EXHIBIT 10.3
SEPARATION AND CONSULTING AGREEMENT
THIS SEPARATION AND CONSULTING AGREEMENT (this "Agreement") is made as
of the 29th day of March, 2002 (the "Effective Date") by and between NEOSE
TECHNOLOGIES, INC. (the "Company") and XXXXXXX X. XXXX, Ph.D. ("Xx. Xxxx").
WHEREAS, Xx. Xxxx currently serves as Chief Executive Officer and
Chairman of the Board of the Company, a position of substantial authority and
responsibility in which he has access to the Company's customers, vendors, trade
secrets, proprietary information, and intellectual property;
WHEREAS, the parties desire to arrange for the cessation of Xx. Xxxx'x
employment with the Company on mutually agreeable terms;
WHEREAS, the parties desire Xx. Xxxx to continue as Chairman of the
Board for a period of transition following the termination of his employment
with the Company;
WHEREAS, the Company desires to retain the services of Xx. Xxxx as a
consultant following the termination of his employment with the Company; and
WHEREAS, the Company desires to obtain certain assurances from Xx. Xxxx
that he will not harm the Company's business interests.
NOW THEREFORE, in consideration of these premises and intending to be
legally bound hereby, the parties agree as follows:
SECTION 1. Definitions. To the extent not defined in the preamble of this
Agreement, capitalized terms used herein will have the meanings provided below:
1.1. "Board" means the Board of Directors of the Company.
1.2. "Business" means research, development, manufacture, supply,
marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic
materials and products and related process technology including, without
limitation, research, development, manufacture, supply, marketing, licensing,
use and sale or products and technology directed to (a) the enzymatic synthesis
of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and
industrial applications, (b) enzymatic synthesis or modification of the
carbohydrate portion of proteins or lipids, and (c) carbohydrate-based
therapeutics.
1.3. "Cause" means Xx. Xxxx'x intentional commission of fraud,
embezzlement, or any other illegal act in the performance of services to the
Company.
1.4. "Code" means the Internal Revenue Code of 1986, as amended.
1.5. "Good Reason" means, without Xx. Xxxx'x prior written consent, any
of the following:
1.5.1. the assignment of consulting duties to Xx. Xxxx outside the
scope of Section 4 of this Agreement or requiring Xx. Xxxx to report to anyone
other than the Company's Chief Executive Officer or the Board; or
1.5.2. the failure by the Company to pay any material amount due
to Xx. Xxxx hereunder;
provided, however, the foregoing events or conditions will constitute Good
Reason only if Xx. Xxxx provides the Company with written objection to the event
or condition within 60 days following the occurrence thereof, the Company does
not reverse or otherwise cure the event or condition within 30 days of receiving
that written objection, and Xx. Xxxx terminates his consulting services
hereunder within 30 days following the expiration of that cure period.
1.6. "Non-Competition Agreement" means a non-competition agreement,
substantially in the form attached hereto as Exhibit I.
1.7. "Restricted Period" means the twelve-month period commencing on
the Effective Date.
1.8. "Restrictive Covenants" means the provisions contained in Section
6.1 of this Agreement.
1.9. "Term" means the three year period beginning on the Effective Date
and ending on the third anniversary of the Effective Date.
SECTION 2. Resignation. Xx. Xxxx hereby resigns as the Company's Chief Executive
Officer and as an employee of the Company, effective as of the Effective Date.
SECTION 3. Board Membership.
3.1. Xx. Xxxx will continue to serve as the Company's Chairman of the
Board for the one-year period following the Effective Date. Upon the expiration
of that one-year period, Xx. Xxxx will resign as the Company's Chairman of the
Board and will thereafter continue to serve as a member of the Board for so long
as (a) he continues to be elected to the Board, and (b) he chooses to serve as a
member of the Board.
3.2. In light of the compensation paid to Xx. Xxxx for his consulting
services under this Agreement, he will not be entitled to any separate
compensation for his service as a member of the Board for the fiscal year of the
Company beginning in 2002. Thereafter, so long as he continues as a member of
the Board, he will be entitled to the same compensation as is then paid to the
Company's other non-employee directors.
SECTION 4. Consulting.
