EMPLOYMENT AGREEMENT
This
Agreement (this “Agreement”), dated
as of February 1, 2005 (the “Effective Date”), by and between VIOQUEST
PHARMACEUTICALS, INC., a Minnesota corporation with principal executive offices
at Princeton Corporate Plaza, 0 Xxxx Xxxx Xxxxx, Xxxxx X, Xxxxxxxx Xxxxxxxx, Xxx
Xxxxxx, 00000 (the “Company”), and
XXXXXX XXXXXXXXX,
residing at 000
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000 (the “Executive”).
W
I T N E S S E T H:
WHEREAS,
the Company desires to employ the Executive as President and Chief Executive
Officer of the Company, and the Executive desires to serve the Company in those
capacities, upon the terms and subject to the conditions contained in this
Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Employment.
(a) Services.
The
Executive will be employed by the Company as its President and Chief Executive
Officer. The Executive will report to the Board of Directors of the Company (the
"Board") and shall perform such duties as are consistent with his position as
President and Chief Executive Officer (the
“Services”). The
Executive agrees to perform such duties faithfully, to devote all of his working
time, attention and energies to the business of the Company, and while he
remains employed, not to engage in any other business activity that is in
conflict with your duties and obligations to the Company.
(b) Acceptance.
Executive hereby accepts such employment and agrees to render the
Services.
2. Term.
The
Executive's employment under this Agreement (the "Term") shall commence as of
the Effective Date and shall continue for a term of three (3) years, unless
sooner terminated pursuant to Section 9 of this Agreement. Notwithstanding
anything to the contrary contained herein, the provisions of this Agreement
governing protection of Confidential Information shall continue in effect as
specified in Section 6 hereof and survive the expiration or termination hereof.
This Agreement may be renewed for additional successive one year terms on the
same terms and conditions as set forth herein if the Company and the Executive
agree in writing prior to the expiration or other termination of the Term. In
the event the Company does not intend to agree to any such renewal, the Company
will indicate to Executive, at least 90 days prior to the expiration of the
Term, whether it intends to attempt to negotiate a new employment agreement with
Executive for a period to commence following the expiration of the Term. At such
time, if the Company informs the Executive that it does not intend to attempt to
negotiate a new employment agreement with Executive for a period to commence
following the expiration of the Term, this Agreement shall terminate and the
Executive shall be entitled to only that compensation described in Section
10(c).
3. Best
Efforts; Place of Performance.
(a) The
Executive shall devote substantially all of his business time, attention and
energies to the business and affairs of the Company and shall
use his best efforts to advance the best interests of the Company and shall not
during the Term be actively engaged in any other business activity, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage, that will interfere with the performance by the Executive of his
duties hereunder or the Executive’s availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.
(b) The
duties to be performed by the Executive hereunder shall be performed primarily
at the office of the Company in Monmouth Junction, New Jersey, subject to
reasonable travel requirements on behalf of the Company, or such
other place as the Board may reasonably designate. Notwithstanding the
foregoing, the Company may be relocated to another city within the United States
with consent of the Board.
4. Directorship. The
Company shall use its best efforts to cause the Executive to be elected as a
member of its Board of Directors throughout the Term and shall include him in
the management slate for election as a director at every annual or other meeting
of shareholders during the Term at which the shareholders will consider the
election of directors. The Executive agrees to accept election, and to serve
during the Term, as director of the Company, without any compensation therefor
other than as specified in this Agreement.
5. Compensation.
As full compensation for the performance by the Executive of his duties under
this Agreement, the Company shall pay the Executive as follows:
(a) Base
Salary. The
Company shall pay Executive a salary (the “Base Salary”) equal to Three Hundred
Sixty Thousand Dollars ($360,000) per
year. Payment shall be made in accordance with the Company’s normal payroll
practices. In
addition, the Board
of Directors of the Company shall annually review the Base Salary in
consultation with the Executive.
