EMPLOYMENT AGREEMENT
Employment Agreement dated as of August 10, 2000, between Enzon, Inc., a
Delaware Corporation (the "Company"), having an address at 00 Xxxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000, and Xxxxx Xxxxxxx ("Executive"), having an address
at 000 Xxxxxxx Xxxx, Xxx Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, the Company is a biopharmaceutical company engaged in developing
advanced therapeutics for life threatening diseases; and
WHEREAS, Executive has extensive experience as an executive of a
pharmaceutical company and a biopharmaceutical company; and
WHEREAS, the Company desires to continue the employment of the Executive
and the Executive desires to continue such employment on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the employment of Executive by the
Company, the above premises and the mutual agreements hereinafter set forth, the
parties hereto agree as follows:
1. Duties.
(a) The Company employs the Executive as its President and Chief Executive
Officer and Executive accepts such employment subject to the terms and
conditions hereof. As President and Chief Executive Officer, Executive shall
have the authority and duty generally to supervise and direct the business of
the Company, subject to the control of the Board of Directors of the Company
(the "Board") and of any duly authorized Committees of the Board.
(b) Executive agrees as President and Chief Executive Officer to devote
substantially all of his time, during regular business hours, to the affairs of
the Company
E-1
and shall at all times act with due regard to the best interests of the Company.
It is understood and agreed that Executive may undertake civic or charitable
responsibilities on a part time basis, provided that such responsibilities don't
cause Executive to violate the provisions of this Section 1(b). It is understood
and agreed that Executive may continue to serve on the board of directors of
Alpharma Inc. and NPS Pharmaceuticals Inc. and subject to the prior approval of
the Board (which approval will not be unreasonably withheld), Executive may join
and serve on the board of directors of other companies.
2. Noncompetition and Confidentiality.
(a) The "Noncompete Period" shall be (i) the term of this Agreement and,
(ii) (A) the two (2) year period immediately following termination of
Executive's full-time employment as President and Chief Executive Officer with
the Company in the event Executive voluntarily terminates his employment, other
than pursuant to Section 4(b)(i) or Section 4(b)(vi) hereof, or the Company
terminates Executive's employment pursuant to Section 4(b)(ii) hereof, or (B)
(x) any period of time during which the Executive receives base salary payments
from the Company pursuant to Section 3(d) hereof in the event Executive's
full-time employment with the Company as its President and Chief Executive
Officer is terminated for any reason which would entitle Executive to base
salary payments under Section 3(d) hereof plus (y) any period of time during
which Executive receives consulting payments pursuant to Section 3(n) hereof in
the event Executive's full-time employment as President and Chief Executive
Officer with the Company is terminated for any reason which would entitle
Executive to consulting payments under Section 3(n). During the Noncompete
Period, Executive will not directly, or indirectly, whether as an officer,
director, stockholder, partner, proprietor, associate, employee, consultant,
representative or otherwise, become, or be interested in or associated with any
other person,
E-2
corporation, firm, partnership or entity, engaged to a significant degree in (x)
developing, marketing or selling enzymes, protein-based biopharmaceuticals or
other pharmaceuticals that are modified using polyethylene glycol ("PEG"), (y)
developing, marketing or selling single-chain antigen-binding proteins or (z)
any technology or area of business in which the Company becomes involved to a
significant degree during the term of this Agreement. For purposes of the
preceding sentence to determine whether any entity is engaged in such activities
to a "significant degree" comparison will be made to the Company's operations at
that time. In other words, an entity will be deemed to be engaged in an activity
to a significant degree if the number of employees and/or amount of funds
devoted by such entity to such activity would be material to the Company's
operations at that time. Notwithstanding anything to the contrary contained
herein, Executive shall be entitled to work with or for (i) an entity that is
developing, marketing or manufacturing monoclonal antibodies, (ii) a licensee of
the Company if the only activities conducted by such licensee that would be
covered by the restrictions in this Section 2(b) are conducted pursuant to, and
covered by, the license granted by the Company and (iii) an entity that is
engaged in a research project that would be covered by the restrictions in this
Section 2(b) if such research project is not material to such entity and
Executive would have no direct involvement in such research project; provided in
the case of employment covered by clauses (ii) and (iii) Executive shall have
provided the Board with a detailed description of the proposed employment and
obtained the written consent of the Board (which consent will not be
unreasonably withheld) prior to commencing any such employment. Executive is
hereby prohibited from ever using any of the Company's proprietary information
or trade secrets to conduct any business, except for the Company's business
while Executive is employed by the Company as provided in Section 2(b) hereof.
