EMPLOYMENT
AGREEMENT
THIS AGREEMENT (the “Agreement”),
made in New York, New York this 31st day of January 2007 and
effective as of March 1, 2007, between SIGA Technologies, Inc., a
Delaware corporation (the “Company”), and
Dr. Eric A. Rose, M.D.
(“Executive”).
WHEREAS, the Company desires to employ Executive
as its Chief Executive Officer, and
Executive desires to accept such employment on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants and agreements hereinafter set forth, the Company and
Executive agree as follows:
1.
Term . Unless earlier terminated in accordance with
Section 4 hereof, the term of this Agreement shall be the one-year
period commencing March 1, 2007 and ending on February 29, 2008
(the “Term” and such year, a “Term Year”).
In addition, unless either party hereto provides notice of its
desire not to renew this Agreement thirty (30) days prior to the
expiration of the Term, this Agreement shall automatically renew
for additional one (1) year periods commencing upon the expiration
of the initial Term (or any such subsequent Term), with each such
additional year thereafter being made part of the Term and each
such additional year, thereafter a Term Year.
(a)
Employment by the
Company . Executive
agrees to be employed by the Company during the Term upon the terms
and subject to the conditions set forth in this Agreement.
Executive shall serve as the Chief Executive Officer of the Company
and shall report to the Board of Directors of the
Company.
(b)
Performance of Duties
. Throughout his employment with the
Company, Executive shall faithfully and diligently perform
Executive’s duties in conformity with the directions of the
Company and serve the Company to the best of Executive’s
ability. Except as permitted pursuant to Section 2(c) below or as
otherwise consented to by the Board of Directors of the Company,
Executive shall devote his full business time and best efforts to
the business and affairs of the Company. In his capacity as the
Chief Executive Officer of the Company, Executive shall have such
duties and responsibilities as he may be assigned by the Board of
Directors of the Company not inconsistent with his position as
Chief Executive Officer of the
Company.
(c)
Appointment at Columbia
University . Executive
shall be permitted to continue with his appointment as a faculty
member of Columbia University, provided that such duties do not
interfere with his duties as Chief Executive Officer of the Company
and subject in all cases to ongoing approval of the Board of
Directors of the Company.
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3.
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Compensation
and Benefits .
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(a)
Base Salary
. The Company agrees to pay to
Executive a base salary (“Base Salary”) at the annual
rate of $400,000, subject to any cost of living adjustments as may
be approved by the Board of Directors of the Company. Payments of
the Base Salary shall be payable in equal installments in
accordance with the Company’s standard payroll
practices.
(b)
Annual Bonus
. The Company may, in its sole
discretion, pay to Executive a bonus in an amount to be determined
by the Board of Directors in its sole discretion. Such bonus, if
any, may be payable in cash or options to purchase Common Stock or
restricted shares of Common Stock, as determined by the Board of
Directors in its sole discretion. Any such cash bonus shall be
paid, and any such options or restricted shares shall be issued, no
later than March 15 of the year following the year in which the
Board of Directors determined such bonus, or, if later, by the date
that is 2½ months following the end of the Company’s
fiscal year in which the Board of Directors determined such
bonus.
(c)
Benefits and
Perquisites . Executive
shall be entitled to participate in, to the extent Executive is
otherwise eligible under the terms thereof, the benefit plans and
programs, and receive the benefits and perquisites, generally
provided by the Company to senior executives of the Company,
including without limitation family medical insurance (subject to
applicable employee contributions). Executive shall be entitled to
receive vacation days in accordance with Company policy, such days
to be accrued in accordance with Company policy.
(d)
Business Expenses
. The Company agrees to reimburse
Executive for all reasonable and necessary travel, business
entertainment and other business expenses incurred by Executive in
connection with the performance of his duties under this Agreement.
Such reimbursements shall be made by the Company on a timely basis
upon submission by Executive of vouchers in accordance with the
Company’s standard procedures.
(e)
Indemnification
. The Company shall indemnify
Executive, to the fullest extent permitted by its certificate of
incorporation, for any and all liabilities to which he may be
subject as a result of, in connection with or arising out of his
employment by the Company hereunder, as well as the costs and
expenses (including reasonable attorneys’ fees) of any legal
action brought or threatened to be brought against him or the
Company as a result of, in connection with or arising out of such
employment or board service. Executive shall be entitled to the
full protection of any insurance policies which the Company may
elect to maintain generally for the benefit of its
officers.
