EMPLOYMENT AGREEMENT
By and Between
ImmunoTherapeutics, Inc.
and
Xxxxxx Xxxxxx, M.D.
Agreement made as of this 1st day of June, 1996, between ImmunoTherapeutics,
Inc., a Delaware corporation (the "Company") and Xxxxxx Xxxxxx, M.D. (the
"Executive").
The Executive is presently employed by the Company as Chairman of the Board,
President and Scientific Director.
The Board of Directors of the Company (the "Board") recognizes that the
Executive's contribution to the Company during the past years has been
substantial. The Board desires to provide for the continued employment
of the Executive and to make certain changes in the Executive's employment
arrangements with the Company which the Board has determined will reinforce
and encourage the continued attention and dedication to the Company of the
Executive as a member of the Company's management, in the best interest of
the Company and its shareholders. The Executive is willing to commit
himself to continue to serve the Company, on the terms and conditions
herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth
below. Accordingly, in consideration of the promises and the respective
covenants and agreements of the parties herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
1. Employment
The Company hereby agrees to continue to employ the Executive, and the
Executive hereby agrees to continue to serve the Company, on the terms and
conditions set forth herein.
2. Term
The employment of the Executive by the Company as provided in Section 1
will commence on the date hereof and end on May 31, 1999, unless further
extended or sooner terminated as hereinafter provided. On and before
May 31, 1999, and on the last day of each year thereafter, the term of the
Executive's employment shall be automatically extended one (1) additional
year unless, prior to such May 31 of such year, the Company shall have
delivered to the Executive or the Executive shall have delivered to the
Company written notice that the term of the Executive's employment hereunder
will not be extended.
3. Position and Duties
The Executive shall serve as Chairman of the Board, President and Scientific
Director of the Company and shall have such responsibilities and authority
consistent with those position as may, from time to time, be assigned to the
Executive by the Board of Directors of the Company. The Executive shall
devote substantially all his working time and efforts to the business and
affairs of the Company.
4. Place of Performance
In connection with the Executive's employment by the Company, the Executive
shall be based at the principal executive offices of the Company in Fargo,
North Dakota, except for required travel on the Company's business to an
extent substantially consistent with present business travel obligations.
5. Compensation and Related Matters
(a) Salary. During the period of the Executive's employment hereunder, the
Company shall pay to the Executive a salary at a rate of not less than
$225,000 per annum in equal monthly or other installments. This salary
may be increased from time to time in accordance with determinations made
by the Company's Board of Directors and, if so increased, shall not
thereafter during the term of this Agreement be decreased. Compensation
of the Executive by salary payments shall not be deemed exclusive and
shall not prevent the Executive from participating in any other
compensation or benefit plan of the Company. The salary payments
(including any increased salary payments) hereunder shall not, in any way,
limit or reduce any other obligation of the Company hereunder, and no other
compensation, benefit or payment hereunder shall, in any way, limit or
reduce the obligation of the Company to pay the Executive's salary hereunder.
(b) Expenses. During the term of the Executive's employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living expenses while away
from home on business or at the request of and in the service of the
Company, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures presently established by the
Company.
(c) Other Benefits. The Company shall maintain in full force and effect,
and the Executive shall be entitled to continue to participate in, all of
its employee benefit plans and arrangements in effect on the date hereof
in which the Executive participates or plans or arrangements providing the
Executive with at least equivalent benefits thereunder (including, without
limitation, each pension and retirement plan and arrangement, supplemental
pension and retirement plan and arrangement, stock option plan, life
insurance and health and accident plan and arrangement, medical insurance
plan, disability plan, survivor income plan, relocation plan and vacation
plan). The Company shall not make any changes in such plans or arrangements
which would adversely affect the Executive's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all executives
of the Company and does not result in a proportionately greater reduction in
the rights of or benefits to the Executive as compared with any other
executive of the Company. The Executive shall be entitled to participate
in or receive benefits under any employee benefit plan or arrangement made
available by the Company in the future to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements. Nothing paid to
the Executive under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the salary payable
to the Executive pursuant to paragraph (a) of this Section. Any payments
or benefits payable to the Executive hereunder in respect of any calendar
year during which the Executive is employed by the Company for less than
the entire such year shall, unless otherwise provided in the applicable
plan or arrangement, be prorated in accordance with the number of days in
such calendar year during which he is so employed.
