EMPLOYMENT AGREEMENT
Exhibit
10.1
EMPLOYMENT
AGREEMENT, dated as of December 4, 2007, by and among Neurologix, Inc.,
a Delaware corporation (the “Company”), and Xxxx X. Xxxxxxx (the
“Executive”).
WITNESSETH
:
WHEREAS,
the Executive is currently employed as President and Chief Executive
Officer of the Company; and
WHEREAS,
the Company desires to continue to retain the services of the Executive,
and the
Executive desires to continue to be employed by the Company;
NOW,
THEREFORE, the parties hereto, in consideration of the mutual promises
and agreements set forth herein, agree as follows:
ARTICLE
I
EMPLOYMENT
AND TERM
Section
1.1 Employment
Period. Upon the terms and subject to the conditions set
forth in this Agreement, the Company shall employ the Executive for a period
of
two years commencing on the date hereof, unless such employment shall be
earlier
terminated pursuant to Article III hereof (the “Employment
Period”).
ARTICLE
II
TERMS
AND CONDITIONS
Section
2.1 Services
to be Rendered by the Executive;
Compensation. (a) During the Employment
Period, the Company shall employ the Executive as President and Chief Executive
Officer. The Executive shall perform the duties and have the
responsibilities customarily associated with the position of President and
Chief
Executive Officer, and shall render such other services, and assume such
other
responsibilities, as may be directed by the Board of Directors (the
“Board”) of the Company. In connection with such employment,
the Executive shall diligently perform his services hereunder and shall devote
substantially all of his working time (reasonable sick leave and vacations
excepted) to his duties and responsibilities to the Company. The
Executive shall report to the Board.
(b) Nothing
contained herein shall preclude the Executive from engaging in charitable
and
community activities, participating in industry and trade organization
activities, managing his and his family’s personal investments and affairs or
engaging in speaking or educational activities, provided that such engagements
or activities shall not materially interfere with the performance of his
duties
and responsibilities under this Agreement.
Section
2.2 Base
Salary. The Company shall pay to the
Executive a base salary (the “Base Salary”) at the rate of at least
$250,000 per annum, payable in accordance with the Company’s regular payroll
practices. The Board shall review the Executive’s performance and
peer group compensation annually and evaluate whether to increase the Base
Salary as part of such review (the “Performance Review”).
Section
2.3 Annual
Bonus. During the Employment Period, the Executive shall
be eligible to receive an annual bonus (the “Bonus”) as may be determined by,
and in the discretion of, the Board pursuant to the Executive’s
annual Performance Review. Any such Bonus shall be payable in cash no
later than 60 days following the end of each year for which such Performance
Review shall have been undertaken by the Board.
Section
2.4 Benefits. The
Executive shall be eligible to participate in all the Company’s employee benefit
plans, including all stock option plans or other stock-based award plans,
on the
same terms and conditions that govern participation by other
employees. The Executive shall be entitled to 20 working days of paid
vacation during each 12-month period of the Employment
Period. The Company shall reimburse the Executive for all
reasonable and necessary expenses and disbursements incurred by him for and
on
behalf of the Company in the performance of his duties under this Agreement,
subject to submission of itemized reports of all such expenses and
disbursements, together with appropriate supporting vouchers. During
the Employment Period, the Company shall reimburse the Executive for the
actual
reasonable cost of temporary housing and reasonable operating automobile
expenses incurred by the Executive in connection with the performance of
his
duties under this Agreement.
ARTICLE
III
TERMINATION
Section
3.1 Death
or Disability. (a) If, during the Employment
Period, the Executive shall die, his termination of employment shall become
effective as of the date of his death. If, during the Employment
Period, the Executive shall be substantially unable to perform the duties
required of him pursuant to the provisions of this Agreement due to any physical
or mental disability which is in existence for a period of 45 consecutive
days
or an aggregate of 90 days in any 12 consecutive month period, the Company
shall
have the right to terminate the Executive’s employment pursuant to this
Agreement by giving not less than 30 days’ written notice to the Executive, at
the end of which time the Executive’s employment hereunder shall be
terminated. The Executive shall retain his status and continue to
receive his Base Salary and other benefits during the period prior to any
termination because of a disability. Upon request by the Company, the
Executive shall submit to reasonable medical examination for the purpose
of
determining the existence, nature and extent of any such
disability.
(b) In
the
event of a termination of the Executive’s employment by reason of his death or
disability, the Company shall have no further obligations hereunder, except
as
follows:
(i) All
accrued and unpaid Base Salary through the date of termination and all bonus
or
incentive compensation or other benefits earned and accrued by the Executive
as
of the date of termination, plus any vacation pay, expense reimbursements
or
other entitlements due to the Executive under any of the Company’s benefits
plans or under this Agreement, shall be paid to the Executive or his estate
or
assigns within 30 days of the date of termination; and
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(ii) All
stock
options and other equity awards granted to the Executive shall fully vest
on the
date of termination, and all such stock options or awards shall thereupon
become
fully exercisable or payable, with such stock options to continue to be
exercisable for one year after the date of termination, but, in no event,
later
than the date of expiration of such options as specified in the
option award letters relating thereto.
