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EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 22, 1998 between Digene Corporation, a Delaware
corporation, 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000
(the "Company"), and Xxxxxxxxx X. Xxxxxx, 00000 Xxxxxx'x Xxxxxx Xxxxxx, Xxxxx,
XX 00000 (the "Executive").
WITNESSETH
WHEREAS, the Company desires to employ Executive on the terms and conditions
herein contained; and
WHEREAS, Executive is willing to enter into this Agreement for employment with
the duties outlined herein on a full-time basis;
NOW, THEREFORE, in consideration of the premises, representations and mutual
covenants and agreements herein contained, the parties agree as follows:
1. Employment. The Company hereby employs the Executive and Executive
hereby accepts employment with the Company for the period beginning July 31,
1998 and ending December 31, 2001, (the "Term"), subject to the terms and
conditions hereinafter contained. Such employment may be renewed upon the
mutual agreement of, and in consideration of such compensation as shall be
established by, the Company and the Executive.
2. Duties. Executive shall perform such duties and functions as the
Board of Directors of the Company (the "Board") may from time to time determine
which are consistent with the position of Vice President, Manufacturing, shall
comply with the policies and reasonable directions of the Board, and shall
discharge her responsibilities in a competent and faithful manner, consistent
with sound business practices.
During the Term of this Agreement, the Executive shall devote her entire
business time, attention and energies to the performance of her duties for the
business of the Company except to the extent that the Board may specifically
approve any outside interests. The Executive shall not, directly or
indirectly, without the consent of a majority of the Board, as owner, partner,
joint venturer, shareholder, employee, corporate officer or director, engage or
become financially interested in, be employed by, or render consulting services
to any business in competition with any business engaged in during the Term by
the Company or its subsidiaries; provided however, that (i) the Executive may
own securities of any corporation which is engaged in any such business and
which is publicly owned and traded, but in an amount not to exceed at any one
time two percent (2.0%) of any class of stock or securities of such company and
(ii) the foregoing shall not be deemed to prohibit the Executive from
conducting and continuing to conduct any business with respect to which the
Executive is engaged as of the date hereof (which businesses are listed in
Exhibit I attached hereto), whether said business is conducted individually or
through an entity in which the Executive has a legal or beneficial interest.
3. Compensation.
a. Salary. During the Term, Executive shall receive a base salary for
services rendered hereunder of $85,000 per year, subject to such increases as
may be approved by the Board, payable not less frequently than monthly
consistent with the regular practices of the Company. As of October, 1998 in
conjunction with the annual salary increases in the company, the Executive
shall receive a base salary for services rendered hereunder of $100,000 per
year, again subject to such increases as may be approved by the Board.
b. Bonus. The Executive shall be entitled to receive, as additional
compensation, on September 1 of each year, an annual cash bonus as set forth in
the Company's Executive Bonus Plan and approved by the Board of Directors of
the Company in its sole discretion. In conjunction with services rendered for
the fiscal year ended June 30, 1998, the Executive shall receive a bonus in the
amount of $15,000, such bonus to be paid on the normal bonus cycle of the
Company during calendar 1998.
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c. Facility related compensation. (i) If the Executive is still an
employee in good standing of the Company at the time of the completed move and
successful validation for FDA/GMP related manufacturing of the new Gaithersburg
manufacturing facility, the Executive shall receive a $10,000 cash bonus
unrelated to other compensation described in this Section 3. (ii) If the
Executive is still an employee in good standing of the Company one year after
the payment described in 3.c(i), the Executive shall receive an additional
$10,000 cash bonus unrelated to other compensation described in this Section 3.
d. Relocation reimbursement. It is contemplated that Executive, in
conjunction with the new manufactuing facility, will relocate to the
Gaithersburg, Maryland, metropolitan area. For any such relocation, the
Company agrees to reimburse Executive for up to an aggregate of $60,000 of bona
fide moving expenses, closing costs associated with the sale of Executive's
current home and/or purchase of a new home, and lost equity associated with the
sale of Executive's current residence. In addition, the Company will 'gross
up' the amounts paid to Executive in order that Executive is not subject to
out-of-pocket income tax obligations related to these reimbursements; Executive
agrees to work with the Company to minimize negative tax consequences. Amounts
reimbursed by the Company are subject to immediate repayment by the Executive
as follows: if Executive resigns or is terminated for justifiable cause (as
hereinafter defined) within six months of moving, 75% will be repaid to the
Company; between six and twelve months, 50% will be repaid to the Company; and
between twelve and eighteen months, 25% will be repaid to the Company. If
Executive is terminated without justifiable cause, Executive will not be
required to repay the Company any of the above amounts.
