Exhibit 10.1(c)
EMPLOYMENT AGREEMENT
XXXX X. NORTH AND AMERICAN BIOGENETIC SCIENCES, INC.
AGREEMENT, dated as of the 2nd day of November, 1998, by and between
AMERICAN BIOGENETIC SCIENCES, INC., a Delaware corporation, having a place of
business at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter designated
and referred to as "Company"), and Xxxx X. North, residing at 0000 Xxxxxxxxxx
Xx. Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter designated and referred to as
"Employee").
WHEREAS, the Company desires to employ the Employee in the capacity of
President and Chief Executive Officer of the Company; and
WHEREAS, Employee is willing to accept such employment by the Company,
all in accordance with provisions hereinafter set forth.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three (3)
years commencing November 16, 1998 and automatically terminating on November 15,
2001, subject to earlier termination as provided herein or unless extended by
mutual consent of both parties in writing four (4) months prior to the end of
the term of this Agreement or any extension thereof, but nothing herein shall
require the Company to agree to any specific term or condition or to any
continuation of Employee's employment beyond November 15, 2001.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee for and
during the term of this Agreement. Employee is hereby employed by the Company as
its President and Chief Executive Officer, his powers and duties of an executive
nature which are appropriate for a President and Chief Executive Officer shall
be determined only by the Chairman of the Board or the Board of Directors or
their duly authorized designee, from time to time; and the Employee does hereby
accept such employment and agrees to use his best efforts and to devote all his
normal business time, during the term of this Agreement, to the performance of
his duties faithfully, diligently and to the best of his abilities upon the
conditions hereinafter set forth. Employee shall report to the Chairman of the
Board and Board of Directors (collectively hereinafter referred to as the
"Board") of the Company.
3. Compensation: During the term of this Agreement, the Company agrees
to pay Employee, and Employee agrees to accept, an annual salary of Two Hundred
and Sixty Thousand Dollars ($260,000.00) per year less all applicable taxes,
payable every two weeks, for all services rendered by Employee hereunder
including being a Director of the Company if elected to the Board of Directors.
In addition, the Employee shall receive a one time sign on payment of Twenty
Five Thousand Dollars ($25,000) payable on January 15, 1999, and an interest
free loan of One Hundred Thousand Dollars ($100,000) which shall be forgiven as
to twenty-five (25%) every six (6) months provided Employee is still an
Employee.
4. Expenses: The Company shall reimburse Employee, not less often than
monthly, for all reasonable and actual business expenses incurred by him in
connection with his service to the Company, upon submission by him of
appropriate vouchers and expense account reports. The Employee shall have use of
a Company American Express Card for Company business purposes.
5. Benefits: In addition to the salary to be paid to Employee
hereunder, the Company shall provide medical and dental insurance and allow the
Employee to participate in any disability, pension,
retirement or other qualified plans adopted for the benefit of its employees,
and in accordance with the Company's Plan(s). The Employee shall be entitled to
a four (4) weeks annual vacation.
6. Extent of Service: The Employee during the term of this Agreement
shall devote his full normal business time, attention and energy and render his
best efforts and skill to the business of the Company.
7. Restrictive Covenant: (A) Employee acknowledges that (i) the
business in which the Company is engaged is intensely competitive and that his
employment by the Company will require that he have access to and knowledge of
confidential information of the Company, including, but not limited to, certain
of the Company's confidential plans for the creation, acquisition or disposition
of products, expansion plans, product development plans, financial status, and
plans and personnel information and trade secrets, which are of vital importance
to the success of the Company's business; (ii) the direct or indirect disclosure
of any such confidential information to existing or potential competitors of the
Company would place the Company at a competitive disadvantage and would cause
damage, financial and otherwise, to the Company's business; and (iii) by his
training, experience and expertise, some of his services to the Company will be
special and unique. (B) Employee agrees that, during the term of this Agreement
and for a period of one (1) year after the termination of this Agreement, he
will not directly or indirectly become affiliated as an officer, director,
employee or consultant or as a substantial security holder with any other
company or entity in a business which is directly competitive with any business
then being conducted by the Company or its subsidiaries within the Continental
United States or in countries abroad participating in the Company's Global
Network. For the purpose hereof, "substantial security holder" shall mean
ownership, directly or indirectly, of more than 5% of any class of securities of
a company or partnership interest in any partnership.
