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Exhibit 10.3
EMPLOYMENT AGREEMENT
ANTEX BIOLOGICS INC.
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of JANUARY
1, 2001 is entered into by Antex Biologics Inc., a Delaware corporation with
its principal place of business at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), and X. X. Xxxxxxxx, Ph.D., residing at 0000
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ the Employee, and the
Employee desires to be employed by the Company;
NOW THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ
the Employee, and the Employee hereby accepts employment with the Company,
upon the terms set forth in this Agreement, for the period commencing on
JANUARY 1, 2001 (the "Commencement Date") and ending on DECEMBER 31, 2005
(such period, as it may be extended, the "Employment Period"), unless sooner
terminated in accordance with the provisions of Section 4 hereof. Upon the
fifth anniversary of the Commencement Date and upon every fifth anniversary of
the Commencement Date thereafter, the term of the Employment Period shall be
extended automatically for five (5) additional years unless, at least three
(3) years prior to such anniversary, the Company shall have delivered to the
Employee or, at least six (6) months prior to such anniversary, the Employee
shall have delivered to the Company, written notice that the term of the
Employee's employment hereunder will not be extended.
2. Title; Capacity. The Employee shall serve as Chairman of
the Board of Directors and Chief Executive Officer or in such other position
as the Company or its Board of Directors (the "Board") may determine from time
to time is reasonable. The Employee shall be based at the Company's
headquarters in Gaithersburg, Maryland, or such place or places in the
continental United States as the Board shall determine, and is reasonable and
acceptable to the employee. The Employee shall be subject to the supervision
of, and shall have such authority as is delegated to him by the Board.
The Employee hereby accepts such employment and agrees to
undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Board or its designee shall from time
to time reasonably assign to him. The Employee agrees to devote substantially
all of his entire business time, attention and energies to the business and
interests of the Company during the Employment Period. He shall not engage in
any other business activity, except as may be approved by the Company;
provided, however, that nothing herein shall be construed as preventing the
Employee from serving on the board of directors of
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any company, mentoring or consulting, subject to the prohibitions set forth in
Section 6(a) hereof. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company. The Employee
acknowledges receipt of copies of all such rules and policies committed to
writing as of the date of this Agreement.
3. Compensation and Benefits.
3.1 Salary. The Company shall pay the Employee, in
semi-monthly installments on the 15th and month-end or on the last working day
of such month, an annual base salary (the "Annual Base Salary") of FOUR
HUNDRED THOUSAND ($400,000) for the period commencing on the Commencement
Date. Thereafter, upon each anniversary of the Commencement Date (including
the first anniversary thereof), following an annual review by the Board, the
Board may adjust the Employee's Annual Base Salary as it determines in its
sole discretion; provided, however, that the Board of Directors shall not
reduce the Annual Base Salary.
3.2 Fringe Benefits. The Employee shall be entitled
to participate in all bonus, stock option, benefit and insurance programs that
the Company establishes and makes available to its employees, if any, to the
extent that Employee's position, tenure, salary, age, health and other
qualifications make him eligible to participate, including, but not limited
to, the programs indicated on Schedule A of this Agreement. The Employee shall
be entitled to thirty (30) days paid vacation per year, to be taken at such
times as may be approved by the Board or its designee.
3.3 Reimbursement of Expenses. The Company shall
reimburse the Employee for all reasonable travel, entertainment and other
expenses incurred or paid by the Employee in connection with, or related to,
the performance of his duties, responsibilities or services under this
Agreement, upon presentation by the Employee of documentation, expense
statements, vouchers and/or such other supporting information as the Company
may request; provided, however, that the amount available for such travel,
entertainment and other expenses may be fixed in advance by the Board.
3.4 Keyman Insurance. The Company and the Employee
hereby agree that, subject to the insurability of the Employee, the Company
shall apply for and procure in the name of the employee for the Company's own
benefit keyman life insurance in any amount or amounts considered advisable
but not less than Two Million dollars ($2,000,000) and that Employee shall
have no right, title or interest therein. The Employee agrees to submit to any
medical or other examination and to execute and deliver any application or
other instrument necessary to effectuate such life insurance.
3.5 Bonus. The Company shall, subject to approval of
the Board, pay to the Employee an appropriate bonus (the "Bonus") with respect
to each completed year of employment. The Bonus shall be paid to Employee in
one lump sum on or prior to January 31 of each year for the one-year period of
employment, or portion thereof, ending on the preceding December 31.
