EXHIBIT 10.37
-------------
AMENDED AND
RESTATED EMPLOYMENT
AGREEMENT dated as of
January 1, 1998, between
SYNAPTIC PHARMACEUTICAL
CORPORATION, a Delaware
corporation (the
"Company"), and XXXXXX X.
XXXXXX (the "Employee").
The Employee is currently employed by the Company and
possesses special and partic ular knowledge of the business and operations of
the Company and of the industry in which it operates. The Company and the
Employee are parties to an Employment Agreement dated as of January 1, 1994 (the
"Original Employment Agreement") the initial term of which expires on January 1,
1998. The Company and the Employee now desire to amend and restate herein the
terms of the Employee's employment by the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Employee,
and the Employee hereby accepts such employment by the Company, on the terms and
subject to the conditions hereinafter set forth.
2. Term. Subject to earlier termination as provided herein,
the employment of the Employee hereunder shall be for a four-year period
commencing on January 1, 1998 (the "Effective Date") and ending on the fourth
anniversary of the Effective Date; provided, however, that commencing as of such
fourth anniversary and on each anniversary thereafter, unless either party
hereto gives the other party at least 90 days' prior written notice of its or
his election not to extend the period of the Employee's employment hereunder,
such period shall automatically be extended for an additional one-year period on
the same terms and conditions set forth herein, unless otherwise agreed upon by
the parties. For convenience of reference, such period of employment, as the
same may be extended as aforesaid, is referred to herein as the "Employment
Period."
3. Duties. (a) During the Employment Period, the Employee
shall be employed as the Senior Vice President, Finance and Chief Financial
Officer of the Company and shall perform such duties for the Company consistent
with such position as may be assigned to him by the persons having authority
regarding such matters at the Company.
(b) The Employee shall perform his duties hereunder at the offices of the
Company in Paramus, New Jersey; provided, however, that the Company may require
the Employee to travel in connection with the performance of such duties.
Anything contained herein to the contrary notwithstanding, if the Company
requires the Employee to be based anywhere other than within a 50-mile radius of
New York City and notifies the Employee in writing that his continued employment
by the Company is conditional upon such relocation and the Employee refuses to
so
-1-
relocate, then any Termination of Employment of the Employee resulting
therefrom, whether initiated by the Company or by the Employee, shall constitute
a Termination Without Cause.
4. Time to be Devoted to Employment. Except for vacations in
accordance with the Company's vacation policies and absences due to temporary
illness, during the Employment Period, the Employee shall devote all of his
business time, attention and energies to the performance of his duties under
this Agreement. During the Employment Period, the Employee shall not be engaged
in any other business activity which, in the judgment of the Company, conflicts
with the duties of the Employee under this Agreement, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
5. Compensation; Reimbursement.
(a) Base Salary. During the Employment Period, the Company shall pay
to the Employee a base salary of $170,000 per annum, subject to increase by the
Board of Directors of the Company, in its discretion. For convenience of
reference, such base salary, as the same may be increased as aforesaid, is
referred to herein as the "Base Salary." The Base Salary shall be payable in
such installments (but not less frequent than monthly) as is the policy of the
Company generally with respect to its employees.
(b) Annual Performance Bonus. The Employee shall be eligible to
receive a cash bonus of at least $25,000 with respect to each calendar year
during the Employment Period, subject to the achievement of the goals determined
at the commencement of each year by the President of the Company. Such cash
bonus, if earned, will be payable to the Employee within forty-five days after
the end of the calendar year in respect of which such bonus is earned.
Additional bonuses may be approved by the Board of Directors of the Company, in
its discretion.
(c) Benefits. During the Employment Period, the Employee shall be
entitled to such benefits as are generally made available to other employees of
the Company and to such additional benefits as are generally made available to
employees of the Company at substantially the same level of employment as the
Employee.
(d) Reimbursement of Expenses. During the Employment Period, the
Company shall reimburse the Employee, in accordance with the policies and
practices of the Company in effect from time to time during such Period, for all
reasonable and necessary traveling expenses and other disbursements incurred by
him for or on behalf of the Company in connection with the perfor xxxxx of his
duties hereunder (such expenses being referred to herein as "Reimbursable
Expenses") upon presentation by the Employee to the Company of appropriate
documentation therefor.
