EXHIBIT 10.24 (A)
NEXELL THERAPEUTICS INC.
NINE PARKER
XXXXXX, XXXXXXXXXX 00000
May 28, 1998
Mr. L. Xxxxxxx XxXxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Dear Xxxx:
This letter agreement sets forth in all respects the agreement between you
and Nexell Therapeutics Inc. ("Nexell") as to the terms and conditions of your
employment by Nexell.
1) You will be employed as President & Chief Executive Officer of Nexell.
You will report to the Board of Directors of Nexell. At the option of
the Board of Directors of Nexell, you agree to serve, for no
additional compensation, as a director and/or officer of any or all of
Nexell's subsidiaries or affiliates throughout the term of your
employment. The place of employment will be at the offices of Nexell
in Irvine, California.
2) The term of your employment will commence effective March 1, 1998, and
shall continue until terminated under the provisions of Paragraph 5
below. You will be a full-time employee of Nexell and you agree to
devote your business and professional time, energy and skills to the
affairs of Nexell and its subsidiaries and affiliates and to serve
Nexell faithfully and to the best of your ability.
a) As compensation for the services to be rendered by you
hereunder, Nexell will pay you (i) a signing bonus of $25,000 payable
on your execution and delivery of this letter agreement, and (ii) a
base salary of $225,000 per annum, payable in installments in
accordance with Nexell's regular payroll practices, and (iii) an
annual cash bonus to be determined in accordance with the provisions
of subparagraph 2(d).
b) As additional compensation, Nexell shall award you,
effective upon commencement of your employment, Non-Incentive Stock
Options to purchase 125,000 shares of Nexell common stock at an
exercise price of $5.00 per share pursuant to Nexell's 1998 Non-
Incentive Stock Option Plan (the "Plan"), subject to approval of the
Board of Directors of Nexell and approval of the adoption of the
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 2
Plan by the shareholders of Nexell and of VIMRx Pharmaceuticals Inc.
("VIMRx"). Such options will be granted pursuant to such terms and
conditions as are set forth in the Plan and a Non-Incentive Stock
Option Agreement substantially in the form of the Non-Incentive Stock
Option Agreement attached to the Plan as Exhibit A. Such Non-Incentive
Stock Option Agreement shall provide that (i) all of such options
shall be vested and exercisable on and after January 1, 2002 and they
shall become vested in accordance with the following vesting schedule:
31,250 on January 1, 1999; 31,250 on January 1, 2000; 31,250 on
January 1, 2001; and 31,250 on January 1, 2002, (ii) such options
shall expire ten years after their grant (subject to earlier
termination pursuant to the terms of the Plan and the Non-Incentive
Stock Option Agreement), and (iii) pursuant to Section 7(a) of the
Plan, or the corresponding provision of any amendment of the Plan,
such options shall be exercisable for shares of VIMRx common stock at
the rate of 3 shares of VIMRx common stock for each share of Nexell
common stock purchasable under the options, at an exercise price per
share of VIMRx common stock equal to one-third of the exercise price
per share of the Nexell common stock set forth in the Non-Incentive
Stock Option Agreement.
c) You will be eligible to participate in Nexell's medical,
dental, life and long-term disability insurance and other benefit
programs, including any 401(k) or other retirement plans, from time to
time in effect for Nexell's senior executives, your participation in
any such plans to be in accordance with their respective terms and
conditions.
d) Your performance will be reviewed annually by Nexell's Board
of Directors, in connection with which your annual cash bonus and
possible increases in your base compensation for the future will be
discussed, it being understood that any such decisions shall be within
the discretion of Nexell's Board of Directors and/or its Compensation
Committee (or other similar committee duly appointed by Nexell's Board
of Directors). However, it is further understood that the annual cash
bonus is initially targeted at an amount equal to at least 25 percent
of base compensation, assuming satisfactory performance.
e) Until such time as you have relocated your residence to
California or until the expiration of six months following the
commencement of your employment hereunder, whichever occurs first,
Nexell will pay or reimburse (i) all of your reasonable expenses for
travel to and from California and all of your reasonable living
expenses while in California, and (ii) the cost of up to three round
trip economy airline tickets for travel to California by your fiancee.
