Exhibit 10.43
As of April 15, 1999
Xx. Xxxxxxx X. Xxxxxxx
c/o VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Dick:
This letter agreement amends, modifies, clarifies and restates in all
respects the agreements dated March 27, 1996 and October 30, 1996 between you
and VIMRx Pharmaceuticals Inc. (the "Company") as to the terms and conditions of
your employment by the Company.
1. Effective on the consummation of the acquisition of the interest
of Xxxxxx Healthcare Corporation in the Company's principal operating
subsidiary, Nexell Therapeutics Inc., you will act as Chairman and Chief
Executive Officer of the Company, and you will resign from the title of
President of the Company. In your capacity as Chairman and Chief Executive
Officer of the Company, you will report to the Company's Board of Directors. The
Company has caused you to be elected to its Board of Directors, as well as to
the Board of Directors of one or more subsidiaries of the Company, and, at the
option of the Board of Directors of the Company, you agree to serve, for no
additional compensation, as a Director of the Company and as a Director and/or
officer of any or all of its subsidiaries throughout the term of your
employment.
2. The term of your employment commenced on March 27, 1996, and shall
continue until terminated under the provisions of Paragraph 6 below. You are a
full-time employee of the Company and agree to devote your business and
professional time, energy and skills to the affairs of the Company and its
subsidiaries and to serve the Company faithfully and to the best of your
ability.
3. (a) As compensation for the services to be rendered by you
hereunder, the Company will pay you (i) a base salary of $200,000 per annum
(effective July 1, 1999), payable in installments in accordance with the
Company's regular payroll practices, and (ii) an annual cash bonus to be
determined in accordance with the provisions of subparagraph 3(d).
(b) You agree that effective April 15, 1999:
(i) the Incentive Stock Option Agreement to purchase
156,064 shares of the Company's Common Stock and that portion of the Non-
Incentive Stock Option Agreement to purchase 43,936 shares of the Company's
Common Stock, each between
you and the Company and dated March 28, 1996 are hereby terminated in
consideration of the (x) grant to you under the 1990 Incentive and Non-Incentive
Stock Option Plan of an incentive stock option to purchase 200,000 shares of the
Company's Common Stock at $1.50 per share exercisable 33 1/3 % on October 15,
1999, 33 1/3 % on June 30, 2000 and 33 1/3 % on January 31, 2001 pursuant to the
terms of the Incentive Stock Option Agreement attached hereto, and (y) the
amendment of the Non-Incentive Stock Option Agreement between you and the
Company dated March 28, 1996 to change the exercise price thereunder with
respect to 600,000 shares from $2.5625 per share to $1.50 per share, pursuant to
the terms of the Amendment to March 28, 1996 Non-Incentive Stock Option
Agreement attached hereto.
(ii) All shares subject to the options will be registered on
Form S-8 as soon as practicable after the Board of Directors approves such
registration.
(c) You will be eligible to participate in the Company's
medical, dental, life and long-term disability insurance and other benefit
programs, including any 401(k) or other retirement plans, from time to time in
effect for the Company's senior executives, your participation in any such plans
to be in accordance with their respective terms and conditions. In lieu of
participation in the Company's medical and dental plans (if any) you may elect
to receive a $500 monthly allowance therefor.
(d) Your performance will be reviewed annually by the Company's
Board of Directors, in connection with which your annual cash bonus and possible
increases in your base compensation for the future will be discussed, it being
understood that any such decisions shall be within the discretion of the
Company's Board of Directors and/or its Compensation Committee (or other similar
committee duly appointed by the Company's Board of Directors). However, it is
further understood that the annual cash bonus is initially targeted at at least
33% of base compensation, assuming satisfactory performance. Notwithstanding the
foregoing, no bonus will be paid in 1999 in respect of calendar year 1998.
