EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This agreement ("Agreement") dated as of the 1st day of January, 1996,
between Columbia Laboratories Inc. ("Columbia") a corporation organized and
existing under and by virtue of the laws of the State of Delaware, having its
principal place of business at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000
(hereinafter referred to as the "Company"), and Xxxxxxx X. Xxxxxxx, who resides
at 00 Xxxxx xx Xxxxxxx Xxxxxxx, Xxxxx, 00000, Xxxxxx (hereinafter referred to as
"Employee").
W I T N E S E T H:
WHEREAS, the Company is and will be engaged in the development, testing,
registration, manufacturing, licensing, marketing, and selling of pharmaceutical
products; and
WHEREAS, the employee, by reason of his knowledge, skill and ability is
uniquely qualified to aid the Company in the development, testing, registration,
manufacturing, licensing, marketing, and selling of pharmaceutical products; and
WHEREAS, the Company is desirous of employing the Employee to provide
assistance to the Company in the development, testing, registration,
manufacturing, licensing, marketing, and selling of pharmaceutical products and
the Employee is desirous of being employed by the Company to assist it in the
development, testing, registration, manufacturing, licensing, marketing, and
selling of pharmaceutical products; and
WHEREAS, the Company and Employee desire to enter into this Agreement so
that the rights, duties, benefits and obligations of each in respect of the
employment of the Employee for and by the Company will be fully set forth under
the terms and conditions stated herein upon the execution hereof; and
WHEREAS, the Compensation and Stock Option Committee of the Board of
Directors of the Company have approved the employment of the Employee upon the
terms and conditions set forth herein by a resolution issued by it, and have
authorized the execution and delivery of this Agreement.
NOW, therefore, in consideration of the mutual promises contained herein,
the payment of Ten ($10.00) dollars by each party to the other, the receipt of
which is hereby duly acknowledged, and for other good and valuable
consideration, the Company and Employee agree as follows:
1. EMPLOYMENT
The Company hereby employs the Employee in an executive capacity,
specifically as "Chairman of the Board of Directors." The Employee hereby
accepts such employment and agrees to perform the services and duties specified
herein.
2. TERM
(a) The term of this Agreement ("Term") shall be for a period of Five
(5) years from the date hereof, unless sooner terminated in accordance with the
terms and conditions set forth herein.
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(b) Upon the mutual agreement of the Employee and the Company, the Term
may be extended for an additional period of years, either upon the terms and
conditions set forth herein, or upon any other terms and conditions as may be
mutually agreed in writing between the Employee and the Company. The foregoing
notwithstanding, this Agreement shall terminate as provided for in Article 2(a),
and there shall not be any automatic renewal or other similar extension of the
Term.
3. DISABILITY
If, during the Term, the Employee shall become unable to perform his
duties as provided for herein by reason of illness or injury, for a consecutive
period of Three Hundred Sixty Five (365) days, the Company may, on Thirty (30)
days written notice to the Employee, terminate the officership held by Employee.
In the event of such termination, then Employee shall remain an employee of the
Company and receive Seventy (70%) percent of his compensation and all of his
fringe benefits as is set forth below in this Agreement at paragraphs "6" and
"8" respectively.
4. TERMINATION FOR CAUSE
This Agreement may be immediately terminated by the Company for "cause"
at any time, upon written notice to the Employee, after which all obligations of
the Company to the Employee shall thereupon cease. For the purposes of this
Agreement, the term "cause" when used with reference to the termination of this
Agreement, shall mean only any or all of the following:
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(a) Employee's absence from his employment, for any reason other than
sickness or injury, at substantially all times during a period of Ninety (90)
consecutive days;
(b) Failure on the part of the Employee to (i) follow material
instructions or policy of the Board of Directors given or adopted in good faith,
or (ii) carry out an agreed policy or course of action as determined by (a) the
Board of Directors or (b) a committee of the Board of Directors, any or all of
which is or may be to the detriment of the Company; or
(c) Willful misconduct or gross negligence of the Employee in connection
with the performance of his duties.
