EXHIBIT 10(g)
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EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND XXXXX XX XXXXX
EMPLOYMENT AGREEMENT
Employment Agreement effective as of November 18, 1996 between SIGA
PHARMACEUTICALS, INC., a Delaware corporation (with its successors and assigns,
referred to as the "Corporation"), and Xxxxx xx Xxxxx ("Employee").
PRELIMINARY STATEMENT
The Corporation desires to employ Employee, and Employee wishes to continue
to be employed by the Corporation, upon the terms and subject to the conditions
set forth in this Agreement. The Corporation and Employee also wish to enter
into the other agreements set forth in this Agreement, all of which are related
to Employee's employment under this Agreement.
AGREEMENT
Employee and the Corporation therefore agree as follows:
1. EMPLOYMENT FOR TERM. The Corporation hereby employs Employee and
Employee hereby accepts employment with the Corporation for the three-year
period beginning on the date of this Agreement (the "Term"), or upon the earlier
termination of the Term pursuant to Section 6. The termination of the Term for
any reason shall end Employee's employment under this Agreement, but shall not
terminate Employee's or the Corporation's other agreements in this Agreement.
2. POSITION AND DUTIES. During the Term, Employee shall serve as
President, Chairman and Chief Executive Officer of the Corporation and shall be
responsible for developing and presenting the Corporation's strategies and
potential products or technologies, negotiating licensing and sublicensing
agreements, and directing product research and overall corporate direction.
During the Term, Employee shall also perform such other duties as the Board of
Directors of the Corporation (the "Board") may reasonably determine from time to
time. During the Term, Employee shall devote as much time as necessary to
satisfactorily perform his duties as an employee of the Corporation.
3. COMPENSATION.
(a) BASE SALARY AND STOCK OPTIONS. The Corporation shall pay
Employee a base salary of $225,000 per annum, as increased pursuant to Sections
3(b) and 3(c) ("Base Salary"), payable at least monthly on the Corporation's
regular pay cycle for professional employees. The Corporation shall also pay
Employee a monthly car allowance of $500. In additon, the Corporation shall
grant to Employee 100,000 currently exerciseable options to purchase Common
Stock of the Corporation at an exercise price of $0.50 per share. The
Corporation shall thereafter grant 100,000 stock options per annum to Employee
exercisable when granted at the then current market price. The options may be
exercised at any time up to 10 years after their issuance.
(b) ANNUAL INCREASES. The Base Salary shall be increased at the end
of each year of service by the greater of (i) 5% or (ii) a percentage equal to
the increase, if any, in the United States Department of Labor Consumer Price
Index (or comparable index, if unavailable) for the New York metropolitan area
over the previous 12 months.
(c) OTHER AND ADDITIONAL COMPENSATION. Sections 3 and 3(b)
establishe the minimum compensation during the Term and shall not preclude the
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Board from awarding Employee a higher salary or any bonuses or additional stock
options in the discretion of the Board during the Term at any time.
(d) WARRANTS. Upon the execution of this Agreement, Corporation
shall issue to Employee ten-year warrants to purchase 2,766,095 shares of the
Corporation's Common Stock at an exercise price of $.50 per share. Warrants to
purchase 25% of such shares shall be immediately exerciseable and the remaining
warrants shall become exerciseable on a pro rata basis on the first, second and
third anniversaries of this Agreement.
4. EMPLOYEE BENEFITS. During the Term, Employee shall be entitled to
the employee benefits, including vacation, health and other insurance benefits
made available by the Corporation to any other officers or key employees of the
Corporation.
5. EXPENSES. The Corporation shall reimburse Employee for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. TERMINATION.
(a) GENERAL. The Term shall end immediately upon Employee's death,
and upon a change of ownership of at least fifty percent (50%) of the
outstanding Common Stock of the Corporation (on a fully converted basis) by
sale, merger, consolidation or other means (a "Change in Ownership"). The Term
may also end for Cause or Disability, as defined in Section 7.
(b) NOTICE OF TERMINATION. Promptly after it ends the Term, the
Corporation shall give Employee notice of the termination, including a statement
of whether the termination was for Cause or Disability (as defined in Section 7
and 7(b) below). The Corporation's failure to give notice under this Section 6
shall not, however, affect the validity of the Corporation's termination of the
Term.
