1
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, entered into as of this 6th day of November,
1997 is made by and between CELL PATHWAYS, INC., a Delaware corporation
(hereinafter the "Company"), and XXXXX X. XXXXXX (hereinafter "Executive").
RECITALS
WHEREAS, the Company wishes to hire Executive; and
WHEREAS Executive desires to serve the Company; and
WHEREAS, the Company and Executive wish to set forth in this Agreement
the terms and conditions of Executive's employment with the Company.
NOW, THEREFORE, the Company and Executive, in consideration of the
mutual promises set forth herein, agree as follows:
1
TERM OF AGREEMENT
1.1 TERM OF AGREEMENT. This Agreement shall be effective as of November
6, 1997.
2
EMPLOYMENT DUTIES
2.1 TITLE/RESPONSIBILITIES. Executive hereby accepts the position of
Vice President and Chief Financial Officer of the Company. Executive shall
report directly to the Chief Executive Officer of the Company. Executive shall
have all powers and duties commensurate with the position of Chief Financial
Officer.
2.2 FULL-TIME ATTENTION. Executive shall devote his best efforts and
his full business time and attention to the performance of the services
customarily incident to such office and to such other services as the Chief
Executive Officer may reasonably request.
2.3 OTHER ACTIVITIES. Except upon the prior consent of the Chief
Executive Officer, Executive shall not during the period of this Agreement
engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that is or may be competitive with, or that
might place him in a competing position to that of the Company or any other
corporation or entity that directly or indirectly controls, is controlled by, or
is under
2
common control with the Company (an "Affiliated Company") provided that
Executive may own less than two percent (2 %) of the outstanding securities of
any such publicly traded competing corporation.
3
COMPENSATION
3.1 BASE SALARY. Executive shall receive a Base Salary at an annual
rate of One Hundred Fifty-Five Thousand Dollars ($155,000), payable in
accordance with the Company's normal payroll practices.
3.2 ANNUAL INCENTIVE BONUS. In addition to Base Salary, Executive shall
be eligible for annual bonus compensation not exceeding 20 % of base salary,
based upon achievement by the Company of goals established annually. The Board
shall determine, in its sole discretion, whether such goals have been achieved.
3.3 STOCK OPTIONS. Pursuant to the Company's 1997 Equity Incentive
Program, (the "Plan"), the Company shall grant Executive a stock option to
purchase Fifty Thousand (50,000) shares of the common stock of the Company
(post-consolidation), the maximum number of which shall be incentive stock
options within the meaning of section 422 of the Code, under the Plan. The
entire number of shares granted under such option shall vest in equal
installments over four (4) years. The exercise price of this option shall be
equal to the fair market value of the Company's common stock on the date of
grant.
3.4 INITIAL PAYMENT. Upon the date of hire, Executive shall receive a
payment of Fifteen Thousand Dollars ($15,000). This payment is in addition to
any other payment under this Agreement.
3.5 WITHHOLDINGS. All compensation and benefits payable to Executive
hereunder shall be subject to all federal, state, local and other withholdings
and similar taxes and payments required by applicable law.
4
EXPENSE ALLOWANCES AND FRINGE BENEFITS
4.1 VACATION. Executive shall be entitled to the greater of four (4)
weeks of annual paid vacation or the amount of annual paid vacation to which
Executive may become entitled under the terms of the Company's vacation policy
for employees during the term of this Agreement.
3
4.2 BENEFITS. During the term of this Agreement. the Company shall
provide Executive with participation in the same benefit programs which it
provides to any of its other senior executives, including but not limited to
medical, pension, bonus, stock, profit-sharing and savings plans and similar
benefits as such plans and benefits may be adopted by the Company from time to
time. The amount and extent of benefits to which Executive is entitled shall be
governed by the specific benefit plan as it may be amended from time to time.
4.3 BUSINESS EXPENSE REIMBURSEMENT. During the term of this Agreement,
Executive shall be entitled to receive proper reimbursement for all reasonable
out-of-pocket expenses incurred by him (in accordance with the policies and
procedures established by the Company) in performing services hereunder.
