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EXHIBIT 10.LXXVI
EMPLOYMENT AGREEMENT
AGREEMENT dated July 1, 1999 (the "Effective Date") by and between
VIRAGEN, INC., a Delaware corporation ("Employer or the "Company"), and XXXXXX
XXXXXXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ the Employee upon the terms and
conditions hereinafter set forth and Employee desires to accept employment upon
such terms and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the terms
and conditions of their agreements and understandings with respect to Employee's
employment by Employer.
NOW, THEREFORE, Employer hereby employs Employee and Employee hereby
accepts employment under the following terms and conditions:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon all the terms and conditions hereinafter set forth.
2. TERM
Subject to the provisions for earlier termination set forth in
Section 9 hereof, this Agreement shall commence on the Effective Date and shall
end as of the close of business on June 30, 2001 (the "Employment Term"). The
term "first year", as used herein, means the period commencing on the Effective
Date and ending as of the close of business on June 30, 2000, the term "second
year", as used herein, means the period commencing on July 1, 2000 and ending as
of the close of business on June 30, 2001, and the term "year", as used herein,
means, as the context requires, the first year or the second year.
Notwithstanding any of the foregoing to the contrary, if this Employment
Agreement is terminated prior to the expiration of the Employment Term, a year
shall mean, with respect to the year during which termination occurs, the period
commencing on the first day of such year and ending as of the close of business
of the day of termination of Employee's employment, and "Employment Term" shall
mean the period commencing on the Effective Date and ending as of the close of
business of the day of termination of Employee's employment.
3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that he is free
to accept employment with Employer as contemplated herein and has no other
written or oral obligations or commitments of any kind or nature which would in
any way interfere with his
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acceptance of employment pursuant to the terms hereof or the full performance of
his obligations hereunder or the exercise of his best efforts in his employment
hereunder.
4. DUTIES AND EXTENT OF SERVICES
Employee shall be employed as Employer's Executive Vice
President and Chief Executive Officer of Employer's US Subsidiary Viragen
U.S.A., Inc. and, as such, shall, subject to the direction of Employer's
President, supervise the conduct of certain of the Employer's operations and
affairs as assigned by the President, and perform such other duties and
responsibilities as may be assigned to Employee from time to time consistent
with such title by Employer's President. Employee agrees to devote sufficient
time, skill, attention and energy diligently and competently to perform the
duties and responsibilities reasonably assigned to him hereunder or pursuant
hereto to the best of his abilities. Employee shall use his best efforts to be
loyal and faithful at all times and constantly endeavor to improve his ability
and his knowledge of the business of Employer in an effort to increase the value
of his services for the mutual benefit of Employer and Employee. Employee agrees
not to enter into any other employment agreement, other than with subsidiaries
and/or affiliates of the Company as may be approved by the Company's President
and/or Board of Directors, during the term hereof.
5. COMPENSATION
Employee shall receive an annual salary during the first year
of the Employment Term of $160,000. Employee's salary for the second year of the
Employment Term shall be $172,500. Employee's salary shall be payable in
accordance with the Company's normal payroll process, currently bi-weekly.
Additional consideration payable to Employee hereunder consists (a) the grant to
Employee of options to acquire 250,000 shares of common stock of Employer (as
further described herein) and (b) of fringe benefits, if any, that shall be made
available to Employee further described herein.
6. FRINGE BENEFITS AND EXPENSES
A. EMPLOYEE PLANS. Employee shall be eligible (subject to the
terms and conditions of particular plans and programs) to participate in such
medical, hospitalization, group health, accident, disability and life insurance
programs and plans, such pension, profit sharing, stock option, incentive
compensation and stock purchase plans and such other employee benefit programs
to the same extent such plans and programs are made generally available from
time to time by Employer to all of its other similarly-situated employees;
provided, however, Employer shall be under no obligation to make any of such
plans or programs available to its employees or continue any which currently or
in the future exist, except as otherwise required by law.
B. AUTOMOBILE. For the term of this Agreement, Employer shall
provide to Employee an automobile allowance of $400 per month, and shall pay all
gas and other automotive fluids, for performance of Employee's duties on behalf
of Employer as specified herein.
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C. OTHER EXPENSES. Employer shall promptly pay directly or
reimburse Employee for his reasonable out-of-pocket costs and expenses incurred
in connection with the performance of his duties and responsibilities hereunder
subject to the submission by Employee of appropriate invoices, receipts and
other supporting documentation, consistent with Employer's customary
reimbursement policies and procedures.
