Exhibit 10.1
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EXECUTIVE EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, made as of the 14th day of January, 2000, by and
between Xxxxxxx X. Xxxx (the "Executive"), an individual residing at c/o Celsion
Corporation, 00000-0 Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, and
Celsion Corporation (the "Company"), a Maryland corporation with offices at
00000-0 Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000- 1705.
W I T N E S S E T H:
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WHEREAS, the Executive is currently employed by the Company as its
President and Chief Executive Officer, and the Company desires that the
Executive shall continue to be employed by it and render services to it, and the
Executive is willing to continue to be so employed and to render services, all
upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment, Duties and Acceptance.
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1.1 The Company hereby employs Executive, and the Executive
hereby accepts employment, for the term ("Term) set forth in Section 2 hereof,
to render services to Company as its President and Chief Executive Officer. The
Executive represents and warrants to the Company that, subject to the provisions
of Section 17.8 hereof, he has full power and authority to enter into this
Agreement and that he is not under any obligation of a contractual or other
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nature to any person, firm or corporation which is inconsistent or in conflict
with this Agreement, or which would prevent, limit or impair in any way the
performance by Executive of his obligations hereunder.
1.2 The Executive will serve as President and Chief Executive
Officer of the Company and as a member of its Board of Directors when elected as
such, will have general executive supervision over the property, business and
affairs of the Company and its subsidiaries or affiliates (referred to
collectively as "Affiliates") and will have such other duties and
responsibilities, consistent with his position as President and Chief Executive
Officer, as may reasonably be assigned to him by the Board of Directors. In
addition, the Executive will serve as a senior officer and a director (when
elected as such) of each of the Company's Affiliates. The Executive will report
to the Board of Directors of the Company.
1.3 The Executive shall devote all of his business time and
effort to the business and affairs of the Company, and shall use his best
efforts, skills, and abilities to promote the interests of the Company, except
for reasonable vacations and during periods of illness or incapacity, but
nothing contained in this Agreement shall prevent the Executive from engaging in
charitable, community or other business activities provided they do not
interfere with the regular performance of the Executive's duties and
responsibilities under this Agreement.
1.4 Unless the Executive and the Company shall otherwise
agree, the Executive's principal places of employment shall be in and around the
Columbia, Maryland area and the Chicago, Illinois area, but the duties of the
Executive shall include such visits to the Company's Affiliates, research and
development partners, product and clinical trial test sites, customers,
investment and other bankers, in each case at the expense of the Company, as the
Executive determines is reasonably required in the performance of the
Executive's responsibilities.
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2. Term.
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2.1 The Term of this Agreement will commence as of January 1,
2000 and will terminate at the close of business on December 31, 2002, unless
sooner terminated in accordance with the provisions of this Agreement ("Initial
Term"). Thereafter, the employment of the Executive shall continue for
successive one-year periods (each such one year period being hereinafter
referred to as a "Renewal Term") unless the Corporation or Executive shall give
notice to the other at least six months prior to the end of the Term or any
Renewal Term of the election of the Corporation or the Executive to terminate
the employment of the Executive at the end of the Term or the then current
Renewal Term.
3. Base Salary.
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3.1 For all services performed by the Executive under this
Agreement, the Executive shall be paid a base salary ("Base Salary") for the
Company's fiscal year 2000 at the annual rate of $240,000. The Base Salary for
fiscal year 2001 and all subsequent fiscal years shall be the greatest of (i)
one hundred five percent (105%) of the Base Salary for the prior fisscal year;
(ii) the product of the multiplication of the Base Salary during the fiscal year
immediately preceding by the sum of (y) one hundred percent plus (z) the amount
(expressed as a percent) by which the most recently reported Consumer Price
Index ("CPI") applicable to the Washington -Baltimore Metropolitan region is
greater than the CPI for that same region for the prior twelve months; (iii) the
sum offered by the Board of Directors after a review taking into account
corporate and individual performance, the Company's prospects and general
business conditions; or (iv) $360,000.
3.2 Base Salary shall be paid in equal monthly or semi-monthly
installments in keeping with the Company's standard payroll policies applicable
to its senior executives.