(c) TERMINATION UPON CHANGE IN OWNERSHIP. Upon a Change in Ownership
of the Corporation, the Term shall end and all compensation due Employee under
this Agreement will become immediately due and payable and all stock, warrants
and options of Employee in the Corporation shall immediately become vested.
(d) In the event this Agreement is terminated by the Corporation
without Cause, all compensation due Employee under this Agreement will become
immediately due and payable and all stock, warrants and options of Employee in
the Corporation shall immediately become vested.
7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful malfeasance or
willful misconduct by Employee in connection with his employment; (ii)
Employee's gross negligence in performing any of his duties under this
Agreement; (iii) Employee's conviction of, or entry of a plea of guilty to, or
entry of a plea of nolo contendere with respect to, any crime other than a
traffic violation or infraction which is a misdemeanor; (iv) Employee's material
breach of any written policy applicable to all employees adopted by the
Corporation; or (v) material breach by Employee of any of his agreements in this
Agreement.
(b) DISABILITY DEFINED. "Disability" shall mean Employee's incapacity
due to physical or mental illness that results in his being unable to
substantially perform his duties hereunder for six consecutive months (or for
six months out of any nine month period). During a period of Disability,
Employee shall continue to receive his base salary hereunder, provided that if
the Corporation provides Employee with disability insurance coverage, payments
of Employee's base salary shall be reduced by the amount of any disability
insurance payments received by Employee due to such coverage. The Corporation
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shall give Employee written notice of termination which shall take effect thirty
(30) days after the date it is sent to Employee unless Employee shall have
returned to the performance of his duties hereunder during such thirty (30) day
period (whereupon such notice shall become void).
8. CONFIDENTIALITY.
(a) "CORPORATION INFORMATION" DEFINED. "CORPORATION INFORMATION"
means all information, knowledge or data of or pertaining to (i) the
Corporation, its employees and all work undertaken on behalf of the Corporation,
and (ii) any other person, firm, corporation or business organization with which
the Corporation may do business during the Term, that is not in the public
domain (and whether relating to methods, processes, techniques, discoveries,
pricing, marketing or any other matters).
(b) CONFIDENTIALITY. Employee hereby recognizes that the value of all
trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation is attributable substantially to the fact
that such confidential information is maintained by the Corporation in strict
confidentiality and secrecy and would be unavailable to others without the
expenditure of substantial time, effort or money. Employee therefore, except as
provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during and after
the end of the Term and shall not be used or divulged by him outside the scope
of his employment as contemplated by this Agreement, except as the Corporation
may otherwise expressly authorize by action of the Board. In the event that
Employee is requested in a judicial, administrative or governmental proceeding
to disclose any of the Corporation Information, Employee will promptly so notify
the Corporation so that the Corporation may seek a protective order or other
appropriate remedy and/or waive compliance with this Agreement. If disclosure
of any of the Corporation Information is required, Employee may furnish the
material so required to be furnished, but Employee will furnish only that
portion of the Corporation Information that legally is required.
9. COVENANT.
(a) NON-COMPETITION PERIOD DEFINED. "Non-Competition Period" means
the period beginning at the end of the Term and ending one year following the
date of termination of Employee's employment.
(b) COVENANTS REGARDING THE TERM AND NON-COMPETITION PERIOD.
Employee acknowledges and agrees that his services pursuant to this Agreement
are unique and extraordinary; that the Corporation will be dependent upon
Employee for developing and presenting the Corporation's strategies and
potential products or technologies and directing product research and overall
corporate direction; and that he will have access to and control of confidential
information of the Corporation. Employee further acknowledges that the business
of the Corporation is national in scope and cannot be confined to any particular
geographic area of the United States. For the foregoing reasons and to induce
the Corporation to enter this Agreement, Employee covenants and agrees that
during the Term and the Non-Competition Period Employee shall not unless with
written consent of the Corporation:
(i) engage in any business in which the Corporation had been engaged in
during the Term ("Prohibited Activity") in the United States or elsewhere
for his own account;
(ii) directly or indirectly, enter the employ of, or render any services,
including but not limited to consultations, to any individual, corporation,
partnership or other business entity (a "Person") engaged in any Prohibited
Activity in the United States or elsewhere; or
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(iii) become interested in any Person engaged in any Prohibited Activity
in the United States, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, employee, trustee,
consultant or in any other relationship or capacity; provided, however,
that Employee may own directly or indirectly, solely as an investment,
securities of any Person which are traded on any national securities
exchange if Employee (x) is not a controlling person of, or a member of a
group which controls, such person or (y) does not, directly or indirectly,
own 5% or more of any class of securities of such person;
(iv) directly or indirectly hire, engage or retain any person which at any
time during the Term or Non-Competition Period was a supplier, client or
customer of the Corporation, or directly or indirectly solicit, entice or
induce any such person to become, a supplier, client or customer of any
other person engaged in any Prohibited Activity; or
(v) directly or indirectly hire, employ or retain any person who at any
time was an employee of the Corporation or directly or indirectly solicit,
entice, induce or encourage any such person to become employed by any other
person.
