Exhibit 2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement"), is
entered into as of October 6, 2000, between SIGA TECHNOLOGIES, INC., a Delaware
corporation (with its successors and assigns, referred to as the "Corporation")
and Xxxxxx Xxxxxx (referred to as "Xxxxxx").
WHEREAS, the Corporation and Xxxxxx are parties to an Employment Agreement
dated as of January 19, 2000 (the "Original Agreement"); and
WHEREAS, the Corporation and Xxxxxx have agreed to amend and restate the
Original Agreement in order to add certain change of control provisions and make
other modifications.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual agreements and covenants hereinafter set forth, the parties hereto agree
to the terms and conditions of this Agreement as follows:
1. Employment for Term. The Corporation hereby employs Xxxxxx and
Xxxxxx hereby accepts employment with the Corporation for the period beginning
on January 19, 2000 and ending January 19, 2005. (the "Initial Term"), or upon
the earlier termination of the Term pursuant to Section 6. This Agreement shall
be automatically renewed for additional one-year periods (the "Renewal Terms;"
together with the Initial Term, the "Term") unless either party notifies the
other in writing of its intention not to so renew this Agreement no less than
180 days prior to the expiration of the Initial Term or a Renewal Term. The
termination of Xxxxxx'x employment under this Agreement shall end the Term but
shall not terminate Xxxxxx'x or the Corporation's other agreements in this
Agreement, except as otherwise provided herein.
2. Position and Duties. During the Term, Xxxxxx shall serve as Chairman
and Executive Vice President of the Corporation. During the Term, Xxxxxx shall
also hold such additional positions and titles as the Board of Directors of the
Corporation (the "Board") may determine from time to time. During the Term,
Xxxxxx shall devote as much time as is necessary to satisfactorily perform his
duties as an employee of the Corporation.
3. Compensation.
(a) Base Salary. The Corporation shall pay Xxxxxx a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $250,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees (the "Base Salary").
(b) Stock Options. Pursuant to the Corporation's stock option plan
and subject to stockholder approval of the Corporation's Amended 1996 Incentive
and Non-Qualified Stock Option Plan (the "Plan"), the Corporation shall grant to
Xxxxxx fully-vested options to purchase 500,000 shares of the Corporation's
Common Stock exercisable at $2.00 per share, the closing bid price of the Common
Stock of the Corporation on January 19, 2000 (the "Options"). The Options shall
expire on January 19, 2010. In the event the Plan is not approved by the
stockholders at the Corporation's 2000 Annual Meeting, the Corporation shall
grant to Xxxxxx such Options outside of the Plan with the same terms and
conditions as if granted pursuant to the Plan.
(c) Annual Increases. The Base Salary shall be increased at the end
of each year of service by the greater of (i) 5% or (ii) a percentage equal to
the increase, if any, in the United States Department of Labor Consumer Price
Index (or comparable index, if available) for the New York metropolitan area
over the previous 12 months.
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(d) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude the
Board from awarding Xxxxxx a higher salary or any bonuses or stock options in
the discretion of the Board during the Term at any time. The Corporation will
adopt a bonus plan and Xxxxxx will be eligible to participate in such plan. The
Corporation shall pay Xxxxxx a monthly car allowance of $500.
4. Employee Benefits. During the Term, Xxxxxx shall be entitled to the
employee benefits including vacation, 401(k) plan, health plan and other
insurance benefits made available by the Corporation to any other officers or
key employees of the Corporation.
5. Expenses. The Corporation shall reimburse Xxxxxx for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Xxxxxx'x death. The
Term may also end for Cause or Disability, as defined in Section 7.
(b) Notice of Termination. Promptly after it ends the Term, the
Corporation shall give Xxxxxx notice of the termination, including a statement
of whether the termination was for Cause or Disability (as defined in Section
7(a) and 7(b) below). The Corporation's failure to give notice under this
Section 6(b) shall not, however, affect the validity of the Corporation's
termination of the Term.
(c) Effective Termination by the Corporation. If the Corporation
reassigns Xxxxxx'x base of operations outside of New York City, or materially
reduces Xxxxxx'x duties during the term, including replacing Xxxxxx as Chief
Executive Officer, then, at his option, Xxxxxx may treat such reduction in
duties as a termination of the Term without Cause by the Corporation.
