EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of January 19,
2000, between SIGA TECHNOLOGIES, INC., a Delaware corporation (with its
successors and assigns, referred to as the "Corporation") and Xxxxxx Xxxxxx
(referred to as "Xxxxxx").
Preliminary Statement
The Corporation desires to employ Xxxxxx, and Xxxxxx wishes to be employed
by the Corporation, upon the terms and subject to the conditions set forth in
this Agreement. The Corporation and Xxxxxx also wish to enter into the other
agreements set forth in this Agreement, all of which are related to Xxxxxx'x
employment under this agreement.
Agreement
Xxxxxx and the Corporation therefore agree as follows:
1. Employment for Term. The Corporation hereby employs Xxxxxx and
Xxxxxx hereby accepts employment with the Corporation for the period beginning
on the date of this Agreement and ending January 19, 2005. (the "Initial Term"),
or upon the earlier termination of the Term pursuant to Section 6. This
Agreement shall be automatically renewed for additional one-year periods (the
"Renewal Terms;" together with the Initial Term, the "Term") unless either party
notifies the other in writing of its intention not to so renew this Agreement no
less than 180 days prior to the expiration of the Initial Term or a Renewal
Term. The termination of Xxxxxx'x employment under this Agreement shall end the
Term but shall not terminate Xxxxxx'x or the Corporation's other agreements in
this Agreement, except as otherwise provided herein.
2. Position and Duties. During the Term, Xxxxxx shall serve as Chairman
and Executive Vice President of the Corporation. During the Term, Xxxxxx shall
also hold such additional positions and titles as the Board of Directors of the
Corporation (the "Board") may determine from time to time. During the Term,
Xxxxxx shall devote as much time as is necessary to satisfactorily perform his
duties as an employee of the Corporation.
3. Compensation.
(a) Base Salary. The Corporation shall pay Xxxxxx a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $250,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees.
(b) Stock Options. Pursuant to the Corporation's stock option plan
and subject to stockholder approval of the Corporation's Amended 1996 Incentive
and Non-Qualified Stock Plan, the Corporation shall grant to Xxxxxx
fully-vested options to purchase 500,000 shares of the Corporation's Common
Stock exercisable at $2.00 per share, the closing bid price of the Common stock
of the Corporation on the date hereof. The options shall expire on the tenth
anniversary of this Agreement.
(c) Annual Increases. The Base Salary shall be increased at the end
of each year of service by the greater of (i) 5% or (ii) a percentage equal to
the increase, if any, in the United States Department of Labor Consumer Price
Index (or comparable index, if available) for the New York metropolitan area
over the previous 12 months.
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(d) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude the
Board from awarding Xxxxxx a higher salary or any bonuses or stock options in
the discretion of the Board during the Term at any time. The Company will adopt
a bonus plan and Xxxxxx will be eligible to participate in such plan. The
Corporation shall pay Xxxxxx a monthly car allowance of $500.
4. Employee Benefits. During the Term, Xxxxxx shall be entitled to the
employee benefits including vacation, 401(k) plan, health plan and other
insurance benefits made available by the Corporation to any other officers or
key employees of the Corporation.
5. Expenses. The Corporation shall reimburse Xxxxxx for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Xxxxxx'x death. The
Term may also end for Cause or Disability, as defined in Section 7.
(b) Notice of Termination. Promptly after it ends the Term, the
Corporation shall give Xxxxxx notice of the termination, including a statement
of whether the termination was for Cause or Disability (as defined in Section
7(a) and 7(b) below). The Corporation's failure to give notice under this
Section 6(b) shall not, however, affect the validity of the Corporation's
termination of the Term.
(c) Effective Termination by the Corporation. If the Corporation
reassigns Xxxxxx'x base of operations outside of New York City, or materially
reduces Xxxxxx'x duties during the term, including replacing Xxxxxx as Chief
Executive Officer, then, at his option, Xxxxxx may treat such reduction in
duties as a termination of the Term without Cause by the Corporation.
