EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
April 4, 2003, by and between KRONOGEN SCIENCES INC., a Delaware corporation
with its principal executive office located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000 (the "Company"), and XX. XXXXXXX X. XXXXXXXX (the "Executive")
(collectively, the "Parties").
WHEREAS, the Company and the Executive are parties to an Asset Transfer
Agreement dated as of April 4, 2003 (the "Transfer Agreement") pursuant to which
the Company is acquiring certain assets owned by the Executive and The Giampapa
Institute for Anti-Aging Medical Therapy and it is a condition to the
consummation of such Transfer Agreement that the Executive and Company enter
into this Agreement; and
WHEREAS, the Company desires to employ Executive, and Executive desires
to be employed by the Company, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. EMPLOYMENT.
1.1 Employment and Term. The Company hereby agrees to employ
Executive, and Executive hereby agrees to serve the Company, on the terms and
conditions set forth herein for the period commencing on the date hereof and
expiring on the third anniversary thereof (the "Term"), unless sooner terminated
as hereinafter set forth.
1.2 Duties of Executive. Executive shall serve as Chief Scientific
Officer of the Company and, in the event the Company establishes a research
institute (the "Research Institute") and/or a scientific advisory board (the
"Scientific Advisory Board") during the Term, the Executive shall serve as
President of the Research Institute and/or Chairman of the Board of the
Scientific Advisory Board, as the case may be. During the Term, Executive shall
diligently perform such services as may be reasonably assigned to him by the
Board of Directors of the Company. Executive shall devote no less than twenty
hours per week to the business and affairs of the Company, render such services
to the best of his ability and use his best efforts to promote the interests of
the Company. Subject to the terms hereof, Executive may devote such reasonable
amount of personal time as he determines to (i) operating his plastic surgery
medical practice, (ii) serving, with the approval of the Board of Directors, as
a director, trustee or member of any board or committee of any other
organization; or (iii) engaging in charitable and community activities;
provided, however, that such activities may not involve any conflict of interest
with the interests of the Company or interfere materially with the performance
of his duties and responsibilities under this Agreement.
1.3 Certain Covenants Regarding Executive's Medical Practice. During
the Term, in the event that Executive, in connection with his medical practice,
refers or prescribes any of the products owned or marketed by the Company for
use on or by any of his patients or directs any of his medical practice
associates or employees to do so, he must comply with the applicable
restrictions or other requirements under the laws of the State of New Jersey,
including but not limited to, the following: Executive, in his medical practice,
may offer to and provide to a patient medications, including a prescription drug
or an over-the-counter preparation or vitamin or food supplement, at the net
discounted cost of providing these goods plus an administrative fee not to
exceed 10 percent of the cost of the item. Executive shall xxxx patients
directly, in his name, or the name of the practice, for the cost of the Company
products. No third party payer, public or private, shall be billed for these
products.
2. COMPENSATION.
2.1 Base Salary. During the Term, the Company shall pay Executive as
compensation for all services rendered hereunder an annual base salary ("Base
Salary") at the rate of $150,000 per year payable in accordance with the
Company's normal payroll practices. During the Term, the annual Base Salary may
be adjusted from time to time upon a majority vote of the Company's Board of
Directors.
2.2 Bonus. Executive shall be eligible to receive an annual bonus on
such terms, at such time and in such amount as the Board of Directors of the
Company may determine in its sole discretion.
2.3 General Requirement. Notwithstanding anything to the contrary
herein contained, Executive's compensation shall not at any time be related in
any way to the volume of patients who use KRONOGEN SCIENCES products or the
value of the products used.
3. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
3.1 Expense Reimbursement. During the Term, the Company, upon the
submission of appropriate supporting documentation by Executive, shall promptly
reimburse Executive for all reasonable expenses actually paid or incurred by
Executive in the course of and pursuant to the business of the Company.
3.2 Vacation. During the Term, Executive shall be entitled to 4 weeks'
paid vacation per year, provided that no vacation period may exceed 10
consecutive business days.
3.3 Other Benefits. During the Term, Executive shall be entitled to
participate and shall be included in any savings, 401(k), pension, profit
sharing, group medical, group disability or similar plan generally provided to
other senior executives of the Company, subject to any eligibility requirements
applicable thereto.