Section
3.2 For
Cause by the Company or Without Good Reason by the
Executive. (a) The Company shall have the
right to terminate the Executive’s employment pursuant to this Agreement
immediately upon written notice to the Executive for Cause (as hereinafter
defined). Notwithstanding the foregoing, the Company may not
terminate the Executive’s employment for Cause unless (i) a determination of
Cause shall have been made and approved by a majority of the Board and (ii)
the
Executive shall have been given at least 20 days written notice of the Board’s
meeting called to make such determination.
(b) The
Executive shall be entitled to terminate his employment pursuant to this
Agreement without Good Reason (as hereinafter defined) upon not less than
45
days’ written notice to the Company.
(c) In
the
event of a termination of the Executive’s employment by the Company for Cause or
by the Executive without Good Reason, the Company shall have no further
obligations hereunder, except to make payments to the Executive of the
compensation and other amounts specified in Section 3.1(b)(i)
hereof within the time period specified therein.
(d) For
purposes hereof, “Cause” shall mean (i) the conviction of the Executive of a
felony under state or federal law or of a misdemeanor involving theft or
moral
turpitude or a guilty or nolo contendere plea with respect thereto; (ii)
the
engagement by the Executive in conduct that shall constitute gross neglect
or
willful misconduct (including misappropriation or embezzlement of property
or
fraud) in connection with the Executive’s employment, provided that, for
purposes of determining whether conduct shall constitute willful misconduct,
no
act shall be considered “willful” unless committed in bad faith or without
reasonable belief that such act shall have been in the best interests of
the
Company; (iii) the material breach by the Executive of the provisions of
this
Agreement (including, but not limited to, the Executive’s willful failure after
written notice by the Board to perform any of his material duties hereunder)
and
(iv) the violation by the Executive of any material provisions of the Company’s
Code of Conduct and Ethics or other similar policies, from time to time in
effect.
Section
3.3 Without
Cause by the Company or For Good Reason by the
Executive. (a) The Company shall have
the right to terminate the Executive’s employment hereunder without Cause at any
time upon written notice to the Executive.
(b) The
Executive shall be entitled to terminate his employment pursuant to this
Agreement upon 30 days’ written notice to the Company in the event of (i) a
material reduction or material adverse change in the Executive’s title,
employment duties or reporting responsibilities, excluding any isolated or
inadvertent action not taken in bad faith by the Company and which shall
be
remedied by the Company within 10 days after receipt of notice thereof given
by
the Executive; (ii) a Change in Control (as hereinafter
defined); or (iii) the breach by the Company of any material term of
this Agreement (each of (i), (ii) and (iii) above being referred to herein
as
“Good Reason”).
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(c)
In the event of a termination of the Executive’s employment by the Company
without Cause or by the Executive for Good Reason, the Company shall pay
or
provide for the following:
(i) The
Company shall pay to the Executive all the compensation and other amounts
specified in Section 3.1(b)(i) hereof within the time period specified
therein;
(ii) All
stock
options and other equity awards granted to the Executive shall vest and be
payable as of the date of termination and shall be exercisable in the manner
and
to the extent specified in Section 3.1(b)(ii) hereof;
(iii) The
Company shall pay to the Executive in a lump sum in cash within 30 days after
the date of termination an amount equal to the Executive’s Base Salary (as in
effect immediately prior to the date of termination) which, but for termination,
would have been paid to the Executive over a period (the “Payment
Period”) equal to the lesser of (A) 1 year or (B) the remaining
term of the Employment Period; and
(iv) The
Company shall, during the Payment Period, continue to provide, at its cost,
to
the Executive all the medical, life, disability and other insurance benefits
which the Executive shall have been receiving immediately prior to the date
of
termination.
(d) For
purposes hereof, “Change in Control” shall be deemed to occur upon (i)
the sale by the Company of all or substantially all of its assets; (ii) the
consolidation of the Company with any person or entity or the merger of the
Company with any person or entity as a result of which the Company shall
not be
the surviving entity; or (iii) the acquisition by any “person” (as defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”)), excluding for this purpose General Electric Pension Trust,
DaimlerChrysler Corp. Master Retirement Trust, Palisade Private Partnership,
L.P., ATEC Trust, Medtronic, Inc. or Xxxxxx X. Xxxxxxx, M.D., or their
affiliates and/or assigns, of beneficial ownership (as defined in Rule 13d-3
of
the Exchange Act) of voting securities of the Company, whether directly or
indirectly, representing more than 50% of the combined voting power of the
Company’s then outstanding voting securities, provided that no Change of Control
shall be deemed to have occurred as a result of a change in ownership percentage
resulting solely from an issuance or issuances of equity or equity-related
securities of the Company or from an acquisition of such securities by the
Company.
ARTICLE
IV
CONFIDENTIALITY
AND IP AGREEMENT
Section
4.1 Agreement. The
Executive has heretofore executed a confidentiality agreement with the Company
relating to the disclosure and use of confidential information (as defined
therein) relating to the Company and to the protection of the Company’s trade
secrets and other intellectual property. The Executive hereby
acknowledges that such agreement is in full force and effect as of this date
hereof.
