1
Exhibit 99.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT amends and restates, as
of July 31, 1999, that Amended and Restated Employment Agreement made and
entered into as of January 1, 1998, by and between Xxxxxx X. Xxxxxxx, a resident
of California ("Xxxxxxx"), and VaxGen Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company desires to continue to employ Xxxxxxx as its
President and Xxxxxxx desires to be so employed; and
WHEREAS, the Company and Xxxxxxx desire to set forth in writing the
terms of their agreement with respect to Francis's continued employment; and
WHEREAS, the Company and Xxxxxxx desire to amend and restate Section 16
of the Amended and Restated Employment Agreement executed by and between Xxxxxxx
and the Company as of January 1, 1998 to clarify the terms therein contained;
and
WHEREAS, this Agreement replaces and supersedes the Amended and
Restated Employment Agreement executed by and between Xxxxxxx and the Company as
of January 1, 1998:
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants contained herein, the parties agree as follows:
1. Employment. The Company hereby employs Xxxxxxx as its President
and Xxxxxxx hereby accepts such employment upon the terms and conditions set
forth in this Agreement.
2. Term. Francis's employment, which began on January 4, 1996, will
continue for a term ending December 31, 2002. Thereafter, Francis's employment
will be automatically renewed for successive one-year terms, unless notice of
termination is given by either party to the other at least thirty days before
the expiration of the then current term.
3. Business Plan. The Business Plan of the Company will be to
develop, test, and market a vaccine for human immune deficiency virus (HIV).
4. Duties. Xxxxxxx will perform such executive and administrative
duties consistent with his position as President of the Company as are
reasonably assigned to him by the Board and will be given such executive and
administrative powers and authority as may be needed to carry out those duties,
and as are consistent with the office of the President as set forth in the
Charter and Bylaws of the Company. Xxxxxxx will be responsible as President for
scientific strategy, clinical testing, regulatory
1
2
activities, and day-to-day management of the Company. Xxxxxxx will also be
Chairman of the Scientific Advisory Board to the Company. The Company will
provide to Xxxxxxx an office and staff in South San Francisco as are required
for the performance of his duties. Xxxxxxx agrees to serve as Director of the
Company and the Company agrees to cause Xxxxxxx to be elected to the Board of
Directors.
5. Compensation. The Company will pay Xxxxxxx an annual base salary
of $250,000, commencing January 1, 1998. Francis's annual base salary will be
payable in equal installments not less frequently than monthly. Xxxxxxx will
have the opportunity for an annual bonus of up to 30% of annual salary, such
bonus to be determined by the Board of Directors. Payment of the bonus will
occur within 30 days of the first Board meeting of each calendar year.
6. Expenses. The Company will reimburse Xxxxxxx for travel,
entertainment and other expenses reasonably incurred by him in connection with
his employment under this Agreement upon presentation of appropriate vouchers or
receipts.
7. Benefits. During the terms of his employment, Xxxxxxx will be
entitled to the fringe benefits that are generally made available to all
employees of the Company.
8. Early Termination of Employment. Employment under this Agreement
will terminate prior to expiration of the term upon any of the following:
(a) Death. Francis's employment hereunder shall terminate upon
his death.
(b) Disability. The Company may terminate Francis's employment
hereunder if he has been unable to perform his duties hereunder for a period of
six consecutive months and if he has not resumed on a full-time basis the
performance of such duties within thirty days after written notice from the
Company of its intent to terminate his employment due to disability.
(c) Cause. The Company may terminate Francis's employment
hereunder for Cause. For purposes of this Agreement, the term "Cause" means (i)
willful and repeated failure by Xxxxxxx to perform his duties hereunder which is
not remedied within thirty days after written notice from the Company, (ii)
conviction of Xxxxxxx for a felony, or (iii) Francis's dishonesty that is
demonstrably and materially injurious to the Company.