5. DUTIES
(a) The Employee shall perform the following duties in connection with
his employment, all of which shall be subject to the paramount directions of the
Board of Directors:
(i) To serve as "Chairman of the Board of Directors"; and
(ii) To assist the Company in its business affairs and scientific
dealings relating to the development, testing, registration, manufacturing,
licensing, marketing, and selling of pharmaceutical products, as well as in the
Company's dealings with other companies, its regulatory affairs, banking and
other financial institutions and other groups and institutions; and
(iii) To undertake such specific assignments, consistent with his
office and position, as may be given to him from time to time by the Board of
Directors; and
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(iv) To continue to serve as a director of the Company, and then
as, if and when so re-elected to continue to serve as a director of the Company,
and also if so elected, to serve as a director of any subsidiary or affiliate of
the Company.
(b) Employee shall devote his best efforts and skills to the affairs of
the Company, and to the performance of the duties set forth in this Article 5,
on a substantially full-time basis. The Employee shall not participate in any
outside business activity that will either (i) interfere with, or (ii) be a
conflict of interest with the performance of the Employee's duties, activities
and employment pursuant to this Agreement. The foregoing notwithstanding, the
Employee has disclosed to the Company his other outside business interests
("Outside Business Interests") which are listed on Schedule "1" hereto and the
Company with this full knowledge has consented to the Employee's continuance
thereof. Moreover, the Company agrees to permit the Employee to involve himself
in other similar Outside Business Interests, on condition that they similarly be
disclosed and are added to Schedule "1" prior to their being commenced. The
Employee may also invest his assets and devote such reasonable time as is
necessary to do so, so as to manage, protect and support the profitability of
those invested assets.
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6. COMPENSATION
(a) BASE SALARY
The Employee shall receive for the discharge of his duties and
activities on behalf of the Company as provided for herein, an annual salary
("Base Salary") of Two Hundred fifty Thousand ($250,000.00) dollars, which shall
be paid by the Company to the Employee in equal and regular installments not
less frequently than monthly, in accordance with the Company's policy for
payment of executive salaries.
(a) BONUS
The Employee shall receive those benefits accorded to executive
employees pursuant to the Company's Incentive Compensation Plan now in effect,
or from any subsequent similar plan as shall be made available to senior
executives of the Company.
(b) COMPENSATION OPTIONS
The Employee may receive compensation options to purchase $.01 par
value per share common stock of the Company ("Common"), together with those
compensation options granted to other senior management, if it is determined to
be warranted by the Board of Directors.
7. OPTIONS
The Employee from time to time shall be granted as additional
compensation stock options ("Options's") to purchase shares of the Company's
Common ("Grant"). The Grant of the Options's shall
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be made pursuant to the Company's 1988 Stock Option Plan, as may be amended from
time to time ("Plan"). The Company shall enter into an option agreement for the
issuance of the Options's, which option agreement shall be subject to the terms
and conditions contained in the Plan. Notwithstanding the foregoing, the
Employee on August 1, 1996 shall be granted 150,000 Options's ("Signing
Options"). All Options's received by Employee will be exercisable at a price
equal to the fair market value of the Company's Common on the date of the Grant.
The Signing Options shall be issued as of August 1, 1996, vest in the Employee
on the first anniversary of their issuance and be exercisable only to the extent
of Twenty (20%) percent of the 150,000 Signing Options per ANNUM, beginning on
the first anniversary of their issuance, and then on each of the next Four (4)
successive annual anniversaries thereof. Any Signing Options not exercised in
their earliest eligible year shall be exercisable at any time thereafter until
the Tenth (10th) anniversary of the issuance of the Signing Options, at which
time any unexercised Signing Option shall expire.
