Ex 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as
of July 6, 2004 (the "Effective Date") by and between CytRx Corporation, a
Delaware corporation ("Employer"), and Xxxx Xxxxxx, an individual and resident
of the State of California ("Employee").
WHEREAS, Employer desires to engage Employee as an employee, and Employee
is willing to be so engaged by Employer, on the terms set forth in this
Agreement.
NOW, THEREFORE, upon the above premises, and in consideration of the
mutual covenants and agreements hereinafter contained, the parties hereto agree
as follows.
1. Employment. Effective as of the Effective Date, Employer shall employ
Employee, and Employee shall serve, as Employer's Senior Vice President-Drug
Development on the terms set forth herein.
2. Duties; Place of Employment. Employee shall perform in a professional
and business-like manner, and to the best of his ability, the duties described
on Schedule 1 to this Agreement and such other duties as are assigned to him
from time to time by Employer's Chief Executive Officer. Employee understands
and agrees that his duties, title and authority may be changed from time to time
in the discretion of Employer's Chief Executive Officer. Employee's services
hereunder shall be rendered at Employer's principal executive offices, except
for travel when and as required in the performance of Employee's duties
hereunder. Notwithstanding the foregoing, Employer understands and agrees that,
so long as he resides in San Diego County, Employee shall be entitled in his
discretion to render his services hereunder from his home on Friday of each
week.
3. Time and Efforts. Employee shall devote all of his business time,
efforts, attention and energies to Employer's business and the discharge his
duties hereunder.
4. Term. The term (the "Term") of Employee's employment hereunder shall
commence on the Effective Date and shall expire on the first anniversary
thereof, unless sooner terminated in accordance with Section 6. Neither Employer
nor Employee shall have any obligation to extend or renew this Agreement. In the
event this Agreement shall not be extended or renewed, Employer shall continue
to pay Employee his salary as provided for in Section 5.1 during the period
commencing on the date of the termination of Employee's employment with Employer
and ending on (a) October 6, 2005 or (b) the date of Employee's re-employment
with another employer, whichever is earlier.
5. Compensation. As the total consideration for Employee's services
rendered hereunder, Employer shall pay or provide Employee the following
compensation and benefits:
5.1. Salary. Employee shall be entitled to receive an annual salary
of Two Hundred Thirty Thousand Dollars ($230,000), payable in 24 semi-monthly
installments on the 15th day and the last day of each calendar month during the
Term, with the first such installment due on July 15, 2004.
5.2. Discretionary Bonus. Employee may be eligible for an annual
bonus for his services during the Term. Employee's eligibility to receive a
bonus, any determination to award Employee such a bonus and, if awarded, the
amount thereof shall be in Employer's sole discretion.
5.3. Stock Options. Employer shall grant Employee as of the
Effective Date a nonqualified stock option under Employer's 2000 Long-Term
Incentive Plan (the "Plan") to purchase 100,000 shares of Employer's common
stock (the "Option"). The Option shall vest and become exercisable as to
one-third of the shares covered thereby on each of the first, second and third
annual anniversaries of the Effective Date, provided, in each case, that
Employee remains in the continuous employ of Employer through such anniversary
date. The Option shall (a) be exercisable at an exercise price equal to (i)
$1.13 per share or (ii) the last sale price of Employer's common stock on the
Effective Date as reported on the Nadsaq SmallCap Market, whichever is greater,
(b) have a term of ten years, and (c) be on such other terms as shall be
determined by Employer's Board of Directors (or the Compensation Committee of
the Board) and set forth in a customary form of stock option agreement under the
Plan evidencing the Option. Notwithstanding anything to the contrary in Section
6.2 or other provision of this Agreement or of the stock option agreement
evidencing the Option, upon the occurrence of a "Change in Control" (as defined
in the Plan), the Option shall thereupon vest and become exercisable as to all
of the shares covered thereby in accordance with the terms of the Plan.