3.4 Key Man Insurance. During the continuance of the Executive's
employment hereunder, the Company shall have the right, but not the obligation,
to maintain key man life insurance in its own name covering the Executive's life
in such amount as shall be determined by the Company, for a term ending on the
termination or expiration of this Agreement. The Executive shall aid in the
procuring of such insurance by submitting to the required medical examinations,
if any, and by filling out, executing and delivering such applications and other
instrument in writing as may be reasonably required by an insurance company or
companies to which application or applications for insurance may be made by or
for the Company.
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3.5 Indemnification. The Company will indemnify and hold harmless the
Executive (and his legal representatives or other successors) to the fullest
extent permitted (including payment of expenses in advance of final disposition
of the proceeding) by applicable law as in effect at the time of the subject act
or omission, or the certificate of incorporation and bylaws of the Company in
effect at such time or on the date of this Agreement, whichever affords or
afforded greater protection to the Executive.
3.6 Directors and Officers Insurance. The Company shall endeavor to
obtain and maintain directors' and officers' liability insurance with coverage
reasonably consistent with the coverage in respect of similarly situated
companies (both as to size of company and business), provided that the Company
shall be under no obligation to obtain or maintain such insurance if in the
opinion of the Company's Board of Directors, the Company cannot afford the cost
of such insurance based on working capital, cash flow or other considerations
deemed relevant by the Board.
4. TERMINATION.
4.1 Termination for Cause. Notwithstanding anything contained to the
contrary in this Agreement, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, "Cause" shall only mean (i) any willful action
or omission of Executive which constitutes a material breach of this Agreement
(other than Section 5 of this Agreement) which is not cured within ten business
days after receipt by Executive of notice of same; (ii) a breach of Section 5 of
this Agreement; (iii) theft, fraud, embezzlement or misappropriation of the
Company's assets or properties by Executive or any action by Executive of a
nature that disparages or otherwise xxxxx the Company or its business or public
relations; or (iv) the conviction of Executive for any criminal act which is a
felony. Upon any termination pursuant to this Section 4.1, the Company shall
have no further liability to Executive hereunder other than for the payment of
the unpaid portion of his Base Salary and reimbursement of expenses duly
incurred through the date of termination.
4.2 Disability. Notwithstanding anything contained in this Agreement
to the contrary, the Company, by written notice to Executive, shall at all times
have the right to terminate this Agreement, and Executive's employment
hereunder, if Executive shall, as the result of mental or physical incapacity,
illness or disability, fail or be unable to perform his duties and
responsibilities provided for herein for a period of more than 120 days in any
12 month period (a "Permanent Disability"). Upon any termination pursuant to
this Section 4.2, the Company shall have no further liability to Executive
hereunder other than (i) payment to Executive of his Base Salary earned as of
the date of termination and (ii) reimbursement of expenses duly incurred through
the date of termination.
4.3 Death. In the event of the death of Executive during the Term, the
Company shall have no further liability to Executive's estate hereunder other
than (i) payment of Base Salary earned as of the date of death, and (ii)
reimbursement of expenses duly incurred through the date of death.
4.4 Termination Without Cause. Notwithstanding anything contained
herein to the contrary, at any time the Company shall have the right to
terminate Executive's employment hereunder without Cause by written notice to
Executive. Upon any termination pursuant to this Section 4.4, the Company shall
pay Executive (i) his Base Salary (at the annual rate in effect on the date of
termination) through the end of the original three-year Term, and (ii) expenses
duly incurred through the date of termination. Payments under clauses (i) and
(ii) of the preceding sentence shall be made in monthly installments, beginning
not later than the thirtieth day following the date of termination. In addition,
the Company shall continue to provide Executive the benefits provided to other
senior executives of the Company through the end of the Term. The Company shall
be deemed to have terminated Executive's employment pursuant to this Section 4.4
if such employment is terminated by Executive voluntarily as a result of the
occurrence of any of the following events which is not consented to in writing
by Executive prior to its occurrence or which is not cured by the Company within
30 days after its receipt of written notice of Executive's objection to the
occurrence: (a) Executive is assigned to any position, duties or
responsibilities that are significantly diminished from those contemplated by
this Agreement; (b) Executive is requested to engage in conduct that is
reasonably likely to result in a violation of law or (c) any material reduction
in Executive's rate of compensation or in the benefits set forth in this
Agreement (collectively "Good Reason").
