Exhibit 10(w)
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of April 1]
1998, between SIGA PHARMACEUTICALS, INC., a Delaware corporation (with its
successors and assigns, referred to as the "Corporation"), and Xxxxxx Xxxxxxxx
(referred to as "Konatich").
Preliminary Statement
The Corporation desires to employ Konatich, and Konatich wishes to be
employed by the Corporation, upon the terms and subject to the conditions set
forth in this Agreement. The Corporation and Konatich also wish to enter into
the other agreements set forth in this Agreement, all of which are related to
Konatich's employment under this Agreement.
Agreement
Konatich and the Corporation therefore agree as follows:
1. Employment for Term. The Corporation hereby employs Konatich and
Konatich hereby accepts employment with the Corporation for the period beginning
on the date of this Agreement and ending on [April 1], 2000 (the "Initial Term),
or upon the earlier termination of the Term pursuant to Section 6. This
Agreement shall be automatically renewed for additional one-year periods (the
"Renewal Terms;" together with the Initial Term, the "Term") unless either party
notifies the other in writing of its intention not to so renew this Agreement no
less than 60 days prior to the expiration of the Initial Term or a Renewal Term.
The termination of Konatich's employment under this Agreement shall end the Term
but shall not terminate Konatich's or the Corporation's other agreements in this
Agreement, except as otherwise provided herein.
2. Position and Duties. During the Term, Konatich shall serve as the
Secretary and Chief Financial Officer of the Corporation. During the Term,
Konatich shall also hold such additional positions and titles as the Board of
Directors of the Corporation (the "Board") may determine from time to time.
During the Term, Konatich shall devote his full time and efforts to his duties
as an employee of the Corporation.
3. Compensation.
(a) Base Salary. The Corporation shall pay Konatich a base salary,
beginning on the first day of the Term and ending on the last day of the
Term, of not less than $170,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees.
(b) Stock Options. Pursuant to the Corporation's stock option plan,
the Corporation shall grant to Konatich options to purchase 95,000 shares
of the Corporation's Common Stock at an exercise price equal to closing bid
price of the Common Stock of the Corporation on the date hereof. The
options shall vest on a pro rata basis (23,750 shares each) on the first,
second, third and fourth anniversaries of this Agreement. However, once any
such options become vested, only fifty percent (50%) of such vested options
will be immediately exercisable and the remaining fifty percent (50%) of
such vested options will only be exercisable if the closing bid price of
the Corporation's Common Stock, at any time after the date hereof, exceeds
200% of the exercise price of such options for twenty (20) consecutive
business days. The options shall expire on the tenth anniversary of this
Agreement.
(c) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude
the Board from awarding Konatich a higher salary or any bonuses or stock
options in the discretion of the Board during the Term at any time. The
Company intends to adopt a performance based bonus plan for 1998 and
subsequent years and Konatich will be eligible to participate in such plan.
4. Employee Benefits. During the Term, Konatich shall be entitled to the
employee benefits, including vacation, 401(k) plan, health plan and other
insurance benefits made available by the Corporation to any other employee of
the Corporation.
5. Expenses. The Corporation shall reimburse Konatich for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Term shall end immediately upon Konatich's death. The
Term may also end for Cause or Disability, as defined in Section 7.
(b) Notice of Termination. Promptly after it ends the Term, the
Corporation shall give Konatich notice of the termination, including a
statement of whether the termination was for Cause or Disability (as
defined in Section 7(a) and 7(b) below). The Corporation's failure to give
notice under this Section 6(b) shall not, however, affect the validity of
the Corporation's termination of the Term.
(c) Effective Termination by Corporation. If the Corporation
materially reduces Konatich's duties during the term, including replacing
Konatich as Chief Financial Officer, then, at his option, Konatich may
treat such reduction in duties as a termination of the Term without Cause
by the Corporation.
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7. Severance Benefits.
(a) "Cause" Defined. "Cause" means (i) willful malfeasance or willful
misconduct by Konatich in connection with his employment; (ii) Konatich's
gross negligence in performing any of his duties under this Agreement;
(iii) Konatich's conviction of, or entry of a plea of guilty to, or entry
of a plea of nolo contendere with respect to, any crime other than a
traffic violation or infraction which is a misdemeanor; (iv) Konatich's
material breach of any written policy applicable to all employees adopted
by the Corporation which is not cured to the reasonable satisfaction of the
Corporation within fifteen (15) business days after notice thereof; or (v)
material breach by Konatich of any of his agreements in this Agreement
which is not cured to the reasonable satisfaction of the Corporation within
fifteen (15) business days after notice thereof.
(b) Disability Defined. "Disability" shall mean Konatich's incapacity
due to physical or mental illness that results in his being unable to
substantially perform his duties hereunder for six consecutive months (or
for six months out of any nine month period). During a period of
Disability, Konatich shall continue to receive his base salary hereunder,
provided that if the Corporation provides Konatich with disability
insurance coverage, payments of Konatich's base salary shall be reduced by
the amount of any disability insurance payments received by Konatich due to
such coverage. The Corporation shall give Konatich written notice of
termination which shall take effect sixty (60) days after the date it is
sent to Konatich unless Konatich shall have returned to the performance of
his duties hereunder during such sixty (60) day period (whereupon such
notice shall become void).
