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EXHIBIT 10.57
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made as of July 23, 1999, by and
between Guilford Pharmaceuticals Inc., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxxxx, M.D. (the "Consultant").
WHEREAS, the Company and the Consultant are parties to a Consulting
Agreement dated September 1, 1995, as extended by amendments through September
30, 1999 (the "1995 Consulting Agreement"), pursuant to which the Consultant has
provided consulting services to the Company; and
WHEREAS, the parties desire to extend such consulting
relationship on the terms and conditions contained herein;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises of the parties hereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Consultant and the Company hereby agree as follows:
1. Services. The Company hereby retains the Consultant to
perform, and the Consultant hereby agrees to render to the Company, consulting
and advisory services as requested from time to time by the Company (the
"Services"). Such Services may include, but shall not be limited to, the
following: serving on the Board of Directors of the Company and any Committees
thereof; serving as Chairman of the Company's Scientific Advisory Board or
similar advisory body; assisting the Company in scientific matters, including
assessment of programs, strategies for the Company's scientific research,
recruitment of scientific staff and advising the Company with respect to
equipping laboratories; advising the Company regarding the potential acquisition
of new technologies and development by third parties of competing technologies;
and participating in such meetings pertaining to the business of the Company,
all as the Chief Executive Officer of the Company may reasonably request.
Consultant agrees to use reasonable efforts to perform the Services and to make
himself available to render the Services, for a minimum of 30 days and a maximum
of 42 days per year during the term of this Agreement.
2. Consulting Fees.
In consideration of the performance of the Services by the
Consultant, the Company agrees to pay the Consultant the following compensation:
(a) Cash retainer payable monthly on the first of each month as
follows:
(i) August 1999: $16,666.67 per month (annualized rate:
$200,000 per annum);
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(ii) September 1999 to August 2000: $17,500 per month
(annualized rate: $210,000 per annum);
(iii) September 2000 to August 2001: $18,333.33 per month
(annualized rate: $220,000 per annum);
(iv) September 2001 to August 2002: $19,166.67 per month
(annualized rate: $230,000 per annum); and
(v) September 2002 to August 2003: $20,000 per month
(annualized rate: $240,000 per annum).
(b) A one-time adjustment payment of $27,500 on August 1, 1999
representing the pro rata difference between the annualized
rate of $200,000 per annum set forth in Section 2(a)(i) above
and the annualized rate of $170,000 per annum which has been
paid to Consulting during the extended term of the 1995
Consulting Agreement from September 1998 through July 1999.
(c) The Company will also reimburse Consultant for reasonable
expenses incurred by Consultant in the performance of his
duties hereunder against reasonable documentation. Except
as specifically provided in this Agreement, the Company
shall not be obligated to pay Consultant any additional
compensation, fees or expenses, including without
limitation in connection with Consultant's service on the
Board of Directors of the Company or any Committee thereof,
or on the Company's Scientific Advisory Board or similar
body or with Consultant's advisory services to the Company.
3. Split Dollar Life Insurance Policy. In consideration of
the performance of the Services rendered by Consultant pursuant to this
Agreement, the Company agrees to purchase a split dollar survivorship universal
life insurance policy that contains terms and conditions substantially as set
forth below (the "Policy"). The parties agree to cooperate and use their
reasonable best efforts to have the policy in place no later than 120 days after
the date of this Agreement.
(a) The Policy. The parties have been examining two different
policies, one underwritten by Pacific Life (the "Pacific Life
Policy"), and the other by Southland Life (the "Southland Policy"),
illustrative examples of which have been attached hereto as Exhibits
1 and 2, respectively. On or before August 31, 1999, Consultant will
elect which of the Pacific Life Policy and the Southland Policy he
wishes the Company to obtain by giving written notice to the
Company. If no written election is made on or before August 31,
1999, Consultant will be deemed to have elected the Southland
Policy.
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(b) Ownership. The Policy will be owned by the Company during
the term of this Agreement, and as further detailed in Section 3(e)
below.
(c) Description. Subject to Section 3(g) below, the Policy
will cover the second to die of Consultant and his spouse and, upon
the death of the second to die of Consultant or his spouse, will pay
the amount of $5,000,000 to a beneficiary or beneficiaries
designated in writing by Consultant (the "death benefit"), as well
as an additional amount to the Company to repay all premiums paid by
the Company during its ownership of the Policy ("Company Paid
Premiums").
(d) Premium Payments. The Policy will be kept in effect by the
Company's payment of all premiums during the term of this Agreement.
(e) Expiration or Termination of Agreement. Upon the
expiration of this Agreement, or any early termination of this
Agreement by the Company (other than termination of Consultant under
Section 5(ii)(B) or (C) below), Consultant shall have the right
(subject to the terms of the policy) to assume ownership of the
Policy (or cause a party or entity nominated by Consultant and
eligible under the Policy and applicable law) to assume ownership of
the Policy by assuming the subsequent premium payment obligations
therefor and making arrangements for the repayment of Company Paid
Premiums as provided in Section 3(f) below.