D. GROUP HEALTH AND DENTAL COVERAGE EXPENSES. Employer shall
pay all monthly premium cots related to Employee's individual and family Group
Health and Dental Coverage Expenses.
7. VACATIONS
Employee shall be entitled to normal vacation (of not less
than two weeks) taken by other members of senior management during each
twelve-month period of the Employment Term. Employee shall not entitled to be
compensated for any unused vacation upon termination of this Agreement. The
periods during which Employee will be absent from work shall be determined by
Employee taking into account the needs of Employer's business.
8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as it
reasonably determines is adequate for Employee's performance of his duties and
responsibilities under this Agreement.
9. TERMINATION OF EMPLOYMENT
A. TERMINATION EVENTS. Notwithstanding any provisions of this
Agreement to the contrary, Employee's employment may be terminated by Employer
with Cause (as hereinafter defined) effective upon the delivery of written
notice to Employee. In addition, Employee's employment shall terminate (i) upon
Employee's death or (ii) upon Employee becoming Disabled (as hereinafter
defined).
B. DEFINITION OF DISABLED. For purposes of this Agreement,
Employee shall be deemed to be "Disabled" when, by reason of physical or mental
illness or of injury, he is unable to perform substantially all of the duties
and responsibilities required of him in connection with his employment
hereunder. No disability shall be deemed to exist until after Employee shall be
unable to perform his duties hereunder for ninety (90) consecutive days (the
"Disability Period"). If Employee shall have been under a disability but shall
have returned to work prior to the end of the Disability Period, any new
disability commencing within thirty (30) days of the termination of the prior
disability shall be a continuation of the prior disability, and the period of
all such disabilities shall be added together to determine whether, or how much
of, the Disability Period has elapsed.
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C. DEFINITION OF CAUSE. For purposes of this Agreement,
"Cause" shall be: (a) conviction for fraud or criminal conduct (other than
conviction of, or a plea of guilty to, a traffic violation), from which no
appeal can be taken; (b) habitual drunkenness or drug addiction; (c)
embezzlement; (d) material sanctions against Employee in his capacity as an
employee of Employer by regulatory agencies governing Employer or against
Employer because of wrongful acts or conduct of Employee which have a material
adverse affect upon the Employer and its business; (e) material breach or
default by Employee of any of the material terms or conditions of this
Agreement, and the continuation of such material breach or default by Employee
for a period of seven (7) days following the date of receipt of written notice
from Employer specifying the breach or default of Employee; or (f) the
resignation or quitting of Employee prior to the end of the Employment Term (in
this last event, Employee's employment shall be deemed terminated with Cause on
the date that he resigns or quits).
If Employee's employment is terminated by Employer without
Cause as defined in this Section, Employee shall be given sixty (60) days
written notice of termination by Employer and be entitled to receive the greater
of (i) two years compensation and fringe benefits/expenses as provided for in
Sections 5 & 6 hereof or (ii) compensation and fringe benefits/expenses as
provided for in Sections 5 & 6 payable through the remainder of the Employment
Term as provided for in Section 2 hereof. Additionally, in the event of
termination without Cause, or non-renewal of this Agreement at the end of the
Employment Term, any outstanding but unexercised stock options or warrants
granted to Employee shall continue to be fully exercised through their stated
respective Exercise Period(s).
D. TERMINATION FOLLOWING A CHANGE OF CONTROL.
i. In the event that a "Change of Control" as
hereinafter defined, and the occurrence of a "Good Reason" as hereinafter
defined, of the Company shall occur at any time during the Employment Term, the
Employee shall have the right to terminate the Employee's employment under this
Agreement upon thirty (30) days written notice given at any time within one year
after the occurrence of such events, and such termination of the Employee's
employment with the Company pursuant to this Subsection 9D, then, in any such
event, such termination shall be deemed to be a Termination by the Company Other
than for Cause and the Employee shall be entitled to such Compensation and
Benefits as set forth in Subsection 9C of this Agreement.
ii. For purposes of this Agreement, a "Change of
Control" of the Company shall mean a change in control (A) as set forth in
Section 280G of the Internal Revenue Code or (B) of a nature that would be
required to be reported in response to Item 1 of the current report on Form 8K,
as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without
limitation, such a change in control shall be deemed to have occurred at such
time as:
(a) any person (as such term is used in Section
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing
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fifty percent (50%) or more of the combined voting power of the Company's
outstanding securities then having the right to vote at elections of directors;
or,
(b) the individuals who at the commencement
date of this Agreement the Board of Directors cease for any reason to constitute
a majority thereof unless the election, or nomination for election, of each new
director was approved by a vote of at least two thirds of the directors then in
office who were directors at the commencement of this Agreement; or
(c) there is a failure to elect five or more
(or such number of directors as would constitute a majority of the Board of
Directors) candidates nominated by management of the Company to the Board of
Directors; or
(d) the business of the Company for which
the Employee's services are principally performed is disposed of by the Company
pursuant to a partial or complete liquidation of the Company, a sale of assets
(including stock of a subsidiary of the Company) or otherwise.
