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EXHIBIT 10.23
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of the ____ day of May, 2000, by and
between Dennis Smith (the "Executive"), an individual residing at 4818
Lancashire Lane, Tallahassee, Florida 32308, and Celsion Corporation (the
"Company"), a Maryland corporation with offices at 10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705.
W I T N E S S E T H:
WHEREAS, the Executive desires to be employed by the Company, and the
Company desires that the Executive shall be employed by it and render services
to it, and the Executive is willing to be so employed and to render services,
all upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1. The Company hereby employs Executive, and the Executive
hereby accepts employment, for the term ("Term") set forth in Section 2 hereof,
to render services to Company as the Director of Engineering of its Medical
Systems Division. The Executive represents and warrants to the Company that he
has full power and authority to enter into this Agreement and that he is not
under any obligation of a contractual or other nature to any person, film or
corporation which is inconsistent or in conflict with this Agreement, or which
would prevent, limit or impair in any way the performance by Executive of his
obligations hereunder.
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1.2. The Executive will have general supervision over the
research and development of the Medical Systems Division of the Company and its
subsidiaries or affiliates (referred to collectively as "Affiliates") and will
have such other duties and responsibilities, consistent with his position, as
may reasonably be assigned to him by the Board of Directors. In addition, the
Executive will serve as a senior officer of each of the Company's Affiliates.
The Executive will report to the Chairman and Chief Science Officer of the
Company.
1.3. The Executive shall devote all of his business time and
effort to the business and affairs of the Company, and shall use his best
efforts, skills, and abilities to promote the interests of the Company, except
for reasonable vacations and during periods of illness or incapacity, but
nothing contained in this Agreement shall prevent the Executive from engaging in
charitable, community or other business activities provided they do not
interfere with the regular performance of the Executive's duties and
responsibilities under this Agreement.
1.4. Unless the Executive and the Company shall otherwise
agree, the Executive's principal place of employment shall be in and around the
Columbia, Maryland area, but the duties of the Executive shall include such
visits to the Company's Affiliates, research and development partners, product
and clinical trial test sites, customers, investment and other bankers, in each
case at the expense of the Company, as the Executive determines is reasonably
required in the performance of the Executive's responsibilities.
2. TERM.
2.1. The Term of this Agreement will commence as of June 6,
2000 and will terminate at the close of business on May 31, 2003, unless sooner
terminated in accordance with the provisions of this Agreement ("Initial Term").
Thereafter, the employment of the Executive shall continue for successive
one-year periods (each such one year period being hereinafter
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referred to as a "Renewal Term") unless the Corporation or Executive shall give
notice to the other at least three months prior to the end of the Term or any
Renewal Term of the election of the Corporation or the Executive to terminate
the employment of the Executive at the end of the Term or the then current
Renewal Term.
3. BASE SALARY.
3.1. For all services performed by the Executive under this
Agreement, the Executive shall be paid a base salary ("Base Salary") for the
first twelve months of the initial Term at the annual rate of $100,000. The Base
Salary for subsequent years shall be the greatest of (i) one hundred five
percent (105%) of the Base Salary for the prior calendar year; (ii) the product
of the multiplication of the Base Salary during the calendar year immediately
preceding by the sum of (y) one hundred percent plus (z) the amount (expressed
as a percent) by which the most recently reported Consumer Price Index ("CPI")
applicable to the Washington-Baltimore Metropolitan region is greater than the
CPI for that same region for the prior twelve months; or (iii) the sum offered
by the Board of Directors after a review taking into account corporate and
individual performance, the Company's prospects and general business conditions.
