EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "agreement") is made and effective as of the 15 May
1997, by and between EuroBiotech Group, Inc, a Delaware Corporation (the
"Company"), and Xxxxxx Xxxxx (the "Executive").
WHEREAS, the Company desires to retain the Executive in its employ as the
Executive Vice President of the Company for the period provided in this
Agreement, and the Executive has agreed to employment with the Company in
accordance with the contractual terms and conditions set forth below;
WHEREAS, the Company and the Executive have discussed and the Executive has
agreed that this Agreement supersedes any and all agreements, oral and written,
between the parties hereto with respect of the subject hereof, and
WHEREAS, this Agreement is intended to, and shall, set forth the definitive
agreement of the parties.
NOW, THEREFORE, for and in consideration of the recitals and premises, and
the promises, covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Executive, and the Executive
hereby accepts such employment with the Company, for the term of employment set
forth in Section 2 hereof, all upon the terms and conditions hereafter set
forth.
2. Term. Employment shall be for a term commencing on the date hereof and,
subject to prior termination under Section 8, Section 9, Section 10, Section 12
or Section 13 hereof, expiring December 31, 1999. Notwithstanding the previous
sentence, (commencing December 31, 1999), the term of this Agreement shall
automatically be extended for one additional year upon the terms and conditions
set forth herein, unless either party to this Agreement gives the other party
written notice (delivered in accordance with Section 21 hereof and at least 90
days prior to December 31, 1999) of such party's intention not to further extend
the term of this Agreement. For purposes of this Agreement, any reference to the
"term" of this Agreement shall include the original term and any extension
thereof.
3. Duties of the Executive. The Executive shall serve as the Executive
Vice President of the Company. The Executive shall perform such executive duties
as a Executive Vice President would normally perform or as otherwise specified
in the By-Laws of the Company as in effect on the date of this Agreement, and
shall perform, in addition thereto, such other reasonable duties as the CHAIRMAN
may request. Except as may otherwise be approved in advance by the CHAIRMAN and
except during vacation periods and periods of absence due to sickness, personal
injury or other disability, the Executive shall devote substantially all of his
normal working time and his best efforts to the performance of this duties
hereunder. Notwithstanding the foregoing, nothing contained herein shall
preclude the Executive from (i) serving on the boards of directors or other
companies or organisations with the approval of the Board of Directors of the
Company (the "Board") (not to be unreasonably withheld) or (ii) pursuing his
personal, financial and legal affairs provided that such activity does not
materially interfere with the performance of the Executive's obligations
hereunder.
4. Compensation.
a) During the term of this Agreement, the Company shall pay to the
Executive a base salary and such bonus as may be awarded to the Executive from
time to time by the Board pursuant to Section 4(b) hereof.
b) For the period commencing on the date of this Agreement, and ending
December 31, 1999 the Executive's base salary shall be deemed to be $80,000 on
an annualised basis. The Executive's base salary may be increased from time to
time by the Board. During the term of the Agreement, Executive's salary shall be
reviewed at least annually by the Board to determine whether an increase beyond
the Executive's base salary is warranted and appropriate.
Except as set forth in this Section 4, such compensation shall he payable
at the times and in the manner consistent with the Company's general policies
regarding Compensation of executive employees, but in no event less frequently
than bi-monthly.
c) In additional to the base salary provided by Section 4(b) hereof, the
Executive shall be eligible annually to receive any incentive bonus (the
"Bonus"), that the Board may grant to him based on the Company's executive
compensation plan then in effect, based on the CHAIRMAN's assessment of the
Executive's individual performance, which decision shall be made by the Board in
its sole discretion. The CHAIRMAN shall give written notice to the Executive of
the grant of any such Bonus and the amount thereof upon direction of the Board
and Compensation Committee. Such Bonus shall be payable on the next date on
which the Executive is entitled to receive a payment of his base compensation.
The Board may from time to time authorise such additional compensation to the
Executive, in cash, property, options or warrants as the Board may determine in
its sole discretion to be appropriate.