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3.3 The Company reserves the right to pay the Executive on a
current basis at an annual salary rate of no more than $240,000. Any unpaid sum
will accrue as an unpaid obligation owed to the Executive, and that obligation
of the Company will be evidenced not more often than once each calendar quarter
by a junior convertible note issued by the Company bearing interest at 8.75%,
payable interest only at the end of each calendar quarter until September 30,
2001. From and after October 1, 2001, the Company will pay the outstanding
principal amount owed to the Executive in four quarterly installments of
principal and related interest; provided, however, that if, at any time, the
Company achieves annual revenues of $2,500,000 or more, then the unpaid salary
obligations to the Executive (and related interest) shall be paid in full, and
from and after achieving that annual revenue, the Company's right to pay the
Executive at any rate other than the then applicable salary rate shall expire.
At the option of the Executive, however, he may convert the outstanding
principal amount and related interest owing to him (whether or not evidenced by
a note) into Common Stock at a price equal to eighty (80%) percent of the
average closing price of the Common Stock during any ten consecutive trading
days (selected by the Executive) within the forty trading days prior to the date
of conversion.
4. Option to Acquire Bonus Shares.
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4.1 The Company hereby agrees to grant to Executive as a bonus
an option to acquire four hundred fifty (450,000) thousand (the "Bonus Shares")
fully paid and non-assessable shares of common stock, par value $0.01 per share
(the "Common Stock") of the Company. The exercise price for each Bonus Share
shall be the average of the closing price of the Company's Common Stock during
the fiscal quarter ended December 31, 1999. Two hundred fifty (250,000) thousand
of the Bonus Shares may be acquired by Executive on or after March 15, 2000, and
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one hundred (100,000) thousand of the Bonus Shares may be acquired by Executive
on or after each of October 1, 2001, and October 1, 2002. If Executive is not
employed by the Company at any of the three vesting dates, he shall not be
entitled to acquire the Bonus Shares attributable to that date. The Company
shall at all times reserve for issuance and/or delivery such number of shares of
its Common Stock as shall be required for issuance or delivery as Bonus Shares.
No fractional shares or scrip representing fractional shares shall be issued as
Bonus Shares. Bonus Shares will not be registered under federal or state
securities laws, and will have the status of restricted securities. Bonus Shares
may not be sold or offered for sale in the absence of effective registration
under such securities laws, or an opinion of counsel satisfactory to the Company
that such registration is not required. The Company will not include any Bonus
Shares in any registration statement unless there shall be a specific
affirmative agreement to do so by an investment banking firm which has agreed to
serve as underwriter of a public cash offering of the Company's securities.
Bonus Shares may be sold by the Executive in transactions permitted by the
provisions of Rule 144 of the Securities Act of 1933, but notwithstanding the
provisions of Rule 144, Executive agrees that he will not undertake any
disposition of the Bonus Shares in the twelve month period beginning when sales
under Rule 144 are permissible without the approval of a majority of the
disinterested members of the Board of Directors of the Company. In case the
Company shall at any time subdivide or combine the outstanding shares of Common
Stock, the number of Bonus Shares the Executive shall have the right to acquire
shall be proportionately increased in the case of such subdivision or decreased
in the case of such combination (on the date that such subdivision or
combination shall become effective). Bonus Shares shall bear an appropriate
restrictive legend, referring to the provisions hereof.
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5. Incentive Compensation. As incentive compensation to Executive, the
Company hereby grants to Executive the right to acquire from the Company, on an
original issue basis, an aggregate of seven hundred (700,000) thousand fully
paid and non-assessable shares of Common Stock (the "Incentive Shares") at the
several purchase prices designated below upon the achievement by the Company of
the several corporate accomplishments (the "Milestones") listed below.
Executive's right as set forth herein shall be available at any time on and
after the date on which the first Milestone is achieved and so long as he is
employed by the Company, but not later than 5:00 P.M. (New York time) December
31, 2004 (the "Expiration Date"), upon notice to the Company at its principal
office at 00000-X Xxx Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000-0000, Attention:
Treasurer (or at such other location as the Company may advise the Executive in
writing). The notice shall be executed and delivered with the Purchase Form
attached hereto duly filled in and signed and upon payment in cash or cashier's
check of the aggregate exercise price for the number of shares which Executive
is acquiring determined in accordance with the provisions hereof.
