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EXHIBIT 10.1
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of September 2,
2005
(the "Effective Date"), between ENZON
PHARMACEUTICALS, INC. (the "Company"), a
Delaware corporation with offices in
Bridgewater, New Jersey, and IVAN D. HORAK,
M.D. (the "Executive"), a resident of New
Jersey.
BACKGROUND
A. The Company is a biopharmaceutical company engaged in
developing
advanced therapeutics for life threatening
diseases.
B. The Executive has experience as an executive in the
biopharmaceutical industry.
C. The Company wishes to employ the Executive to render services
for
the Company on the terms and conditions set
forth in this Agreement, and the
Executive wishes to be retained and
employed by the Company on such terms and
conditions.
TERMS
In consideration of the foregoing premises, the mutual agreements
set
forth below and other good and valuable
consideration, the receipt and adequacy
of which are hereby acknowledged, the
parties agree as follows:
1. Employment. The Company hereby employs the Executive, and
the
Executive accepts such employment and
agrees to perform services for the
Company, for the period and upon the other
terms and conditions set forth in
this Agreement.
2. Term. The term of the Executive's employment hereunder (the
"Term")
shall commence on the Effective Date, and
unless terminated at an earlier date
in accordance with Section 9 hereof, and
shall extend through the fourth
anniversary of the Effective Date, subject
to automatic renewal for an
additional twenty-four (24) months, unless
either party hereto receives written
notice from the other party no later than
ninety (90) days prior to the fourth
anniversary of the Effective Date (a "first
term notice of non-renewal") that
such other party does not wish for the term
hereof to continue beyond the fourth
anniversary of the Effective Date, in which
event the term hereof and the
Executive's employment shall end at 5:00 PM
on the fourth anniversary of the
Effective Date. If neither party provides a
first term notice of non-renewal
prior to the fourth anniversary of the
Effective Date, then the Term and the
Executive's employment shall extend until
5:00 PM Eastern Time on the earlier of
(a) the sixth (6th) anniversary of the
Effective Date and (b) the date that is
twelve (12) months following the date on
which either party hereto receives
written notice (an "extension term notice
of non-renewal") from the other party
that such other party does not wish for the
term hereof to continue beyond such
twelve (12) month notice period. For the
purposes of this Agreement, a "first
term notice of non-renewal" and an
"extension term notice of non-renewal" shall
be referred to collectively as a "notice of
non-renewal."
3. Position and Duties.
(a) Service with Company. During the Term, the Executive agrees
to
perform such employment duties for the
Company in an executive and managerial
capacity commensurate with the position of
Executive Vice President and Chief
Scientific Officer of the Company. As
Executive Vice President and Chief
Scientific Officer, the Executive shall
have the authority, duties and
responsibilities associated with this
position, including, without limitation,
the authority and duty generally to
supervise and direct all research and
development activities of the Company as
well as such additional duties
consistent with his position as assigned by
the Chief Executive Officer,
reporting to the Chief Executive Officer,
and subject to the control and
direction of the Chief Executive Officer of
the Company, the Board of Directors
of the Company (the "Board"), or any duly
authorized Committee of the Board. For
specificity, Executive's Position
Description is attached hereto as Exhibit C.
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(b) Performance of Duties.
(i) The Executive agrees to serve the Company faithfully and
to the best of his ability and to devote his full time, attention
and
efforts to the business and affairs of the Company during his
employment by the Company.
(ii) The Executive agrees that he will not use on behalf, or
for the benefit, of the Company, or disclose to the Company,
any
confidential information of or concerning his former employer. It
is
the Company's intention that the Executive not breach any
confidentiality agreement to which he is party, including,
without
limitation, any such agreement he may have with his former
employer.
The Executive will not render or perform services for any other
corporation, firm, entity or person which are inconsistent with
the
provisions of this Agreement.
(iii) While he remains employed by the Company, the Executive
may participate in reasonable charitable activities and
personal
investment activities so long as such activities do not conflict
or
interfere with the performance of his obligations under this
Agreement.
