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Exhibit 10.18
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the January 10, 2001 between Xxxx Laboratories,
Inc., a New York corporation having its principal executive offices at 000
Xxxxxxxxx Xxxxx, Xxxxxxxx #00, Xxxxxxx Corporate Park, Blauvelt, New York 10913
(the "Company"), and Xxxxxx Xxx-Xxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Company wishes to assure itself of the services of the
Employee and provide an inducement for the Employee to enter into its employ;
and
WHEREAS, the Employee is willing to serve in the employ of the Company
for the period and on the other terms and conditions hereafter set forth;
NOW, THEREFORE, the Company and the Employee hereby agree as follows:
1. Employment. The Company agrees to employ the Employee, and the
Employee agrees to enter into and remain in the employ of the Company, during
the term of this Agreement and on the other terms and conditions hereafter set
forth.
2. Term. The term of this Agreement shall commence on January 29, 2001 (the
"Commencement Date") and shall terminate at the close of business on the third
anniversary of the Commencement Date unless sooner terminated in accordance with
the terms of this Agreement or extended as hereinafter provided. The term of
this Agreement shall be extended, without further action by the Company or the
Employee, on the date (the "Extension Effective Date") which is six months
before the third anniversary of the Commencement Date and on the date (also an
"Extension Effective Date") which is six months before each subsequent
anniversary of the Commencement Date, for successive periods of twelve months
each, unless either party shall have given written notice to the other party, in
the manner set forth in paragraph 8(e) or (f) below, prior to the Extension
Effective Date in question, that the term of this Agreement that is in effect at
the time such written notice is given is not to be extended or further extended,
as the case may be.
3. Positions and Responsibilities; Place of Performance.
(a) Throughout the term of this Agreement, the Employee agrees
to enter into and remain in the employ of the Company, and the Company agrees to
employ the Employee, as the President of Xxxx Research, reporting to the
Chairman and Chief Executive Officer of the Company (the "CEO"). As the
President of Xxxx Research, the Employee shall be responsible for directing,
managing and overseeing all new proprietary drug discovery and development
studies and activities, including clinical trials and medical affairs and
regulatory affairs related to such activities, and for performing such other
reasonable duties, consistent with the position of President of Xxxx Research,
as
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may lawfully be assigned to her by the CEO or the Board of Directors of the
Company (the "Board").
(b) In connection with her employment by the Company, the
Employee shall be based in the metropolitan Philadelphia, Pennsylvania area but
agrees to travel, to the extent reasonably necessary to perform her duties and
obligations under this Agreement, to Company facilities and other destinations
in Blauvelt, New York and elsewhere.
(c) During the term of this Agreement, the Employee shall
serve the Company on an exclusive basis and shall devote all her business time,
attention, skill and efforts to the faithful performance of her duties
hereunder; provided that the Employee may engage in community service and
charitable activities that do not interfere with the performance of her duties
and responsibilities hereunder and, provided further, that the Employee may
continue to serve as the Chairperson of the Generic Pharmaceutical Association
during the first 18 months of the term of this Agreement.
(d) During the term of this Agreement, the Company agrees to
use reasonable efforts to cause the Employee to be elected to the Board, and, if
so elected, the Employee agrees to serve on the Board without any additional
compensation beyond that provided in Section 4 below.
