EXHIBIT 10.36
EXECUTIVE CHANGE OF CONTROL SEVERANCE AGREEMENT
BETWEEN
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AND
THE CYTOGEN CORPORATION
THE CYTOGEN CORPORATION
EXECUTIVE CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into as of this 18th day of December, 2001,
by and between the Cytogen Corporation, a Delaware corporation (hereinafter
referred to as the "Company") and __________________(hereinafter referred to as
the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has approved the Company entering
into change of control severance agreements with certain key executives of the
Company and its subsidiaries; and
WHEREAS, the Executive is a key executive of the Company or of its subsidiary;
and
WHEREAS, should the possibility of a Change in Control of the Company arise, the
Board believes it imperative that the Company and the Board should be able to
rely upon the Executive to continue in his or her position, and that the Company
should be able to receive and rely upon the Executive's advice, if requested, as
to the best interests of the Company and its shareholders without concern that
the Executive might be distracted by the personal uncertainties and risks
created by the possibility of a Change in Control; and
WHEREAS, should the possibility of a Change in Control arise, in addition to his
or her regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other action as the Board might
determine to be appropriate;
NOW, THEREFORE, to assure the Company that it will have the continued dedication
of the Executive and the availability of his or her advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
ARTICLE 1. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:
a. "Agreement" means this Executive Severance Agreement.
b. "Base Salary" means the salary of record paid to the Executive as
annual salary, excluding amounts received under incentive or other
bonus plans, whether or not deferred.
c. "Beneficial Owner" has the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Exchange Act.
d. "Beneficiary" means the persons or entitles designated or deemed
designated by the Executive pursuant to Section 9.2 hereof.
e. "Board" means the Board of Directors of the Company.
f. "Cause" shall be determined by the Chairman of the Board and/or
the Executive's direct supervisor, in exercise of his or their
good faith and reasonable judgment, and shall mean the occurrence
of any one or more of the following:
(i) The willful and continued failure of the Executive to
substantially perform his or her duties (other than any such
failure resulting from the Executive's Disability), after a
written demand for substantial performance is delivered by the
Chairman of the Board to the Executive that specifically
identifies the manner in which the Company believes that the
Executive has not substantially performed his or her duties, and
the Executive has failed to remedy the situation within thirty
(30) calendar days of receiving such notice; or
(ii) The Executive's conviction for committing an act of fraud,
embezzlement, theft, or other act constituting a felony; or
(iii)The willful engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Company as
determined by the Chairman of the Board. However, no act or
failure to act on the Executive's part shall be considered
"willful unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that his action or
omission was in the best interest of the Company.
g. "Chairman of the Board" shall mean the member of the Board duly elected
by the Board to serve as its chairman, as prescribed in the Company's
By-Laws.
h. "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the Following conditions
shall have been satisfied:
(i) When a "person", as defined in Sections 3(a)(9) and 13(d)(3) of
the Exchange Act, becomes the beneficial owner, directly or
indirectly, of securities of the company representing (A) more
than thirty-five percent (35%) of the combined voting power of
the Company's then outstanding securities, unless such person is
subject to contractual restrictions that would preclude him or
her from voting such shares in a manner to influence or control
the management of the company's business, provided that in the
event such contractual restrictions are removed, a Change of
Control will be deemed to have occurred on the effective date of
such removal or on such later date as the Executive receives
actual notice of such removal, or (B) one hundred percent (100%)
of the combined voting power of the Company's then outstanding
securities regardless of any contractual restrictions. For
purposes of this provision, "person" shall not include the
Company, any subsidiary of the Company, any employee benefit plan
or employee stock plan of the Company, or any person holding the
Company's Common Stock by, for or pursuant to the terms of such a
plan; and "voting power" shall mean the power under ordinary
circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors. For the
purpose of Section (h)(i)(A) and (h)(iii)(B) of this Agreement,
the right to vote shares in transaction for which stockholder
approval is required under Sections 351 through 258 (mergers),
271 (sale of assets), or 275 (dissolution) of the Delaware
General Corporation Law, as the same may be amended from time to
time, will not, in themselves, be deemed to constitute the right
to vote such shares "in a manner to influence or control the
management of the Company's business". Whether other voting
rights may be granted to a beneficial owner without enabling it
to influence or control the management of the Company's business
will depend on the totality of rights granted in each case.
