EXHIBIT 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made effective for all
purposes and in all respects as of March 10, 2003 by and between EXEGENICS,
INC., a Delaware corporation maintaining an office at 0000 Xxxxxxxx Xxx, Xxxxxx,
Xxxxx 00000 (formerly known as Cytoclonal Pharmaceutics, Inc., the "COMPANY"),
and Xxxxx Xxxxx, residing at 0000 XXX, Xxxx Xxxxx, XX 00000 ("EXECUTIVE").
WHEREAS, the Company desires to provide for Executive's performance of
services for the Company and any present or future parent, subsidiary or
affiliate of the Company, and Executive desires to perform such services, all on
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises, of the
mutual covenants hereinafter contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending legally to be bound hereby, agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive, and Executive
hereby accepts such employment, on the terms and conditions set forth in this
Agreement.
2. TERM OF AGREEMENT. The period of employment of Executive by the
Company pursuant to this Agreement (the "EMPLOYMENT PERIOD") shall commence on
the date hereof and shall continue until March 9, 2006 (the "INITIAL TERM");
provided, that, commencing on March 10, 2006, and on each March 10 thereafter,
the Employment Period shall be automatically extended for an additional one-year
period (each, a "RENEWAL TERM"), in case of either the Initial Term or any
Renewal Term, unless sooner terminated in accordance with the provisions of
Sections 6 and 7 or unless either party notifies the other party in writing of
its intentions not to renew this Agreement not less than ninety (90) days prior
to the expiration of any then current term.
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3. POSITION AND DUTIES OF EXECUTIVE; PLACE OF PERFORMANCE.
(a) Position and Duties. Executive shall serve the Company
faithfully, diligently and to the best of his ability under the direction of the
Company's President and Chief Executive Officer and/or his designee and shall
devote all of his full business time, energies and skill to his duties hereunder
and to the business and affairs of the Company and will not, directly or
indirectly, engage or participate in any other business or professional
activities during the Employment Period. The principal duties of Executive shall
be to serve as the Chief Business Officer, Vice President of Finance, and
Secretary of the Company (or such other position of a similar nature as may be
assigned by the Company) and, in such capacity, to render such financial,
business development, managerial, administrative and other services as normally
are associated with and incident to such position and to render such other
services as are consistent with his position and office as the Company's
President and Chief Executive Officer and/or his designee may from time to time
require. Executive shall have such authority as normally is associated with and
incident to his position.
4. COMPENSATION. In consideration of the performance by Executive of
his duties and obligations hereunder, the Company shall pay to Executive and
Executive agrees to accept, as full compensation therefor, the compensation set
forth in this Agreement.
(a) Salary. During the Employment Period, the Company agrees
to pay Executive a salary (the "SALARY") at the rate of $235,000 per annum. The
Salary shall be payable in accordance with the Company's customary payroll
practices as in effect from time to time. Executive's Salary shall be subject to
annual reviews and adjustments in accordance with the Company's compensation
plan and practices. Any adjustment to Executive's Salary shall be subject to the
review and approval of the Compensation Committee (the "COMPENSATION COMMITTEE")
of the Company's Board of Directors (the "BOARD"). If Executive's Salary is
adjusted, then such adjusted Salary shall constitute the Salary for all purposes
of this Agreement.
(b) Discretionary Bonus. The Compensation Committee shall
review Executive's performance once annually during each full year of the
Employment Period and, based on Executive's performance and the overall
performance of the Company, recommend whether the Company should award Executive
a cash bonus ("PERFORMANCE BONUS") in order to reward Executive for services
rendered to the Company and/or as an incentive for continued service.
Executive's performance shall also be reviewed once for each other period during
the Employment Period that does not constitute a full year, and any Performance
Bonuses awarded for such partial-year periods shall be prorated accordingly,
based on the number of months in such periods. The amount of Executive's
Performance Bonus, if any, shall be determined in the sole discretion of the
Compensation Committee (provided that it shall not be more than 30% of
Executive's then current Salary) and shall be payable to Executive within 90
days following the end of each calendar year during the Employment Period to
which such Performance Bonus relates.
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(c) Stock Options.
(i) Executive shall be awarded an option (the
"OPTION") to purchase up to 225,000 shares of the Company's common stock, par
value $.01 per share (the "COMMON STOCK").