Anything herein to the contrary notwithstanding, this Subsection 9D will not
apply where the Employee gives the Employee's explicit written waiver stating
that for the purposes of this Subsection 9D a Change in Control shall not be
deemed to have occurred. The Employee's participation in any negotiations or
other matters in relation to a Change in Control shall in no way constitute such
a waiver which can only be given by an explicit written waiver as provided in
the preceding sentence.
Anything to the contrary notwithstanding, termination shall not be deemed
Termination without Cause if there shall not have also occurred at or around a
change in control a second event.
The second event is that the Employee is given "Good Reason" for choosing to
terminate. Good Reason means, without the Employee's express written consent,
the occurrence of any of the following events after a Change in Control:
I. a reduction by the Employer of the Employee's rate of annual
compensation,
II. the failure of the Employer to continue in effect any Employee
benefit plan or compensation plan in which the Employee
participating following the Change in Control, unless the
Employee is permitted to participate in other plans providing
substantially comparable benefits, or the taking of any action
by the Employer which would adversely affect the Employee's
participation in or materially reduce benefits under any such
plan, PROVIDED, HOWEVER, that changes affecting the
participation or benefits of all similarly situated Employee's
shall not be treated as Good Reason hereunder,
III. a materially adverse change in the level of the Employee's
employment responsibilities, PROVIDED, HOWEVER, that changes
in title or changes in the
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affiliate of the Employer which employs the Employee shall not
be treated as Good Reason hereunder,
IV. a relocation of Employers offices such that Employee would be
required to relocate his primary residence to provide for a
reasonable daily travel distance to such new location.
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. CONFIDENTIAL INFORMATION. Employee acknowledges that
Employee has been informed that it is the policy of Employer to maintain as
secret and confidential all information relating to (i) the financial condition,
businesses and interests of Employer and its affiliates, (ii) the systems,
know-how, products, services, costs, inventions, patents, patent applications,
formulae, research and development procedures, notes and results, computer
software programs, marketing and sales techniques and/or programs, methods,
methodologies, manuals, lists and other trade secrets heretofore or hereafter
acquired, sold, developed and/or used by Employer and its affiliates and (iii)
the nature and terms of Employer's and its affiliates' relationships with their
respective customers, clients, suppliers, lenders, vendors, consultants,
independent contractors and employees (all such information being hereinafter
collectively referred to as "Confidential Information"), and Employee further
acknowledges that such Confidential Information is of great value to Employer
and its affiliates and, in and by reason and as a result of Employee's
employment by Employer, Employee will be making use of, acquiring and/or adding
to such Confidential Information. Therefore, Employee understands that it is
reasonably necessary to protect Employer's and its affiliates' trade secrets,
good will and business interests that Employee agree and, accordingly, Employee
does hereby agree, that Employee will not directly or indirectly (except where
authorized by the President or Board of Directors of Employer for the benefit of
Employer and/or its affiliate(s) and/or as required in the course of his
employment) at any time hereafter divulge or disclose for any purpose whatsoever
to any persons, firms, corporations or other entities other than Employer or its
affiliates (hereinafter referred to collectively as "Third Parties"), or use or
cause or authorize any Third Parties to use, any such Confidential Information,
except as otherwise required by law.
B. EMPLOYER'S MATERIALS. In accordance with the foregoing,
Employee furthermore agrees that (i) Employee will at no time retain or remove
from the premises of Employer or its affiliates any research and development
materials, drawings, notebooks, notes, reports, formulae, software programs or
disc or other containers of software, manuals, data, books, records, materials
or documents of any kind or description for any purpose unconnected with the
strict performance of Employee's duties with Employer and (ii) upon the
cessation or termination of Employee's employment with Employer for any reason,
Employee shall forthwith deliver or cause to be delivered up to Employer any and
all research and development materials, drawings, notebooks, notes, reports,
formulae, software programs or discs or other containers of software, manuals,
data, books, records, materials and other documents and materials in Employee's
possession or under Employee's control relating to any Confidential Information
or any property or information which is otherwise the property of Employer or
its affiliates.