(ii) When, as a result of a vote of stockholders for which proxies are
solicited by or on behalf of any person other than the Company in
accordance with the SEC rules issued under Section 14 of the
Exchange Act, or which is exempt from the SEC proxy rules by
reason of Rule 14A-2 under the Exchange Act, or as a result of an
action by written consent of stockholders without a meeting, the
"incumbent directors" cease to constitute at least a majority of
the authorized number of members of the Board. For purposes of
this provision, "incumbent directors" shall mean the persons who
were members of the Board on March 15, 2001, and the persons who
were elected or nominated as their successors or pursuant to
increases in the size of the Board by a vote of at least an
absolute majority (and not just the majority of a quorum) of the
board members who were then Board members (or successors or
additional members so elected or nominated).
(iii)When the stockholders of the Company approve a merger,
consolidation, or reorganization, whether or not the Company is
the surviving entity in such transactions, (A) other than a
merger, consolidation, or reorganization that would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving
entity) at least sixty-five percent (65%) of the combined voting
power of the voting securities of the Company (or such surviving
entity) outstanding immediately after the merger, consolidation,
or reorganization; and (B) other than a merger, consolidation or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent less than sixty-five percent (65%) but more than one
percent (1%) of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after the merger, consolidation or reorganization if
the holder or holders of the shares in the surviving entity that
do not represent the securities of the Company outstanding prior
to the merger, consolidation or reorganization is or are subject
to contractual restrictions that would preclude such holder or
holders from voting such shares in a manner to influence or
control the management of the company's (or such surviving
entity's) business, providing that in the event such contractual
restrictions are removed, a Change of Control will be deemed to
have occurred on the effective date of such removal or on such
later date as the Executive receives actual notice of such
removal.
(iv) When the stockholders of the Company approve (A) the sale or
other disposition of all or substantially all of the assets of
the company or (B) a complete liquidation or dissolution of the
Company.
(v) When the Board adopts a resolution to the effect that any person
has acquired effective control of the business and affairs of the
Company.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to the Executive, if the Executive is part
of a purchasing group, which consummates the Change-in-Control
transaction. The Executive shall be deemed "part of a purchasing
group" for purposes of the preceding sentence if the Executive is
an equity participant in the purchasing company or group (except
for: (x) passive ownership of less than three percent (3%) of the
stock of the purchasing company; or (y) ownership of equity
participation in the purchasing company or group which is
otherwise not significant, as determined prior to the Change in
Control by an absolute majority of the non-employee Directors who
were Directors prior to the transaction, and who continue as
Directors following the transaction).
(i) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(j) "Company" means the Cytogen Corporation, a Delaware corporation
(including any and all subsidiaries), or any successors thereto as
provided in Article 8 hereof.
(k) "Disability" means permanent and total disability, within the meaning
of Code Section 22(e)(3), as determined by the Chairman of the Board
in the exercise of good faith and reasonable judgment, upon receipt of
and in reliance on sufficient competent medical advice from one or
more individuals, selected by the Company, who are qualified to give
professional medical advice.
(l) "Effective Date" is December 18, 2001.
(m) "Effective Date of Termination" means the date on which a Qualifying
Termination occurs that triggers the payment of Severance Benefits
hereunder.
(n) "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
(o) "Executive" means the individual named in the opening paragraphs of
this Agreement.
(p) "Good Reason" means, without the Executive's express written consent,
the occurrence after a Change in Control of the Company of any one or
more of the following:
(i) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including titles and reporting requirements) as an
officer of the company, or a material reduction or alteration in
the nature or status of the Executive's authorities, duties, or
responsibilities from those in effect as of ninety (90) days
prior to the Change in Control, other than an insubstantial and
inadvertent act that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(ii) The Company's requiring the Executive to be based at a location
in excess of thirty-five (35) miles from the location of the
Executive's principal job location or office immediately prior to
the Change in Control; except for required travel on the
company's business to an extent substantially consistent the
Executive's present business obligations;
(iii)A reduction by the company of the Executive's Base Salary as in
effect on the Effective Date, or as the same shall be increased
from time to time;
(iv) The failure of the Company to maintain the Executive's relative
level of coverage under the company's employee benefit or
retirement plans, policies, practices, or arrangements in which
the Executive participates as of the Effective Date, both in
terms of the amount of benefits provided and the relative level
of the Executive's participation. For this purpose the Company
may eliminate and/or modify existing programs and coverage
levels; provided, however, that the Executive's level of coverage
under all such programs must be at least as great as is such
coverage provided to executives who have the same or lesser
levels of reporting responsibilities within the company's
organization;
(v) The failure of the company to obtain a satisfactory agreement
from any successor to the Company to assume and agree to perform
the Company's obligations under this Agreement, as contemplated
in Article 8 hereof; and
(vi) Any purported termination by the Company of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 2.10 hereof,
and for purposes of this Agreement, no such purported termination
shall be effective.
