Contract
Exhibit
10.58
EMPLOYMENT
AGREEMENT dated as of June 23, 2005, between J. Xxxxxx Xxxxxx (the "Executive")
and DOV Pharmaceutical, Inc., a Delaware corporation (the "Company").
WHEREAS,
the Company and the Executive desire to enter into this Employment Agreement
to
assure the Company of the continued services of the Executive and to set
forth
the duties and compensation of the Executive, all upon the terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the agreements and covenants contained herein,
the Executive and the Company hereby agree as follows:
ARTICLE
I
Employment
Section
1.01. Term.
The
initial term of this Employment Agreement shall commence on expiration of
the
Executive’s previous employment contract (July 29, 2002), and, unless sooner
terminated pursuant to Article III hereof, shall terminate on the date that
is
two years thereafter (the “Employment Period”). Unless sooner terminated
pursuant to Article III, the parties may by written agreement renew this
Agreement for one year (each such one-year period hereinafter referred to
as a
“Renewal Period”; the Initial Employment Period and all Renewal Periods
hereinafter referred to as the “Employment Period”).
Section
1.02. Position.
The
Company shall employ the Executive and the Executive shall serve as Senior
Vice
President and General Counsel during the Employment Period.
Section
1.03. Duties.
(a)
Subject
to the responsibility vested in the Board of Directors of the Company (the
“Board”) under the General Corporation Law of the State of Delaware, the
Executive shall have such responsibility and authority as are customarily
possessed and exercisable by the Senior Vice President and General Counsel
of a
corporation. The Executive shall also perform such other executive and
administrative duties (not inconsistent with the position of Senior Vice
President and General Counsel) as the Executive may reasonably be expected
to be
capable of performing on behalf of the Company and any subsidiaries and
affiliates of the Company as may from time to time be authorized or directed
by
the Board.
(b)
During
the Employment Period, the Executive shall perform faithfully the duties
covered
by Section 1.02(a) to the best of his ability and devote his full business
time
and attention to the Company's business and not engage in any other business
activities except with the approval of the Board provided that he may subject
to
Section 4.01 invest in companies not requiring his services and may subject
to
Section 1.03(a) devote reasonable time to charitable and civic
affairs.
(c)
The
Company shall provide and pay for a standard directors and officers insurance
policy insuring the Executive against liability arising out of the performance
of his duties, and shall indemnify and hold the Executive harmless from
liability arising out of his services hereunder.
ARTICLE
II
Compensation
Section
2.01. Basic
Compensation.
As
compensation for the Executive's services hereunder, the Company shall pay
to
the Executive an annual salary of $330,000 (as adjusted, "Basic Compensation"),
payable in bi-weekly or monthly installments. The Basic Compensation may
be
increased in the discretion of the Board.
Section
2.02. Incentive
Compensation.
(a) In
addition to Basic Compensation, the Executive shall together with other
executive staff be considered at least annually for incentive compensation
(“Incentive Compensation”) upon recommendation by the Compensation Committee.
Its recommendation shall, among other factors considered relevant, take into
account performance of the Company, increase in value of the Company and
the
Executive’s contribution thereto. Incentive Compensation shall be determined in
the discretion of the Board upon such recommendation.
(b)
Incentive
Compensation shall be paid to the Executive within 30 days after the Board’s
determination provided that the Company may determine to pay out Incentive
Compensation over a period not to exceed six months.
Section
2.03. Other
Benefits.
(a)
During
the Employment Period, the Company shall provide the Executive and maintain
on
the Executive’s behalf, or reimburse the Executive for carrying comprehensive
medical insurance, disability insurance and life insurance of $300,000 on
the
life of the Executive. In addition, the Executive shall have the right to
participate in the Company's other programs for the benefit of employees
in
accordance with their terms and as the same may be amended from time to time.
(b) The
Executive shall be eligible to participate further in the Company’s stock option
program. The terms of existing options held by the Executive shall be governed
by the existing stock option agreement with the Company, and the terms of
any
additional options (including the 100,000 options referred to below) shall
be
governed by the Company’s standard stock option agreement in use at the time of
grant, which for all options held by or issued to the Executive may incorporate
the terms established by the Company’s stock option plan if any adopted
subsequent to the date of grant provided that notwithstanding such stock
option
terms if any to be adopted to the contrary the Executive’s options to the extent
not vested shall vest upon a termination of
employment or pursuant to Section 3.01(d), or Section 3.03 or Section 3.04
but
be exercisable during the post-employment period established by such terms
to be
adopted. The Executive is granted options to purchase 100,000 shares of the
Company’s common stock at a strike price determined by the closing price on July
29, 2005, vesting half in 18 months of full time employment and the balance
vesting ratably quarterly over the remaining 18 months of full time employment.
