Exhibit 10(v)
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of February 1,
1998, between SIGA PHARMACEUTICALS, INC., a Delaware corporation (with its
successors and assigns, referred to as the "Corporation"), and Xx. Xxxxxx
Xxxxxxxxxx (referred to as "Flamenbaum").
Preliminary Statement
The Corporation desires to employ Flamenbaum, and Flamenbaum wishes to be
employed by the Corporation, upon the terms and subject to the conditions set
forth in this Agreement. The Corporation and Flamenbaum also wish to enter into
the other agreements set forth in this Agreement, all of which are related to
Xxxxxxxxxx'x employment under this Agreement.
Agreement
Flamenbaum and the Corporation therefore agree as follows:
1. Employment for Term. The Corporation hereby employs Flamenbaum and
Flamenbaum hereby accepts employment with the Corporation for the period
beginning on the date of this Agreement and ending on January 31, 2000 (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 Xxxxxxxxxx'x employment under this Agreement
shall end the Term but shall not terminate Xxxxxxxxxx'x or the Corporation's
other agreements in this Agreement, except as otherwise provided herein.
2. Position and Duties. During the Term, Flamenbaum shall serve as the
President and Chief Operating Officer of the Corporation. During the Term,
Flamenbaum 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, Flamenbaum shall devote his full business time and efforts to
his duties as an employee of the Corporation.
3. Compensation.
(a) Base Salary. The Corporation shall pay Flamenbaum a base salary,
beginning on the first day of the Term and ending on the last day of the
Term, of not less than $225,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees.
(b) Additional Payment. Flamenbaum shall receive a payment of $75,000
in consideration for canceling his contract with Therics, Inc. Such payment
will be made in twelve (12) equal monthly installments of $6,250 commencing
on the date hereof, so long as Xxxxxxxxxx'x employment hereunder is not
terminated (i) for Cause (as defined below) by the Corporation or (ii) due
to Xxxxxxxxxx'x resignation for reasons other than a material breach by the
Corporation of its obligations under this Agreement or a material reduction
of Xxxxxxxxxx'x duties as provided in Section 6(c).
(c) Stock Options. Pursuant to the Corporation's stock option plan,
the Corporation shall grant to Flamenbaum options to purchase 100,000
shares of the Corporation's Common Stock at an exercise price equal to
closing bid price of the Common Stock of the Corporation on the date
hereof. The options shall vest on a pro rata basis (20,000 shares each) on
February 1, 1998, the first, second, third and fourth anniversaries of this
Agreement. However, once any such options become vested, only fifty percent
(50%) of such vested options will be immediately exercisable and the
remaining fifty percent (50%) of such vested options will only be
exercisable if the closing bid price of the Corporation's Common Stock, at
any time after the date hereof, exceeds 200% of the exercise price of such
options for twenty (20) consecutive business days. The options shall expire
on the tenth anniversary of this Agreement.
(d) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude
the Board from awarding Flamenbaum a higher salary or any bonuses or stock
options in the discretion of the Board during the Term at any time. The
Company intends to adopt a performance based bonus plan for 1998 and
subsequent years and Flamenbaum will be eligible to participate in such
plan.
4. Employee Benefits. During the Term, Flamenbaum 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 employee of
the Corporation.
5. Expenses. The Corporation shall reimburse Flamenbaum 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 Xxxxxxxxxx'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 Flamenbaum 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
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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 Corporation. If the Corporation
materially reduces Xxxxxxxxxx'x duties during the term, including replacing
Flamenbaum as President and Chief Operating Officer, then, at his option,
Flamenbaum 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 Flamenbaum in connection with his employment; (ii)
Xxxxxxxxxx'x gross negligence in performing any of his duties under this
Agreement; (iii) Xxxxxxxxxx'x conviction of, or entry of a plea of guilty
to, or entry of a plea of nolo contendere with respect to, any crime other
than a traffic violation or infraction which is a misdemeanor; (iv)
Xxxxxxxxxx'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 Flamenbaum 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 Xxxxxxxxxx'x
incapacity due to physical or mental illness that results in his being
unable to substantially perform his duties hereunder for six consecutive
months (or for six months out of any nine month period). During a period of
Disability, Flamenbaum shall continue to receive his base salary hereunder,
provided that if the Corporation provides Flamenbaum with disability
insurance coverage, payments of Xxxxxxxxxx'x base salary shall be reduced
by the amount of any disability insurance payments received by Flamenbaum
due to such coverage. The Corporation shall give Flamenbaum written notice
of termination which shall take effect sixty (60) days after the date it is
sent to Flamenbaum unless Flamenbaum shall have returned to the performance
of his duties hereunder during such sixty (60) day period (whereupon such
notice shall become void).