4. OPTION TO ACQUIRE COMMON STOCK.
4.1. The Company hereby grants to Executive as a bonus an
option to acquire one hundred (100,000) thousand (the "Bonus") fully paid and
non-assessable shares of common stock, par value $0.01 per share (the "Common
Stock") of the Company. The purchase price for each share of Common Stock
acquired on exercise of the Bonus shall be $2.82. Executive may exercise his
option to acquire thirty four (34,000) thousand shares on or after January 15,
2001, and thirty three (33,000) thousand shares on or after each of October 1,
2001, and October 1, 2002. If Executive is not employed by the Company at any of
the three vesting dates, he shall
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not be entitled to exercise his option to acquire Common Stock attributable to
that date. The Company shall at all times reserve for issuance and/or delivery
such number of shares of its Common Stock as shall be required for issuance or
delivery on exercise of the option granted as a Bonus. No fractional shares or
scrip representing fractional shares shall be issued when the option is
exercised. Common Stock issued on exercise of the Bonus option will not be
registered under federal or state securities laws, and will have the status of
restricted securities. Common Stock issued on exercise of the Bonus may not be
sold or offered for sale in the absence of effective registration under such
securities laws, or an opinion of counsel satisfactory to the Company that such
registration under such securities laws, or an opinion of counsel satisfactory
to the Company that such registration is not required. The Company will not
include any Common Stock issued or issuable on exercise of the Bonus in any
registration statement. Common Stock issued on exercise of the Bonus may be sold
by the Executive in transactions permitted by the provisions of Rule 144 of the
Securities Act of 1933, but notwithstanding the provisions of Rule 144,
Executive agrees that he will not undertake any disposition of such Common Stock
in the twelve month period beginning when sales under Rule 144 are permissible
without the approval of a majority of the disinterested members of the Board of
Directors of the Company. In case the Company shall at any time subdivide or
combine the outstanding shares of Common Stock, the number of shares the
Executive shall have the right to acquire on exercise of his Bonus shall be
proportionately increased in the case of such subdivision or decreased in the
case of such combination (on the date that such subdivision or combination shall
become effective). Common Stock issued on exercise of the Bonus shall bear an
appropriate restrictive legend, referring to the provisions hereof.
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5. INCENTIVE OPTION COMPENSATION. As a form of incentive
compensation to Executive, the Company hereby grants to Executive an option to
acquire from the Company, on an original issue basis, an aggregate of one
hundred fifty (150,000) thousand fully paid and nonassessable shares of Common
Stock at the several purchase prices designated below upon the achievement by
the Company of the several corporate accomplishments (the "Milestones") listed
below. Executive's right as set forth herein shall be available at any time on
and after the date on which the first Milestone is achieved and so long as he is
employed by the Company, but not later than 5:00 P.M. (New York time) May 31,
2005 (the "Expiration Date"), upon notice to the Company at its principal office
at 10220-I Old Columbia Road, Columbia, MD 21046-1705, Attention: Spencer J.
Volk, President and Chief Executive Officer (or at such other location as the
Company may advise the Executive in writing). The notice shall be executed and
delivered with the Purchase Form attached hereto duly filled in and signed and
upon payment in cash or cashier's check of the aggregate Purchase price for the
number of shares which Executive is acquiring determined in accordance with the
provisions hereof.
5.1. For purposes of this paragraph:
A. Corporate Milestones. The Incentive option to
acquire Common Stock shall be available in tranches as indicated herein if, as
and when the Company has achieved the following Milestones:
> Completion of engineering to permit the
commercialization of the equipment for Company's BPH treatment system. (Tranche:
50,000 shares)
> Completion of engineering to permit the
commercialization of the equipment for Company's breast cancer treatment system.
(Tranche: 50,000 shares).
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> Completion of development of prototype
medical device for treating deep seated cancer.
B. Purchase Price. The Purchase Price per share
shall be as follows: On achieving the first Milestone, $2.80 per share;
On achieving the second Milestone: $3.00 per
share;
On achieving the third Milestone: $3.20 per
share.
C. Acquisition of Common Stock on Exercise of
Incentive Option. Executive may acquire Common Stock in tranches as set forth as
each Milestone is achieved at any time or from time to time on or after the date
hereof and so long as he is employed by the Company, but not later than 5:00
p.m. New York time, on the Expiration Date. If such date is a day on which
banking institutions are authorized by law to close, then the Expiration Date
shall be on the next succeeding day which shall not be such a day. The Incentive
Option may be exercised without regard to the sequence in which the Milestones
have been achieved. A Notice of Exercise of the Incentive Option shall be
submitted by the Executive to the Company's Board of Directors, identifying the
Milestone achieved and the number of shares covered by the relevant tranche. The
Board of Directors shall be deemed to have approved the exercise of the
Incentive Option unless, within seventy two (72) hours of the submission of the
Notice of Exercise, the Board adopts a resolution determining that exercise of
the Incentive Option is not agreed as to the Milestone identified in the Notice
of Exercise. In the absence of such a disaffirming resolution, Executive may
acquire Common Stock thereafter by presentation of the Notice of Exercise either
to the Company or at the office of its stock transfer agent, if any, and
accompanied by payment in cash or cash equivalent of the Purchase Price for the
number of
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shares of Common Stock specified in such Notice of Exercise, together with all
federal and state taxes applicable upon such exercise.
