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EMPLOYMENT AGREEMENT
AGREEMENT dated August 1, 1997 (the "Effective Date") by and between
VIRAGEN, INC., a Delaware Corporation ("Employer or the "Company"), and XXXXXX
X. XXXXXX ("Employee").
W I T N E S S E T H
WHEREAS, Employer desires to employ Employee upon the terms and conditions
hereinafter set forth and Employee desires to accept employment upon such terms
and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the terms
and conditions of their agreements and understandings with respect to Employee's
employment by Employer.
NOW, THEREFORE, Employer hereby to employs Employee and Employee hereby
accepts employment under the following terms and conditions:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon all the terms and conditions hereinafter set forth.
2. TERM
Subject to the provisions for earlier termination set forth in
Section 9 hereof, this Agreement shall commence on the Effective Date and shall
end as of the close of business of the day immediately preceding the first
anniversary of the Effective Date (the "Employment Term"). Notwithstanding any
of the foregoing to the contrary, if this Employment Agreement is terminated
prior to the expiration of the Employment Term, "Employment Term" shall mean the
period commencing on the Effective Date and ending as of the close of business
of the day of termination of Employee's employment.
3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that he is free to
accept employment with Employer as contemplated herein and has no other written
or oral obligations or commitments of any kind or nature which would in any way
interfere with his acceptance of employment pursuant to the terms hereof or the
full performance of his obligations hereunder or the exercise of his best
efforts in his employment hereunder.
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4. DUTIES AND EXTENT OF SERVICES
Employee shall be employed as Employer's Chief Executive Officer and
as such, shall, subject to the direction of Employer's President, supervise the
conduct of Employer's operations and affairs, consistent with the position of
Chief Executive Officer and perform such other duties and responsibilities as
may be reasonably assigned to Employee from time to time consistent with such
title by the Employer's President. Employee agrees to devote sufficient time,
skill, attention and energy as Employee deems necessary to perform the duties
and responsibilities reasonably assigned to him hereunder or pursuant hereto to
the best of his abilities. Employee shall use his best efforts to be loyal and
faithful at all times. Employee agrees not to enter into any other employment
agreement during the term hereof.
5. COMPENSATION
Employee shall be compensated at a rate of $500 per day ($750 per
day if traveling on behalf of the Company) for each day Employee is present on
the Company's premises or otherwise performing his duties as Chief Executive
Officer, to a maximum of $120,000 per year during the Employment Term, payable
in accordance with the Company's normal payroll process, currently bi-weekly.
Employee is also entitled to receive fringe benefits that shall be made
available to Employee described in this Agreement.
Commencing September 1, 1997, Employer shall pay to Employee
additional compensation ("Additional Compensation") of $5,000 per month, payable
on the first business day of each month, for a period of six consecutive months,
for each whole month Employee continues to be employed by Employer. Both
Employer and Employee acknowledge that such Additional Compensation represents
monthly payment in areas for services provided by Employee.
6. FRINGE BENEFITS AND EXPENSES
A. Employee Plans. Employee shall be eligible (subject to the terms
and conditions of particular plans and programs) to participate in such medical,
hospitalization, group health, accident, disability and life insurance programs
and plans, such pension, profit sharing, stock option, incentive compensation
and stock purchase plans and such other employee benefit programs to the same
extent such plans and programs are made generally available from time to time by
Employer to all of its other executives; provided, however, Employer shall be
under no obligation to make any of such plans or programs available to its
employees or continue any which currently or in the future exist, except as
otherwise required by law.
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B. Other Expenses. Employer shall promptly pay directly or reimburse
Employee for his reasonable out-of-pocket costs and expenses incurred in
connection with the performance of his duties and responsibilities hereunder
subject to the submission by Employee of appropriate invoices, receipts and
other supporting documentation, consistent with Employer's customary
reimbursement policies and procedures.