Executive agrees to furnish the Company reasonably adequate records and other
documentary evidence of such expenses for which Executive seeks reimbursement.
Such expenses shall be accounted for under the policies and procedures
established by the Company.
5
CONFIDENTIALITY
5.1 PROPRIETARY INFORMATION. Executive contemporaneously herewith is
executing and delivering to the Company the Company's Proprietary Information
and Inventions Agreement, a copy of which is attached hereto as Exhibit A.
5.2 RETURN OF PROPERTY. All documents, records, apparatus, equipment
and other physical property which is furnished to or obtained by Executive in
the course of his employment with the Company shall be and remain the sole
property of the Company. Executive agrees not to make or retain copies,
reproductions or summaries of any such property, except as otherwise necessary
while acting in the course of normal business activities.
6
TERMINATION OF EMPLOYMENT
6.1 DEATH. This Agreement shall automatically terminate upon
Executive's death. In such event, the Company shall pay to Executive's
beneficiaries or his estate, as the case may be, any Accrued Compensation. For
purposes of this Agreement, "Accrued Compensation" shall mean any accrued Base
Salary, any bonus compensation to the extent actually awarded by the Board but
not yet paid, any vested deferred compensation (other than pension plan or
profit-sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Company in which Executive
is a participant to the full extent of Executive's rights under such plans, any
accrued vacation pay and any appropriate business expenses incurred by Executive
in connection with his duties hereunder, all to the date of termination. No
other compensation or reimbursement of any kind, including but not limited to,
severance compensation, shall be paid to Executive's beneficiaries or estate.
4
6.2 DISABILITY. If Executive is prevented from satisfactorily
performing his duties hereunder by reason of any physical or mental incapacity
for a period of more than one hundred eighty (180) consecutive days, or two
hundred forty (240) days out of three hundred sixty-five (365) days, then, to
the extent permitted by law, the Company may terminate his employment on account
of such incapacity. In such event, the Company shall pay to Executive all
Accrued Compensation, and shall continue to pay to Executive his Base Salary
until such time (but not more than One Hundred Eighty (180) days following
termination). Executive becomes entitled to receive disability insurance
payments under the disability insurance policy maintained by the Company. No
other compensation or reimbursement of any kind, including without limitation,
severance compensation, shall be paid to Executive. Nothing in this Section 6.2
shall affect Executive's rights under any disability policy or plan in which he
is a participant.
6.3 TERMINATION FOR CAUSE. The Company may terminate Executive's
employment for Cause (as defined below) without liability at any time with or
without advance notice to Executive. The Company shall pay Executive all Accrued
Compensation, but no other compensation or reimbursement of any kind, including
without limitation, severance compensation, shall be paid to Executive. The
Company's obligations under this Section 6.3 shall terminate upon complete
payment of Accrued Compensation. Termination shall be for "Cause" in the event
of the occurrence of any of the following: (a) any intentional action or
intentional failure to act by Executive which was performed in bad faith and to
the material detriment of the Company; (b) Executive intentionally refuses or
intentionally fails to act in accordance with any lawful and proper direction or
order of the Board or the Chief Executive Officer; (c) Executive willfully and
habitually neglects his duties of employment; or (d) Executive is convicted of a
felony crime involving moral turpitude which causes material detriment to the
Company, provided that in the event that any of the foregoing events is capable
of being cured, the Company shall provide written notice to Executive describing
the nature of such event and Executive shall thereafter have thirty (3 30) days
to cure such event.
6.4 TERMINATION WITHOUT CAUSE. At any time, the Company may terminate
Executive's employment, without liability, for any reason not specified in
Sections 6.1 through 6.3. If the Company elects to terminate Executive pursuant
to this Section 6.4, then (a) the Company shall pay Executive Base Salary in
installments for a period of six (6) months, and (b) the Company shall pay
Executive's COBRA premiums for health care continuation coverage for a period of
twelve (12) months or the time for which Executive is entitled to COBRA
continuation coverage by law, whichever is shorter. In consideration of such
severance compensation, Executive shall not solicit, or attempt to hire on
behalf of himself or any other party any employee or exclusive consultant of the
Company for a period of twelve (12) months following the date of termination of
Executive's employment. If the Company terminates this Agreement or Executive's
employment other than pursuant to Section 6.1, 6.2 or 6. 3, then this Section
6.4 shall apply. The Company's obligations hereunder shall terminate upon
complete payment or completion of those items set forth in this Section 6.4.
