and adequate for
the performance of his duties as set forth in Section 3 hereof.
(G) Options. Subject to execution of this Agreement, Employee shall be
granted an option effective on the date of execution of this Agreement,
to purchase 100,000 shares of the Company's Common Stock, exercisable for
a period of seven (7) years at an exercise price per share equal to the
fair market value of the Common Stock on the date of execution of this
Agreement, based on the bid quotations for the Common Stock in the over-
the-counter market on that date. Such option shall be an Incentive Stock
Option granted under the Company's 1995 Omnibus Incentive Plan. Such
option shall vest and become exercisable at the rate of (i) 6,250 shares on
December 1, 1996 and (ii) a cumulative additional 6,250 shares at the
close of business on the last day of each three-month period thereafter,
commencing March 1, 1997 through December 1, 2000, at which time this
option shall have vested in full. If Employee's employment with the
Company shall terminate before such option is fully vested, such option
shall be exercisable only to the extent the option is exercisable on the
date Employee's employment terminates. The grant of the foregoing option
shall not preclude the participation of the employee in any other stock
option plan of the Company.
(H) It is understood that Employee will relocate his residence and family
home to the Chicago, Illinois area no later than July 1, 1997.
6. Offices
The Employee agrees to serve without additional compensation, if elected
or appointed thereto, as an executive officer of any of the subsidiaries
of Endorex or Orasomal, provided that the Employee is indemnified for
serving in any and all such capacities on a basis no less favorable than
is currently provided by Article VII of the Company's By-Laws. Employee
agrees that, upon termination of his employment with the Company, for any
reason whatsoever, he will resign from all positions as an employee and
officer of the Company and all of its subsidiaries.
7. Confidential Information
Employee covenants and agrees that he will not (except as required in the
course of his employment), while in the employment of the Company or
thereafter, communicate or divulge to, or use for the benefit of himself,
or any other person, firm, association or corporation, without the consent
of the Company, any information concerning any inventions, discoveries,
improvements, processes, formulas, apparatus, equipment, methods, trade
secrets, research, secret data, costs or uses or purchasers of the
Company's current or future products, research activities, immuno-
pharmaceutical agents, or services, or other confidential matters
possessed, owned, or used by the Company that may be communicated to,
acquired by, or learned of by the employee in the course of, or as a
result of, his employment with the Company. All records, files,
memoranda, reports, price lists, customer lists, drawings, plans,
sketches, documents, equipment, and the like, relating to the business of
the Company, which the Company shall use or prepare or come into contact
with, shall remain the sole property of the Company.
8. Competition
(A) During the period of the Employee's employment by the Company and for
a period of eighteen (18) months after such employment (whether such
employment shall have ended by reason of the expiration or termination of
this Agreement or otherwise), Employee will not (i) engage in; (ii) have
any interest in any person, firm or corporation that engages in; or (iii)
perform any services for any person, firm or corporation that engages in
competition with the Company, or any of its subsidiaries in the
development, research relating to, manufacture, processing, marketing,
distribution, or sale of any current or future products that were the
subject of research activities, developed, licensed, manufactured,
processed, distributed, or sold by the Company, or any of its
subsidiaries, at any time during the period of his employment by the
Company, in any area in which such business shall be carried on.
(B) Employee will not, directly or indirectly, employ, solicit for
employment, or advise or recommend to any other person that they employ or
solicit for employment, any employee of the Company during the period of
Employee's employment by the Company and for a period of two (2) years
thereafter.
(C) Notwithstanding any provision of this Section 8 to the contrary,
Employee may own no more than three percent (3%) of the total shares of
all classes of stock outstanding of any corporation having securities
registered with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
(D) Employee represents that his experience and capabilities are such that
the provisions of this Section 8 will not prevent him from earning a
livelihood.
9. Termination
(A) Notwithstanding any provision of this Agreement to the contrary,
Employee's employment shall automatically terminate upon his death, and
the Company at any time may terminate his employment immediately by giving
him written notice of such termination (i) for cause, as hereinafter
defined; (ii) if Employee shall violate any of the provisions of Sections
7 or 8 hereof; or (iii) if Employee shall become physically or mentally
incapacitated and by reason thereof unable to perform his duties hereunder
for a period of ninety (90) consecutive days. For the purpose of clause
(i) of this Subsection 9A, "for cause" shall mean any of the following
events: (x) conviction in a court of law of any crime or offense involving
money or other property of the Company, or any of its subsidiaries, or any
felony, or (y) violation of specific written directions of the Board of
Directors of the Company, provided, however, no discharge shall be deemed
"for cause" under this clause (y) unless Employee shall have first
received written notice from the Board of Directors of the Company
advising of the acts or omissions that constitute such violation, and such
violation continues uncured for a period of thirty (30) days after
Employee shall have received such notice.
(B) In the event that the Company terminates the employment of Employee
for any reason other than "for cause", as defined in Section 9(A) hereof,
Employee shall continue to be paid compensation by the Company for a
period of six (6) months thereafter at the rate and in the amount provided
in Section 5(A) hereof at the time of his termination.
10. Successors; Binding Agreement
(A) 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, by agreement in form and
substance satisfactory to the Employee, 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 if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the Agreement provided for in this Section 10, or
which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(B) This Agreement, and all rights of the Employee hereunder, shall inure
to the benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while
any amounts would still be payable to him hereunder if he had continued to
life, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Employee's devisee,
legatee, or other designee or, if there be no such designee, to the
Employee's estate. The Employee shall not be entitled to assign any of
his rights or obligations under this Agreement.
11. Notice
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to be effective upon personal delivery or fax or two (2) days after
deposit in the U.S. registered mail, return receipt requested, postage pre-
paid, addressed as follows:
If to the Employee: If to the Employer: Endorex Corp.
Xxxxxx Xxxx 000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxx Xxx Xxxxx Xxxx Xxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxxxx 00000 Attn: Xxxxxxx Xxxxx
President
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. Miscellaneous
No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
parties hereto. No waiver by either party hereto any time of any breach by
the other party hereto of, or in compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Illinois.
13. Validity
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. 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 will constitute
one and the same instrument.
15. Arbitration
Any dispute or controversy arising under or in connection with this agreement
shall be settled exclusively by arbitration, conducted before a panel of
three arbitrators, in Chicago, Illinois, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
By:
Attest
By: Xxxxxxx Xxxxx, President
Endorex Corp.
Attest
By: Xxxxxxx Xxxxx, President
Orasomal Technologies, Inc.
Xxxxxx Xxxx