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11. COVENANT-NOT-TO-COMPETE
In view of the Confidential Information to be obtained by or
disclosed to Employee, because of the know-how acquired and to be acquired by
Employee, and as a material inducement to Employer to enter into this Agreement
and continue to employ Employee, Employee covenants and agrees that, so long as
Employee is employed by Employer and for a period of two (2) years after
Employee ceases for any reason to be employed by Employer, Employee shall not,
directly or indirectly, (i) divert business from, (ii) solicit or transact any
business competitive with Employer or its affiliates with, or (iii) sell any
products or services sold or offered by Employer or its affiliates to, any
customer or former customer of Employer or its affiliates. In addition, Employee
covenants and agrees that, so long as Employee is employed by Employer and for a
period of two (2) years after Employee ceases for any reason to be employed by
Employer, Employee hereby agrees to refrain from, anywhere in the world (the
"Geographical Area"), directly or indirectly owning, managing, operating,
controlling or financing, or participating in the ownership, management, control
or financing of, or being connected with or having an interest in, or otherwise
taking any part as a stockholder, director, officer, employee, agent,
consultant, partner or otherwise in, any business competitive with that engaged
in or being developed by Employer or its affiliates during Employee's term of
employment. Without limitation of the foregoing, Employer's business is
acknowledged to include the development, manufacture and sale of human leukocyte
interferon therapy and products and other natural or recombinant technologies
aimed at enhancing the human immune system. Employee acknowledges that
Employer's business is anticipated to be international in scope, that a similar
business could effectively compete with Employer's and its affiliates businesses
from any location in the world, and that, therefore, the restricted Geographical
Area is reasonable in scope to protect Employer's and its affiliates' trade
secrets and legitimate business interests.
12. EMPLOYER'S REMEDIES FOR BREACH OF SECTIONS 10 & 11
Employee covenants and agrees that if Employee shall violate
or breach any of Employee's covenants or agreements provided for in Sections 10
or 11 hereof, Employer and/or its affiliates shall be entitled to an accounting
and repayment of all profits, compensation, commissions, remuneration's or
benefits which Employee directly or indirectly has realized or realizes as a
result of, growing out of or in connection with any such violation or breach. In
addition, in the event of a breach or violation or threatened or imminent breach
or violation of any provisions of Sections 10 or 11 hereof, Employer and/or its
affiliates shall be entitled to a temporary and permanent injunction or any
other appropriate decree of specific performance or equitable relief, without
posting of bond, from a court of competent jurisdiction in order to prevent,
prohibit or restrain any such breach or violation or threatened or imminent
breach or violation by Employee, by Employee's partners, agents,
representatives, servants, employers or employees and/or by any third parties.
Employer shall be entitled to such injunctive or other equitable relief in
addition to any damages which are suffered, and the prevailing party shall be
entitled to reasonable attorney's and paralegals' fees and costs and other costs
incurred in connection with any such litigation, both before and at trial and at
all tribunal levels.
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Resort by Employer and/or its affiliates to such injunctive or other equitable
relief shall not be deemed to waive or to limit in any respect any other rights
or remedies which Employer or its affiliates may have with respect to such
breach or violation.
13. REASONALBENESS OF RESTRICTIONS
A. REASONABLENESS. Employee acknowledges that any breach or
violation of Sections 10 or 11 hereof will cause irreparable injury and damage
and incalculable harm to Employer and its affiliates and that it would be very
difficult or impossible to measure the damages resulting from any such breach or
violation. Employee further acknowledges that Employee has carefully read and
considered the provisions of Sections 10, 11 and 12 hereof and, having done so,
agrees that the restrictions and remedies set forth in such Sections (including,
but not limited to, the time period, geographical and types of restrictions
imposed) are fair and reasonable and are reasonably required for the protection
of the business, trade secrets, interests and goodwill of Employer and its
affiliates.
B. SEVERABILITY. Employee understands and intends that each
provision and restriction agreed to by Employer in Sections 10, 11 and 12 hereof
shall be construed as separate and divisible from every other provision and
restriction and that, in the event that any one of the provisions of, or
restrictions in, Section 10, 11 and/or 12 hereof shall be held to be invalid or
unenforceable, the remaining provisions thereof and restrictions therein shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable provisions or restrictions had not been included therein, and any
one or more of such valid provisions and restrictions may be enforced in whole
or in part as the circumstances warrant. In the event that any such provision
relating to time period and/or geographical and/or type of restriction shall be
declared by a court of competent jurisdiction to exceed the maximum or
permissible time period, geographical area or type of restriction such court
deems reasonable and enforceable, said time period and/or geographical and/or
type of restriction shall be deemed to become and shall thereafter be the
maximum time period and/or geographical restriction and/or type of restriction
which such court deems reasonable and enforceable.