The Executive's right to terminate employment for Good Reason
shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment
shall not constitute consent to, or waiver of rights with respect
to, any circumstance constituting Good Reason herein.
(q) "Person" has the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
(r) "Qualifying Termination" means any of the events described in Section
2.2 hereof, the occurrence of which triggers the payment of Severance
Benefits hereunder.
(s) "Severance Benefits" means the payment of severance compensation as
provided in Section 2.3 hereof.
(t) "Total Payments" means the sum of the Executive's Severance Benefits
and all other payments and benefits provided to the Executive by the
Company that constitute "excess parachute payments" within the meaning
of Code Section 280G(b)(1). Without limiting generality of the
foregoing, Total Payments shall include any and all excess parachute
payments associated with outstanding long-term incentive grants (to
include, but not be limited to, early vesting of stock options or
restricted stock).
(u) "Window Period" means the time period commencing ninety (90) days prior
to a Change in Control, as defined in Section (h) of this Article 1,
and ending twelve (12) months after the latter to occur of (i) any of
the events defined as a Change in Control in Section 1(h); or (ii)
final consummation of the liquidation, sale or disposition of assets,
or the merger, consolidation or reorganization of the Company as
described in Section 1(h)(iii) and (iv).
ARTICLE 2. SEVERANCE BENEFITS
2.1 Right to Severance Benefits. The Executive shall be entitled to receive
from the Company, Severance Benefits as described in Section 2.3
hereof, if there has been a Change in Control of the Company and if,
within the Window Period, the Executive's employment with the Company
ends for any reason specified in Section 2.2 hereof. The Executive
shall not be entitled to receive Severance Benefits if he/she is
terminated for Cause, or if his/her employment with the company ends
due to death, Disability, retirement on or after early retirement age
(as defined under the then established rules of the Company's
tax-qualified retirement plan applicable to the Executive), or due to a
voluntary termination of employment by the Executive without Good
Reason, or if he/she fails to comply with the conditions set forth in
Section 2.7 hereof.
2.2 Qualifying Termination. The occurrence of any one or more of the
following events within the Window Period shall constitute a Qualifying
Termination and shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause;
(b) A successor company's failure or refusal to assume the Company's
obligations under this Agreement, as required by Article 8
hereof; or
(c) The breach by the Company or any successor company of any of the
provisions of this Agreement.
2.3 Description of Severance Benefits. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in this
Article 2, the Company shall pay to the Executive and provide him or
her with the following:
(a) An amount equal to twelve (12) months' of the Executive's annual
Base Salary at the rate in effect at the commencement of the
Window Period or any higher rate that may be in effect from the
date until the Effective Date of Termination;
(b) A pro rata portion of the Executive's expected bonus for the
bonus plan year in which the termination occurs (which expected
bonus will be at least equal to the Executive's average annual
bonus for the three prior bonus plan years or such greater amount
at the Board may determine is due), and accrued salary and
vacation pay through the Effective Date of Termination.
(c) A continuation of all benefits pursuant to any and all welfare
benefit plans under which the Executive and/or the Executive's
family is eligible to receive benefits and/or coverage,
including, but not limited to, group life insurance,
hospitalization, disability, medical and dental plans, at the
same premium cost, and at the same coverage level, as in effect
as of the Executive's Effective Date of Termination or as of the
effective date of the Change in Control, whichever the Executive
may elect. The welfare benefits described in this Subsection
2.3(c) shall continue following the Effective Date of Termination
for twelve months; provided however, that such benefits shall be
discontinued prior to the end of such period in the event the
Executive receives substantially similar benefits from a
subsequent employer.
(d) Reasonable Company-paid outplacement assistance, commensurate
with assistance normally provided to executive-level personnel,
for a period of up to twelve (12) months following the Effective
Date of Termination, or for such longer period as the Company may
agree;
(e) Any other accrued rights of the Executive.
