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EXHIBIT 10(p)
EMPLOYMENT AGREEMENT made as of the 24th day of May, 1996 by and
between CRYOMEDICAL SCIENCES, INC., a Delaware corporation (hereinafter
referred to as the "Company"), and Xxxxxxx X. Xxxxxxxx, residing at 0 Xxxxxx
Xxxx, Xxxxxxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Employee, and Employee is
willing to accept such employment, all on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Employment
The Company hereby employs Employee, and Employee hereby
accepts employment with the Company, as President and Chief Executive Officer,
on the terms and conditions herein set forth.
2. Term of Agreement
Unless terminated sooner pursuant to the express provisions
hereof, the term of employment hereunder shall commence on the date hereof (the
"Commencement Date"), shall continue through December 31, 1999 (the "Original
Term"), and shall be automatically extended for two additional one-year periods
unless (a) the Original Term is terminated pursuant to Section 6 hereof (or
otherwise), or (b) not less than 90 days prior to the commencement of any such
one-year period the Company notifies Employee, in writing, that the term of
employment shall not be extended. The period commencing with the Commencement
Date through the end of the term of Employee's employment hereunder is
hereinafter referred to as the "Employment Period."
3. Duties
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During the Employment Period, Employee shall perform such
functions as are normally carried out by the President and Chief Executive
Officer of a business of the type in which the Company is engaged, and such
other functions as the Board of Directors of the Company (the "Board") shall
from time to time reasonably determine. Employee shall devote his full-time,
energies and abilities exclusively to the Company's business pursuant to, and
in accordance with, reasonable business policies and procedures, as fixed from
time to time by the Board. Employee covenants and agrees that he will
faithfully adhere to and fulfill such policies as are established from time to
time by the Board of Directors of the Company. Employee shall not be assigned,
by the Board, responsibilities, in any material manner, inconsistent with his
position as President and Chief Executive Officer.
4. Compensation
4.1 During the Employment Period, Employee's base salary
shall be in the amount of $150,000 per annum, payable in accordance with the
Company's normal payroll procedures.
4.2 During the Employment Period, in addition to
Employee's base salary, Employee shall be entitled to a bonus for the period
June 1, 1996 through December 31, 1996 ("1996"), and thereafter an annual
bonus, payable on or before March 31st of the year next following the year for
which such bonus is determined, based upon a percentage of "Pre-Tax Profits of
the Company," as follows:
Percent of
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Year Pre-Tax Profits
---- ---------------
1996 10%
1997 10%
1998 7 1/2%
1999 5%
2000 4%
2001 3%
As used herein, the term "Pre-Tax Profits of the Company"
shall mean the pre-tax profits of the Company and any consolidated
subsidiaries as determined in accordance with generally accepted accounting
principles, without taking into account (a) any payments made or to be made
pursuant to this Section 4.2, and (b) any extraordinary gains or losses. The
Company shall use its best efforts to change the Company's fiscal year to a
calendar year.
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4.3 During the Employment Period, Employee shall be
entitled to a non-accountable automobile allowance of $650 per month.
4.4 During the Employment Period, Employee shall be
entitled to family coverage for Blue Cross/Blue Shield (or equivalent thereof)
and major medical insurance coverage.
4.5 Employee shall also be eligible, to the extent he
qualifies, to participate in such fringe benefit plans (including retirement,
pension, life or other similar employee benefit plans), if any, which the
Company may from time to time make available to its employees, provided that
the Company shall have the right from time to time to modify, terminate or
replace any and all of such plans.
4.6 The Company shall reimburse Employee for all
reasonable business expenses incurred by Employee in connection with the
performance of his duties hereunder (including reimbursement for a hotel room
or an apartment in the Rockville, Maryland locale for the first six months of
the Employment Period, to accommodate his travel to and from his home to the
Company's executive offices), provided Employee submits supporting vouchers for
such expenses.
