EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated and effective
November 15, 2001, is between Array BioPharma Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Employee").
In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee and Employee hereby
agrees to be employed by the Company for the period and upon the terms and
conditions hereinafter set forth.
2. Capacity and Duties. Employee shall be employed by the Company as
Chief Executive Officer, or in such other executive capacity as the Company's
Board of Directors shall determine. During his employment Employee shall perform
the duties and bear the responsibilities commensurate with his position and
shall serve the Company faithfully and to the best of his ability, under the
direction of the Board of Directors. Employee shall devote his entire working
time, attention and energies to the business of the Company. His actions shall
at all times be such that they do not discredit the Company or its products and
services. Employee shall not engage in any other business activity or activities
that conflict with the proper performance of Employee's duties hereunder. In
general, personal investments in which Employee owns less than 5% of the
outstanding capital of a particular enterprise and that do not involve any
significant services by Employee shall not be deemed to conflict with the proper
performance of Employee's duties. Employee shall be permitted to serve on a
maximum of two outside boards of directors, subject to the reasonable prior
approval of the Company's Board of Directors. The Company agrees that Employee's
continued service as a Director of DEMCO, Inc. does not currently conflict with
Employee's performance of his duties hereunder, and such continued service is
approved. Employee may serve on additional boards of directors of charitable
organizations if prior approval is obtained from the Company's Board of
Directors.
3. Compensation.
(a) For all services rendered by Employee the Company shall
pay Employee during the term of this Agreement an annual salary as set forth
herein, payable semimonthly in arrears. Employee's initial annual salary shall
be $275,000. During the term of this Agreement, the amount of Employee's salary
shall be reviewed at periodic intervals and, upon agreement of the parties
hereto, appropriate adjustments in such salary may be made on an annual or more
frequent basis, as determined by, and at the discretion of the Board of
Directors.
(b) Employee shall receive an award of options to purchase
400,000 shares of the Company's common stock (the "Options") within 30 days of
the inception of this Agreement. A portion of the Options will be incentive
stock options under Section 422 of the Internal Revenue Code (the "Code") to the
extent permitted under Section 422(d) of the Code, and the remaining portion of
the Options will not be incentive stock options. The Options shall be governed
by one or more option agreements (collectively, the "Option Agreements") and the
Company's Amended and Restated Stock Option and Incentive Plan, as amended (the
"Stock Option Plan"). The Option Agreements shall provide that the Options shall
become exercisable upon vesting, and shall vest in tranches of 100,000 shares
each
at the completion of each year of the term of this Agreement. The exercise price
of the Options shall be the fair market value of the Company's common stock on
the date of grant. In the event of termination of employment, Employee's
exercise of the Options, and any termination of the Options, shall be governed
by the Option Agreements and the Stock Option Plan.
(c) Employee shall also be eligible for a performance bonus
for each fiscal year beginning in fiscal year 2002, or portion thereof, that
Employee is employed by the Company (the "Performance Bonus"). The Performance
Bonus shall be based on Employee's base salary and the achievement of
performance criteria to be established by the Board of Directors under a
Management Bonus Plan (the "Management Bonus Plan"), which Employee shall
develop and recommend to the Board of Directors of the Company for each fiscal
year, beginning in fiscal year 2002, and which shall apply to Employee and other
members of the Company's senior management. The performance criteria under the
Management Bonus Plan shall include such items as performance of the Company
compared to its fiscal year plan and budget; new business and customer
development by the Company; and operational efficiency of the Company. It shall
be a condition to Employee's receipt of a Performance Bonus in any given year
that Employee achieves certain minimum performance criteria to be established
under the Management Bonus Plan. It is anticipated that the Performance Bonus
for any particular fiscal year will range between 25% and 50% of Employee's base
salary; provided that the minimum performance criteria are achieved. The
Performance Bonus may be paid in cash or in equity, at the discretion of the
Board of Directors. The Performance Bonus shall be payable to Employee upon
achievement of the minimum performance criteria and not later than 60 days
following receipt by the Board of Directors of the Company's audited financial
statements for that fiscal year.
(d) In addition to salary payments as provided in Section
3(a), the Company shall provide Employee, during the term of this Agreement,
with the benefits of such medical insurance plans, hospitalization plans and
other employee fringe benefit plans as shall be generally provided to employees
of the Company and for which Employee may be eligible under the terms and
conditions thereof. Nothing herein contained shall require the Company to adopt
or maintain any such employee benefit plans.
(e) During the term of this Agreement, except as otherwise
provided in Section 5(b), Employee shall be entitled to sick leave and annual
vacation consistent with the Company's customary sick leave and vacation
policies.
(f) During the term of this Agreement the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and in the performance
of his duties under this Agreement upon presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data.
4. Term. Unless sooner terminated in accordance with Section 5, the
initial term of this Agreement shall be for four years from the effective date
hereof, and thereafter shall continue for one year terms from year to year
unless and until either party shall give notice to the other at least 60 days
prior to the end of the initial or then current renewal term of his or its
intention to terminate at the end of such term. The provisions of Sections 6, 7,
8, 9, 10 and 11 shall remain in full force and effect notwithstanding the
termination of this Agreement.
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5. Termination and Severance.
(a) If Employee dies during the term of this Agreement, (i)
the Company shall pay his estate the compensation that would otherwise be
payable to him for the month in which his death occurs; (ii) this Agreement
shall be considered terminated on the last day of such month; and (iii) the
Company shall cause any issued but unvested Options granted to Employee to
immediately vest.
