EMPLOYMENT AGREEMENT
By and Between
Endorex
And
Xxxxx X. Xxxx
Agreement made this 8/th/ day of February 2000, between ENDOREX
CORPORATION, a Delaware Corporation, (the "Company") and XXXXX X. XXXX (the
"Executive").
The company is desirous of employing the Executive as VICE PRESIDENT,
FINANCE AND CORPORATE DEVELOPMENT of the Company, and the Executive is desirous
of becoming employed by the Company in this capacity.
The Company and the Executive desire to set forth in this Agreement the
terms and conditions on which the Executive will be employed by the Company as
its VICE PRESIDENT, FINANCE AND CORPORATE DEVELOPMENT.
Accordingly, in consideration of the promises and the respective covenants
and agreements of the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Employment
The Company hereby agrees to employ the Executive, and the Executive hereby
agrees to serve the Company, on the terms and conditions set forth herein.
2. Term
The employment of the Executive by the Company as provided in Section 1
will commence on February 21, 2000 and end on February 20, 2004 unless
further extended or sooner terminated as hereinafter provided.
3. Position and Duties
The Executive shall serve as VICE PRESIDENT, FINANCE AND CORPORATE
DEVELOPMENT of Endorex Corporation and its subsidiaries and shall have such
responsibilities and authority consistent with this position as may, from
time to time, be assigned to the Executive by the President/CEO or Board of
Directors of the Company. The Executive shall devote substantially all his
working time and efforts to the business affairs of the Company. The
Executive will report directly to the President/CEO of the Company.
4. Place of Performance
In connection with the Executive's employment by the Company, the Executive
shall be based at the Company's offices in Lake Forest, IL except for
required travel on the Company's business.
5. Compensation and Related Matters
(A) Salary. During the period of the Executive's employment hereunder, the
Company shall pay to the Executive a salary at a rate of not less than
$130,000 per annum, payable in accordance with the Company's normal
payroll and withholding practices. The Executive's salary and
performance shall be subject to a review commencing at the end of the
calendar year but in any case no later than twelve (12) months
following the commencement of the term of the Executive's employment
hereunder.
(B) Bonuses. At the end of each full year of employment, Executive shall
be entitled to a targeted bonus of up to 30% of the Executive's annual
base salary, as in effect at the time. Determination of any actual
bonus shall be based upon the Executive's meeting mutually agreed
written objectives and the overall performance of the Company for that
period of time, and is at the discretion of the President/CEO and the
Board of Directors. The written objectives for the first year of this
Agreement will be established during the first 45 days of employment.
(C) Expenses. The Company shall reimburse Executive for all normal, usual
and necessary expenses incurred by Executive in furtherance of the
business and affairs of the Company.
(D) Other Benefits. The Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made
available by the Company as of this date and in the future to its key
management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and
arrangements. Nothing paid to the employee under any plan or
arrangement presently in effect or made available in the future shall
be deemed to be in lieu of the salary payable to the employee pursuant
to paragraph (A) of this section.
(E) Vacations. The Executive shall be entitled to three (3) weeks of paid
vacation in each year of his employment (this will be prorated during
a calendar year by the amount of time an employee has worked with the
Company for that given year). The Executive shall also be entitled to
all paid holidays given by the Company to its employees.
(F) Services Furnished. The Company shall furnish the Executive with
office and such other facilities and services as shall be suitable to
the Executive's position and adequate for the performance of his
duties as set forth in Section 3 hereof and for the accomplishment of
Executive's mutually agreed written objectives.
(G) Options and Grants. Subject to execution of this Agreement, Executive
shall be granted on the date of execution of this Agreement, 60,000
share options of Endorex's Common Stock at a price per share equal to
the Closing Price of the Common Stock on the date of execution of this
Agreement. Such stock and options shall vest and become exercisable at
the rate of five equal tranches of 12,000 share options beginning with
the 90-day anniversary of the grant and with each successive tranche
of 12,000 share options vesting on the annual anniversary of the
grant. If Executive's employment with the Company shall terminate
before such stock is fully vested, except as otherwise provided in the
Company's Amended and Restated 1995 Omnibus Incentive Plan such stock
shall be exercisable only to the extent the stock is vested on the
date Executive's employment terminates. The grant of the foregoing
stock shall not preclude the participation of the Executive in any
other stock grant or option plan of the Company.