4.7 Employee shall be entitled to a four-week paid
vacation each year during the Employment Period, to be taken at such time as is
consistent with the needs of the Company and the convenience of Employee.
5. Stock Options
5.1 On the Commencement Date, Employee shall be granted a
10 year Stock Option, under the Company's 1988 Stock Option Plan, to purchase
750,000 shares of the Company's common stock, par value $.001 per share (the
"Common Stock"), at a price per share equal to the fair market value thereof
(i.e., the closing bid price per share) on the date of grant. The Stock Option
shall be exercisable over a 10-year period to the extent of 150,000 shares
commencing with the first anniversary date of the Commencement Date and an
additional 150,000 shares commencing with each of the next four anniversary
dates thereof. A copy of the Stock Option Agreement containing all of the
terms and conditions of the Stock Option has been delivered to and received by
the Employee. The shares underlying the Stock Option have been registered
pursuant to a Registration Statement of Form S-8, and the Company will use its
best efforts to maintain the effectiveness of such Registration
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Statement or file a new Registration Statement of Form S-8, if necessary, to
cover the shares underlying the 1988 Stock Option Plan.
5.2 Notwithstanding the foregoing vesting provisions, in
the event of a "Change of Control," one-half of the balance of the Stock
Options not already vested, shall vest immediately. "Change of Control" shall
mean:
(a) The acquisition by any person, entity or
"group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act") (excluding, for this purpose,
Employee, any group (as defined above) of which Employee is a member, the
Company of its subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting securities of the
Company) of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors; or
(b) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board" ) cease for
any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board.
6. Termination
The Employment Period shall terminate upon the happening of
any of the following events:
6.1 Automatically and without notice upon the death of
Employee.
6.2 Employee leaves the employ of the Company.
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6.3 Upon written notice of termination from the board to
Employee in the event that Employee becomes physically or mentally disabled
("Disability") during the Employment Period such that (a) in the Board's good
faith judgment, Employee is permanently incapable of properly performing each
of the duties customarily performed by him hereunder, or (b) such Disability
lasts for a period of 60 consecutive days or 90 days in any 150 day period and
the Board elects to treat such Disability as being permanent in nature.
6.4 Upon discharge of Employee, or written notice, by the
Board for cause. For purposes of this Agreement, "cause" shall mean the
following: the commission of a felony, crime involving moral turpitude or
other act causing material harm to the Corporation's standing and reputation,
failure to carry out, after reasonable notice of such failure, the reasonable
policies of the Board as they may relate to Employee's duties hereunder (other
than for reasons beyond his control), persistent absenteeism, a material
default or breach of any of the covenants made by Employee in this Agreement, a
breach of Employee's duty of loyalty to the Company or any act of dishonesty or
fraud with respect to the Company, the willful engaging by Employee in
misconduct materially injurious to the Company, or for any other reason which
may constitute "cause" under applicable law.
6.5 In the event any one of the foregoing events shall
occur, the Company shall be obligated to pay to Employee the compensation due
him under Section 4 hereof up to the date of termination only and Employee
shall not be entitled to receive any additional compensation of any nature
whatsoever.
6.6 In the event that Employee's employment with the
Company is terminated by the Board during the Employment Period for a reason
other than as is set forth above in Sections 6.1 through 6.4, the Company shall
be required to continue to pay Employee the salary provided for in Section 4.1
hereof, as follows: (a) if such termination occurs within the first six months
of the Employment Period, Employee shall be entitled to receive the salary due
him under Section 4.1 hereof up to the date of termination only and Employee
shall not be entitled to receive any additional compensation of any nature
whatsoever, and (b) if such termination occurs after the first six months of
the Employment Period, Employee shall be entitled to receive the salary due him
under Section 4.1
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hereof for (i) the balance of the Employment Period, (ii) a period of two and
one-half (2 1/2) years, or (iii) until Employee is subsequently employed,
whichever is sooner, and Employee shall not be entitled to receive any
additional compensation of any nature whatsoever; provided, however that
Employee shall have an affirmative obligation to seek comparable employment and
mitigate the Company's damages.
