EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”), dated June 26, 2009 by and between
Adeona Pharmaceuticals, Inc., a corporation organized under the laws of the
State of Delaware (the “Corporation”), and Xxx Xxxx, an individual (the
“Employee” or the “CEO”).
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1. EMPLOYMENT:
DUTIES
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(a) The
Corporation engages and employs the Employee as Chief Executive Officer and
President and Employee hereby accepts such engagement and employment, as of the
Corporation and, for the term of this Agreement as long as CEO desires to serve.
It is expected that the employment duties of CEO will include reporting directly
to the Chairman and Board of Directors of the Corporation for the full time high
quality performance of directing, supervising and having responsibility for all
aspects of the company’s operations and the general affairs of the Corporation
as directed by the Board of Directors.
(b) The
CEO shall devote substantially all of his professional time
under this Agreement at the Corporation’s executive offices, manufacturing or
clinical laboratories or traveling on corporate business.
The
Corporation shall provide a computer, cellular phone and office for the
Employee.
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2.
TERM
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The term
of the Employee’s employment shall be three years from the execution date of
this Agreement unless terminated earlier under Section 8 of this
Agreement.
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3.
COMPENSATION
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(a) As
compensation for the performance of his duties on behalf of the Corporation,
Employee shall receive the following:
(i) Base
Salary. Employee shall receive a base salary of
one hundred ninety thousand dollars ($190,000) per year (the “Base Salary”),
payable semi-monthly. Employee will receive an initial advance of $15,000
against his annual salary upon signing of the Agreement which advance shall be
deducted from his regular salary payments on a pro rata basis in equal payments
over the initial 12 months of the Agreement.
(ii) Bonus. On
the first of each calendar year while employed, the Employee may be entitled to
receive a discretionary performance bonus based upon the sales and profitability
of the Corporation payable in cash or equity in the sole and absolute discretion
of both the Compensation Committee and the Board of Directors of the
Corporation.
(iii) Discretionary
Transactional Bonus. In connection with a significant transaction
consummated by the Corporation or its subsidiaries in which the Employee is
directly or indirectly involved in, the Employee may be entitled to receive a
discretionary transactional bonus payable in cash or equity in the sole and
absolute discretion of both the Compensation Committee and the Board of
Directors of the Corporation.
(iv) Stock
Options. The Employee shall receive a non-restricted option to purchase
the Corporation’s publicly traded common stock equal to four hundred thousand
(400,000) shares exercisable at the market price per share on the date of issue.
One hundred thousand (100,000) of these options will vest immediately and the
remaining will vest monthly on each monthly anniversary of the start date of
employment and for thirty six (36) successive months while employed by the
Corporation and such options will remain exercisable for a period of ten years
from the date of grant, unless terminated earlier. Other terms of the option
shall be according to the Company’s existing stock option plan.
(b) The
Corporation shall reimburse Employee for all normal, usual and necessary
expenses incurred by Employee, including all travel, lodging and entertainment,
against receipt by the Corporation, as the case may be, of appropriate vouchers
or other proof of Employee’s expenditures and otherwise in accordance with such
Expense Reimbursement Policy as may from time to time be adopted by the
Corporation.
(c) The
Corporation shall provide Employee with full advance indemnification to the
extent permitted by Delaware law, including indemnification for activities at
all subsidiaries.\
(d) The
Employee shall be entitled to three (3) weeks paid vacation per year while
employed, accruing quarterly and sick leave in accordance with the Corporation’s
policies. The Corporation shall provide Employee and his family with
healthcare coverage pursuant to the Corporation’s healthcare insurance policy
plan.
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4.
REPRESENTATIONS
AND WARRANTIES BY
EMPLOYEE
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(a)
Employee hereby represents and warrants to the Corporation as
follows:
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(i)
Neither the execution and delivery of this Agreement nor the performance by
Employee of his duties and other obligations hereunder violates or will violate
any statute, law, determination or award, or conflict with or constitute a
default under (whether immediately, upon the giving of notice or lapse of time
or both) any prior employment agreement, contract, or other instrument to which
Employee is a party or by which he is bound.
(ii)
Employee as 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 Employee
enforceable against his in accordance with its terms. No approvals or consents
of any persons or entities are required for Employee to execute and deliver this
Agreement or perform his duties and other obligations hereunder.