(c) The
Executive's Representations and Warranties. The Executive
represents and warrants to the Company that
his entering into and performing
this Agreement will not constitute a breach
of any employment, consulting,
non-competition or other agreement to which
he is a party or any other
obligation of the Executive. The Executive
represents and warrants to the
Company that he has not been debarred under
the Generic Drug Enforcement Act of
1992 (Sections 306-308 of the Federal Food,
Drug and Cosmetic Act) nor has the
Executive received notice of action or
threat of action of debarment. The
Executive shall comply with the Company's
material policies governing the
conduct of senior executives, including,
without limitation, its Substance Abuse
Policy, during the Term.
4. Compensation.
(a) Base Salary. The Company shall pay to the Executive, less
applicable deductions and withholdings,
base salary (the "Base Salary") at an
annual rate of Four Hundred Twenty-Five
Thousand Dollars ($425,000) per year,
which Base Salary shall be paid in
accordance with the Company's normal payroll
procedures and policies for its senior
management. The compensation payable to
the Executive during each fiscal year of
the Company beginning after the
Effective Date shall be established by the
Board or the Compensation Committee
thereof following an annual performance
review, but in no event shall the annual
rate of Base Salary for any successive year
of the Term be less than the highest
annual rate of Base Salary in effect during
the previous year of the Term.
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(b) Annual Bonus. The Executive shall be entitled to participate in
the
Company's bonus plan for management and any
successor bonus plan covering
management with respect to each fiscal year
of the Company ending during the
Term (the "Bonus Plan"). Under the Bonus
Plan, the Executive shall be eligible
to receive a performance-based cash bonus
for each fiscal year ending during the
Term in an amount, and based on objective
individual and/or corporate
objectives, targets and factors (and
evaluation as to the extent of achievement
thereof), to be established and determined
by the Board in its discretion
following consultation between the Chief
Executive Officer and the Executive
prior to, or within sixty (60) days after
the commencement of, each fiscal year.
Under the Bonus Plan for the Executive, (i)
the minimum cash bonus shall be zero
(0), (ii) the target cash bonus shall equal
50% of the Base Salary (the "Target
Bonus"), and (iii) the maximum cash bonus
shall equal 82.5% of Base Salary. In
addition to the foregoing amounts, within
five (5) days after Executive's first
day of employment, the Company shall pay to
Executive a bonus in cash in the
amount of $100,000.
(c) Participation in Benefit Plans; Indemnification. While he
is
employed by the Company, the Executive
shall also be eligible to participate in
any incentive and employee benefit plans or
programs which may be offered by the
Company to the extent that the Executive
meets the requirements for each
individual plan and in all other plans in
which Company executives participate.
The Company provides no assurance as to the
adoption or continuance of any
particular employee benefit plan or
program, and, except as provided at Section
10 hereof, the Executive's participation in
any such plan or program shall be
subject to the provisions, rules and
regulations applicable thereto. During the
Executive's employment with the Company,
and thereafter, the Company shall
indemnify the Executive and hold him
harmless from and against any claim,
liability and expense (including, without
limitation, reasonable attorney fees)
made against or incurred by him in
connection with his employment by the
Company, and cover him under a policy of
directors and officers liability
insurance, in a manner and to an extent
that is not less favorable to the
Executive as the indemnification
protection, and liability insurance coverage,
that is afforded by the Company to any
other senior officer or director. A copy
of the Company's Directors and Officers
Liability Insurance policy will be
provided to the Executive.
(d) Expenses. The Company will pay or reimburse the Executive for
all
reasonable and necessary out-of-pocket
expenses incurred by him in the
performance of his duties under this
Agreement, subject to the Company's normal
policies for expense verification.