D. Reservation of Shares. The Company hereby agrees
that at all times there shall be reserved for issuance such number of shares of
its Common Stock as shall be required for issuance or delivery upon achievement
of the Milestones set forth herein.
E. Vesting. Common Stock issued on exercise of an
Incentive Option shall vest in the Executive upon issuance.
F. Anti-Dilution Provisions.
(1) Adjustment of Number of Shares of Common
Stock. Anything in this Paragraph (F) to the contrary notwithstanding, in case
the Company shall at any time issue Common Stock by way of dividend or other
distribution on any stock of the Company or subdivide or combine the outstanding
shares of Common Stock, the Purchase Price shall be proportionately decreased in
the case of such issuance (on the day following the date fixed for determining
shareholders entitled to receive such dividend or other distribution) or either
decreased in the case of such subdivision or increased in the case of such
combination (on the date that such subdivision or combination shall become
effective).
(2) No Adjustment for Small Amounts.
Anything in this Paragraph (F) to the contrary notwithstanding, the Company
shall not be required to give effect to any adjustment in the Purchase Price
unless and until the net effect of one or more adjustments, determined as above
provided, shall have required a change of the Exercise Price by at least one
cent, but when the cumulative net effect of more than one adjustment so
determined shall be to change the actual Purchase Price by at least one cent,
such change in the Purchase Price shall thereupon be given effect.
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(3) Number of Shares of Common Stock
Adjusted. Upon any adjustment of the Purchase Price other than pursuant to
Paragraph (F)(1) hereof, the Executive shall thereafter (until another such
adjustment) be entitled to purchase, at the new Purchase Price, the number of
shares, calculated to the nearest full share, obtained by multiplying the number
of shares of Common Stock initially issuable upon achieving any Milestone by the
Purchase Price in effect on the date hereof and dividing the product so obtained
by the new Purchase Price.
G. Reclassification, Reorganization or Merger. In
case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a change in par
value, or from par value to no par value or from no par value to par value, or
as a result of an issuance of Common Stock by way of dividend or other
distribution or of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock) or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company shall cause effective provision to be
made so that the Executive shall have the right thereafter as he has hereunder
to purchase the kind and amount of shares of stock and other securities and
property receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance. The foregoing provisions of
this Paragraph (G) shall similarly apply to successive consolidations, mergers,
sale or conveyances. In the event that in any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for or of a security of the Company other than
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Common Stock, any such issue shall be treated a s an issue of Common Stock
covered by the provisions hereof with the amount of the consideration received
upon the issue thereof being determined by the Board of Directors of the
Company, such determination to be final and binding on the Executive.
6. REIMBURSEMENT FOR EXPENSES.
6.1. Company shall reimburse Executive for all reasonable
out-of-pocket expenses paid or incurred by him in the course of his employment,
upon presentation by Executive of valid receipts or invoices therefor, utilizing
procedures and forms for that purpose as established by Company from time to
time. In addition, the Company shall reimburse the Executive for up to twenty
five thousand ($25,000) dollars in expenses (including relocation living
expenses) incurred before the commencement of his employment to the extent that
such expenses are involved in moving from his present residence to the area in
or around the headquarters of the Company.
7. VACATIONS.
7.1. Executive shall be entitled to reasonable vacations
(which shall aggregate no less than three (3) weeks vacation with pay) during
each consecutive 12 month period commencing on the date hereof. Executive may
not accumulate any vacation days which remain unused at the end of any year
during the term hereof without the prior consent of Company.
8. EMPLOYEE BENEFIT PROGRAMS, ETC.
8.1. Subject to the Executive's meeting the eligibility
requirements of each respective plan, Executive shall participate in and be
covered by each pension, life insurance, accident insurance, health insurance,
hospitalization, disability insurance and any other employee benefit plan of
Company, as the case may be, made available generally from and after the date
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hereof to its respective senior executives, on the same basis as shall be
available to such other executives without restriction or limitation by reason
of this Agreement.
8.2. Nothing herein contained shall prevent the Company from
at any time increasing the compensation herein provided to be paid to Executive,
either permanently or for a limited period, or from paying bonuses and other
additional compensation to Executive, whether or not based upon the earnings of
the business of Company, or from increasing or expanding any employee benefit
program applicable to the Executive, in the event the Company, in its sole
discretion, shall deem it advisable so to do in order to recognize and
compensate fairly Executive for the value of his services.