4. You will be entitled to take up to an aggregate of four weeks of
vacation each calendar year as business conditions permit, it being understood
that no more than one week of unused vacation per year of service with the
Company may be carried over to the succeeding year. The Company shall not be
required to provide any additional compensation to you for vacation time not
utilized by you.
5. (a) The Company will reimburse you for all reasonable and
documented business expenses incurred by you on behalf of the Company during the
term of your employment hereunder (including travel from Wilmington, Delaware to
Irvine, California) consistent with the Company's expense reporting policy (as
the same may be modified from time to time). Notwithstanding anything herein to
the contrary, the provisions of this Paragraph 5(a) shall survive the effective
date of termination of this Agreement for a period of six months.
(b) The Company will pay the cost of renting an apartment for
your use in the Irvine, California area, and will pay or reimburse you for your
living expenses in the Irvine, California area. In addition, the Company will
pay or reimburse you for the expenses
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of one trip per calendar quarter from Wilmington, Delaware to Irvine, California
and return for your spouse.
6. (a) Your employment hereunder may be terminated at any time by
the Company for Cause (as such term is hereinafter defined) or, upon at least 60
days' prior written notice by you or by the Company, without cause.
(b) In the event your employment is terminated by the Company
without Cause, this Agreement shall terminate immediately on the effective date
of termination of your employment; provided, however, that:
(i) you will be paid six months' base salary as severance
in monthly installments (in arrears) beginning the first full month following
the cessation of your employment with the Company; and
(ii) you will be entitled to receive any accrued but unpaid
salary earned by you through the effective date of such termination.
(c) No severance shall be paid or payable to you in the event
your employment is terminated for Cause, or you voluntarily resign from your
employment with the Company, in which events this Agreement shall terminate
immediately upon the effective date of termination of your employment or upon
the effective date of your resignation, respectively; provided, however, that
the Company shall nonetheless be obligated to pay you any accrued but unpaid
salary earned by you through the date of such termination.
(d) For purposes of this Agreement, termination for "Cause"
shall mean termination due to any or more of the following: (i) if you are
indicted for committing a felony or a decision or determination is rendered by
any court or governmental authority that you have committed any act involving
fraud, willful misconduct, dishonesty, breach of trust or moral turpitude; (ii)
if you willfully breach your duty of loyalty to, or commit an act of fraud or
dishonesty upon, the Company; (iii) if you demonstrate gross negligence or
willful misconduct in connection with your employment; (iv) if, in the
reasonable, good faith opinion of a majority of the Company's whole Board of
Directors (excluding yourself, if you shall then be a director of the Company),
you engage in personal misconduct of such a material nature as to render your
presence as Chairman and Chief Executive Officer detrimental to the Company or
its reputation and you fail to cure the same within five days after notice
thereof from the Company; or (v) if you commit a material breach of or a default
under any of the terms or conditions of this Agreement and you fail to cure such
breach or default within ten days after prior written notice thereof from the
Company.
(e) Your employment hereunder shall terminate immediately upon
your death or "permanent disability" (as such term is hereinafter defined). In
either such event, this Agreement shall terminate immediately upon the cessation
of your employment; provided, however, you (or your legal representative, as the
case may be) will be entitled to receive any accrued but unpaid salary earned by
you through the date of such termination, plus
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severance in monthly installments (in arrears), beginning the first full month
following the date of such termination, in an aggregate amount equal to the
positive difference, if any, between (x) the base salary you would have received
hereunder for the six months immediately following such termination date had
your employment continued for such six month period, and (y) the total monies
paid or payable to you with respect to such six month period under the long-term
disability insurance policy or policies maintained by the Company for your
benefit, if any. For purposes of this Agreement, the term "permanent disability"
shall have the meaning set forth in the long-term disability insurance policy or
policies then maintained by the Company for the benefit of its employees, or if
no such policy shall then be in effect, or if more than one such policy shall
then be in effect in which the term "permanent disability" shall be assigned
different definitions, then the term "permanent disability" shall be defined for
purposes hereof to mean any physical or mental disability or incapacity which
renders you incapable of fully performing the services required of you in
accordance with your obligations hereunder for a period aggregating 120 days
during any twelve month period.
