Exhibit 10.26
EMPLOYMENT AGREEMENT
By and Between
Endorex Corporation
and
Xxxxxxxxxx X. Xxxxxxxxxxxxxx, Ph.D.
Agreement made this 4th day of January 2001, between ENDOREX CORPORATION, a
Delaware Corporation, (the "Company" or "Endorex") and Xxxxxxxxxx X.
Xxxxxxxxxxxxxx, Ph.D. (the "Executive").
The company is desirous of employing the Executive as VICE PRESIDENT,
RESEARCH AND DEVELOPMENT of the Company, and the Executive is desirous of
becoming employed by the Company in this capacity.
The Company and the Executive desire to set forth in this Agreement the
terms and conditions on which the Executive will be employed by the Company as
its VICE PRESIDENT, RESEARCH AND DEVELOPMENT.
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 Executive, and the Executive hereby
agrees to serve the Company, on the terms and conditions set forth herein.
2. Term
The employment of the Executive by the Company as provided in Section 1
will commence on January 12, 2001 and will end on January 11, 2004 unless sooner
terminated as provided in Section 8. If neither Executive or the Company has
provided written notice of termination not less than six (6) months prior to
January 11, 2004, this agreement shall continue for an additional year term and
shall continue to renew annually until either Executive or the Company has
provided written notice of termination at least six (6) months prior to the end
of any renewal term.
3. Position and Duties
The Executive shall serve as VICE PRESIDENT, RESEARCH AND DEVELOPMENT of
the Company and its subsidiaries and shall have such responsibilities and
authority consistent with this position as may, from time to time, be assigned
to the Executive by the CEO or Board of Directors of the Company. The Executive
shall devote all his working time and efforts to the business affairs of the
Company. The Executive will report directly to the CEO of the Company or his or
her designee.
4. Compensation and Related Matters
(A) Salary. During the period of the Executive's employment hereunder,
the Company shall pay to the Executive a salary at a rate of not less than
$170,000 per annum, payable in accordance with the Company's normal payroll
and withholding practices.
(B) Bonuses. At the end of each full year of employment, Executive shall
be entitled to a targeted bonus of up to 30% of the Executive's annual base
salary, as in effect at the time (it is understood that this represents a
range of 0% to 30% of the Executive's annual base salary). Determination of
any actual bonus shall be based upon the Executive's meeting reasonable
written objectives and the overall performance of the Company for that
period of time, as determined by the CEO and the Board of Directors in
their sole discretion. The written objectives for the first year of this
Agreement will be established during the first 45 days of employment and
shall be subject to revision quarterly with the CEO based on information
developed during the quarter.
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(C) Expenses. The Company shall reimburse Executive for all normal, usual
and necessary expenses incurred by Executive in furtherance of the business
and affairs of the Company. Additionally, the Company shall reimburse
Executive for reimbursement of reasonable home sale and moving expenses
(including closing costs and excise taxes) of up to $18,000 for the
employee's current Gurnee property to another Chicago location within first
12 months for Executive and his wife. All relocation expenses over $1,000
must be pre-approved in advance by the CEO. The Company shall also
reimburse Executive for actual income taxes incurred by the Executive, if
any, as a result of the reimbursement of expenses provided for herein upon
presentation of reasonably acceptable proof of payment of such taxes.
(D) Other Benefits. The Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made
available by the Company as of this date and in the future to its
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 Executive shall be entitled to three (3) weeks of paid
vacation in each year of his employment (this will be prorated for any
partial calendar years worked). The Executive shall also be entitled to
all paid holidays given by the Company to its employees.
(F) Options and Grants. Subject to execution of this Agreement, Executive
shall be granted as of the date of execution of this Agreement, an option
(the "Stock Option") to purchase 60,000 shares of Endorex's Common Stock
(the "Option Shares") at a price per share equal to the Closing Price of
the Company's Common Stock on the date of execution of this Agreement
[vesting and becoming exercisable as to 25% of the Option Shares on the
first anniversary of the grant of the Stock Option and then an additional
25% each yearly anniversary thereafter, as long as Executive is employed
by Endorex on such vesting dates]. The Stock Option shall be granted under
the terms of the Company's Amended and Restated 1995 Omnibus Incentive Plan
(the "Plan") and the terms of the Company's standard Stock Option
Agreement, which Executive must agree to and sign as a condition of
receiving the Stock Option. The grant of the Stock Option shall not
preclude the participation of the Executive in any other stock grant or
option plan of the Company which the Board may grant from time to time.