2.4 Termination for Total and Permanent Disability. Following a Change in
Control of the Company, if the Executive's employment is terminated due
to Disability, the Executive shall receive his or her Base Salary
through the Effective Date of Termination, at which point in time the
Executive's benefits shall be determined in accordance with the
Company's retirement, insurance, and other applicable plans and
programs then in effect.
2.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of
his or her retirement, or death, the Executive's benefits shall be
determined in accordance with the Company's retirement, survivor's
benefits, insurance, and other applicable programs of the Company then
in effect.
2.6 Termination for Cause or by the Executive Other Than for Good Reason.
Following a Change in Control of the Company, if the Executive's
employment is terminated either: (i) by the Company for Cause; or (ii)
by the Executive other than for Good Reason, the Company shall pay the
Executive his or her full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus any
other amounts to which the Executive is entitled under any compensation
or benefit plans of the company at the time such payments are due, and
the Company shall have no further obligations to the Executive under
this Agreement.
2.7 Conditions to Severance Benefits. As conditions of the Executive's
entitlement and continued entitlement to the Severance Benefits
provided in Section 2.3, the Executive is required to (i) honor in
accordance with their terms the provisions of Section 2.8 and 2.9
hereof and the provisions of the confidential information agreement
signed by the Executive at the beginning of his/her employment (the
"Employee Confidentiality Agreement") and (ii) execute and honor the
terms of a waiver and release of claims against the Company
substantially in the form attached hereto as Exhibit A (and as may be
modified consistent with the purposes of such waiver and release to
reflect changes in the law following the Effective Date). In the event
that the Executive fails to abide by the foregoing, all payments and
benefits to which the Executive may otherwise have been entitled under
Section 2.3 shall immediately terminate and be forfeited, and the
Executive shall be entitled to no severance benefits in excess of those
provided in the Company's standard severance policy in effect as of the
Executive's Effective date of Termination, and the Executive shall
repay to the company any payment received that is in excess of such
amount. For purposes of this Section, the Executive shall be treated as
having failed to honor the provisions of Sections 2.8 or 2.9 hereof or
the provisions of the Employee Confidentiality Agreement only following
written notice by the Company or its successor of the alleged failure
and an opportunity for the Executive to cure the alleged failure for a
period of thirty (30) das from the date of such notice.
2.8 Services During Certain Events. In the event a Person begins a tender
or exchange offer, circulates a proxy to shareholders of the Company,
or takes other steps seeking to effect a Change in Control, the
Executive agrees that he or she will not voluntarily leave the employ
of the Company and will render services until such Person has abandoned
or terminated his or its efforts to effect a Change in Control, or
until six (6) months after a Change in Control has occurred; provided,
however, that the company may terminate the Executive's employment for
Cause at any time, and the Executive may terminate his or her
employment any time after the Change in Control for Good Reason.
2.9 Non-Competition. The Executive shall not, either during the term of
his/her employment with the Company or for a period of twelve months
after a Qualifying Termination, become affiliated with or conduct,
directly or indirectly, any business involved in the research,
development, manufacture or sale of prostate cancer diagnostics or
therapeutics (a "Competitor"); provided, however, that after his/her
Effective Date of Termination, the Executive may become affiliated with
a non-competing subsidiary, division or other business unit of a
Competitor if the Executive's services are provided only to such
separate business unit, and the Executive may become affiliated with
any entity that provides goods or services to a Competitor if the
Executive does not personally participate in the provision of goods or
services to the Competitor.
2.10 Notices. In the event of a transaction that would constitute a Change
of Control but for the provisions of Section 1(h)(i)(A) or 1(h)(iii)(B)
regarding contractual restrictions on the acquirer, the Company will
give written notice to the Executive that no Change of Control has
occurred. Likewise, in the event that such contractual restrictions are
subsequently removed, the Company will give written notice to the
Executive that Change of Control has occurred or will occur as of the
effective date of the removal of such restrictions. Notice of
Termination shall communicate any termination by the Company for Cause
or by the Executive for Good Reason following a Change of Control to
the other party. For purposes of this Agreement, a "Notice of
Termination: shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon, and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
ARTICLE 3. FORM AND TIMING OF SEVERANCE BENEFITS
3.1 Form and Timing of Severance Benefits. The Severance Benefits described
in Sections 2.3(a), 2.3(b), 2.3(d) and 2.3(e) hereof shall be paid in
cash to the Executive in a single lump sum as soon as practicable
following the Effective date of Termination, but in no event beyond
thirty (30) days from such date. Any payment required under this
Section 2.1 or any other provision of this Agreement, that is not made
in a timely manner will bear interest at a rate equal to one hundred
twenty percent (120%) of the applicable federal rate, as in effect
under Section 1274(d) of the Code for the month in which the payment is
required to be made.
