AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and
Restated Employment Agreement (this “Agreement”) is
made and entered into as of November 10, 2008 (the
“Effective Date”) by and between GTx, Inc. ,
located at 3 North Dunlap, 3rd Floor, Memphis, Tennessee 38163 (the
“Employer”), and MITCHELL S. STEINER, M.D. (the
“Employee”), residing at 2600 Forest Hill Irene Road,
Germantown, Tennessee 38139.
WHEREAS, the
Employee has been providing services to Employer as Chief Executive
Officer under the terms of an Employment Agreement effective as of
October 1, 2003 (the “Prior Employment
Agreement”); and
WHEREAS, the
Employer and the Employee wish to amend and restate the Prior
Employment Agreement as set forth herein in order to comply with
the parties’ intent that the Prior Employment Agreement be
interpreted, construed and administered in a manner that satisfies
Section 409A of the Internal Revenue Code of 1986, as amended
from time to time (the “Code”);
WHEREAS, during
the course of Employee’s employment with the Employer, the
Employer will train and continue to train Employee and to impart to
Employee proprietary, confidential, and/or trade secret
information, data and/or materials of the Employer; and
WHEREAS, the
Employer has a vital interest in maintaining its confidential
information and trade secrets, as well as rights to inventions,
since doing so allows the Employer to compete fairly and enhances
the value of the Employer to shareholders and job security for
employees; and
WHEREAS, the
Employer desires to procure the services of Employee and Employee
is willing to be employed and continue to be employed with the
Employer upon the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained in
this Agreement, the employment and continued employment of Employee
in accordance with the terms and conditions of this Agreement, and
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties, intending to be
legally bound, agree and covenant as follows:
For the purposes
of this Agreement, the following terms have the meanings specified
or referred to in this Section 1.
“Agreement” has the meaning set forth in
first paragraph of this Agreement.
“Basic Compensation” means Salary and
Benefits.
“Benefits” means as defined in
Section 3.1(b).
“Board of Directors” means the Board of
Directors of the Employer.
“CEO” has the meaning set forth in
Section 2.2.
“
Change of Control” means any of the following
events: (a) the sale or other disposition of all or
substantially all of the assets of Employer in a single transaction
or in a series of transactions (including, without limitation, any
liquidation or dissolution of Employer); (b) any Person or
group becomes the beneficial owner, directly, or indirectly, of
securities of the Employer representing more than fifty percent
(50%) of the combined voting power of the Employer’s then
outstanding securities other than by virtue of a merger,
consolidation or similar transaction (for such purposes,
“voting stock” shall mean the capital stock of Employer
of any class or classes, the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of
members of the Board of Directors (or Persons performing similar
functions) of Employer); or (c) a merger or consolidation of
Employer with or into any other entity, if immediately after giving
effect to such transaction more than fifty percent (50%) of the
issued and outstanding voting stock of the surviving entity of such
transaction is held by persons who were not holders (taking into
account their individual and affiliated holdings) as of the
Effective Date of at least twenty percent (20%) of the voting stock
of Employer. A Change of Control shall not include: (1) any
transfer or issuance of stock of Employer to one or more of
Employer’s lenders (or to any agents or representatives
thereof) in exchange for debt of Employer owed to any such lenders;
(2) any transfer of stock of Employer to or by any person or
entity, including but not limited to one or more of the
Employer’s lenders (or to any agents or representatives
thereof), pursuant to the terms of any pledge of said stock as
collateral for any loans or financial accommodations to Employer
and/or its subsidiaries; (3) any transfer or issuance to any
person or entity, including but not limited to one or more of
Employer’s lenders (or to any agents or representatives
thereof), in connection with the workout or restructuring of
Employer’s debts to any one of Employer’s lenders,
including but not limited to the issuance of new stock in exchange
for any equity contribution to Employer in connection with the
workout or restructuring of such debt; (4) any transfer of
stock by a stockholder of Employer which is a partnership or
corporation to the partners or stockholders in such stockholder or
any transfer of stock by a stockholder of Employer to an entity
affiliated with such stockholder or the immediate family of such
stockholder or a trust or similar entity for the benefit of such
family members; or (5) any transfer or issuance of stock in
connection with an offering of the Employer’s stock in a
registered public transaction not involving a transaction described
in Rule 145, promulgated under the Securities Act of 1933, as
amended, provided that the Employer’s officers and Board of
Directors shall not materially change as a result
thereof.