7. Severance Benefits.
(a) Cause Defined. "Cause" means (i) willful malfeasance or willful
misconduct by Xxxxxx in connection with his employment; (ii) Xxxxxx'x gross
negligence in performing any of his duties under this Agreement; (iii) Xxxxxx'x
conviction of, or entry of a plea of guilty to, or entry of a plea of nolo
contendre with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Xxxxxx'x material breach of any written
policy applicable to all employees adopted by the Corporation which is not cured
to the reasonable satisfaction of the Corporation within fifteen (15) business
days after notice thereof; or (v) material breach by Xxxxxx of any of his
agreements in this Agreement which is not cured to the reasonable satisfaction
of the Corporation within fifteen (15) business days after notice thereof.
(b) Disability Defined. "Disability" shall mean Xxxxxx'x incapacity
due to physical or mental illness that results in his being substantially unable
to perform his duties hereunder for six consecutive months (or for six months
out of any nine month period). During a period of Disability, Xxxxxx shall
continue to receive his base salary hereunder, provided that if the Corporation
provides Xxxxxx with disability insurance coverage, payments of Xxxxxx'x base
salary shall be reduced by the amount of any disability insurance payments
received by Xxxxxx due to such coverage. The Corporation shall give Xxxxxx
written notice of termination which shall take effect sixty (60) days after the
date it is sent to Xxxxxx unless Xxxxxx shall have returned to the performance
of his duties hereunder during such sixty (60) day period (whereupon such notice
shall become void).
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(c) Termination. If the Corporation ends the Term for Cause or
Disability, or if Xxxxxx resigns as an employee of the Corporation for reasons
other than a material breach by the Corporation of its obligations under this
Agreement or a material reduction of Xxxxxx'x duties as provided in Section
6(c), or if Xxxxxx dies, then the Corporation shall have no obligation to pay
Xxxxxx any amount, whether for salary, benefits, bonuses, or other compensation
or expense reimbursements of any kind, accruing after the end of the Term, and
such rights shall, except as otherwise required by law, be forfeited immediately
upon the end of the Term, except that payments under Section 3(a) shall continue
for the remainder of the Term unless the Corporation ends the Term for Cause or
if Xxxxxx resigns for reasons other than a material breach by the Corporation of
its obligations under this Agreement or a material reduction of his duties as
provided in Section 6(c). If the Corporation ends the Term without Cause, then
the Corporation will be obligated to continue to pay Xxxxxx'x salary and all
other amounts due hereunder for the remainder of the Term.
8. Change of Control Payment. The provisions of this paragraph 8 set forth
the terms of an agreement reached between Xxxxxx and the Corporation regarding
Xxxxxx'x rights and obligations upon the occurrence of a "Change in Control" (as
hereinafter defined) of the Corporation. These provisions are intended to assure
and encourage in advance Xxxxxx'x continued attention and dedication to his
assigned duties and his objectivity during the pendency and after the occurrence
of any such Change in Control. These provisions shall apply in lieu of, and
expressly supersede, the provisions of paragraph 7(c) if Xxxxxx'x employment is
terminated or Notice of Termination is given ninety (90) days prior to or within
eighteen (18) months after the occurrence of an event constituting a Change in
Control.
(a) Escrow. Within ten (10) days after the occurrence of the first
event constituting a Change in Control (irrespective of whether Xxxxxx has
actual knowledge of such event), the Corporation shall place immediately
negotiable funds in escrow in an amount equal to Xxxxxx'x salary and all
other amount due hereunder for the remainder of the Term, plus such
additional amount as equals the "Gross Up Payment" (as hereinafter
defined) thereon (the "Change of Control Amount"). Such escrow shall be
conducted pursuant to a standard escrow agreement among the Corporation,
Xxxxxx and an independent escrow agent providing for the timely payment to
Xxxxxx of the amounts hold in such escrow in the event Xxxxxx becomes
entitled thereto under the applicable provisions of this Agreement (the
"Escrow Arrangement"). The Escrow Arrangement shall be maintained until
the earlier of (A) nineteen (19) months after the occurrence of an event
constituting a Change in Control or (B) the payment to Xxxxxx of all sums
escrowed.
