AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Employment Agreement is made as of the 3rd
day of
January, 2006, by and between Symbollon Pharmaceuticals, Inc., a Delaware
corporation with its principal place of business at 00 Xxxxxx Xxxxx, Xxxxxxxxxx,
XX 00000 (the "Company"), and Xxxx X. Xxxxxxxxx, residing at 00 Xxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000 (the "Employee").
In
consideration of the mutual promises contained in this Agreement, the parties
agree as follows:
1.
Titles
and Responsibilities.
The
Company employs the Employee, and the Employee accepts employment, as President,
Chief Executive Officer, General Counsel and Chief Financial Officer of the
Company. The Employee shall be directly responsible for management of all
business operations and setting of overall corporate strategy. Subject to the
general direction and control of the Board of Directors of the Company (the
"Board"), the Employee agrees to devote his full time and best efforts to his
duties and responsibilities for the Company. The Employee shall report directly
to the Board.
2.
Term.
The
term of this Agreement shall be deemed to have commenced as of the date hereof
and, subject to the provisions of Section 12 of this Agreement, shall continue
in full force and effect until December 31, 2008.
3.
Base
Salary.
During
the term of this Agreement, the Employee shall be entitled to receive base
salary at the rate of $265,000 per year, payable not less than monthly in
arrears, commencing January, 2006. The Company may, but shall not be obligated
to, increase the Employee's base salary in any year.
4.
Bonuses.
(a). Annual.
In
addition to the base salary described in Section 3, during the term of this
Agreement, the Employee may be entitled in each calendar year to receive a
cash
bonus, stock options and/or such other bonuses, in such amounts and on such
terms as the Board or the Compensation Committee of the Board (the "Compensation
Committee") may determine. In the event of the termination of the employment
of
the Employee for (i) any reason other than Cause or (ii) by reason of
Constructive Discharge, the Employee shall be entitled to receive an amount
equal to the bonus which would otherwise have been payable to the Employee
under
any established Company incentive plans, if any, in effect at the time in
respect of the year during which such termination occurs, pro rated for the
portion of the year in which such termination occurs.
(b). Signing.
As an
incentive to execute this Agreement, the Employee shall be granted as of the
date hereof options to purchase Class A Common Stock as detailed on Exhibit
A
hereto.
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5.
Employee
Benefits.
The
Employee shall have the right to participate in all benefit plans and programs
generally made available to executives of the Company, including without
limitation health, dental, life, and disability insurance, vacation programs,
retirement plans, employee stock plans or benefits and profit sharing
plans.
6.
Reimbursement
of Expenses.
The
Company shall reimburse the Employee for all reasonable and necessary expenses
incurred by him in the performance of his duties hereunder, following his
appropriate substantiation thereof, in each case in accordance with the
Company's policies as in effect from time to time.
7.
Outside
Consulting.
With
prior notification to the Compensation Committee, the Employee may provide
consulting services to third parties. The Employee may serve as a consultant
in
any field which does not directly compete with the Company, including without
limitation, medical diagnostic products, provided,
that in
no event shall such proposed consulting interfere with the operations of the
Company or the performance of the Employee's duties under this Agreement more
particularly described in Section 1 hereof. If the Compensation Committee shall
determine that any consulting activity engaged in by the Employee is not
permitted hereunder, the Compensation Committee shall provide the Employee
a
written statement setting forth the basis for its determination. The Employee
agrees that in no event will he devote more than two days per month in the
aggregate in his capacity as a consultant to third parties.
8.
Severance
and Other Arrangements.
(a) Generally.
In the
event of the termination of the employment of the Employee by the Company
without Cause, or by the Employee as the result of a Constructive Discharge,
the
Company shall:
(i). Continue
to pay the Employee, in accordance with the Company's normal payroll practices
and policies in effect from time to time (including any required withholding),
his base salary at the monthly base salary rate in effect for such Employee
immediately prior to the termination of his employment) for a period of twelve
(12) months following the termination of the Employee's employment.
(ii). Provide
the Employee with health, dental, life and disability insurance substantially
similar to that which the Employee was receiving immediately prior to the
termination of his employment until the earlier of: (x) the date which is twelve
(12) months following the termination of the Employee’s employment; or (y) the
date the Employment begins receiving substantially similar insurance from a
subsequent employer. The end of the period during which severance is paid,
rather than the termination date of employment, will be deemed to be a
"qualifying event" which would entitle the Employee to acquire at his own
expense during the minimum election period permitted by the Consolidated Omnibus
Budget Reconciliation Act (commonly known as "COBRA") or such law as may then
be
in effect continuation of coverage under the Company's health and benefit
plans.
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(iii). Provide
that the Employee shall have three (3) years to exercise any then-exercisable,
unexpired installments of any stock options held by the Employee on the
Employee's last date of employment or if later, the date when the Employee
ceases to be a member of the Board.
(b) Disability.