e. Reimbursement for expenses. The Company agrees to reimburse
Executive in a manner consistent with the regular practices of the Company, for
any and all reasonable business expenses incurred by Executive in connection
with the performance of her duties, upon presentation of proper vouchers by
Executive to support said expenses. This shall include, but not be limited to,
all items of travel, entertainment, business expenses, and other items of
expense while away on business from the principal office of the Company or
engaged in other business activity.
f. Vacation. Executive shall be entitled to four (4) weeks' paid
vacation in each calendar year in addition to the regularly scheduled Company
holidays. No more than four (4) weeks' vacation can be accumulated and carried
forward from year to year.
g. Other benefits. The Executive shall, in addition, be entitled to
participate in and receive any other fringe benefits customarily provided by
the Company to its employees of comparable standing with the Executive
(including, but not limited to, any profit-sharing, pension, hospital, major
medical insurance and group life insurance plans in accordance with the terms
of such plans), all as determined from time to time by the Board.
4. Termination. Executive's employment by the Company hereunder shall
terminate on the occurrence of:
a. Disability or Death. In the event of Executive's disability or
death during the Term of the Executive's employment, Executive, or her estate,
shall receive one (1) year's base salary. For the purpose hereof, the term
"disability" shall mean Executive's physical or mental inability to perform her
essential duties and responsibilities hereunder, with reasonable accommodation,
for a period of six (6) consecutive months during the term of this Agreement,
it being understood that notwithstanding any such inability to perform her
duties, Executive shall be entitled to receive her compensation as provided
herein until the termination of her employment hereunder. If the Executive is
entitled to long-term disability, the Company will supplement such long-term
disability payments such that payments, in the aggregate, to the Executive
shall not exceed one year's base salary.
b. Justifiable cause. The obligations and liabilities of the Company
to the Executive shall cease as of the date of termination for "justifiable
cause," and Executive shall not be entitled to any further compensation except
for compensation accrued through the date of the termination and except as
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otherwise provided herein. Executive will be entitled to all stock, incentive
stock options or equivalents vested as of the date of the Board's termination
action. For the purposes hereof, the term "justifiable cause" shall mean and
be limited to any termination by action of a majority of the Board because of:
Executive's conviction of a felony (which, through lapse of time or otherwise,
is not subject to appeal) or willful refusal without proper cause to perform
her obligations under this Agreement; except in the normal course of business
in the performance of her duties, any material disclosure by Executive to any
person, firm or corporation other than the Company, its subsidiaries and its
and their directors, officers and employees, of any confidential information or
trade secret of the Company or any of its subsidiaries; personal or
professional conduct or action by Executive that in the sole judgement of
Digene is inconsistent with it's best interests; or the engaging by Executive
in any business other than the business of the Company and its subsidiaries
which interferes with the performance of her duties hereunder.
c. Without justifiable cause. In the event the Company terminates
this Agreement without justifiable cause (as defined in Section 4.b. hereof),
the parties hereto agree that damages to the Executive shall be difficult to
ascertain in any such event, but in order to limit the liability of the Company
the Executive shall be entitled to receive as liquidated damages and not as
penalty in any such event the following: (i) the amount of the base salary
(excluding bonus) of the Executive remaining due and payable from any such date
of termination for a period of twelve (12) months, which amount shall be
payable in 24 equal installments over the twelve months from such termination
unless the termination without justifiable cause occurs as a result of a change
in control of the Company in which case the the amount due to Employee shall
become payable immediately; (ii) subject to limitations imposed under the
applicable option and incentive plans and grants thereunder, any outstanding
stock, incentive stock options or equivalents that would have vested in the
ordinary course of events until termination plus an additional three months
after the date of termination shall be accelerated and vest immediately upon
such termination; (iii) any bonus accrued to date pro rata over the course of
the year; (iv) all other benefits accruing to the Executive on or prior to the
expiration date of this Agreement as provided hereunder.
d. Resignation. In the event the Executive resigns during the term of
this Agreement, he shall be entitled to: (i) the pro rata amount of the annual
bonus accrued to the date of resignation: (ii) all stock, incentive stock
options or equivalents vested as of the date of the resignation, subject to the
terms of the appropriate stock purchase agreement (s); (iii) all other benefits
accruing to the Executive on or prior to the expiration date of this Agreement
as provided hereunder.