The provision contained in the preceding sentence
E-3
shall survive the termination of Executive's employment pursuant to Section 4
hereof or otherwise. In the event Executive breaches any of the covenants set
forth in this Section 2(a), the running of the period of restriction set forth
herein shall recommence upon Executive's compliance with the terms of this
Section 2(a).
(b) Executive recognizes and acknowledges that information relating to the
Company's business, including, but not limited to, information relating to
patent applications filed or to be filed by the Company, trade secrets relating
to the Company's products or services, and information relating to the Company's
research and development activities, shall be and remain the sole and exclusive
property of the Company and is a valuable, special and unique asset of the
Company's business. The Executive will not, during or after the term of his
employment by the Company, disclose any such information to any person,
corporation, firm, partnership or other entity; provided, however, that,
notwithstanding the foregoing, during the term of Executive's employment with
the Company, Executive may make such disclosure if such disclosure is in the
Company's best interests, is made in order to promote and enhance the Company's
business, and sufficient arrangements are made with the person or entity to whom
such disclosure is made to ensure the confidentiality of such disclosure. The
provisions of this Section 2(b) shall survive the termination of Executive's
employment pursuant to Section 4 hereof or otherwise.
(c) Executive agrees that the covenants and agreements contained in this
Section 2 are the essence of this Agreement; that each of such covenants is
reasonable and necessary to protect and preserve the Company's interests,
properties and business; that irreparable loss and damage will be suffered by
the Company should Executive breach any of such covenants and agreements; that
given the unique nature of the Company's business such
E-4
loss and damage would be suffered by the Company regardless of where a breach of
such covenants and agreements occur, thus, making the absence of a geographical
limitation reasonable; that each of such covenants and agreements is separate,
distinct and severable not only from the other of such covenants and agreements
but also from the other and remaining provisions of this Agreement; that the
unenforceability or breach of any such covenant or agreement shall not affect
the validity or enforceability of any other such covenant or agreement or any
other provision of this Agreement; and that, in addition to other remedies
available to it, the Company shall be entitled to both temporary and permanent
injunctions and any other rights or remedies it may have, at law or in equity,
to prevent a breach or contemplated breach by Executive of any such covenants or
agreements. Notwithstanding anything herein to the contrary, if a period of time
or other restriction specified in this Section 2 should be determined to be
unreasonable in a judicial proceeding, then the period of time or other
restriction shall be revised so that the covenants contained in this Section 2
may be enforced during such period of time and in accordance with such other
restrictions as may be determined to be reasonable.
(d) Executive agrees to assign and does hereby assign to the Company all
tangible and intangible property, including, but not limited to, inventions,
developments or discoveries conceived, made or discovered by Executive solely or
in collaboration with others during the term of Executive's full-time employment
as President and Chief Executive Officer with the Company, which relate in any
manner to the Company's business.
3. Compensation and Other Benefits.
For all services rendered by Executive and all covenants undertaken by him
pursuant to this Agreement, the Company shall pay, and Executive shall accept,
the compensation set forth in this Section 3.
E-5
(a) Executive shall receive an annual base salary of Three Hundred
Sixty-Seven Thousand Five Hundred Dollars ($367,500.00) during the term of
Executive's full-time employment hereunder as the Company's President and Chief
Executive Officer, payable in accordance with the Company's normal payroll
practices for its senior management. The Company may, at any time, in the
discretion of the Board, increase, but not decrease, Executive's base salary in
response to increases in the cost of living or based upon merit as a result of a
positive review of Executive's performance by the Board. Executive shall be
entitled to begin receiving his salary hereunder on the Effective Date.
