EMPLOYMENT AGREEMENT
Employee
Name: Xxxxx Xxxxxx, Ph.D.
This
EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into this April
18, 2008 by and between Xxxxx Xxxxxx (the “Executive”) and PharmAthene, Inc., a Delaware
corporation (the “Company”).
WITNESSETH:
WHEREAS, the Company desires
to employ the Executive and the Executive desires to accept employment with the
Company subject to the terms and conditions herein agreed upon:
NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:
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1.
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Employment; Term. The
Company hereby agrees to employ the Executive and the Executive hereby
accepts employment with the Company upon the terms and conditions
hereinafter set forth for the period commencing on April 18,2008 (the
“Effective
Date”) and ending on the first
anniversary of such date. The term of this Agreement shall be
automatically extended for an additional year on each anniversary of the
date hereof unless written notice of non-extension is provided by either
party to the other party at least 90 days prior to such anniversary. The
period of the Executive’s
employment under this Agreement, as it may be terminated or extended from
time to time as provided herein is referred to as the “Employment
Period.”
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2.
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Position
and Duties.
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a.
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Position and Duties Generally.
The Executive shall be employed by the Company in the position of
Vice President, Regulatory Affairs and Quality and shall faithfully render
such executive, managerial, administrative and other services as are
customarily associated with and incident to such position and as the
Company may from time to time reasonably require consistent with such
position. The Executive shall report to the President and CEO, Xxxxx X.
Xxxxxx.
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b.
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Other Positions. The
Executive shall hold such other positions and executive offices with the
Company and/or of any of the Company’s
subsidiaries or affiliates as may from time to time be authorized by the
Board. The Executive shall not be entitled to any compensation other than
the compensation provided for herein for serving during the Employment
Period in any other office or position of the Company or any of its
subsidiaries or affiliates, unless the Compensation Committee specifically
approves such additional
compensation.
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c.
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Devotion
to Employment. Except for vacation time taken in accordance with
the Company’s vacation policy in effect from time to time and in
accordance with the terms of this Agreement and for absences due to
temporary illness, the Executive shall be a full-time employee of the
Company and shall devote full time, attention and efforts during the
Employment Period to the business of the Company and the duties required
of him in his position. During the Employment Period, the Executive shall
not be engaged in any other business activity which, in the reasonable
judgment of the
Board or its designee, conflicts with the duties of the Executive
hereunder, whether or not such activity is pursued for gain, profit or
other pecuniary
advantage.
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Page
1 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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3.
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Compensation;
Reimbursement.
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a.
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Base Salary. For the
Executive’s services, the Company shall pay to the Executive an annual
base salary of not less than $249,757.00 per annum, payable in equal
periodic installments according to the Company’s customary payroll
practices, but no less frequently than monthly. The Executive’s base
salary shall be subject to review annually by the Compensation Committee
and shall be subject to increase at the option and sole discretion of the
Compensation Committee.
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b.
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Bonus. The Executive
shall be eligible to receive at the sole discretion of the Compensation
Committee, an annual cash bonus of up to an additional 30% of the
Executive’s base salary. In addition, the Executive may be eligible for
additional bonuses at the option and sole discretion of the Compensation
Committee based upon based upon the achievement of certain pre-determined
performance milestones.
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c.
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Benefits
Generally.
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i.
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In
addition to the salary and cash bonus described above, the Executive shall
be entitled during the Employment Period to participate in such employee
benefit plans and programs of the Company, and shall be entitled to such
other fringe benefits, as are from time to time made available by the
Company generally to employees of the level, position, tenure, salary,
age, health and other qualifications of the Executive including, without
limitation, medical, dental and vision insurance coverage for the
Executive and the Executive’s dependents, disability, death benefit and
life insurance and pension plans.
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ii.
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Without
limiting the generality of the foregoing, the Executive shall be eligible
for such awards, if any, including stock and stock options under the
Company’s 2007 Long-Term Incentive Plan or such other plan as the Company
may from time to time put into effect as shall be granted to the Executive
by the Compensation Committee or other appropriate designee of the Board
acting in its sole discretion.
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iii.
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The
Executive acknowledges and agrees that the Company does not guarantee the
adoption or continuance of any particular employee benefit plan and
participation by the Executive in any such plan or program shall be
subject to the rules and regulations applicable
thereto.
