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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of June 2, 1999, by
and between Alteon Inc., a Delaware corporation (the "Company"), and F. Xxxxxxx
Xxxxxxx (the "Employee").
WHEREAS, the Company wishes to employ the Employee as Senior Vice President
for Operations of the Company; and
WHEREAS, the Employee wishes to enter into the employ of the Company as its
Senior Vice President for Operations;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereby agree as follows;
1. Term of Employment. Subject to the terms and conditions hereof, the Company
will employ the Employee, and the Employee will serve the Company, as
Senior Vice President for Operations for a period beginning on the date
hereof and terminating three (3) years from such date, subject to extension
by mutual agreement of the Company and the Employee (such term, as it may
be extended, is hereinafter referred to as the "Term of Employment").
2. Duties. During the Term of Employment, the Employee will serve as Senior
Vice President for Operations, subject to the terms of this Agreement and
the direction and control of the Board of Directors and/or the Chief
Executive Officer of the Company. The Employee will, during the Term of
Employment, serve the Company faithfully, diligently and competently and to
the best of his ability, and will, consistent with the dignity of Senior
Vice President for Operations of the Company, hold, in addition to the
offices of Senior Vice President of Operations of the Company, such other
offices in the Company to which he may be appointed or assigned from time
to time by the Board of Directors and/or the Chief Executive Officer of the
Company and will discharge such duties in connection therewith. The
Employee shall devote all of his business time to the performance of his
duties hereunder.
3. Compensation. The Company will, during the Term of Employment, pay to the
Employee as compensation for the performance of his duties and obligations
hereunder an initial base salary at the rate of $190,000 per annum
("Salary"), payable in equal semi-monthly installments. Such Salary shall
be reviewed annually by the Board of Directors of the Company in accordance
with the Company's compensation program. In each of the
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EMPLOYMENT AGREEMENT PAGE 2
Company's fiscal years during the Term of Employment, the Employee shall be
eligible to receive a bonus, to be awarded at the sole discretion of the
Board of Directors of the Company, in an amount of up to $15,000 for 1999
and $30,000 for 2000 and subsequent years. The Board shall use as a basis
for determining the extent of such bonus awards the attainment of stated
goals and objectives for the Employee to be set by the Compensation
Committee of the Board after consultation with the Chief Executive Officer.
4. Other Benefits. During the Term of Employment:
A. The Company shall grant to the Employee an incentive stock option,
pursuant to the Company's 1995 Stock Option Plan, to purchase 200,000
shares of Common Stock of the Company ("Common Stock") with an
exercise price equal to the closing price of the Company's Common
Stock on June 2, 1999. Such option shall be in the form of and on such
terms and conditions as provided in, the Company's standard form of
Stock Option Grant Agreement in effect as of the date of this
Agreement. Such option grant shall provide, on condition that the
Employee is employed by the Company on the relevant vesting dates,
that such options shall vest as follows:
(1) 25,000 shares shall vest on the first anniversary of the date of
this Agreement and 75,000 shares shall vest over a thirty-six
month period at the rate of 3,125 shares on the first day of each
calendar month commencing on June 1, 2000; and
(2) 100,000 shares shall vest upon the accomplishment by the Employee
of specified milestones, as determined by the Compensation
Committee of the Board after consultation with the Chief
Executive Officer; and
B. The Employee shall be entitled during the Term of Employment to
participate in employee benefit plans and programs of the Company to
the extent that his position, tenure, salary, age, health and other
qualifications make him eligible to participate. The Company does not
guarantee the adoption or continuance of any particular employee
benefit plan or program during the Term of Employment, and the
Employee's participation in any such plan or program shall be subject
to the provisions, rules, regulations and laws applicable thereto;
provided, however, that during the Term of Employment the Employee
shall be entitled to health and hospital insurance benefits consistent
with the past practices of the Company in effect with respect to
Company personnel generally.
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C. The Employee shall be entitled to three (3) weeks' vacation per year
while employed hereunder. Such vacation may be taken by the Employee
at such times as do not unreasonably interfere with the business of
the Company. The accumulation of annual vacation time earned but not
taken will be in accordance with the Company policy guidelines.
Additional vacation will be earned in accordance with Company policy.
5. Expenses. During the Term of Employment, the Company will reimburse the
Employee for commuting and housing expenses in an amount not to exceed
$30,000 per year, subject to the submission of appropriate vouchers and
receipts. In addition, during the Term of Employment, all travel and other
reasonable business expenses incident to the rendering of services by the
Employee under this Agreement will be paid or reimbursed by the Company
subject to the submission of appropriate vouchers and receipts in
accordance with the Company's policy from time to time in effect.
6. Death or Disability.
A. This Agreement shall be terminated by the death of the Employee. In
addition, this Agreement may be terminated by the Board of Directors
of the Company if the Employee shall be rendered incapable by illness
or any other disability from complying with the terms, conditions and
provisions on his part to be kept, observed and performed for a period
in excess of 180 days (whether or not consecutive) or 90 days
consecutively, as the case may be, during a 12-month period during the
Term of Employment ("Disability"). If this Agreement is terminated by
reason of Disability of the Employee, the Company shall give written
notice to that effect to the Employee in the manner provided herein.