(f) In the event of occurrence of any of the following events,
you shall have the right to terminate your employment with the Company on at
least 60 days' notice. Subject to the foregoing provisions of this Paragraph 6,
in the event such notice is given by you within 30 days of any one or more of
such events, such termination of employment shall be deemed termination of your
employment by the Company without "cause" within the meaning of this Paragraph
6:
(i) a material breach of or default under this Agreement by
the Company which is not cured by the Company within ten (10) days after its
receipt of written notice thereof from you; or
(ii) a material reduction in your duties or a material
interference with the exercise of your authority by the Company's Board of
Directors (not arising from any physical or mental disability you may sustain)
which would be inconsistent with the position of Chairman and Chief Executive
Officer of the Company and the same shall not have been alleviated by the
Company's Board of Directors within ten (10) days after its receipt of written
notice thereof from you.
(g) Notwithstanding anything in Paragraphs 6(b) or 6(c) above to
the contrary:
(i) you shall not have any obligation to the Company to
mitigate any termination of your employment whereby you would be required by the
Company promptly to seek, procure or commence substitute employment; and
(ii) in the event you do seek, procure or commence such
substitute employment, none of the income derived or to be derived by you
therefrom shall be setoff by the Company against the balance of any severance
payments, if any, owing to you by the Company under this Agreement.
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7. You hereby agree that you shall not, directly or indirectly,
during the term of your employment hereunder and until the expiration of one
year after you cease to be so employed by the Company, own, manage, operate,
join, control or become employed by, or render any services of any advisory
nature or otherwise, or participate in the ownership, management, operation or
control of, or otherwise be connected in any manner with, any business
competitive with the business of the Company without the Company's prior written
consent.
8. (a) You further hereby covenant and agree that you will not at
any time during, or (a) for a period of three (3) years following the
termination of, your employment with the Company, reveal, divulge or make known
to any person or entity any secrets or confidential information (whether oral,
written, or electronically encoded) whatsoever, of or concerning the Company or
its business or anything connected therewith, all of which is and shall remain
the property of the Company and shall be returned by you to the Company
(including all copies) immediately upon any termination of your employment (or
earlier, if requested by the Company), or (b) for a period of three (3) years
following the termination of your employment with the Company, directly or
indirectly entice away from the Company's employment, retain or otherwise
engage, any employee of the Company.
(b) For purposes hereof, confidential information shall not
include any information which: (i) is or becomes generally available to the
public other than as a result of a wrongful disclosure by you or your
representatives; (ii) was known by you on a non-confidential basis prior to its
disclosure to you by the Company or its representatives; (iii) becomes available
to you from a source other than the Company or its representatives, provided
that such source is not bound by a confidentiality agreement with the Company or
its representatives and otherwise has a right to disclose the same; or (iv) is
required to be disclosed by any governmental or judicial authority, provided, in
such case, that you shall use your best efforts to notify the Company
immediately of any such requirement so that the Company shall have an
opportunity to contest it.
9. In the event of any breach or threatened breach by you of any one
or more of the provisions of Paragraphs 7 (relating to non-competition) or 8
(relating to non-disclosure and non-enticement of employees) above, the Company
will be entitled, in addition to any remedy hereunder or under any applicable
law or in equity, to an injunction restraining the breach of such provisions
hereof.
10. You agree that the Company may, in its discretion, apply for and
take out in its name and at its own expense, and solely for its benefit, key man
life insurance on you in any amount deemed advisable by the Company to protect
its interests, and you agree that you shall have no right, title or interest
therein and further agree to submit to any medical or other examination and to
execute and deliver any application or other instruments in writing reasonably
necessary to effectuate such insurance.
11. You represent and warrant that you are not under any obligation,
restriction or limitation, contractual or otherwise, to any other individual or
entity which would
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prohibit or impede you from performing your duties and responsibilities
hereunder, and that you are free to enter into and perform the terms and
provisions of this Agreement.