6. Termination of Employment.
(a) General. The Company may terminate the Employee's employment
hereunder at any time for any reason. The Employee may terminate his employment
hereunder pursuant to a Resignation for Good Reason, a Voluntary Termination or
a Disability Termination.
-2-
The Employee's employment shall terminate automatically upon his death. Any
termination of the Employee's employment is referred to herein as a "Termination
of Employment."
(b) Termination Notice. The Company or the Employee may initiate a
Termination of Employment in any manner permitted hereunder by giving the other
party written notice thereof (the "Termination Notice").
(c) Termination Date. The effective date (the "Termination Date") of
any Termination of Employment shall be deemed to be the later of (i) the date on
which the Termination Notice is given and (ii) the date specified as the
effective date in the Termination Notice; provided, however, that in the case of
the Employee's death, the Termination Date shall be his date of death.
7. Termination by the Company.
(a) Termination for Cause. Any Termination of Employment initiated
by the Company upon the occurrence of an event that constitutes Cause shall be a
"Termination for Cause." For purposes of this Agreement, the term "Cause" shall
mean the Employee's (i) willful failure to perform those duties that the
Employee is required or expected to perform as an employee of the Company under
Section 2 hereof, (ii) consistent failure over a substantial period of time to
perform competently such duties, (iii) conviction of a crime involving moral
turpitude, dishonesty, theft, unethical business conduct or conduct that
significantly impairs the reputation of the Company or (iv) failure to devote
all of his business time, attention and energies to the performance of his
duties hereunder. In the event of a Termination for Cause, the Termination
Notice given to the Employee by the Company shall state that the Termination of
Employment is "for Cause."
(b) Termination Without Cause. Any Termination of Employment
initiated by the Company (other than a Termination for Cause or a Disability
Termination) shall be a "Termination Without Cause."
8. Termination by the Employee.
(a) Resignation for Good Reason. Any Termination of Employment
initiated by the Employee within 90 days following the occurrence of any of the
following events shall be a "Resignation for Good Reason":
(i) subsequent to a Change in Control, and without the
Employee's express written consent, (A) the assignment to the Employee
of any duties inconsistent with his position, duties, responsibilities
and status within the Company prior to such Change in Control, (B) any
material change in the Employee's titles or offices as in effect prior
to such Change in Control or (C) any removal of the Employee from or
any failure to re-elect the Employee to any material position held by
him prior to such Change in Control;
(ii) subsequent to a Change in Control, a reduction in the
Employee's Base Salary or a termination of the Employee's participation
in any bonus plan or program (or a
-3-
substantial reduction in the level of such participation) as in effect
on the Effective Date or as the same may be increased after the
Effective Date and in effect at the time;
(iii) subsequent to a Change in Control, and without the
Employee's express written consent, any requirement that the Employee
be based anywhere other than within a 50-mile radius of New York City;
(iv) subsequent to a Change in Control, the failure by the
Company to continue the Employee's participation in any benefit or
compensation plan, life insurance plan, health-and- accident plan or
disability plan in which the Employee is participating at the time of
such Change in Control (or in plans providing the Employee with
substantially similar or more favorable benefits) or the taking of any
action by the Company which would materially adversely affect the
Employee's participation in or materially reduce the Employee's
benefits under any of such plans or deprive the Employee of any
material fringe benefit enjoyed by the Employee at the time of such
Change in Control; or
(v) subsequent to a Change in Control, the failure by the
Company to obtain the assumption of the agreement to perform this
Agreement by any successor as contemplated by Section 16.
In the event of a Resignation for Good Reason, the Termination Notice given to
the Company by the Employee shall state that the Termination of Employment is a
"Resignation for Good Reason."
(b) Other Termination by the Employee. Any Termination of
Employment initiated by the Employee (other than a Termination of Employment
resulting from the Employee's death, a Resignation for Good Reason or a
Disability Termination) shall be a "Voluntary Termination."