(b) Guaranteed
Bonus. The
Company shall pay the Executive a bonus (the “Guaranteed Bonus”) of One Hundred
Thousand ($100,000) Dollars within thirty (30) days following each anniversary
of the
Effective Date during the Term, provided that the Executive is employed
hereunder on such anniversary date. Additionally, the Company will remit to the
Executive the sum of Twenty-Five Thousand Dollars ($25,000) within 3 buiness
days of the execution of this Agreement, and an additional Twenty-Five Thousand
Dollars ($25,000) upon the six month anniversary of this Agreement, provided the
Executive is an employee of the Company on such six month anniversary.
In
addition, the Board
of Directors of the Company shall annually review the Guaranteed Bonus in
consultation with Executive.
(c) Discretionary
Bonus.
At the
sole discretion of the Board of Directors of the Company, the Executive shall
receive an additional bonus on each anniversary of the Effective Date during the
Term (the “Discretionary Bonus”) in an amount up to Two Hundred Fifty Thousand
Dollars ($250,000)
based on
the attainment by the Executive of certain financial, clinical development and
business milestones (the
“Milestones”) as
established annually by the Board of Directors (or a committee thereof), after
consultation with the Executive, prior to
the start of each anniversary of this Agreement. The
Milestones for the first year of this Agreement are set forth in Schedule A attached
hereto. The Company agrees that if the Milestones are achieved prior to the
first anniversary of the Effective Date, the applicable portion of the
Discretionary Bonus shall be paid to the
Executive. The Board of Directors, after consultation with the Executive, shall
establish the Milestones for each upcoming year at least sixty (60) days prior
to each anniversary of this Agreement. The Discretionary Bonus shall be payable
either as a lump-sum payment or in installments as determined by the Board of
Directors of the Company in its sole discretion, provided, however, if the Board
determines to pay the Executive in installments, such installments shall be no
less frequently than monthly, and shall be over a time period not to exceed four
months, unless otherwise agreed by the Executive in writing.
(d) Withholding. The
Company shall withhold all applicable federal, state and local taxes and social
security and such other amounts as may be required by law from all amounts
payable to the Executive under this Section 5.
(e) Stock
Options. As
additional compensation for the services to be rendered by the Executive
pursuant to this Agreement, the Company shall grant the Executive stock options
(“Stock Options”) to purchase a number of shares of the Company’s common stock,
par value $.01 per share (the “Common Stock”), equal to five percent (5%) of the
total number of shares of Common Stock issued and outstanding as of the
Effective Date. The Stock Options shall be governed by the Company’s 2003 Stock
Option Plan and shall vest, if at all, in three equal installments on the first,
second and third anniversaries of the Effective Date, subject in each case to
the provisions of Section 10 below. In connection with such grant, the Executive
shall enter into the Company’s standard stock option agreement which will
incorporate the foregoing vesting schedule and the Stock Option related
provisions contained in Section 10 below. The Board of Directors of the Company
shall annually review the number of Stock Options granted to the Executive to
determine whether an increase in the number thereof is warranted. Additionally,
until such time as the (i) Company has raised gross proceeds equal to
$20,000,000 through the sale of its equity securities and (ii) obtained the
right to one clinical stage human therapeutic, the Company shall issue to the
Executive a number of additional Stock Options (the “Additional Stock Options”)
sufficient to maintain Executive’s ownership percentage at 5% (assuming exercise
of his Stock Options and Additional Stock Options). Once the Company has (i)
raised $20,000,000 through the sale of its equity securities and (ii) obtained
the right to one clinical stage human therapeutic, Executive shall be diluted
pro rata along with all other holders of securities of the Company. Such
Additional Stock Options shall be valued at the then existing fair market value
of the Common Stock and shall vest in equal parts over the remaining Term on
each anniversary of this Agreement at the same time as the Stock Options (for
instance, if Additional Stock Options are granted within 6 months of the date
hereof, the first third of the Additional Stock Options shall vest six months
later on the anniversary of this Agreement, and the remainder of the Additional
Stock Options shall vest in 2 equal parts on each of the next two anniversaries
thereof ); provided, however, the Executive remains an employee of the Company
on each such applicable vesting date. For purposes hereof, “fair market value”
shall mean the average closing sale price of the Common Stock during the
preceding five (5) trading days, as reported on the OTC Bulletin Board (or such
other market or exchange if the Common Stock is then quoted or listed on a
market or exchange other than the OTC Bulletin Board); provided, however, that
if the Common Stock is not then listed or quoted on any stock exchange, stock
market or other over-the-couter market, then fair market value of the Common
Stock shall be established in good faith by the Company’s Board of
Directors.
