EXHIBIT 10.2
AGREEMENT
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THIS AGREEMENT, effective as of October 4, 2001, is executed
by and between SPENCER J. VOLK ("Volk"), and CELSION CORPORATION, a Delaware
corporation (the "Company").
PRELIMINARY STATEMENT
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1. Volk has served as President, Chief Executive Officer, and
a Director, of the Company, pursuant to an Amended and Restated Executive
Employment Agreement with the Company dated effective as of January 1, 2000 (the
"Employment Agreement").
2. Volk desires to retire, and consequently resign from his
positions as President, Chief Executive Officer, and as a Director, of the
Company, and the Company desires to accept such retirement and consequent
resignation from said positions, in accordance with the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. RECITALS. The foregoing recitals are hereby incorporated by
reference and made a part of this Agreement.
2. SALARY. In lieu of all amounts payable as salary or cash
bonus pursuant to the Employment Agreement, the Company agrees to pay Volk an
annual salary in the amount of Two Hundred Fifty Two Thousand Dollars ($252,000)
through December 31, 2002, less such amounts as are required to be withheld
pursuant to applicable law, payable in equal monthly or semi-monthly
installments pursuant to the Company's standard payroll policies applicable to
its senior executives.
3. STOCK OPTIONS.
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3.1 Option Grant and Vesting. In lieu of all grants of
stock options set forth in the Employment Agreement (including all option grants
previously made to Volk pursuant to the Employment Agreement) the Company hereby
grants to Volk, non-qualified stock options which in the aggregate entitle Volk
to acquire One Million Eight Hundred Fifty Thousand (1,850,000) fully paid and
non-assessable shares of common stock of the Company, par value $0.01 per share,
all of which shall automatically vest as of the date of this Agreement. Any
stock options previously granted to Volk pursuant to the Employment Agreement,
whether vested or unvested, shall be null and void and superceded by the options
granted pursuant to this Agreement.
3.2 Exercise.
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(i) General. Volk may exercise the stock options at any
time prior to 5:00 p.m. on October 4, 2006 (the "Expiration Date") upon written
notice to the Company at its principal office at 10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705, Attention: Augustine Y. Cheung, after which time
all unexercised options shall expire and be of no further legal force or effect.
The notice shall be executed and delivered with the Purchase Form attached
hereto as Exhibit A duly completed and signed and, except as provided in Section
3.2(ii) below, shall be accompanied by payment in cash or cashier's check of the
aggregate purchase price for the number of shares which Volk is acquiring
pursuant to the provisions hereof.
(ii) Cashless Exercise. If the common stock of the
Company is, at the time of exercise of a stock option, registered under Section
12(b) or 12(g) of the Securities and Exchange Act of 1934, Volk may pay the
exercise price, in whole or in part, by delivery of a properly executed Purchase
Form, together with (a) irrevocable instructions to a brokerage firm designated
by the Company at the request of Volk to deliver promptly to the Company the
amount of proceeds necessary to pay the aggregate purchase price or portion
thereof and any withholding tax obligations that may arise in connection with
the exercise, (b) payment in cash or cashier's check of that portion of the
aggregate purchase price, in any, not covered by the instructions to the
brokerage firm and (c) instruction to the Company to deliver directly to the
designated brokerage firm the certificates for the purchased shares the proceeds
of which are designated to pay the purchase price.
3.3 Exercise Price. The exercise price for each stock
option to acquire one share of common stock shall be as follows:
# of Stock Options Exercise Price
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400,000 $ .75
250,000 $ 1.22
300,000 $ 1.00
100,000 $ 1.22
100,000 $ 1.22
700,000 $ 1.17
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1,850,000
3.4 Sale of Shares; Potential Registration.
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(i) Restrictions on Transfer. Shares received upon
exercise of the stock options may not be sold or offered for sale in the absence
of effective registration under federal and applicable state securities laws, or
an opinion of counsel satisfactory to the Company that such registration is not
required. Shares
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received upon exercise of the stock options may be sold by Volk in transactions
permitted by the provisions of Rule 144 of the Securities Act of 1933.
(ii) Possible Registration. The Company will consider
registering all or any portion of the shares of common stock underlying the
options for resale pursuant to the Act at the request of Volk. However, the
parties acknowledge and agree that the Company is not, and shall not be, under
any legal obligation to effect such a registration at any time or at all.
3.5 Anti-Dilution Provisions.
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(i) Adjustment of Number of Incentive Shares.
