EXHIBIT 10.1(c)
EMPLOYMENT AGREEMENT
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XX. XXXXXXX X. IP AND AMERICAN BIOGENETIC SCIENCES, INC.
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AGREEMENT, dated as of the 16th day of December, 1996, by and between
AMERICAN BIOGENETIC SCIENCES, INC., a Delaware corporation, having a place of
business at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter designated
and referred to as "Company"), and Xxxxxxx X. Ip, Ph.D. of 00 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter designated and referred to as
"Employee").
WHEREAS, the Company desires to employ the Employee in the capacity of
Executive Vice President of the Company; and
WHEREAS, Employee is willing to accept such employment by the Company, all
in accordance with provisions hereinafter set forth.
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three (3)
years commencing January 1, 1997 and automatically terminating on December 31,
1999 subject to earlier termination as provided herein or unless extended by
mutual consent of both parties in writing four (4) months prior to the end of
the term of this Agreement or any extension thereof, but nothing herein shall
require the Company to agree to any specific term or condition or to any
continuation of your employment beyond December 31, 1999.
2. Employment: Subject to the terms and conditions and for the compensation
hereinafter set forth, the Company employs the Employee for and during the term
of this Agreement. Employee is hereby employed by the Company as its Executive
Vice President, his powers and duties of an executive nature which are
appropriate for an Executive Vice President shall be determined only by the
Chairman of the Board or the Board of Directors or their duly authorized
designee, from time to time; and the Employee does hereby accept such employment
and agrees to use his best efforts and to devote all his normal business time,
during the term of this Agreement, to the performance of his duties faithfully,
diligently and to the best of his abilities upon the conditions hereinafter set
forth. Employee shall report to the Chairman of the Board and Board of Directors
(collectively hereinafter referred to as the "Board") of the Company.
3. Compensation: During the term of this Agreement, the Company agrees to
pay Employee, and Employee agrees to accept, an initial first year annual salary
of One Hundred and Fifty Thousand Dollars ($150,000.00) per year less all
applicable taxes, payable every two weeks, for all services rendered by Employee
hereunder including being a Director of the Company if elected to the Board of
Directors. In addition, the Employee shall receive a one time sign on payment of
Twenty Five Thousand Dollars ($25,000) payable on July 1, 1997 provided Employee
is still an Employee and has not given notice of termination in accordance with
Section 12[E]. The Employee shall be entitled to an annual bonus of up to twenty
percent (20%) of his annual salary based on goals mutually agreed to between the
parties.
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4. Expenses: The Company shall reimburse Employee, not less often than
monthly, for all reasonable and actual business expenses incurred by him in
connection with his service to the Company, upon submission by him of
appropriate vouchers and expense account reports. Specially, but without
limitation, Employee shall be paid his reasonable expenses on trips to Long
Island, New York.
5. Benefits: In addition to the salary to be paid to Employee hereunder,
the Company shall provide medical and dental insurance and allow the Employee to
participate in any disability, pension, retirement or other qualified plans
adopted for the benefit of its employees, and in accordance with the Company's
Plan(s). The Employee shall be entitled to a two (2) weeks annual vacation.
6. Extent of Service: The Employee during the term of this Agreement shall
devote his full normal business time, attention and energy and render his best
efforts and skill to the business of the Company.
7. Restrictive Covenant: (A) Employee acknowledges that (i) the business in
which the Company is engaged is intensely competitive and that his employment by
the Company will require that he have access to and knowledge of confidential
information of the Company, including, but not limited to, certain of the
Company's confidential plans for the creation, acquisition or disposition of
products, expansion plans, product development plans, financial status, and
plans and personnel information and trade secrets, which are of vital importance
to the success of the Company's business; (ii) the direct or indirect disclosure
of any such confidential information to existing or potential competitors of the
Company would place the Company at a competitive disadvantage and would cause
damage, financial and otherwise, to the Company's business; and (iii) by his
training, experience and expertise, some of his services to the Company will be
special and unique. (B) Employee agrees that, during the term of this Agreement
and if the Agreement is terminated by the Company for cause, for a period of one
(1) year after the termination of this Agreement, he will not directly or
indirectly become affiliated as an officer, director, employee or consultant or
as a substantial security holder with any other company or entity in a business
which is directly competitive with any business then being conducted by the
Company or its subsidiaries within the Continental United States or in countries
abroad participating in the Company's Global Network. For the purpose hereof,
"substantial security holder" shall mean ownership, directly or indirectly, of
more than 5% of any class of securities of a company or partnership interest in
any partnership.