(f)
Expenses. The
Company shall reimburse the Executive for all normal, usual and necessary
expenses incurred by the Executive in furtherance of the business and affairs of
the Company, including reasonable travel and entertainment, upon timely receipt
by the Company of appropriate vouchers or other proof of the Executive’s
expenditures and otherwise in accordance with any expense reimbursement policy
as may from time to time be adopted by the Company.
(g) Other
Benefits. The
Executive shall be entitled to all rights and benefits for which he shall be
eligible under any benefit or other plans (including, without limitation,
dental, medical, medical reimbursement and hospital plans, pension plans,
employee stock purchase plans, profit sharing plans, bonus plans and other
so-called "fringe" benefits) as the Company shall make available to its senior
executives from time to time.
(h) Vacation. The
Executive shall, during the Term, be entitled to a vacation of four (4)
weeks per
annum (no more
than two (2) consecutive weeks) in addition to holidays observed by the
Company. The
Executive shall not be entitled to carry any vacation forward to the next year
of employment and shall not receive any compensation for unused vacation
days.
6. Confidential
Information and Inventions.
(a) The
Executive recognizes and acknowledges that in the course of his duties he is
likely to receive confidential or proprietary information owned by the Company,
its affiliates or third parties with whom the Company or any such affiliates has
an obligation of confidentiality. Accordingly, during and after the Term, the
Executive agrees to keep confidential and not disclose or make accessible to any
other person or use for any other purpose other than in connection with the
fulfillment of his duties under this Agreement, any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. “Confidential and Proprietary Information”
shall include, but shall not be limited to, confidential or proprietary
scientific or technical information, data, formulas and related concepts,
business plans (both current and under development), client lists, promotion and
marketing programs, trade secrets, or any other confidential or proprietary
business information relating to development programs, costs, revenues,
marketing, investments, sales activities, promotions, credit and financial data,
manufacturing processes, financing methods, plans or the business and affairs of
the Company or of any affiliate or client of the Company. The Executive
expressly acknowledges the trade secret status of the Confidential and
Proprietary Information and that the Confidential and Proprietary Information
constitutes a protectable business interest of the Company. The Executive
agrees: (i) not to use any such Confidential and Proprietary Information for
himself or others; and (ii) not to take any Company material or reproductions
(including but not limited to writings, correspondence, notes, drafts, records,
invoices, technical and business policies, computer programs or disks) thereof
from the Company’s offices at any time during his employment by the Company,
except as required in the execution of the Executive’s duties to the Company.
The Executive agrees to return immediately all Company material and
reproductions (including but not limited, to writings, correspondence, notes,
drafts, records, invoices, technical and business policies, computer programs or
disks) thereof in his possession to the Company upon request and in any event
immediately upon termination of employment.
(b) Except
with prior written authorization by the Company, the Executive agrees not to
disclose or publish any of the Confidential and Proprietary Information, or any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time during or after his employment with the Company.