Nexell also will pay the reasonable expenses of moving your household
and personal effects from your home in southeastern Pennsylvania to a
new residence in California and the reasonable closing costs
[including points?] of purchasing a new home in California.
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 3
To the extent that any of the expenses paid or reimbursed by Nexell
pursuant to this subparagraph 2(e) constitutes compensation income to
you that is subject to personal income taxation, Nexell will pay you
an additional amount of cash compensation equal to the aggregate
federal, state, and local income taxes payable by you with respect to
the compensation income attributable to the payment or reimbursement
of such expenses by Nexell (including income taxes payable with
respect to such additional cash compensation).
3) You will be entitled to take up to an aggregate of four weeks of
vacation each calendar year as business conditions permit. Nexell
shall not be required to provide any additional compensation to you
for vacation time not utilized by you.
4) Nexell will reimburse you for all reasonable and documented business
expenses incurred by you on behalf of Nexell during the term of your
employment hereunder consistent with Nexell's expense reporting policy
(as the same may be modified from time to time). Notwithstanding
anything herein to the contrary, the provisions of this Paragraph 4
shall survive the effective date of termination of this Agreement for
a period of six months.
5)
a) Your employment hereunder may be terminated at any time by
Nexell for cause (as such term is hereinafter defined) or, upon at
least 60 days' prior written notice by you or by Nexell, without
cause.
b) In the event your employment is terminated by Nexell without
cause or is terminated by you in the circumstances described in
Paragraph 5(f) below, this Agreement shall terminate immediately on
the effective date of termination of your employment; provided,
however, that:
i) you will be paid twelve months' base salary as
severance in monthly installments (in arrears)
beginning the first full month following the
cessation of your employment with Nexell;
ii) you will be entitled to receive any accrued but
unpaid salary earned by you through the effective
date of such termination.
iii) in the event that your employment is terminated by
Nexell without cause or is terminated by you in the
circumstances described in Paragraph 5(f) below
within 30 months after the commencement of your
employment hereunder, Nexell will pay or reimburse
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 4
reasonable expenses for moving your household and
personal effects from California to southeastern
Pennsylvania; and
iv) in the event that your employment is terminated by
Nexell without cause or is terminated by you in the
circumstances described in Paragraph 5(f) below
following the date that is two years after the
commencement of your employment hereunder, all of
your then-vested options to purchase Nexell common
stock shall become exercisable for shares of VIMRx
common stock at the rate of 3 shares of VIMRx common
stock for each share of Nexell common stock
purchasable under such vested options, at an exercise
price per share of VIMRx common stock equal to one-
third of the exercise price per share of Nexell
common stock set forth in the Non-Incentive Stock
Option Agreement.
c) No severance shall be paid or payable to you in the event your
employment is terminated for cause, or you voluntarily resign from your
employment with Nexell, in which events this Agreement shall terminate
immediately upon the effective date of termination of your employment or
upon the effective date of your resignation, respectively; provided,
however, that Nexell shall nonetheless be obligated to pay you any accrued
but unpaid salary earned by you through the date of such termination.
d) For purposes of this Agreement, termination for "cause" shall mean
termination due to any or more of the following: (i) if you are indicted
for committing a felony or a decision or determination is rendered by any
court or governmental authority that you have committed any act involving
fraud, willful misconduct, dishonesty, breach of trust or moral turpitude;
(ii) if you willfully breach your duty of loyalty to, or commit an act of
fraud or dishonesty upon, Nexell; (iii) if you demonstrate gross negligence
or willful misconduct in connection with your employment; (iv) if, in the
reasonable, good faith opinion of a majority of Nexell's whole Board of
Directors (excluding yourself, if you shall then be a director of Nexell),
you engage in personal misconduct of such a material nature as to render
your presence as an officer of Nexell detrimental to Nexell or its
reputation and you fail to cure the same within five days after notice
thereof from Nexell; or (v) if you commit a material breach of or a default
under any of the terms or conditions of this Agreement and you fail to cure
such breach or default within ten days after prior written notice thereof
from Nexell.