(d) Vacations. The Executive shall be entitled to the number of vacation
days in each calendar year, and to compensation in respect of earned but
unused vacation days, determined in accordance with the Company's vacation
plan. The Executive shall also be entitled to all paid holidays given by
the Company to its executives.
(e) Services Furnished. The Company shall furnish the Executive with office
space, stenographic assistance and such other facilities and services as
shall be suitable to the Executive's position and adequate for the
performance of his duties as set forth in Section 3 hereof.
6. Offices
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, as a Director of the Company and any of its
subsidiaries and in one or more executive offices of any of the Company's
subsidiaries, provided that the Executive is indemnified for serving in any
and all such capacities on a basis no less favorable than is currently
provided by Article VII of the Company's By-Laws.
7. Termination
The Executive's employment hereunder may be terminated without any breach of
this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his
death.
(b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for the entire period of six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of each such
six-month period) shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the Executive's
employment hereunder.
(c) Cause. The Company may terminate the Executive's employment hereunder
for Cause. For purposes of this Agreement, the Company shall have "Cause"
to terminate the Executive's employment hereunder upon (A) the willful and
continued failure by the Executive to substantially perform his duties
hereunder (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness), after demand for substantial
performance is delivered by the Company that specifically identifies the
manner in which the Company believes the Executive has not substantially
performed his duties, or (B) the willful engaging by the Executive in
misconduct which is materially injurious to the Company, monetarily or
otherwise. For purposes of this paragraph, no act, or failure to act,
on the Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause without (i) reasonable notice to the Executive
setting forth the reasons for the Company's intention to terminate for
Cause, (ii) an opportunity for the Executive, together with his counsel,
to be heard before the Board of Directors of the Company, and (iii) delivery
to the Executive of a Notice of Termination as defined in subsection (e)
hereof from the Board of Directors of the Company finding that in the good
faith opinion of the Board of Directors the Executive was guilty of conduct
set forth above in clause (A) or (B) of the preceding sentence, and
specifying the particulars thereof in detail.
(d) Termination by the Executive. The Executive may terminate his
employment hereunder (i) for Good Reason or (ii) if his health should become
impaired to an extent that makes his continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided
that the Executive shall have furnished the Company with a written statement
from a qualified doctor to such effect and provided, further, that, at the
Company's request, the Executive shall submit to an examination by a doctor
selected by the Company and such doctor shall have concurred in the
conclusion of the Executive's doctor. For purposes of this Agreement,
"Good Reason" shall mean (A) any event described as a change in control
of the Company (as defined below) which may occur at any time or from time
to time on one or more occasions during the term of this Agreement
(including any extension hereof); (B) a failure by the Company to comply
with any material provision of this Agreement which has not been cured within
ten (10) days after notice of such non-compliance has been given by the
Executive to the Company; or (C) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (e) hereof (and for purposes of
this Agreement, no such purported termination shall be effective).
For purposes of this Agreement, a "change in control of the Company" shall
mean a change in control of a nature that would be required to be reported
in response to Item 5(f) of Schedule 14A promulgated under the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without limitation,
such a change in control shall be deemed to have occurred if (Y) any "person"
(as such term is used in Section 13(d) and 14(d) of the Exchange Act), other
than the Company or any "person" who, on the date hereof, is a director or
officer of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities, or (Z) during any period
of two (2) consecutive years during the term of this Agreement, individuals
who at the beginning of such period constitute the Board cease for any reason
to constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds (2/3) of the
directors then in office who were directors at the beginning of the period.
(e) Any termination of the Executive's employment by the Company or by the
Executive (other than termination pursuant to subsection (a) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(f) "Date of Termination" shall mean (i) if the Executive's employment is
terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated pursuant to subsection (b) above, thirty (30)
days after Notice of Termination is given (provided that the Executive shall
not have returned to the performance of his duties on a full-time basis
during such thirty (30) day period), (iii) if the Executive's employment
is terminated pursuant to subsection (c) above, the date specified in the
Notice of Termination, and (iv) if the Executive's employment is terminated
for any other reason, the date on which a Notice of Termination is given;
provided that, if within thirty (30) days after any Notice of Termination
is given the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and
no appeal having been perfected).
8. Compensation Upon Termination or During Disability
(a) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), the Executive shall continue to receive his full
salary at the rate then in effect for such period until his employment is
terminated pursuant to Section 7(b) hereof, and for a period of six (6)
months thereafter, provided that payments so made to the Executive during
the first six (6) months of the disability period shall be reduced by the
sum of the amounts, if any, payable to the Executive at or prior to the
time of any such payment under disability benefit plans of the Company and
which were not previously applied to reduce any such payment.