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d.
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Vacation. The Executive
shall be entitled to 20 days of vacation in each calendar
year.
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Page 2 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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e.
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Expenses. The Company
shall reimburse the Executive in accordance with the practices in effect
from time to time for other officers or staff personnel of the Company for
all reasonable and necessary business and travel expenses and other
disbursements incurred by the Executive for or on behalf of the Company in
the performance of the Executive’s duties hereunder, upon presentation by
the Executive to the Company of appropriate supporting
documentation.
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f.
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Perquisites. The
Executive shall be entitled to those perquisites as the Company shall make
available from time to time to other executive officers of the Company,
which shall include, without limitation, the costs associated with the use
of an automobile in an amount not to exceed $1,000 per month and the costs
for Executive’s use of a cellular telephone and personal digital assistant
to the extent such equipment is used for business
purposes.
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4.
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Death; Disability. In
the event that the Executive dies or is incapacitated or disabled by
accident, sickness or otherwise, so as to render the Executive mentally or
physically incapable of performing the services required to be performed
by the Executive under this Agreement for a period that would entitle the
Executive to qualify for long-term disability benefits under the Company’
s then-current long-term disability insurance program or, in the absence
of such a program, for a period of 120 consecutive days or longer (such
condition being herein referred to as a “Disability”) then (i) in the case of the
Executive’s death, the Executive’s employment shall be deemed to terminate
on the date of the Executive’s death and (ii) in the case of a Disability,
the Company, at its option, may terminate the employment of the Executive
under this Agreement immediately upon giving the Executive notice to that
effect. The determination to terminate the Executive in the event of a
Disability shall be made by the Board or the Board’s designee. In the case
of a Disability, until the Company shall have terminated the Executive’s
employment hereunder in accordance with the foregoing, the Executive shall
be entitled to receive compensation provided for herein notwithstanding
any such physical or mental
disability.
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5.
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Termination For Cause.
The Company may terminate the employment of the Executive hereunder
at any time during the Employment Period for “cause” (such termination
being herein referred to as a “Termination
for Cause”) by giving the Executive notice
of such termination, which termination shall be effective on the date of
such notice or such later date as may be specified by the Company. For
purposes of this Agreement, “Cause” means (i) the
Executive’s willful and substantial misconduct that is materially
injurious to the Company and is either repeated after written notice from
the Company specifying the misconduct or is continuing and not corrected
within 20 days after written notice form the Company specifying the
misconduct, (ii) the Executive’s repeated neglect of duties or failure to
act which can reasonably be expected to affect materially and adversely
the business or affairs of the Company after written notice from the
Company specifying the neglect or failure to act, (iii) the Executive’s
material breach of any of the agreements contained in Sections 11, 12, 13
or 14 hereof or of any of the Company’s policies, (iv) the commission by
the Executive of any material fraudulent act with respect to the business
and affairs of the Company, (v) the Executive’s conviction of (or plea of
nolo contendere to) a crime constituting a felony, (vi) demonstrable gross
negligence, or (vii) habitual insobriety or use of illegal drugs by the
Executive while performing the Executive’s duties under this Agreement
which adversely affects the Executives Performance of the Executive’s
duties under this Agreement.
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Page 3 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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6.
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Termination Without Cause.
The Company may terminate the employment of the Executive hereunder
at any time without “cause” or fail to extend this Agreement pursuant to
the terms hereof (such termination being herein referred to as “Termination
Without Cause”) by giving the Executive notice
of such termination, upon the giving of which such termination shall take
effect not later than 30 days from the date such notice is
given.
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7.
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Voluntary Termination by
Executive. Any termination of the employment of the Executive by
the Executive otherwise than as a result of death or Disability or for
Good Reason (as defmed below) (such termination being herein referred to
as “Voluntary
Termination”). A Voluntary Termination will
be deemed to be effective immediately upon such
termination.
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8.