(ii) The Option shall be granted pursuant to and
subject to all the terms and conditions of the Company's existing stock option
plan or any successor plan (the "OPTION PLAN"), and shall be evidenced by an
agreement, which agreement shall provide, among other things, that Executive
shall have [ten] years to exercise such option for a per share exercise price
equal to the fair market value of the Common Stock as of the date of such option
grant as determined in good faith by the Board (subject to forfeiture, earlier
termination and adjustment under certain circumstances described more fully in
the Option Plan and applicable option agreement). The Option shall vest in three
equal installments: The first immediately upon the grant date (which grant date
shall be the date on which the Board approves this Agreement), the second on the
first anniversary of that date, and the final upon on the second anniversary of
that date on which each such option is granted.
(d) Benefits. Executive shall be entitled to participate, to
the extent that he is eligible under the terms and conditions thereof, in any
pension, retirement, hospitalization, health, insurance, disability or medical
service plan generally available to the Company's senior executives that may be
in effect from time to time during the Employment Period, if any. The Company
shall be under no obligation to institute or continue the existence of any such
employee benefit plan.
(e) Vacation. For each calendar year during the Employment
Period, Executive shall be entitled to four weeks of paid vacation and shall
otherwise enjoy and be bound by the Company's standard policies, as amended from
time to time, regarding accrual and utilization of paid vacation time.
(f) Relocation Expenses. In the event that the Company
requires Executive to relocate his place of residence, the Company shall
reimburse Executive for the reasonable costs and expenses incurred in connection
with such relocation, in an amount to be agreed upon with the Chairman of the
Company.
5. EXPENSES.
(a) Reimbursement of Business Related Expenses. The Company
shall reimburse Executive for all reasonable business expenses upon the
presentation of reasonably itemized statements of such expenses in accordance
with the Company's policies and procedures as in effect from time to time.
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(b) Other Expenses. Concurrently with the execution of this
Agreement, the Company shall reimburse Executive for up to $2,000 of his
reasonable out-of-pocket expenses (including fees and disbursements of legal
counsel), incurred in connection with the negotiation and execution of this
Agreement.
6. TERMINATION. Executive's employment hereunder may be terminated
prior to the expiration of the Employment Period under the following
circumstances:
(a) Death. Executive's employment hereunder shall terminate
upon his death.
(b) Disability. If, as a result of Executive's incapacity due
to physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder in the opinion of Executive's treating physician,
with or without reasonable accommodation, for an aggregate of 180 days in any
365-day period, the Company shall have the right to terminate Executive upon
written notice thereof for "DISABILITY."
(c) Termination by the Company for Cause. Executive's
employment hereunder and all of the Company's obligations hereunder (except as
hereinafter provided) may be immediately terminated by the Company for Cause (as
hereinafter defined) by giving written notice of such termination to Executive.
For purposes of this Agreement, "CAUSE" shall mean: (i) a material breach by
Executive of this Agreement or any other agreement, including, without
limitation, the Non-Competition Agreement (as hereinafter defined), with or for
the benefit of the Company, or any affiliate thereof and to which Executive is a
party or by which he is bound, which is not cured within 15 days following
written notice from the Company detailing such breach, or which, if not curable,
causes the Company material harm, (ii) Executive's breach of his duty of loyalty
to the Company which causes material harm to the Company, (iii) Executive's
continued failure to perform such duties as are reasonably requested by the
Board or the Company's President/Chief Executive Officer or his designee (other
than such failure resulting from Executive's disability which failure continues
for 30 days after written notice thereof, (iv) Executive's commission of an act
of dishonesty, fraud, misrepresentation or other act of moral turpitude with
respect to the Company which causes a material adverse effect on the Company or
its reputation which, in the reasonable good faith judgment of the Board,
constitutes grounds for termination, (v) Executive's conviction of, or plea of
guilty or nolo contendere to any crime constituting a felony, which, in the
Board's reasonable judgment, causes a material adverse effect on the Company or
its reputation, (vi) regular insobriety which interferes with Executive's
ability to perform his duties hereunder, with respect to the Company, or (vi)
Executive's willful misconduct that is, in the Board's reasonable judgment,
injurious to the Company or to any entity in control of, controlled by or under
common control with the Company.
