1
[LETTERHEAD OF FREE RADICAL SCIENCES, INC.]
EXHIBIT 10.8
FREE RADICAL SCIENCES, INC.
EMPLOYMENT AGREEMENT
AGREEMENT dated as of November 28, 1994, by and between Xxxxxx X.
Xxxxx, M.D., Ph.D., of 00 Xxxxxxx Xxxx, Xxxxxxx, XX, 00000,
(hereinafter called "Employee") and FREE RADICAL SCIENCES, INC., a
Delaware corporation with principal operating offices at 000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx (hereinafter called the "Company").
WHEREAS, the Company is engaged in the business of commercializing
pharmaceutical products to attenuate free radical-mediated oxidative
damage in the management of various medical conditions in human health
care; and
WHEREAS, Employee wishes to be employed by the Company as
President and Chief Executive Officer, on all of the tens and
conditions contained herein; and
WHEREAS, the Company and Employee desire to set forth the
terms and conditions of the employment relationship between them;
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Duties
------
During the term of his employment pursuant to this Agreement, the
Employee shall be employed as President and Chief Executive Officer,
shall serve as a member of the Board of Directors of the Company and
shall perform such duties as are assigned to him from time to time by
the Board of Directors of the Company commensurate with his experience
and the position for which he is employed. Employee agrees to devote
during the time hereof his full-time duties and best efforts to the
faithful performance of his duties hereunder.
The Employee shall commence employment with the Company, upon the
terms set forth in this Agreement, for the period commencing on Monday,
November 28, 1994 (the "Commencement Date"), and ending on November 27,
1995, (the "Term"), PROVIDED THAT the Term shall be automatically
extended for one-year periods, unless otherwise terminated in
accordance with the provisions of Section 6.
2
2. Compensation
------------
During each year of employment hereunder, the Company shall pay to
Employee as compensation for all services to be rendered by Employee in
any capacity hereunder an annual salary of Two Hundred Thirty Thousand
Dollars ($230,000) DOLLARS (the "Salary"), payable in equal bi-weekly
installments of $8,846.15, subject to increase at salary reviews
conducted at least annually, the first of which shall take place on the
anniversary of the date the Employee began his employment with the
Company. In addition; the Company shall pay to Employee a guaranteed
signing bonus of Twenty Thousand Dollars ($20,000), payable on December
2, 1994.
Assuming continued employment during the first year of this
Agreement, the Company will pay the Employee a guaranteed bonus of Ten
Thousand Dollars ($10,000) on August 25, 1995 and an additional Ten
Thousand Dollars ($10,000) on December 1, 1995.
3. Employee Benefits
-----------------
Employee shall receive whatever benefits are provided to members
of the Company's full-time staff by the Board of Directors to the
extent that the Employee's position, tenure, salary, age, health and
other qualifications make him eligible to participate (see Schedule A
attached for a list of current benefits).
4. Stock Option Plan
-----------------
Employee shall receive 550,000 incentive stock options to purchase
shares of common stock of the Company pursuant to the 1994 Equity
Incentive Plan at an exercise price of $0.10 cents per share vesting
over four years upon the following schedule. To the extent noted, this
option will be exercisable at any time prior to November 28, 2004. On
December 1, 1995, an option for 137,512 shares will become vested and
fully exercisable. Thereafter, an additional option for 11,458 shares
will become vested and fully exercisable each month, effective the
first day of the month, until the earlier of (i) the termination of the
Option Holder's employment with the Company or (ii) December 1, 1998.
(see Schedule B for draft Option Certificate and terms)
5. Expenses
--------
In addition to the above compensation and benefits, Employee shall
be reimbursed by the Company for reasonable expenses actually incurred
in the course of his employment, all pursuant to policies which may be
established by the Company.
-2-
3
6. Employment-at-Will; Notification of Termination
-----------------------------------------------
Employee understands that he is an Employee-at-Will. Employee's
employment hereunder shall be terminated upon the death or disability
of Employee or the election of the Employee upon three months prior
written notice or of the Company upon written notice. Such notice from
the Company will state whether such termination is (i) without Cause;
or (ii) for Cause and the Employee's employment shall be terminated as
of the date set forth in the notice.
In the event of a Termination by the Company upon the death or
disability of the Employee, the Company shall pay to the estate of the
Employee or to the Employee, as the case may be, the compensation which
would otherwise be payable to the Employee through the end of the
payroll period in which death or disability occurs. For the purposes of
this Agreement, the term "disability" shall mean the inability of the
Employee, due to a physical or mental disability, for a period of 90
days, whether or not consecutive, during any 360-day period to perform
the services contemplated under this Agreement. A determination of
disability shall be made by a physician satisfactory to both the
Employee and the Company, PROVIDED THAT if the Employee and the Company
do not agree on a physician, the Employee and the Company shall each
select a physician and these two together shall select a third
physician, whose determination as to disability shall be binding on all
parties.