(e) Stock Options. Subject to the Executive commencing his
employment
hereunder as the Company's Executive Vice
President and Chief Scientific Officer
on the Effective Date, the Executive shall
be granted options to purchase shares
of common stock of the Company ("Common
Stock") pursuant to the Company's 1987
Non-Qualified Stock Option Plan, as amended
(the "Stock Plan") and the form of
Non-Qualified Stock Option Certificate and
Agreement attached hereto as Exhibit
A (the "Option Agreement"). Such options
(the "Option") will cover 200,000 (Two
Hundred Thousand) shares of Common Stock at
an exercise price per share equal to
the last reported sale price of a share of
Common Stock as reported by the
Nasdaq Stock Market on the Effective Date
or, if the Nasdaq Stock Market is not
open on the Effective Date, on the day next
preceding the Effective Date on
which the Nasdaq Stock Market is open. The
Option shall vest and be exercisable
as to 50,000 shares on each of the first
four anniversaries of the Effective
Date. Except as otherwise provided in
Section 10 hereof, once such options
become exercisable, they shall remain
exercisable until 5:00 PM Eastern Time on
the tenth (10th) anniversary of the
Effective Date. Except as otherwise provided
in this Agreement, the Option Agreement, a
copy of which the Executive has
received and reviewed, shall govern the
terms of the options granted hereunder.
In addition, at the discretion of the Board
of Directors (or its applicable
committee), the Executive shall be entitled
to receive further grants of stock
options, subject to the terms of the Option
Plan.
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(f) Restricted Stock Units. Upon execution of this Agreement,
the
Executive shall be granted 50,000 (Fifty
Thousand) restricted stock units,
subject to the terms of the Restricted
Stock Unit Award Agreement attached
hereto as Exhibit B and the 2001 Incentive
Stock Plan. The restricted stock
units shall vest 15,000 shares on each of
the third and fourth anniversaries of
the Effective Date and 20,000 shares on the
fifth anniversary of the Effective
Date. The Executive acknowledges that he
has received and reviewed a copy of the
2001 Incentive Stock Plan. At the
discretion of the Board of Directors (or its
applicable committee), the Executive shall
be entitled to receive additional
grants of restricted stock units, subject
to the terms of the 2001 Incentive
Stock Plan or such other equity
compensation plans that may be adopted by the
Company from time to time. Nothing
contained herein shall be deemed to guarantee
the Executive any additional grants of
options, restricted stock, restricted
stock units, other equity awards or
securities of the Company.
(g) Vacation. The Executive shall be entitled to vacations in
accordance with the policy of the Company
with respect to its senior management,
in effect from time to time.
(h) Tax and Financial Planning Services. During each year of the
term
of this Agreement, Company agrees to
reimburse Executive, up to $7,500 per
fiscal year, for the costs of all tax
return preparation, including any United
States, state, or local returns, as well as
for professional estate and
financial planning services, if any, with
Executive choosing the tax and other
professionals who will provide such
services. The Company will pay Executive's
professional fees incurred to negotiate and
prepare this Agreement and related
agreements, in an amount not to exceed
$7,500.
(i) Certain Legal Expenses. In the event of any legal
proceedings,
including without limitation arbitration,
between the Company and Executive with
respect to any dispute hereunder in which
Executive prevails over the Company,
the Company shall pay Executive's
reasonable legal fees and expenses incurred in
connection with such proceedings.
(j) Employee Handbook. The Company's Employee Handbook will be
provided
to Executive. In the event the provisions
of the Employee Handbook are
inconsistent with the provisions of this
Agreement, the provisions of this
Agreement shall control.