12. Notwithstanding anything herein to the contrary, the provisions
of Paragraphs 7, 8, 9 and 11 hereof shall expressly survive the expiration or
termination of this Agreement regardless of the reason for, or cause of, any
such termination.
13. All notices, requests, demands, and other communications provided
for by this Agreement shall be in writing and shall be either personally
delivered (including by couriers such as FedEx) or sent by pre-paid certified
mail, return receipt requested, addressed to the address stated below of the
party to which notice is given, or to such changed address as such party may
have fixed by notice given in accordance with the terms hereof:
TO THE COMPANY:
VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
TO XXXXXXX X. XXXXXXX:
Xxxxxxx X. Xxxxxxx *
_______________________
Xxxxxxxxxx, XX 00000
Any notice, sent as provided above, shall be deemed given upon receipt at the
address provided for above (or, in the event delivery is refused, the first date
on which delivery was tendered).
14. This Agreement contains the entire agreement and understanding
between the parties relating to the subject matter hereof and supersedes any and
all prior understandings, agreements and representations, written or oral,
expressed or implied, with respect thereto.
15. This Agreement may not be amended, modified, altered or
terminated (other than pursuant to its terms) except by an instrument in writing
signed by the parties.
16. This Agreement shall be binding upon the parties hereto and their
heirs, distributees, successors and assigns.
_______________________
* to be provided separately to the Company.
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17. In case any one or more of the provisions of this Agreement shall
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected thereby.
18. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely therein (without giving effect to the conflict of
law rules thereof).
19. Kindly indicate your agreement with the foregoing by
countersigning the enclosed duplicate copy of this letter agreement and
returning it to me on behalf of the Company.
On behalf of the Company, we look forward to a long and mutually rewarding
relationship.
Sincerely,
VIMRx Pharmaceuticals Inc.
By: ______________________________
ACCEPTED AND AGREED TO AS OF THIS
15th day of April, 1999
___________________________________
Xxxxxxx X. Xxxxxxx
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VIMRx PHARMACEUTICALS INC.
INCENTIVE STOCK OPTION AGREEMENT
----------------------
To: Xxxxxxx X. Xxxxxxx
We are pleased to notify you that by the determination of the Stock Option
Plan Committee (hereinafter the "Committee") an incentive stock option to
purchase 200,000 shares of the Common Stock of VIMRx Pharmaceuticals Inc.
(herein called the "Company") at a price of $1.50 per share has as of this 15th
day of April, 1999 been granted to you under the Company's 1990 Incentive and
Non-Incentive Stock Option Plan (herein called the "Plan"). This option may be
exercised only upon the terms and conditions set forth below.
1. Purpose of Option.
The purpose of the Plan under which this incentive stock option has been
granted is to further the growth and development of the Company and its
subsidiaries by encouraging key employees, directors, consultants, agents,
independent contractors and other persons who contribute and are expected to
contribute materially to the Company's success to obtain a proprietary interest
in the Company through the ownership of stock, thereby providing such persons
with an added incentive to promote the best interests of the Company, and
affording the Company a means of attracting to its service persons of
outstanding ability.
2. Acceptance of Option Agreement.
Your execution of this incentive stock option agreement will indicate your
acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to this option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in paragraph 4 hereof.
3. When Option May Be Exercised.
(a) The option granted you hereunder may not be exercised for a
period of six months from the date of its grant by the Committee as set forth
above. Thereafter, this option shall be exercisable as follows:
(i) at October 15, 1999, up to 33 1/3 % of the total shares
subject to the option;
(ii) at June 30, 2000, up to 66 2/3 % of the total shares
subject to the option;
(iii) at January 31, 2001, up to 100% of the total shares
subject to the option.