8. Discoveries, etc.:
[A] The Company shall be the owner, without further compensation, of all
rights of every kind in and with respect to any reports, materials, inventions,
processes, discoveries, improvements, modifications, know-how or trade secrets
hereafter made, prepared, invented, discovered, acquired, suggested or reduced
to practice (hereinafter designated and referred to as "Property Rights") by
Employee in connection with Employee's performance of his duties pursuant to
this Agreement, and the Company shall be entitled to utilize and dispose of such
in such manner as it may determine.
[B] The Employee agrees to and shall promptly disclose to the Board all
Property Rights (whether or not patentable) made, discovered or conceived of by
him, alone or with others, at any time during his employment with the Company.
Any such Property Rights will be the sole and exclusive property of the Company,
and Employee will execute any assignments requested by the Company of his right,
title or interest in any such Property Rights. In addition, the Employee will
also provide the Company with any other instruments or documents requested by
the Company, at the Company's expense, as may be necessary or desirable in
applying for and obtaining patents with respect thereto in the United States and
all foreign
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countries. The Employee also agrees to cooperate with the Company in the
prosecution or defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, services marks, secret
processes, discoveries or improvements, whether or not he is employed by the
Company at the time.
9. Confidential Information: Employee recognizes and acknowledges that the
Company, through the expenditure of considerable time and money, will acquire,
has developed and will continue to develop in the future, information, skills,
confidential information, know-how, formulae, technical expertise and methods
relating to or forming part of the Company's services and products and conduct
of its business, and that the same are confidential and proprietary, and are
"trade secrets" of the Company. Employee understands and agrees that such trade
secrets give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on keeping
confidential both the trade secrets already developed or to be acquired and any
future developments of trade secrets. Employee understands that in his capacity
with the Company he will be entrusted with knowledge of such trade secrets and,
in recognition of the importance thereof and in consideration of his employment
by the Company hereunder, agrees that he will not, without the consent of the
Board, make any disclosure of trade secrets now or hereafter possessed by the
Company to any person, partnership, corporation or entity either during or after
the term hereunder, except to such employees of the Company or its subsidiaries
or affiliates, if any, as may be necessary in the regular course of business and
except as may be required pursuant to any court order, judgment or decision from
any court of competent jurisdiction. The provisions of this Section shall
continue in full force and effect notwithstanding any termination of this
Agreement.
10. Irreparable Harm: Employee agrees that any breach or threatened breach
by Employee of provisions set forth in Sections seven (7), eight (8) and nine
(9) of this Agreement, would cause the Company irreparable harm and the Company
may obtain injunctive relief against such actual or threatened conduct and
without the necessity of a bond.
11. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs, books,
notes, electronically stored data and all copies of the foregoing as well as any
other materials or equipment supplied by the Company to the Employee.
12. Termination:
[A] Death: In the event of the Employee's death during the term of his
employment, this Agreement shall automatically terminate on the date of death,
and Employee's estate shall be entitled to payment of Employee's salary until
date of death.
[B] Disability: In the event the Employee, by reason of physical or mental
incapacity, shall be disabled for a period of at least two (2) consecutive
months in any of the years of this Agreement or any extension hereof, the
Company shall have the option at any time thereafter, to terminate Employee's
employment and to terminate this Agreement; such termination to be effective ten
(10) days after the Company gives written notice of such termination to the
Employee, and all obligations of the Company hereunder shall cease upon the date
of such termination. "Incapacity" as used herein shall mean the inability of the
Employee to perform his normal duties as Executive Vice President.
[C] Company's Rights To Terminate This Agreement:
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[a] The Company shall have the right, before the expiration of the
term of this Agreement, to terminate this Agreement and to discharge Employee
for cause (hereinafter "Cause"), and all compensation to Employee shall cease to
accrue upon discharge of the Employee for Cause. For the purposes of this
Agreement, the term "Cause" shall mean the Employee's (i) violation of the
Company's written policy or specific written directions of the Board which
directions are consistent with normally acceptable business practices or the
failure to observe, or the failure or refusal to perform any obligations
required to be performed in accordance with this Agreement. (ii) admission or
conviction of a serious crime involving moral turpitude or (iii) if the Chairman
of the Board determines that employee has committed a demonstrable act (or
omission) of malfeasance seriously detrimental to this Company (which shall not
include any exercise of business judgment in good faith or any illegal or
unethical act).