(b) Change in Control. If, within 90 days prior to, or within
eighteen (18) months after the occurrence of an event constituting a
Change in Control, Xxxxxx'x employment is terminated or a Notice of
Termination is given for any reason other than (A) his death, (B) his
Disability, or (C) by Xxxxxx without Cause on the part of the Corporation,
then such termination shall be deemed to be a "Termination Due to Change
in Control (herein so called), in which event the Corporation shall pay
Xxxxxx, in a lump sum, on or prior to the fifth (5th) day following the
date of termination of the Term:
(1) an amount equal to the Change of Control Amount (including any
Gross Up Payment); and
(2) Cooper's accrued and unpaid base salary.
(c) Stock Option Floor. Upon the occurrence of the first event
constituting a Change in Control, all stock options and other stock-based
grants to Xxxxxx by the Corporation shall, irrespective of any provisions
of his option agreements, immediately and irrevocably vest and become
exercisable as of the date of such first event whereupon, at any time
during the Option Term as defined in the option agreements, Xxxxxx or his
estate may by five (5) days' advance
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written notice given to the Corporation, and irrespective of whether
Xxxxxx is then employed by the Corporation or then living, and solely at
the election of Xxxxxx or his estate, require the Corporation to:
(1) within thirty (30) days of a request by Xxxxxx or his estate
file and cause to become effective a Form S-8 (or other appropriate
form) with the Securities and Exchange Commission ("SEC")
registering for resale all shares underlying stock options granted
to Xxxxxx and outstanding with all fees and expenses of such filing
being paid by the Corporation, or,
(2) allow Xxxxxx to exercise all or any part of such Stock Options
at the option prices therefor specified in the grant of the Stock
Options.
In the event the Corporation does not file and cause to become
effective a Form S-8 (or other appropriate form) with the SEC within
the thirty (30) day time period, the Corporation shall pay
liquidated damages to Xxxxxx or his estate equal to the greater of
(a) the amount equal to the difference between the Market Price of
the Corporation's common stock and the exercise price of the stock
options multiplied by the aggregate number of stock options
outstanding or (b) $500,000. For purposes of this Section 8(c),
Market Price is defined as the average of the closing bid and ask
price of the Corporation's common stock on the Nasdaq SmalICap
Market or the closing sale price of the common stock on a national
exchange, if listed on such exchange, in each case, on the day prior
to the date of the Corporation's breach of this Section 8(c).
(d) Gross Up Payment.
(1) Excess Parachute Payment. If Xxxxxx incurs the tax (the "Excise
Tax") imposed by Section 4999 of the Internal Revenue Code of 1986
(the "Code") on "Excess Parachute Payments" within the meaning of
Section 280G(b)(l) of the Code, the Corporation will pay to Xxxxxx
an amount (the "Gross Up Payment") such that the net amount retained
by Xxxxxx, after deduction of any Excise Tax on both the Excess
Parachute Payment and any federal, state and local income tax
(together with penalties and interest) as well as the Excise Tax
upon the payment provided for by this subparagraph 8(d)(l), will be
equal to the Change of Control Amount.
(2) Applicable Rates. For purposes of determining the amount of the
Gross Up Payment, Xxxxxx will be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the
calendar year in which the Gross Up Payment is to be made and state
and local income taxes at the highest marginal rates of taxation in
the state and locality where taxes thereon are lawfully due, net of
the maximum reduction (if any) in federal income taxes that could be
obtained from deduction of deductible state and local taxes.
(3) Determination of Gross Up Payment Amount. The determination of
whether the Excise Tax is payable and the amount thereof will be
based upon the opinion of tax counsel selected by Xxxxxx and
reasonably approved by the Corporation, which approval will not be
unreasonably withheld or delayed. If such opinion is not finally
accepted by the Internal Revenue Service (or state and local taxing
authorities), then appropriate adjustments to the Excise Tax will be
computed and additional Gross Up Payments will be made in the manner
provided by this subparagraph (d).
(4) Payment. The Corporation will pay the estimated amount of the
Gross Up Payment in cash to Xxxxxx at the time specified in this
Agreement. Xxxxxx and the Corporation agree to reasonably cooperate
in the determination of the actual amount of the Gross Up Payment.