9. DEATH OR DISABILITY.
9.1. If Executive shall die during the term hereof, this
Agreement shall immediately terminate, except that Executive's legal
representatives or designated beneficiaries shall be entitled to receive (i) the
Base Salary due to Executive hereunder to the last day of the month following
the month in which his death occurs, payable in accordance with the Company's
regular payroll practices, (ii) all other benefits payable upon death under any
employee benefit program or other insurance covering the Executive as of the
date of death; and (iii) the right to exercise immediately the option granted
under Section 4.
9.2. In the event of the Disability of the Executive, as
hereinafter defined, the Executive shall be entitled to continue to receive
payment of his Base Salary (prorated as may be necessary) in accordance with the
terms of Section 3 hereof through the last day of the sixth month following the
month in which Executive's employment hereunder is terminated as a result of
such Disability. t any time after the date of the Notice (as hereinafter
defined) and during the continuance of the Executive's Disability, the Company
may at any time thereafter terminate
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Executive's employment hereunder by written notice to the Executive. The term
"Disability" shall mean physical or mental illness or injury which prevents the
Executive from performing his customary duties for the Company for a period of
thirty (30) consecutive days or an aggregate period of ninety (90) days out of
any consecutive twelve (12) months. The date of commencement of Disability shall
be the date set forth in the notice (the "Notice") given by Company to the
Executive at any time following a determination of Disability, which date shall
not be earlier than the date the Notice is given by Company. A determination of
Disability by Company shall be solely for the purposes of this Section 9.2 and
shall in no way affect the Executive's status under any other benefit plan
applicable to the Executive.
9.3. Upon the occurrence of a Disability, and unless
the Executive's employment shall have been terminated as provided in Section
9.2, the Executive shall, during such time as he is continuing to receive Base
Salary payments as set forth in Section 9.2, perform such services for Company,
consistent with this duties under Section 1 hereof, as he is reasonably capable
of performing in light of the condition giving rise to a Disability. All
payments due under Section 9.2 shall be payable in accordance with Company's
regular payroll practices. Any amount paid to Executive pursuant to this
Agreement by reason of his Disability, shall be reduced by the aggregate amount
of all monthly disability payments which the Executive is entitled to receive
under all workers compensation plans, disability plans and accident, health or
other insurance plans or programs maintained for the Executive by Company, by
any company controlling, controlled by or under common control with, Company.
9.4. In the event the Executive's employment is
terminated due to Disability, the Executive shall be entitled, in addition to
the Base Salary payments described in Section 9.2,
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to exercise his option to acquire shares in accordance with Section 4 for the
fiscal year in which such Disability occurs.
10. TERMINATION FOR CAUSE.
10.1. The employment of the Executive may be terminated by the
Company for Cause. For this purpose, "Cause" shall mean:
(i) insubordination or the deliberate failure or
refusal to comply with the terms of this
Agreement or to follow the directions or
policies of the Company, its executive officers
or Board of Directors, which directions or
policies are consistent with normal business
practices and relate to the performance by
Executive of his duties as an executive of
Company in accordance with the provisions of
this Agreement, and which failure or refusal
shall remain uncured for fifteen (15) days after
written notice thereof shall have been paid
given to Executive; provided, however, that the
foregoing right to cure shall not apply to any
failure or refusal of a type substantially
similar to a failure or refusal which was the
subject of a previous notice under this clause
(i);
(ii) the commission by Executive of an act of theft,
dishonesty, embezzlement, vandalism, fraud or
misappropriation against Company any subsidiary
or affiliate of Company;
(iii) the conviction of Executive in any jurisdiction
of a criminal act or acts committed by the
Executive which constitute theft,
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embezzlement, vandalism, fraud,
misappropriation, or dishonest acts against the
Company;
(iv) any deliberate or intentional act or omission,
the purpose of which is to materially damage the
business or reputation of Company;
(v) incompetence, negligence or any misconduct by
Executive in performing his duties or willfully
neglecting to carry out his duties under this
Agreement resulting in harm to the Company.
10.2. In the event of a termination for Cause, the Executive
shall (a) be entitled to any unpaid Base Salary pro rated up to the date of
termination, and (b) shall have no further rights under this Agreement.
Furthermore, the Executive shall be and remain subject to all provisions of
Section 13 below for the period indicated therein, but shall not receive any of
the compensation set forth therein.