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Termination
by Executive for Good Reason. Any termination of the employment of
the Executive by the Executive for Good Reason which shall be deemed to be
equivalent to a Termination without Cause. For purposes of this Agreement
“Good
Reason” means (i)
any material breach by the Company of any of its obligations under this
Agreement, (ii)
any material reduction in the Executive’s duties, authority or
responsibilities without the Executive’s consent, (iii) any assignment to
the Executive of duties or responsibilities materially inconsistent with
the Executive’s position and duties contained in this Agreement without
the Executive’s consent, (iv) a relocation of the Company’s principal
executive offices or the Company determination to require the Executive to
be based anywhere other than within 25 miles of the location at which the
Executive on the date hereof performs the Executive’s duties; (v) the
taking of any action by the Company which would deprive the Executive of
any material benefit plan (including, without limitation, any medical,
dental, disability or life insurance); or (vi) the failure by the Company
to obtain the specific assumption of this Agreement by any successor or
assignee of the Company or any person acquiring substantially all of the
Company’ s assets; provided, however, that the Executive may not terminate
the Employment Period for Good Reason unless the Executive first provides
the Company with written notice specifying the Good Reason and providing
the Company with 20 days in which to remedy the stated
reason.
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9.
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Effect
of Termination of Employment.
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a.
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Voluntary
Termination; Termination For Cause. Upon the termination of the
Executive’s employment as a result of the Executive’s Voluntary
Termination or a Termination For Cause, the Executive shall not have any
further rights or claims against the Company under this Agreement except
the right to receive (i) the unpaid portion of the base salary provided
for in Section 3(a) hereof, computed on a pro rata basis to the date of
termination, (ii) payment of the Executive’s accrued but unpaid amounts
and extension of applicable benefits in accordance with the terms of any
incentive compensation, retirement, employee welfare or other employee
benefit plans or programs of the Company in which the Executive is then
participating in accordance with the terms of such plans or programs, and
(iii) reimbursement for any expenses for which the Executive shall not
have theretofore been reimbursed as provided in Section 3
hereof.
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Page 4 of
10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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b.
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Termination Without Cause;
Termination for Good Reason. Upon the termination of the
Executive’s employment as a result of a Termination Without Cause or for
Good Reason, the Executive shall not have any further rights or claims
against the Company under this Agreement except the right to receive (i)
the payments and other rights provided for in Section 9(a) hereof and (ii)
severance payments in the form of a continuation of the Executive’ s base
salary as in effect immediately prior to such termination for a period of
6 (six) months following the effective date of such termination. To the
extent that severance payments shall be payable under this Agreement such
payments shall be in consideration for and only after the Executive
executes a General Release containing terms reasonably satisfactory to the
Company.
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c.
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Death and Disability.
Upon the termination of the Executive’s employment as a result of
death or Disability, neither the Executive nor the Executive’s
beneficiaries or estate shall have any further rights or claims against
the Company under this Agreement except the right to receive the payments
and other rights provided for in Section 9(a)
hereof.
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d.
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Forfeiture of Rights. In
the event that, subsequent to termination of employment hereunder, the
Executive (i) breaches any of the provisions of Sections 11, 12, 13 or 14
hereof or (ii) makes or facilitates the making of any adverse public
statements or disclosures with respect to the business or securities of
the Company, all payments and benefits to which the Executive may
otherwise have been entitled shall immediately terminate and be forfeited,
and any portion of such amounts as may have been paid to the Executive
shall forthwith be returned to the
Company.
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10.
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Disclosure
of Confidential Information. The Executive shall not, directly or
indirectly, at any time during or after the Employment Period, disclose to
any person, firm, Corporation or other business entity, except as required
by law, or use for any purpose except in the good faith performance of the
Executive’s duties to the Company, any Confidential Information (as herein
defined). For purposes of this Agreement, “Confidential
Information”means
all trade secrets and other non-public Information of a business,
financial, marketing, technical or other nature pertaining to the Company
or any subsidiary, including information of others that the Company or any
subsidiary has agreed to keep confidential; provided, however, that
Confidential Information shall not include any information that has
entered or enters the public domain (other than through breach of the
Executive’s obligations under this Agreement) or which the Executive is
required to disclose by law or legal process. Upon the Company’ s request
at any time, the Executive shall immediately deliver to the Company all
materials in the Executive’s possession which contain Confidential
Information.
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Page 5 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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11.
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Restrictive
Covenant.
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a.
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Term of Restrictive Covenant.