In the
event of any illness (mental or physical) or accident which renders the Employee
unable to perform his duties and responsibilities, the Company shall, during
the
first 3 months of any such illness or after such accident, as the case may
be,
continue to pay the Employee's base salary hereunder; and thereafter, during
any
such period in excess of 3 months the Company shall supplement any disability
benefits which the Employee is entitled to receive under the Company's
disability plans then in effect, for a period of up to 9 additional months,
in
an amount such that, together with any amounts the Employee is entitled to
receive under such plans, the Employee shall receive an aggregate amount equal
to his base salary during such period.
(c). Change
of Control.
Upon a
Change of Control, all stock options held by the Employee shall vest and become
immediately exercisable in full.
9.
Non-competition.
During
the term of this Agreement and thereafter the Employee will not directly or
indirectly, participant in any business that utilizes the Company's proprietary
information, know-how or trade secrets in any field of activity, including
specifically those fields that are competitive with the business of the Company,
nor will the Employee interfere with the contractual relations between the
Company and any of its employees or partners. The provisions of this Section
shall not prohibit the ownership of stock in any entity whose stock is publicly
traded or 5% or less of the outstanding stock of any entity whose stock is
not
publicly traded.
10.
Ownership
of Developments.
The
Employee agrees that any work or research, or the result thereof including
without limitation, inventions, processes, formula, data, information, programs,
systems, software or know-how (hereinafter collectively "Proprietary
Information") made, conceived or developed by Employee, alone or in connection
with others, prior to or during the term of his employment under this Agreement,
whether during or out of the usual hours of employment, which are related to
the
business, research and development work within the Company's Field of Operation
are the sole and exclusive property of the Company. The Employee agrees that
he
will fully assign the foregoing to Company. The Employee further agrees to
disclose all Proprietary Information completely and in writing to the Board.
To
the extent of the Employee's interest therein, all papers and records of every
kind, relating to Proprietary Information included within the terms of this
Agreement, which shall at any time come into the possession of the Employee
shall be the sole and exclusive property of the Company and shall be surrendered
to the Company upon termination of the Employee's employment by the Company
or
upon the Company's request at any time either during or after the termination
of
such employment.
11.
Confidential
Information.
Employee covenants and agrees with the Company that Employee will not during
or
after the term of employment disclose to anyone (except to the extent reasonably
necessary for Employee to perform his duties hereunder) any Proprietary
Information or other confidential information concerning the business or affairs
of the Company or of any of its affiliates or subsidiaries or any of their
customers which Employee may have acquired in the course of or as incident
to
Employee's employment or prior dealings with the Company or with any of its
affiliates, including without limitation, customers lists, or business trade
secrets of, or methods or techniques used by Employee or any of its affiliates
in or about their respective business. Nothing contained in this paragraph
shall
impair or restrict the right of Employee to use or disclose any information
already in the public domain.
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12.
Termination.
Notwithstanding the provisions of Section 2 of this Agreement, the Company
shall
have the right to terminate the employment of the Employee for Cause or as
a
result of his death or Permanent Disability, and the Employee shall have the
right to terminate his employment as the result of a Constructive Discharge,
in
each case without violation of the terms of this Agreement.
In
no
event shall the Company terminate this Agreement without Cause, unless the
Employee shall have been granted a prior meeting with, and an opportunity to
be
heard by, the Board, and a majority of the members of the Board shall have
determined that the Employee has (i) failed to fulfill his duties to the Company
in a satisfactory manner or (ii) engaged in conduct detrimental to the
Company.
13.
Certain
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
indicated:
"Cause"
means (i) the deliberate dishonesty of the Employee with respect to the Company
or any subsidiary or affiliate thereof; (ii) conviction of the Employee of
a felony punishable by imprisonment for more than one year or a fine of $100,000
or more; or (iii) the willful failure of Employee to perform the material
lawful duties assigned to him under this Agreement as determined by the Board,
which failure the Employee shall not have substantially remedied within 30
days
after receiving written notice from the Company describing such failure in
reasonable detail.
"Change
of Control" means (i) the sale, lease, transfer or other disposition by the
Company of all or substantially all of its assets in a single transaction or
a
series of related transactions; (ii) the merger or consolidation of the Company
with another entity in which the stockholders of the Company immediately prior
to such merger or consolidation hold less than 50% of the outstanding voting
stock of the surviving or resulting corporation immediately following such
transaction; or (iii) the sale or exchange (to or with any person or entity
other than the Company) by the stockholders of the Company of more than 50%
of
the outstanding voting stock of the Company in a single transaction or series
of
related transactions.
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"Company's
Field of Operation" means all therapeutic and/or anti-microbial products,
including without limitation iodine-based products, and any additional products
or services developed, marketed, distributed, planned, sold or otherwise
provided by the Company from time to time prior to or during the term of this
Agreement.