5. Noncompetition and Confidentiality Covenant.
(a) Noncompetition. The "Noncompete Period" shall be the Term plus
the
one (1) year period immediately following
termination of the Executive's
employment with the Company irrespective of
the reason for, or circumstances
surrounding, such termination. In
consideration for the compensation payable to
the Executive pursuant to this Agreement,
including without limitation the stock
options and Restricted Stock Units granted
to the Executive hereunder, during
the Noncompete Period, the Executive will
not directly, or indirectly, whether
as an officer, director, stockholder,
partner, proprietor, associate, employee,
consultant, representative or otherwise,
become, or be interested in or
associated with any other person,
corporation, firm, partnership or entity,
engaged to a significant degree in (x)
developing, manufacturing, marketing or
selling enzymes, protein-based
biopharmaceuticals or other pharmaceuticals that
are modified using polyethylene glycol
("PEG"), (y) developing, marketing or
selling single-chain antigen-binding
proteins or (z) any specific technology or
specific area of business in which the
Company becomes involved to a significant
degree during the Term. For purposes of the
preceding sentence, to determine
whether any entity is engaged in such
activities to a "significant degree",
comparison will be made to the Company's
operations at that time. In other
words, an entity will be deemed to be
engaged in an activity to a significant
degree if the number of employees and/or
amount of funds devoted by such entity
to such activity would be material to the
Company's operations at that time. The
Executive is hereby prohibited from ever
using any of the Company's proprietary
information or trade secrets to conduct any
business, except for the Company's
business while the Executive is employed by
the Company as provided in Section
5(b) hereof. The provisions contained in
this Section 5(a) shall survive the
termination of the Executive's employment
pursuant to Section 9 hereof or
otherwise. In the event the Executive
breaches any of the covenants set forth in
this Section 5(a), the running of the
period of restriction set forth herein
shall be tolled for the period during which
the breach exists and recommence
upon the Executive's compliance with the
terms of this Section 5(a).
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(b) Confidentiality.
(i) The Executive acknowledges that, by reason of his
employment by the Company, he will have access to confidential
information of the Company, including, but not limited to,
information
and knowledge pertaining to products, inventions, discoveries,
improvements, innovations, designs, ideas, trade secrets,
proprietary
information, manufacturing, packaging, advertising, marketing,
distribution and sales methods, sales and profit figures, customer
and
vendor lists and relationships between the Company and dealers,
distributors, sales representatives, wholesalers, customers,
suppliers
and others who have business dealings with them (collectively,
"Confidential Information"). The Executive acknowledges that
such
Confidential Information is a valuable and unique asset of the
Company
and covenants that, both during and after the Term, he will not
disclose any Confidential Information to any person or entity, nor
use
the Confidential Information for any purpose, except as his duties
as
an employee of the Company may require, without the prior
written
authorization of the Board. The obligation of confidentiality
imposed
by this Section 5(b) shall not apply to Confidential Information
that
otherwise becomes generally known to the public through no act of
the
Employee in breach of this Agreement or any other party in
violation of
an existing confidentiality agreement with the Company or which
is
required to be disclosed by a specific order of a court or
governmental
agency.
(ii) All Confidential Information, as well as any other
records, designs, patents, business plans, financial
statements,
manuals, memoranda, lists, research and development plans and
products,
and other property delivered to or compiled by the Executive for or
on
behalf of the Company or its vendors or customers that pertain to
the
business of the Company shall be and remain the property of the
Company, and be subject at all times to its discretion and
control.
Likewise, all Confidential Information, as well as any other
formulae,
correspondence, reports, records, charts, advertising materials
and
other similar data pertaining to the business, activities or
future
plans of the Company (and all copies thereof) that are collected by
the
Executive shall be delivered promptly to the Company without
request by
it upon termination of the Executive's employment.
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(c) Nonsolicitation of Employees. During the Noncompete Period,
the
Executive shall not, directly or
indirectly, personally or through others,
encourage to leave employment with the
Company, solicit for employment, or
advise or recommend to any other person,
firm, business, or entity that they
employ or solicit for employment, any
employee of the Company or of any parent,
subsidiary, or affiliate of the
Company.
6. Ventures. If, during the term of his employment, the Executive
is
engaged in or associated with the planning
or implementing of any project,
program, venture or relationship involving
the Company and a third party or
parties, all rights in such project,
program, venture or relationship shall
belong to the Company. Except as approved
by the Board, the Executive shall not
be entitled to any interest in such
project, program, venture or relationship or
to any commission, finder's fee or other
compensation in connection therewith
other than the compensation to be paid to
the Executive as provided in this
Agreement.
