EXHIBIT 10.17
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 5th day of November, 1997 between
Maxim Pharmaceuticals, Inc. ("Company") and Xxxxx X. Xxxxxxxxx ("Executive").
PRELIMINARY STATEMENT
WHEREAS, the Company wishes to retain the Executive as Chairman of the
Board of Directors, President and Chief Executive Officer of the Company, and
the Executive wishes to continue in such positions, all on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the Company and the Executive agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence on October 1,
1997 and shall continue in effect for a term ending on September 30, 2000
("Term"), except as hereinafter provided.
2. POSITION AND DUTIES. Except as may otherwise be agreed upon
between the Company and the Executive, the Company agrees to employ the
Executive, and the Executive agrees to serve the Company, as Chairman of the
Board of Directors, President and Chief Executive Officer. The Executive
shall render such services to the Company as are customary for such positions
and perform all other services incident thereto. At all times, the Executive
shall report directly to the Board of Directors of the Company. The
Executive shall devote substantially all of his working time and efforts to
the business and affairs of the Company, except for time spent for service on
the boards of directors of other corporations, vacations as defined by
Company policy and civic and charitable activities, and shall represent the
Company within its industry.
3. PLACE OF PERFORMANCE. In connection with his employment by the
Company, the Executive shall, except as the Executive may otherwise agree,
perform his principal activities at the offices of the Company located in San
Diego, California, subject to travel reasonably required for the Company's
business.
4. COMPENSATION AND RELATED MATTERS.
4.1 BASE SALARY. During the Term, the Company shall pay to the
Executive, in approximately equal installments not less often than twice per
month, a base salary of not less than $275,000 per year through December 31,
2000 and such base salary shall be subject to increase from time to time
based upon recommendations from the Compensation Committee to the Board of
Directors. All amounts payable to the Executive pursuant to this Agreement
shall be paid subject to such reporting and withholding requirements, if any,
as may be imposed by applicable law and applicable Company policy.
4.2 INCENTIVE PLAN. The Executive shall be eligible to receive
bonus payments pursuant to a plan to be prepared by the Company's Board of
Directors with the Executive's participation ("Bonus Plan"). The parties
shall endeavor to establish the initial Bonus Plan at the earliest
practicable time. The Bonus Plan shall provide that, assuming reasonable
satisfaction of the performance criteria to be set forth in the Bonus Plan,
the Executive shall be eligible to earn an annual bonus with respect to each
of the Company's fiscal years during the Term in an amount up to 30% of the
Executive's annualized base salary hereunder, such bonus to be payable within
ninety days after the end of each such fiscal year. The bonus will be based
upon the annualized base salary for the year in which the bonus applies.
4.3 BENEFIT PLANS AND ARRANGEMENT. The Executive shall be
entitled to participate in and receive benefits under the Company's employee
benefit plans and arrangements in effect during the Term. The Company shall
pay the entire cost of the Executive's health, life and disability insurance
coverage under the Company's plans and policies during the Term,
notwithstanding anything to the contrary in such plans and policies.
4.4 PERQUISITES. During the Term, the Executive shall be entitled
to receive fringe benefits ordinarily and customarily provided by the Company
to its senior officers.
4.5 EXPENSES. The Company shall promptly reimburse the Executive
for all normal out-of-pocket expenses related to the Company's business
actually paid or incurred by him in the performance of his services under
this Agreement.
4.6 STOCK OPTIONS. In addition to previously awarded options, the
Company's Board of Directors will award the Executive options to acquire
83,334 shares of Common Stock of the Company at $14.50, a price which is
considered the fair market value of such stock at the date of this Agreement.
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Options issued will be 25% vested as of September 30, 1998 and the balance
will vest at 25% on each September 30 thereafter.
5. TERMINATION. The Executive's employment hereunder may be
terminated under the following circumstances (without impairing the
Executive's rights under benefit plans and arrangements and the Company's
policies and procedures):
5.1 TERMINATION UPON DEATH OR PERMANENT DISABILITY. The Term
shall automatically terminate in the event of the death or permanent
disability of Executive. For purposes of this Agreement, "permanent
disability" shall mean the inability to perform services hereunder for a
period of six consecutive months.
