Employment Agreement
Exhibit 10.3
This Employment Agreement (the “Agreement”) is made and entered into effective as of July 25,
2007 (the “Effective Date”) by and between Innovive Pharmaceuticals, Inc., a Delaware corporation
(the “Company”) and Xxxxxx Xxxxx (“Employee”), a resident of New York. This Agreement is being
executed contemporaneously with the Nonsolicitation, Nondisclosure and Developments Agreement
attached hereto as Exhibit A (the “NNDA”). This Agreement supersedes the Employment
Agreement dated June 2, 2004 between the parties hereto.
NOW, THEREFORE, for and in consideration of the premises and mutual covenants contained
herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the terms and conditions hereinafter set forth, the parties hereto
enter into this Agreement and agree as follows.
1. DUTIES. Employee shall perform all assigned duties competently, diligently and
efficiently and shall follow the reasonable and lawful instructions and directions of the Board of
Directors of the Company. Employee shall serve as President and Chief Executive Officer of the
Company and will be a full-time employee of the Company and shall devote all of his professional
time to his duties. The Company will use its best efforts to have Employee elected to the Board of
Directors at all times he serves as Chief Executive Officer.
2. COMPENSATION.
(a) Salary. The Company will pay Employee for services rendered hereunder at
the rate of Three Hundred Seventy Five Thousand Dollars ($375,000) per year, less all
applicable local, state and federal taxes and any other deductions required by law or
properly authorized by Employee, payable in accordance with the Company’s usual payroll
practices (the “Base Pay”), which amount may be increased or decreased from time to time by
the Compensation Committee of the Board of Directors of the Company (the “Committee”). The
Base Pay will be retroactive to June 2, 2007.
(b) Guaranteed Bonus. The Company will pay Employee a guaranteed annual bonus
of $50,000, payable for the first year of this contract on the date hereof and payable for
each subsequent year on the first business day of July.
(c) Annual Bonus. Employee will be eligible for a performance-based bonus of
up to fifty percent (50%) of Base Pay at the discretion of the Committee.
(d) Grant of Stock Option. In consideration of his continued service,
Employee will be granted an option to purchase Two Hundred Twenty Five Thousand (225,000)
shares of the Company’s common stock, half at $4.00 per
share and half at $5.00 per share. Such option shall be an incentive stock option to
the extent eligible under the Internal Revenue Code of 1986, as amended. Such option shall
vest and become exercisable as to one third of such shares on the one-year anniversary of
the date of this Agreement and thereafter shall vest in twenty four (24) equal monthly
installments, provided in each case Employee remains an employee of the Company on such
dates.
(e) Eligibility for Annual Awards. Employee shall be eligible for annual
grants of stock options, performance shares, stock appreciation rights or such other equity
or performance based awards as determined by the Committee in its discretion.
3. OTHER BENEFITS. Employee may participate in any of the Company’s benefit plans or
programs available to similarly situated employees, provided, however, that Employee’s
participation is subject to the applicable terms, conditions and eligibility requirements of any
such plans and programs, some of which are in the plan administrator’s discretion as they may exist
from time to time. Employee shall be eligible for twenty (20) days of paid vacation per calendar
year. Employee 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.
4. RESTRICTIVE COVENANTS.
(a) Employee agrees that, while employed or retained by the Company in any capacity and
for a period of one (1) year following the termination of Employee’s employment relationship
with the Company, regardless of the reason for such termination (unless such termination
resulted from the Company’s decision to cease operations other than in connection with a
disposition of its assets for value), Employee shall observe the following separate and
independent covenants:
(i) Noncompetition. Employee shall not, without the prior written
consent of the Committee, directly or indirectly, alone or as a partner, joint
venturer, officer, director, employee, consultant, agent, independent contractor or
stockholder of any company or business, engage in any business activity that is in
competition in the geographical area set forth below with any of the products being
developed, marketed, distributed, sold or otherwise provided by the Company in the
fields of oncology and hematology. Employee’s ownership of not more than five
percent (5%) of the shares of stock of any corporation having a class of equity
securities actively traded on a national securities exchange shall not be deemed,
in and of itself, to violate the prohibitions of this paragraph.
Employee acknowledges that the nature of the Company’s business and the
services he renders to the Company are such that it would be unfair to permit him
to perform services for or otherwise engage in any competing business during the
period specified in Section 4(a) regardless of the location in the United States
(or, if the United States is too broad, then the State of New York), and that such
activity is appropriately prohibited by this Section 4(a) throughout the United
States (or, if the United States is too broad, then the State of New York).
(ii) Nonsolicitation of the Company’s Strategic Partners. Employee
will not, without the prior written consent of the Committee, on Employee’s own
behalf or in the service or on behalf of others, solicit, divert, or attempt to
solicit or divert, for the purpose of providing the “Covered Products” (as defined
below), any entity or individual who was a licensee, licensor or strategic partner
of the Company during the last twelve (12) months that Employee was employed or
retained by the Company. For purposes of this Agreement, the “Covered Products”
are defined as products that are competitive with or similar in purpose or function
to the Company’s products in the field of oncology. Notwithstanding the foregoing,
nothing in this subparagraph (ii) shall be construed to limit the scope or
generality of subsection (i) above.
(iii) Nonsolicitation of Employees. Employee will not, without the
prior written consent of the Committee, on Employee’s own behalf or in the service
or on behalf of others, solicit, divert or hire, or attempt to solicit, divert or
hire, any person then employed by the Company or employed by the Company within the
twelve (12) month period prior to such solicitation, diversion or hiring, whether
or not such employee is a full-time or a temporary employee of the Company, whether
or not such employment is pursuant to written agreement, and whether or not such
employment is at will.