5) Executive Benefits
a) In addition to the compensation described in Section 4, the Company
shall make available to the Executive and his eligible dependants such benefits
which are comparable to those provided to other executive and management
employees of the Company, including without limitation, any group
hospitalisation, health, dental care or sick leave plan, life or other insurance
or death benefit plan, travel or accident insurance, retirement income or
pension plan, employee stock option plan or other present or future group
employee benefit plan or programme of the Company for which key executives are
or shall become eligible, and Executive shall be eligible to receive during the
period of his employment under this Agreement, and, to the extent provided in
Section 11 and Section 13 hereof, during any subsequent period for which he
shall be entitled to receive payment from the Company under Section 11 or
Section 13 hereof, all benefits for which key executives are eligible under
every such plan or program to the extent permissible under the general terms and
provisions of such plans and programmes in accordance with the provisions
thereof provided that expect,to the extent specifically set forth in Section
4(c), 11, 12 and 13, the Executive shall not be permitted to participate in
management incentive programs or in termination pay programs. The Executive
shall be eligible to participate in any such plan or program under the terms and
conditions applicable to other executive and management employees and in a
manner commensurate with the Executive's position and level of responsibility
with the Company as compared to the position and level of responsibility of
other executive and management employees of the Company as determined by the
Board in its sole discretion.
b) In addition to any life insurance coverage made available to the
Executive under Section 5(a) hereof the Company shall provide, at its sole cost
and expense, to the Executive a term life insurance contract on the Executive's
life in an amount one (1) time his annual base compensation, the proceeds of
which shall be payable to such beneficiary as Executive may designate.
c) The Company shall allow the Executive to participate in the Company car
scheme during the term of this Agreement.
d) The Executive shall be entitled to 4 weeks paid vacation per year, which
shall be pro-rated for partial years. Executive may carry over from year to year
up to 500 hours of unused vacation time. Notwithstanding anything herein to the
contrary, the Executive may not take more than two (2) weeks vacation during any
twelve (12) week period without the prior written permission of the Company,
which shall not be unreasonably withheld.
6. Expenses
The Company shall also pay or reimburse the Executive for all reasonable and
necessary expenses incurred by the Executive in connection with his duties on
behalf of the company in accordance with the general policies of the Company and
his employment by the Company pursuant to this Agreement.
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7. Place of Performance. In connection with his employment by the Company,
unless otherwise agreed by the Executive, the Executive shall be based at the
principal executive offices of the Company, except for travel reasonable
required for Company business.
8. Termination. The Company may terminate Executive's employment hereunder
for Cause which shall mean;
a) The Executive's conviction by, or entry of a plea of guilty or
nolocontendere in, a court of competent and final jurisdiction for any crime
involving moral turpitude or punishable by imprisonment in the jurisdiction
involved (provided that if the Executive's conviction is subsequently
overturned, and the Company had terminated the Executive pursuant to this
Section 8(a), such termination shall be deemed to be without Cause and the
Executive shall be entitled to receive the payments and benefits set forth in
Section 11, together with interest at the then current prime rate as reported in
the Wall Street Journal, from the date such payments are made to the Executive);
b) Executive's breach of any of the covenants contained in Section 25 of
this Agreement;
c) Executive's commission of an act of fraud, whether prior to or
subsequent to the date hereof, upon Employer,
d) Executive's continuing repeated wilful failure or refusal to perform his
duties as required by this Agreement, provided, that termination of Executive's
employment pursuant to this subparagraph (d) shall not constitute valid
termination for cause unless Executive shall have first received written notice
from the Board stating with specificity the nature of such failure or refusal
and affording Executive at least fifteen (15) days to correct the act or
omission complained of;
e) Gross negligence, insubordination, or material violation by Executive of
any duty of loyalty to the Company or any other material misconduct on the part
of Executive, provided that termination of Executive's employment pursuant to
this subparagraph (e) shall not constitute valid termination for cause unless
Executive shall have first received written notice from the Board stating with
specificity the nature of such failure or refusal and affording Executive at
least fifteen (15) days to correct the actor omission complained of;
f) A material breach of this Agreement by the Executive as determined by
the Company after the Executive has been given written notice of such alleged
breach, and not less than thirty (30) days to cure such alleged breach or such
longer period as may be reasonably necessary to cure such breach provided that
the Executive is diligently pursuing such cure.