(d) Termination by Executive With Good Reason. Executive may
terminate this Agreement if, in the event of a change of control of the Company
or for any other reason within the control of the Company, his title,
responsibilities or salary are materially reduced from those in effect at the
time ("GOOD REASON"), by providing the Company with at least 30 days' written
notice thereof.
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(e) Termination by the Company Without Cause. The Board, upon
written notice to Executive, may at any time terminate the Employment Period for
other than Cause.
(f) Voluntary Termination by Executive Without Good Reason.
Executive shall have the right to terminate his employment hereunder by
providing the Company with at least 90 days' written notice thereof.
(g) Termination by Mutual Agreement. Executive and the Company
shall have the right, at any time, by mutual agreement, to terminate this
Agreement.
7. TERMINATION PROCEDURE; EFFECTS OF TERMINATION.
(a) Notice of Termination. Any termination of Executive's
employment by the Company or by Executive during the Employment Period shall be
communicated by written notice (a "NOTICE OF TERMINATION") to the other party
hereto in accordance with Section 8(g) below, which notice shall indicate the
specific termination provision in this Agreement relied upon.
(b) Date of Termination. "DATE OF TERMINATION" shall mean (i)
if Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated pursuant Section 6(b), 10 days
after the Notice of Termination is given, (iii) if Executive's employment is
terminated pursuant to Section 6(d), 30 days after the Notice of Termination is
given (or such earlier date if so determined by the Company in its sole and
absolute discretion), (iv) if Executive's employment is terminated pursuant to
Section 6(f), 90 days after the Notice of Termination is given (or such earlier
date if so determined by the Company in its sole and absolute discretion), and
(v) if Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given or any later date set forth in such
Notice of Termination.
(c) Accrued Compensation Upon Termination. If Executive's
employment is terminated prior to the end of the Employment Period, then (i) the
Company shall pay Executive (or, in the case of Executive's death, his legal
representative) his Salary through the Date of Termination, as soon as
practicable following the Date of Termination, (ii) the Company shall pay to
Executive (or, in the case of Executive's death, his legal representative) any
compensation and/or benefits as may be due to Executive in accordance with the
terms and provisions of any agreements, plans or programs of the Company through
and including the Date of Termination, (iii) the Company shall reimburse
Executive pursuant to Section 5 hereof for any reasonable expenses incurred, but
not paid prior to the Date of Termination, (iv) the effect of termination on
Executive's Option shall be governed by the applicable option agreement and the
Option Plan, and (v) the Company shall pay to Executive (or, in the case of
Executive's death, his legal representative) any Performance Bonus determined to
be awarded but not yet paid to Executive, except in the case of termination
pursuant to Section 6(c) or Section 6(f), in which case Executive shall not be
entitled to any such Performance Bonus.
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(d) Severance Payment. In addition to any payments due to
Executive pursuant to Section 7(c) above, in the event that Executive's
employment is terminated prior to the end of the Employment Period by the
Company without Cause pursuant to Section 6(e) above, or by Executive for Good
Reason pursuant to Section 6(d) above, the Company shall (without duplication):
(i) if such termination occurs within the twelve months following the
commencement of the Initial Term, pay Executive his Salary for an additional
twelve months following the Date of Termination based on his then current Salary
(at Executive's current Salary rate, such payment would be equal to an aggregate
of $235,000); (ii) if such termination occurs within the twelve (12) months
following the first anniversary of the commencement of the Initial Term, pay
Executive his Salary for an additional nine (9) months following the Date of
Termination based on his then current Salary (at Executive's current Salary
rate, such payment would be equal to an aggregate of $176,250); (iii) if such
termination occurs within the twelve months following the second anniversary of
the commencement of the Initial Term, pay Executive his Salary for an additional
six (6) months following the Date of Termination based on his then current
Salary (at Executive's current Salary rate, such payment would be equal to an
aggregate of $117,500); and (iv) if such termination occurs within a Renewal
Term, pay Executive his Salary for an additional six (6) months following the
Date of Termination based on his then current Salary (at Executive's current
Salary rate, such payment would be equal to an aggregate of $117,500).
(e) Cooperation with the Company after Termination. Following
any Notice of Termination, Executive shall cooperate reasonably with the Company
in all matters relating to the winding-up of his pending work on behalf of the
Company.
