EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
April 10, 2003 by and between KRONOGEN SCIENCES INC., a Delaware corporation
with its principal executive office located at 000 Xxxxxxxxx Xxxx Xxxxxx, Xxx
Xxxx, XX 00000 (the "Company" or "KRONOGEN SCIENCES"), and XXXXXXX X. XXXXXXX
(the "Executive") (collectively, the "Parties").
WHEREAS, the Company has executed an Asset Transfer Agreement dated as
of April 4, 2003 (the "Transfer Agreement") pursuant to which the Company is
acquiring certain assets owned by Xx. Xxxxxxx X. Xxxxxxxx and The Xxxxxxxx
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 Chairman of the Board
and Executive Vice President of the Company. 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 render such services to the
best of his ability and use his best efforts to promote the interests of the
Company. Executive shall devote such time as he, in his sole discretion, shall
deem appropriate for the performance of his obligations under this Agreement.
Executive may perform services hereunder in such manner and at such place as
Executive may, in his sole discretion, determine. Executive may devote such
amount of time as he determines, in his sole discretion, to (i) 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 (ii) 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. It is acknowledged and agreed that Executive's relationship with and
services and responsibilities to Sands Brothers & Co., Ltd. ("Sands Brothers")
are not and shall not in any way be limited by the terms and provisions of this
paragraph.
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 and based on a 40 hour work week. In the
event the Executive devotes less than 40 hours per week to the affairs of the
Company, then the portion of the Base Salary payable in respect thereof may be
adjusted accordingly in good faith by the parties. 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.
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.
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
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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
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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 Discoveries. During the Term, Executive shall communicate to the
Company as Confidential Information (as hereinafter defined) of Company, each
discovery, idea, design, invention and improvement relating to any manner of the
Company's business, whether or not patentable and whether or not reduced to
practice, which is conceived, developed or made by Executive, alone or jointly
with others during the Term in connection with the services provided by
Executive under this Agreement, and all of such discoveries, ideas, designs,
inventions and improvements shall be the exclusive property of the Company and
all of Executive's rights, title and interest therein are hereby irrevocably
assigned by Executive to the Company.
5.2 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 (A)
Executive may hold less than 5% 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 and (B)
Executive's relationship with, and services and responsibilities to, Sands
Brothers are and shall be excluded from the terms and provisions of this
paragraph.
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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 5.2 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.
5.3 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
5.3, 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.
5.4 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.
5.5 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.
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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.
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. Xxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
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
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Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
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