(c) The
Executive agrees that all inventions, discoveries, improvements and patentable
or copyrightable works (“Inventions”)
initiated, conceived or made by him, either alone or in conjunction with others,
during the Term shall be the sole property of the Company to the maximum extent
permitted by applicable law and, to the extent permitted by law, shall be “works
made for hire” as that term is defined in the United States Copyright Act (17
U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
copyrights, trade secret rights, and other intellectual property or other rights
in connection therewith. The Executive hereby assigns to the Company all right,
title and interest he may have or acquire in all such Inventions; provided,
however, that the Board of Directors of the Company may in its sole discretion
agree to waive the Company’s rights pursuant to this Section 6(c) with respect
to any Invention that is not directly or indirectly related to the Company’s
business. The Executive further agrees to assist the Company in every proper way
(but at the Company’s expense) to obtain and from time to time enforce patents,
copyrights or other rights on such Inventions in any and all countries, and to
that end the Executive will execute all documents necessary:
(i) to apply
for, obtain and vest in the name of the Company alone (unless the Company
otherwise directs) letters patent, copyrights or other analogous protection in
any country throughout the world and when so obtained or vested to renew and
restore the same; and
(ii) to defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.
(d) The
Executive acknowledges that while performing the services under this Agreement
the Executive may locate, identify and/or evaluate patented or patentable
inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of potential interest to the Company or one of its affiliates (the “Third
Party Inventions”). The Executive understands, acknowledges and agrees that all
rights to, interests in or opportunities regarding, all Third-Party Inventions
identified by the Company, any of its affiliates or either of the foregoing
persons’ officers, directors, employees (including the Executive), agents or
consultants during the Employment Term shall be and remain the sole and
exclusive property of the Company or such affiliate and the Executive shall have
no rights whatsoever to such Third-Party Inventions and will not pursue for
himself or for others any transaction relating to the Third-Party Inventions
which is not on behalf of the Company.
(e) Executive
agrees that he will promptly disclose to the Company, or any persons designated
by the Company, all improvements, Inventions made or conceived or reduced to
practice or learned by him, either alone or jointly with others, during the
Term.
(f) The
provisions of this Section 6 shall survive any termination of this
Agreement.
7. Non-Competition,
Non-Solicitation and Non-Disparagement.
(a) The
Executive acknowledges that, due to the unique nature of the Company’s business,
the loss of any of its clients or business flow or the improper use of its
Confidential and Proprietary Information could create significant instability
and cause substantial damage to the Company and its affiliates and therefore the
Company has a strong legitimate business interest in protecting the continuity
of its business interests and the restriction herein agreed to by the Executive
narrowly and fairly serves such an important and critical business interest of
the Company. For purposes of this Agreement, the Company shall be deemed to be
actively engaged on the date hereof in the development and commercialization of
drugs, including therapeutics and vaccines for the treatment of humans in the
medial fields of the Company’s products at the time or such termination or
expiration of this Agreement. Accordingly, during the
Term and for a period of 12 months thereafter, the Executive shall not, directly
or indirectly, without the prior written consent of the Company:
(i) solicit
or induce any employee of the Company or any of its affiliates to leave the
employ of the Company or any such affiliate; or hire for any purpose any
employee of the Company or any affiliate or any employee who has left the
employment of the Company or any affiliate within one year of the termination of
such employee’s employment with the Company or any such affiliate or at any time
in violation of such employee’s non-competition agreement with the Company or
any such affiliate; or
(ii) solicit
or accept employment or be retained by any Person who, at any time during the
term of this Agreement, was an agent, client or customer of the Company or any
of its affiliates where his position will be related to the business of the
Company or any such affiliate; or
(iii) solicit
or accept the business of any agent, client or customer of the Company or any of
its affiliates with respect to products, services or investments similar to
those provided or supplied by the Company or any of its affiliates.
(iv) Accept
employment or an engagement with, as an employee, consultant, agent, partner,
joint venturer or otherwise, at any of the companies listed on Schedule
7(a)(iv), such Schedule to be completed in good faith by the Board in
consultation with the Executive following the acquisition of a human clinical
compound. It is intended that such companies on Schedule 7(a)(iv) will represent
direct competitors of the Company. Schedule 7(a)(iv) shall be reviewed from time
to time and at least annually in good faith by the Board and Executive, and may
be amended by the Board after consultation with the Executive without additional
compensation to Executive.