This option may not be exercised for less than ten shares at any one time (or
the remaining shares then purchasable if less than ten) and expires at the end
of 10 years from the date of grant whether or not it has been duly exercised
(hereinafter, the "Option Expiration Date"), unless sooner terminated as
provided in paragraphs 5, 6 or 7 hereof.
4. How Option May Be Exercised.
This option is exercisable by a written notice signed by you and delivered
to the Company at its executive offices, signifying your election to exercise
the option. The notice must state the number of shares of Common Stock as to
which your option is being exercised, must contain a statement by you (in a form
acceptable to the Company) that such shares are being acquired by you for
investment and not with a view to their distribution or resale (unless a
Registration Statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission) and must be accompanied by
cash or a check to the order of the Company for the full purchase price of the
shares being purchased unless exercised pursuant to the following "cashless
exercise" provision.
In lieu of paying for the shares purchasable under this option by cash or
check, you may (i) deliver previously owned shares of Common Stock with a fair
market value equal to the full purchase price of the shares being purchased
under this option, or (ii) request that the Company withhold shares of Common
Stock issuable upon exercise of this option with a fair market value equal to
the full purchase price of the shares being purchased under this option (thereby
reducing the number of shares issuable upon exercise of this option). For
purposes of this option, unless the Committee determines otherwise, the "fair
market value" of a share of Common Stock as of a certain date shall be the
closing sale price of the Common Stock on The Nasdaq Stock Market or, if the
Common Stock is not then traded on The Nasdaq Stock Market, such national
securities exchange on which the Common Stock is then traded, on the trading
date immediately preceding the date fair market value is being determined. The
Committee may make such other determination of fair market value, based on other
factors, as it shall deem appropriate.
If notice of the exercise of this option is given by a person or persons
other than you, the Company may require, as a condition to the exercise of this
option, the submission to the Company of appropriate proof of the right of such
person or persons to exercise this option.
Certificates for shares of the Common Stock so purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied with all requirements
of the Securities Act of 1933, the Securities Exchange Act of 1934, any stock
exchange on which the Company's Common Stock may then be listed and all
applicable state laws in connection with the issuance or sale of such shares or
the listing of such shares on said exchange. Until the issuance of the
certification for such shares, you or such other person as may be entitled to
exercise this option shall have none of the rights of a stockholder with respect
to shares subject to this option.
The Company shall have the right to require you, or such other person as
may be permitted to exercise this option, to remit to the Company an amount
sufficient to satisfy federal,
2
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for shares of Common Stock issuable upon exercise of
this option.
5. Termination of Employment.
If your employment with the Company (or a subsidiary thereof) is terminated
for any reason other than for Cause (as defined in any applicable employment
agreement between you and the Company) after October 15, 1999 the options shall
become immediately fully exercisable. If your employment with the Company or a
subsidiary thereof is terminated for any reason other than by death or
disability, you may exercise, within three months from the date of such
termination, that portion of the option which was exercisable by you at the date
of such termination, provided, however, that such exercise occurs no later than
the Option Expiration Date, and provided further that any portion of the option
not exercised by three months following termination shall be deemed a non-
incentive option and may be exercised until the Option Expiration Date.
6. Disability.
If your employment with the Company (or a subsidiary thereof) is terminated
by reason of your disability, you may exercise, within twelve months from the
date of such termination, that portion of this option which was exercisable by
you at the date of such termination, provided, however, that such exercise
occurs no later than the Option Expiration Date.
7. Death.
If you die while employed by the Company (or a subsidiary thereof) or
within six months after termination of your employment due to disability, that
portion of this option which was exercisable by you at the date of your death
may be exercised by your legatee or legatees under your Will, or by your
personal representatives or distributees, within twelve months from the date of
your death, but in no event after the Option Expiration Date.
8. Non-Transferability of Option.
This option shall not be transferable except by Will or the laws of descent
and distribution, and may be exercised during your lifetime only by you.
