EXHIBIT 10.38
Execution Copy
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of January 1, 1998, between CHIREX INC., a
Delaware corporation (the "Company"), and Xxx Xxxxxx ("Executive").
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RECITALS
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Executive is presently the Corporate Controller of the Company. The
parties hereto desire to set forth in writing the terms of the Executive's
continuing employment relationship with the Company.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment
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(a) The Company hereby agrees to continue its employment of Executive to
render exclusive and full time services to the Company as its Corporate
Controller, and to perform such other duties commensurate with such office as he
shall reasonably be directed by the senior management of the Company, for the
period specified in Section 2 (the "Employment Period").
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(b) Executive hereby accepts such employment and agrees to render the
services described above to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner. Executive further agrees to
accept election and to serve during all or any part of the term of this
Agreement as an officer or director of the Company and of any subsidiary or
affiliate of the Company, without any compensation therefor, other than that
specified in this Agreement or as otherwise determined by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.
(c) The duties to be performed by Executive hereunder shall be performed
primarily at the principal office of the Company at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx, subject to reasonable travel requirements on behalf of
the Company.
2. Term of Employment. The Employment Period of Executive by the
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Company shall commence on January 1, 1998 and end on December 31, 2000 (the
"Initial Term") unless further extended or sooner terminated as hereinafter
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provided. Executive may terminate his employment during the Initial Term with
six months written notice to the Company. Commencing on December 31, 2000, and
each December 31 thereafter, the term of Executive's employment shall
automatically be extended for one additional year to, respectively, December 31,
2001, and each December 31 thereafter, unless, not later than six months prior
to the end of any renewal term, either party hereunder shall have given notice
to the other party that
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it does not wish to extend this Agreement. If the Company gives Executive notice
that it does not wish to extend this Agreement during the Initial Term or any
renewal term, Executive shall be entitled to the severance payments provided in
Section 4(d) hereof.
3. Base Salary and Benefits.
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(a) During the Employment Period, Executive's base salary shall be
$100,000 per annum or such higher rate as the Company may designate from time to
time (the "Base Salary"), which salary shall be payable in regular installments
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in accordance with the Company's general payroll practices and shall be subject
to customary withholding. In addition, during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company and its
subsidiaries are generally eligible.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) In addition to the Base Salary, the Board may, in its sole
discretion, award a bonus to Executive following the end of each fiscal year
during the Employment Period, which bonus shall be based upon the Company's
operating results during such year and upon Executive achieving defined specific
goals and objectives during the twelve months prior to review.
(d) Executive may be awarded, from time to time, additional compensation
(such as stock options, stock appreciation rights, performance shares,
restricted stock or unrestricted stock) pursuant to the Company's 1997 Stock
Incentive Plan or any additional or replacement incentive compensation program
established for the key employees of the Company. Any awards under such programs
shall be at such levels or in such amounts as the Board of Directors deems, in
its sole discretion, appropriate for the position occupied by Executive and his
performance therein. Subject to Section 4 herein, the terms, conditions and
rights with respect to any such grants will be subject to the actual provisions
and conditions applicable to such plans.
4. Termination and Change of Control
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(a) If the Executive shall die during the Employment Period, this Agreement
shall terminate, except that (i) Executive's surviving spouse or, if none, his
estate, shall be entitled to receive Executive's compensation (including bonus)
to the last day of the third calendar month following the date of his death; and
(ii) such termination shall not affect any rights which Executive may have at
the time of his death pursuant to any insurance or other death benefit,
retirement, stock option or other plans or arrangements of the Company or of any
subsidiary or affiliate of the Company, which rights shall continue to be
governed by the provisions of such plans and arrangements.
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(b) At the sole discretion of the Board of Directors, Executive may be
terminated if the Executive is disabled (as defined below) and shall have been
absent from his duties with the Company on a full time basis for one hundred and
eighty (180) consecutive days, and, within thirty (30) days after written notice
by the Company to do so, the Executive shall not have returned to the
performance of his duties hereunder on a full time basis. In the event of such
termination, the Company shall make to Executive the payments specified in
Section 4(d). As used herein, the term "disabled" shall (i) mean that Executive
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is unable, as a result of a medically determinable physical or mental
impairment, to perform the duties and services of his position, or (ii) have the
meaning specified in any disability insurance policy maintained by the Company,
whichever is more favorable to the Executive.