4. Employment Termination. The employment of the Employee
by the
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Company pursuant to this Agreement shall terminate upon the occurrence of any
of the following:
4.1 Expiration of the Employment Period in accordance
with Section 1 hereof, and if the term is not extended in accordance with
Section 1 hereof, then the provisions of Section 4.4 hereof shall apply;
4.2 At the election of the Company, for cause,
immediately upon written notice by the Company to the Employee. For the
purposes of this Section 4.2, cause for termination shall be deemed to exist
upon (a) a good faith finding by the Company of failure of the Employee to
adequately perform his assigned duties for the Company, dishonesty, gross
negligence or misconduct, or (b) the conviction of the Employee of, or the
entry of a pleading of guilty or nolo contendere by the Employee to, any crime
involving moral turpitude or any felony;
4.3 One year (365 days) after the death or the
disability of the Employee. As used in this Agreement, the term "disability"
shall mean the inability of the Employee, due to a physical or mental
disability, for a period of ninety (90) days, whether or not consecutive,
during any three hundred sixty (360)-day period to perform the services
contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Employee and the Company, provided
that if the Employee and the Company do not agree on a physician, the Employee
and the Company shall each select a physician and these two together shall
select a third physician, whose determination as to disability shall be
binding on all parties;
4.4 At the election of the Company, upon not less
than thirty-six (36) months' prior written notice of termination to the
Employee. At the option of the Company and in lieu of such notice, the Company
may pay to Employee an amount equal to (i) thirty-six (36) months' salary
computed on the basis of the then current Annual Base Salary or the total
amount of salary that would be payable for the remainder of the Employment
Period, which ever is the greater plus (ii) any bonus to which Employee is
entitled (the "Severance Amount"). If the Company elects to pay Severance
Amount in lieu of notice it shall, at the expense of the Company, continue
Employee's participation in all benefits programs including but not limited to
medical, dental and life insurance programs provided by the Company to the
Employee under Section 3.2 hereof on the date on which such amount is paid
(the "Payment Date") until the later of a date thirty-six (36) months after
the Payment Date or the termination of the Employment Period. Acceleration of
stock options and modifications to the exercise period will be in accordance
with the Company's Amended and Restated Stock Option Plan. However, if the
Employee is terminated for other than cause, the stock options will become
fully vested and exercisable until the expiration date of the options or for a
minimum of two years after the Payment Date or termination of the Employment
Period, whichever of the three dates is the greater. In the event that any
payment under this Agreement constitutes an excess parachute payment under
Section 280G of the Internal Revenue Code, the Employee will be entitled to
additional gross-up payments such that the net amount retained by the Employee
after deduction of any excise taxes and all other taxes on the gross-up
payments shall be equal to the net amount that would have been retained from
the initial payments under the Agreement.
4.5 At the election of the Employee, for good reason,
immediately upon written notice of termination to the Company. For the
purposes of this Section 4.5, good
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reason for termination shall be deemed to exist upon an assignment to the
Employee of duties which are inconsistent with the Employee's status as a
senior executive officer of the Company or are a substantial reduction in the
nature of the Employee's responsibilities; a material reduction in the
Employee's benefits unless all other employees entitled to such benefits incur
proportionate reductions; or any breach by the Company of any of its
obligations hereunder. In the event that the Employee terminates his
employment for good reason the Employee shall be entitled to the payments and
benefits stated in Section 4.4.
4.6 At the election of the Employee, for any reason
other than good reason, upon not less than six (6) months prior written notice
of termination to the Company.
5. Effect of Termination.
5.1 Termination for Cause or at Election of Employee.
In the event the Employee's employment is terminated for cause pursuant to
Section 4.2 hereof, or at the election of the Employee pursuant to Section 4.6
hereof, the Company shall pay to the Employee the compensation and benefits
otherwise payable to him under Section 3 and 4 hereof through the last day of
his actual employment by the Company.
5.2 Termination for Death or Disability. In the
event the Employee's employment is terminated by death or because of
disability pursuant to Section 4.3 hereof, the Company shall pay to the estate
of the Employee or to the Employee, as the case may be, the compensation which
would otherwise be payable to the Employee up to the end of the month in which
the termination of his employment because of death or disability occurs.
5.3 Survival. The provisions of Sections 6 and 7
hereof shall survive the termination of this Agreement.
6. Non-Competition.
(a) For a period of two (2) years after the
termination or expiration of Employee's employment herender, thereof, the
Employee will not directly or indirectly:
(i) as an individual proprietor, partner,
stockholder, officer, employee, director, joint venturer, investor,
lender, or in any other capacity whatsoever (other than as the holder
of not more than one percent (1%) of the total outstanding stock of a
publicly held company), engage in the business of developing,
producing, marketing or selling products of the kind or type developed
or being developed, produced, marketed or sold by the Company while
the Employee was employed by the Company; or
(ii) recruit, solicit, or induce, or attempt to
induce, any employee or employees of the Company to terminate their
employment with, or otherwise cease their relationship with, the
Company; or
(iii) solicit, divert or take away, or attempt
to divert or to take away, the business or patronage of any of the
clients, customers or accounts, or prospective clients, customers or
accounts, of the Company which were
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contacted, solicited or served by the Employee while employed by the
Company.