7. Severance Benefits.
(a) "Cause Defined". "Cause" means (i) willful malfeasance or
willful misconduct by Xxxxxx in connection with his employment; (ii) Xxxxxx'x
gross negligence in performing any of his duties under this Agreement; (iii)
Xxxxxx'x conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendre with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Xxxxxx'x material breach of any written
policy applicable to all employees adopted by the Corporation which is not cured
to the reasonable satisfaction of the Corporation within fifteen (15) business
days after notice thereof; or (v) material breach by Xxxxxx of any of his
agreements in this Agreement which is not cured to the reasonable satisfaction
of the Corporation within fifteen (15) business days after notice thereof.
(b) Disability Defined. "Disability" shall mean Xxxxxx'x incapacity
due to physical or mental illness that results in his being substantially unable
to perform his duties hereunder for six consecutive months (or for six months
out of any nine month period). During a period of Disability, Xxxxxx shall
continue to receive his base salary hereunder, provided that if the Corporation
provides Xxxxxx with disability insurance coverage, payments of Xxxxxx'x base
salary shall be reduced by the amount of any disability insurance payments
received by Xxxxxx due to such coverage. The Corporation shall give Xxxxxx
written notice of termination which shall take effect sixty (60) days after the
date it is sent to Xxxxxx unless Xxxxxx shall have returned to the performance
of his duties hereunder during such sixty (60) day period (whereupon such notice
shall become void).
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(c) Termination. If the Corporation ends the Term for Cause or
Disability, or if Xxxxxx resigns as an employee of the Corporation for reasons
other than a material breach by the Corporation of its obligations under this
Agreement or a material reduction of Xxxxxx'x duties as provided in Section
6(c), or if Xxxxxx dies, then the Corporation shall have no obligation to pay
Xxxxxx any amount, whether for salary, benefits, bonuses, or other compensation
or expense reimbursements of any kind, accruing after the end of the Term, and
such rights shall, except as otherwise required by law, be forfeited immediately
upon the end of the Term, except that payments under 3(a) shall continue unless
the Corporation ends the Term for Cause or if Xxxxxx resigns for reasons other
than a material breach by the Corporation of its obligations under this
Agreement or a material reduction of his duties as provided in Section 6(c). If
the Corporation ends the Term without Cause, then the Corporation will be
obligated to continue to pay Xxxxxx'x salary and all other amounts due hereunder
for the remainder of the Term. In addition, in the event of a change in the
ownership of greater than fifty percent (50%) of the Corporation's outstanding
voting stock or any transaction described in Section 9(b), Xxxxxx may elect to
terminate this agreement as if it were a termination by the Corporation without
Cause, and the Corporation shall be obligated to pay Xxxxxx'x salary for the
remainder of the Term.
8. Confidentiality, Ownership, and Covenants.
(a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters). "Inventions"
collectively refers to any and all inventions, trade secrets, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship,
know-how, improvements, research, discoveries, developments, designs, and
techniques regarding any of the foregoing.
(b) Confidentiality. (i) Xxxxxx hereby recognizes that the value of
all trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation may be attributable substantially to the
fact that such confidential information is maintained by the Corporation in
strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Xxxxxx, therefore, except
as provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during the Term
and for the five (5) year period after the end of the Term and shall not be used
or divulged by him outside the scope of his employment as contemplated by his
Agreement, except as the Corporation may otherwise expressly authorize by action
of the Board. In the event that Xxxxxx is requested in a judicial,
administrative or governmental proceeding to disclose any of the Corporation
Information, Xxxxxx will promptly so notify the Corporation so that the
Corporation may seek a protective order of other appropriate remedy and/or waive
compliance with this Agreement. If disclosure of any of the Corporation
Information is required, Xxxxxx may furnish the material so required to be
furnished, but Xxxxxx will furnish only that portion of the Corporation
Information that legally is required.
(ii) Xxxxxx also hereby agrees to keep the terms of this Agreement
confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).