Notwithstanding anything in this Section 3.5 to the contrary, 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 exercise price of the stock options granted
hereunder 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 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).
(ii) No Adjustment for Small Amounts. Anything in this
Section 3.5 to the contrary notwithstanding, the Company shall not be required
to give effect to any adjustment in the exercise price of the stock options
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 exercise price by at least one cent,
such change in the exercise price shall thereupon be given effect.
3.6 Adjustments in the Event of a Recapitalization or
Similar Transaction. In the event of a reclassification, recapitalization, stock
split, reverse stock split, stock dividend or combination of shares, or other
similar event, the number and class of shares issuable to Volk upon exercise of
the option to acquire common stock shall be adjusted proportionately to reflect
such event.
4. FRINGE BENEFITS.
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4.1 Automobile Allowance. The Company shall continue to
provide Volk with the use of an automobile (or at Volk's option, a cash
allowance in the amount of $450.00 per month in lieu thereof) through December
31, 2002, along with fuel, fluids and maintenance, upon such terms and
conditions as are approved by the Company.
4.2 Disability Insurance. Through December 31, 2002, the
Company shall continue to reimburse Volk for the expense of maintaining the
disability insurance policy currently in effect.
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4.3 Participation in Employee Benefit Programs. Subject to
Volk's meeting the respective eligibility requirements of each plan, until
December 31, 2002 Volk shall be entitled to participate in, and be covered by,
each pension, life insurance, accident insurance, health insurance and
hospitalization plan of the Company, as the case may be, made available to its
senior executives generally from and after the date hereof.
5. NON-COMPETITION AND NON-SOLICITATION.
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5.1 Non-Competition. During such time as this Agreement
shall be in effect and for a one-year period following December 31, 2002, Volk
shall not do anything in any way inconsistent with his duties to, or adverse to
the interests of, the Company, nor shall Volk, 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 the Company or be
engaged in or connected with any other business competitive with that of the
Company or any of its affiliates, except that Volk may own, as a passive
investment, not more than five percent (5%) of the total voting power of any
company with a class of securities registered pursuant to the Securities
Exchange Act of 1934 that may engage in such a business competitive with that of
the Company or any of its affiliates.
5.2 Confidentiality. In view of the fact that Volk has been
brought into close contact with all or substantially all of the confidential
affairs of the Company and its affiliates, information with respect to which is
not readily available to the public, Volk 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 strategic partners, licenses and
patents or patent applications, planned or existing products,
know-how, financial condition and other financial affairs (such as
costs, pricing, profits and plans for future development, methods
of operation and marketing concepts) of the 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 the Company or any of its affiliates is operating, Volk shall
not disclose the Confidential Information to anyone not then an
officer, director or authorized employee or agent of the Company or
its affiliates, either during or after the term of this Agreement,
except with the 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, recklessness or negligence
of Volk; and
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(b) to deliver to the Company at any time(s) the Company
may so request, all memoranda, notes, records, reports and other
documents relating to the Company or its affiliates, or their
respective businesses, financial affairs or operations and all
property associated therewith, which he may then possess or have
under his control.
5.3 Non-Solicitation of Employees. Volk shall not at any
time during the three-year period following December 31, 2002, (i) employ any
individual who was employed by the Company or any of its affiliates at any time
commencing January 1, 2001 through and including December 31, 2005, 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 the Company or any of its affiliates.
5.4 Non-Solicitation of Customers. Volk shall not at any
time during the three-year period following December 31, 2002, 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 the Company
or with any affiliate, or to reduce the amount of business it does with the
Company or with any of its affiliates, or (ii) solicit for himself or any person
other than the Company or any of its affiliates, the business of any individual
or business which was a customer or client of the Company or any of its
affiliates at any time during the eighteen month period immediately preceding
December 31, 2002.
5.5 Remedies. Volk acknowledges that his agreement to the
limitations set forth in this Section 5 is an essential inducement to the
Company to enter into this Agreement, and that the Company would not have
entered into this Agreement but for such agreement. Volk further acknowledges
that his services are unique and that any breach or threatened breach by Volk of
any of the foregoing provisions of this Section 5 cannot be remedied solely by
damages. In the event of a breach or a threatened breach by Volk of any of the
provisions of this Section 5, the Company shall be entitled to injunctive relief
restraining Volk 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 the Company from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Volk hereunder.
5.6 Enforceability. Notwithstanding the provisions of
Section 11.2 hereof, if any of the provisions of, or promises contained in, this
Section 5 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 5 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
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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 5 in any other
jurisdiction.