C. SURVIVABILITY. The restrictions, acknowledgments, covenants
and agreements of Employee set forth in Sections 10, 11, 12 and 13 of this
Agreement shall survive any termination of this Agreement or of Employee's
employment (for any reason, including expiration of the Employment Team).
D. COMPARABLE RESTRICTIONS. Employer agrees that it will use
its best efforts to have other senior executives execute and observe agreements
containing similar provisions as are contained in Sections 10, 11 and 12
thereof.
14. STOCK OPTIONS
Effective the Effective Date, Employer hereby grants to
Employee, pursuant to Employer's 1997 Stock Option Plan (the "Plan"), options to
acquire up to 250,000 shares of the Company's Common Stock (the "Options"), for
a period of five (5) years from the date hereof, in accordance with the Stock
Option Agreement attached hereto (Exhibit A) and
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made a part hereof. Such Options shall vest; 125,000 options upon the Effective
Date of this Employment Agreement and 125,000 options upon the first anniversary
of this Employment Agreement.
Employer represents and warrants that (i) all shares
underlying the Options will be issued from shares authorized by and subject to
the provisions of the Plan (ii) the Plan and the shares underlying the Options
have been registered under the applicable regulations of the Securities and
Exchange Commission on Form S-8 (iii) such registration is effective as of the
Effective Date, and (iv) such registration covering the shares underlying the
Options will be maintained as effective for the longer of (a) the Employment
Term or (b) the Exercise Period of the Options as defined in Exhibit A.
15. EMPLOYEE'S DISCLOSURES AND REPRESENTATIONS AND WARRANTIES
Employee hereby acknowledges, represents and warrants to,
and/or agrees with Employer that Employee has full right, power and authority to
perform all obligations under this Agreement.
Employee hereby agrees to indemnify and hold harmless Employer
and its shareholders, directors, officers, employees and agents from and against
any and all loss, damage, liability, cost or expense (including reasonable
attorney's and paralegals' fees and costs before and at trial and at all
appellate levels) due to or arising out of any material inaccuracy in, or
material breach of, any material representation, warranty or covenant of
Employee contained herein.
16. INDEPENDENT COUNSEL
Employer and Employee agree that each of them have been, or
were advised and fully understand that they are entitled to be represented by
independent legal counsel with respect to all matters contemplated herein from
the commencement of negotiations at all times through the execution hereof.
17. LAW APPLICABLE
This Agreement shall be governed by and construed pursuant to
the laws of the State of Florida, without giving effect to conflicts of law
principles.
18. NOTICES
Any notices required or permitted to be given pursuant to this
Agreement shall be sufficient, if in writing, and if personally delivered or
sent by certified or registered mail, return receipt requested, to his
residence, in the case of Employee, or to its then principal office, in the case
of Employer.
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19. SUCCESSION
This Agreement shall inure to the benefit of the be binding
upon the parties hereto and their respective legal representatives, heirs,
assignees and/or successors in interest of any kind whatsoever; provided,
however, that Employee acknowledges and agrees that he cannot assign or delegate
any of his rights, duties, responsibilities or obligations hereunder to any
other person or entity.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire final agreement between
the parties with respect to, and supersedes any and all prior agreements, both
oral and written, between the parties hereto, except as related to rights of the
Employee and obligations related thereto of Employer regarding previously
granted stock options and previously purchased stock, as may have been modified
from time to time. The subject matter hereof may not be amended, modified or
terminated except by writing signed by the parties hereto.
21. SEVERABILITY
If any provision of this Agreement shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction, such
invalidity or enforceability shall attach only to such provision and shall not
in any way affect or render invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if such invalid or
unenforceable provision were not contained herein.
22. NO WAIVER
A waiver of any breach or violation of any term, provision or
covenant contained herein shall not be deemed a continuing waiver or a waiver of
any future or past breach or violation. No oral waiver shall be binding.
23. ATTORNEYS' FEES
In the event that either of the parties to this Agreement
institutes suit against the other party to this Agreement to enforce any of his
or its rights hereunder, the prevailing party in such action shall be entitled
to recover from the other party all reasonable costs thereof, including
reasonable attorneys' and paralegals' fees and costs incurred before and at
trial and at all tribunal levels.