(iii)
Employee understands that some or all of the stock received by Employee pursuant
to section 3(a) (iii) hereof will not be registered under the United States
Securities Act of 1933 (the “1933 Act”), and acknowledges that he will be
obligated to agree, as a condition to the issuance thereof, that he will acquire
such stock for his own account for investment and not with a view to, or for
resale in connection with a distribution thereof, and will bear the economic
risk of his investment in such stock for an indefinite period of
time.
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6.
CONFIDENTIAL
INFORMATION
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(a)
Employee agrees that during the course of his employment or at any time
thereafter, he will not disclose or make accessible to any other person, the
Corporation’s products, services and technology, both current and under
development, promotion and marketing programs, lists, trade secrets and other
confidential and proprietary business information of the Corporation or any
affiliates or any of their clients. Employee agrees: (i) not to use any such
information for himself or others, and (ii) not to take any such material or
reproductions thereof from the Corporation’s facilities at any time during his
employment by the Corporation. Employee agrees immediately to return all such
material and reproductions thereof in his possession to the Corporation upon
request and in any event upon termination of employment.
(b)
Except with prior written authorization by the Corporation, Employee agrees not
to disclose or publish any of the confidential, technical or business
information or material of the Corporation, its clients or any other party to
whom the Corporation owes an obligation of confidence, at any time during or
after his employment with the Corporation.
(c) In
the event that Employee breaches any provisions of this Section 6 or there is a
threatened breach, then, in addition to any other rights which the Corporation
may have, the Corporation shall be entitled, without the posting of a bond or
other security, to injunctive relief to enforce the restrictions contained
herein. In the event that an actual proceeding is brought in equity to enforce
the provisions of this Section 6, Employee shall not urge as a defence that
there is an adequate remedy at law, nor shall the Corporation be prevented from
seeking any other remedies which may be available. In addition, Employee agrees
that in event that he breaches the covenants in this Section 6, in addition to
any other rights that the Corporation may have, Employee shall be required to
pay to the Corporation any amounts he receives in connection with such
breach.
(d) Employee
recognizes that in the course of his duties hereunder, he may receive from the
Corporation or others information which may be considered “material, non-public
information” concerning a public company that is subject to the reporting
requirements of the United States Securities and Exchange Act of 1934, as
amended. Employee agrees not to:
(i) Buy
or sell any security, option, bond or warrant while in possession of relevant
material, non-public information received from the Corporation or others in
connection herewith, and
(ii)
Provide the Corporation with information with respect to any public company that
may be considered material, non-public information, unless first specifically
agreed to in writing by the Corporation.
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7
INVENTIONS
DISCOVERED BY THE EMPLOYEE
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The
Employee shall promptly disclose to the Company any invention, improvement,
discovery, process, formula, or method or other intellectual property, whether
or not patentable or copyrightable (collectively, "Inventions"), conceived or
first reduced to practice by the Executive, either alone or jointly with others,
while performing services hereunder (or, if based on any Confidential
Information, within one (1) year after the Term), (a) which pertain to any line
of business activity of the Company, whether then conducted or then being
actively planned by the Company, with which the Executive was or is involved,
(b) which is developed using time, material or facilities of the Company,
whether or not during
working hours or on the Company premises, or (c) which directly relates to any of the Executive's work during the Term, whether or not during normal working hours. The Executive hereby assigns to the Company all of the Executive's right, title and interest in and to any such Inventions. During and after the Term, the Executive shall execute any documents necessary to perfect the assignment of such Inventions to the Company and to enable the Company to apply for, obtain and enforce patents, trademarks and copyrights in any and all countries on such Inventions, including, without limitation, the execution of any instruments and the giving of evidence and testimony, without further compensation beyond the Executive's agreed compensation during the course of the Executive's employment. All such acts shall be done without cost or expense to Executive. Executive shall be compensated for the giving of evidence or testimony after the term of Executive's employment at the rate of $2,000/day. Without limiting the foregoing, the Executive further acknowledges that all original works of authorship by the Executive, whether created alone or jointly with others, related to the Executive's employment with the Company and which are protectable by copyright, are "works made for hire" within the meaning of the United States Copyright Act, 17 U.S.C. (S) 101, as amended, and the copyright of which shall be owned solely, completely and exclusively by the Company. If any Invention is considered to be work not included in the categories of work covered by the United States Copyright Act, 17 U. S. C. (S) 101, as amended, such work is hereby assigned or transferred completely and exclusively to the Company. The Executive hereby irrevocably designates counsel to the Company as the Executive's agent and attorney-in-fact to do all lawful acts necessary to apply for and obtain patents and copyrights and to enforce the Company's rights under this Section. This Section 5 shall survive the termination of this Agreement. Any assignment of copyright hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights" (collectively "Moral Rights"). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, the Executive hereby waives such Moral Rights and consents to any action of the Company that would violate such Moral Rights in the absence of such consent. The Executive agrees to confirm any such waivers and consents from time to time as requested by the Company.