In the event that the Employee receives disability insurance benefits
paid for by the Company during any period prior to termination of this
Agreement pursuant to this Section 6(a), the Employee's Salary shall
be reduced by an amount equal to such disability insurance benefits
during such period.
B. In addition to and not in substitution for any other benefits which
may be payable by the Company in respect of the death or Disability of
the Employee, in the event of such death or Disability, the Salary
payable hereunder shall continue to be paid at the then current rate
for three (3) months after the termination of employment, and any
bonus to which the Employee would have been entitled for the year in
which his death occurs shall be pro rated to the date of his death and
paid not later than three (3) months after the termination of
employment. In the event of the death of the Employee during the Term
of this Agreement, the sums payable hereunder shall be paid to his
personal representative.
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7. Disclosure of Information, Inventions and Discoveries. The Employee shall
promptly disclose to the Company all processes, trademarks, inventions,
improvements discoveries and other information related to the business of
the Company (collectively, "Developments") conceived, developed or acquired
by him alone or with others during the Term of Employment or during any
earlier period of employment by the Company or any predecessor of the
Company, whether or not during regular working hours or through the use of
materials or facilities of the Company. All such Developments shall be the
sole and exclusive property of the Company, and, upon request, the Employee
shall promptly deliver to the Company all drawings, sketches, models and
other data and records relating to such Developments. In the event any such
Development shall be deemed by the Company to be patentable, the Employee
shall, at the expense of the Company, assist the Company in obtaining a
patent or patents thereon and execute all documents and do all such other
acts and things necessary or proper to obtain letters of patents and to
invest in the Company full right, title and interest in and to such
Developments.
8. Non-Disclosure. The Employee shall not, at any time during or after the
Term of Employment, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of business of the Company) or use
for his own account or for the account of any person any knowledge or
information with respect to confidential or secret processes, inventions,
discoveries, improvements, formulae, plans, materials, devices or ideas or
other know-how, whether patentable or not, with respect to any confidential
or secret development or research work or with respect to any other
confidential or secret aspects of the Company's business (including,
without limitation, customer lists, supplier lists and pricing arrangements
with customers or suppliers).
9. Non-Competition. The Company and the Employee agree that the services
rendered by the Employee hereunder are unique and irreplaceable. The
Employee hereby agrees that, during the Term of Employment and for a period
of one (1) year thereafter, the Employee shall not (i) in any geographical
area in the United States or in those foreign countries where the Company,
during the Term of Employment, conducts or proposes to conduct business or
initiates activities, engage or participate in, directly or indirectly
(whether as an officer, director, employee, partner, consultant, holder of
an equity or debt investment, lender or in any other manner or capacity),
or lend his name (or any part or variant thereof) to any business which is,
or as a result of the Employee's engagement or participation would become,
competitive with any aspect of the business of the Company, such business
being the commercialization of the measurement, prevention therapy or
reversal of glucose-mediated non-enzymatic cross-linking of
macro-
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molecules, and such other specific technologies in which the Company
has, during the Term of Employment, initiated significant plans to develop
products, (ii) deal, directly or indirectly, in a competitive manner with
any customers doing business with the Company during the Term of Employment
(except in connection with the performance of the duties and obligations of
the Employee during the Term of Employment), (iii) solicit any officer,
director, employee, consultant or agent of the Company to become an
officer, director, employee, consultant or agent of the Employee, his
respective affiliates or anyone else, and (iv) engage in or participate in,
directly or indirectly, any business conducted under any name that shall be
the same as or similar to the name of the Company or any trade name used by
it. Ownership, in the aggregate, of less than 1% of the outstanding shares
of capital stock of any corporation with one or more classes of its capital
stock listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a violation of the foregoing
provision.
10. Remedies. The Employee acknowledges that irreparable damage would result to
the Company if the provisions of Section 7, 8, 9 or 14 were not
specifically enforced, and agrees that the Company shall be entitled to any
appropriate legal, equitable or other remedy, including injunctive relief,
in respect to any failure to comply with the provisions of Section 7, 8, 9
or 14.
11. Termination for Cause. In addition to any other remedy available to the
Company, either at law or in equity, the Employee's employment with the
Company may be terminated by the Board of Directors for cause, which shall
include (i) the Employee's conviction for, or plea of nolo contendere to, a
felony or a crime involving moral turpitude, (ii) the Employee's commission
of an act of personal dishonesty or a breach of fiduciary duty involving
personal profit in connection with the Employee's employment by the
Company, (iii) the Employee's commission of an act which the Board of
Directors shall reasonably have found to have involved willful misconduct
or gross negligence on the part of the Employee, in the conduct of his
duties under this Agreement, (iv) habitual absenteeism, (v) the Employee's
material breach of any material provision of this Agreement, or (vii) the
willful and continued failure by the Employee to perform substantially his
duties with the Company (other than any such failure resulting from his
incapacity due to physical or mental illness). In the event of termination
under this Section 11, the Company's obligations under this Agreement shall
cease and the Employee shall forfeit all rights to receive any future
compensation under this Agreement. Notwithstanding any termination of this
Agreement pursuant to this Section 11, the Employee, in consideration of
his employment hereunder to the date of such termination, shall remain
bound by the provisions of Section 7, 8, 9 and 14 hereof.