(b) The
Company and the Executive each agree that both during the Term and at all times
thereafter, neither party shall directly or indirectly disparage, whether or not
true, the name or reputation of the other party or any of its affiliates,
including but not limited to, any officer, director, employee or shareholder of
the Company or any of its affiliates.
(c) In the
event that the Executive breaches any provisions of Section 6 or this Section 7
or there is a threatened breach, then, in addition to any other rights which the
Company may have, the Company shall (i) be entitled, without the posting of a
bond or other security, to seek injunctive relief to enforce the restrictions
contained in such Sections and (ii) have the right to seek to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments and other benefits (collectively “Benefits”)
derived or received by the Executive as a result of any transaction constituting
a breach of any of the provisions of Sections 6 or 7 and the Executive hereby
agrees to account for and pay over such Benefits to the Company. The
Executive agrees that in an action pursuant to this Section 7, that if the
Company makes a prima facie showing that the Executive has violated or
apparently intends to violate any of the provisions of this Section 7, the
Company need not prove either damage or irreparable injury in order to obtain
injunctive relief. The Company and the Executive agree that any such action for
injunctive or equitable relief shall be heard in a state or federal court
situated in the County and State of New York and each of the parties hereto
agrees to accept service of process by registered or certified mail and to
otherwise consent to the jurisdiction of such courts.
(d) Each of
the rights and remedies enumerated in Section 7(d) shall be independent of the
others and shall be in addition to and not in lieu of any other rights and
remedies available to the Company at law or in equity. If any of the covenants
contained in this Section 7, or any part of any of them, is hereafter construed
or adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies which shall be
given full effect without regard to the invalid portions. If any of the
covenants contained in this Section 7 is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and in its reduced form such
provision shall then be enforceable. No such holding of invalidity or
unenforceability in one jurisdiction shall bar or in any way affect the
Company’s right to the relief provided in this Section 7 or otherwise in the
courts of any other state or jurisdiction within the geographical scope of such
covenants as to breaches of such covenants in such other respective states or
jurisdictions, such covenants being, for this purpose, severable into diverse
and independent covenants.
(e) In the
event that an actual proceeding is brought in equity to enforce the provisions
of Section 6 or this Section 7, the Executive shall not urge as a defense that
there is an adequate remedy at law nor shall the Company be prevented from
seeking any other remedies which may be available. The Executive agrees that he
shall not raise in any proceeding brought to enforce the provisions of Section 6
or this Section 7 that the covenants contained in such Sections limit his
ability to earn a living.
(f) The
provisions of this Section 7 shall survive any termination of this
Agreement.
8. Representations
and Warranties by the Executive.
The
Executive hereby represents and warrants to the Company as follows:
(i) Neither
the execution or delivery of this Agreement nor the performance by the Executive
of his duties and other obligations hereunder violate or will violate any
statute, law, determination or award, or conflict with or constitute a default
or breach of any covenant or obligation under (whether immediately, upon the
giving of notice or lapse of time or both) any prior employment agreement,
contract, or other instrument to which the Executive is a party or by which he
is bound.
(ii) The
Executive has the full right, power and legal capacity to enter and deliver this
Agreement and to perform his duties and other obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Executive
enforceable against him in accordance with its terms. No approvals or consents
of any persons or entities are required for the Executive to execute and deliver
this Agreement or perform his duties and other obligations
hereunder.