“Change of Control Termination” means
(i) a Termination Without Cause of the Employee’s
employment by the Employer (other than for death or disability)
within six (6) months after a Change of Control or
(ii) the Employee’s resignation for Good Reason within
six (6) months after a Change of Control.
“Competing Business” means any individual
or entity, other than the Employer, that is engaging in, or
proposes to engage in, the development, manufacture, distribution
or sale of a Competing Product in North America, South America,
Europe and Eastern Europe, and in the countries of Russia,
Australia, Japan, China, Taiwan, South Korea and India (the
“Territory”); provided however, that (i) an entity
that develops, manufactures, distributes or sells a
Competing
2
Product in a
separate business unit than the business unit in which Employee is
then employed shall not be deemed a Competing Business unless
Employee provides Confidential Information and/or Proprietary
Information to the business unit that is engaging in or proposes to
engage in the development, manufacture, distribution or sale of a
Competing Product; and (ii) nothing in this Agreement shall
prevent Employee from conducting research for non-commercial
purposes utilizing institutional or governmental grant funds in
areas relating to any Competing Product as long as such research is
not in areas that are protected or intended to be protected by
patents of Employer.
“Competing Product” means any
pharmaceutical or other compound, composition, formulation, method,
process, product or material that is competitive with any product
of Employer under development, manufacture, distribution or
commercialization at any time from and after the effective date of
the Prior Employment Agreement through the date of termination of
Employee’s employment, including, without limitation, small
molecules that target androgen, estrogen, glucocorticoid, and/or
other hormone receptors for purposes of treating, diagnosing, or
imaging humans in health and disease, including treating cancer,
osteoporosis and bone loss and muscle loss.
“Confidential Information and/or Proprietary
Information” means any and all:
(a) information
disclosed to Employee or known by Employee as a consequence of, or
through, Employee’s employment with the Employer since his
date of employment on August 6, 2001 (including information
conceived, originated, discovered, or developed in whole or in part
by Employee), not generally known in the relevant trade or
industry, about the Employer’s business, products, processes,
and services; and trade secrets concerning the business and affairs
of the Employer, product specifications, data, know-how, formulae,
compositions, research, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current, and
planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information); and any other information, however documented, that
is a trade secret within the meaning of Tenn. Code §39-14-138;
and
(b) information
concerning the business and affairs of the Employer (which includes
historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans,
the names and backgrounds of key personnel, personnel training and
techniques and materials), however documented; and
(c) intellectual
property, inventions, methods, processes, techniques, computer
programs, devices, products, services, compounds, gene therapy
products, pharmaceuticals, substances, vectors, enzymes, genes,
concepts, discoveries, improvements, and designs, whether or not
patenable in the United States or foreign countries, any trade
secrets, information, procedures, technologies, data, results,
conclusions, know-how or show-how and business information;
and
3
(d) notes,
analysis, compilations, studies, summaries, and other material
prepared by or for the Employer containing or based, in whole or in
part, on any information included in the foregoing.
“Delayed Initial Payment Date” has the
meaning stated in Section 9.2 of this Agreement.
“Effective Date” means the date stated in
the first paragraph of the Agreement.
“Employee” has the meaning stated in the
first paragraph of this Agreement.