5. Offices
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, as an executive of Endorex or other Endorex subsidiaries
(collectively "Endorex"), presently existing and as may be established in the
future, and consistent with the position of the Executive with the Company at
the time of such appointment, provided that the Executive is indemnified for
serving in any and all such capacities on a basis no less favorable than
provided by the Company's by-laws and any applicable Directors and Officers
insurance in effect during the term hereof. Executive agrees that, upon
termination of his employment with the Company, for any reason whatsoever, he
will terminate from all positions as an employee of Endorex and all of its
subsidiaries.
6. Confidential Information
Executive covenants and agrees that he will not (except as required in the
course of his employment or as required by law), while in the employment of the
Company or at any time thereafter, communicate or divulge to, or use for his own
benefit, or for the benefit of any other person, firm, association or
corporation, without the consent of the Company, as applicable, any information
concerning any inventions, discoveries, improvements, processes, formulas,
apparatus, equipment, methods, trade secrets, research, secret data, cost or
uses or purchasers of the Company's current or future products (including but
not limited to: its cancer products, POH and ImmTher(R): its oral/mucosal
protein, peptide and vaccine delivery system; the Elan technologies in either of
the two joint ventures with this company, and its MDP vaccine adjuvant product),
research activities, or services, or other confidential information possessed,
owned, or used by the Company that may be communicated to, acquired by, or
learned of by the Executive 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 like, relating to the
business of the Company, which the Company uses or prepares or comes into
contact with, shall remain the sole property of the Company, as applicable. The
obligations of
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confidentiality shall not apply to such information that (a) is at the time of
receipt a matter of public knowledge or after its receipt becomes public
knowledge through no act or omission on the part of Executive, or (b) the
Executive can establish by reasonable proof was known to him prior to disclosure
by the Company. Executive acknowledges that any invention, improvement,
discovery, process, formula, method or other intellectual property
("inventions"), whether or not patentable or copyrightable developed by
Executive, alone or jointly with others, on working time or using material,
resources or facilities of the Company or which relate to Executive's work for
the Company or are based on the Company's confidential information is the
exclusive property of the Company. Executive assigns all of his right, title
and interest in and to any such inventions to the Company.
7. Competition
(A) During the period of the Executive's employment by the Company and for
a period of eighteen (18) months after such employment ends (the
"Restricted Period") (whether such employment shall have ended by reason of
the expiration or termination of this Agreement or otherwise), Executive
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 direct competition with the Company, or
any of its subsidiaries in the development, research relating to,
manufacture, processing, marketing, distribution, or sale of products that
are substantially similar to products ("Products") that were researched,
developed, licensed, manufactured, processed, distributed, or sold by the
Company, or any of its subsidiaries, at any time during the twelve (12)
month period immediately preceding the termination of his employment. The
parties agree that the Company currently conducts business in the following
areas: 1) immunomodulators for cancer and infectious disease and vaccine
adjuvants based on muramyl dipeptide technology, 2) liposome-based
particles for oral/mucosal vaccine and drug delivery, 3) PLGA microspheres
for oral delivery of vaccines, 4) monoterpene-based compounds for the
prevention and treatment of cancer, and 5) delivery of iron chelators using
Elan Corporation's MEDIPAD(R) technology. For the avoidance of doubt, the
parties agree that "Products" shall include any technology and/or products
that the Company in-licenses during the term of Executive's employment
hereunder.
(B) Executive 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 person employed by the Company during the
period of the Executive's employment by the Company and for a period of
eighteen (18) months thereafter.
(C) Notwithstanding any provision of this Section 7 to the contrary,
Executive shall be permitted to own up to three percent (3%) of the total
shares of all classes of publicly-traded stock of any corporation engaging
in direct competition with the Company as described in section 7(A) above,
as a passive investment.
