Exhibit 10.17
EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 23, 2001 between XXXXXX X. XXXXXXX, residing
at 00 Xxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Executive"), and CELL & MOLECULAR
TECHNOLOGIES, INC., a Delaware corporation having its principal office at 000
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx 00000 ("Company").
WHEREAS, the Company is a wholly-owned subsidiary of Sentigen Holding
Corp., a Delaware Corporation ("Sentigen); and
WHEREAS, Executive has been the Chief Executive Officer and President
of the Company under an Employment Agreement dated May 22, 1997 ("Prior
Agreement"), and
WHEREAS, the Company desires to continue to avail itself of Executive's
expertise.
IT IS AGREED:
1. Employment, Duties and Acceptance.
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1.1 The Company shall continue to employ Executive as its Chief
Executive Officer ("CEO") and President for a period commencing on May 23, 2001
("Start Date") and terminating in accordance with the terms of this Agreement.
All of Executive's powers and authority in any capacity shall at all times be
subject to the direction and control of the Company's Board of Directors and the
Board of Directors of Sentigen. When used herein, the term "Board of Directors"
shall mean the Board of the Company. At the Company's request, Executive shall
serve as a member of the Board of Directors during the period in which he serves
as CEO and President. At the request of the Board of Directors given at any
time, Executive shall sign a letter resigning from the Board of Directors.
1.2 The Board of Directors and/or the Chairman of Sentigen may
assign to Executive such general management and supervisory responsibilities and
executive duties for the Company or any subsidiary of the Company as are
consistent with Executive's status as CEO and President.
1.3 Executive accepts such employment and agrees to devote
substantially all of his business time, energy and attention to the performance
of his duties hereunder beginning on the Start Date. Nothing herein shall be
construed as preventing Executive from making and supervising personal
investments during the term of this Agreement, provided they will not (a)
require any substantial services on his part in the operation of the affairs of
the companies in which such investments are made, (b) interfere with the
performance of Executive's duties hereunder or (c) violate the provisions of
paragraph 5.4 hereof.
2. Compensation and Benefits.
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2.1 The Company shall pay to Executive a salary at the annual
rate of $150,000. Executive's compensation shall continue to be paid in equal
two week installments. Executive's salary shall be adjusted on each one year
anniversary of this agreement as set forth below, based on changes in the CPI
(as defined below). Executive may also be awarded merit increases in salary at
the sole discretion of the Board of Directors.
Executive's salary on each one year anniversary of this
Agreement shall be adjusted to an amount equal to the product obtained by
multiplying Executive's salary in the immediately preceding year by a fraction,
the numerator of which shall be the Consumer Price Index for All Urban Wage
Earners and Clerical Workers (CPI-W) Northeast Urban, as published by the U.S.
Bureau of Labor Statistics (reference base 1982-1984 = 100) ("CPI"), for the
month of May in which the adjustment occurs, and the denominator of which shall
be the CPI for the month of May in the immediately preceding year.
2.2 As additional compensation for services to be rendered by
Executive hereunder:
(a) Simultaneously herewith, the Company is issuing to
Executive options ("Options") to purchase 25,000 shares of Sentigen's common
stock ("Common Stock") at a price per share of $9.00. The Options are evidenced
by, and subject to, a Stock Option Agreement, dated as of May 23, 2001, between
Sentigen and Executive ("Stock Option Agreement"), the terms of which are deemed
to be incorporated herein by reference. The Options shall vest in accordance
with the terms of the Stock Option Agreement in five equal, annual installments
commencing on January 1, 2002.
(b) Executive shall be entitled to participate in the
Company's bonus plan, which is based on the Company's net profits and allocated
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each year by the Board of Directors. Notwithstanding the Board's discretion in
allocating bonuses under the plan, Executive's minimum bonus shall be $20,000
for each full fiscal year of employment. If such payment exceeds Executive's
allocated bonus under the plan, the excess shall be credited against any future
allocated bonuses in excess of $20,000.
(c) Executive shall be entitled to a car allowance of
$500 per month during the term of this Agreement.
2.3 Executive shall be entitled to such medical, dental, life,
disability, insurance coverage and other employee benefits (or their
equivalents) as are currently being provided to him by the Company.
2.4 Executive shall be entitled to four weeks of vacation in each
calendar year and to a reasonable number of other days off for religious and
personal reasons.