C. Automobile. For the term of this Agreement, Employer shall pay
Employee $400 per month, payable in advance, for performance of Employee's
duties to Employer as specified herein.
7. VACATIONS
Employee shall be entitled to normal vacation (of not less than two
weeks) taken by other members of senior management during the Employment Term.
Employee shall not be entitled to be compensated for any unused vacation upon
termination of this Agreement. The periods during which Employee will be absent
from work shall be determined by Employee taking into account the needs of
Employer's business and shall be subject to the approval of the President (which
shall not be unreasonably withheld).
8. FACILITIES
Employer shall provide and maintain (or cause to be provided and
maintained) such facilities, equipment, supplies and personnel as it reasonably
determines is adequate for Employee's performance of his duties and
responsibilities under this Agreement.
9. TERMINATION OF EMPLOYMENT
A. Employee Notice of Termination. Employer and Employee acknowledge
that Employee may terminate this Agreement prior to the expiration of the
Employment Term with 60 days written notice ("60 day notice period") to
Employer. Employee shall deliver such written notice to the Company's principal
administrative office: Viragen, Inc., 000 XX 00xx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxx 00000, attention President. Following the expiration of the 60 day
notice period, both Employer and Employee are released from the provisions of
this Agreement, it being understood that the restrictions, acknowledgements,
covenants and agreements of Employee set forth the Sections 10, 11, 12 and 13 of
this Agreement shall survive.
B. Other Termination Events. Notwithstanding any provisions of this
Agreement to the contrary, Employee's employment may be terminated by Employer
with Cause (as hereinafter defined) effective upon the delivery of written
notice to Employee. In addition, Employee's employment shall terminate (i) upon
Employee's death or (ii) upon Employee becoming Disabled (as hereinafter
defined).
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C. Definition of Disabled. For purposes of this Agreement, Employee
shall be deemed to be "Disabled" when, by reason of physical or mental illness
or of injury as confirmed by competent medical evidence, he is unable to perform
substantially all of the duties and responsibilities required of him in
connection with his employment hereunder. No disability shall be deemed to exist
until after Employee shall be unable to perform his duties hereunder for ninety
(90) consecutive days (the "Disability Period"). If Employee shall have been
under a disability but shall have returned to work prior to the end of the
Disability Period, any new disability commencing within thirty (30) days of the
termination of the prior disability shall be a continuation of the prior
disability, and the period of all such disabilities shall be added together to
determine whether, or how much of, the Disability Period has elapsed.
D. Definition of Cause. For purposes of this Agreement, "Cause"
shall be: (a) felony conviction for fraud or criminal conduct (other than
conviction of, or a plea of guilty to, a traffic violation), from which no
appeal can be taken; (b) habitual drunkenness or drug addiction; (c)
embezzlement; (d) material sanctions against Employee in his capacity as an
employee of Employer by regulatory agencies governing Employer or against
Employer because of wrongful acts or conduct of Employee which have a material
adverse affect upon the Employer and its business; (e) material breach or
default by Employee of any of the material terms or conditions of this
Agreement, and the continuation of such material breach or default by Employee
for a period of seven (7) days following the date of receipt of written notice
from Employer specifying the material breach of default of Employee or (f) the
resignation or quitting of Employee prior to the end of the Employment Term,
such resignation or quitting not being in accordance with the provisions of
Section 9.A (in this last event, Employee's employment shall be deemed
terminated with cause on the date that he resigns or quits).
If Employee's employment is terminated by Employer without Cause as
defined in this Section, Employee shall be given sixty (60) days written notice
of termination by Employer and be entitled to receive compensation and fringe
benefits/expenses as provided for in sections 5 & 6 payable through the
remainder of the Employment Term as provided for in Section 2 hereof.
Additionally, in the event of termination without Cause, any outstanding but
unexercised stock options or warrants granted to Employee, shall immediately
vest and become fully exercisable through their stated respective Exercise
Period(s).