8. Discoveries, etc.:
[A] The Company shall be the owner, without further compensation, of
all rights of every kind in and with respect to any reports, materials,
inventions, processes, discoveries, improvements, modifications, know-how or
trade secrets hereafter made, prepared, invented, discovered, acquired,
suggested or reduced to practice (hereinafter designated and referred to as
"Property Rights") by Employee in connection with Employee's performance of his
duties pursuant to this Agreement, and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.
[B] The Employee agrees to and shall promptly disclose to the Board all
Property Rights (whether or not patentable) made, discovered or conceived of by
him, alone or with others, at any time during his employment with the Company.
Any such Property Rights will be the sole and exclusive property of the Company,
and Employee will execute any assignments requested by the Company of his right,
title or interest in any such Property Rights. In addition, the Employee will
also provide the Company with any other instruments or documents requested by
the Company, at the Company's expense, as may be necessary or desirable in
applying for and obtaining patents with respect thereto in the United States and
all foreign countries. The Employee also agrees to cooperate with the Company in
the prosecution or defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, services marks, secret
processes, discoveries or improvements, whether or not he is employed by the
Company at the time.
9. Confidential Information: Employee recognizes and acknowledges that
the Company, through the expenditure of considerable time and money, will
acquire, has developed and will continue to develop in the future, information,
skills, confidential information, know-how, formulae, technical expertise and
methods relating to or forming part of the Company's services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade secrets" of the Company. Employee understands and agrees that such
trade secrets give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on keeping
confidential both the trade secrets already developed or to be acquired and any
future developments of trade secrets. Employee understands that in his capacity
with the Company he will be entrusted with knowledge of such trade secrets and,
in recognition of the importance thereof and in consideration of his employment
by the Company hereunder, agrees that he will not, without the consent of the
Board, make any disclosure of trade secrets now or hereafter possessed
by the Company to any person, partnership, corporation or entity either during
or after the term hereunder, except to such employees of the Company or its
subsidiaries or affiliates, if any, as may be necessary in the regular course of
business and except as may be required pursuant to any court order, judgment or
decision from any court of competent jurisdiction. The provisions of this
Section shall continue in full force and effect notwithstanding any termination
of this Agreement.
10. Irreparable Harm: Employee agrees that any breach or threatened
breach by Employee of provisions set forth in Sections seven (7), eight (8) and
nine (9) of this Agreement, would cause the Company irreparable harm and the
Company may obtain injunctive relief against such actual or threatened conduct
and without the necessity of a bond.
11. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs, books,
notes, electronically stored data and all copies of the foregoing as well as any
other materials or equipment supplied by the Company to the Employee.
12. Termination:
[A] Death: In the event of the Employee's death during the term of his
employment, this Agreement shall automatically terminate on the date of death,
and Employee's estate shall be entitled to payment of Employee's salary until
date of death.
[B] Disability: In the event the Employee, by reason of physical or
mental incapacity, shall be disabled for a period of at least two (2)
consecutive months in any of the years of this Agreement or any extension
hereof, the Company shall have the option at any time thereafter, to terminate
Employee's employment and to terminate this Agreement; such termination to be
effective ten (10) days after the Company gives written notice of such
termination to the Employee, and all obligations of the Company hereunder shall
cease upon the date of such termination. "Incapacity" as used herein shall mean
the inability of the Employee to perform his normal duties as President and
Chief Executive Officer.
[C] Company's Rights To Terminate This Agreement:
[a] The Company shall have the right, before the expiration of
the term of this Agreement, to terminate this Agreement and to discharge
Employee for cause (hereinafter "Cause"), and all compensation to Employee shall
cease to accrue upon discharge of the Employee for Cause. For the purposes of
this Agreement, the term "Cause" shall mean the Employee's (i) violation of the
Company's written policy or directions of the Board which directions are
consistent with normally acceptable business practices or the failure to
observe, or the failure or refusal to perform any obligations required to be
performed in accordance with this Agreement. (ii) admission or conviction of a
serious crime involving moral turpitude or (iii) if the Board determines that
employee has committed a demonstrable act (or omission) of malfeasance seriously
detrimental to this Company.