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8.
TERMINATION
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(a) Employee’s
employment hereunder shall continue as set forth in Section 2 hereof unless
terminated upon the first to occur of the
following events:
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(i) The
death or disability of Employee,
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(ii) Termination
by the Corporation for Just Cause.
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(iii) Termination
by the Corporation without Just Cause.
For the
purpose of this Agreement, termination for “Just Cause” shall mean a termination
for gross insubordination; acts of embezzlement or misappropriation of funds;
fraud; dereliction of fiduciary obligation; conviction of a felony, a willful
unauthorized disclosure of confidential information belonging to the Corporation
or entrusted to the Corporation by a client; a material violation of any
provision of the Agreement which is not cured by the Employee within 15 days of
receiving written notice of such violation by the Corporation; being under the
influence of drugs (other than prescription medicine or other medically-related
drugs to the extent that they are taken in accordance with their directions)
during the performance of Employee’s duties under this Agreement, engaging in
behavior that would constitute
grounds for liability for harassment (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines or any other applicable state or local regulatory body) or other egregious conduct that violates laws governing the workplace; Termination for Just Cause shall also include the failure of the President to perform his written assigned tasks, where such failure is attributable to the fault of the President. In this event, the Corporation will first provide a written warning of such failure and the allocation of fault, and provide a reasonable time period to cure such failure, in no case less than thirty days.
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(iv)
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Material
breach by the Corporation of any provision of this agreement which is not
cured within fifteen (15) days of written notice thereof from the
Employee, or.
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(v)
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Termination
by the Employee at any time.
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(vi)
In the event of the occurrence of (i), (iii) or (iv) above,
the Corporation shall continue to pay the base salary of the Employee for the
period of three (3) months payable on the normal pay period from the date of
termination, or at the Corporation’s option, a number of immediately registered,
freely tradable Form S-8 shares of the Corporation’s common stock equal in value
to three (3) months salary issued and valued at the closing price on date of
issue and issued within five (5) business days of the date of
termination.
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9.
NOTICES
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Any
notice or other communication under this Agreement shall be in person or in
writing and shall be deemed to have been given (i) when delivered personally
against receipt therefor, (ii) one (1) day after being sent by Federal Express
or similar overnight delivery, (iii) three (3) days after being mailed
registered or certified mail, postage prepaid, return receipt requested, to
either party at the address set forth above, or to such other address as such
party shall give by notice hereunder to the other party, or (iv) when sent by
facsimile, followed by oral confirmation and with a hard copy sent as in (ii) or
(iii) above.
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10.
SEVERABILITY
OF PROVISIONS
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If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so a to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provision shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
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11.
ENTIRE
AGREEMENT MODIFICATION
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This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof, and the parties hereto have made no agreements, representations
or warranties relating to the subject matter of this Agreement which are not set
forth herein. No modification of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
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12.
BINDING
EFFECT
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The rights, benefits, duties and obligations
under this Agreement shall inure to, and be binding upon, the Corporation, its
successors and assigns, and upon Employee and his legal representatives. This
Agreement constitutes a personal service agreement, and the performance of the
Employee’s obligations hereunder may not be transferred or assigned by the
Employee.
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13.
NON-WAIVER
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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 said 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.
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14.
GOVERNING
LAW, DISPUTE RESOLUTION
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This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Michigan of the United States of America without
regard to principles of conflict of laws.
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15.
HEADING
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The
headings of paragraphs are inserted for convenience and shall not affect any
interpretation of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
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By:
X. Xxxxxx
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Title:
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Signed
and Agreed to:
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By:
Xxx
Xxxx
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