1
EXHIBIT 10.2.51
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of July 1,
1999 ("Effective Date"), by and between NEOPROBE CORPORATION, a Delaware
Corporation with a place of business at 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxx, Xxxx 00000-0000 (the "Company") and XXXXX X. XXXX of Dublin, Ohio (the
"Employee").
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of January 1, 1996 (the "1996 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of January 1, 1998 (the "1998 Employment Agreement"); and
WHEREAS, the Company and the Employee wish to establish new terms,
covenants, and conditions for the Employee's continued employment with the
Company through this agreement ("Employment Agreement").
NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:
1. DUTIES. From and after the Effective Date, and based upon the terms
and conditions set forth herein, the Company agrees to employ the
Employee and the Employee agrees to be employed by the Company, as
President and Chief Executive Officer of the Company and in such
equivalent, additional or higher executive level position or positions
as shall be assigned to him by the Board of Directors. While serving
in such executive level position or positions, the Employee shall
report to, be responsible to, and shall take direction from the Board
of Directors of the Company. The Board of Directors shall not require
the Employee to perform any task that is inconsistent with the office
of President or the position of Chief Executive Officer. During the
Term of this Employment Agreement (as defined in Section 2 below), the
Employee agrees to devote substantially all of his working time to the
position he holds with the Company and to faithfully, industriously,
and to the best of his ability, experience and talent, perform the
duties which are assigned to him. The Employee shall observe and abide
by the reasonable corporate policies and decisions of the Company in
all business matters.
The Employee represents and warrants to the Company that Exhibit A
attached hereto sets forth a true and complete list of (a) all
offices, directorships and other positions held by the Employee in
corporations and firms other than the Company and its subsidiaries and
(b) any investment or ownership interest in any corporation or firm
other than the Company beneficially owned by the Employee (excluding
investments in life insurance policies, bank deposits, publicly traded
securities that are less than five percent (5%) of their class and
real estate). The Employee will promptly notify the Board of Directors
of the Company of any additional positions undertaken or investments
made by the Employee during the Term of this Employment Agreement if
they are of a type which, if
-1-
2
they had existed on the date hereof, should have been listed on
Exhibit A hereto. As long as the Employee's other positions or
investments in other firms do not create a conflict of interest,
violate the Employee's obligations under Section 7 below or cause the
Employee to neglect his duties hereunder, such activities and
positions shall not be deemed to be a breach of this Employment
Agreement.
2. TERM OF THIS EMPLOYMENT AGREEMENT. Subject to Sections 4 and 5 hereof,
the Term of this Employment Agreement shall be for a period of one (1)
year, commencing July 1, 1999 and terminating June 30, 2000.
3. COMPENSATION. During the Term of this Employment Agreement, the Company
shall pay, and the Employee agrees to accept as full consideration for
the services to be rendered by the Employee hereunder, compensation
consisting of the following:
A. SALARY. Beginning on the first day of the Term of this Employment
Agreement, the Company shall pay the Employee a salary of Two
Hundred Ninety Thousand Dollars ($290,000) per year, payable in
semi-monthly or monthly installments.
B. BONUS. The Compensation Committee of the Board of Directors will,
on an annual basis, review the performance of the Company and of
the Employee and will pay such bonus as it deems appropriate, in
its discretion, to the Employee based upon such review. Such
review and bonus shall be consistent with any bonus plan adopted
by the Compensation Committee which covers the executive officers
of the Company generally.
In addition to any such bonus the Company shall pay the Employee,
a bonus of Fifty Eight Thousand Dollars ($58,000) upon the
completion of the proposed distribution and license agreement
between the Company and Ethicon Endo-Surgery, Inc or any other
strategic alliance with Ethicon Endo Surgery, Inc. or anyone else
relating to the sale, licensing, marketing or use of the Company's
gamma guided surgery business, or any other action which results
in the Company being in substantially the same position, such as,
but not limited to, a settlement of a claim or enforcement of a
judgment against a party for breach of an agreement relating to
the sale, licensing, marketing or use of the Company's gamma
guided surgery business.
C. BENEFITS. During the Term of this Employment Agreement, the
Employee will receive such employee benefits as are generally
available to all employees of the Company.
D. STOCK OPTIONS. The Compensation Committee of the Board of
Directors may, from time to time, grant stock options, restricted
stock purchase opportunities and such other forms of stock based
incentive compensation as it deems appropriate, in its discretion,
to the Employee under the Company's Stock Option and Restricted
Stock Purchase Plan and the 1996 Stock Incentive Plan (the "Stock
Plans"). The terms of the relevant award agreements shall govern
the rights of the Employee and the Company thereunder in the event
of any conflict between such agreement and this Employment
Agreement.