8. FRINGE BENEFITS
In addition to the Base Compensation set forth in Article 6 above, the
Employee shall be entitled to receive the following benefits:
(a) Any benefits under group hospitalization, health, dental care or
sick leave plan, life or other insurance or death benefit plan, travel or
accident insurance, or contingent compensation plan, or any other present or
future plan, including any qualified retirement plan, for which any executives
are or shall become
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eligible. In the event the Employee is not eligible for health benifits as
described above, by reason of age, location or otherwise, the Employee shall be
provided equivalent benefits determined at the election of the Company. Employee
shall be eligible to receive the foregoing benefits during the five (5) years
period following the termination of his employment under this Agreement; and
(b) An annual vacation of either or a combination of (i) up to Four (4)
consecutive weeks or (ii) up to any Thirty (30) days ("Vacation Period"), at
such time or times as shall be approved by the Company, and which approval shall
not be unreasonably refused. Full compensation shall be paid during any Vacation
Period. Any portion of any Vacation Period not used within any year shall be
accrued and will accumulate, and may be used by the Employee at any time during
his employment in accordance with the provisions of this Article 8. In the event
that the Employee has not used all of his accrued and accumulated vacation time
at the termination of his employment, then the employee may then elect to have
his accrued and accumulated Vacation Period time converted to annual Base
Salary, pro rata at the then prevailing Base Salary, regardless of when the
unused vacation time accrued; and
(c) The Employee may incur and shall be reimbursed for reasonable
expenses which are related to the Company's business, including expenses for
entertainment, travel and similar items ("Approved Reimbursable Expenses"). All
such reimbursement of Approved Reimbursable Expenses shall be made within Thirty
(30) days of receipt by the Company from the Employee of an itemized account and
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if necessary proper substantiation of Approved Reimbursable Expenses. In order
to facilitate the payment of the Approved Reimbursable Expenses, the Company
shall furnish the Employee with Company acquired credit cards as may be
available to all other executive officers of the Company; and
(d) The Employee shall be given a private office with secretarial help
and any and all reasonable facilities and services so as to be suitable with his
position as Chairman of the Board and so as to assist in the performance of his
duties and activities.
(e) The Employee shall be given an automobile allowance or automobile
lease plan, to be used to defray acquisition expense for a luxury automobile,
and insurance and maintenance expenses for the automobile.
9. DISCLOSURE OF INFORMATION AND NON-COMPETITION
(a) The Employee recognizes and acknowledges that during the course of
his employment he will have access to certain confidential information of the
Company and that such information constitutes valuable, special and unique
property of the Company. During the term of this Agreement and following
termination of his employment hereunder, the Employee will not disclose
information, including any trade secrets or confidential information of the
Company obtained during the course of his employment with the Company, except
such information as may have become part of the public domain through no fault
of the Employee, which public domain determination shall only be made by the
Company in a written acknowledgement made at the
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request of the Employee, before the Employee may be free to disclose any such
claimed public domain information.
(b) During the term of this Agreement, and for Two (2) years thereafter,
the Employee will not, directly or indirectly, engage in any business enterprise
or activity competitive with the business of the Company either as an employee,
consultant, partner, shareholder, or in any other capacity. For the purposes of
this covenant not to compete, a competing business enterprise will be deemed
competitive only if such business enterprise (i) conducts research, develops
and/or tests products (the "Development") similar to the products the Company
then has under Development, or (ii) offers for sale in any market in which the
Company has significant sales, one or more products for which the major claimed
usage or usages overlap materially with the product or products of the Company
in existence at the time of termination of Employee's employment. Further, the
Employee agrees that he will not either during or within Two (2) years
subsequent to the termination of his employment, disturb, entice, hire or in any
other manner attempt to persuade any employee, dealer, supplier or customer of
the Company to discontinue its business relationship with the Company.
(c) The Employer and the Company acknowledge that it would be very
difficult or impossible to measure the damages resulting from a breach of this
Article 9, and that any such breach would cause immediate and irreparable harm.
Therefore, in consequence of the foregoing, the Employee hereby agrees that any
breach or threatened breach by him of any provision of this Article 9 shall
entitle the
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Company, in addition to any other legal remedies available to it, to obtain from
any Court of competent jurisdiction a temporary and permanent injunction in
order to enjoin such breach or threatened breach, without the necessity on the
part of the Company, in any application for such injunctive relief to show
immediate and irreparable harm, which would be a requirement of such an
application absent this covenant waiving those requirements. The Employee also
covenants that the service of any papers to commence any legal proceedings
including proceedings to obtain injunctive relief, may be done by utilizing
Federal Express in lieu of any other form of personal delivery of the process or
orders of the Court and upon doing so the service and notice provisions for the
commencement of legal proceedings shall be satisfied.