(b) For so long as Executive is employed by the Company on a full-time
basis as its President and Chief Executive Officer, Executive shall be entitled
to participate in the Senior Management Performance Incentive Program, as
approved by the Board or Compensation Committee and any other incentive program
hereafter established and available to executive officers of the Company (the
"Program"). There shall be no guarantee that any payment or grant of options
shall be made under the Program, and a payment or grant of options in one year
does not imply that a similar payment or grant, or any payment or grant, will be
made in subsequent years.
(c) In addition to any options which may be granted to Executive pursuant
to Section 3(b) hereof, Executive is hereby granted, as of the date of this
Agreement, options to purchase an aggregate of 100,000 shares of the Company's
common stock, $.01 par value (the "Common Stock") under the Company's
Non-Qualified Stock Option Plan, as amended (the "Non-Qualified Plan") at the
per share exercise price equal to the closing price of the Common Stock on the
date of grant. Such options shall vest and become exercisable as to such 100,000
shares of Common Stock on June 30, 2003, if, except as otherwise provided in
E-6
Section 3(d), Executive shall then be employed by the Company on a full-time
basis as its President and Chief Executive Officer; provided, however, that such
options immediately shall vest and become exercisable when the closing price of
a share of the Company's Common Stock is at least one hundred dollars ($100.00)
as reported on the NASDAQ National Market for at least twenty (20) consecutive
trading days, provided that, except as otherwise provided in Section 3(d),
Executive is then employed by the Company on a full-time basis as its President
and Chief Executive Officer (the "Accelerated Vesting Schedule"). In all cases,
if such options vest and become exercisable, such options shall remain
exercisable until the close of business on August 9, 2010 (the "Expiration
Date"). Such options shall be represented by a Non-Qualified Stock Option
Certificate (the "Option Certificate") in the form attached hereto as Exhibit A.
The price of the Company's Common Stock that triggers accelerated vesting of
such options shall be adjusted for stock splits, stock dividends and other
similar recapitalization events.
(d) In the event the Company terminates Executive's full-time employment as
the Company's President and Chief Executive Officer for any reason, except "For
Cause" pursuant to Section 4(b)(ii) hereof or due to Executive's Disability or
Death pursuant to Sections 4(b)(iii) or 4(b)(iv) hereof, respectively, or
Executive terminates his full-time employment as the Company's President and
Chief Executive Officer pursuant to Sections 4(b)(i) or 4(b)(vi) hereof, prior
to the second anniversary of the Effective Date (the "Second Anniversary Date"),
Executive shall receive either (A) the remainder of his base salary hereunder
payable through the Second Anniversary Date or (B) his base salary hereunder
payable for one year immediately following such termination, whichever shall be
greater. In the event the Company terminates Executive's full-time employment as
the Company's President and Chief Executive Officer for any reason, except "For
Cause" pursuant to Section 4(b)(ii) hereof or due
E-7
to Executive's Disability or Death pursuant to Sections 4(b)(iii) or 4(b)(iv)
hereof, respectively, or Executive terminates his full-time employment as the
Company's President and Chief Executive Officer pursuant to Sections 4(b)(i) or
4(b)(vi) hereof, subsequent to the Second Anniversary Date, Executive shall
receive his base salary hereunder payable for one year immediately following
such termination or until Executive becomes otherwise employed on a full-time
basis, whichever is sooner. In the event the Executive's full-time employment as
the Company's President and Chief Executive Officer is terminated for any
reason, except for Employee's voluntary resignation, other than pursuant to
Sections 4(b)(i) or 4(b)(vi) hereof, or pursuant to Section 4(b)(ii), (iii) or
(iv) hereof, if the options granted pursuant to Section 3(c) hereof are
exercisable at the time of such termination (the "Vested Options"), such Vested
Options shall remain exercisable until the Expiration Date set forth in Section
3(c) hereof or if the options granted pursuant to Section 3(c) hereof are not
exercisable at the time of such termination (the "Non-Vested Options") such
Non-Vested Options shall become exercisable in accordance with the Accelerated
Vesting Schedule provisions of Section 3(c) or in accordance with the provisions
for Change in Control events set forth in Section 3(g) hereof, in the same
manner as if the Executive's full-time employment as the Company's President and
Chief Executive Officer had not been terminated. In the event the Non-Vested
Options become exercisable in accordance with the preceding sentence, such
options will remain exercisable until the Expiration Date set forth in Section
3(c); provided that the Non-Vested Options will terminate and be of no further
force and effect if such options have not vested in accordance with the
Accelerated Vesting Schedule or the Change in Control provisions of Section 3(g)