5.1 For purposes of this paragraph:
A. Corporate Milestones. The right to acquire
Incentive Shares shall be available in tranches as indicated herein if, as and
when the Company has achieved the first two of the following Class X Milestones:
> Execution and delivery of an agreement
with one or more strategic partners to the Company providing for the marketing
and distribution of any one of the Company's products related to its breast
cancer treatment system. (Tranche: 150,000 shares)
> Execution and delivery of an agreement
with one or more strategic partners to the Company providing for the marketing
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and distribution of any one of the Company's products related to treating
chronic prostate enlargement condition, common in older males, known as benign
prostatic hyperplasia ("BPH") (Tranche: 150,000 shares).
> Execution and delivery of an agreement
with one or more strategic partners to the Company providing for the marketing
and distribution of any one of the Company's products related to liposome
compounds that can carry chemotherapy drugs to a tumor site and release their
payload quickly when triggered by targeted heat. (Tranche: 150,000 shares). Only
300,000 shares may be issued with respect to Class X Milestones. The right to
acquire Incentive Shares shall be available in tranches as indicated herein if,
as and when the Company has achieved any of the following Class Y Milestones:
>Obtaining pre-marketing approval from the
United States Food and Drug Administration for commercialization of the
Company's BPH treatment system. (Tranche: 150,000 shares)
> Obtaining pre-marketing approval from the
United States Food and Drug Administration for commercialization of the
Company's breast cancer treatment system. (Tranche: 150,000 shares).
As a Class Z Milestone, the right to acquire Incentive Shares shall be
available as to a tranche of 100,000 shares if, as and when the Company has
achieved net income of $1,000,000 or more for any fiscal year prior to the
Expiration Date.
A. Purchase Price.The purchase price per share shall be as
follows:
On achieving the first Milestone, $0.80 per share;
On achieving the second Milestone, $1.00 per share;
On achieving the third Milestone, $1.20 per share;
On achieving the fourth Milestone, $1.40 per share, and
On achieving the fifth Milestone, $1.60 per share.
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B. Acquisition of Incentive Shares. Executive may acquire
Incentive Shares in tranches as set forth as each Milestone is
achieved at any time or from time to time on or after the date
hereof and so long as he is employed by the Company, but not
later than 5:00 p.m. New York time, on the Expiration Date. If
such date is a day on which banking institutions are
authorized by law to close, then the Expiration Date shall be
on the next succeeding day which shall not be such a day.
Incentive Shares may be acquired without regard to the
sequence in which the Milestones have been achieved. A Notice
of Intention to acquire Incentive Shares shall be submitted by
the Executive to the Company's Board of Directors, identifying
the Milestone achieved and the number of shares covered by the
relevant tranche. The Board of Directors shall be deemed to
have approved the relevant acquisition of Incentive Shares
unless, within seventy two (72) hours of the submission of the
Notice of Intention, the Board adopts a resolution determining
that Incentive Shares may not be issued as to the Milestone
identified in the Notice of Intention. In the absence of such
a disaffirming resolution, Executive may acquire Incentive
Shares thereafter by presentation of the Notice of Intention
either to the Company or at the office of its stock transfer
agent, if any, and accompanied by payment in cash or cash
equivalent of the purchase price for the number of Incentive
Shares specified in such Notice of Intention, together with
all federal and state taxes applicable upon such exercise.
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C. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance such number of
shares of its Common Stock as shall be required for issuance
or delivery as Incentive Shares upon achievement of the
Milestones set forth herein.
D. Vesting. Incentive Shares shall vest in the Executive upon
issuance.
E. Anti-Dilution Provisions.
(1) Adjustment of Number of Incentive Shares. Anything in this
Paragraph (F) to the contrary notwithstanding, in case the Company
shall at any time issue Common Stock by way of dividend or other
distribution on any stock of the Company or subdivide or combine the
outstanding shares of Common Stock, the Purchase Price shall be
proportionately decreased in the case of such issuance (on the day
following the date fixed for determining shareholders entitled to
receive such dividend or other distribution) or decreased in the case
of such subdivision or increased in the case of such combination (on
the date that such subdivision or combination shall become effective).
(2) No Adjustment for Small Amounts. Anything in this
Paragraph (F) to the contrary notwithstanding, the Company shall not be
required to give effect to any adjustment in the Purchase Price unless
and until the net effect of one or more adjustments, determined as
above provided, shall have required a change of the Purchase Price by
at least one cent, but when the cumulative net effect of more than one
adjustment so determined shall be to change the actual Purchase Price
by at least one cent, such change in the Purchase Price shall thereupon
be given effect.