4.1. Scope of Services and Availability. Xx. Xxxx agrees that during
the Term, he will assist in the transition of responsibility to the Company's
new Chief Executive Officer and will make himself available to the management of
the Company for consultation with respect to strategic planning, corporate
development and other matters mutually determined by Xx. Xxxx and the Company's
Chief Executive Officer; provided, however, that:
2
4.1.1. during the first year of the Term, Xx. Xxxx will not be
required to perform such consulting services for more than 50% of his business
time without Xx. Xxxx'x prior consent;
4.1.2. during the second and third years of the Term, Xx. Xxxx
will not be required to perform such consulting services for more than 10 hours
per month; and
4.1.3. the Company will cooperate with Xx. Xxxx to schedule the
time and place for the performance of such consulting services so as to permit
Xx. Xxxx to fulfill this obligation with minimal interruption of his other
personal and professional obligations.
4.2. Character of Services. It is the mutual intent of the parties that
during the Term, Xx. Xxxx will act strictly in a professional consulting
capacity as an independent contractor for all purposes, including without
limitation, federal, state and local withholding, employment and payroll tax
purposes, and in all situations and will not be considered an employee of the
Company. During the Term, Xx. Xxxx will serve the Company faithfully and to the
best of his ability and will provide such services and perform such tasks as may
be reasonably requested of Xx. Xxxx in accordance with Section 4.1.
4.3. Reimbursement of Expenses. The Company will pay or promptly
reimburse Xx. Xxxx for reasonable expenses actually incurred by Xx. Xxxx in
connection with the provision of consulting services pursuant to this Section 4.
4.4. Compensation. As compensation for all services to be rendered
(including refraining from services) by Xx. Xxxx hereunder:
4.4.1. the Company will pay to Xx. Xxxx a monthly retainer of
$39,622.59 on the last day of each of the first twelve months of the Term; and
4.4.2. in lieu of coverage pursuant to COBRA (29 U.S.C. xx.xx.
1161 - 1169), Xx. Xxxx (and, to the extent covered immediately prior to the date
of termination, his spouse and dependents) will be deemed to have elected to
continue coverage under the Company's group health plan. Such continuation
coverage will be provided at no cost beginning on the Effective Date and
continuing until the earliest to occur of (a) the expiration of the period for
which Xx. Xxxx would have been eligible for COBRA coverage, (b) Xx. Xxxx'x
eligibility for coverage under another employer's group health plan, or (c) the
first anniversary of the Effective Date.
SECTION 5. Termination.
5.1. Without Cause or for Good Reason. If Xx. Xxxx'x retention to
provide consulting services hereunder is terminated by the Company without Cause
or by Xx. Xxxx for Good Reason, the Company will pay to Xx. Xxxx, if not
previously paid, all the amounts described in Section 4.4 at the times therein
specified (notwithstanding the termination of his retention).
3
5.2. For Cause or Without Good Reason. If Xx. Xxxx'x retention to
provide consulting services hereunder is terminated by the Company for Cause or
by Xx. Xxxx without Good Reason, then notwithstanding any other provision of
this Agreement, he will not be entitled to any further payments and all his
entitlements under this Agreement will cease.
SECTION 6. Restrictive Covenants; Remedies.
6.1. Restrictive Covenants. In consideration of the payments and
benefits provided under this Agreement, Xx. Xxxx covenants that, during the
Restricted Period, he will not (except in his capacity as a consultant of the
Company) do any of the following, directly or indirectly, anywhere in the world:
6.1.1. engage or participate in any business competitive with the
Business (as defined below);
6.1.2. become interested in (as owner, stockholder, lender,
partner, co-venturer, director, officer, employee, agent or consultant) any
person, firm, corporation, association or other entity engaged in any business
competitive with the Business. Notwithstanding the foregoing, Xx. Xxxx may hold
up to 4.9% of the outstanding securities of any class of any publicly-traded
securities of any company;
6.1.3. engage in any business, or solicit or call on any customer,
supplier, licensor, licensee, contractor, agent, representative, advisor,
strategic partner, distributor or other person with whom the Company shall have
dealt or any prospective customer, supplier, licensor, licensee, contractor,
agent, representative, advisor, strategic partner, distributor or other person
that the Company shall have identified and solicited at any time during Xx.