8. Termination
(A) Notwithstanding any provision of this Agreement to the contrary,
Executive'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 Executive shall materially violate any of the provisions
of Section 6 or 7 hereof; or (iii) if Executive shall become physically or
mentally incapacitated and by reason thereof be unable to perform his
duties hereunder with or without reasonable accommodation for a period of
ninety (90) consecutive days. For the purpose of clause (i) of this
Subsection 8A, "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,
(y) violation of specific written directions of the CEO or Board of
Directors of the Company regarding lawful activities consistent with the
Executive's job responsibilities to improve the business of the Company,
provided, however, no discharge shall be deemed "for cause" under this
clause (y) unless Executive shall have first received written notice from
the CEO of the Company advising of the acts or omissions that constitute
such violation, and such violation continues uncured for a period of (30)
days after Executive shall have received such notice, or (z) intentional,
reckless or grossly negligent conduct by Executive constituting misconduct.
The Company may also terminate Executive's employment at any time without
cause, subject to its obligations under Section 8C below, with thirty (30)
days written notice, provided that the Company may pay Executive salary in
lieu of any portion of such notice.
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(B) Executive may terminate his employment with the Company upon sixty
(60) days' written notice. If Executive terminates his Employment with the
Company pursuant to this Section 8B, Executive shall only be entitled to
any unpaid compensation accrued through the last day of Executive's
employment; provided, however, that Executive may terminate his employment
agreement with the Company for "Good Reason" and within twelve (12) months
after a "Change in Control" and be entitled to the benefits stated in sub-
paragraph C hereafter.
(C) In the event that (i) the Company terminates the employment of
Executive for any reason (other than "for cause" as defined or as a
consequence of Executive's violation of clause (ii) of Subsection 8A above
[or due to disability or death],) or (ii) Executive terminates his
employment for Good Reason within twelve (12) months after a Change in
Control, then Executive shall be paid his then current salary plus any
earned but unpaid bonus, prorated for the amount of the calendar year
worked, for a period of six (6) months following termination, subject to
set off for amounts earned from alternative employment. A termination by
Executive for "Good Reason" shall mean a termination by Executive within 60
days of (i) a material reduction in Executive's level of responsibility,
(ii) a reduction in his level of base salary or (iii) a relocation of
Executive's primary worksite without his consent of more than 50 miles from
Lake Forest, IL. Executive shall give the Company sixty (60) days' written
notice and opportunity to cure prior to any termination for Good Reason.
"Change in Control" shall have the same meaning as in the Company's Amended
and Restated 1995 Omnibus Incentive Plan.
9. 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 to assume 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 9, or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law. If the successor does not agree to be bound by this
agreement, and Executive is terminated, the Company will pay Executive
severance pay as set forth in Section 8(C).
(B) If the Executive should die during the term of this Agreement, any
amounts earned hereunder but not yet paid, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate. The Executive shall not be entitled
to assign any of his rights or obligations under this Agreement.
10. Notice
For all 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 prepaid,
addressed as follows:
If to the Executive: If to the Employer:
00 Xxxxxxxxx Xxxxx 00000 X. Xxxxxxx Xxxxx, Xxxxx X
Xxxxxx, XX 00000 Xxxx Xxxxxx, Xxx. 00000
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.
11. 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 at 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
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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.
12. Validity
The invalidity or unenforceablitity 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.
13. 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,
other than Sections 6 or 7, 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 arbitration fees shall be borne by the Company but each party
shall be responsible for its own legal fees. The parties agree that any dispute
arising out of or relating to Sections 6 or 7 shall be resolved in the State
and/or Federal courts located in Lake County, Illinois and the parties consent
to the jurisdiction of such courts.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
Endorex Corporation
/s/ Xxxxx Xxxxx
----------------- By: /s/ Xxxxxxx X. Xxxxx
Attest --------------------
Xxxxxxx X. Xxxxx
President/CEO
/s/ Xxxxxxxxxx X. Xxxxxxxxxxxxxx
--------------------------------
Xxxxxxxxxx X. Xxxxxxxxxxxxxx, Ph.D.
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