e) Your employment hereunder shall terminate immediately upon your
death or "permanent disability" (as such term is hereinafter defined). In
either such event,
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 5
this Agreement shall terminate immediately upon the cessation
of your employment; provided, however, you (or your legal representative,
as the case may be) will be entitled to receive any accrued but unpaid
salary earned by you through the date of such termination, plus severance
in monthly installments (in arrears), beginning the first full month
following the date of such termination, in an aggregate amount equal to the
positive difference, if any, between (x) the base salary you would have
received hereunder for the six months immediately following such
termination date had your employment continued for such six month period,
and (y) the total monies paid or payable to you with respect to such six
month period under the long-term disability insurance policy or policies
maintained by Nexell for your benefit, if any. For purposes of this
Agreement, the term "permanent disability" shall have the meaning set forth
in the long-term disability insurance policy or policies then maintained by
Nexell for the benefit of its employees, or if no such policy shall then be
in effect, or if more than one such policy shall then be in effect in which
the term "permanent disability" shall be assigned different definitions,
then the term "permanent disability" shall be defined for purposes hereof
to mean any physical or mental disability or incapacity which renders you
incapable of fully performing the services required of you in accordance
with your obligations hereunder for a period aggregating 120 days during
any twelve-month period.
f) In the event of occurrence of any of the following events, you
shall have the right to terminate your employment with Nexell on at least
60 days' notice. Subject to the foregoing provisions of this Paragraph 5,
in the event such notice is given by you within 30 days of any one or more
of such events, such termination of employment shall be deemed termination
of your employment by Nexell without "cause" within the meaning of this
Paragraph 5:
i) a material breach of or default under this Agreement by
Nexell which is not cured by Nexell within ten (10) days
after its receipt of written notice thereof from you;
ii) a material reduction in your duties by Nexell's Board of
Directors (not arising from any physical or mental
disability you may sustain) which would be inconsistent with
the position of President & Chief Executive Officer of
Nexell or such other executive position to which you may be
assigned and the same shall not have been alleviated by
Nexell's Board of Directors within ten (10) days after its
receipt of written notice thereof from you.
6) You hereby agree that you shall not, directly or indirectly, during the
term of your employment hereunder and until the expiration of six months
after you cease to be
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 6
so employed by Nexell, own, manage, operate, join, control or become
employed by, or render any services of an advisory nature or otherwise, or
participate in the ownership, management, operation or control of, or
otherwise be connected in any manner with, any business competitive with
the business of Nexell or any of its directly or indirectly, wholly or
partially owned subsidiaries without Nexell's prior written consent.
7)
a) You further hereby covenant and agree that you will not at any
time during, or (a) for a period of three (3) years following the
termination of, your employment with Nexell, reveal, divulge or make known
to any person or entity any secrets or confidential information (whether
oral, written, or electronically encoded) whatsoever, of or concerning
Nexell or any of its directly or indirectly, wholly or partially owned
subsidiaries or its business or anything connected therewith, all of which
is and shall remain the property of Nexell and shall be returned by you to
Nexell (including all copies) immediately upon any termination of your
employment (or earlier, if requested by Nexell), or (b) for a period of
three (3) years following the termination of your employment with Nexell,
directly or indirectly entice away from Nexell's employment, retain or
otherwise engage, any employee of Nexell, or attempt to do any of the
foregoing.
b) For purposes hereof, confidential information shall not include
any information which: (i) is or becomes generally available to the public
other than as a result of a wrongful disclosure by you or your
representatives; (ii) was known by you on a non-confidential basis prior to
its disclosure to you by Nexell or its representatives; (iii) becomes
available to you from a source other than Nexell or its representatives,
provided that such source is not bound by a confidentiality agreement with
Nexell or its representatives and otherwise has a right to disclose the
same; or (iv) is required to be disclosed by any governmental or judicial
authority, provided, in such case, that you shall use your best efforts to
notify Nexell immediately of any such requirement so that Nexell shall have
an opportunity to contest it.