The other terms of such options shall be governed by the Company’s standard
stock option agreement to be entered into, which will incorporate the terms
established by the Company’s stock option plan as the same may be amended from
time to time provided that, notwithstanding such stock option terms if any
to
the contrary, the Executive’s options to the extent not vested shall accelerate
and vest fully upon a termination of employment pursuant to Section 3.01(d)
and
accelerate and vest ratably upon a termination pursuant to Section 3.04,
but be
exercisable during the post-employment period established by such terms to
be
adopted, such ratable accelerated vesting of such 100,000 options to extend
to
25,000 options for a termination pursuant to Section 3.04 during the first
year
after the date hereof, to 62,500 options to the extent not vested for such
a
termination during the second year and to 100,000 options to the extent not
vested for such a termination during the third year.
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(c)
The
Company shall pay to or on behalf of the Executive a monthly automobile
allowance of $1,000.
(d)
The
Executive shall be entitled to six weeks of paid vacation in each calendar
year.
The Executive shall also be entitled to the same standard paid holidays given
by
the Company to senior executives generally, all as determined from time to
time
by the Board or appropriate committee thereof. Vacation time shall cumulate
and
carry forward from year to year provided that the Executive shall not be
entitled to more than ten weeks of vacation in any one year without the
permission of the Compensation Committee and provided that the Executive
shall
coordinate his vacation schedule with the Chief Executive Officer.
(e) The
Company shall reimburse the Executive for travel or other expenses or
disbursements reasonably incurred or made by him in connection with the
Company's business during the Employment Period upon receipt of reasonable
documentation thereof.
(f) The
benefits set forth in this Section 2.03 shall be collectively referred to
as the
“Benefits.”
ARTICLE
III
Termination
of Employment
Section
3.01. Termination
of Employment by Company
(a)
Except as otherwise provided in this Article III and in Article IV, upon
the
occurrence of any of the following events, this Agreement and the rights
and
obligations of the parties hereunder shall terminate:
(i)
"Disability"
(as defined in Section 3.05(a)) of the Executive; or
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(ii)
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conduct
by the Executive constituting "Cause" (as defined in Section 3.05(b));
or
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(b)
In
the
case of termination pursuant to Section 3.01(a)(i), the Company shall be
obligated to pay the Executive and the Executive shall be entitled to receive,
in complete and total satisfaction of the obligations of the Company hereunder,
an amount equal to Basic Compensation, Incentive Compensation and Benefits
for
the period commencing on the date of termination and ending on the date that
is
nine months after the date of termination. Basic Compensation, Incentive
Compensation and Benefits shall be paid in the manner and at the intervals
provided in Article II.
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(c)
In the
case of termination pursuant to Section 3.01(a)(ii), the Company shall be
obligated to pay the Executive and the Executive shall be entitled to receive,
in complete and total satisfaction of the obligations of the Company hereunder,
an amount equal to Basic Compensation, Incentive Compensation and Benefits
through the date of such termination.
(d) In
the
case of termination of the Executive by the Company other than pursuant to
Section 3.01(a) or Section 3.02, the Company shall be obligated to pay the
Executive and the Executive shall be entitled to receive, in complete and
total
satisfaction of the obligations of the Company hereunder, an amount equal
to
Basic Compensation commencing on the date of termination and ending nine
months
thereafter. Basic Compensation shall be paid at the intervals set forth in
Article II.
Section
3.02. Death.
In the
event of the death of the Executive during the Employment Period, the Employment
Period shall terminate on the date of death and the Executive's designated
beneficiary or, if none, his estate shall be entitled to receive, in complete
and total satisfaction of the Company's obligations hereunder, Basic
Compensation, Incentive Compensation and Benefits through such date of death
and
for a period of 90 days thereafter.
Section
3.03. Termination
of Employment by the Executive.