(f) Repayment of Company Paid Premiums. Upon any expiration of
this Agreement or other termination of this Agreement, Consultant
shall repay the Company the Company Paid Premiums no later than
sixty (60) days following such expiration or termination, except as
provided below. In the event Consultant or his designee assumes
ownership of the Policy pursuant to Section 3(e) above, then: (i) in
the event the Policy has a cash value at the time of such expiration
or termination that is greater than or equal to the Company Paid
Premiums as of such date (as is expected under the Southland
Policy), Consultant shall pay the Company the amount of the Company
Paid Premiums no later than 60 days following any expiration or
termination of the Agreement; and (ii) in the event that the Policy
has a cash value at the time of such expiration or termination that
is less than the Company Paid Premiums (as is expected in the first
years of the Pacific Life Policy), Consultant (or his designee or
estate, as the case may be) will pay the Company the amount of the
Company Paid Premiums no later than the earliest to occur of: (i) 60
days following the date upon which the cash value reaches the amount
of Company Paid Premiums; or (ii) payment by the insurer of the
proceeds of the Policy to the Policy's beneficiaries; or (iii) any
date upon which the Policy has been renounced or otherwise permitted
to lapse or terminated for any reason. Until repayment of all
Company Paid Premiums, Consultant agrees not to draw down upon,
borrow against or otherwise encumber the cash value of the Policy.
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(g) Commercial Availability and Premium Cap. The Company's
obligation to purchase the Policy for Consultant shall be subject to
the commercially reasonable availability of such insurance and the
commercially reasonable insurability of Consultant and his spouse.
In no event will the Company be obligated to pay more than $45,000
per year in premium, even if the amount of the death benefit must be
decreased as a result. In the event that neither a Pacific Life
Policy nor a Southland Policy is available for any reason, the
parties agree to cooperate to seek to obtain a mutually acceptable
substitute policy, subject however to the first two sentences of
this Section 3(g).
(h) Tax Consequences to Consultant. All tax consequences to
Consultant or his estate that relate to the Policy, including those
triggered by any premium payment, payment of death benefit, or
repayment of premiums to the Company, shall be the responsibility of
Consultant or his designee.
(i) Charges in Addition to Premium Except in the Pacific Life
Policy. Except in the case of the Pacific Life Policy, if the
Company is charged any fees, charges or expenses in addition to the
quoted premium for the on-going monitoring or servicing of a Policy,
such fees, charges or expenses shall be paid or reimbursed to the
Company by Consultant.
4. Eligibility to Receive Stock Option Awards Generally Granted
to Directors. Notwithstanding Section 2(c) above, from and after this date for
so long as Consultant serves as a member of the Board of Directors of the
Company, Consultant shall be eligible to receive stock option awards generally
granted by the Company to its outside directors. Decisions concerning the amount
of any such stock option awards, the timing of any such awards generally, and
the timing of any such awards to Consultant, as in the case of other outside
directors, will be in the absolute discretion of the Board of Directors of the
Company or its Compensation Committee. Nothing in this Agreement shall be deemed
to entitle Consultant to be re-nominated, re-elected or re-appointed to the
Board of Directors of the Company or any Committee thereof.
5. Term; Termination. The term of this Agreement shall commence
on July 23, 1999 and shall continue until and including August 31, 2003, unless
further extended by mutual written agreement of the parties hereto or unless
earlier terminated as provided below (the "Term"). Any reference herein to the
expiration of this Agreement shall mean expiration of any mutually agreed
extension to the term of this Agreement. This Agreement shall terminate prior to
the expiration of such term or any extended term in the event that:
(i) Consultant shall die; or
(ii) the Company shall determine that:
(A) Consultant has become "disabled" (i.e., Consultant
has failed, because of illness or incapacity, to
render services of the character contemplated by
this Agreement over a period
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aggregating six (6) months out of any twelve (12)
consecutive month period); or
(B) Consultant has breached this Agreement in any
material respect, which breach is not cured by
Consultant or is not capable of being cured by
Consultant within ten (10) days after written
notice of such breach is given to Consultant; or
(C) Consultant has engaged in willful and material
misconduct, which the Company determines, in its
sole discretion, is or may be materially injurious
to the Company's reputation or goodwill.