(c) EXCEPTION. Sections 9(a) and (b) above shall not apply to (i)
any consulting arrangement which Employee may have or (ii) any stock, other
securities, Board of directors seat, or other interest which Employee may hold
as of November 17, 1996.
(d) REMEDIES. Employee hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects and
that the Corporation is entering into this Agreement, inter alia, on such
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acknowledgment. If Employee breaches, or threatens to commit a breach, of this
Section 9, the Corporation shall have the following rights and remedies, each of
which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Corporation under
law or in equity: (i) the right and remedy to have this Section 9 specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Corporation and that money damages will not provide an adequate remedy to
the Corporation; (ii) the right and remedy to require Employee to account for
and pay over to the Corporation all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
Employee as the result of any transactions constituting a breach of this Section
9, and Employee shall account for and pay over such Benefits to the Corporation;
(iii) if any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of this Section 9 shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions; and (iv) if any court construes any of this Section 9, or any
part thereof, to be unenforceable because of the duration of such provision or
the area covered thereby, such court shall have the power to reduce the duration
or area of such provision and, in its reduced form, such provision shall then be
enforceable and shall be enforced.
(e) JURISDICTION. The parties intend to and hereby confer
jurisdiction to enforce this Section 9 upon the courts of any jurisdiction
within the geographical scope of such Covenants. If the courts of any one or
more such jurisdictions hold this Section 9 wholly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the parties that
such determination not bar or in any way affect the Corporation's right to the
relief provided above in the courts of any other jurisdiction, within the
geographical scope of such Covenants, as to breaches of such Covenants in such
other respective jurisdictions such Covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
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10. SUCCESSORS AND ASSIGNS.
(a) EMPLOYEE. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Employee may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All rights
and benefits of Employee shall be for the sole personal benefit of Employee, and
no other person shall acquire any right, title or interest under this Agreement
by reason of any sale, assignment, transfer, claim or judgment or bankruptcy
proceedings against Employee. Except as so provided, this Agreement shall inure
to the benefit of and be binding upon Employee and his personal representatives,
distributees and legatees.
(b) THE CORPORATION. Subject to Section 6(c), this Agreement shall be
binding upon the Corporation and inure to the benefit of the Corporation and of
its successors and assigns.
10. SUCCESS FEE. Upon the successful completion of a transaction
resulting in a Change in Ownership of the Corporation, the Corporation shall pay
to Employee, in consideration of his work on behalf of the Corporation, a one
time cash payment equal to one and one-half percent (1.5%) of the total
consideration received by the Corporation.
11. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties concerning Employee's employment with the Corporation and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between Employee and the Corporation relating to the
subject matter of this Agreement.
12. AMENDMENT OR MODIFICATION, WAIVER. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Employee and by a duly authorized officer of the Corporation. No
waiver by any party to this Agreement of any breach by another party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
13. NOTICES. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Employee: Xxxxx xx Xxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
If to the Corporation: SIGA PHARMACEUTICALS, INC.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to: Xxxxxxxxxxx Xxxxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail,
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postage prepaid, return receipt requested, shall be deemed given on the date
mailed.
14. SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Employee that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
15. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
16. HEADINGS. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
17. WITHHOLDING TAXES. All salary, benefits, reimbursements and any other
payments to Employee under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
18. 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 constitute one and same instrument.
19. APPLICABLE LAW: JURISDICTION. The laws of the State of New York
shall govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. Any suit,
action or proceeding against Employee with respect to this Agreement, or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of New York, as the Corporation may elect in
its sole discretion, and Employee hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
/s/ Xxxxx xx Xxxxx
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Xxxxx xx Xxxxx
SIGA PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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