2.5 The Company shall reimburse the Executive for all reasonable
and necessary travel and entertainment expenses, disbursements and other
incidental expenses incurred for or on behalf of the Company, in addition to any
fees, charges or costs for membership in business or professional organizations
reasonably approved by the Company, upon the presentation of appropriate
vouchers or other evidence of such expenditures. The Executive will not incur
any expense in excess of $2,000 without the prior approval of the Board of
Directors or an appropriate committee thereof.
3. Term and Termination.
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3.1 The term of Executive's employment hereunder shall commence on
the Start Date and shall continue until the earlier of May 22, 2006 or the two
year anniversary of a "Change in Control" (as defined below), unless sooner
terminated as herein provided.
3.2 Executive's employment hereunder shall terminate on the date
of his death, in which case the Company shall pay to the legal representative of
Executive's estate (i) the base salary due Executive pursuant to paragraph 2.1
hereof through the date of Executive's death, (ii) all earned and previously
approved but unpaid bonuses, (iii) all valid expense reimbursements through the
date of the termination of employment and (iv) all accrued but unused vacation
pay.
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3.3 The Company, by notice to Executive, may terminate Executive's
employment hereunder if Executive shall fail because of illness or incapacity to
render, for six consecutive months, services of the character contemplated by
this Agreement. Notwithstanding such termination, the Company shall pay to
Executive (i) the base salary due Executive pursuant to paragraph 2.1 hereof
through the date of such notice, less any amount Executive receives for such
period from any Company-sponsored or Company-paid source of insurance,
disability compensation or government program, (ii) all earned and previously
approved but unpaid bonuses, (iii) all valid expense reimbursements through the
date of the termination of employment and (iv) all accrued but unused vacation
pay.
3.4 The Company, by notice to Executive, may terminate Executive's
employment hereunder for "Cause." As used herein, "Cause" shall mean: (a) the
willful and continued failure by Executive to substantially perform his duties
hereunder (other than any such failure resulting form Executive's incapacity due
to physical or mental illness) after demand for performance is delivered by the
Company specifically identifying the manner in which Company believes Executive
has not substantially performed his duties and the failure to correct such
failure within 30 days of Executive's receipt of such demand, (b) the willful
engaging by Executive in criminal misconduct which is injurious to Company,
monetarily or otherwise, (c) Executive is convicted by a court of competent
jurisdiction, or pleads guilty or nolo contendere to, any felony involving the
possession of a controlled substance, fraud or dishonesty, moral turpitude,
theft or larceny, or (d) the willful breach by Executive of any material
provision of this Agreement after demand to cure the breach is delivered by the
Company specifically identifying the manner in which Company believes Executive
has breached and the failure to cure such breach within 30 days of Executive's
receipt of such demand, provided, however, that a repeated failure or breach
after notice and cure of any provision of clauses (a) or (d) above involving the
same or substantially similar actions or conduct, shall be grounds for
termination for "Cause" without any additional notice. Notwithstanding such
termination, the Company shall pay to Executive (i) the base salary due
Executive pursuant to paragraph 2.1 hereof through the date of such notice, (ii)
all earned and previously approved but unpaid bonuses, (iii) all valid expense
reimbursements through the date of the termination of employment and (iv) all
accrued but unused vacation pay.
3.5 The Executive, by notice to the Company, may terminate
Executive's employment hereunder if a "Good Reason" exists. For purposes of this
Agreement, "Good Reason" shall mean the occurrence of any circumstance set forth
below, unless such circumstance is fully corrected within 30 days of receipt by
the Company of written notice of such circumstance from Executive specifically
identifying the circumstance he believes creates "Good Reason":
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(a) the assignment to Executive of duties inconsistent
with the position of President and CEO of the Company, removal of the Executive
from the position of President and CEO of the Company, or a substantial
diminution in the nature or status of Executive's responsibilities from those in
effect as of the Start Date;
(b) a reduction by the Company of the Base Salary as in
effect on the Start Date;
(c) the deliberate failure by the Company to provide,
within two weeks of the date payment was required, the compensation, expense
reimbursement, or benefits specified in Section 2; provided Executive is not the
person responsible for payment of compensation, expense reimbursement or
benefits; and provided, further, that after the passage of two weeks from the
date payment was required, Executive shall have given written notice to
Xxxxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxx at their current addresses or fax
machines in New York and Aspen, respectively (or as changed by notice to
Executive), of such failure by the Company, Executive shall have called a
meeting of the Board of Directors and such failure shall not have been
completely cured by the close of business two business days after such meeting
of the Board of Directors;
(d) moving the principal office of the Company to a
location more than 60 miles from its current location; or
(e) the commission by the Company of a material breach of
the provisions of this Agreement.