Xxxx'x employment or retention by the Company for a purpose competitive with the
Business;
6.1.4. influence or attempt to influence any employee, consultant,
customer, supplier, licensor, licensee, contractor, agent, representative,
advisor, strategic partner, distributor or other person to terminate or modify
any written or oral agreement, arrangement or course of dealing with the
Company; or
6.1.5. solicit for employment or employ or retain (or arrange to
have any other person or entity employ or retain) any person who has been
employed or retained by the Company within the 12 months preceding the
application of this provision to that person.
6.2. Acknowledgements. Xx. Xxxx acknowledges that the Restrictive
Covenants are reasonable and necessary to protect the legitimate interests of
the Company and its affiliates and that the duration and geographic scope of the
Restrictive Covenants are reasonable given the nature of this Agreement and Xx.
Xxxx'x relationship with the Company. Xx. Xxxx further acknowledges that the
Restrictive Covenants are included herein in order to induce the Company to
engage Xx. Xxxx pursuant to this Agreement and that the Company would not have
entered into this Agreement or otherwise retained Xx. Xxxx as a consultant in
the absence of the Restrictive Covenants.
4
6.3. Remedies and Enforcement Upon Breach.
6.3.1. Specific Enforcement. Xx. Xxxx acknowledges that any breach
by him, willfully or otherwise, of the Restrictive Covenants will cause
continuing and irreparable injury to the Company for which monetary damages
would not be an adequate remedy. Xx. Xxxx will not, in any action or proceeding
to enforce any of the provisions of this Section 6, assert the claim or defense
that such an adequate remedy at law exists. In the event of any such breach by
Xx. Xxxx, the Company will have the right to enforce the Restrictive Covenants
by seeking injunctive or other relief in any court, without any requirement that
a bond or other security be posted, and this Section 6.3 will not in any way
limit remedies of law or in equity otherwise available to the Company.
6.4. Termination of Payments and Vesting Service. If Xx. Xxxx breaches
Section 6.1 in any respect, then (a) he will not be entitled to any further
payments under this Agreement, (b) he will immediately cease to treated as
continuing in the service of the Company for purposes of vesting and expiration
of his Company stock options, and (c) all of his entitlements under this
Agreement will cease.
6.5. Extension of Restricted Period. If Xx. Xxxx breaches Section 6.1
in any respect, the Restricted Period will be extended for a period equal to the
period that Xx. Xxxx was in breach.
6.6. Accounting. If Xx. Xxxx breaches any of the Restrictive Covenants,
the Company will have the right and remedy to require Xx. Xxxx to account for
and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits derived or received by Xx. Xxxx as the result of
such breach. This right and remedy will be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in equity.
6.7. Judicial Modification. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court will have the power
to modify such provision and, in its modified form, such provision will then be
enforceable.
6.8. Enforceability. If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.
6.9. Disclosure of Restrictive Covenants. Xx. Xxxx agrees to disclose
the existence and terms of the Restrictive Covenants to any entity to whom Xx.
Xxxx provides services during the Restricted Period.
SECTION 7. Non-Competition Agreement. At any time before March 29, 2003, Xx.
Xxxx, at his option, may execute the Non-Competition Agreement and become
entitled to the consideration therein provided. The Company acknowledges and
agrees that this offer to enter into the Non-Competition Agreement will remain
open until March 28, 2003 (and, if not accepted by that time, will then
terminate).
5
SECTION 8. No Further Liability. Xx. Xxxx acknowledges that: (a) the payments
set forth in Sections 4 and 5 of this Agreement constitute full settlement of
all his rights under this Agreement, (b) he has no entitlement under any other
employment, severance or similar arrangement maintained by the Company, and (c)
except as otherwise provided specifically in the Non-Competition Agreement (if
executed by Xx. Xxxx) or this Agreement, the Company does not and will not have
any other liability or obligation to him in respect of his employment by or
other service to the Company.
SECTION 9. Claims.
