EMPLOYMENT AGREEMENT
Exhibit 10.7
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 30, 2004 by
and among Biodel Inc., a Delaware corporation with an address at 0 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX
00000-0000 (“BIODEL”, “Employer” or the “Company”), and Roderike Xxxx, an individual residing at 0
Xxxxxx Xxxx Xxxx, Xxxxxxx, XX. 00000 (“Employee”).
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Employee as
Vice President, Research; and
WHEREAS, Employee desires to continue into the employ of Employer in accordance with the terms
and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the covenants and agreements of the
parties herein set forth, the parties hereto hereby covenant and agree as follows:
1. Position of Employment. Subject to the terms and conditions hereof, Employer
hereby agrees to employ the services of Employee as Vice President, Research and Employee hereby
accepts such employment and agrees to serve the Company in such capacity. Employee shall have the
duties, authority and responsibilities customarily associated with the office of Vice President,
Research. During the period that Employee is employed by Employer, Employee shall devote
substantially all of her business time and attention to the performance of the duties described
herein. Notwithstanding the foregoing,
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Employee shall be entitled to pursue charitable endeavors and to participate in professional organizations,
provided that such activities do not interfere in any material respect with the performance by
Employee of her duties hereunder. Employee shall at all times act in good faith in the performance
of her duties. Employee agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes therein which may be adopted from time to
time by the Company applicable to employees generally, including, but not limited to, those
relating to the protection of the Company’s proprietary trade secrets and confidential information.
2. Contract Term. Unless terminated earlier pursuant to Section 4 below, the initial
term of Employee’s employment under this Agreement shall be for the period from the date of this
Agreement (the “Commencement Date”) to December 30, 2007 (the “Initial Termination Date”).
Following the Initial Termination Date, this Agreement shall be automatically renewed for
successive one-year terms (each, a “Renewal Term”) unless, at least three months prior to the
Initial Termination Date or the expiration of a Renewal Term, as applicable, Employee or BIODEL in
her or its respective sole discretion notifies the other party in writing of her or its intent to
terminate the Employment Agreement as of the Initial Termination Date or the expiration of a
Renewal Term, as applicable. The term of Employee’s employment hereunder, including any renewal
periods pursuant to the immediately preceding sentence, shall be hereafter referred to as the
“Contract Term.”
3. Salary and Additional Benefits.
3.1 Employer shall pay to Employee and Employee agrees to accept as compensation for her
services to be rendered hereunder, an initial base salary of One
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Hundred Fifty Thousand Dollars ($150,000.00) (“Base Salary”) per year for the period
commencing with the Commencement Date and ending on the completion of the Contract Term, payable in
equal installments on the 15th and last day of each month or, if not a business day, the next
preceding day which is a business day.
3.2 During the term of this Agreement, Employee, as Vice President, shall be entitled to
receive an annual year-end bonus in cash in an amount determined by the Board of Directors. At the
time the Board of Directors considers the Employee’s bonus but not less than annually, the Board of
Directors shall also consider an award to the employee of stock or options to acquire stock under
any stock award plan then in effect.
3.3 Employee shall be entitled to vacations, at such times as Employee shall reasonably
determine, of at least four weeks each year of employment hereunder.
3.4 In addition to the foregoing, Employee shall also(i) participate in and be entitled to
receive medical insurance and other benefits substantially equivalent to the normal benefits
provided by BIODEL to its employees generally and (ii) participate in various retirement, welfare,
fringe benefit and executive perquisite plans, programs and arrangements of the Company to the
extent the senior executives of the Company generally are eligible for participation under the
terms of such plans, programs and arrangements including, without limitation, plans, programs and
arrangements for the granting of options to purchase securities of the Company or other equity
based compensation. Employee acknowledges the right of Employer to change, amend, or terminate any
of the benefits referred to in this paragraph, at any time in a manner which
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does not discriminate between Employee and other company employees who are eligible to participate
in such benefits.
3.5 Employer shall reimburse Employee for any ordinary, necessary and reasonable travel,
maintenance and entertainment expenses incurred by the Employee in the course of her duties under
this Agreement, in accordance with the Employer’s customary policies and practices in effect from
time to time, upon submission to the Employer of appropriate vouchers and receipts evidencing the
same.