7. Acknowledgment. The Executive agrees that the covenants and
agreements contained in Section 5 hereof
are material to this Agreement; that
each of such covenants is reasonable and
necessary to protect and preserve the
Company's interests, properties and
business; that irreparable loss and damage
will be suffered by the Company should the
Executive breach any of such
covenants and agreements; that each of such
covenants and agreements is
separate, distinct and severable not only
from the other of such covenants and
agreements but also from the other and
remaining provisions of this Agreement;
that the unenforceability or breach of any
such covenants or agreement shall not
affect the validity or enforceability of
any other such covenant or agreement or
any other provision of this Agreement; and
that, in addition to other remedies
available to it, the Company shall be
entitled to both temporary and permanent
injunctions and any other rights or
remedies it may have, at law or in equity,
to end or prevent a breach or contemplated
breach by the Executive of any such
covenants or agreements.
(a) Geographic Extent of the Executive's Obligations Concerning
Section
5. The restrictions contained in Section 5
are limited to the United States.
Given the nature of the Company's business,
the restrictions contained in
Section 5 cannot be limited to any
particular geographic region within the
United States. Therefore, the obligations
of the Executive under Section 5 shall
apply to any geographic area in which the
Company (i) has engaged in business
during the period of the Executive's
employment with the Company or (ii) has
otherwise established during the period of
the Executive's employment with the
Company its goodwill, business reputation
or any customer or vendor relations.
(b) Limitation of Covenant. Ownership by the Executive, as a
passive
investment, of less than five percent (5%)
of the outstanding shares of capital
stock or equity of any corporation or other
entity that is publicly traded shall
not constitute a breach of Section 5.
(c) Blue Pencil Doctrine. The restrictions contained in Section 5
are
limited to the United States. If the
duration or geographical extent of, or
business activities covered by, Section 5
are in excess of what is valid and
enforceable under applicable law, then such
provision shall be construed to
cover only that duration, geographical
extent or activities that are valid and
enforceable. The Executive acknowledges the
uncertainty of the law in this
respect and expressly stipulates that this
Agreement be given the construction
which renders its provisions valid and
enforceable to the maximum extent (not
exceeding its express terms) possible under
applicable law.
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(d) Disclosure. The Executive shall disclose to any prospective
employer, prior to accepting or continuing
employment, the existence of Section
5 of this Agreement and shall provide such
prospective employer with a copy of
Section 5 of this Agreement. The obligation
imposed by this subsection 7(d)
shall terminate one year after the
termination of the Executive's employment
with the Company.
8. Intellectual Property and Related Matters.
(a) Disclosure and Assignment. The Executive will promptly disclose
in
writing to the Company complete information
concerning each and every product,
invention, discovery, practice, process or
method, whether patentable or not,
made, developed, perfected, devised,
conceived or first reduced to practice by
the Executive, either solely or in
collaboration with others, during the Term,
or within six months thereafter, whether or
not during regular working hours,
relating either directly or indirectly to
the business, products, practices or
techniques of the Company ("Developments").
The Executive hereby acknowledges
that any and all of the Developments are
the property of the Company and hereby
assigns and agrees to assign to the Company
any and all of the Executive's
right, title and interest in and to any and
all of the Developments. At the
request of the Company, the Executive will
confer with the Company and its
representatives for the purpose of
disclosing all Developments to the Company,
as the Company shall reasonably request
during the period ending three (3) years
after the end of the Term.
(b) Limitation on Section 8(a). The provisions of Section 8(a)
shall
not apply to any Development meeting the
following conditions:
(i) such Development was developed entirely on the Executive's
own time;
(ii) such Development was made without the use of any Company
equipment, supplies, facility or trade secret or customer
information;
(iii) such Development does not relate (A) directly to the
business of the Company or (B) to the Company's actual or
demonstrably
anticipated research or product or customer development; and
(iv) such Development does not result from any work performed
by the Executive for the Company.
(c) Assistance of the Executive. Upon request and without
further
compensation therefor, but at no expense to
the Executive, the Executive will do
all lawful acts, including but not limited
to, the execution of papers and
lawful oaths and the giving of testimony,
that in the opinion of the Company,
may be necessary or desirable in enforcing
the Company's intellectual property
and trade secret rights, and for
perfecting, affirming and recording the
Company's complete ownership and title to
Developments.
