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EXHIBIT 10.11
REVISED EMPLOYMENT AGREEMENT
THIS REVISED EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
November 16, 1999, is between Array BioPharma Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Employee").
In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee and Employee hereby
agrees to be employed by the Company for the period and upon the terms and
conditions hereinafter set forth. Employee's employment shall begin on November
15, 1999.
2. Capacity and Duties. Employee shall initially be employed by the
Company as Chief Executive Officer, or in such other executive capacity as the
officers or directors of the Company shall determine. Employee shall also be
appointed to the Company's Board of Directors, subject to re-election by the
Company's shareholders. During his employment Employee shall perform the duties
and bear the responsibilities commensurate with his position and shall serve the
Company faithfully and to the best of his ability, under the direction of the
board of directors and the duly elected officers of the Company. Employee shall
devote his entire working time, attention and energies to the business of the
Company. His actions shall at all times be such that they do not discredit the
Company or its products and services. Employee shall not engage in any other
business activity or activities that, in the judgment of the board of directors,
may conflict with the proper performance of Employee's duties hereunder. In
general, personal investments in which Employee owns less than 5% of the
outstanding capital of a particular enterprise and that do not involve any
significant services by Employee shall not be deemed to conflict with the proper
performance of Employee's duties. The Company agrees that Employee's continued
service as a Director of DEMCO, Inc. does not currently conflict with Employee's
performance of his duties hereunder.
3. Compensation.
(a) For all services rendered by Employee the Company shall
pay Employee during the term of this Agreement an annual salary as set forth
herein, payable semimonthly in arrears. Employee's initial annual salary shall
be $225,000. Employee shall receive a cash bonus of $60,000 on January 3, 2000.
During the term of this Agreement, the amount of Employee's salary shall be
reviewed at periodic intervals and, upon agreement of the parties hereto,
appropriate adjustments in such salary may be made on an annual or more frequent
basis, as determined by, and at the discretion of the Company.
(b) Upon inception of employment, Employee shall receive an
award of options to purchase 373,333 shares of the Company's common stock (the
"Initial Options"). The Initial Options shall be governed by the option
certificate, and the Company's 1998 Stock Option Plan, as amended. The option
certificate shall provide that the Initial Options shall become exercisable upon
vesting, according to the following vesting schedule: 133,333 of the shares
represented by the Initial Options shall vest on December 31, 1999; 55,000 of
the remaining shares represented by the Initial Options shall vest on the one
year anniversary of Employee's continuous employment with the Company; 5,000 of
the remaining shares shall vest after each additional month of continuous full
time employment thereafter through October 15, 2003; and the final 10,000 shares
shall vest after one additional month of continuous
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employment, on November 15, 2003. The exercise price of the Initial Options
shall be $0.60 per share, which the Company believes is greater than or equal to
the fair market value of the Company's common stock at the time of grant,
November 15, 1999. In the event of termination of employment, any vested but
unexercised Initial Options shall terminate, unless exercised by Employee in
accordance with the time limits provided by the Stock Option Plan, and any
unvested Initial Options shall also terminate unless such vesting is accelerated
under this Agreement.
(c) Upon inception of employment, Employee shall receive an
award of options to purchase 426,667 shares of the Company's common stock (the
"Performance Options"), the vesting of which options shall be conditional upon
Employee satisfying certain performance criteria to be established under a
management bonus plan (the "Management Bonus Plan"), which Employee shall
develop and recommend to the Board of Directors of the Company for each fiscal
year, beginning in fiscal year 2000, and which shall apply to Employee and other
members of the Company's senior management. The performance criteria under the
Management Bonus Plan shall include such items as performance of the Company to
its fiscal year plan and budget; new business and customer development by the
Company; and operational efficiency of the Company. The Performance Options
shall be governed by an option certificate, and the Company's 1998 Stock Option
Plan, as amended. The option certificate shall provide that the Performance
Options shall become exercisable upon vesting, according to the following
schedule: the Performance Options shall vest in four increments of up to 106,667
shares each, conditioned on the achievement by Employee of the performance
criteria in the Management Bonus Plan, not later than 60 days from receipt by
the Board of Directors of the Company's audited financial statements for each of
the next four fiscal years during the term of this Agreement. Based on
Employee's performance under the Management Bonus Plan, some or all of the
Performance Options for a particular year may not vest, in which event the
unvested Performance Options for such year shall terminate. In the event of any
acceleration of unvested options granted to Employee pursuant to this Agreement,
any such terminated Performance Options shall remain cancelled and
unexercisable. The exercise price of the Performance Options shall be $0.60 per
share, which the Company believes is greater than or equal to the fair market
value of the Company's common stock at the time of grant, November 15, 1999. In
the event of termination of employment, any vested but unexercised Performance
Options shall terminate, unless exercised by Employee in accordance with the
time limits provided by the Stock Option Plan, and any unvested Performance
Options shall also terminate unless such vesting is accelerated under this
Agreement.