In the event of a Termination without Cause, the Company shall pay
the Employee his then current annual base salary in equal bi-weekly
installments for (i) the longer of either six months or the period from
the date of termination through the anniversary of the Commencement
Date in the first year of employment, and (ii) six months in the second
year of employment and thereafter; PROVIDED THAT the Company shall not
be required to pay the Employee any salary at any time after the
Employee has secured other employment. Any such payments by the Company
will be reduced by any consulting income earned by the Employee during
these payment periods.
The Company may terminate the Employee's employment hereunder for
"Cause" upon (i) a good faith finding by the Company of dishonesty,
gross negligence or misconduct; (ii) the Employee's willful and
continued failure substantially to perform his duties hereunder; (iii)
the commission by the Employee of an act of fraud or embezzlement
against the Company; (iv) the conviction of the Employee of a felony
involving moral turpitude; or (v) the material breach by the Employee
of the covenants set forth in Sections 7, 8, or 9. In the event of a
termination for Cause, the
-3-
4
Company shall pay the Employee his base annual salary at the level then
in effect through to the date of termination notice.
For purposes of this Agreement, the Employee shall not be deemed
to have been terminated for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution, duly adopted by
affirmative vote of not less than a majority of the entire membership
of the Board of the Company (excluding the Employee) at a meeting
called and held for this purpose after reasonable written notice to the
Employee and an opportunity for him, together with his counsel, to be
heard by the Board, finding that, in the good faith opinion of the
Board, the Employee is guilty of conduct of the type described in this
paragraph, and specifying the particulars thereof in detail.
7. Confidential Information
------------------------
Employee understands that the Company continually obtains and
develops valuable proprietary and confidential information concerning
its business, business relationships and financial affairs (the
"Confidential Information") which may become known to the Employee in
connection with his employment.
Employee acknowledges that all Confidential Information, whether
or not in writing and whether or not labeled or identified as
confidential or proprietary, is and shall remain the exclusive property
of the Company or the third party providing such information to the
Employee or the Company. By way of illustration, but not limitation,
Confidential Information may include Inventions (as hereafter defined),
trade secrets, technical information, know-how, research and
development activities of the Company, product and marketing plans,
customer and supplier information and information disclosed to the
Company or Employee by third parties of a proprietary or confidential
nature or under an obligation of confidence. Confidential Information
is contained in various media, including without limitation, patent
applications, computer programs in object and/ or source code, flow
charts and other program documentation, manuals, plans, drawings,
designs, technical specifications, laboratory notebooks, supplier and
customer lists, internal financial data and other documents and records
of the Company.
Employee agrees that he will not, during the term of his
employment and thereafter, publish, disclose or otherwise make
available to any third party, other than employees of the Company, any
Confidential Information except as expressly authorized in writing by
the Company. Employee agrees that he will use such Confidential
Information only in the performance of his duties for the Company and
in accordance with any Company policies with respect to the protection
of Confidential Information. Employee
-4-
5
agrees not to use such Confidential Information for his own benefit or
for the benefit of any other person or business entity.
Employee agrees to exercise all reasonable precautions to protect
the integrity and confidentiality of Confidential Information in his
possession and not to remove any materials containing Confidential
Information from the Company's premises except to the extent necessary
to his employment. Upon the termination of his employment, or at any
time upon the Company's request, the Employee shall return immediately
to the Company any and all materials containing any Confidential
Information then in his possession or under his control.
Confidential Information shall not include information which (a)
is or becomes generally known within the Company's industry or to the
public through no fault of the Employee; (b) was known to the Employee
at the time it was disclosed; (c) is lawfully made available to the
Employee by a third party who did not to his knowledge derive it from
the Company and who imposes no obligation of confidence on him; or (d)
is required to be disclosed by a governmental authority or by order of
a court of competent jurisdiction, provided to the extent practicable
that such disclosure is subject to all applicable governmental or
judicial protection available for like material and reasonable advance
notice is given to the Company.
8. Covenant Not to Compete
-----------------------
In consideration of the compensation, perquisites and other
benefits paid to Employee hereunder, notwithstanding termination or
expiration of this Agreement (whether voluntary or involuntary), during
the term of employment and for a period of twelve (12) months
thereafter, EMPLOYEE SHALL NOT, directly or indirectly, as an employee,
agent, servant, consultant, partner or stockholder, or in any other
capacity, for himself/herself or for any person, partnership,
organization, association, corporation or other business entity (except
in his capacity as a holder of not more than 5% of the combined voting
power of the outstanding stock of a publicly held company) sell, lease,
license, market, research, develop, design, or manufacture any products
or services which have been, or may be substituted for those which have
been sold, leased, licensed, marketed, researched, developed, designed
or manufactured by the Company at any time during the period of his
employment with the Company.
