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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of May 6,
1999 among ALVIN J. GLASKY, Ph.D. ("Employee"), and NEOTHERAPEUTICS, INC., a
Delaware corporation together with its wholly-owned subsidiaries, Advanced
ImmunoTherapeutics, Inc., a California corporation ("AIT") and NeoTherapeutics,
GmbH, a Swiss corporation ("GmbH"); collectively ("NTI" or the "Companies").
RECITALS:
A. NTI desires to continue the employment of Employee as its President
and Chief Executive Officer, in which positions he shall be responsible for
management and supervision of the day-to-day operations of each of the
Companies, and the Employee desires to accept and serve in such positions with
the Companies pursuant to the terms and conditions set forth herein.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, each of the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Term.
NTI hereby employs Employee and Employee hereby accepts
employment with NTI for a period which shall commence as of January 1, 2000 and
which shall continue until December 31, 2003, unless this Agreement is sooner
terminated as provided herein (the "Term").
2. Duties.
(a) Duties. During the Term, Employee shall perform the duties
and obligations of the President and Chief Executive Officer of each of the
Companies. Employee shall at all times perform such duties and obligations
faithfully, diligently, to the best of the Employee's ability, under the
supervision of and in accordance with lawful policies and directives from time
to time established by the Boards of Directors of the Companies, in compliance
with all applicable laws and the Articles of Incorporation and Bylaws of the
Companies, and shall instruct and require all those working with and under him
to do the same. In this regard, Employee shall perform such duties for each of
the Companies as are required by such positions, or as are assigned to Employee
by the NTI Board of Directors from time to time and which are consistent with
the duties of such positions.
(b) Productive Time. Employee shall devote his entire productive
time, ability and attention to the above duties and obligations during the Term.
Employee shall not directly or indirectly render any services to other persons
or entities of a business, commercial or professional nature, which will
interfere with or detract from his duties under this Agreement without the prior
written approval of the NTI Board.
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3. Compensation.
(a) Base Salary. As compensation for all services to be rendered
by the Employee to the Companies under this Agreement or otherwise, NTI shall
pay to the Employee a base annual salary of Two Hundred Fifteen Thousand Dollars
($215,000) (the "Base Salary"). At each anniversary date, the Base Salary
payable hereunder shall be increased by any increase in the Los Angeles/Long
Beach cost of living index, limited to 5% per year. The Base Salary shall be
paid on a regular basis in accordance with normal payroll procedures and
policies. Notwithstanding the aforementioned annual increase in Employee's
salary which may occur as a result of an increase in the cost of living index,
the amount of the Base Salary shall be reviewed annually by the NTI Board (or a
committee thereof), which shall determine, in its sole discretion, whether
Employee's Base Salary shall be increased, such determination to be made on the
basis of an evaluation of the Employee's performance, the performance of the
Companies and such other factors as the NTI Board (or a committee thereof) shall
deem appropriate.
(b) Bonus. In addition to his Base Salary, Employee may receive a
bonus in such amount, if any, as may be approved by the NTI Board (or a
committee thereof) from time to time.
(c) Stock Options. Concurrently with the execution of this
Agreement, NTI shall enter into a Stock Option Agreement with Employee providing
for the grant of an option to purchase 225,000 shares of NTI's common stock, par
value, $0.001 per share, which will vest in three installments of 75,000 shares
each on May 6, 2000, 2001 and 2002.
(d) Participation in Benefit Plans. The Employee shall be
entitled to participate in all benefit plans or programs (including vacation
time, sick leave and holidays) generally available to all employees of the
Companies, to the extent that his position, title, tenure, salary, age, health
and other qualifications make him eligible to participate therein. The
Employee's participation in any such plan or program shall be subject to the
provisions, rules and regulations thereof that are generally applicable to all
participants therein. With respect to vacations, the Employee will be entitled
to six weeks of vacation per year during the term of this Agreement.
(e) Expenses. In accordance with the Companies' policies
established from time to time, the Companies will pay or reimburse the Employee
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate receipts and reports. Employee will be entitled to travel "Business
Class" at his option or if Business Class is not available, "First Class".
Commensurate with his position, Employee will also be furnished with an
automobile and a gasoline credit card. Further, all costs of operating said
automobile, such as insurance, repairs, and licenses will be incurred by NTI.
Employee agrees to reimburse the Company for the personal use and commuting
costs of such automobile pursuant to the applicable provisions of the Internal
Revenue Code.
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(f) Taxes. All amounts paid to Employee hereunder shall be
subject to the applicable withholding of social security, federal, state and
other taxes and deductions as required by law.
3. Compensation Upon Termination.
(a) Voluntary Termination. In the event that the Employee ceases
to be employed by the Companies by reason of voluntary termination by Employee
pursuant to Section 5(d) below, then he shall not be entitled to any
compensation or any other sum other than the portion of his then current Base
Salary which has accrued through his date of termination and Employee shall
forfeit any incentive or bonus compensation that would otherwise be payable,
then or in the future, to Employee had such termination of employment not
occurred. All payments to be made by the Companies to the Employee pursuant to
this Section 4(a) shall be paid on a regular basis in accordance with NTI's
normal payroll procedures and policies.