3.6 If Executive terminates his employment hereunder for Good
Reason, pursuant to the provisions of paragraph 3.5, or the Company terminates
his employment hereunder without "Cause," as defined in paragraph 3.4, the
Company shall pay to Executive (i) a lump sum payment equal to the base salary
due Executive pursuant to paragraph 2.1 hereof through the six-month anniversary
of the date of such notice, (ii) all earned and previously approved but unpaid
bonuses, (iii) all valid expense reimbursements through the date of the
termination of employment and (iv) all accrued but unused vacation pay; and, in
addition the Company shall continue to pay for Executive's insurance coverage
until the earlier of (a) the date the Executive becomes eligible to be covered
under a similar program by reason of employment elsewhere; or (b) the one-year
anniversary of the termination of employment.
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3.7 A "Change in Control" shall occur if any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act of 1934 ("Exchange
Act")), other than Sentigen or an affiliate of Sentigen becomes the "beneficial
owner" (as referred in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50% of the
voting power of the Company's securities in one or more transactions (including
by way of merger or reorganization), or a sale of all or substantially all of
the Company's assets.
4. Executive Indemnity
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4.1 To the maximum extent permitted by law, the Company agrees to
indemnify and defend Executive and hold Executive harmless against all claims,
causes of action, costs, expenses (including, without limitation, reasonable
attorneys' fees) and liabilities (other than settlements to which the Company
does not consent, which consent shall not be unreasonably withheld)
(collectively, "Losses") reasonably incurred by Executive in connection with any
claim, action, proceeding or investigation brought against or involving
Executive with respect to, arising out of or in any way relating to Executive's
employment with the Company or Executive's service as a director of the Company;
provided, however, that the Company shall not be required to indemnify Executive
for Losses incurred as a result of Executive's intentional misconduct or gross
negligence. Executive shall promptly notify the Company of any claim, action,
proceeding or investigation under this paragraph and the Company shall be
entitled to participate in the defense of any such claim, action, proceeding or
investigation and, if it so chooses, to assume the defense with counsel selected
by the Company; provided that Executive shall have the right to employ counsel
to represent him (at the Company's expense) if Company counsel would have a
"conflict of interest" in representing both the Company and Executive. The
Company shall not settle or compromise any claim, action, proceeding or
investigation without Executive's consent, which consent shall not be
unreasonably withheld; provided, however, that such consent shall not be
required if the settlement entails only the payment of money and the Company
fully indemnifies Executive in connection therewith and obtains a general
release with respect to Executive. The Company further agrees to advance any and
all expenses (including, without limitation, the fees and expenses of counsel)
reasonably incurred by the Executive in connection with any such claim, action,
proceeding or investigation, provided Executive first enters into an appropriate
agreement for repayment of such advances if indemnification is found not to have
been available. The Company shall, upon the settlement of a claim, action,
proceeding or investigation, grant Executive a release of liability if the
Company has obtained a release and if Executive was lawfully entitled to
indemnity. This Section 4 survives the termination of this Agreement.
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5. Protection of Confidential Information; Non-Competition;
Non-Solicitation.
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5.1 (a) The Company will suffer substantial damage which will
be difficult to ascertain if, during the term of this Agreement or thereafter,
Executive should enter a business competitive with the Company, or divulge
Confidential Information as defined below, or breach his obligations under
Section 6.
(b) The provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company.
5.2 Executive acknowledges that:
(a) As a result of Executive's employment with the
Company, he has obtained and will obtain secret and confidential information
concerning the business of the Company and its subsidiaries and affiliates
(referred to collectively in this Section 5 and in Section 6 as the "Company"),
including, without limitation, financial information, designs and other
proprietary rights, trade secrets and "know-how," customers and sources
("Confidential Information"). The obligations herein imposed shall not extend to
Confidential Information which: (i) is or lawfully becomes available to the
public without restriction and without breach of this Agreement by Executive; or
(ii) is previously known to Executive or which is independently developed by
Executive without reference to any Confidential Information and, in either case,
is so evidenced by written material in his possession.
(b) Executive agrees that he will not at any time, either
during the term of this Agreement or thereafter, divulge to any person or entity
any Confidential Information obtained or learned by him as a result of 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 any such information is in the public domain other than as a result of
Executive's breach of any of his obligations hereunder; 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 72 hours after learning of such subpoena, court order, or other government
process, shall notify, by personal delivery or by electronic means, confirmed by
mail, the Company and, at the Company's expense, Executive shall: (a) take all
reasonably necessary and lawful steps required by the Company to defend against
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the enforcement of such subpoena, court order or other government process, and
(b) not object to the Company's intervention and participation with counsel of
its choice in any proceeding relating to the enforcement thereof.