[b] If the Company, elects to terminate Employee's employment for
Cause, under Section 12 [C] [a](i), the Company shall first give Employee
written notice and a period of thirty (30) days to cure such Cause, and if such
Cause is not cured in said thirty (30) days, such termination shall be effective
five (5) days after the Company gives written notice of such termination to the
Employee. In the event of a termination of the Employee's employment for Cause
in accordance with the provisions of Section 12 [C][a][b](ii) or (iii), the
Company shall have no further obligation to the Employee, except for the payment
of salary through the date of such termination from employment.
[D] Termination Without Cause by the Company:
[a] The Company shall have the right to terminate the Agreement
without cause on thirty (30) days' written notice to the Employee.
[b] In the event the Agreement is terminated pursuant to subsection 12
[D][a], the Company shall pay the Employee his then existing compensation for
one (1) year payable monthly commencing with the day following the day the
notice becomes effective and Employee shall be available for on call consulting
services during such one year period at no additional compensation. If during
such one year period Employee enters into a full time employment relationship
with a third party then (i) no further compensation shall be due to Employee
hereunder and (ii) Employee shall no longer be required to provide on call
consulting services.
[E] Termination Without Cause by the Employee:
Employee after July 1, 1997 may give the Company sixty (60) days
written notice of termination under this Agreement without cause.
13. Travel: Employee agrees to work out of the offices of the Company in
Boston, Massachusetts and spend so much of his normal business time at the
facilities of the Company at Copiague, New York, as is necessary to properly
fulfill his duties as its Executive Vice President. Employee agrees to relocate
if so required and relocation expenses shall be paid by the Company. In
addition, the Employee agrees that to the extent required he shall travel both
domestically and internationally for the Company.
14. Waiver: Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any other breach
or default hereof.
15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions
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shall be construed according to the laws of the State of New York without
reference to its choice of law rules.
16. Notice: Any notice required to be given pursuant to the provisions of
this Agreement shall be in writing and by registered or certified mail and
mailed to the following addresses:
Company: American Biogenetic Sciences, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Chairman and CEO
Employee: Xxxxxxx X. Ip, Ph.D.
00 Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
17. Assignment: The Employee's assignment of this Agreement or any interest
herein, or any monies due or to become due by reason of the terms hereof,
without the prior written consent of the Company shall be void. This Agreement
shall be binding upon the Company, its successors (including any transferee of
the good will of the Company) or assigns.
18. Miscellaneous: This Agreement contains the entire understanding between
the parties hereto and supersedes all other oral and written agreements or
understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
19. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Employee hereunder, which are stated to exist or continue after termination
of Employee's employment with the Company, shall exist and continue.
20. Severability: Employee agrees that if any of the covenants, agreements
or restrictions on the part of Employee are held to be invalid by any court of
competent jurisdiction, such holding will not invalidate any of the other
covenants, agreements and/or restrictions herein contained and such invalid
provisions shall be severable so that the invalidity of any such provision shall
not invalidate any others. Moreover, if any one or more of the provisions
contained in this Agreement shall be held to be excessively broad as to
duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
21. Representation: Employee represents and warrants that he has the legal
right to enter into this Agreement and to perform all of the obligations on his
part to be performed hereunder in accordance with its terms and that he is not a
party to any agreement or understanding, written or oral, which prevents him
from entering into this Agreement or performing all of his obligations
hereunder. In the event of a breach of such representation or warranty on his
part or if there is any other legal impediment which prevents him from entering
into this Agreement or performing all of his obligations hereunder, the Company
shall have the right to terminate this Agreement in accordance with Section
12[C][a]; in which event the "Cause" shall not be deemed curable under Section
12[C][b], and Employee will save harmless the Company in the event of legal
action by former employers for injunction relief or damages.
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22. Stock Option: Employee and the Company agree to execute a stock option
agreement that Employee shall have a right to purchase an aggregate of 200,000
shares of Class A Common Stock of the Company in accordance with the Company's
Stock Option Plan ("Plan"), exercisable at the rate of 33 1/3% after the first
year and 16 2/3% for each six months thereafter. The options will be exercisable
at the average of the closing bid and asked prices of such shares on the first
business day after the commencement date of this Agreement. The options will be
subject to all of the terms and conditions of the Plan and Employee hereby
agrees to all such terms and conditions.
23. Descriptive Headings. The headings contained herein are for reference
purposes only and shall not in any affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
AMERICAN BIOGENETIC SCIENCES, INC.
By:/s/Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Chairman and CEO
By:/s/ Xxxxxxx X. Ip
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Xxxxxxx X. Ip, Ph.D.
Employee
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