Upon termination of this Agreement for any reasons, Consultant shall deliver
promptly to the Company all records, manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, data, tables, calculations or
copies thereof, which are the property of the Company or which relate in any way
to the business, products, practices or techniques of the Company, and all other
property, and Confidential Information of the Company, including, but not
limited to, all documents which in whole or in part contain any Confidential
Information of the Company, which in any of these cases are in his possession or
under his control. Any and all personal property, inventions, data, written
materials, findings, records and documents, information and Confidential
Information made or obtained by the Consultant during his engagement by the
Company concerning the business or affairs of the Company and its affiliates are
and will remain property of the Company as "works made for hire," and upon
termination of this Agreement or upon request of the Company during the term of
this Agreement, shall be promptly delivered by the Consultant to the Company.
6. Independent Contractor Relationship. It is understood and
agreed that Consultant's relationship with the Company is that of an independent
contractor and that neither this Agreement nor the Services to be rendered
hereunder shall for any purpose whatsoever or in any way or manner create any
employer-employee relationship between the parties. The parties acknowledge that
the Xxxxx Xxxxxxx University is not a party to this agreement, which is a
private contract between Consultant and the Company.
7. Conflicting Agreements.
(a) The Company understands that Consultant has entered into
certain agreements and understandings to perform services for (a) The Xxxxx
Xxxxxxx University; (b) NEN Life Sciences; and (c) Scios Inc. (solely in the
capacity of a member of its Board of Directors) (collectively, the "Other
Contractors"). Consultant represents and warrants to the Company that Consultant
is, as of and including the date hereof, under no contractual or other
restriction or obligation, including agreements or understandings with Other
Contractors, which conflicts with this Agreement, the performance of his duties
hereunder or the other obligations of Consultant to the Company.
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(b) Consultant will not at any time during the term of this
Agreement and for a period of one year thereafter, engage in any business
activity or occupation or enter into any agreement including entering into any
consulting or research agreement with any organization, which is directly in
competition with the business of the Company; provided, however, that Consultant
may enter into any other consulting or research agreements with organizations
that are not directly in competition with the business of the Company, with the
prior written consult of the Company, which consent will not be unreasonably
withheld. The Company understands and agrees that Consultant may, during the
term of this Agreement, elect to renew one or more of the agreements or
understandings enumerated in Section 7(a) above, provided that any such renewal
is on substantially similar terms and scope as in existence on the date hereof.
8. Assignments; Inventions. Consultant hereby agrees to use his
best efforts without further compensation to assign or to have assigned to the
Company all his right, title and interest in and to, any and all inventions,
processes, systems, improvements, modifications, secrets, designs or
discoveries, etc., whether or not made, possessed, discovered or conceived by
him, individually or jointly with any other person or persons, whether made in
or out of working hours, free and clear of all liens, charges and encumbrances,
created or conceived by him during the term of this Agreement and patented or
reduced to practice within one year thereafter, which relate to the business of
the Company and which are not owned by The Xxxxx Xxxxxxx University pursuant to
the Xxxxx Xxxxxxx School of Medicine Intellectual Property Guidelines (dated
January 1, 1995), a copy of which is attached hereto as Exhibit 3 and
incorporated herein by reference (collectively, the "Inventions").
9. Disclosure of Inventions. Consultant agrees to promptly
disclose the Inventions to the Company. With respect to the Inventions,
Consultant will, either during the term of or after the expiration or
termination of this Agreement for any reason, at the request and at the sole
cost of the Company, sign, execute, make and do all such deeds, documents, acts
and things as the Company and its duly authorized agents may reasonably require,
and further agrees to:
(i) apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) letters
patent or other invention protection in any country
throughout the world and when so obtained or vested to
extend, renew and restore the same;
(ii) defend any opposition proceedings in respect of such
applications and any opposition proceedings or
petitions or applications for revocation of such
letters, patents or other analogous protection; and
(iii) perform any other lawful acts which the Company may
reasonably request to carry out the purpose of this
Agreement.
10. Confidentiality. Consultant agrees that he will not at any
time publish, reveal, sell, make accessible, give away or disclose to others or
use for his own benefit, except
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for the benefit of the Company in the performance of Consultant's duties under
this Agreement, any research, development, engineering and manufacturing data,
plans, designs, formula, processes, specifications, techniques, trade secrets,
financial information, customer or supplier lists or other information which
are, or pursuant to the terms hereof become, the property or confidential
information of the Company or any of its clients, customers, consultants,
licensees or affiliates, or which are acquired by him directly as a result of
his acting as consultant to the Company, except to such extent as may be
required by law. Consultant agrees that he will not make any notes or memoranda
relating to any matter that is a art of the trade, activities or business of the
Company or concerning any of its dealings otherwise than for the benefit of the
Company. Consultant shall return all tangible embodiments of such confidential
information prior to or at the termination of this Agreement.
11. Publication of Information. Anything to the contrary herein
notwithstanding, Consultant may publish information relating to the business of
the Company if in each instance the proposed publication is first submitted to
the Chief Executive Officer of the Company or his/her designate, and such person
in his/her sole discretion consents in writing to such publication.