9.1. Release. The Company (including for purposes of this Section 9.1,
its parents, affiliates and subsidiaries) hereby fully and forever releases and
discharges Xx. Xxxx (and his heirs, executors and administrators), and Xx. Xxxx
hereby fully and forever releases and discharges the Company (including all
predecessors and successors, assigns, officers, directors, trustees, employees,
agents and attorneys, past and present) from any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and
liabilities, of whatever kind or nature, direct or indirect, in law, equity or
otherwise, whether known or unknown, arising through the date of this Release,
out of Xx. Xxxx'x employment by or service to the Company or the termination
thereof, including, but not limited to, any claims for relief or causes of
action under the Age Discrimination in Employment Act, 29 U.S.C. ss. 621 et
seq., or any other federal, state or local statute, ordinance or regulation
regarding discrimination in employment and any claims, demands or actions based
upon alleged wrongful or retaliatory discharge or breach of contract under any
state or federal law. The foregoing will not be deemed to release Xx. Xxxx or
the Company from (a) claims solely to enforce this Agreement, (b) claims solely
to enforce any stock option award agreement between Xx. Xxxx and the Company,
(c) if Xx. Xxxx executes the Non-Competition Agreement pursuant to Section 7 of
this Agreement, claims solely to enforce that agreement, or (d) claims for
indemnification under the Company's By-Laws, under any indemnification agreement
between the Company and Xx. Xxxx or under any similar agreement.
9.2. Covenant Not to Xxx. Xx. Xxxx expressly represents that he has not
filed a lawsuit or initiated any other administrative proceeding against the
Company (including for purposes of this Section 9.2, its parents, affiliates and
subsidiaries) and that he has not assigned any claim against the Company to any
other person or entity. The Company expressly represents that it has not filed a
lawsuit or initiated any other administrative proceeding against Xx. Xxxx, and
that it has not assigned any claim against Xx. Xxxx to any other person or
entity. Both Xx. Xxxx and the Company further promise not to initiate a lawsuit
or to bring any other claim against the other arising out of or in any way
related to Xx. Xxxx'x employment by or service to the Company or the termination
of that employment or service. Notwithstanding the foregoing, this Section 9.2
will not prevent either Xx. Xxxx or the Company from filing (a) claims solely to
enforce this Agreement, (b) claims solely to enforce any stock option award
agreement between Xx. Xxxx and the Company, or (c) if Xx. Xxxx executes the
Non-Competition Agreement pursuant to Section 7 of this Agreement, claims solely
to enforce that agreement. In addition, this Section 9.2 will not prevent Xx.
Xxxx from filing (a) claims for indemnification under the Company's By-Laws,
under any indemnification agreement between the Company and Xx. Xxxx or under
any similar agreement, or (b) a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in any investigation
conducted by the Equal Employment Opportunity Commission (or similar state
agency); provided, however, that any claims by Xx. Xxxx for personal relief in
connection with such a charge or investigation (such as reinstatement or
monetary damages) would be barred.
6
9.3. Claims Against Officers or Directors. In addition, Xx. Xxxx hereby
(a) waives any right to claim payment of amounts owed to him, now or in the
future, pursuant to this Agreement from directors or officers of the Company in
the event the Company becomes insolvent, and (b) fully and forever releases and
discharges the Company's officers and directors from any and all claims,
demands, liens, actions, suits, causes of action or judgments arising out of any
present or future claim for such amounts.
9.4. Acknowledgement. Xx. Xxxx acknowledges that, in the absence of the
release provided in this Section 9, the Company would not have agreed to make
the payments specified in Section 4 of this Agreement.
SECTION 10. Rescission Right. Xx. Xxxx expressly acknowledges and recites that
(a) he has read and understands this Agreement in its entirety, (b) he has
entered into this Agreement knowingly and voluntarily, without any duress or
coercion; (c) he has been advised orally and is hereby advised in writing to
consult with an attorney with respect to this Agreement before signing it; (d)
he was provided 21 calendar days after receipt of the Agreement to consider its
terms before signing it; and (e) he is provided seven calendar days from the
date of signing to terminate and revoke this Agreement, in which case this
Agreement will be unenforceable, null and void. Xx. Xxxx may revoke this
Agreement during those seven days by providing written notice of revocation to
the Company.
SECTION 11. Challenge. If Xx. Xxxx violates or challenges the enforceability of
Sections 6, 8 or 9 of this Agreement, no further payments under Sections 4 or 5
of this Agreement will be due to Xx. Xxxx.
SECTION 12. Miscellaneous.
