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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
BETWEEN SENETEK PLC AND XXXXXX XXXXXXX
This Employment Agreement ("Agreement") is made and entered into on March
27th, 1999, effective as of April 15th, 1999 (the "Effective Date"), between
Senetek PLC, a company organized under the laws of England (the"Company") and
Xxxxxx XxxXxxx, Ph.D. (the "Executive"), residing at Two Sleepy Cove, Xxx
Xxxxxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, it is the desire of the Company to assure itself of the
management services of the Executive by engaging Executive as President & Chief
Operating Officer and
WHEREAS, the Executive desires to serve the Company as herein provided:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and obligations hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
The following terms used in this Agreement shall have the meaning
specified below unless the context clearly indicates the contrary:
"Annual Bonus" shall mean the annual incentive bonus payable to the
Executive described in Section 4.
"Average Bonus" shall mean (a) the total of the Annual Bonuses paid
hereunder with respect to the Employment Term, divided by (b) the length of such
portion of the Employment Term in years (including fractions) as falls on or
prior to the last December 31 thereof.
"Base Salary" shall mean the annual base salary payable to the Executive
at the rate set forth in Section 4.
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"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean the Executive's (a) commission of an act of fraud,
theft or embezzlement, or (b) conviction of a felony or other crime involving
moral turpitude.
"Change in Control" shall mean (a) the sale, lease or other transfer of
all or substantially all of the assets of the Company to any person or group
(as such term is used in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended); (b) the adoption by the stockholders of the Company of a plan
relating to the liquidation or dissolution of the Company; (c) the merger or
consolidation of the Company with or into another entity or the merger of
another entity into the Company or any subsidiary thereof with the effect that
immediately after such transaction the stockholders of the Company immediately
prior to such transaction (or their Related Parties) hold less than fifty
percent (50%) of the total voting power of all securities generally entitled to
vote in the election of directors, managers or trustees of the entity surviving
such merger of consolidation; (d) the acquisition by any person or group of
more than fifty percent (50%) of the voting power of all securities of the
Company generally entitled to vote in the election of directors of the Company;
or (e) that the majority of the Board is composed of members who (i) have
served less than twelve months and (ii) were not approved by a majority of the
Board at the time of their election or appointment.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean Ordinary shares in the capital of the Company.
"Compensation Committee" shall mean the Compensation Committee of the
Board.
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"Deemed Bonus" at any time shall mean the greater of (a) the Average Bonus
calculated as of such time and (b) if any, the Annual Bonus for the last 12
month period completed as of such time.
"Employment Term" shall mean the period beginning on the Effective Date
and ending on the close of business on the effective date of the Executive's
termination of employment with the Company.
"Expiration Date" shall be as defined in Section 2.
"Good Reason" shall mean (a) the Company's material breach of any
provision hereof, (b) any adverse change in the Executive's job
responsibilities, duties, functions, status, offices, title, perquisites or
support staff, (c) relocation of the Executive's regular work address without
his consent, or (d) a Change in Control, provided, however, that the Executive
shall give the Company written notice of any actions (other than that set out in
subsection (d) above) alleged to constitute Good Reason and the Company shall
have a reasonable opportunity to cure any such alleged Good Reason.
"Option Agreement" shall mean the agreement between the Executive and the
Company pursuant to which any Option is granted to the Executive.
"Options" shall mean the non-qualified stock options to be granted to the
Executive hereunder.
"Permanent Disability" shall mean the Executive's inability to perform the
duties contemplated by this Agreement by reason of a physical or mental
disability or infirmity which
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has continued for more than 90 working days (excluding vacation) in any twelve
consecutive month period as determined by the Board. The Executive agrees to
submit such medical evidence regarding such disability or infirmity as it is
reasonably requested by the Board.
"Related Parties" shall mean with respect to any person (a) the spouse and
lineal ascendants and descendants of such person, and any sibling of any such
persons and (b) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or persons beneficially holding an
eighty percent (80%) or more controlling interest of which consist of persons
referred to in subsection (a) above.
"Termination of Employment" shall mean the first to occur of the following
events:
(a) the date of death of the Executive;
(b) the effective date specified in the Company's written notice to the
Executive of the termination of his employment as a result of his Permanent
Disability, which effective date shall not be earlier than the 91st working day
(excluding vacation) following the commencement of the Executive's inability to
perform his duties hereunder.