12. Breach of Agreement. Consultant and the Company agree that any
material breach of this Agreement by either of them could cause irreparable
damage to the other party, and that in the event of such material breach, in
addition to any other remedies hereinbefore mentioned, the non-breaching party
shall have the right to obtain injunctive relief, including, without limitation,
specific performance or other equitable relief to prevent the violation of the
breaching party's obligations hereunder. It is expressly understood and agreed
that nothing herein contained shall be construed as prohibiting the
non-breaching party from pursuing any other remedies available for such material
breach including, without limitation, the recovery of damages by the
non-breaching party.
13. No Assignment; No Other Planned Affiliations by Consultant.
(a) The Services to be rendered by Consultant are personal in
nature. Consultant may not assign or transfer this Agreement or any of his
rights or obligations hereunder, except that Consultant may assign any or all of
his rights under this Agreement to Neuroscience Consultants, Inc., a Maryland
corporation. In no event shall Consultant assign or delegate responsibility for
actual performance or Services or any other obligations hereunder.
(b) Consultant hereby represents and warrants that he has no plans
to terminate his present relationship with The Xxxxx Xxxxxxx University, whether
to join any pharmaceutical company other than the Company or otherwise.
14. Indemnity; Insurance. The parties confirm that the Director
Indemnification Agreement, dated as of March 24, 1994, between the Company and
Consultant continues in full force and effect on the date of this Agreement. The
Company confirms that Consultant is covered in his role as a director of the
Company under the Company's Directors' and Officers' insurance policy generally
in effect for the Company's directors and officers. The Company hereby further
agrees to indemnify and hold Consultant harmless from all liabilities
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incurred by, or claims against, Consultant as a result of his performance of his
obligations under this Agreement, other than liability incurred or claims
against the Consultant caused by his gross negligence or willful misconduct.
15. Notices. All notices and other communications hereunder shall
be delivered or sent by registered or certified mail, return receipt requested,
addressed the Company at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attn:
Xx. Xxxxx X. Xxxxx, or to Consultant at the address set forth beneath his
signature below, or to such address as either party may designate in writing to
the other.
16. Binding on Successors and Assigns. Subject to Section 13
above, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective legal representatives, successors and permitted
assigns. Consultant agrees that the Company may, with the prior written consent
of Consultant, which consent shall not be unreasonably withheld, assign this
Agreement to any person or entity controlled by, in control of, or under common
control with, the Company.
17. Entire Agreement. This Agreement constitutes the entire
agreement between the parties as to the subject matter hereof and supersedes and
terminates as of this date any prior agreements between the parties for the
Services engaged hereunder, including without limitation the 1995 Consulting
Agreement. No provision of this Agreement shall be waived, altered or canceled
except in writing signed by the party against whom such waiver, alteration or
cancellation is asserted. Any such waiver shall be limited to the particular
instance and time and shall not constitute a waiver of any subsequent instance
without a specific waiver in writing by the party against whom such waiver is
sought to be enforced.
18. Counterpart. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
19. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without giving
effect to conflict of laws.
20. Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision. Moreover, if one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to scope,
activity or subject so as to be unenforceable at law, such provision or
provisions shall be construed by limiting or reducing it with the applicable law
as it shall then appear.
21. Gender. Any use of the masculine gender herein shall apply
equally to the feminine.
22. References to Xxxxx Xxxxxxx. With the limited exception of
citing Consultant's faculty title and affiliation, the Company and its
affiliates will not use the names, likenesses, or logos of the Xxxxx Xxxxxxx
University, any of its Schools or Divisions, or the
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Xxxxx Xxxxxxx Hospital and Health System in any of their fundraising or
investment documents, general publications, advertisements, or marketing and
promotional materials without the prior written permission of the Xxxxx Xxxxxxx
University. A request for such permission must be submitted by Consultant to the
School of Medicine's Conflict of Interest Review Coordinator, who in appropriate
circumstances, will have it reviewed by the School of Medicine's Office of
Public Affairs.
23. Survival. Obligations accrued prior to the expiration or
termination of this Agreement shall survive until discharged in full. In
addition, Sections 3(e), (f) and (h), 5, 7(b), 8, 9, 10, 11, 12, 14 and this 23
shall survive any expiration or termination of this Agreement
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
"COMPANY":
GUILFORD PHARMACEUTICALS INC.
By: /s/ Xxxxx X. Xxxxx, M.D.
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Name: Xxxxx X. Xxxxx, M.D.
Title: President and Chief Executive Officer
"CONSULTANT":
/s/ Xxxxxxx X. Xxxxxx, M.D.
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Xxxxxxx X. Xxxxxx, M.D.
Address: 0000 Xxxxxxxxxx Xxxx, Xx. 0000
Xxxxxxxxx, Xxxxxxxx 00000
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