(c) The Company may, by notice to Executive, terminate Executive's
employment hereunder for cause. As used herein, "cause" shall mean (i) the
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conviction of Executive of a felony or conviction of a misdemeanor if such
misdemeanor involves moral turpitude; or (ii) Executive's voluntary engagement
in conduct constituting larceny, embezzlement, conversion or any other act
involving the misappropriation of Company funds in the course of his employment;
or (iii) the willful refusal to carry out specific directions of the Board of
Directors, which directions shall be consistent with the provisions hereof; or
(iv) Executive's committing any act of gross negligence or intentional
misconduct in the performance or non-performance of his duties as an employee of
the Company; or (v) any material breach by the Executive of any material
provision of this Agreement (other than for reasons related only to the business
performance of the Company or business results achieved by Executive). For
purposes of this Section 4(c), no act or failure to act on Executive's part
shall be considered to be reason for termination for cause if done, or omitted
to be done, by Executive in good faith and with the reasonable belief that the
action or omission was in the best interests of the Company.
(d) Executive's employment may be terminated at any time by the Company
without cause; provided, however, that in such event Executive shall be entitled
to receive (so long as he executes and delivers the Company's standard form of
release), 120% of Executive's then effective annual Base Salary. The foregoing
amount shall be payable in one lump sum payment within five (5) days after
Executive's last day of active employment. In addition, Executive shall be
entitled to continue participation in the Company's health and other welfare
benefit plans for a period of up to one year or until Executive is covered by a
successor employer's benefit plans, whichever is sooner.
(e) If a "Change in Control" of the Company (as defined in Section 4(f)
below) occurs, all stock options, restricted stock, deferred compensation and
similar benefits which have not yet become vested on the date of a Change in
Control shall become vested upon such event, and Executive shall be permitted to
exercise all such rights in accordance with the administrative provisions of
those plans, whether or not Executive remains employed with the Company or
terminates his employment in accordance with this subsection (e). In addition,
if a Change in Control occurs, Executive may, after such Change in Control,
terminate his
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employment with the Company for any reason during the thirty (30) day period
immediately following the first anniversary of such Change in Control, in which
event Executive shall be entitled to the payments specified in Section 4(d)
above and to the other rights described herein (subject to his compliance
therewith).
(f) For purposes of this Agreement, a "Change in Control" of the Company
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shall be deemed to have occurred if: (i) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities and Exchange Act of 1934) becomes
the beneficial owner, directly or indirectly, of Company securities representing
30% or more of the capital stock of the Company; or (ii) individuals who
constitute the Company's Board of Directors as of the date of this Agreement
(the "Incumbent Board") cease for any reason to constitute at least a majority
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thereof, provided, however, that any person becoming a director subsequent to
the date of this Agreement whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least 51% of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination) shall be, for the purpose of
this clause (ii), considered as though such person were a member of the
Incumbent Board; or (iii) the Company's shareholders approve a merger or
consolidation (where in either case the Company is not the survivor thereof) in
which shareholders of the Company cease to own at least 80% of the surviving
entity's voting power, or a sale or disposition of all or substantially all of
the Company's assets or a plan of partial or complete liquidation of the
Company.
(g) Executive's employment may be terminated by the Executive for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean: (i) the
assignment to Executive of any duties inconsistent in any respect with
Executive's position (including status, offices, titles, and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1(a) hereof, or any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by Executive; (ii) any failure by the Company to comply with any of the
provisions of Section 3 hereof, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by Executive; (iii) the
Company's requiring Executive to be based at any office or location other than
as provided in Section 1(c) hereof; (iv) any purported termination by the
Company of Executive's employment otherwise than as expressly permitted by this
Agreement; or (v) any failure by the Company to obtain an express assumption of
this Agreement by a successor as required pursuant to Section 14 hereof. For
purposes of this Section 4(g), any good faith determination of "Good Reason"
made by Executive shall be conclusive. Upon any termination pursuant to this
subsection (g), Executive shall be entitled to the payment specified in Section
4(d) hereof and to the other rights described therein (subject to his compliance
therewith).
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5. Confidential Information.
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(a) Executive acknowledges and agrees that the information, observations
and data obtained by him while employed by the Company and its subsidiaries
concerning the business or affairs of the Company or any other subsidiary
("Confidential Information") are the property of the Company or such subsidiary.