24. COUNTERPARTS
This Agreement may be executed in counterparts, each of which
shall be an original, but both of which together shall constitute one and the
same instrument.
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25. INDEMNITY OF EMPLOYEE
Employer shall indemnify and hold harmless Employee from and
against any and all claims, judgements, fines, penalties, liabilities, losses,
costs and expenses (including reasonable attorneys' fees and costs) asserted
against or incurred by Employee as a result of acts or omissions of Employee
taken or made in the course of performing his duties for Employer or by reason
of Employee acting or having acted as a director or officer of Employer, to the
maximum extent permitted by law, including Section 607.850, Florida Statutes
(including the advancement of expense provisions thereof); provided, however,
that such indemnity shall not apply to acts or omissions of Employee which
constitute misconduct, gross negligence or which were intended by Employee to
personally benefit Employee, directly or indirectly, at the expense of Employer,
unless the matter which benefits Employee was first fully disclosed to the Board
of Directors of Employer and approved by said Board.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the day and year first above written.
VIRAGEN, INC.
By:
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XXXXXX XXXXX
President
EMPLOYEE
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XXXXXX XXXXXXXX
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ADDENDUM #1 TO EMPLOYMENT AGREEMENT
BETWEEN VIRAGEN U.S.A., INC. (EMPLOYER)
AND XXXXXX XXXXXXXX (EMPLOYEE)
As employer's majority shareholder, Viragen, Inc. has engaged Employee
under a contract dated July 1, 1999, it is agreed by employer and
employee that the Employment Agreement between Employer and Employee
dated April 27, 1998, be amended such that all paragraphs other than
paragraph 14 cease and paragraph 14 and Exhibit A (attached) be
replaced in its entirety by the following:
14. Effective the Effective Date, Employer hereby grants
to Employee, pursuant to Employer's 1997 Stock Option
Plan (the "Plan"), options to acquire up to 100,000
shares of the Company's Common Stock (the "Options"),
for a period of five (5) years from the date hereof,
in accordance with the Stock Option Agreement
attached hereto (Exhibit A) and made a part hereof.
Such Options shall vest; 50,000 options upon the
first anniversary of the execution of this Employment
Agreement and 50,000 options upon the second
anniversary of this Employment Agreement.
Employer represents and warrants that (i) all shares
underlying the Options will be issued from shares
authorized by and subject to the provisions of the
Plan (ii) the Company shall use its best efforts to
register the Plan and the shares underlying the
Options under the applicable regulations of the
Securities and Exchange Commission on Form S-8 and
prior to the vesting of any or all of Employee's
Options (iii) such registration covering the shares
underlying the Options will be maintained as
effective for the longer of (a) the Employment Term
or (b) the Exercise Period of the Options as defined
in Exhibit A.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
July 1, 1999.
Viragen (Europe) Ltd.
By:
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Xxxxxx X. Xxxxxx
Executive Vice President
Employee
By:
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Xxxxxx Xxxxxxxx
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EXIHBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of July 1, 1999 (the "Effective Date") between
Viragen, Inc., a Delaware Corporation (the "Company") and XXXXXX XXXXXXXX
("Optionee").
The Company, pursuant to the provisions of its 1997 Stock Option Plan (the
"Plan"), hereby grants to Optionee an Incentive Stock Option ("ISO") to acquire
Common Stock, par value $.01 per share, of the Company (the "Common Stock"),
subject to the following terms and conditions:
1. GRANT OF OPTION. The Company hereby grants to Optionee (the
"Option") to purchase up to 250,000 shares of Common Stock (the "Shares"), to be
transferred upon the exercise thereof, fully paid and nonassessable.
2. EXERCISE PRICE. The exercise price of the Shares subject to the
Option shall be at market at the Grant Date, $0.625 per share. The Company shall
pay all original issue or transfer taxes upon the exercise of the Option by
Optionee.
3. EXERCISABILITY OF OPTION; RIGHTS AND PRIVILEGES.
Subject to the provisions of Paragraph 6 hereof, the Option shall be exercisable
by Optionee from time to time, for a period of five (5) years commencing: (i)
125,000 options from the Effective Date and (ii) 125,000 Options from the first
anniversary of the Effective Date.