hereof on or prior to June 30, 2003. In the event the Company terminates
Executive's employment "For Cause" pursuant to Section 4(b)(ii) hereof or
Executive terminates his full-time employment
E-8
hereunder as the Company's President and Chief Executive Officer for any reason
other than as provided in Sections 4(b)(i) or 4(b)(vi) hereof, Executive shall
receive no further payments from the Company, and if the options granted
pursuant to Section 3(c) hereof are Vested Options at the time of such
termination such options shall remain exercisable until the Expiration Date set
forth in Section 3(c) or if the options granted pursuant to Section 3(c) hereof
are Non-Vested Options at the time of such termination such options shall
terminate immediately as of the date of such termination. All salary and other
payments (including any bonus payment under Section 3(m) hereof) made to
Executive hereunder shall be made in accordance with the Company's normal
payroll practices for senior management. It is acknowledged and agreed that the
provisions of this Section 3(d) relating to the exercise of the options granted
pursuant to Section 3(c) hereof subsequent to the termination of Executive's
employment with the Company shall be deemed a waiver and modification of the
restrictions imposed on the exercise of options in the event of termination of
employment under Section H of the Non-Qualified Plan and that such waiver and
modification was authorized and approved by the Compensation Committee of the
Board (the "Committee") as permitted by Section H of the Non-Qualified Plan.
(e) In the event the Company terminates Executive's employment due to
Executive's Disability pursuant to Section 4(b)(iii) of this Agreement, the
Company shall pay to Executive, during the six-month period following such
termination, an amount equal to the difference between Executive's base salary
hereunder for such six months (exclusive of benefits) and the amount received by
Executive during such six-month period under any employee disability policy
maintained by the Company for the benefit of Executive. The Company shall
calculate and pay any amounts due herein no less frequently than semi-monthly.
If the options granted pursuant to Section 3(c) hereof are Vested Options at the
time of such termination for
E-9
Disability such options shall remain exercisable until the Expiration Date set
forth in Section 3(c) hereof. If the options granted pursuant to Section 3(c)
hereof are Non-Vested Options at the time of such termination for Disability, a
pro rata portion (based upon the number of days which have elapsed at the time
of such termination in the three (3) year period commencing on July 1, 2000 and
ending on June 30, 2003 (the "Vesting Period")) of the options which are
Non-Vested Options at the time of such termination shall become exercisable
immediately upon such termination and shall remain exercisable until the
Expiration Date set forth in Section 3(c). All remaining Non-Vested Options will
terminate as of the date of such termination. For example, if such termination
for Disability occurs 50% of the way through the Vesting Period, 50% of the
total number of Non-Vested Options shall vest and become exercisable and the
remaining 50% of the Non-Vested Options will terminate. It is acknowledged and
agreed that the immediately preceding sentence shall be deemed a waiver and
modification of the restrictions imposed on the exercise of options in the event
of disability under Section H of the Non-Qualified Plan and that such waiver and
modification was authorized and approved by the Committee as permitted by
Section H of the Non-Qualified Plan.
(f) In the event Executive's employment is terminated due to his death
pursuant to Section 4(b)(iv) of this Agreement, the Company shall pay to
Executive's estate, during the six-month period following such termination,
Executive's base salary hereunder for such six months (exclusive of benefits).
If the options granted pursuant to Section 3(c) hereof are Vested Options at the
time of such termination for death, such options shall remain exercisable until
the Expiration Date set forth in Section 3(c) hereof. If the options granted
pursuant to Section 3(c) hereof are Non-Vested Options at the time of such
termination for death, a pro rata portion (based upon the number of days which
have elapsed at the time of such
E-10
termination in the Vesting Period) of the options which are Non-Vested Options
at the time of such termination shall become exercisable immediately upon such
termination and shall remain exercisable until the Expiration Date set forth in
Section 3(c). All remaining Non-Vested Options will terminate as of the date of
such termination. For example, if such termination occurs 50% of the way through
the Vesting Period, 50% of the total number of Non-Vested Options shall vest and
become exercisable and the remaining 50% of the Non-Vested Options will
terminate. It is acknowledged and agreed that the immediately preceding sentence
shall be deemed to be a waiver and modification of the restrictions imposed on
the exercise of options in the event of death under Section I of the
Non-Qualified Plan and that such waiver and modification was authorized and
approved by the Committee as permitted by Section I of the Non-Qualified Plan.