(d) Employee shall also be eligible for a cash performance
bonus for each fiscal year beginning in fiscal year 2001, or portion thereof,
that Employee is employed by the Company (the "Performance Bonus"). The
Performance Bonus shall be based on Employee's base salary and the achievement
of performance criteria to be established under the Management Bonus Plan. It
shall be a condition to Employee's receipt of a Performance Bonus in any given
year that Employee achieves certain minimum performance criteria to be
established under the Management Bonus Plan. It is anticipated that the
Performance Bonus for any particular year will range between 25% and 75% of
Employee's base salary; provided that the minimum performance criteria are
achieved. It is the intent of the parties that the performance criteria include
the Company's achievement of a net profit for each fiscal year, and that the
failure to achieve this criterion in any given year may require that the
Performance Bonus for that year, if any, be paid in equity in lieu of cash. The
Performance Bonus shall be payable to Employee upon achievement of the minimum
performance criteria and not later than 60 days from receipt by the Board of
Directors of the Company's audited financial statements for that fiscal year.
(e) In addition to salary payments as provided in Section
3(a), the Company shall provide Employee, during the term of this Agreement,
with the benefits of such medical insurance
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plans, hospitalization plans and other employee fringe benefit plans as shall be
generally provided to employees of the Company and for which Employee may be
eligible under the terms and conditions thereof. Nothing herein contained shall
require the Company to adopt or maintain any such employee benefit plans.
(e) During the term of this Agreement, except as otherwise
provided in Section 5(b), Employee shall be entitled to sick leave and annual
vacation consistent with the Company's customary sick leave and vacation
policies.
(f) During the term of this Agreement the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and in the performance
of his duties under this Agreement upon presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data. The
Company shall reimburse Employee for his and his family's expenses in moving
from Cincinnati to Boulder, which expenses shall include but not be limited to:
real estate fees and commissions, moving costs for personal property, closing
costs, travel costs to and from Boulder for commuting and househunting, and
temporary housing, in an amount not to exceed $80,000.
4. Term. Unless sooner terminated in accordance with Section 5, the
initial term of this Agreement shall be for two years from the date hereof, and
thereafter shall continue for one year terms from year to year unless and until
either party shall give notice to the other at least 60 days prior to the end of
the initial or then current renewal term of his or its intention to terminate at
the end of such term. The provisions of Sections 6, 7, 8 and 10 shall remain in
full force and effect for the time periods specified in such Sections
notwithstanding the termination of this Agreement.
5. Termination/Severance.
(a) If Employee dies during the term of this Agreement, i) the
Company shall pay his estate the compensation that would otherwise be payable to
him for the month in which his death occurs; ii) this Agreement shall be
considered terminated on the last day of such month; and iii) the Company shall
cause any issued but unvested Initial Options granted to Employee to immediately
vest.
(b) If during the term of this Agreement Employee is prevented
from performing his duties by reason of illness or incapacity for a continuous
period of 120 days the Company may terminate this Agreement upon 30 days' prior
notice thereof to Employee or his duly appointed legal representative. For the
purposes of this Section 5(b), a period of illness or incapacity shall be deemed
"continuous" notwithstanding Employee's performance of his duties during such
period for continuous periods of less than 15 days in duration.
(c) The Company may terminate this Agreement at any time, upon
10 days' prior notice, for Employee's intentional misconduct (including willful
failure to perform his duties, fraud, criminal misconduct) or for gross
negligence in the performance of his duties, or for a material breach of any
obligation created by this Agreement (including the non-compete and
confidentiality agreements incorporated by reference in Sections 6 and 7 below.