3.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement, all taxes as legally shall be
required (including, without limitation, any United States Federal
taxes, and any other state, city, or local taxes.).
ARTICLE 4. EXCISE TAX GROSS-UP
4.1 Equalization Payment. In the event that the Executive becomes entitled
to Severance Benefits, if any of the Executive's Total Payments will be
subject to the tax (the "Excise Tax") imposed by Section 4999 of the
Code (or any similar tax that may hereafter be imposed), the Company
shall pay to the Executive in cash an additional amount (the "Gross-up
Payment") such that the net amount retained by the Executive after
deduction of any Excise Tax on the Total Payments and any federal,
state, and local income tax and Excise Tax upon the Gross-up Payment
provided for by this Section 4.1, shall be equal to the Total Payments.
Such payment shall be made by the Company to the Executive as soon as
practicable following the Effective Date of Termination, but in no
event beyond thirty (30) days from such date.
4.2 Tax Computation. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such
Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company
or the Executive's termination of employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement or
agreement with the Company, or with any Person whose actions
result in a Change in Control of the Company or any Person
affiliated with the Company or such Persons) shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of
the Code and all "excess parachute payments" within the meaning
of Section 280G(b)(1) shall be treated as subject to the excise
tax, unless in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Executive,
such other payments or benefits (in whole or in part) do not
constitute parachute payments, or unless such excess parachute
payments (in whole or in part) represent reasonable compensation
for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the excise tax;
(b) The amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of: (i)
the total amount of the Total Payments; or (ii) the amount of
excess parachute payments within the meaning of Section
280G(b)(1) after applying clause (a) above); and
(c) The value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors
in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest
marginal rate of Federal income taxation in the calendar year in which
the Gross-Up Payment is to be made, and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Executive's residence on the Effective Date of Termination, net of the
maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
4.3 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 4.2 hereof, so
that the Executive did not receive the greatest net benefit, the
Company shall reimburse the Executive for the full amount necessary to
make the Executive whole, plus an appropriate market rate of interest,
as determined by the Company's independent auditors.
ARTICLE 5. THE COMPANY'S PAYMENT OBLIGATION
5.1 Payment Obligations Absolute. The Company's obligation to make the
payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim, recoupment,
defense, or other right which the company may have against the
Executive or anyone else, except those arising under this Agreement.
All amounts payable by the Company hereunder shall be paid without
notice or demand. Each and every payment made hereunder by the Company
shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be
entitled thereto, for any reasons whatsoever, except as provided in
Section 2.7. The Executive shall not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made
under any provision of this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the
Company's obligations to make the payments and arrangements required to
be made under this Agreement, except to the extent provided in Sections
2.3(c) and 2.9 hereof.
5.2 Contractual Rights to Benefits. This Agreement establishes and vests in
the Executive a contractual right to the benefits to which he or she is
entitled hereunder. However, nothing herein contained shall require, or
prohibit or be deemed to prohibit, the Company to segregate, earmark,
or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required
hereunder.
ARTICLE 6. TERM OF AGREEMENT
This Agreement will commence on the Effective Date and will terminate on
December 31, 2002; provided, however, that this Agreement will be extended
automatically for one (1) additional year at the end of this initial term and at
the end of each additional year thereafter, unless the Chairman of the Board
delivers written notice twelve (12) months prior to the end of such term, or
extended term, to the Executive, that the Agreement will not be extended. In
such case, the Agreement will terminate at the end of the term, or extended
term, then in progress. However, in the event a Change in Control occurs during
the original or any extended term, this Agreement will remain in effect for the
longer of: (i) the duration of the Window Period; or (ii) until all obligations
of the Company hereunder have been fulfilled, and until all benefits required
hereunder have been paid to the Executive.
ARTICLE 7. LEGAL REMEDIES
7.1 Payment of Legal Fees. To the extent permitted by law, he Company shall
pay all legal fees, costs, including costs of litigation, prejudgment
interest, and other expenses, incurred in good faith by the Executive
as a result of the Company's wrongful refusal to provide the Severance
Benefits to which the Executive becomes entitled under this Agreement,
or as a result of the company's unsuccessful contesting the validity,
enforceability, or interpretation of this Agreement, or as a result of
any conflict between the parties pertaining to this Agreement in which
the Executive is the prevailing party, or which is settled prior to the
entry of a final judgment from which no appeal can be taken.
