Exhibit 10.23
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 8th day of February, 2002 between Xxxx
Laboratories, Inc., a New York corporation having its principal executive
offices at 000 Xxxxxxxxx Xxxxx, Xxxxxxxx #00, Xxxxxxx Corporate Park, Blauvelt,
New York 10913 (the "Company"), and Xxxxxxxxx X. Xxxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Company wishes to assure itself of the services of the
Employee and provide an inducement for the Employee to enter into its employ;
and
WHEREAS, the Employee is willing to serve in the employ of the Company for
the period and on the other terms and conditions hereafter set forth;
NOW, THEREFORE, the Company and the Employee hereby agree as follows:
1. Employment. The Company agrees to employ the Employee, and the Employee
agrees to enter into and remain in the employ of the Company, during the term of
this Agreement and on the other terms and conditions hereafter set forth.
2. Term. The term of this Agreement shall commence on March 1, 2002, (the
Commencement Date") and shall terminate at the close of business on the third
anniversary of the Commencement Date unless sooner terminated in accordance with
the terms of this Agreement or extended as hereinafter provided. The term of
this Agreement shall be extended, without further action by the Company or the
Employee, on the date (the "Extension Effective Date") which is six months
before the third anniversary of the Commencement Date and on the date (also an
"Extension Effective Date") which is six months before each subsequent
anniversary of the Commencement Date, for successive periods of twelve months
each, unless either party shall have given written notice to the other party, in
the manner set forth in paragraph 8(e) or (f) below, prior to the Extension
Effective Date in question, that the term of this Agreement that is in effect at
the time such written notice is given is not to be extended or further extended,
as the case may be.
3. Positions and Responsibilities; Place of Performance.
(a) Throughout the term of this Agreement, the Employee agrees to
enter into and remain in the employ of the Company, and the Company agrees to
employ the Employee, as its Senior Vice President and General Counsel, reporting
to the Chairman and Chief Executive Officer of the Company (the "CEO"). As the
Senior Vice President and General Counsel of the Company, the Employee shall be
responsible for managing and supervising, and shall have responsibility for the
day-to-day conduct of, the legal affairs of the Company, including managing and
supervising internal and external counsel, subject to the authority of the Board
of Directors of the Company (the "Board"), the CEO and the Chief Operating
Officer (the "COO"), and shall have all of the powers, authority, duties and
responsibilities usually incident to the position and role of Senior Vice
President and General Counsel in public companies that are comparable in size
and character to the Company, and shall perform such other reasonable duties,
consistent with the position of Senior Vice President and General Counsel, as
may lawfully be assigned to him by the Board, the CEO or the COO.
(b) In connection with his employment by the Company, the Employee
shall be based at the principal executive offices of the Company in Washington,
D.C. but agrees to travel, to the extent reasonably necessary to perform his
duties and obligations under this Agreement, to Company facilities and other
destinations elsewhere.
(c) During the term of this Agreement, the Employee shall serve the
Company on an exclusive basis and shall devote all his business time, attention,
skill and efforts to the faithful performance of his duties hereunder; provided
that the Employee may engage in community service and charitable activities that
do not interfere with the performance of his duties and responsibilities
hereunder.