6. Offices
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, as an executive of Endorex or other Endorex
subsidiaries (collectively "Endorex"), presently existing and as may be
established in the future, and consistent with the position of the
Executive with the Company at the time of such appointment, provided that
the Executive is indemnified for serving in any and all such capacities on
a basis no less favorable than is currently provided by Article VII of the
Company's by-laws and any Directors and Officers insurance in effect during
the term hereof. Executive agrees that, upon termination of his employment
with the Company, for any reason whatsoever, he will terminate from all
positions as an employee of Endorex and all of its subsidiaries.
7. Confidential Information
Executive covenants and agrees that he will not (except as required in the
course of his employment or as required by law), while in the employment of
the Company or thereafter, communicate or divulge to, or use for his own
benefit, or for the benefit of any other person, firm, association or
corporation, without the consent of the Company, as applicable, any
information concerning any inventions, discoveries, improvements,
processes, formulas, apparatus, equipment, methods, trade secrets,
research, secret
data, cost or uses or purchasers of the Company's current or future
products, research activities, immunopharmaceutical agents, or services, or
other confidential matters possessed, owned, or used by the Company that
may be communicated to, acquired by, or learned of by the Executive in the
course of, or as a result of, his employment with the Company . All
records, files, memoranda, reports, price lists, customer lists, drawings,
plans, sketches, documents, equipment and like, relating to the business of
the Company, which the Company, as applicable shall use or prepare or come
into contact with, shall remain the sole property of the Company, as
applicable. The obligations of confidentiality shall not apply to such
information that (a) is at the time of receipt a matter of public knowledge
or after its receipt becomes public knowledge through no act or omission on
the part of Executive, (b) the Executive can establish by reasonable proof
was known to him prior to disclosure by the Company, (c) is received from a
third party who did not, directly or indirectly, obtain such information as
a result of Executive's breach of this Paragraph 7. EXECUTIVE ACKNOWLEDGES
THAT ANY INVENTION, IMPROVEMENT, DISCOVERY, PROCESS, FORMULA, METHOD OR
OTHER INTELLECTUAL PROPERTY ("INVENTIONS"), WHETHER OR NOT PATENTABLE OR
COPYRIGHTABLE DEVELOPED BY EXECUTIVE, ALONE OR JOINTLY WITH OTHERS, USING
MATERIAL, RESOURCES OR FACILITIES OF THE COMPANY OR WHICH RELATE TO
EXECUTIVE'S WORK FOR THE COMPANY OR ARE BASED ON THE COMPANY'S CONFIDENTIAL
INFORMATION IS THE EXCLUSIVE PROPERTY OF THE COMPANY. EXECUTIVE ASSIGNS ALL
OF HIS RIGHT, TITLE AND INTEREST IN AND TO ANY SUCH INVENTIONS TO THE
COMPANY.
8. Competition
(A) During the period of the Executive's employment by the Company and for
a period of twelve (12) months after such employment ends (the
"Restricted Period") (whether such employment shall have ended by
reason of the expiration or termination of this Agreement or
otherwise), Executive will not (i) engage in; (ii) have any interest
in any person, firm or corporation that engages in; or (iii) perform
any services for any person, firm or corporation that engages in
direct competition with the Company, or any of its subsidiaries in the
development, research relating to, manufacture, processing, marketing,
distribution, or sale of products that are substantially similar to
products ("Products") that were researched, developed, licensed,
manufactured, processed, distributed, or sold by the Company, or any
of its subsidiaries, during the twelve (12) month period immediately
preceding the termination of his employment, provided the Company
continues to engage in such activities with respect to the Products
during the Restricted Period. The parties agree that the Company
currently conducts business in the following areas: 1)
immunomodulators for cancer and infectious disease and vaccine
adjuvants based on muramyl dipeptide technology, 2) polymerized
liposomes for oral/mucosal vaccine and drug delivery, and 3)
monoterpene-based compounds for the prevention and treatment of
cancer, and 4) delivery of iron chelators using Elan Corporation's
Medipad technology. For the avoidance of doubt, the parties agree that
"Products" shall include any technology and/or products that the
Company in-licenses during the term of Executive's employment
hereunder.
(B) During the period of the Executive's employment by the Company and for
a period of two (2) years thereafter, Executive will not, directly or
indirectly, employ, solicit for employment, or advise or recommend to
any other person that they employ or solicit for employment, any
employee of the Company.