12.1. No Mitigation or Offset. In no event will Xx. Xxxx be required to
mitigate any damages or the amount of any payment provided for under this
Agreement by seeking employment or otherwise, nor will any payments or benefits
hereunder, be subject to offset.
12.2. Legal Fees. The Company shall pay the reasonable attorneys' fees
and related expenses and disbursements incurred by Xx. Xxxx in connection with
the negotiation and preparation of this Agreement (including the Non-Competition
Agreement) up to a maximum of $10,000.
12.3. Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the Company and Xx. Xxxx and their respective successors,
executors, administrators, heirs. The Company may assign this Agreement to any
successor to all or substantially all of its assets and business by means of
liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise. Xx. Xxxx may not assign his rights or obligations under this
Agreement.
7
12.4. Notice. Any notice or communication required or permitted under
this Agreement will be made in writing and (a) sent by overnight courier, (b)
mailed by certified or registered mail, return receipt requested or (c) sent by
telecopier, addressed as follows:
If to Xx. Xxxx:
Xxxxxxx X. Xxxx, Ph.D.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Fax: 000-000-0000
If to Company:
Neose Technologies, Inc.
000 Xxxxxx Xxxx
Xxxxxxx XX 00000
Attn: General Counsel
Fax: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esquire
Fax: 000-000-0000
or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.
12.5. Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature relating to the subject matter
hereof, including the Separation and Consulting Agreement executed by Xx. Xxxx
and the Company on March 29, 2002. This Agreement may not be changed or
modified, except by an agreement in writing signed by each of the parties
hereto.
12.6. Waiver. Any waiver by either party of any breach of any term or
condition in this Agreement will not operate as a waiver of any other breach of
such term or condition or of any other term or condition, nor will any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof or constitute or be deemed a waiver or release of any
other rights, in law or in equity.
8
12.7. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
12.8. Governing Law. This Agreement will be governed by, and enforced
in accordance with, the laws of the Commonwealth of Pennsylvania, without regard
to the application of the principles of conflicts of laws.
12.9. Enforcement. Any legal proceeding arising out of or relating to
this Agreement will be instituted in the United States District Court for the
Eastern District of Pennsylvania, or if that court does not have or will not
accept jurisdiction, in any court of general jurisdiction in the Commonwealth of
Pennsylvania, and Xx. Xxxx and the Company hereby consent to the personal and
exclusive jurisdiction of such court(s) and hereby waive any objection(s) that
they may have to personal jurisdiction, the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.
12.10. Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and will not affect its
interpretation.
12.11. Counterparts and Facsimiles. This Agreement may be executed,
including execution by facsimile signature, in one or more counterparts, each of
which will be deemed an original, and all of which together will be deemed to be
one and the same instrument.
[this space left blank intentionally; signature page follows.]
9
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and Xx. Xxxx has executed this
Agreement, in each case on the 29th day of March, 2002.
NEOSE TECHNOLOGIES, INC.
By: /s/ C. Xxxx Xxxxxx
-------------------------------------------
Name & Title: C. Xxxx Xxxxxx, President and CEO
---------------------------------
XXXXXXX X. XXXX, Ph.D.
/s/ Xxxxxxx X. Xxxx, Ph.D.
-----------------------------------------------
10
EXHIBIT I
CONFIDENTIALITY, INTELLECTUAL PROPERTY
AND NON-COMPETITION AGREEMENT
THIS CONFIDENTIALITY, INTELLECTUAL PROPERTY AND NON-COMPETITION
AGREEMENT (this "Agreement") is made as of the __th day of [___________], 200__
by and between NEOSE TECHNOLOGIES, INC. (the "Company") and XXXXXXX X. XXXX,
Ph.D. ("Xx. Xxxx").
WHEREAS, Xx. Xxxx has served as a consultant to the Company and as
Chief Executive Officer and Chairman of the Board of the Company, positions of
substantial authority and responsibility in which he has had access to the
Company's customers, vendors, trade secrets, proprietary information, and
intellectual property;
WHEREAS, the Company desires to obtain certain assurances from Xx. Xxxx
that he will not harm the Company's business interests;
NOW THEREFORE, in consideration of these premises and intending to be
legally bound hereby, the parties agree as follows:
SECTION 1. Definitions. To the extent not defined in the preamble of this
Agreement, capitalized terms used herein will have the meanings provided below:
1.1. "Business" means research, development, manufacture, supply,
marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic
materials and products and related process technology including, without
limitation, research, development, manufacture, supply, marketing, licensing,
use and sale or products and technology directed to (a) the enzymatic synthesis
of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and
industrial applications, (b) enzymatic synthesis or modification of the
carbohydrate portion of proteins or lipids, and (c) carbohydrate-based
therapeutics.