4. Compensation. For all services rendered by the Employee in any capacity
during the term of this Agreement, and for her undertakings with respect to
confidential information set forth in paragraph 6 below, the Employee shall be
entitled to the following:
(a) a salary, payable in installments not less frequent than
monthly, at the annual rate of three hundred thousand dollars ($300,000.00),
with such increases in such rate, if any, as the Compensation Committee of the
Board may approve from time to time during the term of this Agreement (the
annual salary rate as increased from time to time during the term of this
Agreement being hereafter referred to as the "Base Salary");
(b) participation in the Company's annual executive incentive
or bonus plan as in effect from time to time, with the opportunity to receive an
award in accordance with the terms and conditions of such plan, for each fiscal
year of the Company that commences or terminates during the term of this
Agreement, of up to 40% of the Base Salary earned during such year (or such
higher percentage as the Board or a committee of the Board may prescribe from
time to time during the term of this Agreement), it being understood that any
award for the fiscal year of the Company in which the term of this Agreement
commences or terminates pursuant to the terms hereof shall be prorated based on
the portion of such fiscal year that coincides with the term of this Agreement,
and that any award for the fiscal year of the Company in which the term of this
Agreement terminates pursuant to the terms hereof shall be made at the same time
as awards (if any) are made to other participants with respect to such fiscal
year;
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(c) a sign-on bonus of $270,000 which shall be due and payable
on the Commencement Date, plus an additional payment of $270,000 (the "Retention
Payment") which shall be paid no later than September 30, 2001 and which the
Employee agrees to repay to the Company in full if and when the Employee's
full-time employment by the Company terminates within the first two years after
the Commencement Date for any reason other than (i) death, (ii) a disability
that entitles the Employee to Social Security disability benefits (or that will
entitle the Employee to Social Security disability benefits after any applicable
waiting period), (iii) termination of employment by the Company without Good
Cause (as defined in paragraph 5(c) below), or (iv) termination of employment by
the Employee for Good Reason (as defined in paragraph 5(d) below);
(d) options to purchase a total of 50,000 shares of the
Company's common stock, as follows: an option to purchase 10,000 shares at a
purchase price of $26 per share (the "$26 Option"), an option to purchase 10,000
shares at a purchase price of $41 per share (the "$41 Option"), an option to
purchase 10,000 shares at a purchase price of $65 per share (the "$65 Option"),
and an option to purchase 20,000 shares at the fair market value of such shares
on the Commencement Date (the "At-Market Option"; collectively, with the $26
Option, the $41 Option and the $65 Option, the "Options"), subject to the terms
and conditions of any stock option or stock incentive plan of the Company under
which the Options may be granted, such other terms and conditions consistent
with the terms of such plan as the Board or a committee of the Board granting
the Options (the Administrator") may impose, and the following terms and
conditions:
(i) the $26 Option shall become exercisable on
February 15, 2002 if the Employee's full-time employment by
the Company continues until that date; and
(ii) the $41 Option shall become exercisable on
February 15, 2003 if the Employee's full-time employment by
the Company continues until that date; and
(iii) the $65 Option shall become exercisable on
February 15, 2004 if the Employee's full-time employment by
the Company continues until that date; and
(iv) the At-Market Option shall become exercisable on
February 15, 2005 with respect to 10,000 of the shares that
are subject to the At-Market Option if the Employee's
full-time employment by the Company continues until that date,
and on February 15, 2006 with respect to the 10,000 balance of
the shares that are subject to such option if the Employee's
full-time employment by the Company continues until that
latter date; and
(v) to the extent not therefore exercisable, the
Options shall become exercisable on the date, if any, on which
a Change in Control (as defined in the Company's 1993 Stock
Incentive Plan as in effect on the
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date of this Agreement) occurs, if the Employee's full-time
employment by the Company continues until that date, provided
that, if such Change in Control occurs less than six months
after the date on which the option is granted (the "Grant
Date"), the Employee agrees in writing (if requested to do so
by the Administrator) to remain in the employ of the Company
or a subsidiary at least through the date which is six months
after the Grant Date with substantially the same title,
duties, authority, reporting relationships and compensation as
on the day immediately preceding such Change in Control; and
(vi) the $26 Option, the $41 Option and the $65
Option shall each expire on the eighth anniversary of the
Commencement Date and the At-Market Option shall expire on the
tenth anniversary of the Commencement Date unless the
Employee's employment terminates before the applicable
foregoing expiration date, in which case each Option shall
expire upon such termination of employment or within such
period of time thereafter as the Administrator may specify;
(e) the business and personal use of an automobile at Company
expense including, without limitation, payment or reimbursement of automobile
insurance and maintenance expenses in accordance with the Company's automobile
policy applicable to senior officers on the date of this Agreement;
(f) participation in all Company health, welfare, savings and
other employee benefit and fringe benefit plans (including vacation pay plans or
policies and life and disability insurance plans) in which other senior officers
of the Company participate during the term of this Agreement, subject in all
events to the terms and conditions of such plans as in effect from time to time.