6. MUTUAL RELEASE. The parties shall execute a Mutual Release
in the form attached hereto as Exhibit B simultaneously with the execution of
this Agreement.
7. EMPLOYMENT AGREEMENT OF NO FURTHER FORCE OR EFFECT. This
Agreement supercedes all prior agreements between the parties including all
provisions of the Employment Agreement, which is terminated in its entirety and
is of no further legal force or effect effective as of the date of this
Agreement.
8. POSSIBLE CONSULTING ARRANGEMENT. The Company agrees to
consider retaining Volk as a consultant after December 31, 2002, if the parties
can reach mutually agreeable terms for any such arrangement at that time,
provided however, that any such future engagement of Volk by the Company shall
be in the sole and absolute discretion of the Board of Directors of the Company.
9. NOTICES.
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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 three (3) business days after the date when mailed, or upon one (1)
business day after delivery to an agent for overnight delivery, if sent in such
manner, as follows:
If to the Company: Celsion Corporation
10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705
Attention: Augustine Y. Cheung, President
With a copy to: Venable, Baetjer and Howard, LLP
Mercantile Bank and Trust Building
2 Hopkins Plaza, Suite 1800
Attn: Greg Cross
If to Volk: Spencer J. Volk
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The foregoing addresses may be changed by either party from time to time by
notice given in the manner set forth in this Section 9.
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10. JURISDICTION. Any suit involving any dispute or matter
arising under this Agreement may only be brought in any United States federal
district court located in the State of Maryland or in any state court located in
Howard County, Maryland. Each of the parties hereto consents to the venue and
the exercise of personal jurisdiction by such court with respect to all such
proceedings.
11. MISCELLANEOUS.
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11.1 Entire Agreement; Amendment; Waiver. This Agreement
contains the entire understanding of the parties hereto with respect to the
subject matter 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 Volk and the Company pertaining to the terms of the employment of Volk.
A 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.
11.2 Severability. Subject to the provisions of Section
5.6 as they affect the provisions of Section 5 hereof, 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.
11.3 Governing Law. 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.
11.4 Headings. 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.
11.5 Binding Nature. This Agreement shall be binding upon
and inure to the benefit of Volk and his personal representatives, executors and
administrators and to the successors or assigns of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first above written.
WITNESS/ATTEST: CELSION CORPORATION
By: /s/ Augustine Y. Cheung (SEAL)
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Augustine Y. Cheung, President
/s/ SPENCER J. VOLK (SEAL)
- --------------------------------- -------------------
Spencer Volk
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EXHIBIT A
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OPTION EXERCISE FORM
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Celsion Corporation
10220-1 Old Columbia Road
Columbia, MD 21046-1705
Gentlemen:
1. Exercise of Stock Option. I hereby exercise the [Insert Type]
______________Stock Option (the "Stock Option") granted to me on
____________________, 2001, by Celsion Corporation (the "Corporation"), subject
to all the terms and provisions thereof and of the Celsion Corporation 2001
Stock Option Plan (the "Plan"), and notify you of my desire to purchase
____________ shares (the "Shares") of Common Stock of the Corporation at a price
of $___________ per share pursuant to the exercise of said Stock Option.
2. Information about the Corporation. I am aware of the Corporation's
business affairs and financial condition and have acquired sufficient
information about the Corporation to reach an informed and knowledgeable
decision to acquire the Shares.
3. Tax Consequences. I am not relying upon the Corporation for any tax
advice in connection with this option exercise, but rather am relying on my own
personal tax advisors in connection with the exercise of the Stock Option and
any subsequent disposition of the Shares.
4. Tax Withholding. I understand that, in the case of a nonqualified
stock option, I must submit upon demand from the Corporation an amount in cash
or cash equivalents sufficient to satisfy any federal, state or local tax
withholding applicable to this Stock Option exercise, in addition to the
purchase price enclosed, or make such other arrangements for such tax
withholding that are satisfactory to the Corporation, in its sole discretion, in
order for this exercise to be effective.
5. Unregistered Shares. The following shall apply in the event the
Shares purchased herein are not registered under the Securities Act of 1933, as
amended:
(a) I am acquiring the Shares for my own account for
investment with no present intention of dividing my interest with others or of
reselling or otherwise disposing of any of the Shares.
(b) The Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance upon the exemption
provided by Section 3(b) of the Act for employee benefit plans, contained in
Rule 701 promulgated thereunder, or in lieu thereof upon the private offering
exemption contained in Section 4(2) of the Act, and such reliance is based in
part on the above representation.