If Employee's employment is terminated for cause, Employee will be
entitled to receive the equivalent of one month's compensation (exclusive of the
Additional Compensation as described in Section 2) from the date of such
termination.
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Confidential Information. Employee acknowledges that Employee has
been informed that it is the policy of Employer to maintain as secret and
confidential all
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information relating to (i) the financial condition, businesses and interests of
Employer and its affiliates, (ii) the systems, know-how, products, services,
costs, inventions, patents, patent applications, formulae, research and
development procedures, notes and results, computer software programs, marketing
and sales techniques and/or programs, methods, methodologies, manuals, lists and
other trade secrets heretofore or hereafter acquired, sold, developed and/or
used by Employer and its affiliates and (iii) the nature and terms of Employer's
and its affiliates' relationships with their respective customers, clients,
suppliers, lenders, vendors, consultants, independent contractors and employees
(all such information being hereinafter collectively referred to as
"Confidential Information"), and Employee further acknowledges that such
Confidential Information is of great value to Employer and its affiliates and,
in and by reason and as a result of Employee's employment by Employer, Employee
will be making use of, acquiring and/or adding to such Confidential Information.
Therefore, Employee understands that it is reasonably necessary to protect
Employer's and its affiliates' trade secrets, good will and business interests
that Employee agree and, accordingly, Employee does hereby agree, that Employee
will not directly or indirectly (except where authorized by the President of
Employer for the benefit of Employer and/or its affiliate(s) and/or as required
in the course of his employment) at any time hereafter divulge or disclose for
any purpose whatsoever to any persons, firms, corporations or other entities
other than Employer or its affiliates (hereinafter referred to collectively as
"Third Parties"), or use or cause or authorize any Third Parties to use, any
such Confidential Information, except as (i) otherwise required to be disclosed
by a Federal or State Regulatory agency, (ii) is approved for release by prior
written authorization of the Employer or (iii) is or becomes publicly available
through no wrongful or negligent act of Employee.
B. Employer's Materials. In accordance with the foregoing, Employee
furthermore agrees that (i) Employee will at no time retain or remove from the
premises of Employer or its affiliates any research and development materials,
drawings, notebooks, notes, reports, formulae, software programs or discs or
other containers of software, manuals, data, books, records, materials or
documents of any kind or description for any purpose unconnected with the strict
performance of Employee's duties with Employer and (ii) upon the cessation or
termination of Employee's employment with Employer for any reason, Employee
shall forthwith deliver or cause to be delivered up to Employer any and all
research and development materials, drawings, notebooks, notes, reports,
formulae, software programs or discs or other containers of software, manuals,
data, books, records, materials and other documents and materials in Employee's
possession or under Employee's control relating to any Confidential Information
or any property or information which is otherwise the property of Employer or
its affiliates.
11. COVENANT-NOT-TO-COMPETE
In view of the Confidential Information to be obtained by or
disclosed to Employee, because of the know-how acquired and to be acquired by
Employee, and as a material inducement to Employer to enter into this Agreement
and continue to employ
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Employee, Employee covenants and agrees that, so long as Employee is employed by
Employer and for a period of two (2) years after Employee ceases for any reason
to be employed by Employer, Employee shall not, directly or indirectly (i)
divert business from, (ii) solicit or transact any business competitive with
Employer or its affiliates with, or (iii) sell any products or services sold or
offered by Employer or its affiliates to, any customer or former customer of
Employer or its affiliates. In addition, Employee covenants and agrees that, so
long as Employee is employed by Employer and for a period of two (2) years after
Employee ceases for any reason to be employed by Employer, Employee hereby
agrees to refrain from, anywhere in the world (the "Geographical Area"),
directly or indirectly owning, managing, operating, controlling or financing, or
participating in the ownership, management, control or financing, or
participating in the ownership, management, control or financing of, or being
connected with or having an interest in, or otherwise taking any part as a
stockholder, director, officer, employee, agent, consultant, partner or
otherwise in, any business competitive with that engaged in or being developed
by Employer or its affiliates during Employee's term of employment. Employer's
business is acknowledged to be the development, manufacture and sale of human
leukocyte interferon therapy products. Employee acknowledges that Employer's
business is anticipated to be international in scope, that a similar business
could effectively compete with Employer's and its affiliates businesses from any
location in the world, and that, therefore, the restricted Geographical Area is
reasonable in scope to protect Employer's and its affiliates' trade secrets and
legitimate business interests.