(d) The Company or Employee may terminate this Agreement at
any time for any or no reason upon at least 30 days' notice to the other. In the
event that Employee is removed from his position as Chief Executive Officer of
the Company, Employee may elect to treat such event, by notice of termination
within 30 days of its occurrence, as a termination by the Company pursuant to
5(d).
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(e) If this Agreement is terminated by the Company pursuant to
5(b) or 5(d), then i) the Company shall pay as severance to Employee one years'
current base salary, in equal monthly installments, subject to all applicable
deductions and withholdings; and ii) the Company shall, within 60 days from
receipt of the audited financial statements for that fiscal year, pay to
Employee any Performance Bonus and cause to vest any Performance Options for
which Employee would be eligible for that year, pro-rated based on the date of
Employee's termination. Any severance payment obligation pursuant to termination
under 5(b) shall be offset by any disability insurance payments to Employee
under any Company-provided insurance plan. As a condition to receiving any
severance payments under this paragraph, Employee shall execute a release
reasonably acceptable to the Company, and shall comply with his obligations
under the confidentiality and non-compete agreements with the Company
incorporated by reference in Sections 6 and 7 of this Agreement.
(f) In the event of a consolidation or merger involving the
Company in which the Company is not the surviving entity or any transaction in
which more than 50% of the Company's voting power is transferred or more than
50% of the Company's assets are sold, or an initial public offering of the
Company's stock, the vesting of 75% of the Initial and Performance Options
granted hereunder to Employee shall be accelerated to occur immediately upon
such event, and any remaining unvested Initial and Performance Options granted
hereunder shall vest simultaneously one year from such event.
(g) If Employee gives notice of termination pursuant to 5(d),
the Company may, at its option, terminate Employee immediately upon payment to
Employee of 30 days salary or salary for the remainder of the notice period,
whichever is less, subject to all applicable deductions and withholdings. A
termination initiated by Employee pursuant to 5(d) shall cause no acceleration
of vesting of Initial or Performance Options, shall cause Employee to forfeit
his eligibility for a Performance Bonus or further vesting of Performance
Options for that year, and shall create no severance obligation under 5(e).
6. Confidential Information. This Agreement incorporates by reference
all the terms of that certain Confidential Information Agreement between
Employee and the Company, as if fully set forth herein.
7. Covenants Not to Compete or Interfere. This Agreement incorporates
all the terms of that certain Noncompete Agreement between Employee and the
Company, as if fully set forth herein.
8. Waiver of Breach. A waiver by the Company of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.
9. Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this Section in the particular jurisdiction in which
such adjudication is made.
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10. Notices. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given if
mailed by first class mail, postage prepaid, addressed as follows: i) If to the
Company: to its principal office at 0000 00xx Xxxxxx, Xxxxxxxx XX-0, Xxxxxxx,
Xxxxxxxx 00000-0000; ii) If to Employee: to 0000 00xx Xxxxxx, Xxxxxxxx XX-0,
Xxxxxxx, Xxxxxxxx 00000-0000; or such other address as either party may
hereafter designate by notice as herein provided. Notwithstanding the foregoing
provisions of this Section 10, so long as Employee is employed by the Company
any such communication, request, consent or other notice shall be deemed given
if delivered as follows: if to the Company, by hand delivery to any executive
officer of the Company other than Employee, and if to Employee, by hand delivery
to him.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Colorado without regard
to choice of law provisions thereof, and the parties each agree to exclusive
jurisdiction in the state and federal courts in Colorado.
12. Assignment. The Company may assign its rights and obligations under
this Agreement to any affiliate of the Company or to any acquirer of
substantially all of the business of the Company, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by or
against any such assignee. Neither this Agreement nor any rights or duties
hereunder may be signed or delegated by Employee.
13. Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties and supersedes all prior understandings,
agreements or representations by or between the parties, whether written or
oral, which relate in any way to the subject matter hereof. Without limiting the
foregoing, this Agreement shall supersede in its entirety that certain
Employment Agreement between the Company and Employee dated effective as of
November 16, 1999.
14. Amendments. No provision of this Agreement shall be altered,
amended, revoked or waived except by an instrument in writing signed by the
party sought to be charged with such amendment, revocation or waiver.
15. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
***Signature Page Follows***
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IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first above written.
THE COMPANY:
ARRAY BIOPHARMA INC.
By: /s/
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Name:
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Title:
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EMPLOYEE:
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
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