11. TERMINATION BY COMPANY WITHOUT CAUSE.
11.1. In the event that the Company shall actually or
constructively terminate this Agreement during the Initial Term or any Renewal
Term without cause, the Executive shall be entitled, without any duty to
mitigate damages, to:
(a) All unpaid Base Salary pro-rated up to the date
of termination; and
(b) The immediate opportunity to exercise the option
granted pursuant to Section 4;
(c) A severance payment equal one hundred (100%)
percent of the Base Salary in effect for the prior fiscal year;
and
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(d) All benefits available under the Company's
employee benefit programs, to the extent applicable to senior
executives voluntarily and amicably retiring from employment
with the Company.
11.2. The payments and any other compensation and benefits to
which the Executive is entitled under this Section 11 shall be made available to
the Executive no later than thirty (30) days after the date of any termination
referred to herein.
11.3. In the event that Executive receives the payments and
any other compensation and benefits referred to in this Section 11, he will be
bound by the restrictive provisions of Section 13 for the period therein
provided, subject to the right to receive the compensation therein set forth.
12. TERMINATION BY EXECUTIVE.
12.1. If the Executive shall terminate his employment under
this Agreement during the Initial Term without the express written consent of
the Company, then, for purposes of establishing the rights of the Executive upon
such termination shall be deemed the equivalent of a termination for Cause under
Section 10.1, and the Executive shall have only those rights with regard to
compensation as are set forth in Section 12.2, and the restrictive provisions of
Section 13 below shall fully apply (but the Executive shall not have any right
to the compensation set forth therein).
12.2. If the Executive shall terminate his employment under
this Agreement during any Renewal Term without the express written consent of
the Company, then, for purposes of establishing the rights of the Executive upon
such termination, the Executive shall be entitled (i) to receive all unpaid Base
Salary pro-rated up to the date of termination, and (ii) for a period of ten
(10) days following the date of termination, to exercise any unexercised option
to
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acquire Common Stock under either Section 4 or Section 5 hereof that Executive
could have exercised on the day preceding the date of termination.
12.3. In the case of a termination pursuant to Section 12.2,
the restrictions set forth in Section 13 shall apply to Executive for the period
therein stated, and the Executive shall receive the compensation set forth
therein.
13. RESTRICTIVE COVENANTS; COMPENSATION.
13.1. During such time as this Agreement shall be in effect
and, except as otherwise explicitly stated herein, for a period of three (3)
years following the termination of Executive's employment, and without the
Company's prior written consent (which may be withheld for any reason or for no
reason in Company's sole discretion), Executive shall not do anything in any way
inconsistent with his duties to, or adverse to the interests of, the Company,
nor shall Executive, directly or indirectly, himself or by or through a family
member or otherwise, alone or as a member of a partnership or joint venture, or
as a principal, officer, director, consultant, employee or stockholder of any
other entity, compete with Company or be engaged in or connected with any other
business competitive with that of Company or any of its affiliates, except that
Executive may own as a passive investment not more than five percent (5%) of the
securities of any publicly held corporation that may engage in such a business
competitive with that of Company or any of its Affiliates.
13.2. In view of the fact that Executive will be brought into
close contact with many confidential affairs of Company and its Affiliates not
readily available to the public, Executive agrees during the Term of this
Agreement and thereafter:
(a) to keep secret and retain in the strictest
confidence all non-public information about (i) research and
development, test results, suppliers, venture or
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strategic partners, licenses and patents or patent applications,
planned or existing products, knowhow, financial condition and
other financial affairs (such as costs, pricing, profits and
plans for future development, methods of operation and marketing
concepts) of Company and its Affiliates; (ii) the employment
policies and plans of the Company and its Affiliates; and (iii)
any other proprietary information relating to the Company and
its Affiliates, their operations, businesses, financial
condition and financial affairs (collectively, the "Confidential
Information") and, for such time as Company or any of its
Affiliates is operating, Executive shall not disclose the
Confidential Information to anyone not then an officer, director
or authorized employee of Company or its Affiliates, either
during or after the term of this Agreement, except in the course
of performing his duties hereunder or with Company's express
written consent or except to the extent that such confidential
information can be shown to have been in the public domain
through no fault of Executive; and
(b) to deliver to Company within ten days after
termination of his services, or at any time Company may so
request, all memoranda, notes, records, reports and other
documents relating to Company or its Affiliates, businesses,
financial affairs or operations and all property associated
therewith, which he may then possess or have under his control.