(d) Termination by Xxxxxxx. Xxxxxxx may terminate his employment
hereunder for Good Reason. For purposes of this Agreement, the term "Good
Reason" shall mean (i) the Company substantially reducing Francis's duties,
position, authority or responsibility hereunder and not reinstating the same
within thirty days after written notice from Xxxxxxx, or (ii) breach by the
Company of its obligations under paragraphs 4 through 8 hereof if not remedied
within thirty days after written notice from Xxxxxxx, (iii) reduction of
Francis's compensation, (iv) change of control of the Company (see Section 18),
(v) Francis's loss of board position.
2
3
(e) Termination without Cause. The Company shall be obligated, if
termination by the Company occurs without cause or if termination by Xxxxxxx for
Good Reason occurs, to pay in full all compensation due for the remaining
duration of this contract within 10 days of the notice of termination.
9. Restrictive Covenants.
(a) Confidential Information. Xxxxxxx acknowledges that, during
the course of his employment with the Company, he will have access to
confidential information and biological materials not generally known outside
the Company (whether conceived or developed by Xxxxxxx or others) and
confidential information and biological materials entrusted to the Company by
third parties, including, without limitation, trade secrets, techniques,
formulae, biological materials, marketing and other business plans, data,
strategies and forecasts (collectively, "Confidential Information"). Any
Confidential Information conceived or developed by Xxxxxxx during employment
will be the exclusive property of the Company. Except as may be necessary in
connection with the Company's business, Xxxxxxx will not (during or after his
employment with the Company) disclose Confidential Information to any third
person, firm or entity or use Confidential Information for his own purposes or
for the benefit or any third person, firm or entity. In his work for the
Company, Xxxxxxx will refrain from unauthorized use or disclosure of information
and biological materials owned by former employers or other third parties.
(b) Inventions. Xxxxxxx will promptly disclose to the Company any
discoveries, inventions, formulae and techniques, whether or not patentable,
made, conceived or first reduced to practice by him, either alone or together
with others, during his employment with the Company (collectively, the
"Inventions"). Xxxxxxx hereby assigns to the Company all of his right, title and
interest in and to any Inventions. Xxxxxxx will execute such documents and take
such other actions as may be reasonably requested by the Company (at the
Company's expense) to enable the Company to apply for, obtain, maintain and
enforce patents on any of the Inventions or to facilitate the transfer or
assignment of any of the Company's rights with respect to the Inventions and
patents.
(c) Company Documents. Upon the termination of his employment,
Xxxxxxx will deliver to the Company all documents and other tangible property
containing Confidential Information which are then in his possession or control.
(d) Covenant Not to Compete. Xxxxxxx acknowledges that his duties
hereunder and the services he will provide to the Company are of a special,
unique, unusual and extraordinary character, which gives this Agreement
particular value to the Company, and that it would be difficult to employ any
individual or individuals to replace Xxxxxxx in the performance of such duties
and services. Therefore, during employment and for a period of one year after
the termination of his employment with the Company, Xxxxxxx will not, directly
or indirectly, enter into, organize, control, engage in, be employed by, serve
as a consultant to, be an officer or director of or have any direct or indirect
investment in any business, person, partnership, association, firm or
corporation
3
4
engaged in any business activity (including, but not limited to, research,
development, manufacturing, selling, leasing, licensing or providing services)
which is competitive with the business and/or scientific activities that the
Company is developing or exploiting during Francis's employment with the
Company. Nothing contained in this Agreement shall be construed to prevent
Xxxxxxx from owning at any time, directly or indirectly, as much as 5% of any
class of equity securities issued by any corporation or other entity which are
publicly traded and registered under the Securities and Exchange Act of 1934, as
amended.
(e) Miscellaneous. The restrictive covenants set forth in the
preceding Section 9(d) will not be applicable or enforceable if Francis's
employment is terminated prior to the expiration of the term of this Agreement
either by the Company without Cause and for disability pursuant to subparagraph
8(b) or by Xxxxxxx for Good Reason.
10. Indemnification. The Company will indemnify Xxxxxxx to the
fullest extent permitted by law and will hold harmless from and against any
claim, liability or expense (including reasonable attorneys' fees) made against
or incurred by Xxxxxxx in connection with his relationship with the Company.