4. Termination. The employment of the Employee by the Company pursuant to the
Agreement shall terminate upon the occurrence of any of the following:
4.1 Expiration of the Contract Term in accordance with Section 2;
4.2 At the election of the Company, for cause, upon written notice by the Company to the
Employee. For the purposes of this Section 4.2, cause for termination shall be deemed to exist upon
(a) a good faith finding by the Board of Directors of the Company of (i) failure of the Employee to
perform in any material respect her assigned duties for the Company customarily associated with the
Office of Vice President, which failure continues for ten (10) days subsequent to written notice
from the Company to the Employee of such failure, or (ii) dishonesty, gross negligence or
misconduct not involving any exercise of business judgment in good faith relating to the
performance of her duties for the Company; (b) the conviction of the Employee of, or the entry of a
pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude or
any felony; or (c) the material breach by the Employee of any terms of the Agreement, which breach
continues for ten (10) days subsequent to written notice from the Company to the Employee of the
breach;
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4.3 Upon the death or, at the election of the Company, disability of the Employee. As used in
this Agreement, the term “disability” shall mean the inability of the Employee, due to a physical
or mental disability, for a period of 180 days, whether or not consecutive, during any 360-day
period to perform the services contemplated under this Agreement. A determination of disability
shall be made by a physician satisfactory to both the Employee and the Company; provided that if
the Employee and the Company do not agree on a physician, the Employee and the Company shall each
select a physician and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties. Nothing herein shall be construed to violate any
Federal or State law including the Family and Medical Leave Act of 1993, 29 U.S.C.S. §2601 et
seq., and the Americans With Disabilities Act, 42 U.S.C.S. §12101 et seq.
4.4 The Company may terminate the employment of the Employee at any time without cause
immediately upon giving the Employee ninety (90) days’ prior written notice of termination or
payment in lieu of notice. The Employee may terminate her employment at any time for good reason
immediately upon giving the Employer thirty (30) days prior written notice of termination. For the
purpose of the Section 4.4, good reason for termination shall exist upon (i) the material breach by
the Company of any term of this Agreement which breach continues for ten (10) days subsequent to
written notice from the Employee to the Company of the breach, (ii) the relocation of the principal
office of the Company to a location which is more than 50 miles away from the present location, or
(iii) the assignment of the Employee of any duties inconsistent in any material respect with the
Employee’s positions with the Company as set forth in this Agreement (including status, offices
and titles), authority, duties or responsibilities as
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contemplated by this Agreement or any action by the Company which results in a material diminution in such positions,
authority, duties or responsibilities, excluding for this purpose any isolated, insubstantial and
inadvertent action not taken in bad faith and which is promptly remedied by the Company.
5. Effect of Termination.
5.1 Termination for Cause. In the event the Employee’s employment is terminated for
cause pursuant to Section 4.2, the Company shall pay to the Employee the compensation and benefits
which would otherwise be payable or accrued to her through the last day of her actual employment by
the Company.
5.2 Termination for Death or Disability. If the Employee’s employment is terminated
by death or because of disability pursuant to Section 4.3, the Company shall pay to the estate of
the Employee or to the Employee, as the case may be, the compensation and benefits which would
otherwise be payable or accrued to the Employee through the date of her termination and an
additional six months because of death or disability. The Company will continue health benefits for
one year after the date of termination.
5.3 Termination Without Cause or For Good Reason. If the Employee’s employment is
terminated (a) at the election of the Company pursuant to Section 4.4 without cause, or (b) at the
election of the Employee pursuant to Section 4.4 for good reason, and in consideration of the
post-termination non-compete and non-solicitation agreement set forth in Section 6, the Company
shall pay to the Employee the compensation and benefits payable or accrued to her under Section 4
(including the provision of medical insurance, disability and life insurance), at the times
provided in
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Section 4, through the longer of (x) two (2) years following the termination date or (y) the
balance of the term of this Agreement.
6. Non-Compete and Non-Solicitation.
6.1 The Employee recognizes that her willingness to enter into the restrictive covenants
contained in the Section 6 are a critical condition precedent to the willingness of BIODEL to enter
into and perform under this Agreement. The Employee also acknowledges that the restrictions
contained in this Section 6 will not materially or unreasonably interfere with the Employee’s
ability to earn a living. The Employee acknowledges that the restrictions contained in this
Section 6 are necessary to protect the legitimate interests of BIODEL and to ensure that Employee
will not reveal or use BIODEL’s confidential, proprietary or trade secret information or unfairly
compete with BIODEL after her termination.