(c) Termination. If the Corporation ends the Term for Cause or
Disability, or if Konatich resigns as an employee of the Corporation for
reasons other than a material breach by the Corporation of its obligations
under this Agreement or a material reduction of Konatich's duties as
provided in Section 6(c), or if Konatich dies, then the Corporation shall
have no obligation to pay Konatich any amount, whether for salary,
benefits, bonuses, or other compensation or expense reimbursements of any
kind, accruing after the end of the Term, and such rights shall, except as
otherwise required by law, be forfeited immediately upon the end of the
Term. If the Corporation ends the Term without Cause, then the Corporation
will be obligated to continue to pay Konatich's salary for the remainder of
the Term. In addition, in the event of a change in the ownership of greater
than fifty percent (50%) of the Corporation's outstanding voting stock or
any transaction described in Section 9(b), Konatich may elect to terminate
this Agreement as if it were a termination by the Corporation without
Cause, except that the Corporation shall not be obligated to pay Konatich's
salary for the remainder of the Term.
8. Confidentiality, Ownership, and Covenants.
(a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to
(i) the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term,
that is not in the public domain (and whether relating to methods,
processes,
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techniques, discoveries, pricing, marketing or any other matters).
"Inventions" collectively refers to any and all inventions, trade secrets,
ideas, processes, formulas, source and object codes, data, programs, other
works of authorship, know-how, improvements, research, discoveries,
developments, designs, and techniques regarding any of the foregoing.
(b) Confidentiality. (i) Konatich hereby recognizes that the value of
all trade secrets and other proprietary data and all other information of
the Corporation not in the public domain disclosed by the Corporation in
the course of his employment with the Corporation may be attributable
substantially to the fact that such confidential information is maintained
by the Corporation in strict confidentiality and secrecy and would be
unavailable to others without the expenditure of substantial time, effort
or money. Konatich, therefore, except as provided in the next two
sentences, covenants and agrees that all Corporation Information shall be
kept secret and confidential at all times during the Term and for the five
(5) year period after the end of the Term and shall not be used or divulged
by him outside the scope of his employment as contemplated by this
Agreement, except as the Corporation may otherwise expressly authorize by
action of the Board. In the event that Konatich is requested in a judicial,
administrative or governmental proceeding to disclose any of the
Corporation Information, Konatich will promptly so notify the Corporation
so that the Corporation may seek a protective order or other appropriate
remedy and/or waive compliance with this Agreement. If disclosure of any of
the Corporation Information is required, Konatich may furnish the material
so required to be furnished, but Konatich will furnish only that portion of
the Corporation Information that legally is required.
(ii) Konatich also hereby agrees to keep the terms of this Agreement
confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).
(c) Ownership of Inventions, Patents and Technology. Konatich hereby
assigns to the Corporation all of Konatich's right (including patent
rights, copyrights, trade secret rights, and all other rights throughout
the world), title and interest in and to Inventions, whether or not
patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by Konatich, either alone or
jointly with others, during the course of the performance of services for
the Corporation. Konatich shall also assign to, or as directed by, the
Corporation, all of Konatich's right, title and interest in and to any and
all Inventions, the full title to which is required to be in the United
States government by a contract between the Corporation and the United
States government or any of its agencies. The Corporation shall have all
right, title and interest in all research and work product produced by
Konatich as an employee of the Corporation, including, but not limited to,
all research materials and lab books.
(d) Non-Competition Period Defined. "Non-Competition Period" means the
period beginning at the end of the Term and ending one (1) year after the
end of the Term.
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(e) Covenants Regarding the Term and Non-Competition Period. Konatich
acknowledges and agrees that his services pursuant to this Agreement are
unique and extraordinary; that the Corporation will be dependent upon
Konatich for the development of its products; and that he will have access
to and control of confidential information of the Corporation. Konatich
further acknowledges that the business of the Corporation is international
in scope and cannot be confined to any particular geographic area. For the
foregoing reasons and to induce the Corporation to enter this Agreement,
Konatich covenants and agrees that, subject to Section 8(h), during the
Term and the Non-Competition Period Konatich shall not unless with written
consent of the Corporation:
(i) engage in any business related to the research and
development of the products or processes in which the Corporation is
engaged in during the Term or in any other business conducted by the
Corporation during the Term (collectively the "Prohibited Activity")
in the World for his own account;
(ii) become interested in any individual, corporation,
partnership or other business entity (a "Person") engaged in any
Prohibited Activity in the World, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent,
employee, trustee, consultant or in any other relationship or
capacity; provided, however, that Konatich may own directly or
indirectly, solely as an investment, securities of any Person which
are traded on any national securities exchange if Konatich (x) is not
a controlling person of, or a member of a group which controls, such
person or (y) does not, directly or indirectly, own 5% or more of any
class of securities of such person;
(iii) directly or indirectly hire, engage or retain any person
which at any time during the Term or Non-Competition Period was a
supplier, client or customer of the Corporation, or directly or
indirectly solicit, entice or induce any such person to become, a
supplier, client or customer of any other person engaged in any
Prohibited Activity; or
(iv) directly or indirectly hire, employ or retain any person who
at any time during the Term was an employee of the Corporation or
directly or indirectly solicit, entice, induce or encourage any such
person to become employed by any other person.