(b) If any restriction set forth in this Section 6 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend only over
the maximum period of time, range of activities or geographic area as to which
it may be enforceable.
(c) The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the Company and
are considered by the Employee to be reasonable for such purpose. The Employee
agrees that any breach of this Section 6 will cause the Company substantial
and irrevocable damage and therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company shall have
the right to seek specific performance and injunctive relief.
(d) The Company and the Employee acknowledge and
agree that ten percent (10%) of the Annual Base Salary paid pursuant to
Section 3.1 shall be allocated as consideration for the Employee's agreement,
pursuant to this Section 6, not to compete with the Company. In the event that
the Company elects to pay the Severance Amount in lieu of notice as described
in Section 4.4, the Company and the Employee acknowledge and agree that ten
percent (10%) of the amount equal to thirty-six months' salary shall be
allocated as consideration for the Employee's agreement, pursuant to this
Section 6, not to compete with the Company.
7. Proprietary Information and Development.
7.1 Proprietary Information.
(a) Employee agrees that all information and
know-how, whether or not in writing, or a private, secret or confidential
nature concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and shall be the exclusive property of the
Company. By way of illustration, but not limitation, Proprietary Information
may include inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, and customer
and supplier lists. Employee will not disclose any Proprietary Information to
others outside the Company or use the same for any unauthorized purposes
without written approval by an officer of the Company, either during or after
his employment, unless and until such Proprietary Information has become
public knowledge without fault by the Employee.
(b) Employee agrees that all files, letters,
memoranda, reports, records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the Employee or others,
which shall come into his custody or possession, shall be and are the
exclusive property of the Company to be used by the Employee only in the
performance of his duties for the Company.
(c) Employee agrees that his obligation not to
disclose or use information, know-how and records of the types set forth in
paragraphs (a) and (b) above, also
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extends to such types of information, know-how, records and tangible property
of customers of the Company or suppliers to the Company or other third parties
who may have disclosed or entrusted the same to the Company or to the Employee
in the course of the Company's business.
7.2 Developments.
(a) Employee will make full and prompt disclosure to
the Company of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, whether patentable or not,
which are created, made, conceived or reduced to practice by the Employee or
under his direction or jointly with others during his employment by the
Company, whether or not during normal working hours or on the premises of the
Company (all of which are collectively referred to in this Agreement as
"Developments").
(b) Employee agrees to assign and does hereby assign
to the Company (or any person or entity designated by the Company) all his
right, title and interest in and to all Developments and all related patents,
patent applications, copyrights and copyright applications. However, this
Section 7.2 (b) shall not apply to Developments which do not relate to the
present or planned business or research and development of the Company and
which are made and conceived by the Employee not during normal working hours,
not on the Company's premises and not using the Company's tools, devices,
equipment or Proprietary Information.
(c) Employee agrees to cooperate fully with the
Company, both during and after his employment with the Company, with respect
to the procurement, maintenance and enforcement of copyrights and patents
(both in the United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments,
assignment of priority rights, and powers of attorney, which the Company may
deem necessary or desirable in order to protect its rights and interests in
any Development.
7.3 Other Agreements. Employee hereby represents
that he is not bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of his employment with
the Company or to refrain from competing, directly or indirectly, with the
business of such previous employer or any other party. Employee further
represents that his performance of all terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by him in
confidence or in trust prior to his employment with the Company.
8. Prior Agreements. This Agreement supersedes an
Employment Agreement dated as of January 1, 1996 by and between the Company
and Employee (the "Prior Agreement") and, as of the date hereof, the Prior
Agreement shall be of no further force and effect.
9. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States Post Office, by registered or
certified mail, postage prepaid, addressed to the other party at the address
shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 9.
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10. Pronouns. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.
11. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of
this Agreement.
12. Amendment. This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Employee.
13. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland.
14. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of both parties and their respective successors
and assigns, including any corporation with which or into which the Company
may be merged or which may succeed to its assets or business, provided,
however, that the obligations of the Employee are personal and shall not be
assigned by him.
15. Miscellaneous.
15.1 No delay or omission by the Company in exercising
any right under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.
15.2 The captions of the sections of this Agreement
are for convenience of reference only and in no way define, limit of affect
the scope or substance of any section of this Agreement.
15.3 In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year set forth above. ANTEX BIOLOGICS INC.
by /s/Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
Director and Chairman of the
Compensation Committee
Employee
/s/X. X. Xxxxxxxx
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X. X. Xxxxxxxx
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SCHEDULE A
COMPANY BONUS AND BENEFIT PROGRAMS
Health Insurance
Medical
Dental
Life Insurance
Long Term Disability
401(k) Saving Plan
Employee Stock Option Plans
Bonus Plan
Deferred Compensation Plan
Executive Split-dollar Plan