(a)
If
during the Employment Period there should occur any of the following events
(each of the following being an event giving the Executive the right to resign
for "Good Reason”): (i)
a
change in the title and/or responsibilities of the Executive, such that the
Executive is no longer functionally the Senior Vice President and General
Counsel of the Company and no longer has such responsibilities and authorities
as are customarily exercisable by the Senior Vice President and General Counsel
of a corporation or (ii)
a
failure by the Company to provide the Executive with Basic Compensation,
Incentive Compensation or Benefits, other than a failure that is not in bad
faith and is remedied by the Company within 15 days after receipt of notice
thereof given by the Executive, or (iii) a breach by the Company of a material
term of this Agreement that is not remedied by the Company within 15 days
of
notice thereof by the Executive, the Executive may elect to terminate his
employment by notice to the Company (subject to Article IV). If the Executive
exercises such election, the Employment Period shall terminate effective
upon
the later to occur of (x) receipt of such notice by the Company and (y)
expiration of the 15-day period referred to in Section 3.03(a)(ii) or
(iii).
(b)
If
the
Executive exercises his election to terminate pursuant to Section 3.03(a),
the
Company shall be obligated to pay the Executive and the Executive shall be
entitled to receive, in complete and total satisfaction of the obligations
of
the Company hereunder, an amount equal to Basic Compensation for the period
commencing on the date of such termination and ending nine months
thereafter.
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(c)
If
the
Executive terminates this Employment Agreement for any reason other than
those
contained in Section 3.03(a), or this Agreement terminates pursuant to Section
3.02, the rights and obligations of the parties hereunder shall terminate
immediately (except as otherwise provided in Article IV) and the Employment
Period shall terminate immediately except that the Executive shall be entitled
to receive, in complete and total satisfaction of the obligations of the
Company
hereunder, his Basic Compensation, Incentive Compensation and Benefits through
the date of such termination.
Section
3.04. Change
of Control.
In the
event the Executive terminates his employment within six months following
a
Change of Control (as defined in Section 3.05), the Company shall be obligated
to pay the Executive, and the Executive shall be entitled to receive in complete
and total satisfaction of the obligations of the Company hereunder, an amount
equal to the Executive’s Basic Compensation for the period commencing on the
date of termination and ending on July 29, 2007, or, if a larger period,
nine
months thereafter.
Section
3.05. Definitions
of Certain Terms.
(a)
"Disability" shall mean any physical or mental condition of the Executive
that
renders the Executive incapable of performing any substantial portion of
the
services contemplated hereby (as confirmed by competent medical evidence)
and
that has continued for at least 90 consecutive business days in any 12-month
period or a total of six months during any 12-month period.
(b)
The
following shall constitute conduct entitling the Company to terminate the
Executive's employment for "Cause": (i) the Executive's willful refusal to
perform or substantial disregard of the Executive’s duties to the Company that
is not cured within ten days of written notice (specifying the failure) thereof
from the Board, (ii) the commission by the Executive of a willful and material
breach of Article IV, (iii) the conviction of any felony by the Executive
(or
the equivalent thereof under the laws of any state), (iv) the commission
of any
act constituting financial dishonesty against the Company (which act would
be
chargeable as a crime under applicable law), (v) the Executive‘s engaging in any
other act of dishonesty, fraud, intentional misrepresentation, moral turpitude,
illegality or harassment that, as determined in good faith by the Board,
would
(A) materially adversely affect the business or reputation of the Company
with
its current or prospective customers, supplies, lenders and/or other third
parties with whom it does or might do business or (B) expose the Company
to a
risk of civil or criminal legal damage, liabilities or penalties, (vi) the
repeated failure by the Executive to follow the directives of the Company’s
chief executive officer or Board, or (vii) any material misconduct by the
Executive in connection with the business affairs of the Company.
It
shall
be presumed that any termination of the Executive by the Company is without
Cause, and such presumption may only be overcome by clear and convincing
evidence that the termination of the Executive’s employment can properly be
construed as for Cause. If the issue of “Cause” is litigated in a proceeding in
any court or through any means of alternative dispute resolution and such
issue
is resolved in the Executive’s favor, the Company shall reimburse the Executive
for all reasonable attorney’s fees, costs and expenses incurred by the Executive
in such proceeding.