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Section
4.2 Compliance
with Agreement. The Executive shall continue to comply
with, and to observe all conditions of, the agreement described in Section
4.1
hereof. Any material breach of such agreement shall be deemed, and
shall constitute, a breach of this Agreement.
ARTICLE
V
NON-COMPETITION
AND NON-SOLICITATION
Section
5.1 Non-Competition
and Non-Solicitation. (a) During the Restricted Period
(as hereinafter defined), the Executive shall not, anywhere in the United
States, directly or indirectly, provide any services, with or without pay,
own,
manage, operate, join, control, advise, consult with, invest in, participate
in
or be connected as a stockholder, partner or otherwise with, any business,
individual, partnership, firm, corporation or other entity that develops,
designs, licenses, merchandises, manufactures or causes the manufacture of
gene
therapy products or treatments, including any medical or pharmaceutical products
relating thereto. Notwithstanding the foregoing, the Executive may
beneficially own (as such term is defined under Section 13 of the Exchange
Act)
up to 5% of the shares of any company whose securities are traded on a national
securities exchange or the NASDAQ National Market. For purposes of
this Section 5.1, “Restricted Period” shall mean the Employment Period
(and giving effect to early termination) and the one-year period immediately
thereafter.
(b) During
the Restricted Period, the Executive shall not, for himself or on behalf
of any
other person or entity, or by action in concert with any other person or
entity,
directly or indirectly, (i) solicit, induce or encourage any person who is
an
employee of the Company to terminate his or her employment or other contractual
relationship with the Company, (ii) hire any person who is an employee of
the
Company or who was such an employee at any time during the six-month period
preceding such hiring or (iii) solicit, encourage or induce any person or
entity
known by the Executive to have a relationship with the Company to discontinue,
terminate or cancel any such relationship or refrain from entering into any
new
relationship or extending any existing relationship with the
Company.
(c) The
Executive acknowledges that the provisions of this Article V are reasonable
and
that, in the event of a violation thereof, the Company’s damages would be
difficult to ascertain and the legal remedy for such damages available to
the
Company would be inadequate. Accordingly, the Executive expressly
acknowledges and agrees that, in the event of any threatened or active breach
of
this Article V, the Company shall be entitled to specific enforcement of
this
Article V through injunctive or other equitable relief in a court with
appropriate jurisdiction, without the need to post any bond.
ARTICLE
VI
MISCELLANEOUS
Section
6.1 Indemnification. The
Executive shall be indemnified by the Company to the fullest extent permitted
by
law and as provided for in the Company’s certificate of incorporation, the
Company’s by-laws or in any separate agreement between the Company and the
Executive.
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Section
6.2 Notices. All
notices and other communications provided for or permitted hereunder shall
be
made by hand delivery, first class mail (registered or certified mail, return
receipt requested), telecopier or commercial courier guaranteeing next day
delivery addressed to the Company at its principal executive offices and
to the
Executive at his last known address reflected in the Company’s
records. All such notices and communications shall be deemed to have
been duly given at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged (verbally or electronically), if telecopied; and
the
next business day after timely delivery to the courier, if sent by commercial
courier guaranteeing next day delivery. Either party hereto may
change its address by giving notice of such change in the manner specified
herein.
Section
6.3 Entire
Agreement. This Agreement constitutes
the entire understanding and agreement between the parties hereto with respect
to the matters set forth herein, and supersedes all other written or oral
agreements concerning the subject matter of this Agreement.
Section
6.4 Amendment
and Waiver. No term of this Agreement may be amended
without the written consent of the parties hereto.
Section
6.5 Severability. If
any provision of this Agreement, or the application thereof in any
circumstances, shall be held to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality or enforceability of any such
provision in every other respect and of the remaining provisions hereof shall
not be in any way impaired or affected.
Section
6.6 Assignments. This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, administrators, executors, personal representatives,
successors and assigns. This Agreement may be assigned by the Company
to a successor in interest if such successor shall assume and be
bound by the terms of this Agreement. This Agreement may not be
assigned by the Executive.
Section
6.7 Jurisdiction
and Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New
York. For all conflicts arising out of this Agreement, each party
agrees to submit to the jurisdiction of the federal and state courts in New
York
County, New York.
Section
6.8 Withholding. The
Company shall be entitled to withhold from any compensation paid to Executive
under this Agreement an amount sufficient to satisfy all federal, state and
local income and employment tax withholding requirements.
Section
6.9 Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
Section
6.10 Counterparts. This
Agreement may be executed in two or more counter-parts, all of which taken
together shall constitute one instrument.
[signature
page follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
| NEUROLOGIX, INC. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxx | |
| Xxxxxx X. Xxxxxxx, MD | |||
| Chairman of the Board | |||
|
|
By:
|
/s/ Xxxx Xxxxxx | |
| Xxxx Xxxxxx | |||
| Chief Financial Officer, Treasurer and Secretary | |||
| /s/ Xxxx X. Xxxxxxx | |||
| Xxxx X. Xxxxxxx |
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