Nothing in this paragraph (f) shall preclude the Company from amending or
terminating any such plan at any time. The plans covered by this paragraph (f)
shall not include the annual incentive or stock option plans, which are covered
by paragraphs (b) and (d) above; and
(g) the Company shall pay, or reimburse the Employee for, the
premiums she incurs to maintain her current medical malpractice insurance
coverage (or equivalent coverage) during the term, such premiums payable or
reimburseable by the Company in no event to exceed $15,000 per year of the term.
5. Termination of Employment.
(a) Termination by the Company without Good Cause or by the
Employee for Good Reason.
(i) If during the term of this Agreement the
Employee's employment with the Company is terminated by the Company without Good
Cause or is terminated by the Employee for Good Reason other than at or after
the expiration of the term of this Agreement as the same may have been extended
in accordance with the
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provisions of paragraph 2 above, the Company, subject to compliance by the
Employee with the provisions of paragraph 6 below, relating to confidential
information, shall, as liquidated damages, and as additional consideration for
the Employee's undertakings under paragraph 6 below, (A) pay the Employee a lump
sum amount of money equal to 1.5 times the Employee's Base Salary, and (B) if
such employment termination occurs before the Retention Payment referred to in
paragraph 4(c) above has been paid to the Employee, pay the Retention Payment.
(ii) If the term of this Agreement as the same may
have been extended in accordance with the provisions of paragraph 2 above is not
extended or further extended because the Company gives written notice of
non-extension to the Employee as provided in paragraph 2 above, and the Company
does not have Good Cause for termination of the Employee's employment at the
time of giving such notice, then the Company, subject to fulfillment by the
Employee of her obligations under this Agreement during the balance of the term
and her compliance with the provisions of paragraph 6 below, relating to
confidential information, shall, as non-renewal compensation, and as additional
consideration for the Employee's undertakings under this Agreement including
paragraph 6 below, pay the Employee a lump sum amount of money equal to 1.0
times the Employee's Base Salary. The Company shall pay such amount upon the
expiration of the term that is in effect at the time the Company gives such
written notice of non-extension to the Employee.
(iii) The foregoing provisions of this paragraph 5(a)
shall be in lieu of any severance pay that may be payable under any plan or
practice of the Company.
(b) Termination by the Company for Good Cause or by the
Employee without Good Reason. If, during the term of this Agreement, the
Employee's employment by the Company is terminated by the Company for Good Cause
or by the Employee without Good Reason, the Employee shall not be entitled to
receive any compensation under paragraph 4 above acruing after the date of such
termination or any payment under paragraph 5(a) above. The provisions of this
paragraph 6(b) shall be in addition to, and not in lieu of, any other rights and
remedies the Company may have at law or in equity or under any other provision
of this Agreement (including without limitation paragraph 4(c) above) in respect
of such termination of employment.
(c) Good Cause Defined. For purposes of this Agreement, the
Company shall have "Good Cause" to terminate the Employee's employment during
the term of this Agreement if:
(i) the Employee fails to substantially perform her
duties hereunder for any reason or fails to devote substantially all her
business time exclusively to the affairs of the Company, and such failure is not
discontinued within a reasonable period of time, in no event to exceed 30 days,
after the Employee receives written notice from the Company of such failure; or
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(ii) the Employee commits an act of dishonesty
resulting or intended to result directly or indirectly in gain or personal
enrichment at the expense of the Company; or
(iii) the Employee is grossly negligent or engages in
willful misconduct or insubordination in the performance of her duties
hereunder; or
(iv) the Employee breaches her obligations under
paragraph 6 below, relating to confidential information.
(d) Good Reason Defined. For purposes of this Agreement, the
Employee shall have "Good Reason" to terminate her employment during the term of
this Agreement only if:
(i) the Company fails to provide compensation or
benefits that the Company is obligated to provide under paragraph 4 above and
the failure is not remedied within 30 days after the Company receives written
notice from the Employee of such failure; or
(ii) the Company assigns the Employee duties,
responsibilities or reporting relationships not contemplated by paragraph 3
above without her consent, or limits her duties or responsibilities contemplated
by paragraph 3 above in any respect materially detrimental to her, and in either
case the situation is not remedied within 30 days after the Company receives
written notice from the Employee of the situation; or
(iii) she is removed from, or not elected or
reelected to, the position of President of Xxxx Research, or the Board, and the
Company does not have Good Cause for doing so; or
(iv) the Company relocates her office outside of a
forty (40) mile radius from her residence on the date of this Agreement without
her consent and the situation is not remedied within 30 days after the Company
receives written notice from the Employee of the situation.