4.5 Notice. Executive agrees to give the Company 60 days' prior
written notice of voluntary termination. Any termination under this Agreement
shall be communicated by the terminating party to the other party in writing,
specifying the termination provision in this Agreement relied upon and setting
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination.
4.6 Procedure Upon Termination. On termination of employment,
regardless of the reason, Executive shall promptly return to the Company all
documents (including copies) and other property of the Company, including
without limitation, client, customer and supplier lists, manuals, letters,
materials, reports and records in his possession or control.
5. NON-COMPETITION AND NON-DISCLOSURE COVENANTS.
5.1 Disclosure of Discoveries. During the Term, Executive shall fully
disclose to the Company (a) as Confidential Information (as hereinafter defined)
of the Company, all Specific Work Product (defined below) and (b) as
Confidential Information of Executive, all other Work Product (defined below).
5.2 Rights in Improvements. All rights (including without limitation,
Intellectual Property Rights (defined below)), title, and interest in and to
Improvements (defined below) lie, upon creation, exclusively with the Company
and Executive reserves no rights in any Improvements. To the extent that some or
all rights (including without limitation, Intellectual Property Rights), title,
and interest in and to the Improvements do not lie, upon creation, exclusively
with the Company, Executive irrevocably sells, assigns, transfers, and sets
over, upon creation, exclusively to the Company all rights (including without
limitation, Intellectual Property Rights), title, and interest in and to such
Improvements, and Executive reserves no rights in any such Improvements. If
Executive has any such rights that cannot be assigned to the Company in
accordance with this Section 5.2, then Executive grants to the Company an
exclusive (even as to Executive), royalty-free, perpetual, irrevocable,
transferable (including without limitation, sublicensing), unlimited license,
throughout the universe, in all media, now existing or created in the future,
for all versions and elements, and in all languages, to use, copy, distribute,
create derivative works of, publicly perform, publicly display, digitally
perform, make, have made, offer for sale and import, and sell, such Improvements
for the entire duration of such rights. If Executive has any such rights that
cannot be assigned or licensed to the Company in accordance with this Section
5.2, then Executive waives the enforcement of such rights. Executive shall, at
the Company's expense, cooperate and take all steps reasonably requested by the
Company to perfect, confirm, and protect the Company's rights (including without
limitation, Intellectual Property Rights), title, and interest in and to the
Improvements including without limitation, executing and delivering all
documents, filing registration and assignment documents, and giving testimony.
5.3 Rights in Specific Work Product. Executive shall, for the one year
period following the disclosure in accordance with this Section 5 of a Specific
Work Product (the "Exclusive Period"), grant rights to such Specific Work
Product equal to the rights provided for Improvements by this Section 5 to the
Company on such terms as the parties may mutually agree and, for the one year
period commencing immediately upon expiration of the Exclusive Period, grant to
the Company a right of first refusal to acquire rights in such Specific Work
Product on terms no less favorable than is offered to the Executive by a bona
fide third party.
5.4 Certain Definitions
5.4.1 "Improvement" means any Specific Work Product (defined
below) that (a) the unlicensed making, having made, use, offering to
sell, selling, importing, exporting, selling for export, distribution,
copying, making of derivative works, display, performance or disclosure
of which would infringe one or more of the Transferred Rights; (b)
performs the same function as a product or service that is subject to
any of the Transferred Rights; (c) is useful or necessary to the
Company's exercise of its rights under the Transferred Rights; or (d)
uses, incorporates, is derived from, or is based on Transferred Rights
or that could not be conceived, developed, or reduced to practice but
for the use of the Transferred Rights.