(b) Involuntary Termination for Cause. In the event that the
Employee ceases to be employed by the Companies pursuant to Sections 5(a) or
5(b) below, then he shall not be entitled to any compensation, nor shall the
Companies have any obligation to pay any sum or have any liability to Employee
whether as compensation for his services or as a result of such termination of
employment, other than (i) the portion of his then current Base Salary which has
accrued through his date of termination, and (ii) any undistributed bonus or
other incentive compensation for any years prior to the year in which such
termination occurred, provided that the payment thereof is not contingent or
conditional on Employee's continued employment with the Companies or the
satisfaction of any other condition that is unsatisfied, pursuant to any bonus
or incentive plan under which such bonus or incentive compensation was awarded.
All payments required to be made by the Companies to the Employee pursuant to
this Section 4(b) shall be paid in accordance with NTI's normal payroll
procedure and policies.
(c) Involuntary Termination Without Case. In the event that the
Employee ceases to be employed by the Companies by reason of the involuntary
termination of Employee by the Companies without Cause pursuant to Section 5 (c)
below, or by reason of Employee's termination of his employment for Good reason
pursuant to Section 5 (e), Employee shall be entitled to the following
compensation: (i) the portion of his then current Base Salary which has accrued
through his date of termination, (ii) any undistributed bonus or incentive
compensation previously awarded to Employee pursuant to any bonus or incentive
compensation plan of the Companies in which he is then participating or had
previously participated, and (iii) a severance payment in an amount (the
"Severance Amount") equal to the result obtained by multiplying his then current
monthly Base Salary (as hereinafter defined) by the number of months then
remaining in the term of this Agreement. As used in this Agreement, the term
"monthly Base Salary" shall refer to an amount equal to one-twelfth (1/12) of
Employee's then current annual Base Salary. All payments required to be made by
the Companies to the Employee pursuant to this Section 4(c) shall be paid on a
regular basis in accordance with NTI's normal payroll procedures and policies,
including, without limitation, the Severance Amount which shall be paid at such
times and in such amounts consistent with NTI's normal payroll procedures and
policies over the number of months then remaining in the original term of
Agreement.
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5. Termination Prior to Expiration of Term.
(a) Death or Disability. Employee's employment shall terminate
immediately, without notice, upon the death of the Employee or upon Employee
becoming totally disabled. For purposes of this Agreement, the term "totally
disabled" or "total disability" means an inability of the Employee, due to a
physical or mental illness, injury or impairment, to perform a substantial
portion of his duties for a period of 180 or more consecutive days, as
determined by the NTI Board (or a committee thereof).
(b) Termination for Cause. The Companies may terminate
Employee's employment at any time for "Cause" (as hereinafter defined)
immediately upon written notice from the NTI Board to Employee. For purposes of
this Agreement, "Cause" shall mean: (A) gross neglect or willful and continuing
failure by Employee to substantially perform his reasonable duties (except by
reason of the incapacity of Employee) and which failure is not substantially
cured within 30 days after written notice to Employee of the existence of such
breach and the specific facts causing such breach; (B) embezzlement, theft or
other misappropriation of property of the Companies; (C) gross or willful
misconduct resulting in substantial loss to the Companies or substantial damage
to the reputation of the Companies; (D) conviction of a felony; (E) gross or
willful neglect of Employee's assigned duties; (F) gross breach of Employee's
fiduciary obligations to the Companies; (G) any chemical dependence (other than
as prescribed by a physician) which adversely affects Employee's performance of
his duties; or (H) conviction in a court of law of sexual harassment.
(c) Termination Without Cause. The Companies may terminate
Employee's employment for any reason other than one of the reasons enumerated in
Section 5(b) hereof, or for no reason whatsoever, at any time effective upon
written notice from the NTI Board to Employee. Any such termination pursuant to
this Section 5(c), shall constitute a termination "without cause".
(d) Voluntary Termination by Employee Without Good Reason.
Employee may terminate his employment for any reason or no reason at any time
upon thirty (30) days' prior written notice to the NTI Board; provided, however,
that, at the NTI Board's election the effective date of such termination may be
shortened to any date between the fifth (5th) and thirtieth (30th) day following
the date of the Employee's notice of termination hereunder.
