EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into this 22nd
day of February, 1999, by and between ZONAGEN, INC., a Delaware corporation
(hereinafter referred to as the "COMPANY," which term shall for all purposes be
deemed to include its successors and assigns), and F. Xxxxx Xxxxxx (the
"EXECUTIVE").
WITNESSETH
WHEREAS, the Company desires to employ the Executive as its Chief Financial
Officer on the terms and subject to the conditions set forth herein, and the
Executive desires to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive and the Executive hereby
accepts employment as the Chief Financial Officer of the Company,
subject to the direction of the Board of Directors and the
Company's officers designated by the Board of Directors, and
shall perform and discharge well and faithfully the duties and
responsibilities that are assigned to him by the Board of
Directors. The Executive agrees to devote such of his time,
attention and energy to the business of the Company, and any of
its subsidiaries or affiliates, as may be required to perform the
duties and responsibilities assigned to him by the Board of
Directors to the best of his ability and with requisite
diligence. If the Executive is appointed a director or elected
to another executive officer position of the Company or any
subsidiary thereof during the term of this Agreement, the
Executive will serve in such capacity without further
compensation.
(b) The Executive agrees to comply in all material respects, at all
times during the Executive Period (as defined in Section 2
hereof), with all applicable policies, rules and regulations of
the Company.
2. TERM. Subject to the terms hereof, this Agreement shall commence on the
date hereof (the "EXECUTION DATE") and shall terminate on the second
anniversary of the Execution Date; provided, that this Agreement will
automatically renew for successive one-year periods unless written notice
of termination is given to the Executive by the Company not less than
sixty (60) days before the expiration of the term hereof or any renewal
period then in effect. The term of this Agreement shall include any such
renewal periods and shall be referred to herein as the "EXECUTIVE PERIOD."
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 2 OF 7
3. COMPENSATION. For all services rendered under this Agreement, the
Company agrees to pay to Executive during the Executive Period:
(i) A base monthly salary of $14,584, payable in equal semi-monthly
installments or on any other periodic basis consistent with the
Company's payroll procedures, subject only to such payroll and
withholding deductions as are required by applicable federal and
state laws.
4. FRINGE BENEFITS: EXPENSES.
(a) So long as the Executive is employed by the Company, the
Executive shall participate in all employee benefit plans
sponsored by the Company for its executive employees, including,
but not limited to, vacation policy, health insurance, dental
insurance and pension or profit-sharing plans; provided, however,
that the nature, amount and limitations of such plans shall be
determined from time to time by the Board of Directors of the
Company.
(b) The Company agrees to propose to the Compensation Committee of
the Board of Directors that the Executive be granted stock
options under the Company's Amended and Restated 1993 Employee
and Consultant Stock Option Plan (the "Plan") to purchase up to
40,000 shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), at an exercise price equal to the
closing sale price of a share of Common Stock, as reported by the
NASDAQ Market, on the date of grant (which date shall be no later
that the date of this Agreement), with such option to (i) vest in
accordance with the Company's customary vesting schedule for
stock options and (ii) automatically vest in full on a Change in
Control (as defined in the Plan) of the Company.
(c) The Company agrees to reimburse the Executive for all reasonable
out-of-pocket expenses incurred by him in the performance of his
duties, subject to the submission of appropriate documentation in
accordance with the Company's expense reimbursement policy as in
existence from time to time.
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 3 OF 7
(d) The Company will pay for all normal and customary expenses
associated with moving your household belongings from Darien,
Connecticut to Houston. In addition, the Company will reimburse
you for normal closing costs associated with the sale of your
home in Darien, Connecticut, grossed up to cover tax
consequences. If you voluntarily leave the Company before
completing 12 months of service, you will compensate the Company
for the costs defined in this paragraph. If you voluntarily leave
the Company during the 13th through 24th month of service, you
will compensate the Company for the costs defined in this
paragraph on a pro-rated basis for the remaining number of months
not worked on the date of termination.
5. CONFIDENTIAL INFORMATION AND NON-COMPETITION. The Executive shall
execute and comply with the Proprietary Information and Inventions and
Non-Competition Agreement in the form attached as Exhibit A hereto and
incorporated herein by reference.
6. TERMINATION.
(a) At any time during the Executive Period, the Company may, at its
sole discretion, discharge the Executive, with or without
"cause". Such termination shall be effective on delivery of
written notice to the Employee of the Company's election to
terminate this Agreement under this Section 6. For purposes of
this Agreement, the following events shall constitute "CAUSE":
(i) the conviction of the Executive by a court of competent
jurisdiction of a crime involving moral turpitude; (ii) the
commission, or attempted commission, by the Executive of an act
of fraud on the Company; (iii) the misappropriation, or attempted
misappropriation, by the Executive of any funds or property of
the Company; (iv) the continued and unreasonable failure by the
Executive to perform in any material respect his obligations
under the terms of this Agreement; (v) the knowing engagement by
the Executive, without the written approval of the Board of
Directors, in any direct, material conflict of interest with the
Company without compliance with the Company's conflict of
interest policy; (vi) the knowing engagement by the Executive,
without the written approval of the Board of Directors, in any
activity which competes with the business of the Company or which
would result in a material injury to the Company; or (vii) the
knowing engagement by the Executive in any activity that would
constitute a material violation of the provisions of the
Company's Xxxxxxx Xxxxxxx Policy or Business Ethics Policy, if
any, then in effect.