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(3) Number of Incentive Shares Adjusted. Upon any adjustment
of the Purchase Price other than pursuant to Paragraph (F)(1) hereof,
the Executive shall thereafter (until another such adjustment) be
entitled to purchase, at the new Purchase Price, the number of shares,
calculated to the nearest full share, obtained by multiplying the
number of shares of Common Stock initially issuable upon achieving any
Milestone by the Purchase Price in effect on the date hereof and
dividing the product so obtained by the new Purchase Price.
F. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than
a change in par value, or from par value to no par value or
from no par value to par value, or as a result of an issuance
of Common Stock by way of dividend or other distribution or of
a subdivision or combination), or in case of any consolidation
or merger of the Company with or into another corporation
(other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares
of Common Stock) or in case of any sale or conveyance to
another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company shall
cause effective provision to be made so that the Executive
shall have the right thereafter as he has hereunder to
purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification,
capital reorganization or other change, consolidation, merger,
sale or conveyance. The foregoing provisions of this Paragraph
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(G) shall similarly apply to successive reclassifications,
capital reorganizations and changes of shares of Common Stock
and to successive consolidations, mergers, sale or
conveyances. In the event that in any such capital
reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be
issued in exchange, conversion, substitution or payment, in
whole or in part, for or of a security of the Company other
than Common Stock, any such issue shall be treated as an issue
of Common Stock covered by the provisions hereof with the
amount of the consideration received upon the issue thereof
being determined by the Board of Directors of the Company,
such determination to be final and binding on the Executive.
6. Reimbursement for Expenses.
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6.1 Company shall reimburse Executive for all reasonable
out-of-pocket expenses paid or incurred by him in the course of his employment,
upon presentation by Executive of valid receipts or invoices therefor, utilizing
procedures and forms for that purpose as established by Company from time to
time.
7. Vacations.
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7.1 Executive shall be entitled to reasonable vacations (which
shall aggregate no less than four (4 ) weeks vacation with pay) during each
consecutive 12 month period commencing on the date hereof. Executive may not
accumulate any vacation days which remain unused at the end of any year during
the term hereof without the prior consent of Company.
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8. Employee Benefit Programs, etc.
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8.1 The Company shall provide the Executive with an automobile
(or at Employee's option, a cash allowance in the amount of $450.00 per month in
lieu thereof) for use in the performance of Executive's duties, along with fuel,
fluids and maintenance, upon such terms and conditions as are approved by
Company. The Company will also either provide or pay or reimburse the Executive
for the costs of a cellular telephone.
8.2 The Company shall provide the Executive at the Company's
expense disability insurance providing for disability payments to the Executive,
in a sum at least equal to 70 % of his Base Salary then in effect, following a
termination of Executive's employment hereunder as a result of Disability (as
defined in Section 9.2 below). In the event such policy is not obtained,
Executive shall be entitled to participate in such disability plan(s) as are
available to Company executives generally.
8.3 The Company shall obtain at its expense, and shall be the
owner of, a policy on the life of the Executive in the amount of Three Million
($3,000,000) Dollars, naming the Company as the beneficiary.
8.4 In addition to the life insurance to be provided in
accordance with paragraph 8.3, subject to the Executive's meeting the
eligibility requirements of each respective plan, Executive shall participate in
and be covered by each pension, life insurance, accident insurance, health
insurance, hospitalization and any other employee benefit plan of Company, as
the case may be, made available generally from and after the date hereof to its
respective senior executives, on the same basis as shall be available to such
other executives without restriction or limitation by reason of this Agreement.
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8.5 Nothing herein contained shall prevent the Company from at
any time increasing the compensation herein provided to be paid to Executive,
either permanently or for a limited period, or from paying bonuses and other
additional compensation to Executive, whether or not based upon the earnings of
the business of Company, or from increasing or expanding any employee benefit
program applicable to the Executive, in the event the Company, in its sole
discretion, shall deem it advisable so to do in order to recognize and
compensate fairly Executive for the value of his services.
9. Death or Disability.
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9.1 If Executive shall die during the term hereof, this
Agreement shall immediately terminate, except that Executive's legal
representatives or designated beneficiaries shall be entitled to receive (i) the
Base Salary due to Executive hereunder to the last day of the month following
the month in which his death occurs, payable in accordance with the Company's
regular payroll practices, (ii) all other benefits payable upon death under any
employee benefit program or other insurance covering the Executive as of the
date of death; and (iii) a pro-rated portion of the Bonus Shares payable under
Section 4.