Further, Xxxxxx and the Corporation agree to make such adjustments
to the estimated amount of the Gross Up Payment as may be necessary
to
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equal the actual amount of the Gross Up Payment, which in the case
of the Corporation will refer to refunds of prior overpayments by
the Corporation and in the case of Xxxxxx will refer to additional
payments to Xxxxxx to make up for prior underpayments.
(e) Definitions. For purposes of this paragraph 8, the following terms
shall have the following meanings:
"Change in Control" shall mean any of the following:
(1) the acquisition by any individual, entity, or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the
"Acquiring Person"), other than the Corporation, or any of its
Subsidiaries or any Excluded Group (as defined herein), of
beneficial ownership (within the meaning of Rule 13d-3- promulgated
under the Exchange Act) of 35% or more of the combined voting power
or economic interests of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors; provided however, that any transfer from any director or
executive officer listed in the Company's Form l0-KSB for the year
ended December 31, 1999 under "Security Ownership of Certain
Beneficial Owners" (the "Excluded Group") will not result in a
Change in Control if such transfer was part of a series of related
transactions the effect of which, absent the transfer to such
Acquiring Person by the Excluded Group, would not have resulted in
the acquisition by such Acquiring Person of 35% or more of the
combined voting power or economic interests of the then outstanding
voting securities; or
(2) during any period of 12 consecutive months after the date of
this Amendment, the individuals who at the beginning of any such
12-month period constituted a majority of the Directors (the
"Incumbent Non-Investor Majority") cease for any reason to
constitute at least a majority of such Directors; provided that (i)
any individual becoming a director whose election, or nomination for
election by the Corporation's stockholders, was approved by a vote
of the stockholders having the right to designate such director and
(ii) any director whose election to the Board or whose nomination
for election by the stockholders of the Corporation was approved by
the requisite vote of directors entitled to vote on such election or
nomination in accordance with the Restated Certificate of
Incorporation of the Corporation, shall, in each such case, be
considered as though such individual were a member of the Incumbent
Non-Investor Majority, but excluding, as a member of the Incumbent
Non-Investor Majority, any such individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation
(as such terms are used in Rule 14a- 2 of Regulation I 4A
promulgated under the Exchange Act) and further excluding any person
who is an affiliate or associate of an Acquiring Person having or
proposing to acquire beneficial ownership of 25% or more of the
combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors; or
(3) the approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, with respect
to which all or substantially all of the individuals and entities
who were the respective beneficial owners of the voting securities
of the Corporation immediately prior to such reorganization, merger,
or consolidation do not, following such reorganization, merger, or
consolidation, beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of the Corporation resulting from such reorganization, merger, or
consolidation; or
(4) the sale or other disposition of assets representing 50% or more
of the assets of the Corporation in one transaction or series of
related transactions not initiated or commenced by any person within
the Excluded Group; or
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(5) a "Fundamental Change in Business" as hereinafter defined; or
(6) a "Hostile Takeover" as hereinafter defined is declared.
"Fundamental Change in Business" shall mean that the Corporation, at
any time, no longer spends at least fifty percent (50%) of its annual
budget on activities related to biotechnology or pharmaceuticals.
"Hostile Takeover" shall mean any Change in Control which at any
time is declared by at least a majority of the Board, directly or
indirectly, to be hostile or not in the best interests of the Corporation,
or in which an attempt is made (irrespective of whether successful) to
wrest control away from the incumbent management of the Corporation, or
with respect to which the Board makes any effort to resist.
9. Confidentiality, Ownership, and Covenants.
(a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters). "Inventions"
collectively refers to any and all inventions, trade secrets, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship,
know-how, improvements, research, discoveries, developments, designs, and
techniques regarding any of the foregoing.
(b) Confidentiality. (i) Xxxxxx hereby recognizes that the value of
all trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation may be attributable substantially to the
fact that such confidential information is maintained by the Corporation in
strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Xxxxxx, therefore, except
as provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during the Term
and for the five (5) year period after the end of the Term and shall not be used
or divulged by him outside the scope of his employment as contemplated by his
Agreement, except as the Corporation may otherwise expressly authorize by action
of the Board. In the event that Xxxxxx is requested in a judicial,
administrative or governmental proceeding to disclose any of the Corporation
Information, Xxxxxx will promptly so notify the Corporation so that the
Corporation may seek a protective order of other appropriate remedy and/or waive
compliance with this Agreement. If disclosure of any of the Corporation
Information is required, Xxxxxx may furnish the material so required to be
furnished, but Xxxxxx will furnish only that portion of the Corporation
Information that legally is required.