(c) Ownership of Inventions, Patents and Technology. Xxxxxx hereby
assigns to the Corporation all of Xxxxxx'x rights (including patent rights,
copyrights, trade secret rights, and all other rights throughout the world),
title and interest in and to Inventions, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by Xxxxxx, either alone or jointly with others, during the
course of the performance of services for the Corporation. Xxxxxx shall also
assign to, or as directed by, the Corporation, all of Xxxxxx'x right, title and
interest in and to any and all Inventions, the full title to which is required
to be in the United States government of any of its
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agencies. The Corporation shall have all right, title and interest in all
research and work product produced by Xxxxxx as an employee of the Corporation,
including, but not limited to, all research materials and lab books.
(d) Non-Competition Period Defined. "Non-Competition Period" means
the period beginning at the end of the Term and ending one (1) year after the
end of the Term.
(e) Covenants Regarding the Term and Non-Competition Period. Xxxxxx
acknowledges and agrees that his services pursuant to this Agreement are unique
and extraordinary; that the Corporation will be dependent upon Xxxxxx for the
development of its products; and that he will have access to and control of
confidential information of the Corporation. Xxxxxx further acknowledges that
the business of the Corporation is international in scope and cannot be confined
to any particular geographic area. For the foregoing reasons and to induce the
Corporation to enter this Agreement, Xxxxxx covenants and agrees that, subject
to Section 8(h), during the Term and the Non-Competition Period Xxxxxx shall not
unless with written consent of the Corporation:
(i) engage in any business related to the research and development of
the products or processes in which the Corporation is engaged in
during the Term or in any other business conducted by the
Corporation during the Term (collectively the "Prohibited Activity")
in the World for his own account;
(ii) become interested in any individual, corporation, partnership or
other business entity (a "Person") engaged in any Prohibited
Activity in the World, directly or indirectly, as an individual,
partner, shareholder, officer, director, principal, agent, employee,
trustee, consultant or in any other relationship or capacity;
provided, however, that Xxxxxx may own directly or indirectly,
solely as an investment, securities of any Person which are traded
on any national securities exchange if Xxxxxx (x) is not a
controlling person of, or a member of a group which controls, such
person or (y) does not, directly or indirectly, own 5% or more of
any class of securities of such person; or
(iii) directly or indirectly hire, employ or retain any person who at any
time during the Term was an employee of the Corporation or directly
or indirectly solicit, entice, induce or encourage any such person
to become employed by any other person.
(f) Remedies. Xxxxxx hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects and
that the Corporation is entering into this Agreement, inter alia, on such
acknowledgement. If Xxxxxx breaches, or threatens to commit a breach, of any of
the Restrictive Covenants, the Corporation shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Corporation under law or in equity: (i) the right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Corporation and that
money damages will not provide an adequate remedy to the Corporation; (ii) the
right and remedy to require Xxxxxx to account for and pay over to the
Corporation such damages as are recoverable at law as the result of any
transactions constituting a breach of any of the Restrictive Covenants; (iii) if
any court determines that any of the Restrictive Covenants, or any part thereof,
is invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect, without regard to the
invalid portions; and (iv) if any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power to
reduce the duration or area of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
(g) Jurisdiction. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more such jurisdictions hold the Restrictive Covenants wholly
unenforceable by
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reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect the Corporation's
right to the relief provided above in the courts of any other jurisdiction,
within the geographical scope of such Covenants, as to breaches of such
Covenants in such other respective jurisdiction such Covenants as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
(h) Xxxxxx'x agreements and covenants under Section 8(e) shall
automatically terminate if the Corporation ends the Terms without Cause or
Xxxxxx resigns due to a material breach by the Corporation of its obligations
under this Agreement or a material reduction of Xxxxxx'x duties as provided in
Section 6(c).
9. Successors and Assigns.
(a) Xxxxxx. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Xxxxxx may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. All rights and benefits
of Xxxxxx shall be for the sole personal benefit of Xxxxxx, and no other person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment, transfer, claim or judgement or bankruptcy proceedings against
Xxxxxx. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Xxxxxx and his personal representatives, distributes and
legatees.