10. DEATH DURING EMPLOYMENT
If the Employee dies during the term of his employment, the Company
shall pay to his estate compensation which would otherwise be payable to the
Employee for the shorter of (i) Three (3) years from the date of his death, or
(ii) through to the termination date of this Agreement. Said sums shall be paid
in accordance with written directions given by the Employee to the Company, or
lacking any such directions then to the surviving spouse of the Employee, or if
there is no surviving spouse, then to his surviving children in equal shares, or
if there are none, then to his estate.
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11. PATENTS AND PROPRIETARY RIGHTS
During the Term of employment all work product emanating directly
and/or indirectly from the Employees duties and activities effected on behalf of
the Company ("Work Product"), shall be exclusively owned by the Company. In the
event that any such Work Product is the subject of an application for patent,
copyright, trade xxxx or similar proprietary protection ("Application"), then
regardless of the name of the person or entity submitting the Application, the
Employee hereby acknowledges the Company's exclusive rights in and to the
Application for proprietary protection. In the event that the Application
results in the issuance of the requested proprietary protection, e.g. a patent,
then the Employee hereby acknowledges the Company's exclusive ownership therein,
and the employee will execute any documents necessary to give effect and
implement this ownership, including but not limited to an assignment of the
Application and/or the issued proprietary protection.
12. NOTICES
Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and actually delivered, or if sent either by Federal
Express, or postage prepaid, by certified mail, return receipt requested, with a
copy by ordinary mail, to the addresses below:
As to Company: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
As to Employee: 00 Xxxxx xx Xxxxxxx Xxxxxxx
Xxxxx, 00000 Xxxxxx
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or to such other address as either party shall designate by written notice to
the other.
13. ASSIGNMENT
The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Company. The Employee acknowledges that the services to be rendered by him
are unique and personal, and accordingly, he may not assign any of his rights,
duties, obligations or benefits under this Agreement.
14. ENTIRE AGREEMENT
This Agreement contains the entire agreement and understanding of the
Company and the Employee with respect to the subject matter hereof, and shall
incorporate, merge and supersede all prior agreements and understandings had
between the Company and the Employee, either oral or written, if any. No
modification, change or amendment to this Agreement, shall be binding upon the
Company or the Employee unless the same is in writing, and signed by the party
against whom enforcement of the modification, change or amendment is sought to
be enforced.
15. MISCELLANEOUS
(a) This Agreement and the implementation of it shall be subject to and
governed by the laws of the State of Florida, and any legal proceedings relating
to (i) the interpretation or enforcement of any of the provisions of this
Agreement, or (ii) any dispute relating to the employment relationship created
by the
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Agreement, shall only be brought in the Circuit Court of the State of Florida,
in and for the County of Dade.
(b) The Article headings contained herein are for reference purposes
only and shall not in any way affect the meaning or the interpretation of this
Agreement.
(c) The failure of any provision of this Agreement shall in no manner
affect the right to enforce the remainder of this Agreement, and the waiver by
either The Company or the Employee of any breach of any provision of this
Agreement shall not be construed to be a waiver by the Company or the Employee
of any succeeding breach of such provision or a waiver by such party of any
breach of any other provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
January 31, 1996.
EMPLOYEE:
Witness:
/s/ XXXXXXXX X. XXXXX /s/ XXXXXXX X. XXXXXXX
--------------------- -------------------------
Xxxxxxx X. Xxxxxxx
COMPANY:
COLUMBIA LABORATORIES, INC.
Witness:
/s/ XXXXXXXX X. XXXXX /s/ XXXXXX X. XXXXX
--------------------- -------------------------
By: President
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SCHEDULE 1
OUTSIDE BUSINESS INTERESTS
As of execution date:
None.
Columbia Laboratories, Inc.
/s/ XXXXXX X. XXXXX
---------------------------
By: President
/s/ XXXXXXX X. XXXXXXX
---------------------------
Xxxxxxx X. Xxxxxxx
Dated: January 31, 1996
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