7. Non-Competition
7.1 In view of the unique and valuable services that
Employee has rendered and is expected to render to the Company, and Employee's
knowledge of the business of the Company and proprietary information relating
to the business of the Company and similar knowledge regarding the Company that
Employee has obtained and is expected to obtain during the course of his
employment with the Company and in consideration of the compensation to be
received by Employee hereunder, Employee agrees that during the Employment
Period and for a period of eighteen months immediately following the
termination or expiration thereof (the Employment Period and the subsequent
eighteen month period being hereinafter collectively referred to as the
"Covenant Period"), he will not compete with, or, directly or indirectly, own,
manage, operate, control, loan money to, or participate in the ownership,
operation or control of, or be connected with as a director, partner,
consultant, agent, independent contractor or otherwise, or acquiesce in the use
of his name in any other business or organization which is in competition with
the Company in any geographical area in which the Company is then conducting
business or any geographical area in which, to the knowledge of Employee at the
time of cessation of employment, the Company plans to conduct business within
eighteen months from the date thereof; provided, however, that Employee shall
be permitted after the cessation of his employment but during the Covenant
Period to own less than a 5% interest as a shareholder in any company which is
listed on any national securities exchange even thought it may be in
competition with the Company.
7.2 Employee will not, during the Covenant Period,
solicit or interfere with, or endeavor to entice away from the Company, any of
its employees or customers without the written consent of the Company or unless
such employee is Employee's personal secretary.
7.3 Since a breach of the provisions of this Section 7
could not adequately be compensated by money damages and will cause irreparable
injury to the Company, the Company shall
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be entitled, in addition to any other right or remedy available to it, to an
injunction or restraining order restraining such breach or a threatened breach,
and no bond or other security shall be required in connection therewith, and
Employee hereby consents to the issuance of any such injunction or restraining
order. Employee agrees that the provisions of this Section 7 are reasonable
and necessary to protect the Company and its business. It is the desire and
intent of the parties that the provisions of this Section 7 shall be enforced
to the fullest extent permitted under the public policies and laws applied in
each jurisdiction in which enforcement is sought. If any restriction contained
in the Section 7 shall be deemed to be invalid, illegal or unenforceable by
reason of the extent, duration or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope or other provision hereof and in its
reduced form such restriction shall then be enforceable in the manner
contemplated hereby.
7.4 No provision of this Agreement shall be deemed to
preclude Employee from serving as a director on the board of companies not in
competition with the Company or of charitable organizations, provided, that any
such directorship or consulting activities do not reduce Employee's ability to
attend to his duties on behalf of the Company.
8. Entire Agreement
The provisions hereof and the agreements referred to herein
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede any prior oral understanding, and no modification,
supplement or discharge hereof shall be effective unless in writing and
executed on behalf of the Company and Employee.
9. Assignability
This Agreement, and its rights and obligations may not be
assigned by Employee. The Company may assign any of its rights and obligations
hereunder to a successor or surviving corporation resulting from a merger or
consolidation of the Company, the sale by the Company of all or substantially
all of its assets or other similar corporate reorganization, upon condition
that the assignee shall assume, either expressly or by operation of law, all of
the Company's obligations hereunder.
10. Waiver
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No waiver by either party of any condition, term or provision
of this Agreement shall be deemed to be a waiver of any prior or succeeding
breach of the same or of any other condition, term or provision thereof.
11. Notices
All notices required or permitted to be given by either party
hereunder shall be in writing and mailed by registered mail, return receipt
requested, to the other party at the address set forth above or such different
address as may be given by notice as provided for herein. Any notice mailed as
provided above shall be deemed given seven (7) days after the date of mailing
or on the date of receipt, whichever is sooner.
12. Counterparts
This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
13. Construction
This Agreement shall be construed in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
/s/ Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
CRYOMEDICAL SCIENCES, INC.
By: /s/ Xxxx X. Xxxxx
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