All granted but unexercised Options shall continue to be fully exercisable in
accordance with the provisions herein:
(i) if there occurs any corporate transaction (which
shall include a series of corporate transactions occurring within 60 days or
occurring pursuant to a plan), that has the result that shareholders of the
Company immediately before such transaction cease to own at least 66 2/3 percent
of the voting stock of the Company in a (a) reorganization, (b) consolidation,
(c) merger, (d) liquidation or (e) a similar or corporate transaction;
(ii) if the shareholders of the Company shall approve
a plan of merger, consolidation, reorganization, liquidation or dissolution in
which the Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or
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(iii) if the shareholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
4. NON-ASSIGNABILITY OF OPTION. The Option shall not be given, granted,
sold, exchanged, transferred, pledged, encumbered, assigned or otherwise
disposed of by Optionee, other than by will or the laws of descent and
distribution, and during the lifetime of Optionee, shall not be exercisable by
any other person, but only by Optionee.
5. METHOD OF EXERCISE OF OPTION. Optionee shall notify the Company by
written notice, in the form of the Notice of Exercise attached hereto
(Attachment A), delivered to the Company's principal office, attention: Chief
Financial Officer. At the Optionee's option, the payment for the Shares may be
made either by Optionee's check payable to the order to the Company in full
payment for the total exercise price of the number of Shares purchased or by
execution and delivery by the Optionee to the Company of a Note(s), in similar
form and content as Notes previously used by the Company for similar purposes
("Note(s)"), dated as of each Notice of Exercise. As soon as practicable after
the receipt of such Notice of Exercise and accompanying payment for the purchase
of Shares, the Company shall, at its principal office, tender to Optionee a
certificate or certificates issued in Optionee's name evidencing the Shares
purchased by Optionee hereunder.
6. TERMINATION OF OPTION. To the extent exercisable but not exercised,
the Option shall terminate upon the first to occur of the following dates:
(a) five (5) years from the Exercise Date as defined herein;
or
(b) the expiration of ninety (90) days following the date
Optionee's employment terminates with the Company and/or any of its subsidiaries
included in the Plan with Cause, as defined in Optionee's Employment Agreement
attached hereto.
Subject to the provisions of this paragraph, in the event of Optionee's death,
the exercisable but unexercised portion of the Option may be exercised by the
estate of Optionee, or by the person who acquired the right to exercise the
Option by bequest or inheritance or by reason of the death of Optionee.
In the event of Employee's termination without Cause, all granted but
unexercised Options shall continue to be fully exercisable in accordance with
the provisions herein. Additionally, in the event this Agreement is not renewed
at the end of the Employment Term, then all granted but unexercised Options
shall continue to be fully exercisable in accordance with the provisions herein.
7. PLEDGE OF SHARES. If payment for the purchase of Shares under this
Option is made through execution and delivery of a Note(s), effective upon
Optionee's purchase(s), of the Shares and the delivery of the Note(s), in order
to secure the Company's obligations under the Note(s), Optionee hereby pledges,
assigns and sets over
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to the Company, and grants to the Company a security interest in, the Shares.
The Shares pledged pursuant hereto shall be maintained in escrow with Atlas,
Xxxxxxxx, Trop & Borkson, P.A. pursuant to the terms of a Pledge and Escrow
Agreement previously used by the Company for similar purposes, which shall be
executed by Optionee and the Company upon delivery of a Note(s). As long as any
Shares remain subject to the lien of the Pledge, such Shares may not be further
pledged or encumbered in any manner, and shall not be sold, transferred or
otherwise disposed of. The Escrow Agent shall not be required to relinquish the
Pledge or the Escrow Agent's possession of the certificates evidencing the
Shares, unless no later than concurrently with the sale of the Shares pursuant
to an S-8 registration, all Notes which are secured by such Shares are paid in
full. In the event any of the Shares are to be titled in the name of an
immediate family member of Optionee or a trust pursuant to the terms herein, as
a condition thereto the designated title holder(s) of such Shares shall execute
and deliver to the Company a pledge and escrow agreement, in form and content
reasonably satisfactory to the Company and its counsel, consistent with the
terms herein. No transfer of Shares to, or designation by Optionee of (for the
purposes of owning Shares) any person or entity shall relieve Optionee of any of
his obligations under the Note(s) or this Agreement. With respect to each Note
under which a voluntary prepayment is made by Optionee, provided that interest
payments on such Note are current through the date of prepayment and such Note
is not in default and has not been accelerated, for each $2,200 of principal
paid by Optionee under such Note, 10,000 Shares of the Shares pledged to secure
such Note shall be released from the lien of the Pledge. As long as no event of
default has occurred with respect to a Note and no event giving right to
accelerate such Note has occurred, Optionee shall retain all voting rights with
respect to all Shares securing such Note. Following an event of default or an
acceleration event, the Company shall have and may exercise all voting rights
with respect to such Shares. Optionee hereby irrevocably appoints the Company
Optionee's attorney-in-fact for such purpose, it being acknowledged that such
appointment is coupled with an interest. Any dividends or distributions payable
in respect of any Shares subject to the Pledge shall automatically be applied to
pay down the Note(s) in inverse order of their respective maturity date(s). In
the event of a default under any Note, in addition to and not in limitation or
lieu of any other rights or remedies the Company may have against Optionee as a
result of such default, the Company may exercise all of its rights at law and in
equity as a secured party, including without limitation under the Uniform
Commercial Code, with respect to all Shares then securing the Note with respect
to which the default has occurred. Upon a default, without limiting any of the
Company's other rights and remedies, the Company may conduct a public or private
foreclosure sale of the Shares securing th Note with respect to which the
default has occurred. Optionee agrees that 10 days notice to him of any private
sale is fair and reasonable. The Company may be the purchaser at any public
foreclosure sale, and may bid any commercially reasonable amount at such sale.