(g) In the event of a Change of Control, the Change of Control Agreement
dated as of January 20, 1995, between Executive and Company shall govern, except
as specifically set forth herein with respect to the options granted to
Executive pursuant to Section 3(c) hereof. For purposes hereof "Change of
Control" shall mean: (i) A "Board Change" which, for purposes of this Agreement,
shall have occurred if a majority of the seats (other than vacant seats) on the
Company's Board were to be occupied by individuals who were neither (A)
nominated by a majority of the Incumbent Directors nor (B) appointed by
directors so nominated. An "Incumbent Director" is a member of the Board who has
been either (A) nominated by a majority of the directors of the Company then in
office or (B) appointed by directors so nominated, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or other actual or threatened
solicitation of
E-11
proxies or consents by or on behalf of a Person (as defined herein) other than
the Board; or (ii) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of a majority of the then outstanding voting securities of the
Company (the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change of Control: (A) any
acquisition by the Company, or (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (C) any public offering or private placement by
the Company of its voting securities; or (iii) a merger or consolidation of the
Company with another entity in which neither the Company nor a corporation that,
prior to the merger or consolidation, was a subsidiary of the Company, shall be
the surviving entity; or (iv) a merger or consolidation of the Company following
which either the Company or a corporation that, prior to the merger or
consolidation, was a subsidiary of the Company, shall be the surviving entity
and a majority of the Outstanding Company Voting Securities is owned by a Person
or Persons who were not "beneficial owners" of a majority of the Outstanding
Company Voting Securities immediately prior to such merger or consolidation; or
(v) a voluntary or involuntary liquidation of the Company; or (vi) a sale or
disposition by the Company of at least 80% of its assets in a single transaction
or a series of transactions (other than a sale or disposition of assets to a
subsidiary of the Company in a transaction not involving a Change of Control or
a change in control of such subsidiary). If any of the Change in Control events
specified in (iii), (v) or (vi) above occur prior to July 1, 2003, and the
options granted pursuant to Section 3(c) hereof are Non-Vested Options as of the
effective date of such Change in Control event, such options shall vest
immediately prior to such effective date (and Executive
E-12
will be provided a reasonable opportunity to exercise such options prior to such
effective date) in the event the shareholders of the Company receive a payment
or consideration for their shares of Common Stock in connection with such Change
in Control event which is at least equal to $100 per share (as such price may be
adjusted for stock splits, stock dividends and other similar recapitalization
events); provided that if Executive is no longer employed by the Company on a
full-time basis as its President and Chief Executive Officer at the time of such
Change in Control event, such option will vest as provided herein only if such
option is otherwise eligible to vest in accordance with Section 3(d) hereof
based on the manner in which such employment was terminated. In the event any of
the Change in Control events specified in (iii), (v) or (vi) above occur, all
options granted under Section 3(c) (whether Vested Options or Non-Vested
Options) shall terminate as of the effective date of such Change in Control
event to the extent not previously exercised. If any of the Change in Control
events specified in (i), (ii) or (iv) above occur and the options granted
pursuant to Section 3(c) hereof are Vested Options as of the effective date of
such Change in Control event, such options shall remain exercisable until the
Expiration Date set forth in Section 3(c) hereof and if the options granted
under Section 3(c) hereof are Non-Vested Options as of the effective date of
such Change in Control event, such options shall become exercisable and remain
exercisable in accordance with the provisions of Section 3(c) in the same manner
as if such Change in Control event had not occurred; provided, however, that if
a Change in Control event specified in (iv) occurs prior to July 1, 2003 and the
shareholders of the Company receive a payment or consideration for their shares
of Common Stock in connection with such Change in Control event which is at
least equal to $100 per share (as such price may be adjusted for stock splits,
stock dividends and other similar recapitalization events), such Non-Vested
Options shall vest and become exercisable as of the effective date of
E-13
such Change in Control event; provided that if Executive is no longer employed
by the Company on a full-time basis as its President and Chief Executive Officer
at the time of such Change in Control event, such option will vest as provided
herein only if such option is otherwise eligible to vest in accordance with
Section 3(d) hereof based on the manner in which such employment was terminated.