(f)
No Other Compensation or
Benefits; Payment . The
compensation and benefits specified in this Section 3 and in
Section 5 of this Agreement shall be in lieu of any and all other
compensation and benefits. Payment of all compensation and benefits
to Executive specified in this Section 3 and in Section 5 of this
Agreement (i) shall be made in accordance with the relevant Company
policies in effect from time to time to the extent the same are
consistently applied, including normal payroll practices, and (ii)
shall be subject to all legally required and customary
withholdings.
(g)
Cessation of
Employment . In the event
Executive shall cease to be employed by the Company for any reason,
Executive’s compensation and benefits shall cease on the date
of such event, except as otherwise specifically provided herein or
in any applicable employee benefit plan or program or as required
by law.
4.
Termination of
Employment .
Executive’s employment hereunder may be terminated prior to
the end of the Term under the following circumstances.
(a)
Death . Executive’s employment hereunder shall
terminate upon Executive’s death.
(b)
Executive Becoming Totally
Disabled . The Company
may terminate Executive’s employment hereunder at any time
after Executive becomes “Totally Disabled.” For
purposes of this Agreement, Executive shall be “Totally
Disabled” in the event Executive is unable to perform the
duties and responsibilities contemplated under this Agreement for a
period of either (A) 120 consecutive days or (B) 6 months in any
12-month period due to physical or mental incapacity or impairment.
During any period that Executive fails to perform Executive’s
duties hereunder as a result of incapacity due to physical or
mental illness (the “Disability Period”), Executive
shall continue to receive the compensation and benefits provided by
Section 3 of this Agreement until Executive’s employment
hereunder is terminated; provided, however, that the amount of base
compensation and benefits received by Executive during the
Disability Period shall be reduced by the aggregate amounts, if
any, payable to Executive under any disability benefit plan or
program provided to Executive by the Company.
(c)
Termination by the Company for
Cause . The Company may
terminate Executive’s employment hereunder for Cause at any
time after providing written notice to Executive. For purposes of
this Agreement, the term “Cause” shall mean any of the
following: (i) Executive’s neglect or failure or refusal to
perform his duties under this Agreement (other than as a result of
total or partial incapacity due to physical or mental illness);
(ii) any act by or omission of Executive constituting gross
negligence or willful misconduct in connection with the performance
of his duties that could reasonably be expected to materially
injure the reputation, business or business relationships of the
Company or any of its affiliates; (iii) perpetration of an
intentional and knowing fraud against or affecting the Company or
any of its affiliates or any customer, client, agent, or employee
thereof; (iv) the commission by or indictment of Executive for (A)
a felony or (B) any misdemeanor involving moral turpitude, deceit,
dishonesty or fraud (“indictment,” for these purposes,
meaning a United States-based indictment, probable cause hearing or
any other procedure pursuant to which an initial determination of
probable or reasonable cause with respect to such offense is made);
(v) the breach of a covenant set forth in Section 6; or (vi) any
other material breach of this Agreement.
(d)
Termination by the Company
Without Cause . The
Company may terminate Executive’s employment hereunder at any
time for any reason or no reason by giving Executive thirty (30)
days prior written notice of the termination. Following any such
notice, the Company may reduce or remove any and all of
Executive’s duties, positions and titles with the
Company.
(e)
Termination by Executive for Good
Reason . Executive may
terminate his employment hereunder for Good Reason at any time
after providing written notice to the Company. For purposes of this
Agreement, the term “Good Reason” shall mean any of the
following: (i) the Company fails to pay the compensation described
in Section 3(a) of this Agreement (in accordance with, and subject
to, such provisions); (ii) Executive no longer holds the office of
Chief Executive Officer or offices of
equivalent stature, or his functions and/or duties as Chief
Executive Officer are materially
diminished; or (iii) Executive’s job site is relocated to a
location which is more than fifty (50) miles from New York City
unless the parties mutually agree to such relocation.
(f)
Termination Upon a Change in
Control . If the Company
terminates Executive’s employment hereunder without Cause
within 90 days after the occurrence of the Change in Control
Executive shall be entitled to the payments provided for by Section
5(d). For purposes of this Agreement, a “Change in
Control” shall be conclusively deemed to have occurred if any
of the following shall have taken place:
(i) the consummation of a transaction or a series of
related transactions pursuant to which any “person” (as
such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 (“Exchange Act”), other than the
Executive, his designee(s) or “affiliate(s)” (as
defined in Rule 12b-2 under 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 forty percent (40%) or more of the combined voting
power of the Company’s then outstanding
securities;
(ii) stockholders of the Company approve a merger or
consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than eighty
percent (80%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation; or
(iii) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale
or disposition by the Company of, or the Company sells or disposes
of, all or substantially all of the Company’s
assets.