9. Adjustments upon Changes in Capitalization.
If at any time after the date of grant of this option, the Company shall,
by stock dividend, split-up, combination, reclassification or exchange, or
through merger or consolidation, or otherwise, change its shares of Common Stock
into a different number or kind or class of shares or other securities or
property, then the number of shares covered by this option and the price of each
such share shall be proportionately adjusted for any such change by the
Committee, whose determination shall be conclusive.
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10. Acceleration of Exercisability Upon Change in Control.
Upon the occurrence of a "change in control" of the Company (as defined
below), this option shall become immediately fully exercisable. For purposes of
this option, a "change in control" of the Company shall mean (i) the acquisition
at any time by a "person" or "group" (as such terms are used Sections 13(d) and
14(d)(2) of the Exchange Act of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities representing 50%
or more of the combined voting power in the election of directors of the then
outstanding securities of the Company or any successor or the Company; (ii) the
termination of service of directors, for any reason other than death, disability
or retirement from the Board of Directors, during any period of two consecutive
years or less, of individuals who at the beginning of such period constituted a
majority of the Board of Directors, unless the election of or nomination for
election of each new director during such period was approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of the period; (iii) approval by the stockholders of the Company of
any merger, consolidation, or statutory share exchange as a result of which the
Common Stock shall be changed, converted or exchanged (other than a merger,
consolidation or share exchange with a wholly-owned Subsidiary) or liquidation
of the Company or any sale or disposition of 80% or more of the assets or
earning power or the Company; or (iv) approval by the stockholders of the
Company of any merger, consolidation, or statutory share exchange to which the
Company is a party as a result of which the persons who were stockholders
immediately prior to the effective date of the merger, consolidation or share
exchange shall have beneficial ownership of less than 50% of the combined voting
power in the election of directors of the surviving corporation; provided,
however, that no change in control shall be deemed to have occurred if, prior to
such time as a change in control would otherwise be deemed to have occurred, the
Company's Board of Directors deems otherwise.
11. Subject to Terms of the Plan.
This incentive stock option agreement shall be subject in all respects to
the terms and conditions of the Plan and in the event of any question or
controversy relating to the terms of the Plan, the decision of the Committee
shall be conclusive.
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12. Cancellation of Prior Options.
You acknowledge that the incentive stock option previously granted to you
by the Company to purchase 156,064 shares and the non-incentive stock option
previously granted to you by the Company to purchase 43,936 shares, each dated
as of March 28, 1996, are hereby terminated and canceled and are of no further
force and effect.
Sincerely yours,
VIMRx PHARMACEUTICALS INC.
By:__________________________
Name:
Title:
Agreed to and accepted as of this
15th day of April, 1999.
_____________________________________
Signature of Optionee
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VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
As of April 15, 1999
Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Re: Amendment to March 28, 1996 Non-Incentive Stock Option Agreement
----------------------------------------------------------------
Dear Dick:
This letter constitutes an amendment to the Non-Incentive Stock Option
Agreement dated as of March 28, 1996, as amended to date, (the "Option
Agreement") between you and VIMRx Pharmaceuticals Inc. (the "Company") as
follows:
In consideration of your willingness to enter into a new employment
agreement with the Company, the parties hereto acknowledge and agree that (i)
the exercise price of the option with respect to 600,000 shares is changed from
$2.5625 per share to $1.50 per share; (ii) options with respect to 43,936 shares
are hereby terminated and canceled and are of no further force and effect, and
(iii) the reference in paragraphs 5 and 11(a) of the Option Agreement providing
the option must be exercised within three months following termination of
employment is deleted, so that such exercise must occur prior to the expiration
date of the option.
Except as expressly set forth herein, the Option Agreement shall remain in
full force and effect.
Please sign below in the space provided to signify your consent to the
foregoing amendment.
Very truly yours,
VIMRX PHARMACEUTICALS INC.
By:________________________________
I hereby acknowledge and agree to the foregoing amendment.
______________________________
Xxxxxxx X. Xxxxxxx