1.2. "Board" means the Board of Directors of the Company.
1.3. "Effective Date" means March 29, 2003.
1.4. "Restricted Period" means the two-year period commencing on the
Effective Date.
1.5. "Restrictive Covenants" means the provisions contained in Section
3 of this Agreement.
SECTION 2. Consideration. In consideration for the covenants described in
Section 3, subject to Section 5.2:
2.1. The Company will pay to Xx. Xxxx $39,622 on March 31, 2003 and on
the last day of each of the first 23 months thereafter;
2.2. Notwithstanding the terms of the Company's equity incentive plans
and any stock option award agreement between Xx. Xxxx and the Company, solely
for purposes of the vesting and expiration of the options to purchase shares of
the Company's common stock held by Xx. Xxxx as of the Effective Date, Xx. Xxxx
will be treated as continuing in the service of the Company until the later of
(a) the second anniversary of the Effective Date and (b) the end of Xx. Xxxx'x
service as a member of the Board; and
2.3. If Xx. Xxxx [and his spouse and dependents][is/are] still
receiving continuation coverage under the Company's group health plan
immediately prior to the Effective Date, that coverage will be further continued
at no cost to him until the earliest to occur of (a) the expiration of the
period for which Xx. Xxxx would have been eligible for COBRA coverage following
his termination of employment with the Company, or (b) Xx. Xxxx'x eligibility
for coverage under another employer's group health plan.
SECTION 3. Restrictive Covenants. In consideration of all the payments and
benefits provided under this Agreement, Xx. Xxxx covenants that, during the
Restricted Period, he will not (except in his capacity as a consultant of the
Company) do any of the following, directly or indirectly, anywhere in the world:
3.1. engage or participate in any business competitive with the
Business (as defined below);
3.2. become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent or consultant) any person, firm,
corporation, association or other entity engaged in any business competitive
with the Business. Notwithstanding the foregoing, Xx. Xxxx may hold up to 4.9%
of the outstanding securities of any class of any publicly-traded securities of
any company;
3.3. engage in any business, or solicit or call on any customer,
supplier, licensor, licensee, contractor, agent, representative, advisor,
strategic partner, distributor or other person with whom the Company shall have
dealt or any prospective customer, supplier, licensor, licensee, contractor,
agent, representative, advisor, strategic partner, distributor or other person
that the Company shall have identified and solicited at any time during Xx.
Xxxx'x employment or retention by the Company for a purpose competitive with the
Business;
3.4. influence or attempt to influence any employee, consultant,
customer, supplier, licensor, licensee, contractor, agent, representative,
advisor, strategic partner, distributor or other person to terminate or modify
any written or oral agreement, arrangement or course of dealing with the
Company; or
3.5. solicit for employment or employ or retain (or arrange to have any
other person or entity employ or retain) any person who has been employed or
retained by the Company within the 12 months preceding the application of this
provision to that person.
2
SECTION 4. Acknowledgements. Xx. Xxxx acknowledges that the Restrictive
Covenants are reasonable and necessary to protect the legitimate interests of
the Company and its affiliates and that the duration and geographic scope of the
Restrictive Covenants are reasonable given the nature of this Agreement and Xx.
Xxxx'x relationship with the Company. Xx. Xxxx further acknowledges that the
Restrictive Covenants are included herein in order to induce the Company to make
the payments provided for herein and that the Company would not have entered
into this Agreement in the absence of the Restrictive Covenants.
SECTION 5. Remedies and Enforcement Upon Breach.
5.1. Specific Enforcement. Xx. Xxxx acknowledges that any breach by
him, willfully or otherwise, of the Restrictive Covenants will cause continuing
and irreparable injury to the Company for which monetary damages would not be an
adequate remedy. Xx. Xxxx will not, in any action or proceeding to enforce any
of the provisions of this Agreement, assert the claim or defense that such an
adequate remedy at law exists. In the event of any such breach by Xx. Xxxx, the
Company will have the right to enforce the Restrictive Covenants by seeking
injunctive or other relief in any court, without any requirement that a bond or
other security be posted, and this Agreement will not in any way limit remedies
of law or in equity otherwise available to the Company.
