EXHIBIT 10.23
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT dated as of October 15, 2002 is made by and between GenVec,
Inc. (the "Company"), and Xxxxxx X. Xxxxx (the "Executive").
WHEREAS the Company considers it essential to its best interests and to the
best interests of its stockholders to xxxxxx the continuous employment of its
key management personnel; and
WHEREAS the Company has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of the
Company's management, including the Executive, to their assigned duties.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. DEFINED TERMS. Capitalized terms shall have the meaning provided in
this Agreement.
2. TERM OF AGREEMENT. Subject to section 4.15, this Agreement shall
become effective as of the date hereof and shall remain in effect indefinitely
thereafter provided, however, that the Company may terminate this Agreement by
giving the Executive at least 12 months advance written notice of such
termination.
3. SEVERANCE BENEFITS.
(a) In order to induce the Executive to continue to serve as an employee of
the Company, the Company agrees, under the terms and conditions set forth
herein, that the Company shall provide to the Executive the benefits described
in Sections 3.1 and 3.2 below (the "Severance Benefits"), if the Company
terminates the Executive's employment without Cause and other than by reason of
death or disability.
(b) For purposes of this Agreement, Cause shall mean:
(a) the willful and continued failure of the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness);
(b) the willful engaging by the Executive in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Company;
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(c) personal dishonesty or breach of fiduciary duty to the
Company that in either case results or was intended to result in personal profit
to the Executive at the expense of the Company; or
(d) willful violation of any law, rule or regulation (other
than traffic violations, misdemeanors or similar offenses) or cease-and-desist
order, court order, judgment or supervisory agreement, which violation is
materially and demonstrably injurious to the Company.
For purposes of the preceding clauses, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith and without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon prior approval given by the Board or upon the
instructions or with the approval of the Executive's superior or based upon the
advice of counsel for the Company, shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.
3.1 SEVERANCE PAYMENT. In lieu of any further salary payments to
the Executive for periods subsequent to the Executive's date of termination of
employment with the Company (the "Date of Termination"), the Company shall
continue to pay to the Executive the Executive's base salary for a 12 month
period. Such continued base salary shall be paid in a manner consistent with the
then current payroll practices of the Company.
3.2 CONTINUED BENEFITS. For a 12 month period beginning on the
Executive's Date of Termination (the "Benefits Period"), the Company shall
provide Executive with life insurance and health insurance (together, "Welfare
Benefits") under the Company's employee benefit plans and policies. During the
Benefits Period, the Executive shall be entitled to elect to change Executive's
level of coverage and/or Executive's choice of coverage options (such as the
Executive only or family medical coverage) with respect to the Welfare Benefits
to be provided by the Company to the Executive to the same extent that active
employees of the Company are permitted to make such changes; provided, however,
that in the event of any such changes, the Executive shall pay the amount of any
cost increase that would actually be paid by an active employee of the Company
by reason of making the same changes in Executive's level of coverage or
coverage options. In the event that the Executive becomes employed by a new
employer and is eligible to receive health insurance and/or other welfare
benefits ("New Coverage"), the Welfare Benefits coverage provided under this
Section 3.2 shall be secondary to such New Coverage.
3.3 PRO RATA BONUS. The Company shall pay to the Executive a lump
sum cash payment equal to the product of (x) the bonus paid to the Executive for
the fiscal year preceding the Executive's Date of Termination, divided by twelve
(12) and multiplied by (y) the number of months of service during the year of
termination.
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4. MISCELLANEOUS.
4.1 NON-DISPARAGEMENT. Executive agrees that Executive will not
make or publish any adverse, disparaging, untrue, or misleading statement or
comment about the Company or any of its officers, directors, employees, or
agents. The Company agrees that it will not make or publish any adverse,
disparaging, untrue, or misleading statement or comment about Executive.
4.2 NON-COMPETE.
(a) Executive acknowledges that, as a result of Executive's positions
with the Company Executive has access to information with respect to the
development, implementation and management of the Company's business strategies
and plans, including those which involve the Company's finances, manufacturing,
marketing, operations, industrial relations and acquisitions. Accordingly,
during the period of Executive's employment with the Company and for a period of
12 months thereafter, Executive agrees that Executive shall not, directly or
indirectly, in any capacity, carry on, be engaged in, assist, consult for or
have any financial or other interest in any business which is in competition
with the business of the Company (provided that a financial interest of not more
than two percent (2%) in any company which is publicly traded and whose shares
are listed on a national stock exchange or as quoted on NASDAQ shall be
permitted). In addition, Executive shall not, on Executive's behalf or on behalf
of any firm, partnership, corporation or any other person or entity, directly or
indirectly, during the twelve month period following Executive's termination of
employment from the Company, for any reason whatsoever, solicit or offer
employment to any person who has been employed by the Company at any time during
the twelve months immediately preceding such solicitation. For purposes of this
Section 4.2, a business shall be deemed to be in competition with the business
of the Company if it is principally involved or if it has proposed to become
principally involved in the purchase, sale or other dealing in any property or
product or the rendering of any service purchased, sold, dealt in or rendered,
by the Company as a material part, or expected material part, of the business of
the Company.