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Therefore, Executive agrees to keep secret and retain in the strictest
confidence all Confidential Information, including without limitation, trade
"know-how" secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects and other
business affairs of the Company, learned by him prior to or after the date of
this Agreement, and not to disclose them to anyone outside the Company, either
during or after his employment with the Company, except (i) in the course of
performing his duties hereunder; (ii) with the Company's express written
consent; (iii) to the extent that the Confidential Information becomes generally
known to and available for use by the public other than as a result of
Executive's acts or omissions; or (iv) where required to be disclosed by court
order, subpoena or other government process. If Executive shall be required to
make disclosure pursuant to the provisions of clause (iv) of the preceding
sentence, Executive promptly, but in no event more than 48 hours after learning
of such subpoena, court order or other governmental process, shall notify the
Company, by personal delivery or fax (pursuant to Section 9 hereof), and, at
the Company's expense, shall take all reasonably necessary steps requested by
the Company to defend against the enforcement of such subpoena, court order or
other governmental process and permit the Company to intervene and participate
with counsel of its own choice in any related proceeding.
(b) Executive shall deliver to the Company at the termination of his
employment, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Company or
any subsidiary which he may then possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all inventions,
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innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company or its predecessor and its subsidiaries ("Work Product") belong to the
Company or such subsidiary. Executive shall promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board (whether
during or after his employment) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
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7. Indemnification. The Company will indemnify Executive and his legal
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representatives, to the fullest extent permitted by the laws of the State of
Delaware and the existing by-laws of the Company or any other applicable laws or
the provisions of any other corporate document of the Company, and Executive
shall be entitled to the protection of any insurance policies the Company may
elect to obtain generally for the benefit of its directors and officers, against
all costs, charges and expenses whatsoever incurred or sustained by him or his
legal representatives in connection with any action, suit or proceeding to which
he or his legal representatives may be made a party by reason of him being or
having been a director or officer of the Company or of any of its subsidiaries
or affiliates or actions taken purportedly on behalf of the Company or of any of
its subsidiaries or affiliates.
8. Executive's Representations. Executive hereby represents and
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warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, and (ii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
9. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be deemed to have been duly given if delivered personally with
receipt acknowledged or sent by registered or certified mail or equivalent, if
available, postage prepaid, or by fax (which shall be confirmed by a writing
sent by registered or certified mail or equivalent on the same day that such fax
was sent), addressed to the parties at the following addresses or to such other
address as such party shall hereafter specify by notice to the other:
Notices to Executive: Xxx Xxxxxx
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Xxxxxxxxxx, Xxxxxxxxxxx
(000) 000-0000 (Phone)
Notices to the Company: ChiRex Inc.
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Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
(000) 000-0000 (Phone)
(000) 000-0000 (Fax)
Attention: General Counsel
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10. Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Complete Agreement. This Agreement constitutes the complete
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agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12. No Strict Construction. The language used in this Agreement shall
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be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
13. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
14. Successors and Assigns. This Agreement is intended to bind and
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inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company. The Company will require any successor to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
15. Choice of Law. All issues and questions concerning the
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construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to any choice of
law or conflict of law rules or provisions that would cause the application of
the laws of any jurisdiction other than the State of New York.
16. Amendment and Waiver. The provisions of this Agreement may be
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amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement .
17. Arbitration. Any controversy or claim arising out of or relating
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to this Agreement, the making, interpretation or the breach thereof, other than
a claim solely for injunctive relief for any alleged breach of the provisions of
Section 5 as to which the parties shall have the right to apply for specific
performance to any court having equity jurisdiction, shall be
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settled by arbitration in New York City by one arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and
judgement upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof and any party to the arbitration may, if he elects,
institute proceedings in any court having jurisdiction for the specific
performance of any such award. The powers of the arbitrator shall include, but
not be limited to, the awarding of injunctive relief. The Company shall
reimburse Executive for all expenses incurred by Executive in connection with
any arbitration, including reasonable attorney's fees, to the extent the
arbitration is concluded in Executive's favor.
18. No Mitigation or Set-Off. The provisions of this Agreement are not
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intended to, nor shall they be construed to require that Executive mitigate the
amount of any payment provided for in this Agreement by seeking or accepting
other employment, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by Executive as a result of his
employment by another employer or otherwise. The Company's obligations to make
the payments to Executive required under this Agreement, and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action that the
Company may have against Executive.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CHIREX INC.
By Its Chief Financial Officer:
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Xxxxxxx X. Xxxxxxxx
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Xxx Xxxxxx
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