EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of May
22, 1997, by and between Cell & Molecular Technologies, Inc., a Delaware
corporation having its principal offices at 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 (the "Company" or "Employer") and Xxxxxx X. Xxxxxxx, an
individual residing at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (the
"Employee").
INTRODUCTION
To provide for the best interests of the Company and the Employee, the
Company and Employee have agreed to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Employee and the Employee accepts such
employment as President and Chief Executive Officer ("CEO") of the Company.
2. TERM OF AGREEMENT.
This Agreement shall commence as of the date first written above (the
"Effective Date") and shall continue in effect for an initial term of 3 years;
provided, however, that it shall automatically renew for one additional year
upon expiration of such initial term (the initial term and renewal, if any,
being hereinafter referred to collectively as the 'Term") unless the Company or
Employee shall give written notice to the other that it or he does not wish to
extend this Agreement not later than 30 days prior to such renewal.
3. DUTIES.
Employee shall be employed under this Agreement as President and CEO of the
Company, with scientific responsibilities, and agrees to perform the duties
normally incidental to the position of President and CEO during the Term of this
Agreement.
4. SCOPE.
The Employee shall devote substantially full time to the business of the
Company during the Term of this Agreement. The Company acknowledges and supports
Employee's duties and
responsibilities under a part-time appointment as a senior research associate at
Columbia University, and Employee and the Company agree that Employee can
continue in such or a similar position during the Term hereof, provided the
Employee's duties in such position do not unreasonably interfere with Employee's
duties under this Agreement.
5. COMPENSATION AND BENEFITS.
During the Term of this Agreement, the Employee shall be entitled to the
following compensation and benefits.
(a) Base Salary. The Company shall pay to the Employee an annual
salary of One Hundred Fifty Thousand Dollars ($150,000) ("Base Salary") for
all services to be rendered by the Employee pursuant to this Agreement. The
Base Salary shall be paid in equal installments every two weeks.
(b) Employee Benefit and Retirement Programs. The Employee shall be
entitled to the benefits described in Exhibit I hereto and the management
employees shall be entitled to the benefits described in Exhibit 2 hereto.
(c) Expense Reimbursement. The Company shall reimburse the Employee
for all reasonable and necessary travel and entertainment expenses,
disbursements, and other reasonable and necessary incidental expenses
incurred for or on behalf of the Company, in addition to any fees, charges,
or costs for membership in business or professional organizations
reasonably approved by the Company, upon the presentation of appropriate
vouchers or other evidence of such expenditures. The Employee will not
incur any single expense in excess of $2,000 without the prior approval of
the Board of Directors or an appropriate committee thereof.
6. TERMINATION.
(a) Termination for Cause. Employer may terminate Employee's employment
hereunder for Cause. For purposes of this Agreement, "Cause" shall mean and be
limited to (i) the willful and continued failure by Employee to substantially
perform his duties hereunder (other than any such failure resulting from
Employee's incapacity due to physical or mental illness) after demand for
substantial performance is delivered by Employer specifically identifying the
manner in which Employer believes Employee has not substantially performed his
duties and the failure to correct such failure within 15 days of Employee's
receipt of such demand, or (ii) the willful engaging by Employee in criminal
misconduct which is injurious to Employer, monetarily or otherwise, and the
failure to correct such failure within 15 days of Employee's receipt of such
demand, or (iii) Employee is convicted by a court of competent jurisdiction or,
or pleads guilty or nolo contendere to, any felony involving the possession of
controlled substance, moral turpitude, theft or larceny,
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or (iv) the willful violation by Employee of the provisions of Section 8 hereof
provided that such violation results in material injury to Employer.
(b) Termination for Good Reason. Employee may terminate this Agreement for
"Good Reason". "Good Reason" shall mean the occurrence of any circumstance set
forth below, unless such circumstance is fully corrected within 30 days of
receipt by the Company of written notice of such circumstance from Employee:
(1) the assignment to Employee of "duties inconsistent with the
position of President and CEO of the Company," (as defined below), removal
of the Employee from the position of President and CEO of the Company, or a
substantial diminution in the nature or status of Employee's
responsibilities from those in effect as of the Effective Date, other than
pursuant to a merger or combination of the Company with another company in
a transaction approved by the vote of Employee in his capacity as a member
of the Board of Directors of the Company or as a shareholder of the
Company;
(2) a reduction by the Company of the Base Salary as in effect on the
effective date hereof;
(3) the deliberate failure by the Company to provide, within two weeks
of the date payment was required, the compensation, expense reimbursement,
or benefits specified in Section 5, provided Employee is not the person
responsible for payment of compensation, expense reimbursement or benefits;
and provided, further, that after the passage of two weeks from the date
payment was required, Employee shall have given written notice to Xxxxxxxxx
X. Xxxxx and Xxxxxx X. Xxxxxx at their addresses or fax machines as
provided in Section 9(j) (or as changed by notice to Employee) of such
failure by the Company, Employee shall have called a meeting of the Board
of Directors and such failure shall not have been completely cured by the
close of business two business days after such meeting of the Board of
Directors.