9) Resignation
a) In the event that (i) the Company shall during the term of this
Agreement (A) fail to continue the Executive as Executive Vice President of the
Company, (B) reduce the Executive's base salary below the minimum amount
specified in Section 4(a) without the Executive's prior written consent, (C)
violate any material term of this Agreement, provided that the Executive gives
the Company written notice of such violation and the Company fails to cure such
violation within 30 days or such longer period (the "Cure Period") as may be
reasonably necessary to cure such violation provided that the Company is
diligently pursuing such cure, then the Executive, at his sole option, may give
notice to the Company at any time within ten (10) days after the expiration of
the Cure Period of his election to resign and terminate this Agreement
("Permitted Resignation") effective immediately upon receipt of such notice
(delivered in accordance with Section 21 hereof), or effective upon such other
date (not later than ten (10) days following such notice) that the Executive may
designate in such notice; (ii) the Executive is required to move more than fifty
[50] miles from the then place of performance of the Executive, as defined under
Section 7 herein, or due to a "Change of Control," which shall mean the
occurrence during the term of this Agreement of any the following events;
A) the Company is merged, consolidated or reorganised into or with another
corporation or other legal persona, and as a result of such merger,
consolidation or reorganisation less than fifty percent (50%) of the combined
voting power of the then outstanding securities entitled to vote
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generally in the election of directors ("Voting Stock") of such corporation or
person immediately after such transaction are held in the aggregate by the
holders of Voting Stock of the Company immediately prior to such transaction; or
B) The Company sells or otherwise transfers all or substantially all of its
assets to another corporation or other legal person, and as a result of such
sale or transfer less than fifty percent (50%) of the combined voting power of
the ten outstanding Voting Stock of such corporation or person immediately after
such sale or transfer is held in the aggregate by the holders of Voting Stock of
the Company immediately prior to such sale or transfer, or
C) If, during any period of two consecutive years, (i) individuals who at
the beginning of any such period constitute the Directors of the Company and
(ii) such other persons as are nominated or elected by a vote of the Directors
of the company, collectively, cease for any reason to constitute at least a
majority of the Directors of the Company; provided, however, that for purposes
of this clause 9(b)(C) each Director who is first elected, or first nominated
for election by the Company's stockholders, by a vote of the Director's of the
Company (or a committee thereof) then still in office who were Director's of the
company at the beginning of any such period will be deemed to have been a
Director of the company at the beginning of such period.
10. Death. The term of this Agreement shall terminate on the death of the
Executive.
11. Termination Payments and Benefits. If the Executive's employment
hereunder is terminated by the Executive by Permitted Resignation or by the
Company other than for Cause, prior to the end of the term of this Agreement,
then the Company shall be obligated to pay to the Executive certain termination
payments and make available certain benefits as follows:
a) Termination Payment. The Company shall pay to the Executive a lump sum
in cash, payable within ten (10) business days after the effective date of such
termination, equal to one time the sum of (i) the Executive's base salary
pursuant to Section 4(a) plus (ii) the Executive's average annual bonus granted
pursuant to Section 4(c) hereof during the two-year period (or such shorter
period during which the Executive is employed by the Company) immediately
preceding the Executive's termination, prorated for a partial year. In addition,
(i) if at the time of termination the remainder of the term is greater than one
(1) year, and the Executive remains unemployed one (1) year, and the Executive
remains unemployed one (1) year after the termination date, the Executive shall
be entitled to receive his base salary pursuant to Section 4(a) from such one
(1) year anniversary of the termination date until the earlier of (A) the end of
the term or (B) the date on which the Executive becomes employed (subject to
the limitation that the total amount paid to the Executive pursuant to this
Section 11(a) shall not exceed the total amount of base salary the Executive
would have received pursuant to Section 4(a) between the termination date and
the end of the term) and (ii) if at the time of termination the remainder of the
term is less than one (1) year, the Executive will receive one (1) time the
amount otherwise provided in this Section 11(a). Notwithstanding any provision
to the contrary contained herein, the Executive shall be entitled to receive the
payments provided for in the second sentence of this Section 11(a) (A) only for
so long as the Executive uses all reasonable means available to him to
diligently pursue new employment and (B) provided the Executive accepts a
reasonable offer of employment. It shall be within the company's sole and
absolute discretion to determine whether the Executive has complied with the
provisions of this Section 11(a).
b) Benefits. Notwithstanding any provision to the contrary in any option
agreement or other agreement or in any plan, except as provided for under
Section 8(a), (i) all of the Executive's outstanding stock options shall
immediately vest and become exercisable and the Executive shall have the full
term of the option to exercise any of the Executive's stock options, and (ii)
all restrictions on any other equity awards relating to continued performance of
services shall lapse.
Subject to Section 15, for one year following the termination of this
Agreement, the Company shall use its reasonable best efforts to maintain in full
force and effect for the continued benefit of the Executive all employee welfare
benefit plans and perquisite programs in which the Executive was
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entitled to participate immediately prior to the Executive's termination or
shall arrange to make available to the Executive benefits substantially similar
to those which the Executive would otherwise have been entitled to receive if
his employment had not been terminated; provided, however, that (i) if the
remainder of the term exceeds one (1) year, the Company shall use its reasonable
best efforts to continue to provide such benefits to the Executive until the end
of the term and (ii) if the remainder of the term is less than one (1) year, the
obligation of the Company pursuant to this Section 11(b) shall extend for only
one year (1) year following the termination date. Such welfare benefits shall be
provided to the Executive on the same terms and conditions (including, without
limitation, employee contributions toward the premium payments) under which the
Executive was entitled to participate immediately prior to his termination.