(g)
Termination by Executive Without
Good Reason . Executive
may terminate his employment hereunder at any time for any reason
or no reason by giving the Company thirty (30) days prior written
notice of the termination. Following any such notice, the Company
may reduce or remove any and all of Executive’s duties,
positions and titles with the Company, and any such reduction or
removal shall not constitute Good Reason.
5.
Compensation Following
Termination . In the
event that Executive’s employment hereunder is terminated,
Executive shall be entitled only to the following compensation and
benefits upon such termination:
(a) General . On
any termination of Executive’s employment prior to the end of
the Term, Executive shall be entitled to the following
(collectively, the “Standard Termination
Payments”):
(i) any accrued but unpaid Base Salary for services
rendered through the date of termination; provided, however, that
in the event Executive’s employment is terminated pursuant to
Section 4(b), the amount of Base Salary received by Executive
during the Disability Period shall be reduced by the aggregate
amounts, if any, payable to Executive under any disability benefit
plan or program provided to Executive by the Company;
(ii)
any vacation accrued to the date of
termination, in accordance with Company policy;
(iii) any accrued but unpaid expenses through the date
of termination required to be reimbursed in accordance with Section
3(d) of this Agreement; and
(iv) any benefits to which he may be entitled upon
termination pursuant to the plans, programs and grants referred to
in Section 3(c) hereof in accordance with the terms of such plans,
programs and grants.
(b)
Termination Prior to the
Expiration of the Term by Reason of Death or Executive Becoming
Totally Disabled; Termination Prior to the Expiration of the Term
by the Company for Cause; Termination Prior to the Expiration of
the Term by Executive Without Good Reason . In the event that Executive’s employment
is terminated prior to the expiration of the Term (i) by reason of
Executive’s death pursuant to Section 4(a) or Executive
becoming Totally Disabled pursuant to Section 4(b), (ii) by the
Company for Cause pursuant to Section 4(c) or (iii) by Executive
without Good Reason pursuant to Section 4(g), Executive (or his
estate, as the case may be) shall be entitled only to the Standard
Termination Payments.
(c)
Termination Prior to the
Expiration of the Term by the Company Without Cause; Termination
Prior to the Expiration of the Term by Executive for Good
Reason . In the event
that Executive’s employment is terminated prior to the
expiration of the Term by the Company without Cause pursuant to
Section 4(d) or by Executive for Good Reason pursuant to Section
4(e), Executive shall be entitled only to the following:
(i) the Standard Termination Payments;
and
(ii) the continued payment of the Base Salary (as
determined pursuant to Section 3(a)) for one year
(such sums to be paid at the times and in
the amounts such Base Salary would have been paid had
Executive’s employment not terminated); provided, however,
that if necessary to comply with Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”),
and applicable administrative guidance and regulations, the payment
of such sums shall be made as follows: (A) no payments shall be
made for a six-month period following the date of termination, (B)
an amount equal to six months of Base Salary shall be paid in a
lump sum six months following the date of termination, and (C)
during the period beginning six months following the date of
termination through the remainder of the twelve-month
period,
payment of the
Base Salary shall be made at the times and in the amounts such Base
Salary would have been paid had Executive’s employment not
terminated.
(iii) the Company shall take all such action as is
necessary such that all stock options and other stock-based grants
to Executive shall, immediately and irrevocably vest and become
exercisable as of the date of termination and shall remain
exercisable for a period of not less than one (1) year from the
date of termination.
(d)
Termination Upon a Change of
Control . In the event
that the Company terminates Executive’s employment upon a
Change in Control other than for Cause pursuant to Section 4(f),
Executive shall be entitled only to the following:
(i) the Standard Termination Payments;
(ii) the continued payment of the Base Salary (as
determined pursuant to Section 3(a)) for one year (such sums to be
paid at the times and in the amounts such Base Salary would have
been paid had Executive’s employment not terminated);
provided, however, that if necessary to comply with Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended
(the “Code”), and applicable administrative guidance
and regulations, the payment of such sums shall be made as follows:
(A) no payments shall be made for a six-month period following the
date of termination, (B) an amount equal to six months of Base
Salary shall be paid in a lump sum six months following the date of
termination, and (C) during the period beginning six months
following the date of termination through the remainder of the
twelve-month period, payment of the Base Salary shall be made at
the times and in the amounts such Base Salary would have been paid
had Executive’s employment not terminated; and
(iii) the Company shall take all such action as is
necessary such that all stock options and other stock-based grants
to Executive shall, immediately and irrevocably vest and become
exercisable as of the date of termination and shall remain
exercisable for a period of not less than one (1) year from the
date of ter