5.4.2 "Intellectual Property Rights" means all intellectual
property rights and industrial property rights (throughout the
universe, in all media, now existing or created in the future, for all
versions and elements, in all languages, and for the entire duration of
such rights) arising under statutory or common law, contract, or
otherwise, and whether or not registered or otherwise perfected,
including without limitation, all (a) patents, reissues of and
reexamined patents, and patent applications, whenever filed and
wherever issued, including without limitation, continuations,
continuations-in-part, substitutes, and divisions of such applications
and all priority rights resulting from such applications; (b) rights
associated with works of authorship including without limitation
copyrights, moral rights, copyright applications, copyright
registrations, synchronization rights, mask work rights, mask work
applications, and mask work registrations; (c) rights associated with
trademarks, service marks, trade names, logos, trade dress, Internet
domain names, Internet and World Wide Web uniform resource locators and
addresses and the applications for registration and registrations of
such items; (d) rights relating to the protection of trade secrets and
confidential information; (e) rights analogous to those set forth in
this Section 5.4.2 and all other proprietary rights relating to
intangible property; (f) divisions, continuations, renewals, reissues
and extensions of the foregoing (as and to the extent applicable) now
existing, or later filed, issued, or acquired; and (g) causes of action
for infringement of any of such rights that occurred prior to the date
hereof.
5.4.3 "Specific Work Product" means any Work Product (defined
below) relating to any Transferred Rights (defined below).
5.4.4 "Transferred Rights" means Intellectual Property Rights
transferred or licensed to the Company under or in connection with the
Transfer Agreement including without limitation, rights licensed
pursuant to the agreement between the Company and Executive entitled
Exclusive License and dated the date hereof.
5.4.5 "Work Product" means any discovery, idea, design,
invention, work of authorship, or trademark, service xxxx, trade name,
trade dress, or other indicia of origin, related to the Company's
business, whether or not patentable and whether or not completed or
reduced to practice, that is conceived, developed or made by Executive,
alone or jointly with others during the Term, and any component of any
such thing.
5.5 Non-Competition. From the date hereof through (i) the first
anniversary date of any termination of Executive's employment with the Company
by the Company without Cause or by Executive for Good Reason or (ii) the second
anniversary date of any termination with Cause of Executive's employment with
the Company or of Executive's resignation, Executive agrees not to engage in,
have an interest in or render any services to, directly or indirectly (as an
officer, director, stockholder, partner, associate, employee, consultant, owner,
agent, creditor, co-venturer or otherwise), any business which (i) is engaged in
the anti-aging/age management and medical practice management businesses or (ii)
offers products or services similar to or competitive with products and services
offered by the Company in the markets and territories in which the Company's
products and services are offered during the Term, whether as executive,
partner, director, employee, agent, consultant, shareholder, owner, manager,
operator, licensor, licensee, joint venturer or otherwise; provided that
Executive may hold less than 1% of the outstanding shares in any business listed
on a national securities exchange or authorized for quotation on an inter-dealer
quotation system of a regulated national securities association.
Executive shall not, during the Term and for a period of two years
thereafter, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities.
For purposes of clarification, but not of limitation, Executive hereby
acknowledges and agrees that the provisions of this Section 5.5 shall serve as a
prohibition against him from, during the period referred to herein, directly or
indirectly, hiring, offering to hire, enticing, soliciting or in any other
manner persuading or attempting to persuade any officer, employee, agent,
lessor, lessee, licensor, licensee, client or customer of the Company, to
discontinue or alter his, her or its relationship with the Company.
5.6 Non-Disclosure. During the Term and thereafter, Executive agrees
to (i) hold all Confidential Information in trust and confidence for the Company
and shall not use or disclose any such information to any person under any
circumstances and (ii) be liable for damages incurred by the Company as a result
of disclosure of any such information by Executive (without the prior written
consent of the Company) for any purpose at any time after the date hereof.
Notwithstanding the foregoing, Executive may disclose any such information to
the extent such disclosure is compelled by a subpoena issued under applicable
law or to the extent such information becomes publicly available other than by
unauthorized disclosure by Executive. As used herein the term "Confidential
Information" shall mean, with respect to the Company, any and all information
(oral and written), other than such information which can be shown to be in the
public domain (such information not being deemed to be in the public domain
merely because it is embraced by more general information which is in the public
domain) other than as a result of a breach of the provisions of this Section
5.6, including, but not limited to, business secrets, techniques and know-how,
and information relating to clients, customers and prospects, suppliers,
pricing, costs, marketing, and selling and servicing.
