Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is effective as of the 1st day of April, 2002 by and
between GENEREX BIOTECHNOLOGY CORPORATION (the "Company"), a Delaware
corporation and XXXXXX XXXXXXXXX, M.D. ("Executive"), an individual residing at
00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, the Company is engaged, directly and through subsidiary
corporations (all of which, for the purposes of this Agreement, are included and
encompassed by any reference in this Agreement to the Company) in the research,
development, testing and commercialization of drug delivery technologies,
including drug technologies for oral administration of pharmaceuticals such as
peptidic drugs, vaccines and hormones using a buccal spray device (collectively,
the "Technology"); and
WHEREAS, the Company wishes to engage the Executive to provide certain
services, as more particularly described below, and the Executive agrees to
provide such services, all on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment
1.1 The Company agrees to employ the Executive and the Executive
agrees to serve the Company pursuant to the terms of this
Agreement as Vice President of Medical Affairs of the Company
(hereinafter the "Employment"), reporting to Xxxx X. Xxxxxxx,
President of the Company.
1.2 The term of this Agreement shall be for the period commencing
on the date hereof and expiring three years thereafter,
subject to earlier termination in accordance with the
provisions of Section 5 of this Agreement.
1.3 The Executive hereby warrants and undertakes to the Company
(in the knowledge that the Company is relying on such
undertaking by agreeing to enter into this Agreement) that:
1.3.1 by entering into this Agreement and performing his
obligations hereunder, he is not and will not be in
breach of any other contract of employment or other
agreement (whether still in effect or not) and
neither he nor the Company will be liable to any
action relating to any such contract; and
1.3.2 he is not or will not on commencement of this
Agreement and thereafter be subject to any
restriction or obligation, howsoever arising, which
may hinder or restrict him from performing fully any
of the duties required under the terms of this
Agreement.
1.4 The Company hereby warrants and undertakes to the Executive
(in the knowledge that the Executive is relying on such
undertaking by agreeing to enter into this Agreement) that
during the Employment the Executive shall be primarily based
in the State of New York, unless the Executive otherwise
agrees with the Company, and that the Executive shall be
insured from liability arising from his status, actions or
omissions as an officer of the Company to the extent of the
coverage provided by the Company's directors' and officers'
liability insurance policy as in effect from time to time and
subject to the limitations and exclusions set forth in such
policy. Notwithstanding anything to the contrary herein, the
Company, without limiting the rights of Executive to
compensation and benefits hereunder, shall have the right at
any time to assign this Agreement and the Executive's
Employment hereunder to any business entity which is
controlling, controlled by or under common control with the
Company ("Affiliates"). In the event of such assignments, (i)
any amounts paid to or for the benefit of Executive by the
Affiliate shall be credited against amounts payable to
Executive by the Company under this Agreement, and (ii)
references to the "Company" in Sections 2, 5 and 6 of this
Agreement shall be deemed to include, in addition to the
Company, any Affiliate to which this Agreement shall have been
assigned.
2. Duties
The Executive covenants and agrees that during the Employment he will:
2.1 faithfully and diligently perform the duties of Vice President
of Medical Affairs as may be assigned to or vested in him from
time to time by the Company and which shall be consistent with
the responsibilities generally entrusted to senior management
of a corporation in the same business as that of the Company,
and will use his best efforts to promote the interests of the
Company and its shareholders;
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2.2 comply with all laws, rules and regulations applicable to the
Company's business and in accordance with all applicable
policies or guidelines (including any applicable policies or
guidelines pertaining to disclosure of conflicts of interest)
of any institution or organization with which the Executive is
affiliated;
2.3 give to the President and/or the Board of Directors such
information regarding the affairs of the Company as they may
request;
2.4 agree to comply with all laws and regulations under the U.S.