“Employee Invention” means any idea,
invention, technique, modification, process, improvement (whether
patentable or not), industrial design (whether registerable or
not), work of authorship (whether or not copyright protection may
be obtained for it), design, copyrightable work, discovery,
trademark, copyright, trade secret, formula, device, method,
compound, gene, prodrug, pharmaceutical, structure, product
concept, marketing plan, strategy, customer list, technique,
blueprint, sketch, record, note, drawing, know-how, data, patent
application, continuation application, continuation-in-part
application, file wrapper continuation application or divisional
application, created, conceived, or developed by the Employee,
either solely or in conjunction with others, during the
Employee’s employment, or a period that includes a portion of
the Employee’s employment, that relates in any way to, or is
useful in any manner in, the business then being conducted or
proposed to be conducted by the Employer, and any such item created
by the Employee, either solely or in conjunction with others,
following termination of the Employee’s employment with the
Employer, that is based upon or uses Confidential Information
and/or Proprietary Information.
“Employer” means GTx, Inc., its
successors and assigns, and any of its current or future
subsidiaries, or organizations controlled by, controlling, or under
common control with it.
“Expenses” has the meaning stated in
Section 4.1 of this Agreement.
“Good
Reason” for termination means that Employee
voluntarily resigns from all positions he then holds with Employer
if and only if:
(a) one of
the following actions have been taken without Employee’s
express written consent:
(i) following
a Change of Control, an adverse change in the Employee’s
authority, duties or responsibilities (including reporting
responsibilities) which, without Employee’s consent,
represents a material reduction in or a material demotion of the
Employee’s authority, duties or responsibilities as in effect
immediately prior to a Change of Control or the assignment to the
Employee of any duties or responsibilities which are materially
inconsistent with and materially adverse to such authority, duties
or responsibilities;
(ii) following
a Change of Control, a material reduction in the then current
Salary of Employee;
4
(iii) following
a Change of Control, the relocation of the Employer’s
principal Employee offices to a location that increases
Employee’s one-way commute by more than twenty
(20) miles; or
(iv) following
a Change of Control, the failure of the Employer to obtain an
agreement reasonably satisfactory to Employee from any successor or
assign of the Employer to assume and agree to perform this
Agreement in all material respects; or
(v) Employer
materially breaches its obligations under this Agreement or any
other then-effective agreement with Employee (including any
agreement or arrangement providing for incentive compensation or
employee benefits, including the Benefits provided in this
Agreement).
(b) Employee
provides written notice to the Employer’s Board within the
thirty (30) day period immediately following such action;
and
(c) Such
action is not remedied by the Employer within thirty (30) days
following the Employer’s receipt of such written notice;
and
(d) Employee’s
resignation is effective not later than sixty (60) days after
the expiration of such thirty (30)-day cure period.
“Person” means any individual,
corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or governmental
body.
“Proprietary Items” means any Proprietary
and/or Confidential Information embodied in any document, record,
recording, electronic media, formulae, notebook, plan, model,
component, device, or computer software or code, whether embodied
in a disk or in any other form.
“Release” means a general release of
claims, which shall specifically relate to all of Employee’s
rights and claims in existence at the time of such execution and
shall confirm Employee’s continuing obligations to the
Employer (including but not limited to obligations under
Section 7 and Section 8 of this Agreement and any other
confidentiality and/or non-competition agreement with the
Employer).
“Salary” has the meaning stated in
Section 3.1(a) of this Agreement.
“Section 409A” has the meaning
stated in Section 9.2 of this Agreement.
“Termination Date” has the meaning stated
in Section 6.3 of this Agreement.
“
Termination With Cause” means the termination of
the Employee’s employment by act of the Board for any of the
following reasons:
(a) the
Employee’s conviction for a felony;
5
(b) the
Employee’s theft, embezzlement, misappropriation of or
intentional infliction of material damage to the Employer’s
property or business opportunities;
(c) the
Employee’s breach of the provisions contained in
Section 7 of this Agreement; or
(d) the
Employee’s ongoing willful neglect of or failure to perform
his duties hereunder or his ongoing willful failure or refusal to
follow any reasonable, unambiguous duly adopted written direction
of the Board of Directors that is not inconsistent with the
description of the Employee’s duties set forth in
Section 2.3, if such willful neglect or failure is materially
damaging or materially detrimental to the business and operations
of the Employer; provided that Employee shall have received written
notice of such failure and shall have continued to engage in such
failure after 30 days following receipt of such notice from
the Board of Directors, which notice specifically identifies the
manner in which the Board of Directors believes that Employee has
engaged in such failure. For purposes of this subsection, no act,
or failure to act, shall be deemed “willful” unless
done, or omitted to be done, by Employee not in good faith, and
without reasonable belief that such action or omission was in the
best interest of the Employer.