13.3. Executive shall not at any time during the three-year
period following the termination of his employment for any reason whatsoever,
including termination resulting from the natural expiration of the term of this
Agreement, (i) employ any individual who was employed by Company or any of its
Affiliates at any time during the such period or during the 12
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calendar months immediately preceding such termination, or (ii) in any way
cause, influence or participate in the employment of any such individual by
anyone else in any business that is competitive with any of the businesses
engaged in by Company or any of its Affiliates.
13.4. Executive shall not at any time during the three-year
period following the termination of his employment, for any reason whatsoever,
including termination resulting from the natural expiration of the term of this
Agreement, directly or indirectly, either (i) persuade or attempt to persuade
any customer or client of the Company or of any of its Affiliates to cease doing
business with Company or with any Affiliate, or to reduce the amount of business
it does with Company or with any of its Affiliates, or (ii) solicit for himself
or any person other than Company or any of its Affiliates, the business of any
individual or business which was a customer or client of Company or any of its
Affiliates at any time during the eighteen month period immediately preceding
such termination.
13.5. Executive acknowledges that the execution and delivery
by him of the promises set forth in this Section 13 is an essential inducement
to Company to enter into this Agreement, and that Company would not have entered
into this Agreement but for such promises. Executive further acknowledges that
his services are unique and that any breach or threatened breach by Executive of
any of the foregoing provisions of this Section 13 cannot be remedied solely by
damages. In the event of a breach or a threatened breach by Executive of any of
the provisions of this Section 13, Company shall be entitled to injunctive
relief restraining Executive and any business, firm, partnership, individual,
corporation or other entity participating in such breach or attempted breach.
Nothing herein, however, shall be construed as prohibiting Company from pursuing
any other remedies available at law or in equity for such
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breach or threatened breach, including the recovery of damages and the immediate
termination of the employment of Executive hereunder.
13.6. If any of the provisions of, or promises contained in,
this Section 13 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalid portions or the unenforceability in such
other jurisdiction. If any provisions contained in this Section 13 are held to
be unenforceable in any jurisdiction because of the duration or scope thereof,
the parties hereto agree that the court making such determination shall have the
power to reduce the duration and/or scope (if such provision, in its reduced
form, shall be enforceable); provided, however, that the determination of such
court shall not affect the enforceability, duration or scope of this Section 13
in any other jurisdiction.
13.7. As separate and additional compensation to be paid to
the Executive in consideration of the observance and performance of the promises
contained in this Section 13, the Company agrees that, during the period of
restrictions set forth in this Section 13, the Executive will be entitled to be
paid an amount equal to 125% of the Base Salary computed at the annual rate
prevailing immediately prior to the termination of his employment (such amount
to be paid in the same manner as the Company's regular payroll practices),
except that, (i) in the case of termination of the Executive's employment for
Cause, or (ii) in case the Executive shall terminate this Agreement under
Section 12.1, the Executive will receive no such compensation.
14. RELATIONSHIP OF PARTIES.
Nothing herein contained shall be deemed to constitute a
partnership between or a joint venture by the parties, nor shall anything herein
contained be deemed to constitute either
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the Executive, the Company or any Affiliates the agent of the other except as is
expressly provided herein. Neither Executive nor Company shall be or become
liable or bound by any representation, act or omission whatsoever of the other
party made contrary to the provisions of this Agreement.
15. NOTICES.
All notices and communications hereunder shall be in writing and
delivered by hand or sent by registered or certified mail, postage and
registration or certification fees prepaid, return receipt requested, or by
overnight delivery such as Federal Express, and shall be deemed given when hand
delivered or upon three (3) business days after the date when mailed, or upon
one (1) business day after deliver to an agent for overnight delivery, if sent
in such manner, as follows:
If to Company: Celsion Corporation
10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705
Attention: Board of Directors
With a copy to: Bresler Goodman & Unterman LLP
521 Fifth Avenue
New York, NY 10175
Attention: Seymour H. Bucholz
If to Executive: Dennis Smith
4818 Lancashire Lane
Tallahassee, Florida 32308
The foregoing addresses may be changed by notice given in the manner set forth
in this Section 15.