(d) Records. The Executive will keep complete, accurate and
authentic
accounts, notes, data and records of the
Developments in the manner and form
requested by the Company. Such accounts,
notes, data and records shall be the
property of the Company, and, upon the
earlier of the Company's request or the
conclusion of his employment, the Executive
will promptly surrender same to the
Company.
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(e) Copyrightable Material. All right, title and interest in
all
copyrightable material that the Executive
shall conceive or originate, either
individually or jointly with others, and
which arise out of the performance of
his duties under this Agreement or
otherwise as an employee of the Company, will
be the property of the Company and are by
this Agreement assigned to the Company
along with ownership of any and all
copyrights in the copyrightable material.
Upon request and without further
compensation therefor, but at no expense to the
Executive, the Executive shall execute all
papers and perform all other acts
necessary to assist the Company to obtain
and register copyrights on such
materials in any and all countries. Where
applicable, works of authorship
created by the Executive for the Company in
performing his responsibilities
under this Agreement shall be considered
"works made for hire," as defined in
the U.S. Copyright Act.
(f) Know-How and Trade Secrets. All know-how and trade secret
information conceived or originated by the
Executive that arises out of the
performance of his obligations or
responsibilities under this Agreement or any
related material or information shall be
the property of the Company, and all
rights therein are by this Agreement
assigned to the Company.
9. Termination of Employment.
(a) Grounds for Termination. The Executive's employment pursuant
to
this Agreement shall terminate prior to the
expiration of the Term in the event
that at any time:
(i) the Executive dies,
(ii) the Executive becomes disabled (as defined below), so
that he cannot perform the essential functions of his position with
or
without reasonable accommodation,
(iii) The Board elects to terminate the Executive's employment
for "Cause" and notifies the Executive in writing of such
election,
(iv) The Board elects to terminate the Executive's employment
without "Cause" and notifies the Executive in writing of such
election,
or
(v) The Executive elects to terminate his employment, without
Good Reason and without liability, and notifies the Board in
writing of
such election.
If the Executive's employment is terminated pursuant to clause
(i),
(ii) or (iii) of this Section 9(a), such
termination shall be effective
immediately. If the Executive's employment
is terminated pursuant to subsection
(iv) of this Section 9(a), such termination
shall be effective 30 days after
receipt of the notice of termination, and
if pursuant to subsection (v) of this
Section 9(a), such termination shall be
effective 15 days after receipt of such
notice.
(b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by
the
Executive in illegal conduct or gross
misconduct that is demonstrably and
materially injurious to the Company, (ii)
the Executive's willful refusal to
perform his duties hereunder (other than
any such failure resulting from illness
or incapacity) which refusal is
demonstrably and materially injurious to the
Company, but only after the Executive has
first received written notice of such
alleged refusal, and such refusal shall
have continued for fifteen (15) days
after such notice without cure by the
Executive, or (iii) the Executive's
material breach of his obligations under
this Agreement which breach is
demonstrably and materially injurious to
the Company, but only after the
Executive has first received written notice
of such alleged breach and has
failed to cure such breach within fifteen
(15) days after such notice; provided,
however, that if the breach is not one that
can be reasonably cured, then the
foregoing requirement in this Clause (iii)
for notice and opportunity to cure
shall not apply. For purposes of this
Section 9(b), no act or failure to act on
the Executive's part shall be deemed
"willful" unless done, or omitted to be
done, by the Executive not in good faith
and without reasonable belief that the
Executive's action or omission was in the
best interests of the Company.
Notwithstanding the foregoing, the
Executive shall not be deemed to have been
terminated for Cause unless and until the
Company delivers to the Executive a
copy of a resolution duly adopted by the
affirmative vote of not less than a
majority of the Board (not including the
Executive, if he is then on the Board)
at a meeting of the Board called and held
for such purpose (after reasonable
notice to the Executive and an opportunity
for the Executive, together with
counsel, to be heard before the Board)
finding that, in the good faith opinion
of the Board, the Executive engaged in
conduct set forth above and specifying
the particulars thereof in reasonable
detail.