6.2 During the Contract Term and, in the event the Employee’s employment is terminated for
cause pursuant to Section 4.2, through the day immediately prior to the first anniversary of the
termination date, or, if the Employee’s employment is terminated (a) at the election of the Company
pursuant to Section 4.4 without cause, or (b) at the election of the Employee pursuant to Section
4.4 for good reason, for so long as the Company shall pay to the Employee the compensation and
benefits payable or accrued to her under Section 4 (including the provision of medical insurance,
disability and life insurance), at the times provided in Section 4, the Employee will not directly
or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant,
director, joint venturer, investor, agent, distributor, dealer,
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representative, lender, or in any other capacity whatsoever (other than as the holder of not
more than 5% of the outstanding stock or equity of another entity), engage in the business of
delivering insulin by the oral, sublingual or injectable route of administration; or
(b) recruit, solicit or induce, or attempt to induce, any employee or employees of the Company
to terminate their employment with, or otherwise cease their relationship with, the Company, or
hire any such employee; or
(c) knowingly solicit, divert, limit or take away, or attempt to divert or to take away, the
business or patronage of any of the clients, customers, dealers, distributors, representatives or
accounts, or prospective clients, customers, dealers, distributors, representatives or accounts, of
the Company which were contacted, solicited or served by employees of the Company while the
Employee was employed by the Company.
6.3. In the event that any court of competent jurisdiction determines that the duration or the
scope, or both, of the non-competition and non-solicitation provisions set forth in this Section 6
are unreasonable and that such provisions are to that extent unenforceable, the parties hereto
agree that the provisions shall remain in full force and effect for the greatest time period, in
the greatest area and to the greatest number of persons and entities that would not render them
unenforceable.
6.4 The restrictions contained in this Section 6 and in Section 7 are necessary for the
protection of the Company’s legitimate interests, confidential, proprietary or trade secret
information, or goodwill; to protect the Company from the misuse or disclosure of its confidential,
proprietary or trade secret information; and to protect the Company from unfair competition. The
Employee agrees that any breach of
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this Section 6 or Section 7 will cause the Company substantial
and irreparable damage and
therefore, in the event of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific performance and injunctive relief.
6.5 The Employee agrees that the duration and other restrictions imposed in this Agreement are
fair and reasonable and are reasonably required for the protection of the Company. To the extent
any portion of this Agreement, or any portion of any provision of this Agreement, is held to be
invalid or unenforceable, it shall be revised to reflect most nearly the parties’ intent and the
remainder of the provision or provisions of this Agreement shall be unaffected and shall continue
in full force and effect.
6.6 For purposes of this Section 6 and Section 7, the “Company” refers to the Company and any
of its affiliates.
7. Confidential Information
7.1. By executing this Agreement, the Employee recognizes and agrees that he is employed in a
position with the Company in which he will have access to certain confidential and proprietary
information concerning the business of the Company which is of great value to the Company and
which, if used in competition with the Company, would render great and irreparable harm to the
Company. Such information includes, but is not limited to, information relating to business
operations; services; network; systems; strategic business plans; marketing plans; long-range
goals; assets and liabilities; technical and engineering methods, processes, and/or know-how;
research and development activities; products; computer software and programs; marketing data;
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pricing; product designs; discoveries; inventions; budgets; projections; customers and suppliers;
development plans, strategies and forecasts; new products and services; and financial
statements. This information is provided to the Employee solely for use in the course of her
employment with, and for the benefit of, the Company.
7.2. To ensure that such confidential information provided to the Employee is maintained in
confidence by her and not used by her to unfairly compete with the Company, the Employee shall not,
during the course of the Employee’s employment and at any time within two (2) years thereafter
following the termination of her employment (regardless of whether the Employee’s termination is
voluntary or involuntary, or with or without cause), divulge, furnish or make accessible to anyone,
or use in any way other than in furtherance of the interests of the Company: (i) any confidential,
proprietary or secret knowledge or information which the Employee has acquired or become acquainted
with, or will acquire or become acquainted with, during the course of the Employee’s employment
with the Company; (ii) any confidential or proprietary information concerning the Company’s
customers, including but not limited to, information concerning a customer’s need, practice or
preferences; (iii) any confidential, proprietary or trade secret research and development
activities of the Company; and (iv) any other confidential, proprietary or trade secret information
relating to the business of the Company. The Employee agrees that this restriction applies to all
such information regardless of whether such information was developed by her. This restriction
shall not apply to information (i) which is or becomes public knowledge through no fault of the
Employee, (ii) is known to the Employee at the time of its disclosure to her as shown by her prior
written records, or (iii) is disclosed to the
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Employee by a third party who is under no
confidential obligation to the Company. The Employee further agrees that upon request by the
Company, or upon the termination of
the Employee’s employment, the Employee will immediately return to the Company any and all such
information in the Employee’s possession or under the Employee’s control.