(ii) Xxxxxx also hereby agrees to keep the terms of this Agreement
confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).
(c) Ownership of Inventions, Patents and Technology. Xxxxxx hereby
assigns to the Corporation all of Xxxxxx'x rights (including patent rights,
copyrights, trade secret rights, and all other rights throughout the world),
title and interest in and to Inventions, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by Xxxxxx, either alone or jointly with others, during the
course of the performance of services for the Corporation. Xxxxxx shall also
assign to, or as directed by, the Corporation, all of Xxxxxx'x right, title and
interest in and to any and all Inventions, the full title to which is required
to be in the United States government of any of its agencies. The Corporation
shall have all right, title and interest in all research and work product
produced
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by Xxxxxx as an employee of the Corporation, including, but not limited to, all
research materials and lab books.
(d) Non-Competition Period Defined. "Non-Competition Period" means
the period beginning at the end of the Term and ending one (1) year after the
end of the Term.
(e) Covenants Regarding the Term and Non-Competition Period. Xxxxxx
acknowledges and agrees that his services pursuant to this Agreement are unique
and extraordinary; that the Corporation will be dependent upon Xxxxxx for the
development of its products; and that he will have access to and control of
confidential information of the Corporation. Xxxxxx further acknowledges that
the business of the Corporation is international in scope and cannot be confined
to any particular geographic area. For the foregoing reasons and to induce the
Corporation to enter this Agreement, Xxxxxx covenants and agrees that, subject
to Section 9(h), during the Term and the Non-Competition Period Xxxxxx shall not
unless with written consent of the Corporation:
(i) engage in any business related to the research and development of
the products or processes in which the Corporation is engaged in
during the Term or in any other business conducted by the
Corporation during the Term (collectively the "Prohibited Activity")
in the World for his own account;
(ii) become interested in any individual, corporation, partnership or
other business entity (a "Person") engaged in any Prohibited
Activity in the World, directly or indirectly, as an individual,
partner, shareholder, officer, director, principal, agent, employee,
trustee, consultant or in any other relationship or capacity;
provided, however, that Xxxxxx may own directly or indirectly,
solely as an investment, securities of any Person which are traded
on any national securities exchange if Xxxxxx (x) is not a
controlling person of, or a member of a group which controls, such
person or (y) does not, directly or indirectly, own 5% or more of
any class of securities of such person; or
(iii) directly or indirectly hire, employ or retain any person who at any
time during the Term was an employee of the Corporation or directly
or indirectly solicit, entice, induce or encourage any such person
to become employed by any other person.
(f) Remedies. Xxxxxx hereby acknowledges that the covenants and
agreements contained in Section 9 are reasonable and valid in all respects and
that the Corporation is entering into this Agreement, inter alia, on such
acknowledgement. If Xxxxxx breaches, or threatens to commit a breach, of any of
the Restrictive Covenants, the Corporation shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Corporation under law or in equity: (i) the right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Corporation and that
money damages will not provide an adequate remedy to the Corporation; (ii) the
right and remedy to require Xxxxxx to account for and pay over to the
Corporation such damages as are recoverable at law as the result of any
transactions constituting a breach of any of the Restrictive Covenants; (iii) if
any court determines that any of the Restrictive Covenants, or any part thereof,
is invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect, without regard to the
invalid portions; and (iv) if any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power to
reduce the duration or area of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
(g) Jurisdiction. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the parties that such determination
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not bar or in any way affect the Corporation's right to the relief provided
above in the courts of any other jurisdiction, within the geographical scope of
such Covenants, as to breaches of such Covenants in such other respective
jurisdiction such Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
(h) Xxxxxx'x agreements and covenants under Section 9(e) shall
automatically terminate if the Corporation ends the Term without Cause or Xxxxxx
resigns due to a material breach by the Corporation of its obligations under
this Agreement or a material reduction of Xxxxxx'x duties as provided in Section
6(c).