12. EMPLOYER'S REMEDIES FOR BREACH
OF SECTIONS 10 AND 11
Employee covenants and agrees that if Employee shall violate or
breach any of Employee's covenants or agreements provided for in Sections 10 and
11 hereof, Employer and/or its affiliates shall be entitled to an accounting and
repayment of all profits, compensation, commissions, remuneration's or benefits
which Employee directly or indirectly has realized or realizes as a result of,
growing out of or in connection with any such violation or breach. In addition,
in the event of a breach or violation or threatened or imminent breach or
violation of any provisions of Sections 10 or 11 hereof, Employer and/or its
affiliates shall be entitled to a temporary and permanent injunction or any
other appropriate decree of specific performance or equitable relief, without
posting of bond, from a court of competent jurisdiction in order to prevent,
prohibit or restrain any such breach or violation or threatened or imminent
breach or violation by Employee, by Employee's partners, agents,
representatives, servants, employers or employees and/or by any third parties.
Employer shall be entitled to such injunctive or other equitable relief in
addition to any damages which are suffered. Resort by Employer and/or its
affiliates to such injunctive or other equitable relief shall not be deemed to
waive or to limit in any respect any other rights or remedies which Employer or
its affiliates may have with respect to such breach or violation.
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13. REASONABLENESS OF RESTRICTIONS
A. Reasonableness. Employee acknowledges that any breach or
violation of Sections 10 or 11 hereof will cause irreparable injury and damage
and incalculable harm to Employer and its affiliates and that it would be very
difficult or impossible to measure the damages resulting from any such breach or
violation. Employee further acknowledges that Employee has carefully read and
considered the provisions of Sections 10, 11 and 12 hereof and, having done so,
agrees that the restrictions and remedies set forth in such Sections (including,
but not limited to, the time period, geographical and types of restrictions
imposed) are fair and reasonable and are reasonably required for the protection
of the business, trade secrets, interests and good will of Employer and its
affiliates.
B. Severability. Employee understands and intends that each
provision and restriction agreed to by Employee in Sections 10, 11 and 12 hereof
shall be construed as separate and divisible from every other provision and
restriction and that, in the event that any one of the provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid or
unenforceable, the remaining provisions thereof and restrictions therein shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable provisions or restrictions had not been included therein, and any
one or more of such valid provisions and restrictions may be enforced in whole
or in part as the circumstances warrant. In the event that any such provision
relating to time period and/or geographical and/or type of restriction shall be
declared by a court of competent jurisdiction to exceed the maximum or
permissible time period, geographical area or type of restriction such court
deems reasonable and enforceable, said time period and/or geographical and/or
type of restriction shall be deemed to become and shall thereafter be the
maximum time period and/or geographical restriction and/or type of restriction
which such court deems reasonable and enforceable.
C. Survivability. The restrictions, acknowledgments, covenants and
agreements of Employee set forth in Sections 10, 11, 12 and 13 of this Agreement
shall survive any termination of this Agreement or of Employee's employment (for
any reason, including expiration of the Employment Term).
D. Comparable Restrictions. Employer agrees that it will use its
best efforts to have other senior executives execute and observe agreements
containing similar provisions as are contained in Sections 10, 11 and 12 hereof.
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14. EMPLOYEE'S DISCLOSURES AND REPRESENTATIONS
AND WARRANTIES.