16. DISPUTES. Any dispute arising under this Agreement shall be
settled in accordance with the following provisions. If the parties are
deadlocked on any issue arising
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under the terms of this Agreement, a tiebreaker shall be chosen by the Dean of
the School of Business Administration at the University of Maryland. Each party
may present its proposal to the designated tiebreaker in written form and may,
on a date established by the tiebreaker within fifteen calendar days of the day
the tiebreaker is shown, make an oral presentation not to exceed two hours in
length, accompanied by exhibits and written arguments not to exceed 50 pages in
length. The designated tiebreaker shall then select one of the submitted
proposals, without any change or adjustment, and shall announce to the parties
his or her selection within five calendar days of the day of submission. The
party offering the proposal that is not selected by the tiebreaker shall bear
all costs and expenses (including legal, expert and other fees and expenses),
and the expenses and fees charged by the tiebreaker. Any award by the tiebreaker
may be enforced on application of either party by the order or judgment of any
Federal or state court in the State of Maryland as the party making such
application shall elect, having jurisdiction over the subject matter thereof.
Each of the parties hereto hereby submits itself to the jurisdiction of any such
court and agree that service of process on it in any action, suit or proceeding
to enforce any such award may be effected by the means by which notices are to
be given to it under this Agreement.
17. MISCELLANEOUS.
17.1. This Agreement contains the entire understanding of the
parties hereto with respect to the employment of Executive by Company during the
term hereof, and the provisions hereof may not be altered, amended, waived,
terminated or discharged in any way whatsoever except by subsequent written
agreement executed by the party charged therewith. This Agreement supersedes all
prior employment agreements, understandings and arrangements between Executive
and Company pertaining to the terms of the employment of Executive. A
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waiver by either of the parties of any of the terms or conditions of this
Agreement, or of any breach hereof, shall not be deemed a waiver of such terms
or conditions for the future or of any other term or condition hereof, or of any
subsequent breach hereof.
17.2. The provisions of this Agreement are severable, and if
any provision of this Agreement is invalid, void inoperative or unenforceable,
the balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any circumstance, it shall nevertheless remain applicable to all
other circumstances.
17.3. Company shall have the right to deduct and withhold from
Executive's compensation the amounts required to be deducted and withheld
pursuant to any present or future law concerning the withholding of income
taxes. In the event that Company makes any payments or incurs any charges for
Executive's account or Executive incurs any personal charges with Company,
Company shall have the right and Executive hereby authorizes Company to recoup
such payments or charges by deducting and withholding the aggregate amount
thereof from any Compensation otherwise payable to Executive hereunder.
17.4. This Agreement shall be construed and interpreted under
the laws of the State of Maryland applicable to contracts executed and to be
performed entirely therein.
17.5. The captions and section headings in this Agreement are
not part of the provisions hereof, are merely for the purpose of reference and
shall have no force or effect for any purpose whatsoever, including the
construction of the provisions of this Agreement.
17.6. To the extent any provision of this Agreement
contemplates action after termination hereof or creates a cause of action or
claim on which action may be brought by either party, such provision, cause of
action or claim shall survive termination of Executive's employment or
termination of this Agreement.
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17.7. Executive may not assign his rights nor delegate his
duties under this Agreement; provided, however, that notwithstanding the
foregoing this Agreement shall inure to the benefit of Executive's legal
representatives, executors, administrators or successors and to the successors
or assigns of Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CELSION CORPORATION
By:
--------------------------------
Spencer J. Volk, President
-----------------------------------
Dennis Smith
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Celsion Corporation (the "Company")
10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705
May __, 2000
Dennis Smith
4818 Lancashire Lane
Tallahassee, Florida 32308
Dear Dennis:
In connection with your proposed Executive Employment Agreement
with the Company, we agree that, if, during the course of your employment and at
any time after you are entitled to exercise options granted under either
Paragraph 4 or Paragraph 5 of your Agreement, you ask the Company for assistance
in assembling resources to fund the exercise of those options, the Company will
seek to assist you in negotiating a loan from one or more of the principal
financial institutions with which the Company is then doing business (or from
another source reasonably acceptable to you) to permit you to exercise your
options to acquire either Bonus Shares or Incentive Shares. If, in connection
with such borrowing, you are requested by the lending institution to pledge the
Bonus Shares or the Incentive Shares that you will be acquiring on exercise of
the option as collateral security for the benefit of the lender, your signature
below confirms that you will pledge such shares to support your borrowing.
Very truly yours,
Celsion Corporation
By:
--------------------------
Spencer J. Volk
Chairman
Agreed:
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Dennis Smith