8) In the event of any breach or threatened breach by you of any one or more
of the provisions of Paragraphs 6 (relating to non-competition) or 7
(relating to non-disclosure and non-enticement of employees) above, Nexell
will be entitled, in addition to any remedy hereunder or under any
applicable law or in equity, to an injunction restraining the breach of
such provisions hereof.
9) You agree that Nexell may, in its discretion, apply for and take out in its
name and at its own expense, and solely for its benefit, key man life
insurance on you in any
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 7
amount deemed advisable by Nexell to protect its interests, and you agree
that you shall have no right, title or interest therein and further agree
to submit to any medical or other examination and to execute and deliver
any application or other instruments in writing reasonably necessary to
effectuate such insurance.
10) You represent and warrant that you are not under any obligation,
restriction or limitation, including but not limited to confidentiality
and/or non-competition restrictions, contractual or otherwise, to any other
individual or entity which would prohibit or impede you from performing
your duties and responsibilities hereunder and that you are free to enter
into and perform the terms and provisions of this Agreement. Your
employment agreement dated May 19, 1997 with VIMRx has been terminated by
the mutual consent of the parties, effective February 28, 1998, and VIMRx
has consented to your employment by Nexell.
11) Notwithstanding anything herein to the contrary, the provisions of
Paragraphs 6, 7, 8 and 10 hereof shall expressly survive the expiration or
termination of this Agreement regardless of the reason for, or cause of,
any such termination.
12) All notices, requests, demands, and other communications provided for by
this Agreement shall be in writing and shall be either personally delivered
(including by couriers such as FedEx) or sent by pre-paid certified mail,
return receipt requested, addressed to the address stated below of the
party to which notice is given, or to such changed address as such party
may have fixed by notice given in accordance with the terms hereof:
TO Nexell: Nexell Therapuetics Inc.
Nine Xxxxxx
Xxxxxxxxxx 00000
Attn: The Board of Directors
WITH A COPY TO: VIMRx Pharmaceuticals Inc.
c/o Xxxxxxx X. Xxxxxxx, President
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000, Xxxxxx Xxxxx II
Xxxxxxxxxx, Xxxxxxxx 00000
AND A COPY TO: Xxxxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Mr. L. Xxxxxxx XxXxxxxx
May 28, 1998
Page 8
TO Xx. XxXxxxxx: L. Xxxxxxx XxXxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Any notice, sent as provided above, shall be deemed given upon receipt at the
address provided for above (or, in the event delivery is refused, the first
date on which delivery was tendered).
13) This Agreement contains the entire agreement and understanding between
the parties relating to the subject matter hereof and supersedes any
and all prior understandings, agreements and representations, written
or oral, expressed or implied, with respect thereto.
14) This Agreement may not be amended, modified, altered or terminated
(other than pursuant to its terms) except by an instrument in writing
signed by the parties.
15) In case any one or more of the provisions of this Agreement shall be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby.
16) This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware applicable to
contracts made and to be performed entirely therein (without giving
effect to the conflict of law rules thereof) .
Kindly indicate your agreement with the foregoing by countersigning
the enclosed duplicate copy of this letter agreement and returning it to me on
behalf of Nexell.
On behalf of the Board of Directors of Nexell, we look forward to a
long and mutually rewarding relationship.
Sincerely,
NEXELL THERAPEUTICS INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx, Director
ACCEPTED AND AGREED TO THIS
28th DAY OF MAY, 1998
/s/ L. Xxxxxxx XxXxxxxx
---------------------------
L. Xxxxxxx XxXxxxxx