The Executive hereby acknowledges and recognizes that, during the
Employment Period, the Executive shall be privy to trade secrets and
Confidential Information critical to the Company’ s business and the
Executive further acknowledges and recognizes that the Company would find
it extremely difficult or impossible to replace the Executive and,
accordingly, the Executive agrees that, in consideration of the benefits
to be received by the Executive hereunder, the Executive shall not, from
and after the date hereof, throughout the Employment Period, and for a
period of 12 months following the termination of the Employment Period (i)
directly or indirectly engage in the development, production, marketing or
sale of products that compete (or, upon commercialization, would compete)
with products of the Company being developed (so long as such development
has not been abandoned), marketed or sold at the time of the termination
of the Employment Period (such business or activity being herein referred
to as a “Competing
Business”) whether such engagement shall
be as an officer, director, owner, employee, partner, affiliate or other
participant in any Competing Business, (ii) assist others in engaging in
any Competing Business in the manner described in the foregoing clause
(i), or (iii) induce other employees of the Company or any subsidiary
thereof to terminate their employment with the Company or any subsidiary
thereof or engage in any Competing Business or hire any employees of the
Company or any subsidiary unless such persons have not been employees of
the Company for at least 12 months.
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b.
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Sufficient Consideration.
The Executive understands that the foregoing restrictions may limit
the ability of the Executive to earn a livelihood in a business similar to
the business of the Company, but nevertheless believes that the Executive
has received and shall receive sufficient consideration and other
benefits, as an employee of the Company and as otherwise provided
hereunder, to justify such restrictions which, in any event (given the
education, skills and ability of the Executive), the Executive believes
would not prevent the Executive from earning a
living.
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12.
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Non-Disparagement. The Executive shall not engage in
conduct, through word, act, gesture or other means, or
disclose any information to the public or any third party
which (i) directly
or indirectly discredits or disparages in whole or in part
the company, its subsidiaries, divisions, affiliates and/or successors as
well as the products and the respective officers, directors, stockholders
and employees of each of them; (ii) is detrimental to the reputation, character or
Standing of these entities, their products or any of their respective
officers, directors, stockholders and/or employees; or (iii) which generally reflects
negatively on the management decisions, strategy or decision-making of
these entities.
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Page 6 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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13.
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Company Right to Inventions.
The Executive shall promptly disclose, grant and assign to the
Company, for its sole use and benefit, any and all inventions,
improvements, technical information and suggestions relating in any way to
the business of the Company which the Executive may develop or acquire
during the Employment Period (whether or not during usual working hours),
together with all patent applications, letters patent, copyrights and
reissues thereof that may at any time be granted for or upon any such
invention, improvement or technical Information. In connection therewith:
(i) the Executive shall, without charge, but at the expense of the
Company, promptly at all times hereafter execute and deliver such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to any
such inventions, improvements, technical Information, patent applications,
patents, copyrights or reissues thereof in the Company and to enable it to
obtain and maintain the entire right and title thereto throughout the
world, and (ii) the Executive shall render to the Company, at its expense
(including a reasonable payment for the time involved in case the
Executive is not then in its employ), all such assistance as it may
require in the prosecution of applications for said patents, copyrights or
reissues thereof, in the prosecution or defense of interferences which may
be declared involving any said applications, patents or copyrights and in
any litigation in which the Company may be involved relating to any such
patents, inventions, improvements or technical
Information.
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14.
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Enforcement. It is the
desire and intent of the parties hereto that the provisions of this
Agreement be enforceable to the füllest extent permissible under the laws
and public policies applied in each Jurisdiction in which enforcement is
sought. Accordingly, to the extent that a restriction contained in this
Agreement is more restrictive than permitted by the laws of any
Jurisdiction where this Agreement may be subject to review and
Interpretation, the terms of such restriction, for the purpose only of the
Operation of such restriction in such Jurisdiction, shall be the maximum
restriction allowed by the laws of such Jurisdiction and such restriction
shall be deemed to have been revised accordingly
herein.
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15.
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Remedies;
Survival.
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a.
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Injunctive Relief. The
Executive acknowledges and understands that the provisions of the
covenants contained in Sections 11, 12, 13 and 14 hereof, the violation of
which cannot be accurately compensated for in damages by an action at law,
are of crucial importance to the Company, and that the breach or
threatened breach of the provisions of this Agreement would cause the
Company irreparable harm. In the event of a breach or threatened breach by
the Executive of the provisions of Sections 11,12, 13 or 14 hereof, the
Company shall be entitled to an injunction restraining the Executive from
such breach. Nothing herein contained shall be construed as prohibiting
the Company from pursuing any other remedies available for any breach or
threatened breach of this
Agreement.