8. Representations and Warranties of the Employee. The Employee represents and
warrants to the Company as follows:
8.1. All facts concerning the Employee’s background, education, experience and employment
history as described to the Company in writing are true and correct;
8.2 The Employee’s execution of this Agreement and employment with the Company does not and
will not conflict with any obligations that the Employee has to any current or former employer, any
other individual, corporation, partnership, association, trust or any other entity or organization,
including any instrumentality of government;
8.3 All files, records, compilations, reports, studies, manuals, memoranda, notebooks,
documents, financial reports and statements, correspondence, and other confidential information
whether prepared by the Employee or otherwise coming into the possession of the Employee, and all
copies thereof, are, and shall remain, the exclusive property of the Company, and shall be
delivered to the Company as soon as reasonably practicable and at the expense of the Company in the
event of the Employee’s termination or at any other time if requested by the Company.
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8.4 The Employee acknowledges that the Company may, and contemplates, purchasing “key man life
insurance” on Employee with the Company as sole benificiary.
8.5 The Employee confirms that all IP created or owned by her, since the commencement of her
employment by the Company belongs to the Company.
9. Indemnification. Employer shall indemnify Employee and hold her harmless against
any and all claims and liabilities asserted against Employee which arise in connection with the
performance of Employee’s duties and responsibilities while acting in Employee’s capacity as an
employee of Employer, except Employer shall not be obligated to indemnify or hold Employee harmless
against any claim or liability which arises out of Employee’s bad faith or intentional misconduct
or breach of a representation set forth in Article 8.
10. Property Rights. With respect to information, inventions and discoveries
developed, made or conceived of by Employee, either alone or with others, at any time during
Employee’s employment by the Company and whether or not within working hours, arising out of such
employment or pertinent to any field of business or research in which, during such employment, the
Company is engaged or (if such is known to or ascertainable by Employee) is considering engaging,
Employee agrees:
10.1 that all such information, inventions and discoveries, whether or not patented or
patentable, shall be and remain the exclusive property of the Company;
10.2 to disclose promptly to an authorized representative of the Company all such information
in Employee’s possession as to possible applications and uses thereof;
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10.3 not to file any patent application relating to any such invention or discovery except
with the prior written consent of an authorized officer of the Company;
10.4 that Employee hereby waives and releases any and all rights Employee may have in and to
such information, inventions and discoveries and hereby assigns to the Company and/or its nominees
all of Employee’s right, title and interest in them, and all Employee’s right, title and interest
in any patent, patent application, copyright or other property right based thereon. Employee hereby
irrevocably designates and appoints the Company and each of its duly authorized officers and agents
as Employee’s agent and attorney-in-fact to act for Employee and in Employee’s behalf and stead to
execute and file any document and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of any such patent, patent application, copyright or other
property right with the same force and effect as if executed and delivered by Employee; and
10.5 at the request of the Company and without expense to Employee, to execute such documents
and perform such other acts as the Company deems necessary or appropriate for the Company to obtain
patents on such inventions in a jurisdiction or jurisdictions designated by the Company, and to
assign to the Company or its designee such inventions and any patent applications and patents
relating thereto.
11. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the
address shown above, or at such other address or addresses as either party shall designate to the
other in accordance with this Section 10.
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12. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws (and not the law of conflicts) of the State of New York.
13. Jurisdiction. Except as otherwise provided for herein, each of the parties (a)
submits to the exclusive jurisdiction of any state court sitting in New York County, New York or
federal court sitting in the Southern District of New York in any action or proceeding arising out
of or relating to this Agreement, (b) agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court and (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives
any bond, surety or other security that might be required of any other party with respect thereto.
Any party may make service on another party by sending or delivering a copy of the process to the
party to be served at the address and in the manner provided for giving of notices in Section 11.
Nothing in this Section 13, however, shall affect the right of any party to serve legal process in
any other manner permitted by law.
14. Survival. The provisions of Sections 6, 7, 8, 9, 10, 11, 12, 13 and 14 shall
survive the termination of this Agreement.
15. Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
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16. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral, relating to
the subject matter of the Agreement.
17. Amendment. This Agreement may be amended or modified only by a written
instrument executed by all of the parties hereto.
18. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may succeed to its assets
or business; provided, however, that the obligations of the Employee are personal and shall not be
assigned by her.
19. Miscellaneous.
19.1 No delay or omission by either party in exercising any right under this Agreement shall
operate as a waiver of that or any other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be construed as a bar or waiver of
any right on any other occasion.
19.2 The captions of the sections of this Agreement are for convenience of reference only and
in no way define, limit or affect the scope or substance of any section of this Agreement.
19.3 In case any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
written above.
| BIODEL INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||||
| Name: Xxxxxxx X. Xxxxxxx | ||||||
| Title: Chief Executive Officer | ||||||
| /s/ Roderike Xxxx | ||||||
| Roderike Xxxx | ||||||
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