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12. Termination Without Cause. Each of the Company and Employee may terminate
this Agreement at any time for any reasons whatsoever, without any further
liability or obligation of the Company to the Employee or of the Employee
to the Company from and after the date of such termination (other than
liabilities or obligations accrued but unsatisfied on, or surviving, the
date of such termination), by sending thirty (30) days prior written notice
to the other party. In the event (a) the Company elects to terminate this
Agreement prior to the end of the Term of Employment or (b) the Company
gives Employee notice of its election not to extend the Term of Employment
beyond the expiration of the then current Term of Employment, or (c) by the
date which is four (4) months prior to the end of the then current Term of
Employment, the Company has not offered to extend the then current Term of
Employment, the Company shall continue to pay the Employee the full Salary
(exclusive of bonuses, if any) as such Salary would have otherwise accrued
for a period of three (3) months if the effective date of such termination
occurs prior to the first anniversary of this Agreement and for a period of
six (6) months if the effective date of such termination occurs thereafter.
In the event the Employee elects to terminate prior to the end of the Term
of Employment, the Company's obligation to pay Salary shall cease as of the
effective date of termination. Notwithstanding any termination of this
Agreement pursuant to this Section 12, the Employee, in consideration of
his employment hereunder to the date of such termination, shall remain
bound by the provisions of Section 7, 8, 9 and 14 hereof. Any termination
of this Agreement by the Company as provided in this Section 12 shall be in
addition to, and not in substitution for, any rights with respect to
termination of the Employee which the Company may have pursuant to Section
11.
13. Resignation. In the event that the Employee's services under this Agreement
are terminated under any of the provisions of this Agreement (except by
death), the Employee agrees that he will deliver his written resignation
from all positions held with the Company to the Board of Directors, such
resignation to become effective immediately; provided, however, that
nothing herein shall be deemed to affect the provisions of Section 7, 8, 9
and 14 hereof relating to the survival thereof following termination of the
Employee's services hereunder, and provided, further, that except as
expressly provided in this Agreement, the Employee shall be entitled to no
further compensation hereunder.
14. Data. Upon termination of the Term of Employment or termination pursuant to
Sections 6, 11 or 12 hereof, the Employee or his personal representative
shall promptly deliver to the Company all books, memoranda, plans, records
and written data of every kind relating to the business and affairs of the
Company which are then in his possession.
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15. Insurance. The Company shall have the right, at its own cost and expense to
apply for and to secure in its own name, or otherwise, life, health or
accident insurance or any or all of them covering the Employee, and the
Employee agrees to submit to usual and customary medical examinations and
otherwise to cooperate with the Company in connection with the procurement
of any such insurance, and any claims thereunder.
16. Waiver of Breach. Any waiver of any breach of this Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on
the part either of the Employee or of the Company.
17. Assignment. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company upon any sale of all or
substantially all of the Company's assets, or upon any merger or
consolidation of the Company with or into any other entity, all as though
such successors and assigns of the Company and their respective successors
and assigns were the Company. Insofar as the Employee is concerned, this
Agreement, being personal, may not be assigned.
18. Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and not in
limitation of the foregoing, should the duration or geographical extent of,
or business activities covered by, any provision of this Agreement be in
excess of that which is valid and enforceable under applicable law, then
such provision shall be construed to cover only that duration, extent or
activities which may be validly and enforceable covered.
19. Notices. All notices, requests and other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given,
if delivered in person or by courier, telegraphed, telexed or by facsimile
transmission or five business days after being sent by registered or
certified mail, return receipt requested, postage paid, addressed as
follows:
If to the Employee
F. Xxxxxxx Xxxxxxx
0 Xxxxx Xxxxx
Xxxxx, Xxxxxxxxxxxxx 00000
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If to the Company:
Alteon Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Smith, Stratton, Wise, Xxxxx & Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Any party may, by written notice to the other in accordance with this
Section 19, change the address to which notices to such party are to be
delivered or mailed.
20. General. Except as otherwise provided herein, the terms and provisions of
this Agreement and the Stock Option Grant Agreement to be entered into
between the Employee and the Company shall constitute the entire agreement
by the Company and the Employee with respect to the subject matter hereof,
and shall supersede any and all prior agreements or understandings between
the Employee and the Company, whether written or oral. This Agreement may
be amended or modified only by a written instrument executed by the
Employee and the Company. This Agreement may be executed in any number of
counterparts, all of which, when executed, shall be deemed to be an
original, and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
ALTEON INC.
By: /S/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Chief Executive Officer
By: /S/ F. Xxxxxxx Xxxxxxx
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F. Xxxxxxx Xxxxxxx