(b) If during the term of this Agreement Employee is prevented
from performing his duties by reason of illness or incapacity for a continuous
period of 120 days, the Company may terminate this Agreement upon 30 days' prior
notice thereof to Employee or his duly appointed legal representative. For the
purposes of this Section 5(b), a period of illness or incapacity shall be deemed
"continuous" notwithstanding Employee's performance of his duties during such
period for continuous periods of less than 15 days in duration.
(c) The Company may terminate this Agreement at any time, upon
10 days' prior notice, for Employee's (i) gross negligence in the performance of
his duties, upon notice of same from Company and failure to cure within 30 days;
(ii) intentional misconduct, including but not limited to, commission of any
felony, or of any misdemeanor involving dishonesty or moral turpitude, or
violation of any state or federal law in the course of his employment; or theft
or intentional misuse of the Company's property or time; or (iii) material
breach of any obligation created by this Agreement (including the Noncompete
Agreement and Confidentiality and Inventions Agreement incorporated by reference
in Sections 6 and 7 below).
(d) The Company or Employee may terminate this Agreement at
any time for any or no reason upon at least 30 days' notice to the other. In the
event that Employee is removed from his position as Chief Executive Officer of
the Company, or his duties as Chief Executive Officer are materially diminished,
Employee may elect to treat such event, by notice of termination within 30 days
of its occurrence, as a termination by the Company pursuant to this Section
5(d).
(e) If this Agreement is terminated by the Company pursuant to
Sections 5(b) or 5(d), then (i) the Company shall pay as severance to Employee
one years' current base salary, in equal monthly installments, subject to all
applicable deductions and withholdings (provided that a termination by the
Company resulting from a change of control event described in Section 5(f) shall
cause the severance payment to be increased to two years' current base salary);
and (ii) the Company shall, within 60 days from receipt of the audited financial
statements for that fiscal year, pay to Employee any Performance Bonus for which
Employee would be eligible for that year, pro-rated based on the date of
Employee's termination. As a condition to receiving any severance payments under
this Agreement, Employee shall execute a release reasonably acceptable to the
Company and Employee, and shall comply with his obligations under the Noncompete
Agreement and Confidentiality and Inventions Agreement incorporated by reference
in Sections 6 and 7 of this Agreement.
(f) In the event of a consolidation or merger involving the
Company in which the Company is not the surviving entity or any transaction in
which more than 50% of the Company's voting power is transferred or more than
50% of the Company's assets are sold, the vesting of 100% of the Options granted
hereunder to Employee shall be accelerated to occur immediately upon such event.
(g) If Employee gives notice of termination pursuant to
Section 5(d), the Company may, at its option, terminate Employee immediately
upon payment to Employee of 30 days
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salary or salary for the remainder of the notice period, whichever is less,
subject to all applicable deductions and withholdings. A termination initiated
by Employee pursuant to Section 5(d) shall cause no acceleration of vesting of
Options, shall cause Employee to forfeit his eligibility for a Performance Bonus
for that fiscal year, and shall create no severance obligation under Section
5(e).
6. Confidential Information. This Agreement incorporates by
reference all the terms of that certain Confidentiality and Inventions Agreement
between Employee and the Company, as if fully set forth herein.
7. Covenants Not to Compete or Interfere. This Agreement
incorporates all the terms of that certain Noncompete Agreement between Employee
and the Company, as if fully set forth herein. The parties hereby acknowledge
that any severance payments made under Section 5 of this Agreement shall be
consideration for Employee's covenant not to compete with the Company.
8. Waiver of Breach. A waiver by the Company of a breach of
any provision of this Agreement by Employee shall not operate or be construed as
a waiver of any subsequent breach by Employee.
9. Severability. It is the desire and intent of the parties
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision or portion
of this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this Section 9 in the particular jurisdiction in
which such adjudication is made.
10. Notices. All communications, requests, consents and other
notices provided for in this Agreement shall be in writing and shall be deemed
given if mailed by first class mail, postage prepaid, addressed as follows: (i)
If to the Company: to its principal office at 0000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000; (ii) If to Employee: to 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx
00000; or such other address as either party may hereafter designate by notice
as herein provided. Notwithstanding the foregoing provisions of this Section 10,
so long as Employee is employed by the Company any such communication, request,
consent or other notice shall be deemed given if delivered as follows: (x) If to
the Company, by hand delivery to any executive officer of the Company other than
Employee, and (y) If to Employee, by hand delivery to him.
11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Colorado
without regard to choice of law provisions thereof, and the parties each agree
to exclusive jurisdiction in the state and federal courts in Colorado.
12. Assignment. The Company may assign its rights and
obligations under this Agreement to any affiliate of the Company or to any
acquirer of substantially all of the business of the Company, and all covenants
and agreements hereunder shall inure to the benefit of and be enforceable by or
against any such assignee. Neither this Agreement nor any rights or duties
hereunder may be assigned or delegated by Employee.
13. Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties and supersedes all prior
understandings, agreements or representations by or between the parties, whether
written or oral, which relate in any way to the subject matter hereof.
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Without limiting the foregoing, this Agreement shall supersede that certain
Revised Employment Agreement between the Company and Employee dated as of
November 16, 1999, in its entirety.
14. Amendments. No provision of this Agreement shall be altered,
amended, revoked or waived except by an instrument in writing signed by the
party sought to be charged with such amendment, revocation or waiver.
15. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
***Signature Page Follows***
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IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first above written.
COMPANY:
ARRAY BIOPHARMA INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Chairman
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EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
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