(c) the effective date specified in the Company's written notice to the
Executive of the Company's termination of his employment without Cause;
(d) the effective date specified in the Company's written notice to the
Executive of the Company's termination of his employment for Cause;
(e) the effective date specified in the Executive's written notice to
the Company of the Executive's termination of his employment for Good Reason.
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(f) the effective date specified in the Executive's written notice to the
Company of the Executive's termination of his employment without Good Reason;
and
(g) the date the Executive's employment terminates pursuant to Section 2.
"Termination without Cause" shall mean a termination by Company of the
Executive's employment without Cause.
2. EMPLOYMENT
The Company agrees to continue the employment of the Executive, and the
Executive agrees to continue to provide services to the Company, from the
Effective Date until the close of business on April 15, 2002 (the "Expiration
Date"), unless the Executive's employment is earlier terminated pursuant to a
Termination of Employment. The Executive will serve the Company subject to the
general supervision, advice and direction of the Board upon the terms and
conditions set forth in this Agreement.
3. TITLE AND DUTIES
(a) The Executive's job title shall be President & COO (Chief Operating
Officer) of the Company and will report solely to Xxxxx X. Xxxxxxx, the Chief
Executive Officer & Chairman of the Board. During the Employment Term the
Executive shall have such authority and duties as are customary in such
position, and shall perform such other services and duties as the Chief
Executive Officer may from time to time designate consistent with such position.
(b) All executives of the Company not reporting directly to Xxxxx X.
Xxxxxxx, the Chief Executive Officer & Chairman of the Board, shall report,
directly or indirectly through other senior officers, to the Executive, and the
Executive shall be responsible for reviewing the performance of such executives
of the Company.
(c) The Executive shall devote his full business time and best efforts to
the business affairs of the Company; however, the Executive may devote
reasonable time and attention to:
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(i) serving as a director of, or member of a committee of the
directors of any not-for-profit organization or engaging in other
charitable or community activities;
(ii) serving as a director of, or member of a committee of the
directors of, the corporations or organizations for which the Executive
presently serves in such capacity, provided, that except as specified
above, the Executive may not accept employment with any other individual or
other entity, or engage in any other venture which is indirectly or
directly in conflict or competition with the then existing business of the
Company.
4. COMPENSATION AND BENEFITS
(a) Base Compensation. During the Employment Term, the Company shall pay
the Executive, in installments according to the Company's regular payroll
practice, Base Salary at the annual rate of $200,000.
(b) Annual Incentive Bonus. The Executive shall be entitles to an Annual
Bonus for each calendar year on the last day of which he is employed hereunder
and also for the calendar year, if any, in which this contract expires pursuant
to Section 2. Such Annual Bonus for any such calendar year shall be determined
by the Compensation Committee in its sole discretion to reward Executive for his
performance during the time period in question and to incentivize future
performance.
(c) Stock Option.
(i) Effective March 27, 1999 the Executive shall be granted an Option
to purchase 350,000 shares of Common Stock at the price allowable under the
terms of Option Scheme No. 1, the Employee's Option Scheme.
(ii) The Option described in paragraph (i) shall be granted subject
to the following terms and conditions: (A) 50,000 shares shall be vested on
the
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date of grant and 300,000 shares shall vest according to the terms set
forth in Option Scheme No. 1, the Employee Option Scheme; (B) the Option
shall be exercisable for the greater of three years from the date of grant
or one year from the Termination of Employment; (C) Executive shall have
the right, on two occasions, to require the Company to register (in such
manner that the Common Stock will be freely transferable, "Register"), the
Common Stock underlying the Option at no cost to the Executive. If the
Company Registers Common Stock at any other time, Executive shall also have
the right to require the Company to Register the Common Stock underlying
the Options, at no cost to Executive and (D) the Option shall be evidenced
by, and subject to, an Option Agreement.
(iii) The Option Agreement shall specify that the Option shall
remain exercisable for the periods described in paragraph (ii) above
notwithstanding any Termination of Employment
(d) Vacation. During each complete 12 month period of the Employment Term,
the Executive shall be entitled to no fewer than three weeks of paid vacation
(unless, based on his length of service with the Company and his position with
the Company, the Executive is entitled to a greater number of weeks of paid
vacation under the Company's generally applicable vacation policy, as determined
by the Compensation Committee).
(e) Employee Benefit Plans. During the Employment Term, the Executive
shall be Entitled to participate in all pension, profit sharing and other
retirement plans, all incentive compensation plans and all group health
hospitalization and disability insurance plans and other employee welfare
benefit plans in which other senior executives of the Company may participate on
terms and conditions no less favorable than those which apply to such other
senior executives of the Company.