5.3 Upon termination of his employment with the Company for any
reason, Executive will promptly deliver to the Company all memoranda, notes,
correspondence, records, reports, manuals, drawings, blueprints and any other
documents (and all copies thereof) relating to the business of the Company and
all property associated therewith, including by not limited to any of its
Confidential Information, which he may then possess or have under his control;
provided, however, that Executive shall be entitled to retain copies of such
documents reasonably necessary to document his financial relationship (both past
and future) with the Company.
5.4 During the period commencing on the date hereof and ending on
the second anniversary of the date Executive's employment hereunder is
terminated (provided, however, that if Executive's employment is terminated
without "Cause" or Executive terminates his employment with "Good Reason," such
period shall terminate on the one-year anniversary of the termination date), and
in consideration for Executive's employment hereunder, Executive, without the
prior written permission of the Company, shall not, (i) be employed by, or
render any services to, any person, firm or corporation engaged in any business
which is in competition with either (a) the business conducted by the Company on
the effective date of termination or (b) a business which the Company is
involved in as of the effective date of termination (either, a "Competitive
Business"); (ii) engage in any Competitive Business for his or its own account;
(iii) be associated with or interested in 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 (iv) solicit, interfere with, or endeavor to entice away from the Company,
for the benefit of a Competitive Business, any of its customers, employees or
other persons with whom the Company has a contractual relationship.
Notwithstanding the foregoing, this provision shall not preclude Executive from
investing his personal assets in the publically traded securities of any
corporation or other business entity which is engaged in a Competitive Business
if such ownership is in compliance with the requirements set forth in clauses
(a) and (b) of the last sentence of paragraph 1.3 hereof and if such investment
does not result in his beneficially owning, at any time, more than 1% of the
publicly traded equity securities of such Competitive Business.
5.5 If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of paragraphs 5.2 or 5.4, or of any of the
provisions of Section 6, the Company shall have the right and remedy to have
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the provisions of this Agreement specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed by Executive that the
services being rendered hereunder to the Company are of a special, unique and
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company.
Each of the rights and remedies enumerated in this paragraph
5.5 shall be independent of the other, and shall be severally enforceable, and
such rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or equity.
In connection with any legal action or proceeding arising out
of or relating to this Agreement, the prevailing party in such action or
proceeding shall be entitled to be reimbursed by the other party for the
reasonable attorneys' fees and costs incurred by the prevailing party.
5.6 If Executive violates any covenant contained in paragraph 5.4,
the duration of such covenant so violated shall automatically extend for a
period of time equal to the period of such violation.
5.7 If any provision of paragraphs 5.2 or 5.4 is held to be
unenforceable, the tribunal making such determination shall have the power to
modify such provision or provisions which shall then be applicable in such
modified form.
5.8 The provisions of this Section 5 shall survive the termination
of this Agreement.
6. Inventions, Patents and Copyrights.
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6.1 All inventions and other creative works, including any patent,
copyright, trade secret, trademark or other intellectual property rights,
developed or produced by Executive either alone or jointly with others and which
relate to the Company's business or technology (collectively, "Intellectual
Property) shall be considered to have been prepared for the Company as a part,
and in the course, of Executive's employment with the Company. Any such
Intellectual Property shall be owned by the Company regardless of whether it
would otherwise be considered a work made for hire. Such Intellectual Property
shall include, among other things, software and documentation therefor.
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6.2 The Company shall have full ownership of the Intellectual
Property, with no rights of ownership vested in Executive. Executive agrees
that, if any Intellectual Property is determined by a court of competent
jurisdiction not to be a work for hire under the federal copyright laws, this
Agreement shall operate as an irrevocable assignment by him to the Company of
the copyright in the works, including all rights thereunder in perpetuity. Under
this irrevocable assignment, Executive hereby assigns to the Company the sole
and exclusive right, title, and interest in and to the Intellectual Property,
without further consideration, and agrees to assist the Company in registering
and enforcing all copyrights and other rights and protections relating to the
Intellectual Property in any and all countries. Executive agrees that in the
event of any dispute arising out of or concerning this Section 6, no actions by
the Executive undertaken for the purpose of securing, maintaining, or preserving
the copyright in the works shall be considered by any finder of fact or
determiner of law in determining the character of the work as work made for
hire, unless expressly authorized by the Company.