9. Termination. The
Executive’s employment hereunder shall be terminated upon the Executive’s death
and may be terminated as follows:
(a) The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company for Cause. Any of the following actions by the Executive shall
constitute “Cause”:
(i) The
willful failure, disregard or refusal by the Executive to perform his duties
hereunder;
(ii) Any
willful, intentional or grossly negligent act by the Executive having the effect
of injuring, in a material way (whether financial or otherwise and as determined
in good-faith by a majority of the Board of Directors of the Company), the
business or reputation of the Company or any of its affiliates, including but
not limited to, any officer, director, executive or shareholder of the Company
or any of its affiliates;
(iii) Willful
misconduct or neglect by the Executive in respect of the duties or obligations
of the Executive under this Agreement,
including, without limitation, insubordination with respect to lawful directions
received by the Executive from the Board of Directors of the Company;
(iv) The
Executive’s indictment of any felony or a misdemeanor involving moral turpitude
(including entry of a nolo contendere plea);
(v) The
determination by the Company, after a reasonable and good-faith investigation by
the Company following a written allegation by another employee of the Company,
that the Executive engaged in some form of harassment prohibited by law
(including, without limitation, age, sex or race discrimination);
(vi) Any
misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony);
(vii) Breach by
the Executive of any of the provisions of Sections
6, 7 or
8 of this
Agreement; and
(viii) Breach by
the Executive of any provision of this Agreement other than those contained in
Sections
6, 7 or
8 which is
not cured by the Executive within sixty (60) days after written notice thereof
is given to the Executive by the Company.
(b) The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company due to the Executive’s Disability. For purposes of this Agreement, a
termination for “Disability” shall
occur (i) when the Board of Directors of the Company has provided a written
termination notice to the Executive supported by a written statement from a
reputable independent physician to the effect that the Executive shall have
become so physically or mentally incapacitated as to be unable to resume, within
the ensuing six months, his employment hereunder by reason of physical or mental
illness or injury, or (ii) upon rendering of a written termination notice by the
Board of Directors of the Company after the Executive has been unable to
substantially perform his duties hereunder for 60 or more consecutive days, or
more than 120 days in any consecutive twelve month period, by reason of any
physical or mental illness or injury. For purposes of this Section 9(b), the
Executive agrees to make himself available and to cooperate in any reasonable
examination by a reputable independent physician retained by the
Company.
(c) The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company (or its successor) upon the occurrence of a Change of Control. For
purposes of this Agreement, “Change
of Control” means
(i) the acquisition, directly or indirectly, following the date hereof by any
person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities if such person or his or its affiliate(s) do not own in
excess of 50% of such voting power on the date of this Agreement, or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company). Notwithstanding any provision to the contrary
contained herein, a Change of Control shall not be deemed to have occurred in
the event the Company sells or otherwise disposes of all or substantially all of
the stock or assets of Chiral Quest, Inc., its wholly-owned
subsidiary.
(d) The
Executive’s employment hereunder may be terminated by the Executive for Good
Reason. For purposes of this Agreement, “Good
Reason” shall
mean
(i) any
material breach of Section 5 of this Agreement that is not cured by the Company
within 60 days after receipt of written notice by Executive to the Company of
such material breach.
(ii) if
Executive is assigned duties materially inconsistent with his position as chief
executive, or there is a material reduction in the nature of his authority or
responsibilities;
(iii) if
Executive is required to relocate his office to a location which requires a
commute from his present residence, the address of which is set forth in the
preamble of this Agreement, to a new office which (A) is in excess of fifty (50)
miles from such residence and (B) is
in excess of three miles from the Company’s headquarters as of the date of this
Agreement in Monmouth Junction, New Jersey;
(e) Notwithstanding
any provision to the contrary contained herein, the
Executive’s employment may be terminated by the Company for any reason or no
reason.
10. Compensation
upon Termination.