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(f) Company Payment of Health Benefit Coverage. During the Employment
Term, the Company shall pay the amount of premiums or other cost incurred for
coverage of the Executive and his eligible spouse and dependent family members
under the applicable Company health benefits arrangement (consistent with the
terms of such arrangement).
(g) Life Insurance Policy. In addition to the insurance coverage
contemplated by Section 4(e), during the Employment Term the Company shall
maintain in effect term life insurance coverage for the executive with a death
benefit of at least $500,000, with the beneficiary or beneficiaries thereof
designated by the Executive. Notwithstanding Section 9 of this Agreement, such
life insurance policy or policies may be assigned to a trust for the benefit of
any beneficiary designated by the Executive.
(h) Automobile and Parking Allowance; Other Benefits. During the
Employment Term, the Company shall provide the Executive with an automobile
allowance of $750 per month.
5. Reimbursement of Expenses
In addition to the compensation provided for under Section 4 hereof, upon
submission of proper vouchers, the Company will pay or reimburse the Executive
for all normal and reasonable travel and entertainment expenses incurred by the
Executive during the Employment Term in connection with the Executive's
responsibilities to the Company.
6. Termination Benefits
(a) Upon the termination of the Executive's employment with the
Company for any reason, the Company shall provide the Executive (or, in the case
of his death, his estate or other legal representative), any Annual Bonus earned
but not yet paid with respect to the preceding calendar year, all benefits due
him under the Company's benefits plans and policies for his services rendered to
the Company prior to the date of such termination (according to the terms of
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such plans and policies), and, not later than three days after such
termination, in a lump sum, all Base Salary earned through the date of such
termination. The Executive shall be entitled to the payments and benefits
described below only as applicable to such termination of employment.
(b) In the event that the Executive's employment hereunder is terminated
by the Company without Cause (but not by reason of expiration or non-renewal of
this Agreement), or by the Executive for Good Reason, the Company shall pay to
the Executive, in a lump sum no later than three days following such
termination, an amount equal to the product of (i) the sum of the Base Salary
and the Deemed Bonus and (ii) the number of calendar years (including
fractional years) form the date of such termination to the otherwise applicable
Expiration date. In such event the Company shall also cause any options held by
Executive with respect to Common Stock to become immediately vested and
exercisable.
(c) In the event that the Executive's employment hereunder is terminated
by reason of the Executive's death or Permanent Disability, the Company shall
pay the Executive (or his estate), in a lump sum no later than three days
following such termination, an amount equal to twelve months' Base Salary and
Deemed Bonus. In such event the Company shall also cause any options held by
Executive with respect to Common Stock to become immediately vested and
exercisable.
(d) In the event of any Termination of Employment, the Executive shall
not be required to seek other employment to mitigate damages, and any income
earned by the Executive from other employment or self-employment shall not be
offset against any obligations of the Company to the Executive under this
Agreement.
7. PROTECTED INFORMATION; PROHIBITED SOLICITATION
(a) The Executive hereby recognizes and acknowledges that during the
course of his
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employment by the Company, the Company will furnish, disclose or make available
to the Executive confidential or proprietary information related to the
Company's business, that such confidential or proprietary information related to
the Company's business, that such confidential or proprietary information has
been developed and will be developed through the Company's expenditure of
substantial time and money, and that all such confidential information could be
used by the Executive and others to compete with the Company. The Executive
hereby agrees that all such confidential or proprietary information shall
constitute trade secrets, and further agrees to use such confidential or
proprietary information only for the purpose of carrying out his duties with the
Company and not to disclose such information unless required to do so by
subpoena or other legal process. No information otherwise in the public domain
(other than by an act of Executive in violation hereof) shall be considered
confidential. The Executive agrees that all memoranda, notices, files, records
and the documents concerning the business of the Company, made or compiled by
the Executive during the period of his employment or made available to him,
shall be the Company's property and shall be delivered to the Company upon its
request therefor and in any event upon the termination of the Executive's
employment with the Company, provided, however, that the Executive shall be
permitted to retain copies of personal correspondence generated or received by
him during the Employment Term, subject to the use restrictions of this Section
7(a).
(b) The restrictions in this Section 7 shall survive the termination of
this Agreement and shall be in addition to any restrictions imposed upon the
Executive by statute or common law.