-2-
3
E. VACATION. The Employee shall be entitled to twenty (20) days of
vacation during each calendar year during the Term of this
Employment Agreement.
F. EXPENSES. The Company shall reimburse the Employee for all
reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder, including expenses for
travel, entertainment and similar items, promptly after the
presentation by the Employee, from time to time, of an itemized
account of such expenses.
4. TERMINATION.
A. FOR CAUSE. The Company may terminate the employment of the
Employee prior to the end of the Term of this Employment Agreement
"for cause." Termination "for cause" shall be defined as a
termination by the Company of the employment of the Employee
occasioned by the failure by the Employee to cure a willful breach
of a material duty imposed on the Employee under this Employment
Agreement within 15 days after written notice thereof by the
Company or the continuation by the Employee after written notice
by the Company of a willful and continued neglect of a duty
imposed on the Employee under this Employment Agreement. In the
event of termination by the Company "for cause", all salary,
benefits and other payments shall cease at the time of
termination, and the Company shall have no further obligations to
the Employee.
B. RESIGNATION. If, the Employee resigns for any reason, all salary,
benefits and other payments (except as otherwise provided in
paragraph G of this Section 4 below) shall cease at the time such
resignation becomes effective. At the time of any such resignation
the Company shall pay the Employee, the value of any accrued but
unused vacation time, and the amount of all accrued but previously
unpaid base salary through the date of such termination. The
Company shall promptly reimburse the Employee for the amount of
any expenses incurred prior to such termination by the Employee as
required under paragraph F of Section 3 above.
C. DISABILITY, DEATH. The Company may terminate the employment of the
Employee prior to the end of the Term of this Employment Agreement
if the Employee has been unable to perform his duties hereunder
for a continuous period of six (6) months due to a physical or
mental condition that, in the opinion of a licensed physician,
will be of indefinite duration or is without a reasonable
probability of recovery. The Employee agrees to submit to an
examination by a licensed physician of his choice in order to
obtain such opinion at the request of the Company, made after the
Employee has been absent from his place of employment for at least
six (6) months. Such examination shall be paid for by the Company.
However, this provision does not abrogate either the Company's or
the Employee's rights and obligations pursuant to the Family and
Medical Leave Act of 1993, and a termination of employment under
this paragraph C shall not be deemed to be a termination for
cause.
If during the Term of this Employment Agreement, the Employee dies
or his employment is terminated because of his disability, all
salary, benefits and other
-3-
4
payments shall cease at the time of death or disability, provided,
however, that the Company shall provide such health, dental and
similar insurance or benefits as were provided to Employee
immediately before his termination by reason of death or
disability, to Employee or his family for the longer of six (6)
months after such termination or the full unexpired Term of this
Employment Agreement on the same terms and conditions (including
cost) as were applicable before such termination. In addition, for
the first six (6) months of disability, the Company shall pay to
the Employee the difference, if any, between any cash benefits
received by the Employee from a Company-sponsored disability
insurance policy and the Employee's salary hereunder. At the time
of any such termination the Company shall pay the Employee, the
value of any accrued but unused vacation time, and the amount of
all accrued but previously unpaid base salary through the date of
such termination. The Company shall promptly reimburse the
Employee for the amount of any expenses incurred prior to such
termination by the Employee as required under paragraph F of
Section 3 above.
D. TERMINATION WITHOUT CAUSE. A termination without cause is a
termination of the employment of the Employee by the Company that
is not "for cause" and not occasioned by the resignation, death or
disability of the Employee. If the Company terminates the
employment of the Employee without cause, (whether before the end
of the Term of this Employment Agreement or, if the Employee is
employed by the Company under paragraph E of this Section 4 above,
after the Term of this Employment Agreement has ended) the Company
shall, at the time of such termination, pay to the Employee the
severance payment provided in paragraph F of this Section 4 below
together with the value of any accrued but unused vacation time
and the amount of all accrued but previously unpaid base salary
through the date of such termination and shall provide him with
all of his benefits under paragraph C of Section 3 above for the
longer of six (6) months or the full unexpired Term of this
Employment Agreement. The Company shall promptly reimburse the
Employee for the amount of any expenses incurred prior to such
termination by the Employee as required under paragraph F of
Section 3 above.
If the Company terminates the employment of the Employee because
it has ceased to do business or substantially completed the
liquidation of its assets or because it has relocated to another
city and the Employee has decided not to relocate also, such
termination of employment shall be deemed to be without cause.