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(c)
”Change
of Control“ shall mean: (i)
a
merger or consolidation of the Company with or into another corporation other
than a transaction (A) in which the Company is the surviving Corporation
(except
where such other merger or consolidation party is controlled by or under
common
control with another corporation) or (B) merging or consolidating the Company
with any corporation controlling, controlled by or under common control with
the
Company (in which case the surviving corporation shall be deemed the ”Company“
for purposes of this Agreement), or (ii)
the
sale of all or substantially all the assets of the Company to any corporation
or
entity, other than a sale to any corporation or entity controlling, controlled
by or under common control with the Company prior to such transaction (in
which
case the surviving corporation shall be deemed the ”Company“ for purposes of
this Agreement).
ARTICLE
IV
Non-Competition;
Confidential Information
Section
4.01 Non-Competition.
(a)
Subject to Sections 4.01(b) and 4.01(c), the Executive shall not engage in
any
activities, whether as employer, proprietor, partner, stockholder (other
than as
the holder of less than 5% of the stock of a corporation listed on a national
securities exchange or in the National Association of Securities Dealers,
Inc.
Automated Quotation System (such a corporation being hereinafter referred
to as
a "Public Corporation")), director, employee, consultant or otherwise, of
any
company with substantially the same business as or that competes directly
with
the Company in the United States during the following periods:
(i)
the
Employment Period; and
(ii)
during any period after the termination of this Agreement pursuant to Article
3
for which the Executive is being or has been paid Basic
Compensation.
(b)
The
Executive shall not be deemed to be in breach of this Agreement by reason
of
services performed for a subsidiary or affiliate of the Company.
(c)
Notwithstanding anything to the contrary contained herein, if the Company
finds
that the Executive has violated any covenants contained in Section 4.01,
4.02 or
4.03, the Company shall be obligated to pay any amounts due to the Executive
("Escrow Amount") to Xxxxxxx Procter LLP, as escrow agent ("Escrow Agent"),
at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Escrow Agent shall hold the
Escrow Amount in escrow until a court or agency legally empowered to enforce
the
covenants contained in Section 4.01, 4.02 and 4.03 reaches a final determination
whether the Executive has violated any such covenants or until mutually
instructed by the parties. Escrow Agent shall disburse the Escrow Amount
in
accordance with such court or agency's final determination or pursuant to
such
party instructions.
Section
4.02 Non-Interference.
During
the Employment Period and the period of non-competition as determined pursuant
to Section 4.01(a), the Executive:
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(a)
shall
not
publicly disparage any of the products, services or actions of the Company
or
any of the Company's subsidiaries or affiliates; and
(b)
shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization, solicit, endeavor
to entice away from the Company, or otherwise interfere with the relationship
of
the Company with any person or entity who is, or was within the then most
recent
12-month period, a customer or client of the Company.
Section
4.03. Trade
Secrets.
The
Executive shall not, at any time during the Employment Period or thereafter,
use
(except for the sole benefit of the Company, the Company's subsidiaries and
affiliates) or, without the written consent of the Board, divulge to any
person
(other than, during the Employment Period, an executive of the Company or
any of
the Company's subsidiaries or other person to whom disclosure is reasonably
necessary or appropriate or legally required in connection with the Executive's
duties hereunder) any trade secrets or other confidential information of
the
Company or any of its subsidiaries or affiliates, except to the extent that
(a)
such information becomes a matter of public record, or is published in a
newspaper, magazine or other periodical available to the general public,
in each
case, through no violation of this Agreement by the Executive or (b) such
disclosure is required by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process provided that the Executive shall immediately notify the Company
of the
existence, terms and circumstances surrounding such a request so that it
may
seek an appropriate protective order. When the Executive ceases to be employed
by the Company, the Executive shall surrender to the Company all records
and
documents in any form obtained by him or entrusted to him during the course
of
his employment hereunder (together with all copies thereof) that pertain
to the
business of the Company or its subsidiaries or affiliates or that were paid
for
by the Company or any of the Company's subsidiaries or affiliates provided
that
the Executive may retain copies of such documents as may be necessary for
the
Executive's personal records for federal income tax purposes or, with the
approval of the Board, for other purposes relating to the Executive's legal
affairs, which approval shall not be unreasonably withheld.
Section
4.04. Survival
of Terms.