In all events, in the event of a public or private foreclosure sale, Optionee
shall be liable for any deficiency. All of the Company's rights and remedies
under the Note(s), the Pledge and this Agreement, and at law or in equity, are
cumulative, and none is intended to be in substitution or in lieu of, nor is the
exercise of one intended to be a waiver of, any other. The Company shall have no
obligation to proceed against the Shares before proceeding against Optionee with
respect to any default under any of the Notes.
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8. SECURITIES LAWS. Employer represents and warrants that (i) all
shares underlying the Options will be issued from shares authorized by and
subject to the provisions of the Plan; (ii) the Company shall use its best
efforts to register the Plan and the shares underlying the Options under the
applicable regulations of the Securities and Exchange Commission on Form S-8
prior to the vesting of any Options held by Optionee; and (iii) such
registration covering the shares underlying the Options will be maintained as
effective for the longer of (a) the Employment Term or (b) the Exercise Period
of th Options as defined herein.
9. ADJUSTMENT OF SHARES. If at any time prior to the expiration or
exercise in full of the Option, there shall be any increase or decrease in the
number of issued and outstanding shares of the Common Stock through the
declaration of a stock dividend or through any recapitalization resulting in a
stock split-up, combination or exchange of the Common Stock, then and in such
event:
(i) appropriate adjustment shall be made in the maximum number
of Shares available for grant, so that the same percentage of the Company's
issued and outstanding Shares shall continue to be subject to being so optioned;
and
(ii) appropriate adjustment shall be made in the number of
Shares, and the exercise price per Share thereof, that remain unexercised under
the Option, so that the same percentage of the Company's issued and outstanding
shares of Common Stock shall remain subject to purchase at the same aggregate
exercise price.
Except as otherwise expressly provided herein, the issuance by the Company of
shares of its capital stock of any class, or securities convertible into shares
of capital stock of any class, either in connection with a direct sale of upon
the exercise of rights or warrants to subscribe therefore, or upon conversions
of shares or obligations the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of exercise price of the Shares that remain
unexercised under the Option.
Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Option shall not affect in any manner the right or power of the
Company to make, authorize or consummate (i) any or all adjustments,
recaritalizations, reorganizations or other changes in the Company's capital
structure or its business; (ii) any merger or consolidation of the Company;
(iii) any issue by the Company of debt securities, or preferred or preference
stock that would rank above the Shares issuable upon exercise of the Option;
(iv) the dissolution or liquidation of the Company; (v) any sale, transfer or
assignment of all or any part of the assets or business of the Company; or (vi)
any other corporate act or proceeding, whether of a similar character or
otherwise.
10. NO RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder of the Company in respect of the Shares as to which the Option shall
not have been exercised and payments made therefore as herein provided.
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11. BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, their
heirs, legal representatives, successors and permitted assigns. Optionee
acknowledges that Optionee has read and understands the Plan and agrees to abide
by its terms.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws principles thereof. All terms not defined in this Agreement
shall have the same meaning as in the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
VIRAGEN, INC.
By:
---------------------------
Xxxxxx Xxxxx
President
OPTIONEE
---------------------------
Xxxxxx Xxxxxxxx
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ATTACHMENT A
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NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the within Option to the
extent of purchasing ____________ shares of Common Stock of Viragen Inc.,
Delaware Corporation, and hereby makes payments of $ ________ in payment
therefor.
---------------------------
Signature
---------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK AND CORPORATE RECORDS
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Name:
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(Please type or print in block letters)
Address:
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Social Security #:
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Phone #: ( )
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Fax #: ( )
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