[b] If the Company, elects to terminate Employee's employment
for Cause, under Section 12 [C] [a](i), the Company shall first give Employee
written notice and a period of ten (10) days to cure such Cause, and if such
Cause is not cured in said ten (10) days, such termination shall be effective
five (5) days after the Company gives written notice of such termination to the
Employee. In the event of a termination of the Employee's employment for Cause
in accordance with the provisions of Section 12 [C][a] (ii) or (iii), the
Company shall have no further obligation to the Employee, except for the payment
of salary through the date of such termination from employment.
[D] Termination Without Cause by the Company:
[a] The Company shall have the right to terminate the
Agreement without cause on thirty (30) days' written notice to the Employee.
[b] In the event the Agreement is terminated pursuant to
subsection 12 [D][a], the Company shall pay the Employee his then existing
compensation for twelve (12) months payable monthly commencing with the day
following the day the notice becomes effective and Employee shall be available
for on call consulting services during such one year period at no additional
compensation. If during such one year period Employee enters into an employment
relationship or provides consultation services, with a third party then (i) no
further compensation shall be due to Employee hereunder and (ii) Employee shall
no longer be required to provide on call consulting services.
13. Travel: Employee agrees to work out of the offices of the Company
in Copiague, New York, and spend so much of his normal business time at the
other facilities of the Company, as is necessary to properly fulfill his duties
as its President and Chief Executive Officer. Employee agrees to relocate to
Long Island, New York and maintain an apartment or home. In addition, the
Employee agrees that to the extent required he shall travel both domestically
and internationally for the Company.
14. Waiver: Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York without reference to its choice
of law rules.
16. Notice: Any notice required to be given pursuant to the provisions
of this Agreement shall be in writing and by registered or certified mail and
mailed to the following addresses:
Company: American Biogenetic Sciences, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Chairman
Employee: Xxxx X. North
0000 Xxxxxxxxxx Xx. Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
17. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be binding upon the Company, its successors (including any
transferee of the good will of the Company) or assigns.
18. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except in writing signed by both
parties.
19. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Employee hereunder, which are stated to exist or continue after termination
of Employee's employment with the Company, shall exist and continue.
20. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall
be severable so that the invalidity of any such provision shall not invalidate
any others. Moreover, if any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity or
subject, such provisions shall be construed by limiting and reducing them so as
to be enforceable to the maximum extent allowed by applicable law.
21. Representation: Employee represents and warrants that he has the
legal right to enter into this Agreement and to perform all of the obligations
on his part to be performed hereunder in accordance with its terms and that he
is not a party to any agreement or understanding, written or oral, which
prevents him from entering into this Agreement or performing all of his
obligations hereunder. In the event of a breach of such representation or
warranty on his part or if there is any other legal impediment which prevents
him from entering into this Agreement or performing all of his obligations
hereunder, the Company shall have the right to terminate this Agreement in
accordance with Section 12[C][a]; in which event the "Cause" shall not be deemed
curable under Section 12[C][b], and Employee will save harmless the Company in
the event of legal action by former employers for injunction relief or damages.
22. Stock Option: Employee and the Company agree to execute a stock
option agreement that Employee shall have a right to purchase an aggregate of
300,000 shares of Class A Common Stock of the Company in accordance with the
Company's Stock Option Plan ("Plan"), exercisable at the rate of 25% per year.
The options will be exercisable at the price of $.25 per share. The options will
be subject to all of the terms and conditions of the Plan and Employee hereby
agrees to all such terms and conditions. The Company will have an annual review
for the issuance of additional Stock Options to the Employee. If the Company
terminates the Agreement prior to the term hereof without Cause per Section
12[C], the Employee shall retain all of the above Stock Options granted.
23. Descriptive Headings: The headings contained herein 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 duly executed this
Agreement as of the day and year first above written.
AMERICAN BIOGENETIC SCIENCES, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
Chairman and CEO
By: /s/ Xxxx X. North
-------------------------------------
Xxxx X. North
Employee