(a) If the
Executive’s employment is terminated as a result of his death or Disability, the
Company shall pay to the Executive or to the Executive’s estate, as
applicable, his (i)
Base Salary, the pro-rata portion of the Guaranteed Bonus payable for the year
in which the death or Disability occurred (for example, if Executive was
employed four months of a year prior to his death or Disability, he would be
entitled to receive one-third of the Guaranteed Bonus); (iii) earned
Discretionary Bonus (for example, if Executive is terminated under this Section
(d), and at that time the Company has acquired a clinical stage compound
approved by the Board, Executive shall be entitled to receive $80,000); and (iv)
and any expense reimbursement amounts through the date of his Death or
Disability. All Stock Options and Additional Stock Options that are
scheduled to vest by the end of the calendar year in which such termination
occurs shall be accelerated and deemed to have vested as of the termination
date, and shall remain exercisable for a period of 12 months following such
termination. All Stock Options and
Additional Stock Options that
have not
vested (or been
deemed pursuant to the immediately preceding sentence to have
vested) as of
the date of termination shall be deemed to have expired as of such date. The
Company shall maintain health benefit coverage of Executive (or his family, if
applicable) and other general benefits that are offered to all full time
employees of the Company at the time of termination (life insurance, disability,
401K, if applicable etc) for a period of 12 months following any termination
pursuant to this Section 10(a).
(b) If the
Executive’s employment is terminated by the Board of Directors of the Company
for Cause, then the Company shall pay to the Executive his Base Salary through
the date of his termination and the Executive shall have no further entitlement
to any other compensation or benefits from the Company. All Stock
Options and
Additional Stock Options that
have not
vested as of the
date of termination shall be deemed to have expired as of such date. Any
Stock Options and
Additional Stock Options that have
vested as of the date of the Executive’s termination for Cause shall remain
exercisable for a period of 90 days following the date of such
termination.
(c)
If the
Executive’s employment is terminated by the Company (or its successor) (1) upon
the occurrence of a Change of Control and on the date of termination pursuant to
this Section 10(c) the fair market value of the Company’s Common Stock, in the
aggregate, as determined in good faith by the Board on the date of such Change
of Control, is less than $38,000,000 or (2) pursuant to the terms of Section 2,
then the Company (or its successor, as applicable) shall continue to pay to the
Executive his Base Salary for a period of six months following such termination
as well as any expense reimbursement amounts owed through the date of
termination. All Stock Options and Additional Stock Options that are
scheduled to vest by the end of the calendar year in which such termination
occurs shall be accelerated and deemed to have vested as of the termination
date. Any Stock Options and
Additional Stock Options that have
vested (or been deemed pursuant to the immediately preceding sentence to have
vested) as of the
date of the Executive’s termination and shall remain exercisable for 12 months
following such termination. The
Company shall maintain health benefit coverage of Executive and other general
benefits that are offered to all full time employees of the Company at the time
of termination (life insurance, disability, 401K, if applicable etc) for a
period of 12 months following any termination pursuant to this Section
10(c).
(d) If the
Executive’s employment is terminated by the Company other than as a result of
the Executive’s death or Disability and other than for reasons specified in
Sections 9(a), 9(b), 9(c), 10(b) or 10(c), then the Company shall (i) continue
to pay to the Executive his Base Salary for a period of twelve months following
such termination; (ii) pay the Executive the Guaranteed Bonus payable for the
year in which such termination occurs; (iii) pay to Executive any earned
Discretionary Bonus (for example, if Executive’s employment is terminated under
this Section (d), and at that time the Company has acquired a clinical stage
compound approved by the Board, Executive shall be entitled to receive $80,000
in accordance with the Milestones described on Schedule A hereto); and (iv) pay
the Executive any expense reimbursement amounts owed through the date of
termination. All Stock Options and Additional Stock Options that are
scheduled to vest shall be accelerated and deemed to have vested as of the
termination date and shall remain exercisable for 12 months following such
termination. The
Company shall maintain health benefit coverage of Executive and other general
benefits that are offered to all full time employees of the Company at the time
of termination (life insurance, disability, 401K, if applicable etc) for a
period of 12 months following any termination pursuant to this Section
10(d).
(e) This
Section 10 sets forth the only obligations of the Company with respect to the
termination of the Executive’s employment with the Company, and the Executive
acknowledges that, upon the termination of his employment, he shall not be
entitled to any payments or benefits which are not explicitly provided in
Section 10.