Notwithstanding the foregoing, with respect to the Executive's continued
coverage under the Company's medical and dental plan, or a successor plan,
pursuant to this provision, the Executive's "qualifying event" for purposes of
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") shall be
his date of termination from the Company.
12. Other Termination. If the Company terminates this Agreement for Cause
or if the Executive terminates this Agreement for any reason other than by
Permitted Resignation or if the Executive dies or in the event of the
Executive's Disability, then the Company and the Executive shall have no further
obligation hereunder except as follows or except as provided in any available
plan, program or agreement:
a) The Company shall pay the Executive his then current minimum base salary
through the effective date of such termination;
b) If the Executive terminated this Agreement other than by Permitted
Resignation, he shall receive such benefits, if any, as are afforded by the
Company under its then existing policies applicable to employees who voluntarily
terminate their employment; and
c) The Executive shall have the rights set forth in Section 13 hereof in
the event of termination of this Agreement upon his Disability.
13. Disability
a) In the event of the Executive's Disability (as defined herein) during
the term of this Agreement, the Executive's duties and obligations hereunder
shall cease and the Company shall pay to the Executive in cash, for each
calendar year until the Executive reaches the age of 65 and at the times at
which the Executive would have received payment of his base salary, an amount
equal to 60% of the sum of (i) the Executive's highest annual base salary
pursuant to Section 4(a) than in effect for the period prior to the Executive's
Disability. For this purpose, the Company shall maintain in full force and
effect during the term of this Agreement an insurance policy with an insurance
company that reasonably shall provide for the payment of such amounts to the
Executive upon his Disability.
b) "Disability" shall be defined as in the insurance policy referenced in
Section 13(a) hereof.
c) For the period during which the Executive is entitled to receive
payments under this Section 13, the Company shall use its reasonable best
efforts to maintain in full force and effect for the continued benefit of the
Executive all employee welfare benefit plans, as provided for under the
insurance policy limits, except for life insurance provided for under Section
5(b); and except for the automobile allowance set forth in Section 5(c). Such
welfare benefits shall be provided to the Executive on the same terms and
conditions (including employee contributions toward the premium payments) under
which the Executive was entitled to participate immediately prior to his
Disability.
d) The Company shall have no obligation under this Section 13 if the
Executive is not insurable under an insurance policy with a reasonably priced
premium, as determined by the Company in its sole absolute discretion.
14. No other Termination Compensation. Except as specifically provided in
Sections 11, 12 and 13 hereof, upon termination of this Agreement for any
reason, the Executive shall not be entitled
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to any severance pay or to any other compensation or payments (by way of salary,
damages or otherwise) of any nature relating to this Agreement or otherwise
relating to or arising out of his employment by the Company.
15. Mitigation Obligation. The Executive shall mitigate damages including
the amount of any payment provided for pursuant to Section 13 by seeking other
employment or otherwise; provided, however, that the Executive is under no
obligation to mitigate any amount provided for by insurance policies under
Section 13 hereof.
16. Arbitration. Any dispute between the parties under this Agreement
shall be submitted to arbitration and such arbitration shall be conducted in
accordance with the rules of the International Chamber of Commerce ("ICC"). Each
of the parties hereto shall appoint one person as an arbitrator to hear and
determine any such dispute and if the two arbitrators so chosen shall be unable
to agree, then the two arbitrators shall select a third impartial arbitrator
whose decision shall control. All arbitrators selected shall have previously
engaged in and conducted arbitration's for at least the past three (3) years in
accordance with die rules of ICC. The arbitrators shall have the right only to
interpret and apply the provisions of this Agreement and may not change any of
its provisions except as permitted by Section 23 hereof. The arbitrators shall
permit reasonable pre-hearing discovery of facts, to the extent necessary to
establish a claim or defence to a claim, subject to supervision by the
arbitrators. The determination of the arbitrators shall be conclusive and
binding upon the parties and judgement upon the same may be entered in any court
having jurisdiction thereof. The arbitrators shall give written notice to the
parties stating his or their determination, and shall furnish to each party a
signed copy of such determination. Arbitration hereunder shall be final and
binding on the parties and may not be appealed. The expenses of arbitration,
including reasonable attorneys' fees, shall be borne by the losing party or as
the arbitrators shall otherwise equitably determine.