9. Termination by the Company or by the Employee -- Disability
Termination. Any Termination of Employment resulting from the Employee's
Disability shall be a "Disability Termination." For purposes of this Agreement,
the term "Employee's Disability" shall mean the Employee's illness or other
physical or mental disability that prevents the Employee from performing his
duties hereunder for a period of 90 days in any 180-day period. In the event of
a Disability Termination, the Termination Notice given to one party by the other
party shall state that the Termination of Employment is a "Disability
Termination."
10. Effect of Termination of Employment. (a) In the Event of a
Termination of Employment (other than a Termination of Employment contemplated
by Section 11(a)), neither the Employee nor his estate or beneficiaries shall
have any further rights or claims against the Company under this Agreement
except the right to receive:
(i) the portion of the Base Salary which accrued with respect
to the period prior to the Termination Date but which remained unpaid
as of the Termination Date;
-4-
(ii) the aggregate amount of Reimbursable Expenses which were
incurred prior to the Termination Date but which were not reimbursed by
the Company as provided in Section 5(d) prior to the Termination Date;
and
(iii) any other benefits to which the Employee may be entitled
upon such Termination of Employment under the plans, programs and
policies of the Company then in effect, which benefits shall be payable
in accordance with the terms of such plans, programs and policies;
provided, however, that if the Termination of Employment is pursuant to a
Termination Without Cause, then, in addition to the amounts computed pursuant to
the foregoing provisions of this Section 10(a), the Employee shall have the
right to receive as severance compensation an amount (the "Severance Amount")
equal to 50% of one year's Base Salary, such Severance Amount to be payable at
the same times at which and in the same manner in which the Base Salary would
have been payable to the Employee had the Termination of Employment not
occurred.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 10 by seeking other employment or
otherwise, and no payment or benefit provided for in this Section 10 shall be
reduced by compensation earned by the Employee as a result of his employment by
another employer following the Termination Date, or otherwise.
11. Effect of Termination of Employment following a Change in
Control. (a) In the event that the Employee's employment with the Company is
terminated in contemplation of, or at any time within one year following, a
Change in Control, and such termination constitutes a Termination Without Cause
or a Resignation for Good Reason, neither the Employee nor his estate or
beneficiaries shall have any further rights or claims against the Company under
this Agreement other than the following:
(i) the right to receive all amounts and benefits to which the
Employee would be entitled under Section 10 upon a Termination of
Employment; and
(ii) all stock options, stock bonus awards and restricted
stock grants relating to securities of the Company held by the Employee
on the Termination Date shall vest or become exercisable, as the case
may be, on the Termination Date, notwithstanding any provisions in any
such stock options, stock bonus awards or restricted stock grants or
the plans covering the same to the contrary, and all rights to exercise
such stock options shall remain exercisable by the Employee for a
period of not less than 120 days after the Termination Date.
If the benefits payable hereunder, together with other payments in the nature of
compensation to or with respect to the Employee, would otherwise be subject to
the excise taxes imposed under Section 280G of the Internal Revenue Code of
1986, as amended ("Code"), and if the net value of such benefits and payments in
the nature of compensation, after reduction for such taxes, is less than the
aggregate value of the benefits and payments in the nature of compensation
determined as if such amounts had been $1.00 less than a maximum amount which
could be paid without imposition of
-5-
excise taxes, then the benefits payable hereunder shall be reduced to highest
amount such that such excise taxes shall not be imposed with respect to the
benefits or the other payments in the nature of compensation. It is the
intention of this provision to reduce benefits payable hereunder only if the
Employee would be in a superior position taking into account such excise taxes
than if such payments were made, and such reduction shall, in any event, be the
least amount in order that the Employee be better off with the reduction than
before such reduction. The calculation of the value of benefits payable
hereunder and other payments in the nature of compensation, and the implications
of the excise tax rules of Section 280G of the Code, shall be determined by the
Company in good faith based on written advice of a national accounting firm.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 11 by seeking other employment or
otherwise, and no payment or benefit provided for in this Section 11 shall be
reduced by compensation earned by the Employee as a result of his employment by
another employer following the Termination Date, or otherwise.