(f) Upon
termination of the Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned as director of the Company, effective
as of the date of such termination.
(g) The
obligations of the Company that arise under this Section 10 shall survive the
expiration or earlier termination of the Term.
11. Miscellaneous.
(f) This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New Jersey, without giving effect to its
principles of conflicts of laws.
(g) Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 6 or 7 hereof), or regarding the interpretation thereof,
shall be finally settled by arbitration conducted in Newark, New Jersey in
accordance with the rules of the American Arbitration Association then in effect
before a single arbitrator appointed in accordance with such rules. Judgment
upon any award rendered therein may be entered and enforcement obtained thereon
in any court having jurisdiction. The arbitrator shall have authority to grant
any form of appropriate relief, whether legal or equitable in nature, including
specific performance. For the purpose of any judicial proceeding to enforce such
award or incidental to such arbitration or to compel arbitration and for
purposes of Sections 6 and 7 hereof, the parties hereby submit to the
non-exclusive jurisdiction of the Supreme Court of the State of Jersey, Newark,
or the appropriate federal court in the State of New Jersey, and agree that
service of process in such arbitration or court proceedings shall be
satisfactorily made upon it if sent by registered mail addressed to it at the
address referred to in paragraph (g) below. The costs
of such arbitration shall be borne proportionate to the finding of fault as
determined by the arbitrator. Judgment on the arbitration award may be entered
by any court of competent jurisdiction.
(h) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, legal representatives, successors and
assigns.
(i) This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive. The Company may assign its rights, together with its
obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets.
(j) This
Agreement cannot be amended orally, or by any course of conduct or dealing, but
only by a written agreement signed by the parties hereto.
(k) The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as a
waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
(l) All
notices, requests, consents and other communications, required or permitted to
be given hereunder, shall be in writing and shall be delivered personally or by
an overnight courier service or sent by registered or certified mail, postage
prepaid, return receipt requested, to the parties at the addresses set forth on
the first page of this Agreement, and shall be deemed given when so delivered
personally or by overnight courier, or, if mailed, five days after the date of
deposit in the United States mails. Either party may designate another address,
for receipt of notices hereunder by giving notice to the other party in
accordance with this paragraph (g).
(m) This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by or
liable for any alleged representation, promise or inducement not so set
forth.
(n) As used
in this Agreement, “affiliate” of a specified Person shall mean and include any
Person controlling, controlled by or under common control with the specified
Person.
(o) The
section headings contained herein are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
(p) This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
| VIOQUEST PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
|
Name: Xxxxxxx X. Xxxxxxxxx | ||
| Title: Chairman of the Board | ||
| EXECUTIVE | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxxxx | |
|
Name: Xxxxxx Xxxxxxxxx | ||
SCHEDULE
A
Milestones
for 2005 for Xxxxxx Xxxxxxxxx
The
Milestones and Milestone Payments described below are to be approved by the
compensation committee and ultimately subject to approval by the Board of
Directors and are intended to provide cash incentives pursuant to the terms of
this Agreement.
|
Milestone |
Milestone
Payments |
|
The
acquisition of a clinical stage compound as approved by the Board of
Directors. |
Eighty-Five
Thousand Dollars ($85,000). |
|
The
acquisition of a second clinical stage compound as approved by the Board
of Directors. |
Thirty
Thousand Dollars ($30,000). |
|
Successful
completion of a financing in excess of Five Million Dollars
($5,000,000). |
Forty
Thousand Dollars ($40,000). |
|
Successful
Completion of a second financing in excess of Five Million Dollars
($5,000,000). |
Forty
Thousand Dollars ($40,000). |
|
List
of the Company’s Common Stock on the American Stock Exchange, NASDAQ
Smallcap or NASDAQ National Market |
Twenty-Five
Thousand Dollars ($25,000). |
|
The
initiation of a human clinical trial with a compound acquired by the
Company in the United States under a Company sponsored IND |
Thirty
Thousand Dollars ($30,000). |