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(c) Termination by the Executive for Good Reason. The
Executive's
employment pursuant to this Agreement may
be terminated by the Executive prior
to the expiration of the Term in the event
the Executive has "Good Reason" to
terminate his employment, which shall mean
the following:
(i) Any material adverse change in the Executive's status or
position, including, without limitation, any material diminution in
the
Executive's position, duties, responsibilities or authority, as
set
forth in Executive's Position Description, or the assignment to
the
Executive of any duties or responsibilities that are inconsistent
with
the Executive's status or position as of the Effective Date; or
(ii) A reduction in the Executive's annual Base Salary as the
same may be increased from time to time or failure to pay same;
or
(iii) A reduction in the Target Bonus which could be paid to
the Executive under the Bonus Plan below 50% of the Executive's
Base
Salary or a failure to pay when due any bonus earned for a
completed
performance period in accordance with the applicable bonus plan
("Earned Bonus"), provided however, that the Company's failure
to
actually award any bonus to the Executive, or the Company's
actually
awarding a bonus to the Executive which is less than the Target
Bonus
in each case in accordance with the applicable bonus plan, shall
not
constitute Good Reason; or
(iv) The breach by the Company of any of its material
obligations under this Agreement; or
(v) The relocation of the Company's principal executive
offices to a location that increases the Executive's commuting
distance
by more than thirty-five (35) miles or the Company requiring
the
Executive to be based anywhere other than the Company's
principal
executive offices, except for required travel substantially
consistent
with the Executive's business obligations; or
(vi) The Company provides the Executive a notice of
non-renewal of the Term under Section 2(b) hereof.
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Prior to the Executive being permitted to terminate his employment
for
Good Reason, the Company shall have sixty
(60) days to cure any such alleged
breach, assignment, reduction or
requirement, after the Executive provides the
Company written notice of the actions or
omissions constituting such breach,
assignment, reduction or requirement.
(d) "Change of Control" Defined. Change of Control means the
following:
(i) "Board Change" which, for purposes of this Agreement,
shall have occurred if, over any twenty-four month period, a
majority
of the seats (other than vacant seats) on the Company's Board were
to
be occupied by individuals who were neither (A) nominated by at
least
one-half (1/2) of the directors then in office (but excluding, for
this
purpose, any such individual whose initial assumption of office
occurs
as a result of either an actual or threatened election contest or
other
actual or threatened solicitation of proxies or consents by or
on
behalf of a Person (as defined herein) other than the Board) nor
(B)
appointed by directors so nominated, or
(ii) the acquisition by any individual, 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") (a "Person") of
beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the
Exchange Act) of a majority of the then outstanding voting
securities
of the Company (the "Outstanding Company Voting Securities");
provided,
however, that the following acquisitions shall not constitute a
Change
of Control: (A) any acquisition by the Company, or (B) any
acquisition
by any employee benefit plan (or related trust) sponsored or
maintained
by the Company or any corporation controlled by the Company, or (C)
any
public offering or private placement by the Company of its
voting
securities; or
(iii) a consolidation of the Company with another entity or a
merger of the Company with another entity in which neither the
Company
nor a corporation that, prior to the merger or consolidation, was
a
subsidiary of the Company, shall be the surviving entity; or
(iv) a merger or consolidation of the Company following which
either the Company or a corporation that, prior to the merger
or
consolidation, was a subsidiary of the Company, shall be the
surviving
entity, but a majority of the Outstanding Company Voting Securities
is
then owned by a Person or Persons who were not "beneficial owners"
of a
majority of the Outstanding Company Voting Securities immediately
prior
to such merger or consolidation; or
(v) a voluntary or involuntary liquidation of the Company; or
(vi) a sale or disposition by the Company of at least 80% of
its assets in a single transaction or a series of transactions
(other
than a sale or disposition of assets to a subsidiary of the Company
in
a transaction not involving a Change of Control or a change in
control
of such subsidiary).
Transactions in which the Executive is part of the acquiring group
do
not constitute a Change of Control.
10
<PAGE>
(e) "Disabled" Defined. As used in this Agreement, the term
"disabled"
means any mental or physical condition that
renders the Executive unable to
perform the essential functions of his
position, with o