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 4 OF 7
If the Company terminates the Executive's employment under this
Agreement for reasons other than Cause, then the Company shall,
subject to the terms of this Section 6, pay to the Employee (or
his estate or representative, as appropriate) an amount equal to
six (6) months compensation at his then current salary, payable
bi-monthly or in accordance with the Company's payroll
procedures, and shall continue to provide benefits in the kind
and amounts provided up to the date of termination for the 6-
month period, including, without limitation, continuation of any
Company-paid benefits as described in Section 5 of this Agreement
for the Executive and his family. Under no circumstances shall
the Executive be entitled to any compensation or continuation of
benefits for any period of time following his termination if his
termination is for Cause. If the Company terminates the
Executive's employment under this Agreement for reasons other
than Cause, the Executive agrees to accept, in full settlement of
any and all claims, losses, damages and other demands that the
Executive may have arising out of such termination as liquidated
damages and not as a penalty, the six-month salary payments and
continuation of Company-paid benefits as set forth above. The
Executive hereby waives any and all rights that he may have to
bring any cause of action or proceeding, as a result of such
termination, except to enforce the Company's obligation to pay
amounts owing pursuant to this Section 6.
(b) This Agreement will terminate automatically on the earliest to
occur of: (i) the death or disability of the Executive; (ii) the
voluntary retirement of the Executive; or (iii) the expiration of
the Executive Period unless otherwise renewed.
(c) If at any time during the term of this Agreement, the Executive
is unable to perform effectively his duties hereunder because of
physical or mental disability, the Company shall continue payment
of compensation as provided in Section 3 hereof during the first
six-month period of such disability to the extent not covered by
the Company's disability insurance policies. On the expiration
of such six-month period, the Company, at its sole discretion,
may continue payment of the Executive's salary for such
additional periods as the Company elects or may terminate this
Agreement without any further obligations thereunder. If the
Executive should die during the term of this Agreement, the
Executive's employment and the Company's obligations hereunder
shall terminate as of the last day of the month in which the
Executive's death occurs.
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 5 OF 7
(d) Notwithstanding the terms of Section 6(a) above, the Executive
shall be obligated to actively pursue employment following
termination of his employment to be entitled to be paid the
continuation of salary provided in Section 6(a), and the
Company's obligation to pay any such continuation of salary shall
terminate at such time as the Executive commences employment with
another employer; provided, however, that nothing herein shall
obligate the Executive to pursue or accept employment for a
position that is not commensurate with his current position at
the Company or otherwise acceptable to him.
(e) At any time during the term of this Agreement, the Executive may
terminate this Agreement by giving at least thirty days written
notice to the Company of his intent to terminate this Agreement,
with the date of termination to be specified in such notice.
(f) If this Agreement is terminated by the Executive pursuant to
Section 6(e) hereof, then the Company will have no obligation to
pay any amount to the Executive other than amounts earned or
accrued pursuant to Section 3 hereof, but which have not yet been
paid, as of the date of termination.
7. ASSIGNMENT BY EXECUTIVE. Except as otherwise expressly provided herein,
the Executive agrees for himself, and on behalf of his executors and
administrators, heirs, legatees, distributees and any other person or
persons claiming any benefits under him by virtue of this Agreement, that
this Agreement and the rights, interests and benefits hereunder shall not
be assigned, transferred, pledged or hypothecated in any way by the
Executive or any executor, administrator, heir, legatee, distributee or
person claiming under the Executive by virtue of this Agreement and shall
not be subject to execution, attachment or similar process. Any attempt at
assignment, transfer, pledge or hypothecation or other disposition of this
Agreement or of such rights, interests and benefits contrary to the
foregoing provision, or the levy of any attachment or similar process
thereupon, shall be null and void and without effect.
8. SUCCESSORS OF THE COMPANY. This Agreement shall be binding on and inure to
the benefit of any Successor (as hereinafter defined) of the Company and
any such Successor shall be deemed substituted for the Company under the
terms of this Agreement. As used in this Agreement, the term "SUCCESSOR"
shall include any person, firm, corporation or other business entity which
at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or businesses of the Company; but no such
substitution shall relieve such companies of their original obligations
hereunder. This Agreement may not otherwise be assigned by the Company
without the Executive's consent to any person, firm, corporation, limited
liability company, trust or other entity.
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 6 OF 7
9. NOTICES. All notices or other communications that are required or may be
given under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person, transmitted by telecopier or
mailed by registered or certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the address set forth
below (as the same may be changed from time to time by notice similarly
given) or the last known business or residence address of such other
person as may be designated by either party hereto in writing.
If to the Company:
Zonagen, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-0
The Woodlands, Texas 77380
Attn: Xxxxxx X. Xxxxxxxx
If to the Executive:
F. Xxxxx Xxxxxx
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
10. WAIVER OF BREACH. A waiver by the Company or the Executive of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other breach by the other party.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
12. SEVERABILITY. If any provision of this Agreement shall, for any reason, be
held to violate any applicable law, and so much of said Agreement is held
to be unenforceable, then the invalidity of such specific provision herein
shall not be held to invalidate any other provision herein which shall
remain in full force and effect.
13. AMENDMENT. This Agreement constitutes and contains the entire agreement of
the parties and supersedes any and all prior negotiations, correspondence,
understandings and agreements between the parties respecting the subject
matter hereof. This Agreement may be modified only by an agreement in
writing executed by all the parties hereto.
14. HEADINGS. The section and subsection headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
EMPLOYMENT AGREEMENT
F. XXXXX XXXXXX
PAGE 7 OF 7
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
16. CUMULATIVE REMEDIES. All rights and remedies hereunder are cumulative and
are in addition to all other rights and remedies provided by law,
agreement or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY:
ZONAGEN, INC.
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
EXECUTIVE:
/s/ F. Xxxxx Xxxxxx
-------------------------------------------
F. Xxxxx Xxxxxx