Employee hereby acknowledges, represents and warrants to,
and/or agrees with, Employer as follows:
(a) That Employee and his representatives and agents (i) have
received and read and are familiar with this Agreement. (ii) are familiar with
the business and operations conducted and to be conducted by Employer and the
risks attendant thereto, (iii) have been given access to and have examined or
have had an opportunity to examine before the date hereof all applicable
agreements, documents, records and books and such other applicable information
as are available and relevant to such business and operations and to enable them
to verify the accuracy of any information, agreements, documents, records or
books provided to them.
(b) That Employee and/or his representatives and agents have
had an opportunity to ask questions of and receive satisfactory answers from
Employer and/or a person or persons authorized to act on Employer's behalf
concerning the terms and conditions of this Agreement, this transaction and
Employer and its currently contemplated business and operations.
(c) That Employee has been represented by such legal and other
professional advisors (if any), each of whom has been personally selected by
Employee, as Employee has found necessary to consult concerning the transactions
contemplated in or by this Agreement.
(d) That Employee has full right, power and authority to
perform all obligations under this Agreement.
Employee hereby agrees to indemnify and hold harmless Employer and
its shareholders, directors, officers, employees and agents from and against any
and all loss, damage, liability, cost or expense (including reasonable
attorneys' and paralegals' fees and costs before and at trial and at all
appellate levels) due to or arising out of any inaccuracy in, or breach of, any
representation, warranty or covenant of Employee contained in this Section 14.
15. INDEPENDENT COUNSEL
Employer and Employee agree that each of them have been, or were
advised and fully understand that they are entitled to be, represented by
independent legal counsel with respect to all matters contemplated herein, from
the commencement of negotiations at all times through the execution hereof.
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16. LAW APPLICABLE
This Agreement shall be governed by and construed pursuant to the
laws of the State of Florida, without giving effect to conflicts of laws
principles.
17. NOTICES
Any notices required or permitted to be given pursuant to this
Agreement shall be sufficient, if in writing, and if personally delivered or
sent by certified or registered mail, return receipt requested, to his
residence, in the case of Employee, or to its then principal administrative
office, in the case of Employer.
18. SUCCESSION
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective legal representatives, heirs, assignees
and/or successors in interest of any kind whatsoever; provided, however, that
Employee and Employer acknowledge and agree that they cannot assign or delegate
any of their rights, duties, responsibilities or obligations hereunder to any
other person or entity.
19. ENTIRE AGREEMENT
This Agreement constitutes the entire final agreement between the
parties with respect to, and supersedes any and all prior agreements between the
parties hereto both oral and written concerning, the subject matter hereof and
may not be amended, modified or terminated except by a writing signed by the
parties hereto.
20. SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable, and is not reformed by a court of competent jurisdiction, such
invalidity or unenforceability shall attach only to such provision and shall not
in any way affect or render invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if such invalid or
unenforceable provision were not contained herein.
21. NO WAIVER
A waiver of any breach or violation by either party of any term,
provision or covenant contained herein shall not be deemed a continuing waiver
or a waiver of any future or past breach or violation. No oral waiver shall be
binding.
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22. INDEMNITY OF EMPLOYEE
Employer shall indemnify and hold harmless Employee from and against
any and all claims, judgments, fines, penalties, liabilities, losses, costs and
expenses (including reasonable attorneys' fees and costs) asserted against or
incurred by Employee as a result of acts or omissions of Employee taken or made
in the course of performing his duties for Employer or by reason of Employee
acting or having acted as an officer of Employer, to the maximum extend
permitted by law, including Section 607.0850, Florida Statutes (including the
advancement of expense provisions thereof); provided, however, that such
indemnity shall not apply to acts or omissions of Employee which constitute
misconduct, gross negligence or which were intended by Employee to personally
benefit Employee, directly or indirectly, at the expense of Employer, unless the
matter which benefits Employee was first fully disclosed to the Board of
Directors of Employer and approved by said Board.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the
day and year first above written.
VIRAGEN, INC.
By: /s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
President
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
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