17. Indemnification. To the maximum extent permitted under the corporate
laws of the State of Delaware or, if more favourable, the By-Laws of the Company
as in effect on the date of this Agreement, (a) the Executive shall be
indemnified and held harmless by the Company, as provided under such corporate
laws or such By-Laws, as applicable, for any and all actions taken or matters
undertaken, directly or indirectly, in the performance of his duties and
responsibilities under this Agreement or otherwise on behalf of the Company, and
(b) without limiting clause (a), the Company shall indemnify and hold harmless
the Executive from and against (i) any claim, loss, liability, obligation,
damage, cost, expense, action, suit, proceeding or cause of action
(collectively, "Claims") arising from or out of or relating to the Executive's
performance as an officer, director, employee or agent of the Company or any of
its affiliates or in any other capacity, including, without limitation, any
fiduciary capacity, in which the Executive serves at the request of the Company,
and (ii) any cost or expense (including, without limitation, fees and
disbursements of counsel) (collectively, "Expenses") incurred by the Executive
in connection with the defence or investigation thereof. If any Claim is
asserted or other matter arises with respect to which the Executive believes in
good faith the Executive is entitled to indemnification as contemplated hereby,
the Company shall pay the Expenses incurred by the Executive in connection with
the defence or investigation of such Claim or matter (or cause such Expenses to
be paid) on a monthly basis, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the then current prime
rate as reported in the Wall Street Journal as in effect from time to time,
compounded annually, if the Executive shall be found, as finally judicially
determined by a court of competent jurisdiction, not to have been entitled to
indemnification hereunder.
18. Agreement. This Agreement supersedes any and all other agreements,
either oral or written, between the parties hereto with respect to the subject
matter hereof, and contains all of the covenants and agreements between the
parties hereto with respect to such subject matter, and Executive has received
legal counsel regarding the entirety of the Agreement.
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19. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to any law or government regulation or ruling.
20. Successors and Binding Agreement.
a) The Company will reasonably require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganisation or otherwise) to
all or substantially all of the business or assets of the Company, by agreement
in form and substance satisfactory to the Executive acting reasonably, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place. This Agreement will be binding upon and inure to the benefit of the
Company and any successor to the Company, including, without limitation, any
persons acquiring directly or indirectly all or substantially all of the
business or assets of the Company whether by purchase, merger, consolidation,
reorganisation or otherwise (and such successor shall thereafter be deemed the
"Company" for the purposes of this Agreement).
b) This Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributes and legatees.
c) The rights of the Company under this Agreement may without the consent
of Executive, be assigned by the Company in its sole and unfettered discretion
(a) to any person, firm, corporation, or other business entity which at any
time, whether by purchase, merger, or otherwise, directly or indirectly,
acquires all or substantially all of the assets or business of the Company, or
(b) to any subsidiary or affiliate of the Company (the "Company Group"), or any
transferee, whether by purchase, merger or otherwise, which directly or
indirectly acquires all or substantially all of the assets of the Company or any
other member of the Company Group.
21. Notices. For all purposes of this Agreement, all communications,
including, without limitation, notices, consents, request or approvals, required
or permitted to be given hereunder will be in writing and will be deemed to
have been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three business days after having been sent by a
nationally recognised overnight courier service such as Federal Express, UPS, or
Purolator, addressed to the Company (to the attention of the Secretary of the
Company) at its principal executive offices and to the Executive at his
principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith, except that notices of changes
of address shall be effective only upon receipt.
22. Governing Law. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to
the principles of conflict of laws of such state.
23. Severability and Reformation. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of the parties under this Agreement would not
be materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance therefrom, and, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 23.
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24. Survival of Provisions. Notwithstanding any other provision of this
Agreement, the parties' respective rights and obligations under Sections 4, 5,
11, 12, 13, 14, 15, 16, 17, and 19 hereof and under any other Sections that
provide a party with rights (including without limitation, rights to receive
payments) that have not been fully satisfied as of such termination or
expiration, will survive any termination or expiration of this Agreement or the
termination of the Executive's employment for any reason whatsoever.
25. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. Unless otherwise noted, references to
"Sections" are to sections of this Agreement. The captions used in this
Agreement are designed for convenient reference only and are not to be used for
the purpose of interpreting any provision of this Agreement.
26. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement. The delivery by facsimile
of an executed counterpart of this Agreement shall be deemed to be an original
and shall have the full force and effect of an original copy.
IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of
the day and year first above written.
/s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx
EUROBIOTECH GROUP INC.
By: /s/ SIGNATURE
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Name: /s/ SIGNATURE
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Title: /s/ SIGNATURE
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