(c) As used herein, the term "Change in Control" shall mean a
change in control of the Company of a nature that would be required to be
reported in response to Item 1 of Form 8-K promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), if the Company were at that
time subject to such reporting requirements of the Exchange Act; provided,
however, that such term shall in any event be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
35% or more of the combined voting power of the Company's then outstanding
securities or (ii) during any one-year period or any period of two consecutive
years, individuals who at the beginning of any such period constitute the Board
of Directors of the Company cease for any reason to constitute at least a
majority thereof as of the end of such period unless the election, or the
nomination for election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors of the Company then
still in office who were directors at the beginning of such period.
12. Notices. All notices or other communications that are
required or permitted hereunder shall be in writing and shall be deemed to have
been given if (a) personally delivered or sent by telecopier, (b) sent by
nationally-recognized overnight courier or (c) sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
if to the Employee, to him at:
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
-6-
if to the Company, to it at:
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been received (i) when delivered, if
personally delivered, sent by telecopier or sent by nationally-recognized,
overnight courier and (ii) on the third Business Day following the date on which
the piece of mail containing such communication is posted, if sent by mail. As
used herein, the term "Business Day" means a day that is not a Saturday, a
Sunday or a day on which banking institutions in the city to which the notice or
communication is to be sent are not required to be open.
13. Entire Agreement; Amendments. This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior or contemporaneous negotiations, correspondence,
understandings and agreements between the parties with respect thereto,
including, without limitation, the Original Employment Agreement. This Agreement
may be amended only by an agreement in writing signed by both parties hereto.
Anything contained herein to the contrary notwithstanding, the provisions of
Sections 10 and 11 shall survive the expiration or early termination of the
Employment Period.
14. Assignment. This Agreement is personal in its nature.
Accordingly, neither party hereto shall, without the consent of the other,
assign this Agreement or any rights or obligations hereunder to any other person
or entity.
15. Benefits of Agreement. The provisions of this Agreement
shall be binding upon and inure to the benefit of the heirs, beneficiaries,
executors, administrators and permitted assigns of the Employee and the
successors and permitted assigns of the Company.
16. Obligation of the Company's Successors. Any successor to
substantially all of the Company's assets and business, whether by merger,
consolidation, purchase of assets or otherwise, shall succeed to the rights and
obligations of the Company hereunder. The Company shall require any such
successor, by agreement in form and substance satisfactory to the Employee, 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 it if no such
succession had taken place. The failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Employee to receive from the Company or its
successor the same amounts and benefits that the Employee would be entitled to
receive under Sections 11(a)(i) and 11(a)(ii) upon a Resignation for Good
Reason. For purposes of implementing the immediately preceding sentence, the
date on which any such succession becomes effective shall be deemed the
Termination Date.
-7-
17. Waiver of Breach. A waiver of any breach of any provision
of this Agreement shall not constitute or operate as a waiver of any other
breach of such provision or of any other provision, and any failure to enforce
any provision hereof shall not operate as a waiver of such provision or of any
other provision.
18. Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
19. Headings. The headings of sections in this Agreement
are for convenience only, are not a part of this Agreement and shall not affect
the construction of the provisions of this Agreement.
20. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New Jersey
without giving effect to principles of conflicts of laws.
21. Enforceability. In the event that any provision of this
Agreement is determined to be partially or wholly invalid, illegal or
unenforceable in any jurisdiction, then such pro vision shall, as to such
jurisdiction, be modified or restricted to the extent necessary to make such
provision valid, binding and enforceable, or, if such provision cannot be
modified or restricted, then such provision shall, as to such jurisdiction, be
deemed to be excised from this Agreement; provided, however, that the binding
effect and enforceability of the remaining provisions of this Agreement, to the
extent that the economic benefits conferred upon the parties by virtue of this
Agreement remain substantially unimpaired, shall not be affected or impaired in
any manner, and that any such invalidity, illegality or unenforceability with
respect to such provisions shall not invalidate or render unenforceable such
provision in any other jurisdiction.
-8-
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
-9-