5.7 Irreparable Harm. Executive agrees that all of the restrictive
covenants set forth in Section 5 herein are reasonable in both scope and
duration. Executive acknowledges that monetary damages for a breach of these
restrictive covenants are inadequate and that breach would irreparably harm the
Company. Executive, therefore, further agrees that the Company may enforce these
restrictive covenants by obtaining an immediate injunction in a court of law or
equity without the necessity of showing any actual damages and without the
necessity of posting any bond. This right to injunctive relief is cumulative and
in addition to all other remedies available to the Company by reason of any
breach. In the event that any provision of these restrictive covenants is held,
in whole or in part, to be invalid or unenforceable by reason of its scope
and/or duration, such invalidity or unenforceability shall be limited to such
provision and shall not affect any other portion of these restrictive covenants
and the restrictive covenants shall be construed as if their scope of duration
had been more narrowly drawn so as to be valid and enforceable.
5.8 Consideration. Executive expressly acknowledges that the covenants
set forth in this Section 5 are a material part of the consideration bargained
for by the Company and without the agreement of Executive to be bound by such
covenants, the Company would not have agreed to enter into this Agreement.
6. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey applicable to contracts entered into and
wholly performed in the State of New Jersey.
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7. NOTICES.
In order to be effective, any notice or other communication required or
permitted hereunder must be in writing and must be transmitted by personal
delivery, reputable overnight courier service, certified mail (postage pre-paid,
receipt requested) or telecopy, as follows:
If to the Company: Kronogen Sciences Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
Facsimile: (000) 000-0000
with a copy to: Blank Rome LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to Executive: Xxxxxxx X. Xxxxxxxx, M.D.
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to: ____________________________________
____________________________________
____________________________________
____________________________________
Attention:
or at such other address as the party shall designate in a written notice to the
other parties hereto, given in accordance with this Section 7. All notices and
other communications shall be effective (i) if delivered in person, when
delivered; (ii) if sent by overnight courier, the next business day following
the delivery thereof to such courier (or such later date as is demonstrated by a
bona fide receipt therefor); (iii) if sent by certified mail, three days after
deposit in the mail; or (iv) if sent by telecopier with receipt acknowledged,
when sent.
8. BENEFITS; BINDING EFFECT.
This Agreement shall be for the benefit of and binding upon the Parties
hereto and their respective heirs, personal representatives, legal
representatives, successors and, where applicable, assigns. Notwithstanding the
foregoing, neither Party may assign its rights or benefits hereunder without the
prior written consent of the other Party hereto.
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9. SEVERABILITY.
If any provision of this Agreement is held to be unenforceable for any
reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
fullest extent possible.
10. AMENDMENT; WAIVER.
This Agreement shall not be amended, modified or supplemented, except
in writing signed by both parties. The waiver by either Party hereto of a breach
or violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
11. NO THIRD-PARTY BENEFICIARY.
Nothing expressed or implied in this Agreement is intended, or shall be
construed, to confer upon or give any person (other than the parties hereto and,
in the case of Executive, his heirs, personal representatives and/or legal
representative) any rights or remedies under or by reason of this Agreement.
12. SURVIVAL.
Notwithstanding the termination of this Agreement by Company for Cause,
for disability or otherwise under this Agreement, Executive's obligations under
Section 5 hereof shall survive and remain in full force and effect for the
periods therein provided, and the provisions for equitable relief against the
Executive in Section 5 hereof shall continue in force.
13. ENTIRE AGREEMENT.
This Agreement together with the Transfer Agreement and any other
agreements entered into between the Parties pursuant to any provision thereof
constitute and contain the entire agreement of the Parties and supersedes any
and all prior negotiations, correspondence, understandings and agreements
between the parties respecting the subject matter hereof.
14. COUNTERPARTS.
This Agreement may be executed in original or facsimile counterparts,
each of which shall be deemed an original, but both of which when taken together
shall constitute one and the same instrument.
15. COUNSEL.
The parties to this Agreement do further state that they have been
represented by counsel of their own choice in arriving at this Agreement and
that this Agreement represents the product of their negotiations.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first above written.
KRONOGEN SCIENCES INC.
By /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xx. Xxxxxxx Xxxxxxxx
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