(c) Termination. If the Corporation ends the Term for Cause or
Disability, or if Flamenbaum 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 Xxxxxxxxxx'x duties as
provided in Section 6(c), or if Flamenbaum dies, then the Corporation shall
have no obligation to pay Flamenbaum 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 Section 3(b) shall continue unless the
Corporation ends the term for Cause or if Flamenbaum 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 Xxxxxxxxxx'x salary and all
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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), Flamenbaum may elect to terminate this Agreement as if it
were a termination by the Corporation without Cause, except that the
Corporation shall not be obligated to pay Xxxxxxxxxx'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) Flamenbaum 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. Flamenbaum, 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 this
Agreement, except as the Corporation may otherwise expressly authorize by
action of the Board. In the event that Flamenbaum is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Corporation Information, Flamenbaum will promptly so notify the Corporation
so that the Corporation may seek a protective order or other appropriate
remedy and/or waive compliance with this Agreement. If disclosure of any of
the Corporation Information is required, Flamenbaum may furnish the
material so required to be furnished, but Flamenbaum will furnish only that
portion of the Corporation Information that legally is required.
(ii) Flamenbaum 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. Flamenbaum hereby
assigns to the Corporation all of Xxxxxxxxxx'x right (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
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or reduced to practice or learned by Flamenbaum, either alone or jointly
with others, during the course of the performance of services for the
Corporation. Flamenbaum shall also assign to, or as directed by, the
Corporation, all of Xxxxxxxxxx'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 by a contract between the Corporation and the United
States government or any of its agencies. The Corporation shall have all
right, title and interest in all research and work product produced by
Flamenbaum 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.
Flamenbaum acknowledges and agrees that his services pursuant to this
Agreement are unique and extraordinary; that the Corporation will be
dependent upon Flamenbaum for the development of its products; and that he
will have access to and control of confidential information of the
Corporation. Flamenbaum 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, Flamenbaum covenants and agrees that,
subject to Section 8(h), during the Term and the Non-Competition Period
Flamenbaum 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 Flamenbaum may own directly or
indirectly, solely as an investment, securities of any Person which
are traded on any national securities exchange if Flamenbaum (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. Flamenbaum hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects
and that the
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Corporation is entering into this Agreement, inter alia, on such
acknowledgment. If Flamenbaum 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 Flamenbaum 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 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 jurisdictions
such Covenants as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.
(h) Xxxxxxxxxx'x agreements and covenants under Section 8(e) shall
automatically terminate if the Corporation ends the Term without Cause or
Flamenbaum resigns due to a material breach by the Corporation of its
obligations under this Agreement or a material reduction of Xxxxxxxxxx'x
duties as provided in Section 6(c).
9. Successors and Assigns.
(a) Flamenbaum. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Flamenbaum may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All
rights and benefits of Flamenbaum shall be for the sole personal benefit of
Flamenbaum, and no other person shall acquire any right, title or interest
under this Agreement by reason of any sale, assignment, transfer, claim or
judgment or bankruptcy proceedings against Flamenbaum. Except as so
provided, this
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Agreement shall inure to the benefit of and be binding upon Flamenbaum and
his personal representatives, distributees 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 Flamenbaum 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 acquiror 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 an executed
copy of such assumption to Flamenbaum), 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. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Xxxxxxxxxx'x employment with the Corporation and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between Flamenbaum and the Corporation relating to the
subject matter of this Agreement.
11. 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 Flamenbaum and by a duly authorized officer of the Corporation. No
waiver by any party to this Agreement of 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.
12. 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 Flamenbaum: Xx. Xxxxxx Xxxxxxxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
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If to the Corporation: SIGA PHARMACEUTICALS, INC.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx X. xx Xxxxx
with a copy to: Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
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.
13. 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
Flamenbaum 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
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.
14. 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.
15. 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.
16. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Flamenbaum under this Agreement shall be subject to all applicable
payroll and
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withholding taxes and deductions required by any law, rule or regulation of and
federal, state or local authority.
17. 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.
18. 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 PHARMACEUTICALS, INC.
By: /s/ Xxxxx xx Xxxxx
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Xxxxx X. xx Xxxxx, President
/s/ Xx. Xxxxxx Xxxxxxxxxx
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Xx. Xxxxxx Xxxxxxxxxx
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