(b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns, including (but not limited to) any corporation that may acquire all
or substantially all of the corporation's assets or business or into or with
which the Corporation may be consolidated or merged. In the event that the
Corporation sells all or substantially all of its assets, merges or
consolidates, otherwise combines or affiliates with another business, dissolves
and liquidates, or otherwise sells or disposes of substantially all of its
assets and Xxxxxx does not elect to treat any such transaction as a termination
by the Corporation without Cause pursuant to Section 7(c), then this Agreement
shall continue in full force and effect. The Corporation's obligations under
this Agreement shall cease, however, if the successor to, the purchaser or
acquirer either of the Corporation or of all or substantially all of its assets,
or the entity with which the Corporation has affiliated, shall assume in writing
the Corporation's obligations under this Agreement (and deliver and executed
copy of such assumption to Xxxxxx), in which case such successor or purchaser,
but not the Corporation, shall thereafter be the only party obligated to perform
the obligations that remain to be performed on the part of the Corporation under
this Agreement.
10. Change in Control. Upon the completion of a transaction resulting in a
Change in Control of the Corporation or any transaction described in Section
9(b), the Corporation shall pay to Xxxxxx, in consideration of his work on
behalf of the Corporation, a one time cash payment equal to one and one-half
percent (1.5%) of the total consideration received by the Corporation. "Change
in Control" shall mean any merger or consolidation of the Corporation into or
with another corporation, or any reorganization, recapitalization or like
transaction or series of transactions having substantially equivalent effect and
purpose, at the conclusion of which such merger, consolidation, reorganization,
recapitalization or like transaction the holders of the voting capital stock of
the Corporation immediately prior to such transaction or series of transactions
own less than a majority of the voting capital stock of the acquiring entity or
entity surviving or resulting from such transaction or series of transactions
immediately thereafter, or any sale, transfer or other disposition of all or
substantially all of the assets or capital stock of the Corporation.
11. Sale, Merger or Spin-out of Subsidiary. Upon the sale, merger or
public spin-out of any wholly-owned or partially-owned subsidiary of the
Corporation, or of any material asset of the Corporation, Xxxxxx shall receive a
success fee equal to one and one-half percent (1.5%) of the value of SIGA's
shares of the subsidiary, or of the value of the material asset, upon the sale,
merger or spin-out. In the event the subsidiary or material asset is sold for
cash, the 1.5% success fee shall be paid for in cash. In the event the
subsidiary or material asset is sold for equity in another company, the 1.5%
success fee shall be paid for in the form of equity received by the Corporation.
In the event of a merger or public spin-out of
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the subsidiary or of any material asset of the Corporation, the 1.5% success fee
shall be paid for in the form of shares of the subsidiary or in the form of
equity received by the Corporation.
12. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Xxxxxx'x employment with the Corporation and
supersedes all prior negotiations, discussions, understanding and agreements,
whether written or oral, between Xxxxxx and the Corporation relating to the
subject matter of this Agreement.
13. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Xxxxxx and by a duly authorized officer of the Corporation. No waiver
by any party to this Agreement or any breach by another party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.
14. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Xxxxxx: Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to the Corporation: SIGA TECHNOLOGIES, INC.
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to: Xxxxxx, Xxxxxxxxxx and Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
15. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Xxxxxx that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
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having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
16. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
17. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
18. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Xxxxxx under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
19. 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 constitute one and same instrument.
20. Applicable Law; Arbitration. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of New York, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before the
American Arbitration Association in New York, New York and consent to the
jurisdiction to the federal courts of the Southern District of New York or, if
there shall be no jurisdiction, to the state courts located in New York County,
New York, to enforce any arbitration award rendered with respect thereto. Each
party shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator. All costs and fees related to such arbitration (and judicial
enforcement proceedings, if any) shall be borne by the unsuccessful party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGA TECHNOLOGIES INC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chief Executive Officer
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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