The
covenants contained in Sections 4.01, 4.02 and 4.03 shall survive the
termination of the Executive's employment.
ARTICLE
V
Miscellaneous
Section
5.01. Services
as Officer or Director.
During
the Employment Period, the Executive shall, if elected or appointed, serve
as a
director of the Company and as an officer and director of all current and
future
subsidiaries and affiliates of the Company without any additional compensation
for such services provided that the Executive shall be provided with reasonable
and customary directors and officers insurance if any such corporation is
or
becomes publicly held and further provided that the Company shall cause any
such
subsidiary and affiliate to save the Executive harmless from any and all
liability arising out of the performance of the Executive’s duties as director
and officer.
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Section
5.02. Right
to Change Business.
This
Agreement and any rights or privileges granted to the Executive hereunder
shall
not prevent the Company or any of the Company's subsidiaries from exercising
its
corporate powers to modify the business operations or activities of such
entity.
Section
5.03. Notices.
Any
notice or request required or permitted to be given under this Employment
Agreement shall be sufficient if in writing and delivered personally or sent
by
registered mail, return receipt requested, to the addresses set forth below
or
to any other address designated by either party by notice similarly given.
Such
notice shall be deemed to have been given upon the personal delivery thereof
or
three days after the date of such mailing thereof, as the case may
be.
If
to the
Executive, to:
J.
Xxxxxx
Xxxxxx
c/o
XXX
Pharmaceutical, Inc.
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
If
to the
Company, to:
DOV
Pharmaceutical, Inc.
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Attention
of the CEO
Section
5.05. Assignment
and Succession.
The
Executive acknowledges that the services to be rendered by him hereunder
are
unique and personal. Accordingly, the Executive may not assign any of his
rights
or delegate any of his duties or obligations under this Agreement. The rights
and obligations of the Company under this Agreement shall inure to the benefit
of and be binding upon its successors and assigns.
Section
5.06. Headings.
The
headings contained in this Agreement are for convenience of reference only
and
shall not define or limit the provisions hereof.
Section
5.07. Applicable
Law.
This
Agreement shall be interpreted in accordance with the laws of the State of
New
Jersey, without regard to conflict of law rules. Each party hereby irrevocably
consents and submits to the in personam
jurisdiction of any court of general jurisdiction in the State of New Jersey,
which shall serve as the sole and exclusive forum in any suit, action or
proceeding arising out of or in connection with this Agreement.
8
Section
5.08. Withholding
Taxes.
The
Company may withhold from any amounts payable under this Agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulations.
Section
5.9. Entire
Agreement; Amendments.
This
Agreement contains the entire understanding of the parties hereto with regard
to
the subject matter contained herein, and supersedes all prior agreements
including the employment agreement dated as of July 29, 2002, or understandings
between the parties hereto or any related parties. This Agreement may be
amended
only pursuant to a writing signed by both parties hereto.
Section
5.10. Waivers.
Any
term or provisions of this Agreement may be waived, or the time for its
performance may be extended, by the party or parties entitled to the benefits
thereof but only to the extent evidenced by a writing executed by such party.
The failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in
any
way to affect the validity of this Agreement or any part hereof or the right
of
any party thereafter to enforce each and every such provision. No waiver
of any
breach of this Agreement shall be held to constitute a waiver of any other
or
subsequent breach.
Section
5.11. Partial
Invalidity.
Each
provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions
contained herein is for any reason held to be unenforceable in any respect,
such
unenforceability shall not affect any other provisions of this Agreement,
and
this Agreement shall be construed as if such unenforceable provision or
provisions had never been contained herein unless the deletion of such provision
or provisions would result in such a material change as to cause the remaining
terms hereof to be unreasonable.
Section
5.12. Execution
of Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
considered an original instrument, but all of which shall be considered one
and
the same agreement, and shall become binding when one or more counterparts
have
been signed by each of the parties and delivered to the other.
IN
WITNESS WHEREOF the Company has caused this Agreement to be signed by its
duly
authorized officer and the Executive has signed this Agreement as of the
day and
year first above written.
| DOV Pharmaceutical, Inc. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name: Xxxxxx Xxxxx |
||
| Title: CEO | ||
| /s/ J. Xxxxxx Xxxxxx | ||
|
J.
Xxxxxx Xxxxxx
|
||
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