9.2 In the event of the Disability of the Executive, as
hereinafter defined, the Executive shall be entitled to continue to receive
payment of his Base Salary (prorated as may be necessary) in accordance with the
terms of Section 3 hereof through the last day of the third month following the
month in which Executive's employment hereunder is terminated as a result of
such Disability. At any time after the date of the Notice (as hereinafter
defined) and during the continuance of the Executive's Disability, the Company
may at any time thereafter terminate Executive's employment hereunder by written
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notice to the Executive. The term "Disability" shall mean physical or mental
illness or injury which prevents the Executive from performing his customary
duties for the Company for a period of sixty (60) consecutive days or an
aggregate period of one hundred twenty (120) days out of any consecutive twelve
(12) months. The date of commencement of Disability shall be the date set forth
in the notice (the "Notice") given by Company to the Executive at any time
following a determination of Disability, which date shall not be earlier than
the date the Notice is given by Company. A determination of Disability by
Company shall be solely for the purposes of this Section 9.2 and shall in no way
affect the Executive's status under any other benefit plan applicable to the
Executive.
9.3 Upon the occurrence of a Disability, and unless the
Executive's employment shall have been terminated as provided in Section 9.2,
the Executive shall, during such time as he is continuing to receive Base Salary
payments as set forth in Section 9.2, perform such services for Company,
consistent with his duties under Section 1 hereof, as he is reasonably capable
of performing in light of the condition giving rise to a Disability. All
payments due under Section 9.2 shall be payable in accordance with Company's
regular payroll practices. Any amount paid to Executive pursuant to this
Agreement by reason of his Disability, shall be reduced by the aggregate amount
of all monthly disability payments which the Executive is entitled to receive
under all workers compensation plans, disability plans and accident, health or
other insurance plans or programs maintained for the Executive by Company, by
any company controlling, controlled by or under common control with, Company.
9.4 In the event the Executive's employment is terminated due
to Disability, the Executive shall be entitled, in addition to the Base Salary
payments described in Section 9.2, to the Bonus Shares payable in accordance
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with Section 4 for the fiscal year in which such Disability occurs, pro-rated by
multiplying the Bonus Shares otherwise issuable by a fraction, the numerator of
which is the number of days the Executive was employed during such fiscal year
and the denominator of which is 365.
10. Termination for Cause.
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10.1 The employment of the Executive may be terminated by
the Company for Cause. For this purpose, "Cause" shall mean:
(i) an act constituting a felony and resulting or
intended to result, directly or indirectly, in
his gain or personal enrichment at the expense
of the Company and its shareholders;
(ii) dishonest acts against the Company;
(iii) illegal drug use;
(iv) grossly or willfully neglecting to carry out his
duties under this Agreement resulting in
material harm to the Company.
The Executive's employment shall not be terminated for Cause under
clauses (ii) or (iv) unless
(a) the Executive has received at least 15 days notice of a meeting of
the Board of Directors at which meeting the Board shall consider the
existence of Cause, shall provide the Executive with an opportunity to
be heard before the Board, and, following such consideration and
hearing, the Board has determined, based upon credible evidence, that
grounds for Cause exist; and
(b) the misconduct or breaches on which an assertion of Cause is based
are not cured within 30 days thereafter if such misconduct or breaches
are capable of being cured.
10.2 In the event of a termination for Cause, the Executive
shall (a) be entitled to any unpaid Base Salary pro rated up to the date of
termination, and (b) shall have no further rights
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under this Agreement. Furthermore, the Executive shall be and remain subject to
all provisions of Section 13 below for the period indicated therein, but shall
not receive any of the compensation set forth therein.
11. Termination Upon Change of Control or by Company Without Cause.
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11.1 A "Change in Control" shall occur: (A) if any Person, or
combination of Persons (as hereinafter defined), or any affiliate of any of the
above, is or becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934) directly or indirectly,
of securities of the Company representing twenty- five percent (25%) or more of
the total number of outstanding shares of common stock of the Company; or (B) if
individuals who, at the date of this Agreement, constitute the Board (the
"Incumbent Directors") cease, for any reason, to constitute at least a majority
thereof, provided that any new director whose election was approved by a vote of
at least 75% of the Incumbent Directors shall be treated as an Incumbent
Director. For purposes hereof, "person" shall mean any individual, partnership,
joint venture, association, trust, or other entity, including a "group" as
referred to in section 13(d)(3) of the Securities Exchange Act of 1934.