7.2 Arbitration. The Executive shall have the right and option to elect (in
lieu of litigation) to have any dispute or controversy arising under or
in connection with this Agreement settled by final and binding
arbitration, conducted before a panel of three (3) arbitrators sitting
in a location selected by the Executive within fifty (50) miles from
the location of his or her job with the Company, in accordance with the
rules of the American Arbitration Association then in effect. Judgment
may be entered on the award of the arbitration in any court having
proper jurisdiction. All expenses of any such arbitration in which the
Executive is the prevailing party, as determined by the arbitrators,
including the fees and expenses of the counsel for the Executive, shall
be borne by the Company.
ARTICLE 8. SUCCESSORS
8.1 Assumption of Company's Obligations. The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to
perform the Company's obligations under this Agreement in the same
manner and to the same extent that the Company would be required to
perform them if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effective
date of any such succession shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as he or she
would be entitled to hereunder if he or she had terminated his or her
employment with the Company voluntarily for Good Reason. The date on
which any such succession becomes effective shall be deemed the
Effective Date of Termination.
8.2 Payment to Beneficiary. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributes, devisees, and legatees. If the Executive should die while
any amount would still be payable to him or her hereunder had he or she
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement, to the
Executive's Beneficiary. If the Executive has not named a Beneficiary,
then such amounts shall be paid to the Executive's devisee, legatee, or
other designee, or if there is no such designee, to the Executive's
estate.
ARTICLE 9. INDEMNIFICATION
9.1 Commitments. The Company shall indemnify the Executive to the fullest
extent permitted by applicable law, and the Company (or its successor)
shall maintain in full force and effect, for the duration of all
applicable statue of limitation periods, insurance policies at least as
favorable to the Executive as those maintained by the Company for the
benefit of its directors and officers at the time of the Change in
Control, which respect to all costs, charges and expenses whatsoever
(including payment of expenses in advance of final disposition of a
proceeding) which he/she may be made a party by reason of being or
having been a director, officer or employee of the Company.
ARTICLE 10. MISCELLANEOUS
10.1 Employment Status. The Executive and the Company acknowledge that,
except as may be provided under any other agreement between the
Executive and the Company, the employment of the Executive by the
Company is "at will" and, prior to the effective date of a Change in
Control, may be terminated by either the Executive or the Company at
any time, subject to applicable law. Upon a termination of the
Executive's employment prior to the effective date of a Change in
Control, there shall be no further rights under this Agreement;
provided, however, that if such an employment termination shall occur
within ninety (90) days prior to a Change in Control, then the
Executive's rights shall be the same as if the termination had occurred
within twelve (12) months following a Change in Control.
10.2 Previous Severance Agreements. This Agreement contains the entire
understanding between the Executive and the Company in relation to
severance benefits, and all other prior or contemporaneous written or
oral agreements or representations, if any, relating to the subject
Matter of this Agreement are null and void.
10.3 Designation of Beneficiaries. The Executive may designate one or more
persons or entitles as the primary and/or contingent Beneficiaries of
any Severance Benefits owing to the Executive under this Agreement.
Such designation must be in the form of a signed writing acceptable to
the Chairman of the Board. The Executive may make or change such
designations at any time.
10.4 Confidentiality of this Agreement. The Executive shall treat the terms
and conditions of this Agreement as confidential information subject to
the provisions of his/her Employee Confidentiality Agreement, except
that the Executive may disclose them on a privileged and confidential
basis to his/her legal counsel.
10.5 Entire Agreement. This Agreement contains the entire understanding of
the company and the Executive with respect to the subject matter
hereof.
10.6 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the
Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included. Further, the captions of this
Agreement are not part of the provisions hereof and shall have not
force and effect.
10.7 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by the Executive and by an authorized
representative of the Company, or by the respective parties' legal
representatives and successors.
10.8 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the State of New Jersey shall be the controlling
law in all matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
this ____________ day of ___________, 2002.
CYTOGEN CORPORATION __________________________
By:___________________________________ ___________________________
H. Xxxxxx Xxxxxx Executive
President and Chief Executive Officer