4. Compensation. For all services rendered by the Employee in any capacity
during the term of this Agreement, and for his undertakings with respect to
confidential information set forth in paragraph 6 below, the Employee shall be
entitled to the following:
(a) a salary, payable in installments not less frequent than
monthly, at the annual rate of three hundred and twenty-five thousand dollars
($325,000), with such increases in such rate, if any, as the Compensation
Committee of the Board may approve from time to time during the term of this
Agreement (the annual salary rate as increased from time to time during the term
of this Agreement being hereafter referred to as the "Base Salary");
(b) participation in the Company's annual executive incentive or
bonus plan as in effect from time to time, with the opportunity to receive an
award in accordance with the terms and conditions of such plan, for each fiscal
year of the Company that commences or terminates during the term of this
Agreement, of up to 40% of the Base Salary earned during such year (or such
higher percentage as the Board or a committee of the Board may prescribe from
time to time during the term of this Agreement), it being understood that (i)
any award for the fiscal year of the Company in which the term of this Agreement
commences or terminates pursuant to the terms hereof shall be prorated based on
the portion of such fiscal year that coincides with the term of this Agreement,
(ii) notwithstanding clause (i) of this paragraph 4(b), the award for the fiscal
year of the Company in which the term of this Agreement commences shall not be
less than sixty-five thousand dollars ($65,000), and (iii) any award for the
fiscal year of the Company in which the term of this Agreement terminates
pursuant to the terms hereof shall be made at the same time as awards (if any)
are made to other participants with respect to such fiscal year;
(c) a sign-on bonus of $125,000 which shall be due and payable on
the Commencement Date, plus an additional payment of $125,000 (the "Retention
Payment") which shall be paid on January 3, 2003 if the Employee is then in the
employ of the Company;
(d) options to purchase a total of 50,000 shares of the Company's
common stock, subject to the terms and conditions of any stock option or stock
incentive plan of the Company under which the options may be granted, such other
terms and conditions consistent with the terms of such plan as the Board or a
committee of the Board granting the options (the Administrator") may impose, and
the following terms and conditions:
(i) the price at which shares may be purchased under the
options shall be the fair market value of the shares on the date on
which the options are granted (the "Grant Date"); and
(ii) the options shall become exercisable in five equal annual
installments of 10,000 shares each commencing on the first
anniversary of the Grant Date and continuing on each of the four
succeeding anniversaries of the Grant Date, provided in the case of
each such installment that the Employee's full-time employment by
the Company continues until the anniversary date in question; and
(iii) to the extent not therefore exercisable, the options
shall become exercisable on the date, if any, on which a Change in
Control (as defined in the Company's 1993 Stock Incentive Plan as in
effect on the date of this Agreement) occurs, if the Employee's
full-time employment by the Company continues until that date,
provided that, if such Change in Control occurs less than six months
after the Grant Date, the Employee agrees in writing (if requested
to do so by the Administrator) to remain in the employ of the
Company or a subsidiary at least through the date which is six
months after the Grant Date with substantially the same title,
duties, authority, reporting relationships and compensation as on
the day immediately preceding such Change in Control; and
(iv) the options shall expire on the tenth anniversary of the
Grant Date unless the Employee's employment terminates before that
date, in which case the options shall expire upon such termination
of employment or within such period of time thereafter as the
Administrator may specify in the instrument evidencing the grant of
the options;
(e) the business and personal use of an automobile at Company
expense including, without limitation, payment or reimbursement of automobile
insurance and maintenance expenses in accordance with the Company's automobile
policy applicable to senior officers on the date of this Agreement; and
(f) participation in all Company health, welfare, savings and other
employee benefit and fringe benefit plans (including vacation pay plans or
policies and life and disability insurance plans) in which other senior officers
of the Company participate during the term of this Agreement, including without
limitation the Company's 401(k) Savings and Retirement Plan, its supplemental
401(k) plan, its employee stock purchase plan, the CIGNA medical and dental
plan, its supplemental medical reimbursement program, its group term life
insurance and supplemental life insurance plan, its flexible spending account
plan and its long term care insurance plan, subject in all events to the terms
and conditions of such plans as in effect from time to time. Nothing in this
paragraph (f) shall preclude the Company from amending or terminating any such
plan at any time; provided that in no event shall the Employee be entitled to
less than four weeks of vacation with pay per year of employment. The plans
covered by this paragraph (f) shall not include the annual incentive or stock
option plans, which are covered by paragraphs (b) and (d) above.
5. Termination of Employment.
(a) Termination by the Company without Good Cause or by the Employee
for Good Reason.
(i) If during the term of this Agreement the Employee's
employment with the Company is terminated by the Company without
Good Cause or is terminated by the Employee for Good Reason other
than at or after the expiration of the term of this Agreement as the
same may have been extended in accordance with the provisions of
paragraph 2 above, the Company, subject to compliance by the
Employee with the provisions of paragraph 6 below, relating to
confidential information, shall, as liquidated damages or severance
pay or both (whichever characterization will serve to validate the
payments), and as additional consideration for the Employee's
undertakings under paragraph 6 below, (A) pay the Employee a lump
sum amount of money equal to two (2) times the Employee's Base
Salary, and (B) if such employment termination occurs before the
Retention Payment referred to in paragraph 4(c) above has been paid
to the Employee, pay the Retention Payment.