5. Non-Competition. Executive agrees that for a period of twelve (12)
months after termination of her employment (the "Non-Competitive Period"),
Executive shall not, directly or indirectly, as owner, partner, joint venturer,
stockholder, employee, broker, agent, principal, trustee, corporate officer,
director, licensor, or in any capacity whatsoever engage in, become financially
interested in, be employed by, render any consultation or business advice with
respect to, or have any connection with, any business engaged in the research,
development, testing, design, manufacture, sale, lease, marketing, utilization
or exploitation of any products or services which are designed for the same
purpose as, are generically the same as, or are otherwise competitive with,
products or services of the Company, in existence or under development, in any
geographic area where, at the time of termination of her employment hereunder,
the business of the Company was being conducted in any manner whatsoever;
provided, however, that Executive may own any securities of any corporation
which is engaged in such business and is publicly owned and traded but in an
amount not to exceed at any one time two percent (2.0%) of any class of stock
or securities of such corporation. In addition, Executive shall not, during
the Non-Competitive Period, request or cause any customers of the Company to
cancel or terminate any business relationship with the Company. The Executive
further agrees that, during the Non-Competitive Period, the Executive and any
individual or entity controlled by or under common control with Executive,
shall not, without the Company's prior written consent, solicit, directly or
indirectly, for himself, themselves, or for any other person or entity, any
employee or consultant of the Company or any of its affiliates, or request or
cause any employee or consultant of the Company or any of its affiliates to
terminate her employment or services with the Company or any of its affiliates.
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If any portion of the restrictions set forth in this Section 5 should, for
any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
Executive declares that the territorial, time limitations and scope of
activities restricted as set forth in this Section 5 are reasonable and
properly required for the adequate protection of the business of the Company.
In the event that any such territorial, time limitation and scope of activities
restricted is deemed to be unreasonable by a court of competent jurisdiction,
Executive agrees to the reduction of the territorial, time limitation or scope
to the area or period which such court shall have deemed reasonable.
The existence of any claim or cause of action by Executive against the
Company shall not constitute a defense to the enforcement by the Company of the
foregoing restrictive covenants, but such claim or cause of action shall be
litigated separately.
6. Confidentiality. Except in the normal course of business in the
performance of her duties, Executive shall not, during the Term of this
Agreement, or at any time following the end of the Term of this Agreement,
directly or indirectly, disclose or permit to be known, to any person, firm or
corporation, any confidential information acquired by him during the course of,
or as an incident to, her employment hereunder, relating to the Company, the
directors of the Company, or any client of the Company, including, but not
limited to, the business affairs of each of the foregoing. Such confidential
information shall include, but shall not be limited to, proprietary technology,
trade secrets, patented processes, research and development data, know-how,
formulae, pricing policies, the substance of agreements with customers and
others, and arrangements, customers lists and any other documents embodying
such confidential information.
All information and documents relating to the Company shall be the
exclusive property of the Company, and Executive shall use her best efforts to
prevent any publication or disclosure thereof. Upon termination of Executive's
employment with the Company, all documents, records, reports, writings and
other similar documents containing confidential information then in Executive's
possession or control shall be returned and left with the Company.
7. Representations and Agreements of Executive. Executive represents and
warrants that he is free to enter into this Agreement and to perform the duties
required hereunder, and that there are no employment contracts or
understandings, restrictive covenants or other restrictions, whether written or
oral, preventing the performance of her duties hereunder. Executive agrees to
submit to a medical examination (if job related and consistent with business
necessity) and to cooperate and supply such other information and documents as
may be required by any insurance company in connection with the Company's
obtaining life insurance on the life of the Executive, and any other type of
insurance or fringe benefit as the Company shall determine from time to time to
obtain.
8. Notices. Any notices required or permitted to be given hereunder
shall be sufficient if in writing, and if delivered by hand, or sent by
registered or certified mail, return receipt requested, to the Company of the
address set forth above and to Executive at the address set forth in the
personnel records of the Company, or such other address as either party may
from time to time designate in writing to the other, and shall be deemed given
as of the date of the delivery or mailing.
9. Severability. If any of the covenants contained in this Agreement,
any part of any such covenant, are hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, or the remainder of the Agreement, which shall be given full effect,
without regard to the invalid portions.
10. Non-Waiver. The waiver or breach of any term or condition of this
Agreement shall not be deemed to constitute a waiver or breach of any other
term or condition.
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11. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to its subject matter, and no modification or waiver
of any provision hereof shall be valid unless it is in writing and signed by
all of the parties hereto.
12. Assignment. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of any successor or
successors by reorganization, merger or consolidation and any assignee of all
or substantially all of its business and properties, but, except as to any such
successor or assignee of the Company, neither this Agreement nor any rights or
benefits hereunder may be assigned or transferred by either party without the
prior written consent of the other party.
13. Binding Effect. This Agreement and all of the provisions hereof shall
be binding upon the legal representatives, heirs, distributees, successors and
assigns of the parties hereto.
14. Choice of Law . This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed therein.
15. Headings. The Section headings appearing in this Agreement are for
purposes of easy reference and shall not be considered a part of this Agreement
or in any way modify, amend, or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EXECUTIVE
By:
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Xxxxxxxxx X. Xxxxxx.
DIGENE CORPORATION
By:
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Xxxx Xxxxx
President & CEO