"Constructive
Discharge" means the termination of employment by the Employee on the grounds
that (a) there has been a decrease in the total annual compensation
payable by the Company to the Employee, other than as a result of a material
decrease in compensation payable to the Employee and to all other employees
of
similar rank and stature of the Company on the basis of the financial
performance of the Company, provided,
however,
that
nothing contained herein shall be construed as giving the Company the right
to
decrease the Employee's base salary specified in Section 3 hereof, (b) there
has
been a Change of Control within the past twelve (12) months, or (c) the
relocation of the Company's business to a site more than twenty-five (25) miles
from the Employee's residence.
"Permanent
Disability" means illness (mental or physical) or accident which renders the
Employee unable to perform his duties and responsibilities for a period of
six
consecutive months or six months in any twelve-month period, and which is
confirmed to the Board as continuing at the end of such period by expert medical
opinion. Nothing contained in this Agreement shall affect the right of the
Employee to receive long-term disability benefits under any long-term disability
insurance plan(s) of the Company then in effect.
14.
Miscellaneous.
(a) Notices.
Any
notice hereunder shall be effective if delivered personally, by registered
or
certified mail, return receipt requested, by overnight or special courier with
a
signed receipt, or by facsimile where confirmation of receipt may be verified,
at the addresses set forth in the preamble to this Agreement or to any other
properly noticed address given by the parties to each other.
(b) Governing
Law.
This
Agreement shall be construed and governed by the law of the Commonwealth of
Massachusetts.
(c) Amendments.
This
Agreement may not be modified or amended orally. All amendments shall be in
writing and signed by the Company and Employee.
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(d) Assignments.
This
Agreement may not be assigned in whole or in part by the Employee. This
Agreement may be assigned by the Company to any entity acquiring or succeeding
to control of ownership of the Company or substantially all of the assets of
the
Company. This Agreement shall be binding upon and inure to the benefit of the
parties and to their permitted successors and assigns.
(e) Entire
Agreement.
This
Agreement constitutes the entire understanding of the parties with respect
to
its subject matter and supersedes any other agreements between the parties
with
respect to such subject matter.
(f) Enforceability.
If any
portion or provision of this Agreement shall to any extent be declared illegal
or unenforceable by a court of competent jurisdiction, then the remainder of
this Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provisions of this Agreement
shall
be valid and enforceable to the fullest extent permitted by law.
(g) Waiver.
No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
(h) Arbitration.
Any
controversy or claim which arises out of or relating to this Agreement, or
the
breach thereof (other than
controversies or claims with regard to Sections 9, 10 or 11 of this Agreement),
shall be settled by arbitration in accordance with the Rules of the American
Arbitration Association then in effect. The controversy or claim shall be
submitted to three arbitrators, one of whom shall be chosen by the Employee,
one
of whom shall be chosen by the Company, and one of whom shall be chosen by
the
two so selected. The party desiring arbitration shall give written notice to
the
other party of its desire to arbitrate the particular matter in question, naming
the arbitrator selected by it. If the other party shall fail within a period
of
15 days after such notice shall have been given to reply in writing naming
the
arbitrator chosen as above provided, or if the two arbitrators selected by
the
parties shall fail within 15 days after their selection to agree upon the third
arbitrator, then either party may apply to the American Arbitration Association
for the appointment of an arbitrator to fill the place so remaining vacant.
The
decision of any two of the arbitrators shall be final and binding upon the
parties hereto. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
The
proceedings shall be held in Boston, Massachusetts. The arbitrators shall have
no power to award punitive or exemplary damages or to ignore or vary the terms
of this Agreement, and shall be bound to apply controlling law. Arbitration
shall be binding and the remedy for the settlement of the controversy or claims
(except as set forth in the preceding paragraph of this Section).
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(i) Certain
Remedies.
The
restrictions contained in Sections 9, 10 and 11 of this Agreement are necessary
for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. Without limiting
the remedies available to the Company, the Employee acknowledges that a breach
of any of the covenants contained in any of such Sections 9, 10 and 11 would
result in irreparable injury to the Company for which there might be no adequate
remedy at law, and that, in the event of such a breach or threat thereof, the
Company shall be entitled to obtain a temporary restraining order and/or such
other equitable relief as may be required to enforce specifically any of the
covenants of such Sections 9, 10 and 11. The provisions of such Sections 9,
10
and 11 shall survive the termination of this Agreement and shall continue
thereafter indefinitely in full force and effect in accordance with their
respective terms.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the
date and year first above written.
SYMBOLLON
PHARMACEUTICALS, INC.
By:
_/c/ Xxxx X. Kessler__________________________
Xxxx
X.
Xxxxxxx
Chairman
of the Board
Xxxx
X. Desjourdy_______________________________
Xxxx
X.
Xxxxxxxxx
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|
Exhibit
A
|
||
|
Option
Grant
|
||
|
Number
of Shares
|
Exercise Price
|
Vesting
Date
|
|
200,000
|
Fair
Market Value*
|
First
Anniversary
|
|
200,000
|
Fair
Market Value*
|
Second
Anniversary
|
|
200,000
|
Fair
Market Value*
|
Third
Anniversary
|
|
600,000
|
*
Fair
Market Value of the Class A Common Stock, as determined under the
Company=s
1993
Employee Stock Option