Notwithstanding any provisions contained in Section L of the Non-Qualified Plan
or in the Option Certificate pertaining to the exercise of the options granted
pursuant to Section 3(c) hereof, if any of the events specified in (iii), (iv),
(v) or (vi) above occur the provisions contained herein shall apply.
(h) Executive shall be entitled to vacations in accordance with the policy
of the Company with respect to its senior management, in effect from time to
time and shall be eligible to participate in any pension, profit sharing or
similar plan and any health, hospitalization, medical, accident, disability,
sick leave, supplementary income benefit, life insurance or other similar
benefit plan or program of the Company now existing or hereafter established and
available to the Company's employees generally or to key employees as a group,
in all cases to the extent his age, health and other qualifications make him
eligible to participate. Executive also shall be entitled to such additional
benefits as may be granted to him from time to time by the Board. Upon the
termination of Executive's full-time employment as President and Chief Executive
Officer for any reason, the Company shall pay Executive for any unused accrued
vacation time.
(i) Executive shall be reimbursed for reasonable travel, entertainment and
other expenses associated with the performance of his duties hereunder, promptly
upon his delivery of appropriate receipts and other documentation evidencing the
incurrence of such expenses.
E-14
(j) All compensation payable and other benefits provided under this Section
3 shall be subject to customary withholding for income, F.I.C.A. and other
employment taxes.
(k) All options granted pursuant to this Section 3 shall be issued in
accordance with and be subject to the terms and conditions of the Non-Qualified
Plan. Except as otherwise specifically set forth herein, if there exists a
conflict between the terms of the Non-Qualified Plan and the terms of this
Agreement, the terms of the Non-Qualified Plan shall govern. If there exists a
conflict between the terms of this Agreement and the Option Certificate, this
Agreement shall govern. Executive has reviewed the Non-Qualified Plan and the
form of the Option Certificate prior to executing this Agreement.
(l) All options and terms and conditions pertaining thereto granted
pursuant to this Section 3 shall extend beyond the Termination Date of this
Agreement.
(m) In the event the Company terminates Executive's full-time employment as
the Company's President and Chief Executive Officer for any reason, except "For
Cause" pursuant to Section 4(b)(ii) hereof, or Executive terminates his
full-time employment as the Company's President and Chief Executive Officer
pursuant to Sections 4(b)(i) or 4(b)(vi) hereof, prior to the Termination Date,
Executive will be entitled to participate in the bonus pool which may be awarded
to the executive officers of the Company for the year in which such termination
occurs (and any prior year with respect to which a bonus was awarded to the
executive officer but not paid) to the same extent as if he had been Chief
Executive Officer of the Company for the entire year for which the bonus is
awarded; provided that the amount of the bonus awarded to Executive will be pro
rated based on the number of days during such year on which Executive served as
Chief Executive Officer of the Company. For example, if Executive
E-15
served as Chief Executive Officer for six months of the year for which the bonus
is awarded he would receive 50% of the bonus he would have been entitled to
receive if he had served as Chief Executive Officer for the entire year. Nothing
contained herein shall guarantee that any bonus will be paid to Executive and
Executive will only receive a bonus as determined hereunder if the other
executive officers of the Company are awarded a bonus.
(n) In the event the Company terminates Executive's full-time employment as
the Company's President and Chief Executive Officer for any reason, except "For
Cause" pursuant to Section 4(b)(ii) hereof, or Executive terminates his
full-time employment as the Company's President and Chief Executive Officer
pursuant to Sections 4(b)(i) or 4(b)(vi) hereof prior to the Termination Date,
Executive will continue to consult with the Company and the Board on a part time
basis from the date his full-time employment is so terminated until the
Termination Date. During the period in which Executive provides such consulting
services, Executive will be deemed to be a part-time employee of the Company
and, thus an employee of the Company for purposes of the Non-Qualified Plan.