federal securities laws and regulations against misuse or
miscommunication of material non-public information about the
Company and acknowledge that he is aware of these
prohibitions;
2.5 devote the whole of his business time, attention and skills to
the business and affairs of the Company and will not, except
with the prior consent by the President and/or the Board of
Directors, be directly or indirectly engaged or concerned in
the conduct of any other business, whether or not competing in
any respect with the business of the Company; provided,
however, that the Executive (a) may continue to serve during
the term of this Agreement as a director or trustee of the
American Diabetes Association or of any affiliated foundation
thereof, (b) may serve during the term of this Agreement,
subject to the prior consent of the President and/or the Board
of Directors (which may be withheld for any reason or no
reason), as a director or trustee of any other organization,
(c) may maintain or establish during the term of this
Agreement an affiliation with any medical institution or
educational institution (including, without limitation, as an
adjunct or emeritus faculty member or as a physician with
admitting privileges), provided that such affiliation does not
detract in any material way from the available time and the
ability of the Executive to fulfill his obligations under this
Agreement, and (d) may continue to serve as a consultant in
connection with a legal proceeding for which he was engaged as
a medical expert prior to the effective date of this Agreement
until the resolution or conclusion of such proceeding,
provided that such activity does not detract in any material
way from the available time and the ability of the Executive
to fulfill his obligations under this Agreement.
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3. Compensation
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3.1 During the Employment the Company will pay to the Executive, a
base salary at the annual rate of $150,000 (or such higher
rate as may from time to time be determined by the Company and
notified to the Executive), which salary will be payable in
equal monthly installments (less customary withholdings) in
arrears.
3.2 In addition to payments provided in Paragraph 3.1, the Company
shall pay to the Executive advances, bonuses, options and
other compensation in such amounts and on such terms as are
described in Exhibit A hereto.
3.3 The Company will be entitled at any time during the
Employment, and in all events on termination howsoever
arising, to deduct from the Executive's compensation under
this Agreement or from any other sums owed by the Company to
the Executive any monies due from him to the Company,
including, but not limited to, any outstanding loans or
advances taken (including advances pursuant to Exhibit A).
4. Benefits.
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4.1 During the Employment, the Executive will be entitled:
4.1.1 to paid vacation during each year to be accrued and
taken in accordance with the Company's vacation
policy as set forth in the Company's Employee Manual;
4.1.2 to payment of or reimbursement for health insurance
premiums to continue (i) Executive's health insurance
in the form of his Medicare Supplement (at an annual
cost at the present time of approximately $4,100.00)
and (ii) his wife's individual health insurance
policy (at an annual cost at the present time of
approximately $6,900.00);
4.1.3 to reimbursement for the cost of Executive's
professional expenses (e.g. journals, professional
societies) in the amount of no more than $4,000
annually; and
4.1.4 for the Company to bear the costs of any reasonable
and necessary costs for travel and lodging incurred
by the Executive at the request of the Company. To
the extent practicable, the Executive will make
travel and lodging arrangements through the Company
or agents designated by the Company. To the extent
practicable, the Company shall bear such expenses for
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its own account. If it is not feasible for the
Company to bear an expense directly for its own
account, the Executive will submit expenses borne by
the Executive for reimbursement of expenses. The
Executive shall provide receipts in support of any
request hereunder for reimbursement of expenses.
Individual expenses in excess of $200 must be
arranged through the Company or agents of the Company
and approved in advance by the Company in order to be
eligible for reimbursement. Notwithstanding anything
to the contrary set forth herein, the Executive will
not be entitled to reimbursement for expenses
incurred by the Executive (regardless of the dollar
amount) that could reasonably have been arranged
through the Company or agents of the Company and were
not.
5. Termination
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5.1 Either party may terminate its obligations under this
Agreement (except for the payment of sums having become due)
in its or his absolute discretion, upon written notice to the
other party of not less than ninety (90) days.