5.4. Expense Reimbursement. Employer shall reimburse Employee for
reasonable and necessary business expenses incurred by Employee in connection
with the performance of Employee's duties in accordance with Employer's usual
practices and policies in effect from time to time.
5.5. Vacation. Employee shall be entitled to ten business days of
vacation each year during the Term in accordance with California law.
5.6. Employee Benefits. Employee shall be eligible to participate in
any medical insurance and other employee benefits made available by Employer to
all of its employees under its group plans and employment policies in effect
during the Term. Schedule 2 hereto sets forth a summary of such plans and
policies as currently in effect. Employee acknowledges and agrees that, any such
plans and policies now or hereafter in effect may be modified or terminated by
Employer at any time in its discretion.
5.7. Payroll Taxes. Employer shall have the right to deduct from the
compensation and benefits due to Employee hereunder any and all sums required
for social security and withholding taxes and for any other federal, state, or
local tax or charge which may be in effect or hereafter enacted or required as a
charge on the compensation or benefits of Employee.
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6. Termination. This Agreement may be terminated as set forth in this
Section 6.
6.1. Termination by Employer for Cause. Employer may terminate
Employee's employment hereunder for "Cause" upon notice to Employee. "Cause" for
this purpose shall mean any of the following:
(a) Employee's breach of any material term of this Agreement;
provided that the first occasion of any particular breach shall not constitute
such Cause unless Employee shall have previously received written notice from
Employer stating the nature of such breach and affording Employee at least ten
days to correct such breach;
(b) Employee's conviction of, or plea of guilty or nolo
contendere to, any misdemeanor, felony or other crime of moral turpitude;
(c) Employee's act of fraud or dishonesty injurious to
Employer or its reputation;
(d) Employee's continual failure or refusal to perform his
material duties as required under this Agreement after written notice from
Employer stating the nature of such failure or refusal and affording Employee at
least ten days to correct the same;
(e) Employee's act or omission that, in the reasonable
determination of Employer's Board of Directors (or a Committee of the Board),
indicates alcohol or drug abuse by Employee; or
(f) Employee's act or personal conduct that, in the judgment
of Employer's Board of Directors (or a Committee of the Board), gives rise to a
material risk of liability of Employee or Employer under federal or applicable
state law for discrimination, or sexual or other forms of harassment, or other
similar liabilities to subordinate employees.
Upon termination of Employee's employment by Employer for Cause, all
compensation and benefits to Employee hereunder shall cease and Employee shall
be entitled only to payment, not later than three days after the date of
termination, of any accrued but unpaid salary and unused vacation as provided in
Sections 5.1 and 5.5 as of the date of such termination and any unpaid bonus
that may have been awarded Employee as provided in Section 5.2 prior to such
date.
6.2. Termination by Employer without Cause. Employer may also
terminate Employee's employment without Cause upon five days notice to Employee.
Upon termination of Employee's employment by Employer without Cause, all
compensation and benefits to Employee hereunder shall cease and Employee shall
be entitled to payment of (a) any accrued but unpaid salary and unused vacation
as of the date of such termination as required by California law, which shall be
due and payable upon the effective date of such termination, and (b) an amount
(the "Severance Amount"), which shall be due and payable within ten days
following the effective date of
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such termination, equal to 1/360th of Employee's salary provided for in Section
5.1 for each four days (prorated for any period of less than four days) that
Employee was employed hereunder prior to the date of such termination of
employment. By way of example, if Employer were to terminate Employee's
employment without Cause 60 days after the date hereof, the Severance Amount
payable to Employee would be $9,583 (i.e., [60 / 4] / 360 multiplied by
$230,000). Employer and Employee agree that, if this Agreement is extended or
renewed, unless Employer and Employee agree otherwise, the Severance Amount
under this Section 6.2 shall be fixed at three months' salary provided for in
Section 5.1.