During his tenure as a part-time employee, (i) Executive will be available to
consult with the Company and the Board during normal business hours as
reasonably requested by the Board upon at least ten days prior written notice to
Executive (it being understood that Executive will not be required to devote
more than four days per month to the Company and will not be required to travel
on behalf of the Company), (ii) commencing once Executive ceases receiving base
salary payments pursuant to Section 3(d) hereof, Executive will receive $10,000
per month (payable in accordance with the Company's normal payroll procedures),
(iii) except as provided in Section 3(o) hereof and under the Non-Qualified
Plan, Executive will not receive any other benefits as an employee of the
Company, (iv) the Company will pay all reasonable expenses incurred by Executive
in providing
E-16
Services under this Section 3(n), and (v) Executive will use reasonable efforts
to fulfill any consulting requests under this Section 3(n), but shall not be in
breach of any provision hereof if health concerns prevent him from providing
such services and Executive may terminate his consulting service obligation
under this Section 3(n) (and his employment under the Non-Qualified Plan) at any
time upon notice to the Company (it being understood that such termination shall
not affect any of Executive's rights hereunder except for the payments provided
for in this Section 3(n)).
(o) During the period commencing as of the date this Agreement is executed
and ending on the Termination Date, Executive will receive reimbursement from
the Company (payable monthly) at the rate of up to $10,000 per year for health
insurance coverage for Executive and his family which is substantially similar
to the health insurance coverage Executive had as of the Effective Date.
(p) To the extent allowable under the Company's 401(k) Plan and all
applicable laws and regulations, the Company shall make matching contributions
to Executive's 401(k) Plan account with the Company based upon the base salary
payments made to Executive pursuant to Section 3(d) hereof. Such contributions
will be made in the manner and amount which is consistent with the Company's
practice at the time Executive's employment with the Company is terminated. If
such matching contributions are not permitted, the Company shall pay to
Executive the maximum amount the Company would have been able to contribute to
Executive's 401(k) account assuming Executive would have made the maximum
contribution allowed based upon his base annual salary at the time his full-time
employment is terminated.
E-17
4. Term and Termination of this Agreement
(a) The term of Executive's employment pursuant to this Agreement shall be
deemed to have commenced as of July 1, 2000 (the "Effective Date") and will
terminate at the close of business on June 30, 2003 (the "Termination Date")
unless earlier terminated as provided herein.
(b) Executive's employment by the Company hereunder may be terminated prior
to the Termination Date:
(i) By Executive at any time upon the breach by the Company of any
material term of this Agreement, provided that Executive shall have sent
written notice of such breach to the Chairman of the Board and the Company
shall have failed to correct such breach within thirty (30) days of its
receipt of such notice;
(ii) By the Company immediately For Cause. For purposes hereof "For
Cause" shall mean (A) any willful and knowing material breach of this
Agreement by Executive; (B) any attempt by Executive to secure any personal
profit in connection with the business of the Company not previously
disclosed to and approved by the Company and a majority of its Board of
Directors; (C) Executive's criminal conviction for fraud, embezzlement,
bribery or any felonious offense; or (D) Executive's commission of any
willful and intentional act of fraud or dishonesty against the Company. In
the event the Company terminates Executive's employment "For Cause" the
Board shall provide Executive as soon as practicable (but not later than
seven (7) business days thereafter) with a written explanation of the
reasons for such termination;
E-18
(iii) By the Company upon Executive's Disability. For purposes hereof
"Disability" shall mean a physical or mental condition which prevents
Executive from performing his duties hereunder for a continuous six month
period or for a total of six months during any 18 month period;
(iv) Upon the death of Executive;
(v) By the Company at any time upon thirty (30) days prior notice of
such termination sent to Executive by or at the direction of the Company's
Board of Directors; provided that such termination shall terminate
Executive's full-time employment as the Company's President and Chief
Executive Officer; or
(vi) By Executive immediately once a successor to Executive as Chief
Executive Officer of the Company begins his or her employment with the
Company (it being understood that for purposes of this Agreement a
termination of his employment with the Company pursuant to this Section
4(b)(vi) shall not be deemed to be a voluntary resignation by Executive);
provided that such termination shall terminate Executive's full-time
employment as the Company's President and Chief Executive Officer.