(4) any breach of Section 3.1 of the Shareholders Agreement which
continues more than 15 days after notice of such breach has been received
by Shareholders Xxxxx and Xxxxxx; or
(5) any purported termination of employment under this Agreement by
the Company which is not based on "Cause" under Section 6(a); for purpose
of this Agreement, no such purported termination shall be effective.
(c) Definition. Employee's duties at Molecular Cell Science, Inc. and
Specialty Media, Inc. prior to the date hereof related to executive scientific
management and executive business development shall not be deemed "duties
inconsistent with the position of President and CEO of the Company" as used in
Section 6(b)(1).
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(d) Death or Disability. Upon the (i) death of Employee, or (ii) the
permanent disability of Employee such that he is no longer capable of performing
his duties under this Agreement, the Company can terminate this Agreement after
ensuring payment of any applicable benefits provided in Section 5(b).
(e) Judicial Determination. If a court determines that "Good Reason" did
not exist for Employee's termination of this Agreement, Employee shall become
subject to the obligations under Section 8.
7. COMPENSATION UPON TERMINATION.
Upon termination of employment as provided herein during the term of this
Agreement, Employee shall be entitled to the following benefits:
(a) For Cause or Other Than Good Reason. If employment is terminated
by the Company for Cause, or by Employee other than for Good Reason,
Company shall pay to Employee the full Base Salary up to the date of
termination at the rate in effect at the time and shall pay any other
amounts payable to Employee up to the date of termination pursuant to any
other compensation plans, programs, or this Agreement. Upon such payment,
the Company shall have no further obligation to Employee under this
Agreement.
(b) Good Reason or Other than Cause, Death, or Disability. If
employment is terminated by the Employee for Good Reason or by the Company
other than for Cause, death, or disability, the Employee shall be entitled
to the benefits set forth below:
(1) The Company shall pay to Employee (i) the full Base Salary
through the date of termination at the rate in effect at the time and
no later than the loth business day following the date of termination;
and (ii) all other amounts to which Employee is entitled under this
Agreement or any compensation plan of the Company applicable to
Employee at the time such payments are due; and
(2) Employee shall be relieved of his obligations under Section
8.
8. NON-DISCLOSURE; NON-COMPETITION.
(a) Confidential Information. Subject to the disclosures and uses essential
to Employee's duties and responsibilities under the part-time position referred
to in Section 4, Employee shall not, to the detriment of Employer, knowingly use
for his own benefit or disclose or reveal to any unauthorized person, any trade
secret or other confidential information received by Employee in the course of
his employment or engagement in any capacity by Employer which relates to
Employer or to any of the businesses operated by it, including, but not limited
to, any scientific procedures or processes, customer lists, customer needs,
price and performance information, specifications, hardware, software, devices,
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supply sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, or other information relating to
the business of Employer, and Employee confirms that such information
constitutes the exclusive property of Employer. However, information shall not
be deemed to be confidential if it is: (i) generally available in the industry
in which Employer operates, (ii) a matter of common knowledge or public record
or is disclosed in published literature or (iii) obtained by Employee from a
third party without violation of any confidentiality agreement. Employee agrees
that, except as otherwise expressly agreed to by Employer, he will return to
Employer, promptly upon the request of the Board or any executive officer
designated by the Board, at the time his employment terminates, any physical
embodiment of such confidential information.
(b) Non-Competition. For a period of one year following the termination of
the Term, other than a termination by Employer without Cause, or a termination
by Employee for Good Reason, Employee shall not engage, directly or indirectly
(which includes, but is not limited to, owning, managing, operating,
controlling, being employed by, giving financial assistance to, participating in
or being connected in any material way with any business of the Company;
provided, however, that Employee's ownership as a passive investor of less than
one percent (1%) of the issued and outstanding stock of any publicly held
corporation or partnership so engaged shall not by itself be deemed to
constitute such engagement by Employee.