5.2. Termination of Payments and Vesting Service. If Xx. Xxxx breaches
Section 3 in any respect, then (a) he will not be entitled to any further
payments under this Agreement, (b) he will immediately cease to treated as
continuing in the service of the Company for purposes of vesting and expiration
of his Company stock options, and (c) all of his entitlements under this
Agreement will cease.
5.3. Extension of Restricted Period. If Xx. Xxxx breaches Section 3 in
any respect, the Restricted Period will be extended for a period equal to the
period that Xx. Xxxx was in breach.
5.4. Accounting. If Xx. Xxxx breaches any of the Restrictive Covenants,
the Company will have the right and remedy to require Xx. Xxxx to account for
and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits derived or received by Xx. Xxxx as the result of
such breach. This right and remedy will be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in equity.
5.5. Judicial Modification. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court will have the power
to modify such provision and, in its modified form, such provision will then be
enforceable.
5.6. Enforceability. If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.
3
5.7. Disclosure of Restrictive Covenants. Xx. Xxxx agrees to disclose
the existence and terms of the Restrictive Covenants to any entity to whom Xx.
Xxxx provides services during the Restricted Period.
SECTION 6. Miscellaneous.
6.1. Claims Against Officers or Directors. Xx. Xxxx hereby (a) waives
any right to claim payment of amounts owed to him, now or in the future,
pursuant to this Agreement from directors or officers of the Company in the
event the Company becomes insolvent, and (b) fully and forever releases and
discharges the Company's officers and directors from any and all claims,
demands, liens, actions, suits, causes of action or judgments arising out of any
present or future claim for such amounts.
6.2. Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the Company and Xx. Xxxx and their respective successors,
executors, administrators, heirs. The Company may assign this Agreement to any
successor to all or substantially all of its assets and business by means of
liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise. Xx. Xxxx may not assign his rights or obligations under this
Agreement.
6.3. Notice. Any notice or communication required or permitted under
this Agreement will be made in writing and (a) sent by overnight courier, (b)
mailed by certified or registered mail, return receipt requested or (c) sent by
telecopier, addressed as follows:
If to Xx. Xxxx:
Xxxxxxx X. Xxxx, Ph.D.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Fax: 000-000-0000
If to Company:
Neose Technologies, Inc.
000 Xxxxxx Xxxx
Xxxxxxx XX 00000
Attn: General Counsel
Fax: 000-000-0000
4
with a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esquire
Fax: 000-000-0000
or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.
6.4. Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature relating to the subject matter
hereof. This Agreement may not be changed or modified, except by an agreement in
writing signed by each of the parties hereto.
6.5. Waiver. Any waiver by either party of any breach of any term or
condition in this Agreement will not operate as a waiver of any other breach of
such term or condition or of any other term or condition, nor will any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof or constitute or be deemed a waiver or release of any
other rights, in law or in equity.
6.6. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
6.7. Governing Law. This Agreement will be governed by, and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania, without regard to
the application of the principles of conflicts of laws.
6.8. Enforcement. Any legal proceeding arising out of or relating to
this Agreement will be instituted in the United States District Court for the
Eastern District of Pennsylvania, or if that court does not have or will not
accept jurisdiction, in any court of general jurisdiction in the Commonwealth of
Pennsylvania, and Xx. Xxxx and the Company hereby consent to the personal and
exclusive jurisdiction of such court(s) and hereby waive any objection(s) that
they may have to personal jurisdiction, the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.
5
6.9. Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and will not affect its
interpretation.
6.10. Counterparts and Facsimiles. This Agreement may be executed,
including execution by facsimile signature, in one or more counterparts, each of
which will be deemed an original, and all of which together will be deemed to be
one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Xx. Xxxx has executed this
Agreement, in each case as of the date first above written.
NEOSE TECHNOLOGIES, INC.
By:
-------------------------------------------
Name & Title:
---------------------------------
XXXXXXX X. XXXX, Ph.D.
----------------------------------------------
6