(c) Except as otherwise provided herein, upon termination of Executive's
full-time employment as the Company's President and Chief Executive Officer, the
Company shall have no further obligation to Executive or his personal
representative with respect to remuneration due under this Agreement or
otherwise.
5. Notices.
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and shall be deemed to have been given when
delivered by hand and acknowledged by receipt or when mailed at any general or
branch United States Post
E-19
Office enclosed in a registered or certified postpaid envelope and
addressed to the address of the respective party stated below or to such
changed address as the party may have fixed by notice:
To the Company: Enzon, Inc.
00 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Corporate Secretary
To Executive: Xxxxx Xxxxxxx
000 Xxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
6. Miscellaneous.
(a) This Agreement shall be construed, interpreted and governed by the
laws of the State of New Jersey, without regard to the conflicts of law
provisions thereof.
(b) This Agreement shall be binding upon and inure to the benefit of
Executive, his legal representatives, heirs and distributees, and shall be
binding upon and inure to the benefit of the Company, and its successors
and assigns; provided, however, that, because this Agreement is a personal
service contract, Executive shall not assign any of his employment duties
or obligations hereunder and any purported assignment shall be null and
void ab initio.
(c) Except as otherwise specifically provided herein, this Agreement
contains the entire agreement of the parties with respect to its subject
matter, and no waiver, modification or change of any of its provisions
shall be valid unless in writing and signed by the party against whom such
claimed waiver, modification or change is sought to be enforced.
(d) Except as otherwise specifically provided for hereunder, the
waiver of any breach of any duty, term or condition of this Agreement shall
not be deemed to
E-20
constitute a waiver of any preceding or succeeding breach of the same or of
any other duty, term or condition of this Agreement.
(e) The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof.
(f) Executive represents and warrants that his performance of all of
the terms of this Agreement and of his obligations as an executive of the
Company does not and will not breach any non-competition agreement or
agreement to keep in confidence any proprietary information or knowledge
acquired by him in confidence or in trust from a third party prior to his
employment with the Company.
(g) Except as otherwise specifically provided for hereunder any claim
or controversy arising out of or relating to this Agreement or the breach
hereof shall be settled by arbitration in accordance with the laws of the
State of New Jersey. Such arbitration shall be conducted in the State of
New Jersey in accordance with the rules then existing of the American
Arbitration Association. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In the
event of any dispute arising under this Agreement, the prevailing party
shall be entitled to reasonable legal fees and disbursements incurred in
connection therewith.
(h) Whenever the context requires, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the
singular forms of nouns and pronouns shall include the plural forms and
vice versa.
E-21
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.
EXECUTIVE
/s/ Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx
ENZON, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx,
----------------------------------
Xxxxxxx X. Xxxxxxxx,
Vice President, Finance and Chief
Financial Officer
E-22
Exhibit A
Certificate No. ______________
No. of options: 100,000 Date granted: August 10, 2000 Price: $50.625
This Option is granted pursuant to the employment agreement dated as of
August 10, 2000 (the "Employment Agreement") between the Optionee and Enzon Inc.
(the "Company"). The Optionee acknowledges receipt of a copy of the Enzon 1987
Non-Qualified Stock Option Plan (the "Plan"), and represents that he is familiar
with the terms and provisions of the Plan and the Employment Agreement. The
Optionee hereby accepts this Option subject to all the terms and provisions of
the Plan and the Employment Agreement, it being understood and agreed that the
vesting and exercise terms of this Option shall be governed by the Employment
Agreement. The Optionee hereby agrees to accept as binding, conclusive, and
final all decisions and interpretations of the Stock Option Committee or the
Board of Directors upon any questions arising under the Plan. As a condition to
the issuance of shares of Common Stock of the Company under this Option, the
Optionee authorizes the Company to withhold, in accordance with applicable law
from any regular cash compensation payable to him, any taxes required to be
withheld by the Company under Federal, state or local law as a result of his
exercise of this Option.
Dated:
---------------------------
Signature
---------------------------
Name
E-23