(ii) If the term of this Agreement as the same may have been
extended in accordance with the provisions of paragraph 2 above is
not extended or further extended because the Company gives written
notice of non-extension to the Employee as provided in paragraph 2
above, and the Company does not have Good Cause for termination of
the Employee's employment at the time of giving such notice, then
the Company, subject to fulfillment by the Employee of his
obligations under this Agreement during the balance of the term and
his compliance with the provisions of paragraph 6 below, relating to
confidential information, shall, as non-renewal compensation, and as
additional consideration for the Employee's undertakings under this
Agreement including paragraph 6 below, pay the Employee a lump sum
amount of money equal to 1.5 times the Employee's Base Salary. The
Company shall pay such amount upon the expiration of the term that
is in effect at the time the Company gives such written notice of
non-extension to the Employee.
(iii) The foregoing provisions of this paragraph 5(a) shall be
in lieu of any severance pay that may be payable under any plan or
practice of the Company , but shall be in addition to (and not in
lieu of) any payments to which the Employee may be entitled under
Section 6A below.
(b) Termination by the Company for Good Cause or by the Employee
without Good Reason. If, during the term of this Agreement, the Employee's
employment by the Company is terminated by the Company for Good Cause or by the
Employee without Good Reason, the Employee shall not be entitled to receive any
compensation under paragraph 4 above acruing after the date of such termination
or any payment under paragraph 5(a) above. However, the Company's obligations
under Section 6A below shall not be affected by such termination of employment.
The provisions of this paragraph 6(b) shall be in addition to, and not in lieu
of, any other rights and remedies the Company may have at law or in equity or
under any other provision of this Agreement in respect of such termination of
employment.
(c) Good Cause Defined. For purposes of this Agreement, the Company
shall have "Good Cause" to terminate the Employee's employment during the term
of this Agreement if:
(i) the Employee fails to substantially perform his duties
hereunder for any reason or fails to devote substantially all his
business time exclusively to the affairs of the Company, and such
failure is not discontinued within a reasonable period of time, in
no event to exceed 30 days, after the Employee receives written
notice from the Company of such failure; or
(ii) the Employee commits an act of dishonesty resulting or
intended to result directly or indirectly in gain or personal
enrichment at the expense of the Company; or
(iii) the Employee is grossly negligent or engages in willful
misconduct or insubordination in the performance of his duties
hereunder; or
(iv) the Employee breaches his obligations under paragraph 6
below, relating to confidential information.
(d) Good Reason Defined. For purposes of this Agreement, the
Employee shall have "Good Reason" to terminate his employment during the term of
this Agreement only if:
(i) the Company fails to provide compensation or benefits or
indemnification that the Company is obligated to provide under
paragraph 4 above or Section 6A below and the failure is not
remedied within 30 days after the Company receives written notice
from the Employee of such failure; or
(ii) the Company assigns the Employee duties, responsibilities
or reporting relationships not contemplated by paragraph 3 above
without his consent, or limits his duties or responsibilities
contemplated by paragraph 3 above in any respect materially
detrimental to him, and in either case the situation is not remedied
within 30 days after the Company receives written notice from the
Employee of the situation; or
(iii) he is removed from, or not elected or reelected to, the
position of Senior Vice President and General Counsel, and the
Company does not have Good Cause for doing so; or
(iv) the Company relocates his office outside of Washington,
D.C. or the Company's principal executive offices in Washington,
D.C. without his consent and the situation is not remedied within 30
days after the Company receives written notice from the Employee of
the situation.