(b) If the Executive's employment is terminated by his death, the Company
shall pay to the Executive's spouse, or if he leaves no spouse, to his estate,
commencing on the next succeeding day which is the fifteenth day or last day
of the month, as the case may be, and monthly thereafter on the fifteenth and
last days of each month, until a total of six (6) payments have been made, an
amount on each payment date equal to the monthly salary payment to the
Executive pursuant to Section 5(a) hereof at the time of his death.
(c) If the Executive's employment shall be terminated for Cause, the Company
shall pay the Executive his full salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and the Company
shall have no further obligations to the Executive under this Agreement.
(d) If (A) in breach of this Agreement, the Company shall terminate the
Executive's employment other than pursuant to Section 7(b) or 7(c) hereof
(it being understood that a purported termination pursuant to Section 7(b)
or 7(c) hereof which is disputed and finally determined not to have been
proper shall be a termination by the Company in breach of this Agreement)
or (B) the Executive shall terminate his employment for Good Reason, then:
(i) the Company shall pay the Executive his full salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given;
(ii) in lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay as severance
pay to the Executive an amount equal to the product of (A) the Executive's
annual salary rate in effect as of the Date of Termination, multiplied by
(B) the greater of the number of years (including partial years) remaining
in the term of employment hereunder or the number three (3), such payment to
be made (X) if resulting from a termination based on a change of control of
the Company, in a lump sum on or before the fifth day following the Date of
Termination, or (Y) if resulting from any other cause, in substantially equal
monthly installments commencing with the month in which the Date of
Termination occurs and continuing for the number of consecutive monthly
payment dates (including the first such date as aforesaid) equal to the
product obtained by multiplying the number of years (including partial years)
applicable under (ii)(B) above by twelve (12); and
(iii) if termination of the Executive's employment arises out of a breach
by the Company of this Agreement, the Company shall pay all other damages
to which the Executive may be entitled as a result of such breach, including
damages for any and all loss of benefits to the Executive under the Company's
employee benefit plans (other than the Company's Incentive Compensation Plan)
which the Executive would have received if the Company had not breached this
Agreement and had the Executive's employment continued for the full term
provided in Section 2 hereof, and including all legal fees and expenses
incurred by him as a result of such termination.
(e) If the Executive shall terminate his employment under clause (ii) of
Section 7(d) hereof, the Company shall pay the Executive his full salary
through the Date of Termination at the rate in effect at the time Notice
of Termination is given.
(f) Unless the Executive is terminated for Cause, the Company shall maintain
in full force and effect, for the continued benefit of the Executive for the
greater of the number of years (including partial years) remaining in the
term of employment hereunder or the number three (3), all employee benefit
plans and programs in which the Executive was entitled to participate
immediately prior to the Date of Termination provided that the Executive's
continued participation is possible under the general terms and provisions
of such plans and programs. In the event that the Executive's continued
participation is possible under the general terms and provisions of such
plans and programs. In the event that the Executive's participation in any
such plan or program is barred, the Company shall arrange to provide the
Executive with benefits substantially similar to those which the Executive
would otherwise have been entitled to receive under such plans and programs
from which his continued participation is barred.
(g) The Executive shall not be required to mitigate the amount of any payment
provided for in this Section 8 by seeking other employment or otherwise.
9. Successors; Binding Agreement
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the
same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall
be deemed the Date of Termination. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 9, or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of
law.
(b) This Agreement, and all rights of the Executive hereunder, shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would
still be payable to him hereunder if he had continue to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive's devisee, legatee, or
other designee or, if there be no such designee, to the Executive's estate.
10. Notice
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx Xxxxxx, M.D.
c/o ImmunoTherapeutics, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxx Xxxxxx 00000
If to the Company:
ImmunoTherapeutics, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxx Xxxxxx 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
11. Miscellaneous
No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
parties hereto. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of North Dakota.
12. Validity
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. 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 will constitute
one and the same instrument.
14. Arbitration
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of
three arbitrators, in Chicago, Illinois, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
ImmunoTherapeutics, Inc.
By: /s/ Xxxxx Xxxxxx
Title: Secretary
/s/ Xxxxxx Xxxxxx, M.D.
Attest: /s/ Xxxxxx Xxxxxxx