5.2 The Company may terminate its obligations hereunder for cause
(effective immediately upon the giving of notice to the
Executive except as set forth in Section 5.2.5) if the
Executive shall have:
5.2.1 become disqualified or prohibited by law, rule or
regulation from carrying out the material duties or
functions he is employed under this Agreement to
carry out; or
5.2.2 been convicted of any felony or other crime which has
the effect of bringing the Company into disrepute; or
5.2.3 committed any act of misconduct in the course of the
Employment which had the effect of bringing the
Company into disrepute or which caused material harm
to the Company; or
5.2.4 made any material misrepresentation in connection
with his securing the Employment; or
5.2.5 failed to carry out any of the material duties
provided in this Agreement to be performed by him
after having received notice of such non-performance
from the Board of Directors of the Company and after
having had a reasonable opportunity, not to exceed 30
days, to cure the non-performance specified in such
notice.
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5.3 The Company may terminate its obligations hereunder for other
than cause (effective immediately upon the giving of written
notice to the Executive) if the Executive shall have:
5.3.1 been unable to perform his regular duties for the
Company by reason of a disability for more than 9
months in any 12 month period; or
5.3.2 in the event of Executive's death.
5.4 The Executive may terminate his obligations under this
Agreement upon written notice in the event of a material
breach or default by the Company of any of its material
obligations hereunder, provided that in respect to termination
of this Agreement by the Executive pursuant hereto:
5.4.1 notice of termination given by the Executive
hereunder shall not be effective unless the Executive
first shall have given written notice to the Company
specifying any breach or default by the Company and
such breach or default shall not have been cured
within 14 days after the receipt of such notice; and
5.4.2 not later than 14 days following the date of notice
given by the Executive hereunder, the Company shall
pay to Executive an amount equal to the sum of (i)
the lesser of (x) $150,000 or (y) the aggregate
amounts payable to Executive by way of base salary
under Paragraph 3.1 from the date of such notice to
the date on which this Agreement would have expired
in accordance with its terms, plus (ii) all amounts
earned or credited to the account of the Executive to
the date of such notice under any bonus or other
incentive or deferred compensation plan maintained by
the Company but which were not paid to the Executive
by reason of the delay or deferral provisions of such
plan; payment of the amounts described in this
subparagraph 5.4.2 shall be the Executive's exclusive
right and remedy for breach of this Agreement and
Executive shall not be entitled to any other damage
or remedies for breach of this Agreement including
equitable relief or special, incidental or
consequential damages.
5.5 In the event of a termination by the Executive (except a
termination pursuant to Section 5.4) or by the Company
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pursuant to Sections 5.2 or 5.3, the Executive shall receive
only that portion of the Executive's salary due and owing as
of his last day worked, less any applicable set-off pursuant
to Section 3.3. The Executive shall not be entitled to any
bonus or incentive compensation.
If the Company gives notice of termination of the Executive's
employment pursuant to Section 5.1 (not under circumstances
under which the Company could terminate its obligations for
cause pursuant to Section 5.2 or to Section 5.3), the
Executive shall be entitled to severance payments in the form
of base salary continuation for the lesser of twelve months or
the remainder of the term of this Agreement (which severance
payments shall not include any bonus or incentive compensation
other than amounts earned or credited to the account of the
Executive to the date of such notice under any bonus or other
incentive or deferred compensation plan maintained by the
Company but which were not paid to the Executive by reason of
the delay or deferral provisions of such plan).
5.6 Upon the Executive's ceasing to be an employee of the Company
for any reason, the Executive will:
5.6.1 on or before the date upon which the Executive ceases
to perform services as an employee of the Company
("Termination Date"), deliver up to the Company or
its authorized representative all property, including
(without limitation) all documents, copies of
documents, records, keys, correspondence, discs,
tapes, credit cards or other items in his possession
which are the property of the Company or which were
made by Executive from media which were the property
of the Company;
5.6.2 not at any time wrongfully represent himself as being
employed by or connected with the Company; and
5.6.3 make himself reasonably available to the Company and
its counsel, without cost to the Executive, to
provide information and testimony in connection with
any litigation involving activities of the Executive
while he was employed by the Company.