“Termination Without Cause” means the
termination of the Employee’s employment by the Employer for
any reason other than (i) Termination With Cause, or
(ii) a termination by the Employer due to Employee’s
death or disability.
2. EMPLOYMENT
TERMS AND DUTIES
The
Employer hereby continues the employment of the Employee, and the
Employee hereby accepts continued employment by the Employer, upon
the terms and conditions set forth in this Agreement.
Either
the Employee or the Employer may terminate this Agreement and the
Employee’s employment and compensation with or without Cause
or notice, at any time, at either the Employer’s or the
Employee’s option. No company officer or manager has the
authority to enter into any other agreement for employment for a
specified period of time, or to modify or to make any agreement
contrary to the foregoing, except by written amendment to this
Agreement, dated and signed by the President of the
Employer.
The
Employee will continue to have such duties as are assigned or
delegated to the Employee by the Board of Directors and will
initially serve as Chief Executive Officer for the Employer. The
Employee will devote his full time, attention, skill and energy to
the business of the Employer, will use his best efforts to promote
the success of the Employer’s business, and will cooperate
fully with the Board of Directors in the advancement of the best
interest of the Employer. Employee agrees to abide by all bylaws,
policies, practices, procedures or rules of Employer. Employee may
be reassigned or transferred to another management position,
as
6
designated by
the Board of Directors, which may or may not provide the same level
of responsibility as the initial assignment, in accordance with the
terms and conditions of this Agreement.
(a)
Salary. Employee will be paid for each of the twenty-six pay
periods approximately $19,231, which is the equivalent of $500,000
per calendar year (the “Salary”). Employee’s
Salary may be adjusted from time to time by agreement of the
Employee and the Board of Directors.
(b)
Benefits. The Employee will, during his employment, be
permitted to participate in such life insurance, hospitalization,
major medical, short term disability, long term disability, 401K
plan and other employee benefit plans of the Employer that may be
in effect from time to time, to the extent the Employee is eligible
under the terms of those plans (collectively, the
“Benefits”).
(c)
The Employer may withhold from any salary or benefits payable to
Employee all federal, state, local, and other taxes and other
amounts as permitted or required pursuant to law, rules or
regulations.
4. FACILITIES
AND EXPENSES
The
Employer will furnish the Employee office space, equipment,
supplies, and such other facilities and personnel as the Employer
deems necessary or appropriate for the performance of the
Employee’s duties under this Agreement. The Employer will pay
the Employee’s dues in such professional societies and
organizations as the Board of Directors deems appropriate, and will
pay on behalf of the Employee (or reimburse the Employee for)
reasonable expenses incurred by the Employee at the request of, or
on behalf of, the Employer in the performance of the
Employee’s duties pursuant to this Agreement, and in
accordance with the Employer’s employment policies, including
reasonable expenses incurred by the Employee in attending
conventions, seminars, and other business meetings, in appropriate
business entertainment activities, and for promotional expenses
(the “Expenses”). To the extent that any reimbursements
payable pursuant to this Agreement are subject to the provisions of
Section 409A of the Code, any such reimbursements payable
pursuant to this Agreement shall be paid no later than
December 31 of the year following the year in which the
expense was incurred, the amount of expenses reimbursed in one year
shall not affect the amount eligible for reimbursement in any
subsequent year, and the right to reimbursement under this
Agreement will not be subject to liquidation or exchange for
another benefit. The Employee must file expense reports with
respect to such expenses in accordance with the Employer’s
policies.
7
5. VACATIONS
AND HOLIDAYS
|