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b.
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Survival.
Notwithstanding anything contained in this Agreement to the
contrary, the provisions of the Sections 3, 9, and 11 through 17 hereof
shall survive the expiration or earlier termination of this Agreement
until, by their terms, such provisions are no longer
operative.
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16.
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Notices. Notices and
other communications hereunder shall be in writing and shall be delivered
personally or sent by air courier or first class certified or registered
mail, return receipt requested and postage prepaid, addressed as
follows:
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Page 7 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
if to the
Company:
Xxx Xxxx
Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxx 00000
with a
copy to:
XxXxxxxx
& English, LLP
Four
Gateway Center
000
Xxxxxxxx Xxxxxx
Xxxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxxxxx Xxxxxx, Esq.
if to the
Executive to:
with a
copy to :
All
notices and other communications
given to any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of delivery, if
personally delivered; on the business day after the date when sent, if sent by
air courier; and on the third business day after the date when sent, if sent by
mail, in each case addressed to such party as provided in this Section 16 or in
accordance with the latest unrevoked direction from such party.
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18.
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Binding Agreement; Benefit.
The provisions of this Agreement shall be binding upon, and shall
inure to the benefit of, the respective heirs, legal representatives and
successors of the parties
hereto.
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19.
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Governing Law; Jurisdiction.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland applicable to contract
made and to be performed therein. Any action to enforce any of the
provisions of this Agreement shall be brought in a court of the State of
Maryland or in Federal court located within that State. The parties
consent to the Jurisdiction of such courts and to the Service of process
in any manner provided by Maryland law. Each party irrevocably waives any
objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such court and any claim
that such suit, action or proceeding brought in such court has been
brought in an inconvenient forum and agrees that service of process in
accordance with the foregoing shall be deemed in every respect effective
and valid personal service of process upon such
party.
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Page 8 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
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20.
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Waiver of Breach. The
waiver by either party of a breach of any provision of this Agreement by
the other party must be in writing and shall not operate or be construed
as a waiver of any subsequent breach by such other
party.
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21.
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Entire Agreement; Amendments.
This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior
agreements or understandings among the parties with respect thereof. This
Agreement may be amended only by an agreement in writing signed by the
parties hereto.
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22.
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Headings. The section
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
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23.
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Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
Jurisdiction shall, as to such Jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
Jurisdiction shall not invalidate or render unenforceable such provision
in any other Jurisdiction.
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24.
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409A Compliance. The
intent of the Executive and the Company is that the severance and other
benefits payable to the Executive under this Agreement not be deemed
“deferred compensation” under,
and shall otherwise comply with, Section 409A of the Internal Revenue Code
of 1986, as amended. The Executive and the Company agree to use reasonable
best efforts to amend the terms of this Agreement from time to time as may
be necessary to avoid the imposition of liability under Section 409A of
the Code in any manner that does not materially alter the substantive
rights and obligations of the parties
hereunder.
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25.
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Executive’s
Acknowledgement. The Executive acknowledges (a) that the Executive
has had the opportunity to consult with independent counsel of his own
choice concerning this Agreement and (b) that the Executive has read and
understands the Agreement, is fully aware of its legal effect and has
entered into it freely based on the Executive’s
own judgment.
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26.
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Assignment. This
Agreement is personal in its nature and the parties hereto shall not,
without the consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder; provided, that the provisions hereof
shall inure to the benefit of, and be binding upon, each successor of the
Company, whether by merger, consolidation, transfer of all or
substantially all of its assets or
otherwise.
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27.
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Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
for all purposes constitute one agreement which is binding on all of the
parties hereto.
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Page 9 of 10
Employee
Name: Xxxxx Xxxxxx, Ph.D.
IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above
written.
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EXECUTIVE
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/s/
Xxxxx
Xxxxxx 12
Aug 08
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Xxxxx
Xxxxxx, Ph.D.
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By
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/s/ Xxxxx X. Xxxxxx |
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Title:
President and Chief Executive
Officer
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Page
10 of 10