6.3. Death or Disability. Employee's employment will terminate
automatically in the event of Employee's death or upon notice from Employer in
event of his permanent disability. Employee's "permanent disability" shall have
the meaning ascribed to such term in any policy of disability insurance
maintained by Employer (or Employee, as the case may be) with respect to
Employee, or if no such policy is then in effect, shall mean Employee's
inability to fully perform his duties hereunder for any period of at least 75
consecutive days or for a total of 90 days, whether or not consecutive. Upon
termination of Employee's employment as aforesaid, all compensation and benefits
to Employee hereunder shall cease and Employer shall pay to the Employee's heirs
or personal representatives, not later than ten days after the date of
termination, any accrued but unpaid salary and unused vacation as of the date of
such termination as required by California law.
7. Confidentiality. While this Agreement is in effect and for a period of
five years thereafter, Employee shall hold and keep secret and confidential all
"trade secrets" (within the meaning of applicable law) and other confidential or
proprietary information of Employer and shall use such information only in the
course of performing Employee's duties hereunder; provided, however, that with
respect to trade secrets, Employee shall hold and keep secret and confidential
such trade secrets for so long as they remain trade secrets under applicable
law. Employee shall maintain in trust all such trade secret or other
confidential or proprietary information, as Employer's property, including, but
not limited to, all documents concerning Employer's business, including
Employee's work papers, telephone directories, customer information and notes,
and any and all copies thereof in Employee's possession or under Employee's
control. Upon the expiration or earlier termination of Employee's employment
with Employer, or upon request by Employer, Employee shall deliver to Employer
all such documents belonging to Employer, including any and all copies in
Employee's possession or under Employee's control.
8. Equitable Remedies; Injunctive Relief. Employee hereby acknowledges and
agrees that monetary damages are inadequate to fully compensate Employer for the
damages that would result from a breach or threatened breach of Section 7 of
this Agreement and, accordingly, that Employer shall be entitled to equitable
remedies, including, without limitation, specific performance, temporary
restraining orders, and preliminary injunctions and permanent injunctions, to
enforce such Section without the necessity of proving actual damages in
connection therewith. This provision shall not,
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however, diminish Employer's right to claim and recover damages or enforce any
other of its legal or equitable rights or defenses.
9. Indemnification; Insurance. Employer and Employee acknowledge that, as
the Senior Vice President-Drug Development of the Employer, Employee shall be a
corporate officer of Employer and, as such, Employee shall be entitled to
indemnification to the full extent mandated by Employer to its officers,
directors and agents under the Employer's Certificate or Articles of
Incorporation and Bylaws as in effect as of the date of this Agreement. Subject
to his insurability thereunder, effective the Effective Date, Employer shall add
Employee as an additional insured under its current policy of directors and
officers liability insurance and shall use commercially reasonable efforts to
continue to insure Employee thereunder, or under any replacement policies in
effect from time to time, during the Term.
10. Severable Provisions. The provisions of this Agreement are severable
and if any one or more provisions is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.
11. Successors and Assigns. This Agreement shall inure to the benefit of
and shall be binding upon Employer, its successors and assigns and Employee and
his heirs and representatives; provided, however, that neither party may assign
this Agreement without the prior written consent of the other party.
12. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This Agreement
supersedes any and all prior or contemporaneous agreements, written or oral,
between Employee and Employer relating to the subject matter hereof. Any such
prior or contemporaneous agreements are hereby terminated and of no further
effect, and Employee, by the execution hereof, agrees that any compensation
provided for under any such agreements is specifically superseded and replaced
by the provisions of this Agreement.
13. Amendment. No modification of this Agreement shall be valid unless
made in writing and signed by the parties hereto and unless such writing is made
by an executive officer of Employer (other than Employee). The parties hereto
agree that in no event shall an oral modification of this Agreement be
enforceable or valid.
14. Governing Law. This Agreement is and shall be governed and construed
in accordance with the laws of the State of California without giving effect to
California's choice-of-law rules.