5.2 TERMINATION BY COMPANY FOR CAUSE. The Company shall have the
option to terminate the Term (a) for cause in the event the Executive engages
in grossly negligent conduct or willful misconduct in connection with the
execution of his duties hereunder which materially and adversely affects the
Company, after written notice by the Company to the Executive of the specific
acts that form the basis for the termination, and (b) for the Executive's
material nonperformance of his duties hereunder, provided the nonperformance
continues uncorrected for a period of thirty days after written notice
thereof by the Company to the Executive specifically identifying the manner
in which the Company believes the Executive has not performed his duties.
For purposes of this Section 5.2, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his act or
omission was in the best interests of the Company.
5.3 SEVERANCE AND LIFE INSURANCE. If the Company terminates
Executive's employment other than for cause pursuant to Section 5.2,
Executive, in lieu of all other remedies and as liquidated damages, shall be
entitled to receive a severance payment equal to his then annual base salary
plus health care insurance coverage for one year or the remainder of the term
of this Agreement, whichever is greater.
The Company shall also during the Term hereof maintain for Executive a term
life insurance policy in the amount of $1,000,000, with Executive's nominee
as beneficiary. Such insurance shall, however, decrease to $750,000 at the
next anniversary of the policy and by $250,000 each anniversary thereafter.
Nothing herein shall derogate from the Executive's rights under employee
benefit plans, programs and arrangements or under applicable law.
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5.4 CONSTRUCTIVE DISCHARGE. Any significant reduction or adverse
change in the nature or scope of the Executive's authority, duties, status or
position contemplated by Section 2 hereof, including an involuntary
relocation, or a reduction the base salary and/or benefits of the Executive
from those provided for in Section 4 hereof as they may from time to time be
in effect, will be the basis for the Executive's termination of this
Agreement by giving at least 30 days prior notice to the Company and in such
event the termination will be treated as a termination by the Company without
cause under Section 5.3.
5.5 BENEFITS UPON TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION
BY EXECUTIVE. In the event the Company properly terminates Executive's
employment under this Agreement for cause pursuant to Section 5.2 or
Executive voluntary resigns from his employment during the Term:
a. all salary shall be prorated as of the date of
termination and such prorated amount shall be paid to Executive;
b. all stock options or stock appreciation rights granted to
Executive shall be governed by the instruments granting such rights; and
c. the Company shall (i) make such other and further payment
to Executive, his designated beneficiaries and his dependents as may be
provided pursuant to the terms of any employee benefit plan and other
compensation plans, programs and structures, or fringe benefit programs in
which Executive is a participant at the time of the termination of his
employment with the Company and (ii) promptly reimburse the Executive for any
then unreimbursed out-of-pocket expenses pursuant to Section 4.6.
6. ATTORNEYS FEES. If litigation shall be instituted to enforce or
interpret any provision hereof the prevailing party will reimburse the other
part for his reasonable attorneys' fees and disbursements incurred in such
proceeding and will pay prejudgment interest at the legal rate then in effect
on any money judgment or award obtained in such proceeding.
7. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed as follows:
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If to the Executive:
Xxxxx X. Xxxxxxxxx
00000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
If to the Company:
Maxim Pharmaceuticals, Inc.
00000 Xxxxxx Xxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change in address
shall be effective only upon receipt.
8. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provision
or conditions at the same or at any proper or subsequent time. No agreements
or representations, oral otherwise, expressed or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly or referred to in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of California relating to contracts to be performed entirely
therein.
9. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
10. HEADINGS. The headings of the paragraphs herein are for
convenience only and shall have no significance in the interpretation of this
Agreement.
11. BIND AND INURE. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, personal representatives
and successors, including any successor of the Company by reason of any
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dissolution, merger, consolidation, sale of assets or other reorganization of
the Company.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officer thereunto duly authorized,
and Executive has signed this Agreement, as of the day and year first above
written.
MAXIM PHARMACEUTICALS, INC.
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
Vice President, Finance and
Chief Financial Officer
Date: 11/10/97
/s/ XXXXX X. XXXXXXXXX
Executive
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