8. MISCELLANEOUS.
(a) Tax Withholding and Deductions. Payments to Executive of
all compensation contemplated under this Agreement shall be subject to all
applicable legal requirements of federal, state, local and foreign taxing
authorities with respect to the withholding of taxes. Notwithstanding any
amounts withheld pursuant to the foregoing, Executive shall be responsible for
the payment of all applicable income tax and other tax liability, if any, on all
compensation paid to his under the terms of this Agreement, other than the
Company's share of social security and similar taxes.
(b) Non-Competition Agreements. Concurrently with the
execution of this Agreement, Executive and the Company shall enter into and
agree to be bound by a Non-Competition Agreement, substantially in the form
annexed hereto as Exhibit A (the "Non-Competition Agreement").
(c) Further Assurances. The parties hereto agree (i) to
furnish upon request to each other such further information, (ii) to execute and
deliver to each other such other documents, and (iii) to do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to in this
Agreement.
(d) Amendment; Waiver. This Agreement may not be modified,
amended or waived in any manner except by an instrument in writing signed by the
parties hereto. The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be
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construed as a waiver of any provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
(e) No Prior Agreements; Authorization. Executive represents
and warrants that (a) Executive is not under any other obligation, contractual
or otherwise, to any other person or entity which would prevent his entry into,
or prevent or impair the performance of his obligations or the provision of his
services under, this Agreement, and (b) this Agreement has been duly executed
and delivered by Executive and constitutes a valid and binding agreement
enforceable against Executive in accordance with its terms.
(f) Severability. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions hereof shall not affect the validity and enforceability of the
other provisions hereof.
(g) Notices. Any notice required to be given hereunder shall
be sufficient if in writing, and shall be deemed duly given (i) when delivered
personally, (ii) when transmitted by facsimile or other electronic transmission
(with receipt of transmission) if transmitted on a regular business day during
normal business hours, and otherwise on the next business day, provided, that
such facsimile or other electronic transmission is followed by delivery via
another method permitted hereby, (iii) one business day after being deposited
with a nationally recognized overnight courier service (with proof of service),
(iv) or three days after being mailed by certified or registered mail (return
receipt requested and first-class postage prepaid), to his residence in the case
of Executive (as set forth on the first page of this Agreement), and to its
principal office in the case of the Company, or in each case, at such other
address as either party may notify to the other in writing.
(h) Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Texas.
(i) Binding Effect; Assignment. This Agreement is binding on,
and will inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns. This Agreement is not assignable
by the parties, provided, however, that the Company may assign this Agreement or
any of its rights hereunder without the prior written consent of Executive to
any affiliate, joint venture partner or successor.
(j) Knowing and Voluntary Agreement; Joint Participation in
Preparation of Agreement. Executive acknowledges (i) that he is entering into
this Agreement knowingly and voluntarily after carefully reviewing it, (ii) that
he has had the opportunity to review it with counsel of his own choosing, namely
Xxxx X. Eagle, X.X. of the firm of Xxxxxxx, Best & Friedrich, LLP, (iii) that he
understands its final and binding effect, and (iv) that the only promises made
to his to obtain his agreement and signature are those stated in this Agreement.
The parties hereto participated jointly in the negotiation and preparation of
this Agreement and each party has had the opportunity to obtain the advice of
legal counsel and to review, comment upon, and redraft it. Accordingly, it is
agreed that no rule of construction shall apply against any party in favor of
any party. This Agreement shall be construed as if the parties jointly prepared
it, and any uncertainty or ambiguity shall not be interpreted against any one
party and in favor of the other.
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(k) Entire Agreement. This Agreement, together with the
Non-Competition Agreement, contains the entire agreement of the parties and
embodies all the representations and warranties that have been made between them
with respect to the subject matter hereof. All previous agreements or
understandings between the parties hereto, whether in writing or oral, are
merged into this Agreement. This Agreement may not be changed orally, but only
by an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
(l) Headings. The section headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
(m) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
{Remainder of this page left intentionally blank. Signature page(s) to follow.}
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IN WITNESS WHEREOF, the Company and Executive have duly executed this
Agreement as of the day and year first above written.
EXEGENICS, INC.
By:
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Xxxxxx X. Xxxxx Ph.D., President and
Chief Executive Officer
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XXXXX XXXXX
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EXHIBIT A
TO EMPLOYMENT AGREEMENT
{Attach form of Non-Competition, Non-Disclosure Agreement}
F-1