(b) The Executive and the Company agree that this covenant not to
compete and the covenant not to solicit are reasonable covenants under the
circumstances, Executive has been adequately compensated for such covenants, and
further agree that if in the opinion of any court of competent jurisdiction such
restraint is not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of this
covenant as to the court shall appear not reasonable and to enforce the
remainder of the covenant as so amended.
4.3 NONDISCLOSURE. During the Executive's employment with the
Company and thereafter, the Executive shall not disclose or use in any way any
confidential business or technical information or trade secret acquired in the
course of such employment, other than (i) information that is generally known in
the Company's industry or acquired from public sources, (ii) as required in the
course of such
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employment, (iii) as required by any court, supervisory authority administrative
agency or applicable law, or (iv) with the prior written consent of the Company.
4.4 NO MITIGATION. The Company agrees that, if the Executive's
employment by the Company is terminated in a manner that results in the
Executive becoming entitled to the Severance Benefits, the Executive shall not
be required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to this Agreement.
Except to the extent provided in Section 3.2 hereof, the amount of any payment
or benefit provided for under this Agreement shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer or by retirement benefits.
4.5 SUCCESSORS. In addition to any obligations imposed by law upon
any successor to the Company, the Company shall be obligated to require any
successor (whether direct or indirect and whether by merger, consolidation,
operation of law, or otherwise) to the Company to expressly assume this
Agreement and the obligations hereunder. In the event of such a succession,
references to the "Company" herein shall thereafter be deemed to include such
successor.
4.6 DEATH. This Agreement 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 shall die while any amount or benefit would still be payable or
required to be provided to the Executive hereunder if the Executive had
continued to live, all such amounts and benefits, unless otherwise provided
herein, shall be paid or provided in accordance with the terms of this Agreement
to the executors, personal representatives or administrators of the Executive's
estate.
4.7 NOTICES. For the purpose of this Agreement, notices and all
other communications shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall
be effective only upon actual receipt:
To the Company:
GenVec, Inc.
00 Xxxx Xxxxxxx Xxxx Xxxx,
Xxxxxxxxxxxx, XX 00000
Attention: Director of Human Resources
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To the Executive:
Xxxxxx X. Xxxxx
GenVec, Inc.
00 Xxxx Xxxxxxx Xxxx Xxxx,
Xxxxxxxxxxxx, XX 00000
4.8 MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board or its delegee. The Company's or the
Executive's failure to insist upon strict compliance with the terms of this
Agreement or the failure of the Company or the Executive to assert any right the
Company or the Executive may have hereunder shall not be deemed a waiver of such
provision or right or any other provision of this Agreement.
4.9 ENTIRE AGREEMENT. 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 expressly set forth in this Agreement.
4.10 APPLICABLE LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Maryland without regard to principles of conflicts of laws thereof.
4.11 WITHHOLDING. The Severance Benefits shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
4.12 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.
4.13 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement
shall be deemed to give the Executive the right to be retained in the employ of
the Company, or to interfere with the right of the Company to discharge the
Executive at any time and for any lawful reason, subject in all cases to the
terms of this Agreement.
4.14 NO ASSIGNMENT OF BENEFITS. Except as otherwise provided herein
or by applicable law, no right or interest of the Executive under this Agreement
shall be assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by execution, levy,
garnishment, attachment, pledge or in any manner; no attempted assignment or
transfer thereof shall be effective.
4.15 TERMINATION OF AGREEMENT. In the event Executive becomes
entitled to any severance benefits under Section 3 of the Change in Control
Agreement
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between the Company and the Executive dated October 15, 2002, this Agreement
shall be superceded and of no further force and effect.
4.16 HEADINGS. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Agreement,
and shall not be employed in the construction of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
officer, thereunto duly authorized, and the Executive has executed this
Agreement, all as of the day and year first above written.
GENVEC, INC.
/s/Xxxx X. Xxxxxxx
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By: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
EXECUTIVE:
/s/Xxxxxx X. Xxxxx
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