6.5 TERMINATION BY EXECUTIVE. At any time, Executive may terminate his
employment by giving thirty (30) days advance written notice to the Company. The
Company shall pay Executive all Accrued Compensation, but shall not pay any
other compensation or
5
reimbursement of any kind, including without limitation, severance compensation.
The Company's obligations under this Section 6.5 shall terminate upon the
payment of Accrued Compensation.
6.6 MITIGATION. Except as otherwise specifically provided herein,
Executive shall not be required to mitigate damages or the amount of any payment
provided under this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for under this Agreement be reduced by
any compensation earned by Executive as a result of employment by another
employer or by retirement benefits after the date of the termination without
Cause or Constructive Termination.
7
GENERAL PROVISIONS
7.1 GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement and the rights of the parties hereunder shall be
interpreted and enforced under Pennsylvania law without reference to principles
of conflicts of laws. The parties expressly agree that inasmuch as the Company's
headquarters and principal place of business are located in Pennsylvania, it is
appropriate that Pennsylvania law govern this Agreement.
7.2 ASSIGNMENT; SUCCESSORS; BINDING AGREEMENT.
7.2.1 Executive may not assign, pledge or encumber his
interest in this Agreement or any part thereof.
7.2.2 The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by operation of
law or by agreement in form and substance reasonably satisfactory to Executive,
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
7.2.3 This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees If
Executive should die while any amount is at such time payable to him hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee or other
designatee or, if there be no such designatee, to his estate.
7.3 NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand-delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below. Either party may furnish to the
6
other party in writing a different address; however, such notice of change of
address shall be effective only upon receipt.
To the Company: Cell Pathways, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Secretary
To Executive: Xxxxx X. Xxxxxx
00 Xxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxx, XX 00000
7.4 MODIFICATION; WAIVER; ENTIRE AGREEMENT. No provisions of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by Executive and such officer as may
be specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party of, or compliance with, any condition or
provision or this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.
7.5 VALIDITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
7.6 CONTROLLING DOCUMENT. In case of conflict between any of the terms
and conditions of this Agreement and the documents herein referred to, or any
other documents or agreements affecting the terms and conditions of Executive's
employment, the terms and conditions of this Agreement shall control, and such
other documents shall be deemed to be amended hereby.
7.7 EXECUTIVE ACKNOWLEDGMENT. Executive acknowledges (a) that he has
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement, and has been advised to do so by the
Company, and (b) that he has read and understands the Agreement, is fully aware
of its legal effect, and has freely entered into it based on his judgment.
7
7.8 REMEDIES.
7.8.1 INJUNCTIVE RELIEF. The parties agree that the services
to be rendered by Executive hereunder are of a unique nature and that in the
event of any breach or threatened breach of any of the covenants contained
herein, the damage or imminent damage to the value and the goodwill of the
Company's business will be irreparable and extremely difficult to estimate,
making any remedy at law or in damages inadequate. Accordingly, the parties
agree that the Company shall be entitled to injunctive relief against Executive
in the event of any breach or threatened breach of the provisions of Article 2,
Article 5 and Exhibit A, in addition to any other relief (including damages)
available to the Company under this Agreement or under law.
7.8.2 NON-EXCLUSIVITY. Both parties agree that the remedies
specified in Section 7.8.1 above are not exclusive of any other remedy for the
breach by Executive or the terms hereof.
7.9 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
7.10 CONSTRUCTION. In. the event of a conflict between the text of the
Agreement and any summary, description or other information regarding the
Agreement, the text of the Agreement shall control.
7.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
Agreement.
Executed by the parties as of the day and year first above written.
CELL PATHWAYS, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxxxxx
Chief Executive Officer
EXECUTIVE
------------------------------------------