6. Covenants
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6.1 The Executive acknowledges that the Company has developed
and/or possesses, and will continue to develop and/or possess,
valuable business and scientific and technical information,
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including scientific, technical, medical, financial and other
data; test formulations; research and development projects;
devices, methods, systems, solutions, processes and
applications relating to the preparation, administration or
delivery of formulations; and other know-how and trade secrets
that are proprietary or are otherwise or a confidential nature
(collectively, "Confidential Information"). The obligations
set forth in this Section 6 with regard to Confidential
Information shall not apply to information which is generally
known to the public or in the future becomes generally known
to the public other than through a direct or indirect breach
of this Section 6 by the Executive.
6.2 The Executive agrees that all information, work product, data,
equipment, methods, systems, expertise, know-how, solutions,
processes, applications, inventions, discoveries,
developments, concepts and ideas provided to or developed by
the Executive in the course of his employment hereunder which
relate to the Technology or which are based in whole or part
on Confidential Developments (collectively, "Developments"),
as well as embodiments and representations thereof (such as,
for example, manuals, reports, schematics, drawings,
blueprints, software, tapes and disks, workpapers, narratives,
programming and manufacturing materials and visual
aids)(collectively, "Materials"), whether or not patentable or
protectable and whether or not conceived, developed or reduced
to practice by Executive alone or in conjunction with others,
or both, are exclusive property of the Company.
6.3 Consultant agrees (i) not to disclose (other than within the
Company or to authorized representatives of the Company),
utilize or exploit any Confidential Information, Developments
or Materials without the prior consent of the Company, (ii) to
take reasonable precautions against unauthorized disclosure of
Confidential Information, Developments or Materials; (iii) to
advise the Company of any Developments and will make prompt
full written disclosure of same to the Company, (iv) at the
request of the Company, to acknowledge in writing the
Company's full right, title and interest in and to all
Developments and Materials and to assign worldwide rights in
the same to the Company, and (v) at the Company's cost and
expense, to execute all and any applications for patents,
trademarks, copyrights or other commercial protection and to
do such other acts (including the execution and delivery of
instruments of further assurance or confirmation) deemed by
the Company to be necessary or desirable at any time or times
in order to effect the full ownership and enjoyment of the
Company of all Developments and Materials.
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6.4 At the termination of this Agreement, Executive will promptly
return to the Company all Materials and all other writings and
other tangible embodiments reflecting or containing
Confidential Information or Developments.
6.5 The Executive undertakes that except as set forth at the end
of this Section 6.5, for a period of twelve months immediately
following the Termination Date or if the Agreement has not yet
expired, the period between the Termination Date and the
expiration of the then remaining term of the Agreement,
whichever is longer, he will not
6.5.1 induce or procure or attempt to induce or procure any
person who on the Termination Date is an employee or
consultant of or under contract of services to the
Company to terminate such relationship, whether or
not such person would commit any breach of his or her
employment or appointment by reason of leaving the
service of the Company;
6.5.2 accept into employment or otherwise engage or use the
services of any person who is on the Termination Date
an employee or consultant of the Company; or
6.5.3 compete with the Company, anywhere in Canada or the
United States or in any other jurisdiction where the
Company, during Executive's employment or at the time
of his termination from employment engages in
operations, either alone or together with another or
others, for his own account or for the account of any
entity, as an employee, partner, stockholder or other
investor (other than as a stockholder or investor in
an entity whose equity securities are publicly traded
and in which he, together with other former employees
of the Company, own less than two percent of the
outstanding capital stock or other equity interests),
agent or contractor of any other person (except for
employment as an employee, and not as a consultant or
independent contractor, by a single governmental
entity). The term "compete with the Company" means to
be involved or engaged in the development of
non-injection methods of administering insulin (or
any variants, analogs or mimetics thereof) or to be
employed by or engaged as an advisor, consultant or
director by any entity or person involved or engaged
in such development.