6. Confidential Information. The Employee agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any person not
employed by the Company, or not engaged to render services to the Company,
except with the prior written consent of an authorized officer of the Company or
as necessary or appropriate for the performance of his duties hereunder, any
confidential information obtained by him while in the employ of the Company,
including, without limitation, information relating to any of the inventions,
processes, formulae, plans, devices, compilations of information, research,
methods of distribution, suppliers, customers, client relationships, marketing
strategies or trade secrets of the Company or any subsidiary thereof; provided,
however, that this provision shall not preclude the Employee from use or
disclosure of
information known generally to the public or of information not considered
confidential by persons engaged in the businesses conducted by the Company or
any subsidiary thereof, or from disclosure required by law or court order. The
Employee also agrees that upon leaving the Company's employ he will not take
with him, without the prior written consent of an authorized officer of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company or any
subsidiary thereof, together with any copy or reproduction thereof, mechanical
or otherwise, which is of a confidential nature relating to the Company or any
subsidiary thereof, or without limitation, relating to its or their methods of
distribution, suppliers, customers, client relationships, marketing strategies
or any description of any formulae or secret processes, or which was obtained by
him or entrusted to him during the course of his employment with the Company.
6A. Indemnification
To the fullest extent permitted by applicable law, the Company shall
indemnify, defend and hold harmless the Employee from and against any and all
claims, demands, actions, causes of action, liabilities, losses, judgments,
fines, costs and expenses (including reasonable attorneys' fees and settlement
expenses) arising from or relating to his service or status as an officer,
director, employee, agent or representative of the Company or any subsidiary of
the Company or in any other capacity in which the Employee serves or has served
at the request of, or for the benefit of, the Company or its subsidiaries. The
Company's obligations under this Section 6A shall be in addition to, and not in
derogation of, any other rights the Employee may have against the Company to
indemnification or advancement of expenses, whether by statute, contract or
otherwise, and shall survive the expiration or termination of the term of this
Agreement for any reason.
7. Severability
(a) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement not so invalid or unenforceable shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law; and
(b) Any provision of the Agreement which may for any reason be
invalid or unenforceable in any jurisdiction shall remain in effect and be
enforceable in any jurisdiction in which such provision shall be valid and
enforceable.
8. General Provisions.
(a) No right or interest to or in any payments to be made under this
Agreement shall be subject to anticipation, alienation, sale, assignment,
encumbrance, pledge, charge or hypothecation or to execution, attachment, levy
or similar process, or assignment by operation of law. All payments to be made
by the Company hereunder, including the sign-on bonus and Retention Payment
referred to in paragraph 4(c) above, shall be subject to the withholding of such
amounts as the Company may determine it is required to withhold under the laws
or regulations of any governmental authority, whether foreign, federal, state or
local.
(b) To the extent that the Employee acquires a right to receive
payments from the Company under this Agreement, such right shall be no greater
than the right of an
unsecured general creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the Company and no special or separate
fund shall be established and no segregation of assets shall be made to assure
payment of any amount hereunder.
(c) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to
the principles of conflicts of laws of that State.
(d) This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Employee, his heirs, devisees,
distributees and legal representatives.
(e) Any notice or other communication to the Company pursuant to any
provision of this Agreement shall be given in writing and will be deemed to have
been delivered:
(i) when delivered in person to the Corporate Secretary or
Chief Executive Officer of the Company; or
(ii) one week after it is deposited in the United States
certified or registered mail, postage prepaid, addressed to the
Corporate Secretary of the Company at 000 Xxxxxxxxx Xxxxx, Xxxxxxxx
#00, Xxxxxxx Corporate Park, Blauvelt, New York 10913 or at such
other address of which the Company may from time to time give the
Employee written notice in accordance with paragraph 8(f) below.
(f) Any notice or other communication to the Employee pursuant to
any provision of the Agreement shall be given in writing and will be deemed to
have been delivered:
(i) when delivered to the Employee in person, or
(ii) one week after it is deposited in the United States
certified or registered mail, postage prepaid, addressed to the
Employee at his address as it appears on the records of the Company
or at such other address of which the Employee may from time to time
give the Company written notice in accordance with paragraph 8(e)
above.
(g) No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be agreed to in a
writing signed by the Employee and an authorized officer of the Company.
(h) This instrument contains the entire agreement of the parties
relating to the subject matter of this Agreement and supersedes and replaces all
prior agreements and understandings with respect to such subject matter, and the
parties have made no agreements, representations or warranties relating to the
subject matter of this Agreement which are not set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXX LABORATORIES, INC.
By:
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[SEAL]
Attest:
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Secretary
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