6. Confidential Information. The Employee agrees not to disclose,
either while in the Company's employ or at any time thereafter, to any person
not employed by the Company, or not engaged to render services to the Company,
except with the prior written consent of an authorized officer of the Company or
as necessary or appropriate for the performance of her duties hereunder, any
confidential information obtained by her while in the employ of the Company,
including, without limitation, information relating to any of the inventions,
processes, formulae, plans, devices, compilations of information, research,
methods of distribution, suppliers, customers, client relationships, marketing
strategies or trade secrets of the Company or any subsidiary thereof; provided,
however, that this provision shall not preclude the Employee from use or
disclosure of information known generally to the public or of information not
considered confidential by persons engaged in the businesses conducted by the
Company or any subsidiary thereof, or from
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disclosure required by law or court order. The Employee also agrees that upon
leaving the Company's employ she will not take with her, without the prior
written consent of an authorized officer of the Company, and she will surrender
to the Company, any record, list, drawing, blueprint, specification or other
document or property of the Company or any subsidiary thereof, together with any
copy or reproduction thereof, mechanical or otherwise, which is of a
confidential nature relating to the Company or any subsidiary thereof, or
without limitation, relating to its or their methods of distribution, suppliers,
customers, client relationships, marketing strategies or any description of any
formulae or secret processes, or which was obtained by him or entrusted to her
during the course of her employment with the Company.
7. Severability
(a) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement not so invalid or unenforceable shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law; and
(b) Any provision of the Agreement which may for any reason be
invalid or unenforceable in any jurisdiction shall remain in effect and be
enforceable in any jurisdiction in which such provision shall be valid and
enforceable.
8. General Provisions.
(a) No right or interest to or in any payments to be made
under this Agreement shall be subject to anticipation, alienation, sale,
assignment, encumbrance, pledge, charge or hypothecation or to execution,
attachment, levy or similar process, or assignment by operation of law. All
payments to be made by the Company hereunder, including the sign-on bonus and
Retention Payment referred to in paragraph 4(c) above, shall be subject to the
withholding of such amounts as the Company may determine it is required to
withhold under the laws or regulations of any governmental authority, whether
foreign, federal, state or local.
(b) To the extent that the Employee acquires a right to
receive payments from the Company under this Agreement, such right shall be no
greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of any amount hereunder.
(c) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of laws of that State.
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(d) This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Employee, her heirs,
devisees, distributees and legal representatives.
(e) Any notice or other communication to the Company pursuant
to any provision of this Agreement shall be given in writing and will be deemed
to have been delivered:
(i) when delivered in person to the Corporate
Secretary or Chief Executive Officer of the Company; or
(ii) one week after it is deposited in the United
States certified or registered mail, postage prepaid, addressed to the Corporate
Secretary of the Company at 000 Xxxxxxxxx Xxxxx, Xxxxxxxx #00, Xxxxxxx Corporate
Park, Blauvelt, New York 10913 or at such other address of which the Company may
from time to time give the Employee written notice in accordance with paragraph
8(f) below.
(f) Any notice or other communication to the Employee pursuant
to any provision of the Agreement shall be given in writing and will be deemed
to have been delivered:
(i) when delivered to the Employee in person, or
(ii) one week after it is deposited in the United
States certified or registered mail, postage prepaid, addressed to the Employee
at her address as it appears on the records of the Company or at such other
address of which the Employee may from time to time give the Company written
notice in accordance with paragraph 8(e) above.
(g) No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be agreed to in a
writing signed by the Employee and an authorized officer of the Company.
(h) This instrument contains the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes and
replaces all prior agreements and understandings with respect to such subject
matter, and the parties have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXX LABORATORIES, INC.
By: XXXXX XXXXXX
[SEAL]
Attest:
-----------------------
Secretary
XXXXXX X. XXX-XXXXXX
Employee
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