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6.6 Each of the restrictions contained in this Paragraph 6 is
considered by the parties to be reasonable in all the
circumstances. However if any one or more of such restrictions
shall be determined to be invalid by reason of breadth or
duration, but would be valid and enforceable if any particular
restriction or restrictions were modified, the offending
restriction shall be deemed to be reduced to a scope or period
which is valid, and as so reduced shall be binding and
enforceable against the Executive.
6.7 Executive agrees that (i) upon his breach, threatened breach,
or violation of any of his obligations set forth in this
Section 6, the Company shall be entitled as a matter of right
to obtain relief in any court of competent jurisdiction
enjoining such breach, or violation, in addition to all other
remedies provided to the Company at law, in equity or under
this Agreement; and his obligations under this Section 6 shall
survive the expiration or earlier termination of this
Agreement.
6.8 Notwithstanding anything to the contrary elsewhere in this
Agreement, all rights, obligations and waivers under
Paragraphs 6 and 7 will continue in force in accordance with
their terms after termination of the Employment for any reason
and will be binding upon the Executive's personal
representative(s), receiver or trustee (as the case may be),
except in the case of a termination of this Agreement by the
Executive pursuant to the terms of Paragraph 5.4.
7. Miscellaneous
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7.1 This Agreement sets out the entire terms and conditions of
Employment and supersedes all prior agreements between
Executive and the Company relating to the Executive's
employment, consultancy with the Company or otherwise, and any
variation or amendment of this Agreement shall be valid only
if expressed in writing and signed on behalf of both the
Executive and the Company.
7.2 To be effective all notices, consents, approvals and requests
relating to this Agreement must be in writing and may be
delivered in person or sent by certified mail, return receipt
requested, or facsimile transmission to the party to be
served.
7.3 This Agreement will be governed by and interpreted in
accordance with the laws of the State of Delaware.
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7.4 This Agreement is binding only upon the parties hereto, and
may-not be assigned or transferred by either party, with the
sole exception that the Company may assign its interests in
this Agreement (i) pursuant to Paragraph 1.4, above or (ii) to
its secured lender for the purpose of obtaining financing and,
in the event of such assignment, the secured lender may assign
its interest in this Agreement to a buyer of the business of
the Company.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed this Agreement on the date first above written.
GENEREX BIOTECHNOLOGY CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President
/s/ Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX, M.D.
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EXHIBIT A
DESCRIPTION OF COMPENSATION
In addition to the compensation described in Section 3 of this Agreement, the
Company will provide Executive with the following:
o Discretionary cash bonuses in amounts, if any, to be determined for
each fiscal year (from August 1 through July 31 of each year) by the
Company's Board of Directors within four months after the end of
each such fiscal year.
o Cash bonuses, if any, for any partial fiscal year will be prorated,
except that for the fiscal year ended July 31, 2002, the Company
will provide the Executive with service credit for the months of
April, May, June and July and two additional months in recognition
of his service at forty percent (40%) of full time as a consultant
to the Company during the prior six months (i.e. for the year ended
July 31, 2002, the Executive will be entitled to fifty percent (50%)
of the full cash bonus rate, if any, set by the Company's Board of
Directors).
o Advances against potential cash bonuses in the sum of $2,500 per
month shall be paid by the Company to the Executive with his base
salary on an ongoing basis. Such advances will be credited as
set-off against any cash bonus awarded. In the event that such cash
bonuses for a particular fiscal year amounts to less than actual
advances the Company provides to the Executive, then the net amount
will be treated as set-off against the Executive's base salary until
the net amount is zero. The Company and the Executive may by mutual
agreement decide to discontinue such advances.
o Options exercisable for the 50,000 shares of the Company's common
stock will be granted to the Executive for each contract year during
the term of this Agreement. The options for each contract year will
be granted on or before the end of each anniversary of the effective
date of this Agreement. The options will be exercisable at the fair
market value at the time of grant. The Board of Directors of the
Company will determine the applicable fair market value in its
discretion at the time of grant.