(f) Remedies. Konatich hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects
and that the Corporation is entering into this Agreement, inter alia, on
such acknowledgment. If Konatich breaches, or threatens to commit a breach,
of any of the Restrictive Covenants, the Corporation shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights
and remedies available to the Corporation under law or in equity: (i) the
right and remedy to have the Restrictive
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Covenants specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach
will cause irreparable injury to the Corporation and that money damages
will not provide an adequate remedy to the Corporation; (ii) the right and
remedy to require Konatich to account for and pay over to the Corporation
such damages as are recoverable at law as the result of any transactions
constituting a breach of any of the Restrictive Covenants; (iii) if any
court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect,
without regard to the invalid portions; and (iv) if any court construes any
of the Restrictive Covenants, or any part thereof, to be unenforceable
because of the duration of such provision or the area covered thereby, such
court shall have the power to reduce the duration or area of such provision
and, in its reduced form, such provision shall then be enforceable and
shall be enforced.
(g) Jurisdiction. The parties intend to and hereby confer jurisdiction
to enforce the Restrictive Covenants upon the courts of any jurisdiction
within the geographical scope of such Covenants. If the courts of any one
or more such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of the breadth of such scope or otherwise, it is
the intention of the parties that such determination not bar or in any way
affect the Corporation's right to the relief provided above in the courts
of any other jurisdiction, within the geographical scope of such Covenants,
as to breaches of such Covenants in such other respective jurisdictions
such Covenants as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.
(h) Konatich's agreements and covenants under Section 8(e) shall
automatically terminate if the Corporation ends the Term without Cause or
Konatich resigns due to a material breach by the Corporation of its
obligations under this Agreement or a material reduction of Konatich's
duties as provided in Section 6(c).
9. Successors and Assigns.
(a) Konatich. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Konatich may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All
rights and benefits of Konatich shall be for the sole personal benefit of
Konatich, and no other person shall acquire any right, title or interest
under this Agreement by reason of any sale, assignment, transfer, claim or
judgment or bankruptcy proceedings against Konatich. Except as so provided,
this Agreement shall inure to the benefit of and be binding upon Konatich
and his personal representatives, distributees and legatees.
(b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its
successors and assigns, including (but not limited to) any corporation that
may acquire all or substantially all of the Corporation's assets or
business or into or with which the Corporation may be consolidated or
merged. In the event that the Corporation sells all or substantially all of
its assets, merges or
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consolidates, otherwise combines or affiliates with another business,
dissolves and liquidates, or otherwise sells or disposes of substantially
all of its assets and Konatich does not elect to treat any such transaction
as a termination by the Corporation without Cause pursuant to Section 7(c),
then this Agreement shall continue in full force and effect. The
Corporation's obligations under this Agreement shall cease, however, if the
successor to, the purchaser or acquiror either of the Corporation or of all
or substantially all of its assets, or the entity with which the
Corporation has affiliated, shall assume in writing the Corporation's
obligations under this Agreement (and deliver an executed copy of such
assumption to Konatich), in which case such successor or purchaser, but not
the Corporation, shall thereafter be the only party obligated to perform
the obligations that remain to be performed on the part of the Corporation
under this Agreement.
10. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Konatich's employment with the Corporation and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between Konatich and the Corporation relating to the
subject matter of this Agreement.
11. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Konatich and by a duly authorized officer of the Corporation. No
waiver by any party to this Agreement of any breach by another party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
12. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Konatich: Xxxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxxxxxxxx, XX 00000
If to the Corporation: SIGA PHARMACEUTICALS, INC.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx X. xx Xxxxx
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with a copy to: Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
13. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Konatich that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.
14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
16. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Konatich under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
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18. Applicable Law; Arbitration. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of New York, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before the
American Arbitration Association in New York, New York and consent to the
jurisdiction to the federal courts of the Southern District of New York or, if
there shall be no jurisdiction, to the state courts located in New York County,
New York, to enforce any arbitration award rendered with respect thereto. Each
party shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator. All costs and fees related to such arbitration (and judicial
enforcement proceedings, if any) shall be borne by the unsuccessful party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGA PHARMACEUTICALS, INC.
By: /s/ Xxxxx xx Xxxxx
--------------------------------
Xxxxx X. xx Xxxxx, President
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
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