11.2 If there occurs a Change in Control, and if there
subsequently occurs a material adverse change, without the Executive's written
consent, in the Executive's working conditions or status, including but not
limited to a significant change in the nature or scope of the Executive's
authority, powers, duties or responsibilities, or a reduction in the level of
support services or staff, then, whether or not such change would otherwise
constitute a breach of this Agreement by the Company, this Agreement may be
terminated by notice given by the Executive, specifying the Change of Control
and significant adverse change or changes.
11.3 Upon the termination of this Agreement in accordance with
Section 11.2 above, the Executive will be entitled, without any duty to mitigate
damages, to:
(a) All unpaid Base Salary pro-rated up to the date of
termination; and
(b) The full number of unissued Bonus Shares pursuant to
Section 4;
(c) A severance payment equal to 2.99 times the Base
Salary in effect for the prior fiscal year; and
(d) All benefits available under the Company's employee
benefit programs, to the extent applicable to senior
executives voluntarily and amicably retiring from
employment with the Company.
11.4 In the event that the Company shall actually or
constructively terminate this Agreement during the Initial Term or any Renewal
Term without cause (and with or without a Change of Control), the Executive
shall be entitled to the same payments, compensation and rights as provided in
the case of a termination by the Executive under Section 11.3.
11.5 The payments and any other compensation and benefits to
which the Executive is entitled under this Section 11 shall be made available to
the Executive no later than thirty (30) days after the date of any termination
referred to in Section 11.2, 11.3 or 11.4.
11.6 In the event that Executive receives the payments and any
other compensation and benefits referred to in this Section 11, he will be bound
by the restrictive provisions of Section 13 for the period therein provided,
subject to the right to receive the compensation therein set forth.
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12. Termination by Executive.
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12.1 If the Executive shall terminate his employment under
this Agreement during the Initial Term without either (i) a Change of Control or
(ii) the express written consent of the Company, then, for purposes of
establishing the rights of the Executive upon such termination, such termination
shall be deemed the equivalent of a termination for Cause under Section 12.1,
and the Executive shall have only those rights with regard to compensation as
are set forth in Section 12.2, and the restrictive provisions of Section 13
below shall fully apply (but the Executive shall not have any right to the
compensation set forth therein).
12.2 If the Executive shall terminate his employment under
this Agreement during any Renewal Term without either (i) a Change of Control or
(ii) the express written consent of the Company, then, for purposes of
establishing the rights of the Executive upon such termination, the Executive
shall be entitled to receive:
(a) All unpaid Base Salary pro-rated up to the date of
termination; and
(b) the full and absolute ownership of all Bonus Shares
previously delivered to him, subject to the provisions of the
securities laws of the United States, but without the specific
limitations set forth in Section 4 hereof.
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12.3 In the case of a termination pursuant to Section
12.2, the restrictions set forth in Section 13 shall apply to Executive for the
period therein stated, and the Executive shall receive the compensation set
forth therein.
13. Restrictive Covenants; Compensation.
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13.1 During such time as this Agreement shall be in
effect and, except as otherwise explicitly stated herein, for a period of three
(3) years following the termination of Executive's employment, and without the
Company's prior written consent (which may be withheld for any reason or for no
reason in Company's sole discretion), Executive shall not do anything in any way
inconsistent with his duties to, or adverse to the interests of, the Company,
nor shall Executive, directly or indirectly, himself or by or through a family
member or otherwise, alone or as a member of a partnership or joint venture, or
as a principal, officer, director, consultant, employee or stockholder of any
other entity, compete with Company or be engaged in or connected with any other
business competitive with that of Company or any of its affiliates, except that
Executive may own as a passive investment not more than five percent (5%) of the
securities of any publicly held corporation that may engage in such a business
competitive with that of Company or any of its Affiliates.