6.3 Executive agrees to divulge to the Company promptly and fully
in writing, in such format as the Company may deem appropriate, all Intellectual
Property and to assign to the Company all Intellectual Property.
6.4 Executive shall make and maintain adequate permanent records
of all Intellectual Property, in the form of memoranda, notebook entries,
drawings, printouts, or reports relating thereto, in keeping with then current
Company procedures. Executive agrees that these records, as well as the
Intellectual Property, shall be and remain the property of the Company at all
times.
6.5 Executive shall cooperate with and assist the Company and its
nominees, at their sole expense, during the term of this Agreement and
thereafter, in securing and protecting patent, copyright or other similar rights
in the United States and foreign countries in the Intellectual Property. In this
connection, Executive specifically agrees to execute all papers which the
Company deems necessary to protect its interests including the execution of
assignments of invention and copyrights and to give evidence and testimony, as
the Company may deem necessary, to secure and enforce the Company's rights in
the Intellectual Property. Executive hereby appoints the Company as his agent
and attorney-in-fact to act for and in his behalf and stead to execute,
register, and file any applications, and to do all other lawfully permitted acts
to further the registration, prosecution, issuance, renewals, and extensions of
patents, copyrights or other protections with the same legal force and effect as
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if personally executed by Executive. The Company agrees that, to the extent (i)
allowable by law and (ii) not affecting the Company's rights in any way, it will
include Executive's name as an "author" on all patents to which he has
substantially contributed.
6.6 The provisions of this Section 6 shall survive termination of
this Agreement.
7. Miscellaneous Provisions.
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7.1 All notices provided for in this Agreement shall be in
writing, and shall be (i) delivered personally to the party to receive the same,
(ii) given by facsimile transmission, or (iii) mailed first class postage
prepaid, by certified mail, return receipt requested, addressed to the party to
receive the same at his or its address set forth below, or such other address as
the party to receive the same shall have specified by written notice given in
the manner provided for in this paragraph 7.1. All notices shall be deemed to
have been given as of the date of personal delivery, faxing (if evidence of
successful transmission is obtained by the sender) or mailing thereof.
If to Executive:
Xxxxxx X. Xxxxxxx
00 Xxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxx X. Xxxxxxx, Xx., Esq.
Pitney, Xxxxxx, Xxxx & Xxxxx LLP
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
If to the Company:
Cell & Molecular Technologies, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn. Xxxxxxx Xxxxxxxxx, Vice President and
Chief Operating Officer
Facsimile No. (000) 000-0000
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with a copy to:
Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn. Xxxxx Xxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
7.2 This Agreement sets forth the entire agreement of the parties
relating to the employment of Executive and is intended to supersede all prior
negotiations, understandings and agreements. The Prior Agreement shall terminate
and be of no further force and effect from and after the date hereof. No
provisions of this Agreement may be waived or changed except by a writing signed
by the party against whom such waiver or change is sought to be enforced. The
failure of any party to require performance of any provision hereof or thereof
shall in no manner waive or affect the right at a later time to enforce such
provision.
7.3 This Agreement shall be governed by and construed under the
law of the State of New Jersey, disregarding any principles of conflicts of law
that would otherwise provide for the application of the substantive law of
another jurisdiction. Each of the parties (i) agrees that any legal suit, action
or proceeding arising out of or relating to this Agreement shall be instituted
exclusively in New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (ii) waives
any objection to the venue of any such suit, action or proceeding and the right
to assert that such forum is not a convenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New
York, and agrees in any such suit, action or proceeding. Each of the parties
further agrees to accept and acknowledge service of any and all process which
may be served in any such suit, action or proceeding in the New York State
Supreme Court, County of New York, or in the United States District Court for
the Southern District of New York and agrees that service of process upon it
mailed by certified mail to its address shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding.
7.4 This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company, including any transferee of all
or substantially all of the Company's assets. This Agreement shall not be
assignable by Executive, but shall inure to the benefit of and be binding upon
Executive's heirs and legal representatives.
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7.5 Should any provision of this Agreement become, or be held to
be, legally unenforceable, no other provision of this Agreement shall be
affected thereby, and this Agreement shall continue as if the Agreement had been
executed absent the unenforceable provision.
7.6 Executive represents that he is not prohibited or limited in
any way, pursuant to the terms of any employment, non-competition or similar
agreement, or otherwise, from entering into this Agreement and performing his
obligations hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CELL & MOLECULAR TECHNOLOGIES, INC.
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
By: Xxxxxxx Xxxxxxxxx, Vice President and
Chief Operating Officer
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
XXXXXX X. XXXXXXX, Executive
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