(C) Notwithstanding any provision of this Section 8 to the contrary,
Executive may own no more than three percent (3%) of the total shares
of all classes of stock outstanding of any corporation having
securities registered with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
9. Termination
(A) Notwithstanding any provision of this Agreement to the contrary,
Executive's employment shall automatically terminate upon his death,
and the Company at any time may terminate his employment immediately
by giving him written notice of such termination (i) for cause, as
hereinafter defined; (ii) if Executive shall materially violate any of
the provisions of Section 7 or 8 hereof; or (iii) if Executive shall
become physically or mentally incapacitated and by reason thereof be
unable to perform his duties hereunder for a period of ninety (90)
consecutive days. For the purpose of clause (i) of this Subsection 9A,
"for cause" shall mean any of the following events: (x) conviction in
a court of law of any crime or offense involving money or other
property of the Company, or any of its subsidiaries, or any felony,
(y) violation of specific written directions of the President/CEO or
Board of Directors of the Company, provided, however, no discharge
shall be deemed "for cause" under this clause (y) unless Executive
shall have first received written notice from the President/CEO of the
Company advising of the acts or omissions that constitute such
violation, and such violation continues uncured for a period of (30)
days after Executive shall have received such notice, or (z)
intentional, reckless or grossly negligent conduct by Executive
constituting misconduct. Termination of Executive by the Company in a
circumstance other than one stipulated in this Subsection 9A shall
occur with 30 days written notice, provided that the Company may pay
Executive salary in lieu of any portion of such notice.
(B) Executive may terminate his employment with the Company upon thirty
(30) days written notice. If Executive terminates his Employment with
the Company pursuant to this Section 9B, Executive shall only be
entitled to any unpaid compensation accrued through the last day of
Executive's employment.
(C) In the event that (i) the Company terminates the employment of
Executive for any reason (other than "for cause" as defined or as a
consequence of Executive's violation of clause (ii) of Subsection 9A
above,) or (ii) Executive terminates his employment for Good Reason
within twelve (12) months after a Change in Control, then Executive
shall be paid any earned but unpaid bonus plus his then current salary
for a period of six (6) months following termination, subject to set
off for amounts earned from alternative employment. "Good Reason"
shall mean a material reduction in Executive's level of
responsibility, a reduction in his level of base salary or targeted
bonus level, or a proposed relocation without his consent by more than
50 miles from Lake Forest, IL. "Change in Control" shall have the same
meaning as in the Company's Amended and Restated 1995 Omnibus
Incentive Plan.
10. Successors: Binding Agreement
(A) 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 agreement in form
and substance satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such
succession had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its
business and /or assets as aforesaid which executes and delivers the
agreement provided for in this Section 10, or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation
of law. If the successor does not agree to be bound by this
agreement, and Executive is terminated, the Company will terminate
Executive as stipulated in Section 9(C).
(B) This Agreement, and all rights of the Executive hereunder, shall inure
to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while
any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no
such designee, to the Executive's estate. The Executive shall not be
entitled to assign any of his rights or obligations under this
Agreement.
11. Notice
For all purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to be effective upon personal delivery or fax or two
(2) days after deposit in the U.S. registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: If to the Employer:
000 Xxxxxxx Xx. 00000 X. Xxxxxxx Xxxxx
Xxxxxxxx, Xxx. 00000 Xxxx Xxxxxx, Xxx. 00000
Or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
12. Miscellaneous
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the parties hereto. No waiver by either party hereto at any time
of any breach by the other party hereto of, or in compliance with, any
condition or provision of 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 at 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 set
forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of Illinois.
13. Validity
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. Counterparts
This agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
15. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement, other than Sections 7 or 8, shall be settled exclusively by
arbitration, conducted before a panel of three arbitrators, in Chicago,
Illinois, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitration's
award in any court having jurisdiction. The expense of such arbitration
shall be borne by the Company. The parties agree that any dispute arising
out of or relating to Sections 7 or 8 shall be resolved in the State and/or
Federal courts located in Lake County, Illinois and the parties consent to
the jurisdiction of such courts.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Endorex Corporation
_________________ By: _________________
Attest Xxxxxxx X. Xxxxx
President/CEO
_________________
Xxxxx X. Xxxx