13.2 In view of the fact that Executive will be brought
into close contact with many confidential affairs of Company and its Affiliates
not readily available to the public, Executive agrees during the Term of this
Agreement and thereafter:
(a) to keep secret and retain in the strictest
confidence all non-public information about (i) research and
development, test results, suppliers, venture or strategic
partners, licenses and patents or patent applications, planned
or existing products, knowhow, financial condition and other
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financial affairs (such as costs, pricing, profits and plans
for future development, methods of operation and marketing
concepts) of Company and its Affiliates; (ii) the employment
policies and plans of the Company and its Affiliates; and
(iii) any other proprietary information relating to the
Company and its Affiliates, their operations, businesses,
financial condition and financial affairs (collectively, the
"Confidential Information") and, for such time as Company or
any of its Affiliates is operating, Executive shall not
disclose the Confidential Information to anyone not then an
officer, director or authorized employee of Company or its
Affiliates, either during or after the term of this Agreement,
except in the course of performing his duties hereunder or
with Company's express written consent or except to the extent
that such confidential information can be shown to have been
in the public domain through no fault of Executive; and
(b) to deliver to Company within ten days after
termination of his services, or at any time Company may so
request, all memoranda, notes, records, reports and other
documents relating to Company or its Affiliates, businesses,
financial affairs or operations and all property associated
therewith, which he may then possess or have under his
control.
13.3 Executive shall not at any time during the three-year
period following the termination of his employment for any reason whatsoever,
including termination resulting from the natural expiration of the term of this
Agreement, (i) employ any individual who was employed by Company or any of its
Affiliates at any time during the such period or during the 12 calendar months
immediately preceding such termination, or (ii) in any way cause, influence or
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participate in the employment of any such individual by anyone else in any
business that is competitive with any of the businesses engaged in by Company or
any of its Affiliates.
13.4 Executive shall not at any time during the three -year
period following the termination of his employment, for any reason whatsoever,
including termination resulting from the natural expiration of the term of this
Agreement, directly or indirectly, either (i) persuade or attempt
to persuade any customer or client of the Company or of any of its Affiliates to
cease doing business with Company or with any Affiliate, or to reduce the amount
of business it does with Company or with any of its Affiliates, or (ii) solicit
for himself or any person other than Company or any of its Affiliates, the
business of any individual or business which was a customer or client of Company
or any of its Affiliates at any time during the eighteen month period
immediately preceding such termination.
13.5 Executive acknowledges that the execution and delivery by
him of the promises set forth in this Section 13 is an essential inducement to
Company to enter into this Agreement, and that Company would not have entered
into this Agreement but for such promises. Executive further acknowledges that
his services are unique and that any breach or threatened breach by Executive of
any of the foregoing provisions of this Section 13 cannot be remedied solely by
damages. In the event of a breach or a threatened breach by Executive of any of
the provisions of this Section 13, Company shall be entitled to injunctive
relief restraining Executive and any business, firm, partnership, individual,
corporation or other entity participating in such breach or attempted breach.
Nothing herein, however, shall be construed as prohibiting Company from pursuing
any other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
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13.6 If any of the provisions of, or promises contained in,
this Section 13 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalid portions or the unenforceability in such
other jurisdiction. If any provisions contained in this Section 13 are held to
be unenforceable in any jurisdiction because of the duration or scope thereof,
the parties hereto agree that the court making such determination shall have the
power to reduce the duration and/or scope (if such provision, in its reduced
form, shall be enforceable); provided, however, that the determination of such
court shall not affect the enforceability, duration or scope of this Section 13
in any other jurisdiction.
13.7 As separate and additional compensation to be paid to the
Executive in consideration of the observance and performance of the promises
contained in this Section 13, the Company agrees that, during the period of
restrictions set forth in this Section 13, the Executive will be entitled to be
paid an amount equal to 100% of the Base Salary computed at the annual rate
prevailing immediately prior to the termination of his employment (such amount
to be paid in the same manner as the Company's regular payroll practices),
except that, (i) in the case of termination of the Executive's employment for
Cause, or in case the Executive shall terminate this Agreement under Section
12.1 during the Initial Term, the Executive will receive no such compensation
14. Relationship of Parties.
------------------------
Nothing herein contained shall be deemed to constitute a
partnership between or a joint venture by the parties, nor shall anything herein
contained be deemed to constitute either the Executive, the Company or any
Affiliates the agent of the other except as is expressly provided herein.
Neither Executive nor Company shall be or become liable or bound by any
representation, act or omission whatsoever of the other party made contrary to
the provisions of this Agreement.
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15. Notices.
--------
All notices and communications hereunder shall be in writing
and delivered by hand or sent by registered or certified mail, postage and
registration or certification fees prepaid, return receipt requested, or by
overnight delivery such as Federal Express, and shall be deemed given when hand
delivered or upon three (3) business days after the date when mailed, or upon
one (1) business day after delivery to an agent for overnight delivery, if sent
in such manner, as follows:
If to Company: Celsion Corporation
00000-0 Xxx Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000-0000.