This obligation will include, without limitation, prompt payment in advance of
any and all costs of defending the same, including attorney fees.
11. No Impediment to Agreement. Except as otherwise disclosed herein,
Xxxxxxx hereby represents to the Company that he is not, as of the date hereof,
and will not be, during employment with the Company, employed under contract,
oral or written, by any other person, firm or entity and is not and will not be
bound by the provisions of any restrictive covenant or confidentiality agreement
which would constitute an impediment to, or restriction upon, his ability to
enter into this Agreement and to perform the duties of his employment.
12. Notices. Any notice under this Agreement must be in writing and
will be deemed to have been given when personally delivered or mailed by
first-class or express mail to the recipient at the following address (or such
other address as shall be specified by prior written notice):
To the Company: VaxGen, Inc.
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
Copy to:
To Xxxxxx Xxxxxxx: Xx. Xxxxxx Xxxxxxx
VaxGen, Inc.
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
4
5
13. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. If any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or the interpretation of this Agreement in any other jurisdiction.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the law
of conflicts.
15. Successors and Assigns. The services and duties to be performed
by Xxxxxxx hereunder are personal and may not be assigned. This Agreement shall
be binding upon and inure to the benefit of the Company, its successors and
assigns, and Xxxxxxx, his heirs and representatives.
16. Success Bonus. In recognition of the success of the Company,
Xxxxxxx shall receive a one-time success bonus. Success shall be considered to
have been achieved if either of the following tests is met (either of which
shall be an Event of Success): (i) the public market valuation of a share of the
Company's common stock, as computed on a 30 day trailing average based on the
average of the daily closing price of the Company's Common Stock over such
period as reported by the Nasdaq Stock Market, is equal to or greater than four
(4) times the valuation of the initial private placement ($7.00 per share, as
adjusted for the April 1999 reverse stock split); or (ii) there is an
acquisition of the Company through tender offer or otherwise in which all
shareholders have the opportunity to participate and realize a value equal to or
greater than four (4) times the valuation of the initial private placement
($7.00 per share, as adjusted for the April 1999 reverse stock split). The
Compensation Committee shall notify Xxxxxxx when an Event of Success has
occurred. Upon the occurrence of an Event of Success, Xxxxxxx shall be entitled
to receive a success bonus of 125,000 shares of common stock (as adjusted for
the April 1999 reverse stock split). All share and price figures set forth in
this provision shall be adjusted proportionately for stock splits, reverse stock
splits, dividends, combinations, consolidations or subdivisions of shares of the
Company's capital stock.
17. Change of Control. In the event following the closing of the
original public offering or private financing, the Company undergoes a change of
control by virtue of any person or entity, or affiliated group of persons or
entities, increasing its shareholding in the Company to a level of 50% or more
of the voting stock of the Company, this Agreement shall terminate and all
salary obligations to Xxxxxxx outstanding in this Agreement shall be paid in
full.
18. Complete Agreement. This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements between the parties concerning the subject
matter hereof.
5
6
19. Waiver. Failure by either party to insist upon strict adherence
to any one or more of the provisions of this Agreement on one or more occasions
shall not be construed as a waiver, nor shall it deprive that party of the right
to require strict compliance thereafter.
20. Survival. The obligations set forth in paragraphs 10(a) and 11
shall survive termination of this Agreement.
21. Amendments. No amendment hereto, or waivers or releases of
obligations or liabilities hereunder, shall be effective unless agreed to in
writing by the parties hereto.
22. Withholding. The Company may deduct and withhold from the
payments to be made to Xxxxxxx hereunder any amounts required to be deducted and
withheld by the Company under the provisions of any statute, law, regulation or
ordinance now or thereafter enacted.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
VaxGen, Inc.
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------
Its: Chairman
-----------------------------
/s/ XXXXXX X. XXXXXXX
-----------------------------
Xxxxxx X. Xxxxxxx
6