(b) Employee acknowledges and agrees that the time and territory of the restrictive
covenants contained in this Section are necessary for the protection of the Company’s
legitimate business interests and do not unfairly restrict Employee’s ability to hold
gainful employment.
5. RIGHT TO INJUNCTION. The parties agree that any breach of this Agreement by either
of them will cause irreparable damage to the other party. In the event of such breach or
threatened breach, each of the parties shall have, in addition to any and all remedies at law, the
right to an injunction, specific performance and other equitable relief to prevent the violation of
the other party’s obligations hereunder.
6. CONSIDERATION TO EMPLOYEE. In consideration of Employee’s execution of this
Agreement, the Company agrees to (a) employ Employee, subject to Section 7 below, and (b) upon his
termination by the Company without “Cause” (as
defined below) or termination of employment by Employee for “Good Reason” (as defined below), (i)
pay to Employee an amount equal to six (6) months Base Pay, which shall be payable either upon
termination of Employee’s employment with the Company or on the Company’s regular payroll schedule,
at the sole option of the Company, (ii) continue to pay for Employee’s health insurance (or
reimburse Employee for the premiums payable by Employee with respect to health insurance in an
amount equal to that paid by the Company immediately prior to such termination of employment) for a
period of six (6) months from such termination and (iii) all stock options, restricted stock and
other equity rights subject to any time-based vesting or restrictions shall immediately vest and
such restrictions shall lapse. Any payments required to be made by the Company pursuant to this
Section 6 shall be reduced by any applicable withholdings for taxes and other withholdings
authorized by Employee or required by law and shall be conditioned upon Employee executing and
delivering (and not revoking) a separation agreement satisfactory in form and content to the
Company providing for, among other things, mutual non-disparagement, a release of all claims by
Employee against the Company and a reaffirmation of the restrictive covenants set forth in this
Agreement.
For the purposes of this Agreement, “Cause” is defined as (i) any material breach by Employee
of this Agreement or the NNDA, which breach is not cured, if susceptible to cure, within five (5)
days after written notice to Employee; (ii) Employee ‘s gross neglect of duty, which failure
continues for more than five (5) days after written notice to Employee; (iii) willful or reckless
misconduct by Employee which is materially injurious to Company; (iv) indictment of Employee under
a felony charge or commission of a criminal act by Employee that results in an active sentence of
at least thirty (30) days imprisonment; or (v) any act by Employee which is a grossly negligent or
an intentional violation of the Company’s policies or rules, including without limitation any act
of harassment. For purposes of this Agreement, “Good Reason” is defined as (i) a reduction of Base
Pay below that amount set forth in Section 2 hereof without Employee’s consent or without a similar
percentage decrease for all employees of a similar level; (ii) relocation of Employee outside of a
50-mile radius of the Company’s current location in New York, New York without Employee’s consent
(reasonably required travel outside of such area shall not constitute the relocation of Employee),
or (iii) a material reduction in Employee’s duties without Employee’s consent, provided that a
change in Employee’s specific title or duties will not constitute Good Reason so long as following
any such change Employee’s title and duties are commensurate with a position as a key employee as
such term is generally understood.
Upon termination of Employee’s employment with the Company, Employee shall be entitled to
receive payment for all accrued and unpaid Base Pay. Eligibility and timing of payment of
unreimbursed expenses will be pursuant to the Company’s then-prevailing policies.
7. EMPLOYMENT AT-WILL. Employee understands and agrees that this Agreement does not
create an obligation of the Company to continue Employee’s employment for any defined period of
time, and that Employee’s employment
relationship with the Company may be terminated by the Company or by Employee at any time for any
or no reason with or without cause.
8. WAIVERS. Any waiver by either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of such provision or any
other provision hereof.
9. SEVERABILITY. The parties hereby agree that each provision herein shall be treated
as a separate and independent clause, and the unenforceability of any one clause shall in no way
impair the enforceability of any of the other clauses herein. Moreover, if one or more of the
provisions contained in this Agreement shall for any reason be held to be excessively broad as to
scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be
construed by the appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the maximum extent compatible with the applicable law as it shall then exist. The
terms of this Agreement will control over any conflicting terms in the NNDA.
10. SURVIVAL. Sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 of this Agreement shall
survive the termination of this Agreement and Employee’s employment regardless of the manner of
such termination and shall be binding upon Employee’s heirs, executors, administrators and legal
representatives.
11. ASSIGNABILITY; AMENDMENT; TERMINATION OF PRIOR AGREEMENT. The term “Company”
shall include the company named on the first page of this Agreement and any of its subsidiaries,
subdivisions or affiliates. This Agreement shall inure to the benefit of and be enforceable by the
parties hereto and their successors and permitted assigns. This Agreement may not be assigned by
Employee without the prior written consent of the Company. This Agreement may be amended only in a
writing signed by each of the parties hereto.
12. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to the conflict of laws principles thereof.
This Agreement may be executed in counterparts.
[The Next Page is the Signature Page]
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as a sealed
instrument as of the date first above written.
| EMPLOYEE: | ||||||
| Signature: (SEAL) | ||||||
| Xxxxxx Xxxxx | ||||||
| COMPANY: | ||||||
| Innovive Pharmaceuticals, Inc. | ||||||
| By: | ||||||
| J. Xxxxxxx Xxxxxx, CFO | ||||||