(c) Since the Shares have not been registered under the Act,
they must be held indefinitely until an exemption from the registration
requirements of the Act is available or they are subsequently registered, in
which event the representation in Paragraph (a) hereof shall terminate. As a
condition to any transfer of the Shares, I understand that the Corporation will
require an opinion of counsel satisfactory to the Corporation to the effect that
such transfer does not require registration under the Act or any state
securities law.
(d) The issuer is not obligated to comply with the
registration requirements of the Act, with the requirements for an exemption
under Regulation A under the Act, or with the public information requirements
necessary for reliance on Rule 144 under the Act, for my benefit.
(e) The certificates for the shares to be issued to me shall
contain appropriate legends to reflect the restrictions on transferability
imposed by the Act.
Total Amount Enclosed: $__________
Date:________________________ ____________________________________
(Optionee)
Received by Celsion Corporation
On:_________________________, 200__
By:_________________________________
EXHIBIT B
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MUTUAL RELEASE
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1. CELSION CORPORATION, a Delaware corporation (the "Corporation"), for and in
consideration of the execution by SPENCER J. VOLK ("Volk") of the Agreement
executed by and between the parties simultaneously herewith (the "Agreement"),
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, for itself and its directors, officers, employees,
stockholders, agents, successors, assigns, attorneys and trustees (collectively
the "Celsion Releasors"), does hereby irrevocably and unconditionally remise,
release, acquit, exonerate and forever discharge Volk, and his heirs, personal
representatives, executors, administrators, successors and assigns, of and from
any or all actions, causes of action, suits, debts, dues, sums of money,
accounts, claims, demands, covenants, contracts, controversies, promises,
agreements, damages, attorneys' fees, costs and expenses of suit, obligations,
liabilities and judgments, of whatever kind or nature, known or unknown, now
existing or which may develop in the future, in law or in equity, which any of
the Celsion Releasors ever had against Volk, now has or which any of the Celsion
Releasors hereafter can, shall or may have, upon or by reason of any act,
omission, matter, cause or thing whatsoever, from the beginning of time through
the date of this Release, except for those arising under or with respect to the
Agreement.
2. SPENCER J. VOLK ("Volk") for and in consideration of the
execution by the Corporation of the Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, for
himself and his heirs, personal representatives, executors, administrators,
successors and assigns (collectively the "Volk Releasors"), does hereby
irrevocably and unconditionally remise, release, acquit, exonerate and forever
discharge the Corporation and its directors, officers, employees, stockholders,
agents, attorneys and trustees, of and from any or all actions, causes of
action, suits, debts, dues, sums of money, accounts, claims, demands, covenants,
contracts, controversies, promises, agreements, damages, attorneys' fees, costs
and expenses of suit, obligations, liabilities and judgments, of whatever kind
or nature, known or unknown, now existing or which may develop in the future, in
law or in equity, which any of the Volk Releasors ever had against the
Corporation, now has or which any of the Volk Releasors hereafter can, shall or
may have, upon or by reason of any act, omission, matter, cause or thing
whatsoever, from the beginning of time through the date of this Release, except
for those arising under or with respect to the Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their
respective hands and seals as of the date and year set forth below.
ATTEST/WITNESS: CELSION CORPORATION
By: /s/ Augustine Y. Cheung (SEAL)
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Title: President & CEO
October _____, 2001
/s/Spencer J. Volk (SEAL)
- ------------------------------ ------------------
Spencer J. Volk
October 15, 2001
STATE OF MARYLAND
COUNTY OF BALTIMORE, to wit:
I hereby certify that on this _____ day of
___________________, 2001, before me the subscriber, a Notary Public of the
State of Maryland, in and for the County aforesaid, personally appeared
______________________, in his capacity as ______________________ of Celsion
Corporation, and he acknowledged that he executed the foregoing Release for the
purposes therein contained.
IN WITNESS WHEREOF, I hereto set my hand and official seal.
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Notary Public
My Commission Expires: ______________
STATE OF MARYLAND
COUNTY OF MONTGOMERY, to wit:
I hereby certify that on this 15th day of October, 2001,
before me the subscriber, a Notary Public of the State of Maryland, in and for
Montgomery County, personally appeared Spencer J. Volk, and he acknowledged that
he executed the foregoing Release for the purposes therein contained.
IN WITNESS WHEREOF, I hereto set my hand and official seal.
/s/ Maureen Conahan Diaz
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Notary Public
My Commission Expires: July 6, 2004