(c) Remedies. Employee recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his obligations
under this Section 8 are required of the reasonable protection of Employer and
Employee expressly acknowledges that damages alone will be an inadequate remedy
for any breach or violation of this Section 8, and that Employer, in addition to
all other remedies at law or in equity, shall be entitled, as a matter of right,
to injunctive relief, including specific performance, with respect to any such
breach or violation, in any court of competent jurisdiction. If any of the
provisions of this Section 8 are held to be in any respect an unreasonable
restriction upon Employee, then they shall be deemed to extend only over the
maximum period of time, geographic area, and/or range of activities as to which
they may be enforceable.
9. MISCELLANEOUS.
(a) General Interpretative Principles. For purposes of this Agreement,
except as expressly provided or unless the context otherwise requires (i) the
terms defined in this Agreement have the meanings assigned to them in the
provision in which they first appear and include the plural as well as the
singular, (ii) references herein to "Sections" or "Subsections" without
reference to a document are to designated Sections and "Subsections" of this
Agreement, and (iii) the words "herein" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision.
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(b) Indemnification. To the greatest extent not inconsistent with the laws
and public policies of the State of New Jersey, the Company hereby agrees to
indemnify and hold Employee harmless from and against any and all claims,
liabilities, cost, or expense (including reasonable attorney's fees) incurred by
Employee in connection with any investigation, hearing, or proceeding, whether
administrative or judicial, or in any forum whatsoever, (as such, a
"proceeding"), arising from or related to Employee's employment by Company or
performance of the duties hereunder. The Company shall pay for or reimburse the
Employee on a monthly basis for the reasonable expenses incurred by Employee in
connection with any such proceeding in advance of final disposition, within 10
business days of the submission by Employee of supporting documentation, subject
to first receiving from the Employee an unsecured written undertaking to return
such funds to the Company if a court determines that the Employee was not
entitled thereto. The indemnification and advancement of expenses provided
herein shall be applicable to any claims, investigation, hearing, or proceeding
arising from acts or omissions of Employee relating to his employment or
performance of the duties hereunder occurring before or after the Effective
Date. The obligations of this Section 9(b) shall survive the termination of this
Agreement.
(c) Cumulative Remedies. If either party breaches any provision in this
Agreement, the other party shall be entitled to pursue any remedy available in
law or in equity. The parties agree that remedies for breach of this Agreement
are cumulative.
(d) Successors, Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the parties and their legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. The Company shall require any successor hereto to assume and agree to
perform this Agreement in accordance with its terms. Failure of any successor to
so assume and agree shall entitle Employee to all rights and privileges
applicable to termination for "Good Reason."
(e) Notice. Notices, requests or other communications provided for herein
shall be given in writing, sent by hand delivery or by recognized overnight
delivery service or by registered or certified mail, return receipt requested,
with postage prepaid, or by fax. Such notices shall be addressed to the parties
at their respective addresses set forth on the first page of this Agreement, or,
if to Xx. Xxxxx, at 0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxx Xxxxx, XX 00000 (or to fax
number (000) 000-0000) and if to Xx. Xxxxxx, at 000 X. Xxxxxx, Xxxxx 000, Xxxxx,
XX 00000 (or to fax number (000) 000-0000), unless notice of a change of address
or fax is furnished in the manner provided in this Section 8(e). Any notice
which is required to be made within a stated period of time shall be considered
timely if delivered before midnight of the last day of such period.
(f) Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by the parties hereto. No waiver by any party hereto at any time
of any breach by any other party hereto of, or compliance with, any provision of
this Agreement to be performed by any
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other party shall be deemed a waiver of similar or dissimilar provision at the
same or at any prior or subsequent time.
(g) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. There are no
other written, oral, express, or implied agreements, understandings, or
representations between the parties except as have been expressly set forth in
this Agreement.
(h) Choice of Law. This Agreement shall be governed, construed and enforced
in accordance with the internal laws, and not the laws of conflicts, of the
State of New Jersey.
(i) Validity. The invalidity or unenforceability of any provision 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
CELL & MOLECULAR TECHNOLOGIES, INC.
By:
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Xxxxxxx Xxxxxxxxx, Vice-President
EMPLOYEE
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Xxxxxx X. Xxxxxxx
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