8. INJUNCTIVE RELIEF
The Executive hereby expressly acknowledges that any breach or threatened
breach by
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the Executive of any of the terms set forth in Section 7 of this Agreement may
result in significant and continuing injury to the Company, the monetary value
of which would be impossible to establish. Therefore, the Executive agrees that
the Company shall be entitled to apply for injunctive relief in a court of
appropriate jurisdiction. The provisions of this Section 8 shall survive the
Employment Term.
9. PARTIES BENEFITED; ASSIGNMENTS
This Agreement shall be binding upon the Executive, his heirs and personal
representative or representatives, and upon the Company and its successors and
assigns. Neither this Agreement nor any rights or obligations hereunder may be
assigned by the Executive, other than by will or by the laws of descent and
distribution.
10. NOTICES
Any notice required or permitted by this Agreement shall be in writing,
sent by registered or certified mail, return receipt requested, addressed to the
Board and the Company at its then principal office, or to the Executive at the
address set forth in the preamble, as the case may be, or to such other address
or addresses an any party hereto may from time to time specify in writing for
the purpose in a notice given to the other parties in compliance with this
Section 10. Notices shall be deemed given when received.
11. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY THE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT
OF LAW PRINCIPLES.
12. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES
The Company shall indemnify the Executive to the fullest extent permitted
by the laws of
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the State of Delaware, as in effect at the time of the subject act or omission,
and shall advance to the Executive reasonably attorney's fees and expenses as
such fees and expenses are incurred (subject to an undertaking from the
Executive to repay such advances if it shall be finally determined by a
judicial decision which is not subject to further appeal that the Executive was
not entitled to the reimbursement of such fees and expenses). The Company shall
maintain directors' and officers' liability insurance coverage which shall
cover him against costs, charges and expenses incurred or sustained by him in
connection with any action, suit or proceeding to which he may be made a party
by reason of his being or having been a director, officer or employee of the
Company or any of its subsidiaries or his serving or having served any other
enterprises as a director, officer or employee at the request of the Company
(other than any dispute, claim or controversy arising under or relating to this
Agreement).
13. REPRESENTATIVES AND WARRANTIES OF EXECUTION
Executive represents and warrants to Company that (a) Executive is under
no contractual or other restriction which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder or the other rights of
Company hereunder, and (b) Executive is under no physical or mental disability
that would hinder the performance of his duties under this Agreement.
14. DISPUTES
The Company shall pay the costs and expenses of any proceeding to resolve
any dispute arising hereunder, including the fees of the Executive's counsel
and experts. Any such dispute shall be tried in the United States.
15. INDEMNITY
The Company agrees hereby forever to indemnify, release, discharge, and
covenant not to
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xxx Executive, from any and all claims, debts, demands, accounts, judgements,
rights, causes of action, equitable relief, damages, costs, charges, complaints,
obligations, promises, agreements, controversies, suits, expenses, compensation,
responsibility and liability of every kind and character whatsoever (including
attorneys' fees and costs), whether in law or equity, known or unknown, asserted
or unasserted, suspected or unsuspected (collectively, "Claims"), which the
Company, any affiliate or any other person or entity has or may have had against
Executive or the Company based on any events or circumstances arising or
occurring on or prior to the date hereof.
16. MISCELLANEOUS
The provisions of this Agreement shall survive the termination of the
Executive's employment with the Company. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof. This Agreement
supersedes any prior written or oral agreements or understandings between the
parties relating to the subject matter hereof. No modification or amendment of
this Agreement shall be valid unless in writing and signed by or on behalf of
the parties hereto. A waiver of the breach of any term or condition of this
Agreement shall not be deemed to constitute a waiver of any subsequent breach of
the same or any other term or condition. This Agreement is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations. If any provisions of this
Agreement, or the application thereof to any person or circumstances, shall, for
any reason and to any extent, be held invalid or unenforceable, such invalidity
and unenforceability shall not affect the remaining provisions hereof and the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The compensation
provided to the Executive pursuant to this Agreement shall be subject to any
withholdings and deductions required by any applicable tax laws. Any
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amounts payable under this Agreement to the Executive after the death of the
Executive shall be paid to the Executive's estate or legal representative. The
headings in this Agreement are inserted for convenience of reference only and
shall not be part of or control or affect the meaning of any provisions hereof.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
Senetek PLC
By /s/ XXXXX X. XXXXXXX
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Title: Chief Executive Officer
By /s/ XXXXXX XXX XXXX
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Title:
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