Attention: Board of Directors
With a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Lake
If to Executive: Xxxxxxx X. Xxxx
C/o Celsion Corporation
00000-0 Xxx Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000-0000.
The foregoing addresses may be changed by notice given in the manner set forth
in this Section 15.
16. Disputes.
--------
Any dispute arising under this Agreement shall be settled in
accordance with the following provisions. If the parties are deadlocked on any
issue arising under the terms of this Agreement, a tiebreaker shall be chosen by
the Xxxx of the School of Business Administration at the University or Maryland.
Each party may present its proposal to the designated tiebreaker in written form
and may, on a date established by the tiebreaker within fifteen calendar days of
the day the tiebreaker is chosen, make an oral presentation not to exceed two
hours in length, accompanied by exhibits and written arguments not to exceed 50
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pages in length. The designated tiebreaker shall then select one of the
submitted proposals, without any change or adjustment, and shall announce to the
parties his or her selection within five calendar days of the day of submission.
The party offering the proposal that is not selected by the tiebreaker shall
bear all costs and expenses (including legal, expert and other fees and
expenses), and the expenses and fees charged by the tiebreaker. Any award by the
tiebreaker may be enforced on application of either party by the order or
judgment of any Federal or state court in the State of Maryland as the party
making such application shall elect, having jurisdiction over the subject matter
thereof. Each of the parties hereto hereby submits itself to the jurisdiction of
any such court and agree that service of process on it in any action, suit or
proceeding to enforce any such award may be effected by the means by which
notices are to be given to it under this Agreement.
17. Miscellaneous.
--------------
17.1 This Agreement contains the entire understanding of the
parties hereto with respect to the employment of Executive by Company during the
term hereof, and the provisions hereof may not be altered, amended, waived,
terminated or discharged in any way whatsoever except by subsequent written
agreement executed by the party charged therewith. This Agreement supersedes all
prior employment agreements, understandings and arrangements between Executive
and Company pertaining to the terms of the employment of Executive. A waiver by
either of the parties of any of the terms or conditions of this Agreement, or of
any breach hereof, shall not be deemed a waiver of such terms or conditions for
the future or of any other term or condition hereof, or of any subsequent breach
hereof.
17.2 The provisions of this Agreement are severable, and if
any provision of this Agreement is invalid, void, inoperative or unenforceable,
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the balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any circumstance, it shall nevertheless remain applicable to all
other circumstances.
17.3 Company shall have the right to deduct and withhold from
Executive's compensation the amounts required to be deducted and withheld
pursuant to any present or future law concerning the withholding of income
taxes. In the event that Company makes any payments or incurs any charges for
Executive's account or Executive incurs any personal charges with Company,
Company shall have the right and Executive hereby authorizes Company to recoup
such payments or charges by deducting and withholding the aggregate amount
thereof from any compensation otherwise payable to Executive hereunder.
17.4 This Agreement shall be construed and interpreted under
the laws of the State of Maryland applicable to contracts executed and to be
performed entirely therein.
17.5 The captions and section headings in this Agreement are
not part of the provisions hereof, are merely for the purpose of reference and
shall have no force or effect for any purpose whatsoever, including the
construction of the provisions of this Agreement.
17.6 To the extent any provision of this Agreement
contemplates action after termination hereof or creates a cause of action or
claim on which action may be brought by either party, such provision, cause of
action or claim shall survive termination of Executive's employment or
termination of this Agreement.
17.7 Executive may not assign his rights nor delegate his
duties under this Agreement; provided, however, that notwithstanding the
foregoing this Agreement shall inure to the benefit of Executive's legal
representatives, executors, administrators or successors and to the successors
or assigns of Company.
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17.8 Effective on the execution and delivery of this Agreement, each of
the Company and the Executive agrees that the prior agreement between the
parties dated the 11th day of May, 1997, as in effect prior to the date hereof
shall cease to be of further force and effect, except to the extent that
separate written arrangements between the Executive and the Company have been
agreed to reflect modifications in certain of the terms of that prior agreement
requested by the Company and agreed by the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CELSION CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------
Xxxxxxxxx X. Xxxxxx, Chairman
/s/ Xxxxxxx X. Xxxx
--------------------
Xxxxxxx X. Xxxx
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