E. END OF THE TERM OF THIS EMPLOYMENT AGREEMENT. Except as otherwise
provided in paragraphs F and G of this Section 4 below, the
Company may terminate the employment of the Employee at the end of
the Term of this Employment Agreement without any liability on the
part of the Company to the Employee but, if the Employee continues
to be an employee of the Company after the Term of this Employment
Agreement ends, his employment shall be governed by the terms and
conditions of this Agreement, but he shall be an employee at will
and his employment may be terminated at any time by either the
Company or the Employee without notice and for any reason not
prohibited by law or no reason at all. If the Company terminates
the employment of the Employee at the end of the Term of this
Employment Agreement, the Company shall, at the time of such
termination, pay to
-4-
5
the Employee the severance payment provided in paragraph F of this
Section 4 below together with the value of any accrued but unused
vacation time and the amount of all accrued but previously unpaid
base salary through the date of such termination. The Company
shall promptly reimburse the Employee for the amount of any
reasonable expenses incurred prior to such termination by the
Employee as required under paragraph F of Section 3 above.
X. XXXXXXXXX. If the employment of the Employee is terminated by the
Company, at the end of the Term of this Employment Agreement or,
without cause (whether before the end of the Term of this
Employment Agreement or, if the Employee is employed by the
Company under paragraph E of this Section 4 above, after the Term
of this Employment Agreement has ended), the Employee shall be
paid, as a severance payment at the time of such termination, the
amount of Three Hundred Forty Five Thousand Seven Hundred Seventy
Dollars ($345,770). If any such termination occurs at or after the
substantial completion of the liquidation of the assets of the
Company, the severance payment shall be increased by adding
Seventy Two Thousand Five Hundred Dollars ($72,500) to such
amount.
G. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans (paragraphs C
of Section 3 above) but in lieu of any severance payment under
paragraph F of this Section 4 above, if there is a Change in
Control of the Company (as defined below) and the employment of
the Employee is concurrently or subsequently terminated (a) by the
Company without cause, (b) by the expiration of the Term of this
Employment Agreement, or (c) by the resignation of the Employee
because he has reasonably determined in good faith that his
titles, authorities, responsibilities, salary, bonus opportunities
or benefits have been materially diminished, that a material
adverse change in his working conditions has occurred, that his
services are no longer required in light of the Company's business
plan, or the Company has breached this Employment Agreement, the
Company shall pay the Employee, as a severance payment, at the
time of such termination, the amount of Six Hundred Thirty Five
Thousand Seven Hundred Seventy Dollars ($635,770) together with
the value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the date
of such termination and shall provide him with all of his benefits
under paragraph C of Section 3 above for the longer of six (6)
months or the full unexpired Term of this Employment Agreement. If
any such termination is occurs at or after the substantial
completion of the liquidation of the assets of the Company, the
severance payment shall be increased by adding Seventy Two
Thousand Five Hundred Dollars ($72,500) to such amount. The
Company shall promptly reimburse the Employee for the amount of
any expenses incurred prior to such termination by the Employee as
required under paragraph F of Section 3 above.
For the purpose of this Employment Agreement, a Change in Control
of the Company has occurred when: (a) any person (defined for the
purposes of this paragraph G to mean any person within the meaning
of Section 13(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than Neoprobe or an employee benefit plan
created by its Board of Directors for the benefit of its
employees, either directly or indirectly, acquires beneficial
ownership (determined
-5-
6
under Rule 13d-3 of the Regulations promulgated by the Securities
and Exchange Commission under Section 13(d) of the Exchange Act)
of securities issued by Neoprobe having fifteen percent (15%) or
more of the voting power of all the voting securities issued by
Neoprobe in the election of Directors at the next meeting of the
holders of voting securities to be held for such purpose; (b) a
majority of the Directors elected at any meeting of the holders of
voting securities of Neoprobe are persons who were not nominated
for such election by the Board of Directors or a duly constituted
committee of the Board of Directors having authority in such
matters; (c) the stockholders of Neoprobe approve a merger or
consolidation of Neoprobe with another person, other than a merger
or consolidation in which the holders of Neoprobe's voting
securities issued and outstanding immediately before such merger
or consolidation continue to hold voting securities in the
surviving or resulting corporation (in the same relative
proportions to each other as existed before such event) comprising
eighty percent (80%) or more of the voting power for all purposes
of the surviving or resulting corporation; or (d) the stockholders
of Neoprobe approve a transfer of substantially all of the assets
of Neoprobe to another person other than a transfer to a
transferee, eighty percent (80%) or more of the voting power of
which is owned or controlled by Neoprobe or by the holders of
Neoprobe's voting securities issued and outstanding immediately
before such transfer in the same relative proportions to each
other as existed before such event. The parties hereto agree that
for the purpose of determining the time when a Change of Control
has occurred that if any transaction results from a definite
proposal that was made before the end of the Term of this
Employment Agreement and which was the subject of negotiations
that began during the Term of this Employment Agreement but which
continued until after the end of the Term of this Employment
Agreement and such transaction is consummated after the end of the
Term of this Employment Agreement, such transaction shall be
deemed to have occurred when the definite proposal was made for
the purposes of the first sentence of this paragraph G of this
Section 4.