9. Inventions
----------
All Inventions related to the business of the Company that are
conceived or reduced to practice by the Employee, either alone or with
others, during the period of employment hereunder, whether
-5-
6
or not done during regular working hours, are the property of the
Company. The foregoing sentence shall not apply to an Invention for
which no equipment, supplies, facilities, or trade secret information
of the Company is used and which is developed entirely on the
Employee's own time, unless (a) the Invention relates to (i) the
business of the Company, or (ii) to the Company's actual or
demonstrably anticipated research or development, or (b) the Invention
results from work performed by the Employee for the Company. For
purposes of this Agreement, "Inventions" shall mean processes,
formulas, data, discoveries, developments, designs, improvements,
inventions, techniques, programs, original works of authorship, trade
secrets and know-how, whether or not patentable or registerable under
copyright or similar statutes. The Employee hereby assigns to the
Company or its nominee all his rights, title and interest in and to
such Inventions, and any related patent rights, copyrights and
applications and registrations therefor. During and after his
Employment, Employee shall cooperate with the Company, at the Company's
expense, in obtaining proprietary protection for the Inventions and
will execute all papers and perform all lawful acts that are necessary
for the preparation, filing, prosecution, issuance, procurement,
maintenance or enforcement of patent applications and patents of the
United States and foreign countries for these Inventions, and for the
transfer of any interest Employee has therein. Employee hereby appoints
the Company his attorney to execute and deliver any such documents on
his behalf in the event she should fail or refuse to do so within a
reasonable period following the Company's request. Employee understands
that, to the extent this Agreement shall be construed in accordance
with the laws of any state which limits the assignability to the
Company of certain employee inventions, this Agreement shall be
interpreted not to apply to any such invention which a court rules or
the Company agrees is subject to such state limitation. Attached
hereto, as Schedule C, is a list of all Inventions that, as of the date
of this Agreement, Employee claims as his own.
10. Miscellaneous
-------------
10.1 INJUNCTIONS. If Employee shall engage in any of the
activities prohibited by this Agreement the Company may apply to any
court of competent jurisdiction for a restraining order or injunction
to restrain Employee from continuing any such violation.
10.2 SEVERABILITY. If any court having jurisdiction of any cause
of action arising under this Agreement shall find that any provision or
provisions hereof are unenforceable because unreasonable or excessively
broad, such provisions shall be enforced to the extent and within the
limitations that the court may find reasonable; and the invalidity of
any one or more of the
-6-
7
provisions of this Agreement shall not affect the validity and
enforceability of any other provision hereof.
10.3 BINDING EFFECT. The obligations of each party hereunder shall
be binding upon and shall inure to the benefit of any successor
corporation, in each case as if such successor corporation were a
direct party to this Agreement in lieu of the Company. For purposes of
this Section 10.3, the term "successor corporation" shall mean any
corporation with which the Company shall consolidate or into which it
shall merge or liquidate, or to which the Company shall transfer all or
substantially all of its assets. This Agreement shall also be binding
upon and inure to the benefit of the successors, assigns, personal
representatives, heirs and legatees of Employee.
10.4 AMENDMENTS AND WAIVERS. This Agreement represents the entire
agreement between the parties concerning the subject matter hereof and
may not be amended, modified or revoked in whole or in part except by
written agreement of every party having rights hereunder. This
Agreement supersedes any previous agreement between the parties. Any
waiver of any provision of this Agreement must be in writing, signed by
the party to be charged therewith, and shall not constitute a waiver of
any such right or remedy on any future occasion unless the waiver
specifically provides otherwise.
10.5 PERFORMANCE AFTER TERMINATION. Notwithstanding the
termination of this Agreement for any reason, the parties shall be
required to carry out any provisions hereof which contemplate
performance by them subsequent to such termination.
10.6 NOTICES. All notices required under this Agreement shall be
sufficient if made by certified or registered mail, return receipt
requested, if to the Employee, at the above address or at the last
address for which the Employee gave notice to the Company, and if to
the Company, as its then principal office.
10.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement,
binding upon each party, notwithstanding that such party did not sign
the same counterpart.
10.8 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.
-7-
8
IN WITNESS WHEREOF, Free Radical Sciences, Inc. has caused this
Agreement to be executed by its duly authorized officer, and the
Employee has hereunto set his hand and seal, all as of the date first
above written.
FREE RADICAL SCIENCES, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx III
Title: Chairman of the Board
/s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx, M.D., Ph.D.
-8-