15. Notice. All notices and other communications under this Agreement
shall be in writing and mailed, telecopied (in case of notice to Employer only)
or delivered by hand or by a nationally recognized courier service guaranteeing
overnight delivery to a
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party at the following address (or to such other address as such party may have
specified by notice given to the other party pursuant to this provision):
If to Employer:
CytRx Corporation
00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
If to Employee:
Xx. Xxxx Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
16. Survival. Sections 7 through 16 shall survive the expiration or
termination of this Agreement.
17. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
18. Attorney's Fees. In any action or proceeding to construe or enforce
any provision of this Agreement the prevailing party shall be entitled to
recover its or his reasonable attorneys' fees and other costs of suit in
addition to any other recoveries.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
"EMPLOYER"
CytRx Corporation
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
"EMPLOYEE"
/s/ XXXX XXXXXX
-----------------------------------
Xxxx Xxxxxx
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Schedule 1
LIST OF DUTIES - XXXX XXXXXX
Senior Vice President, Drug Development
- Review and supervision of all pre-clinical and clinical programs
including clinical progress of HIV project, which includes
developing a relationship with ABL, Xx. Xxxxxxx and Xxxx Xx.
Preparation and filing of NIH grant for a phase II trial.
- CMV Project: Supervising Xx. Xxxxxxx Xxxxxxx and moving project as
quickly as possible into the clinic.
- ALS Program: Working with UMass, Mass General, Xxxxxxxx Xx and
Xxxxxx Xxxxx Xx. to move program into the clinic as soon as
possible. Working on either getting a vector or other technology
that can be used to get a drug into the clinic. Preparation of the
IND. Contacting and dealing with the FDA on setting up a pre-IND
meeting with them before the end of the year, 2004.
- Reporting to the CEO on the progress of each of these areas on a
weekly basis in writing.
- Working with the members of the management team.
- CytRx Laboratories: Working with Xxxx X. Xxxxxx, Ph.D. and members
of the Scientific Advisory Board as needed or as requested by Xxxx
Xxxxxx. Communicate and make suggestions to the CEO based on
observations of programs. (i.e.: need more information, going in the
wrong direction)
- Handling all of CytRx IP matters. Working out a delegation between
Xxxx, who will do diabetes and obesity, and you who will do
everything else. Coordinating IP matters with our new counsel, Xxx
Xxxxx, as well as outside IP counsel (currently Fish & Neave and
Xxxxxxxxxx and Xxxxxxxx).
S1 - 1
- Making sure that all patent work is handled on a timely basis so
that we don't go delinquent. Reviewing any patents still in force on
old technology from the old CytRx.
- Assist Investor Relations Department, analysts, etc. with regard to
any press releases and information that has to be distributed to the
public of a scientific nature.
- Prepare and keep current a matrix of all CytRx licenses and patents.
- Working with Director of Corporate Development on doing
due-diligence on any in-licensing, mergers and acquisitions and
strategic alliance opportunities.
- Assisting the CEO with any strategic alliance opportunities in the
obesity and diabetes area.
- As part of the above, doing the necessary budgets and timelines for
moving products through the clinic and developing drugs to go to
market.
- In the event we are successful in closing the Biorex financing,
taking over responsibilities for getting that drug in the clinic,
including filing with the FDA for a phase II clinical trial, doing
any work prior to the filing, including possible pre-filing meetings
with the FDA. Working with the former employees of Biorex to make
sure we have complete data packages that we need and inventory, etc.
- Be CytRx liaison with the FDA, NIH and any other regulatory
organizations.
- Speaking at various scientific and business conferences and
assisting the CEO and/or other members of the senior management team
on road shows and due-diligence meetings to advance the companies
stock performance.
- Attend meetings to discuss strategy as a member of the management
team which includes Corporate Vice-President, Director of Business
Development, Corporate Counsel, CFO, and CEO.
S1 - 2
- Other duties as Board of Directors, management team and outside
agencies may require.
S1 - 3
Schedule 2
Summary of Group Plans and Employee Benefits
1. See CytRx Corporation Employee Handbook, dated July 15, 2004, which is
incorporated herein by reference.
S2 - 1