H. BENEFIT AND STOCK PLANS. In the event that a benefit plan or Stock
Plan which covers the Employee has specific provisions concerning
termination of employment, or the death or disability of an
employee (e.g., life insurance or disability insurance), then such
benefit plan or Stock Plan shall control the disposition of the
benefits or stock options.
5. PROPRIETARY INFORMATION AGREEMENT. Employee has executed a Proprietary
Information Agreement as a condition of employment with the Company.
The Proprietary Information Agreement shall not be limited by this
Employment Agreement in any manner, and the Employee shall act in
accordance with the provisions of the Proprietary Information Agreement
at all times during the Term of this Employment Agreement.
-6-
7
6. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for two (2) years
thereafter, the Employee will not:
A. enter into the employ of or render any services to any person,
firm, or corporation, which is engaged, in any part, in a
Competitive Business (as defined below);
B. engage in any Competitive Business for his own account;
C. become associated with or interested in through retention or by
employment any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor, or in any other
relationship or capacity; or
D. solicit, interfere with, or endeavor to entice away from the
Company, any of its customers, strategic partners, or sources of
supply.
Nothing in this Employment Agreement shall preclude Employee from
taking employment in the banking or related financial services
industries nor from investing his personal assets in the securities of
any Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment
does not result in his beneficially owning, at any time, more than one
percent (1%) of the publicly-traded equity securities of such
Competitive Business. "Competitive Business" for purposes of this
Employment Agreement shall mean any business or enterprise which:
a. is engaged in the development and/or commercialization of products
and/or systems for use in (1) the intraoperative detection of
cancer and/or (2) Activated Cellular Therapy for cancer, or
b. reasonably understood to be competitive in the relevant market
with products and/or systems described in clause a above, or
c. the Company engages in during the Term of this Employment
Agreement pursuant to a determination of the Board of Directors
and from which the Company derives a material amount of revenue or
in which the Company has made a material capital investment.
The covenant set forth in this Section 6 shall terminate immediately
upon the substantial completion of the liquidation of the assets of the
Company or the termination of the employment of the Employee by the
Company without cause or at the end of the Term of this Employment
Agreement.
7. ARBITRATION. Any dispute or controversy arising under or in connection
with this Employment Agreement shall be settled exclusively by
arbitration in Columbus, Ohio, in accordance with the nonunion
employment arbitration rules of the American Arbitration Association
("AAA") then in effect. If specific nonunion employment dispute rules
are not in effect, then AAA commercial arbitration rules shall govern
the
-7-
8
dispute. If the amount claimed exceeds $100,000, the arbitration shall
be before a panel of three arbitrators. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The Company shall
indemnify the Employee against, and hold him harmless from, any
attorney's fees, court costs and other expenses incurred by the
Employee in connection with the preparation, commencement, prosecution,
defense or enforcement of any arbitration, award, confirmation or
judgment in order to assert or defend any right or obtain any payment
under paragraph G of Section 4 above or under this sentence; without
regard to the success of the Employee or his attorney in any such
arbitration or proceeding.
8. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
9. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Employment Agreement shall not affect the validity
or enforceability of any other provision of the Employment Agreement,
which shall remain in full force and effect.
10. ENTIRE AGREEMENT.
A. The 1998 Employment Agreement is terminated as of the effective
date of this Employment Agreement, except that the Stock Options
granted to the Employee in the 1998 Employment Agreement or in any
previous employment agreement or by the Compensation Committee
remain in full force and effect, and survive the termination of
the 1998 Employment Agreement and except that the bonus
opportunities granted to the Employee in paragraph 3 of the letter
agreement dated February 16, 1995 remain in full force and effect,
and survive the termination of the 1998 Employment Agreement.
B. This Employment Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions, and preliminary
agreements. This Employment Agreement may not be amended except in
writing executed by the parties hereto.
11. EFFECT ON SUCCESSORS OF INTEREST. This Employment Agreement shall inure
to the benefit of and be binding upon heirs, administrators, executors,
successors and assigns of each of the parties hereto. Notwithstanding
the above, the Employee recognizes and agrees that his obligation under
this Employment Agreement may not be assigned without the consent of
the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxx
-------------------------------------- --------------------------------
Xxxxx X. Xxxxxx, Vice President Xxxxx X. Xxxx
-8-