10. Successors and Assigns.
(a) Xxxxxx. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Xxxxxx may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. All rights and benefits
of Xxxxxx shall be for the sole personal benefit of Xxxxxx, and no other person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment, transfer, claim or judgement or bankruptcy proceedings against
Xxxxxx. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Xxxxxx and his personal representatives, distributes and
legatees.
(b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns, including (but not limited to) any corporation that may acquire all
or substantially all of the corporation's assets or business or into or with
which the Corporation may be consolidated or merged. In the event that the
Corporation sells all or substantially all of its assets, merges or
consolidates, otherwise combines or affiliates with another business, dissolves
and liquidates, or otherwise sells or disposes of substantially all of its
assets and Xxxxxx does not elect to treat any such transaction as a termination
by the Corporation without Cause pursuant to Section 7(c), then this Agreement
shall continue in full force and effect. The Corporation's obligations under
this Agreement shall cease, however, if the successor to, the purchaser or
acquirer either of the Corporation or of all or substantially all of its assets,
or the entity with which the Corporation has affiliated, shall assume in writing
the Corporation's obligations under this Agreement (and deliver and executed
copy of such assumption to Xxxxxx), in which case such successor or purchaser,
but not the Corporation, shall thereafter be the only party obligated to perform
the obligations that remain to be performed on the part of the Corporation under
this Agreement.
11. Transaction Fee. Upon the completion of a transaction resulting in a
Transaction (as defined herein) or any transaction described in Section 10(b),
the Corporation shall pay to Xxxxxx, in consideration of his work on behalf of
the Corporation, a one time cash payment equal to one and one-half percent
(1.5%) of the total consideration received by the Corporation. "Transaction"
shall mean any merger or consolidation of the Corporation into or with another
corporation, or any reorganization, recapitalization or like transaction or
series of transactions having substantially equivalent effect and purpose, at
the conclusion of which such merger, consolidation, reorganization,
recapitalization or like transaction the holders of the voting capital stock of
the Corporation immediately prior to such transaction or series of transactions
own less than a majority of the voting capital stock of the acquiring entity or
entity surviving or resulting from such transaction or series of transactions
immediately thereafter, or any sale, transfer or other disposition of all or
substantially all of the assets or capital stock of the Corporation.
12. Sale, Merger or Spin-out of Subsidiary. Upon the sale, merger or
public spin-out of any wholly-owned or partially-owned subsidiary of the
Corporation, or of any material asset of the Corporation, Xxxxxx shall receive a
success fee equal to one and one-half percent (1.5%) of the value of the
Corporation's shares of the subsidiary, or of the value of the material asset,
upon the sale, merger or spin-out. In the event the subsidiary or material asset
is sold for cash, the 1.5% success fee shall be paid for in cash. In the event
the subsidiary or material asset is sold for equity in another company, the 1.5%
success fee shall be paid for in the form of equity received by the Corporation.
In the event of a merger or public spin-out of the subsidiary or of any material
asset of the Corporation, the 1.5% success fee shall be paid for in the form of
shares of the subsidiary or in the form of equity received by the Corporation.
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13. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Xxxxxx'x employment with the Corporation and
supersedes all prior negotiations, discussions, understanding and agreements,
whether written or oral, between Xxxxxx and the Corporation relating to the
subject matter of this Agreement.
14. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Xxxxxx and by a duly authorized officer of the Corporation. No waiver
by any party to this Agreement or any breach by another party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.
15. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Xxxxxx: Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to the Corporation: SIGA TECHNOLOGIES, INC.
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
16. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Xxxxxx that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
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17. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
18. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
19. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Xxxxxx under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
20. 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 constitute one and same instrument.
21. Applicable Law; Arbitration. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of New York, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before the
American Arbitration Association in New York, New York and consent to the
jurisdiction to the federal courts of the Southern District of New York or, if
there shall be no jurisdiction, to the state courts located in New York County,
New York, to enforce any arbitration award rendered with respect thereto. Each
party shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator. All costs and fees related to such arbitration (and judicial
enforcement proceedings, if any) shall be borne by the unsuccessful party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
Xxxxxx X. Xxxxxx
Chief Executive Officer
/s/ Xxxxxx Xxxxxx
-----------------------
Xxxxxx Xxxxxx
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