(e) Termination of Employee for Good Reason. If, without the
consent of Employee: (i) the Companies materially reduce Employee's total annual
cash compensation hereunder, other than as an "across-the-board" decrease in
compensation payable to executives of the Companies as a cost-cutting measure,
or materially reduce Employee's duties as President and Chief Executive Officer
of either of the Companies, and such reduction in Employee's cash compensation
or in Employee's duties as President and Chief Executive Officer of the
Companies, and such reduction in Employee's cash compensation or in Employee's
duties occurs within twelve (12) months following a "Change in Control of the
Companies" (as hereinafter defined), or (ii) the breach by the Companies of a
material obligation of the Companies to Employee under this Agreement, and such
material reduction of cash compensation or duties or breach of a material
obligation (as the case may be) continues
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uncorrected for a period of thirty (30) days after written notice of the
occurrence thereof from Employee to the NTI Board, the same shall constitute an
event of "Good Reason" which event shall entitle Employee, as his sole right and
remedy therefore, to terminate his employment with the Companies with Good
reason effective on written notice from the Employee to the Companies stating
that he is terminating his employment for Good Reason and specifying the event
constituting same. For purposes hereof, a "Change in Control of the Companies"
shall be deemed to have occurred if (i) NTI is merged or consolidated with or
into another corporation and the holders of the outstanding capital stock of NTI
immediately prior to such merger or defined under the Securities Exchange Act of
1934, as amended (the "1934 Act") (or in the rules and regulations thereunder),
do not beneficially own, directly or indirectly, immediately after such merger
or consolidation, securities representing more than 50% of the combined voting
power of the outstanding securities of the surviving corporation in such merger
or consolidation; (ii) substantially all of the assets of NTI are sold in a
single or series of related transactions to one or more other corporations or
business entities and the holders of the outstanding capital stock of NTI
immediately prior to such sale, or their affiliates (as hereinabove defined), do
not beneficially own securities representing more than 50% of the combined
voting power of the outstanding securities of NTI.
6. Confidential Information. Except in the performance of his duties
hereunder, or with the express written permission of the NTI Board, or except as
required by law, the Employee shall not during or after the term of his
employment, directly or indirectly, use or permit the use of any information
concerning the Companies or their customers which is of a confidential or
proprietary nature, including, but not limited to, customer names, contacts,
reports, techniques, operations, contracts, agreements, work orders, trade
secrets, software, formulas, computer systems, know-how, designs, plans,
invoices, work records, copyrights, patents, patent applications, production
scheduling, introduction dates, production or manufacturing processes, and other
business or technical information of or relating to the Companies or their
customers ("Confidential Information") and shall not reveal, disclose, divulge
or make known any Confidential Information to any person, firm or corporation
whatsoever at any time. All Confidential Information is the exclusive property
of the Companies. All records, papers and documents kept or made by Employee
relating to the Companies shall be and remain the property of the Companies, and
shall be returned by Employee to the Companies upon request or upon termination
of his employment. In the event of a breach or threatened breach by Employee of
the provisions of this Section, the Companies, in addition to their other
remedies, shall be entitled to an injunction restraining Employee from so
disclosing or using any Confidential information. The obligations under this
Section shall survive the termination of this Agreement, but shall not apply at
any time to information that is or becomes generally known to the public (other
than through a breach of this Section).
7. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter contained
and it supersedes all prior agreements, representations, and understandings of
the parties pertaining to such subject matter.
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(b) Arbitration. Except as provided in Section 7(c), all disputes
between the parties hereto shall be determined solely and exclusively by
arbitration under, and in accordance with the rules then in effect of, the
American Arbitration Association, or any successors thereto ("AAA"), in Orange
County, California, unless the parties otherwise agree in writing. The parties
shall jointly select an arbitrator. In the event the parties fail to agree upon
an arbitrator within ten (10) days, then the Companies shall select an
arbitrator and Employee shall select an arbitrator and such arbitrators shall
then select a third arbitrator to serve as the sole arbitrator, provided that if
either the Companies or Employee, in such event, fails to select an arbitrator
within seven (7) days, such arbitrator shall be selected by the AAA upon
application of either the Companies or Employee. Judgment upon the award of the
agreed upon arbitrator or the so chosen third arbitrator, as the case may be,
shall be binding and shall be entered into by a court of competent jurisdiction.
(c) Injunctive Relief. In the event of any violation or
threatened violation of the provisions of Section 6 of this Agreement, the
Companies shall be entitled, in addition to any other rights or remedies which
they may have, to obtain temporary and permanent injunctive relief. The
Companies shall be entitled to such temporary and permanent injunctive relief
because the Companies would sustain substantial and irreparable damage upon any
such violation, which damage is difficult to ascertain in advance.
(d) Amendments. This Agreement may not be amended or supplemented
except by written instrument executed by the parties hereto.
(e) Waivers. All waivers hereunder shall be in writing. No waiver
by any party hereto of any breach or anticipated breach of any provision of this
Agreement by any other party shall be deemed a waiver of any other
contemporaneous, preceding, or succeeding breach or anticipated breach, whether
or not similar, on the part of the same or any other party.
(f) Severability. In the event that any provision of this
Agreement shall be unenforceable or inoperative as a matter of law, the
remaining portions or provisions shall remain in full force and effect.
(g) Successors and Assigns. This Agreement shall be binding
following and inure to the benefit of the parties hereto and their respective
heirs, representatives, executors, administrators, successors, and assigns;
provided, however, that Employee may not assign any or all of his rights or
duties hereunder except with the prior written consent of the Companies.
(h) Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same Agreement.
(i) Section Headings. The section headings used in this
Agreement are inserted for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
(j) Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year above written.
Entered into this 6th day of May, 1999, in Irvine, California.
ALVIN J. GLASKY, Ph.D.,
Employee
/s/Alvin J. Glasky
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NEOTHERAPEUTICS, INC.,
a California corporation
By: /s/Samuel Gulko
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Its: Chief Financial Officer, Secretary
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and Treasurer
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