EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 1, 2000
between INKINE PHARMACEUTICAL COMPANY, INC., a New York corporation
("Employer"), and XXXXXX XXXX, M.D., X.X. ("Employee")
Background. Employee has been employed by Employer in various
capacities. Employer and Employee mutually agree to the employment of Employee
as Executive Vice President Research and Development.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
accepts such employment and agrees to perform his duties and responsibilities
hereunder, in accordance with the terms and conditions hereinafter set forth.
1.1 Employment Term. The employment term of this Agreement shall be
for a period of one year and may be renewed in accordance with
Section 1.2. The term "Employment Term" shall refer to the
initial Employment Term, which shall commence on the date
hereof and shall continue and end on the first anniversary date
of this Agreement (unless terminated prior thereto in
accordance with Section 4 hereof and, to the extent this
Agreement is renewed pursuant to Section 1.2, to the last day
of any successive one year period.
1.2 Renewal. This Agreement shall be automatically renewed for
successive one year terms at the expiration of the initial
Employment Term, and any subsequent Employment Term, unless
written notice to the contrary is provided by either the
Employer or the Employee at least ninety days prior to the
expiration of such Employment Term
1.3 Duties and Responsibilities.
a) During the Employment Term, Employee shall serve
as Executive Vice President Research and
Development for Employer and shall perform all
duties and accept all responsibilities incidental
to such position or as may be assigned to him by
Employer's Board of Directors, and he shall report
to the Company's Chief Executive Officer and shall
cooperate fully with the Board of Directors.
Employee shall operate primarily out of Employer's
executive office, currently situated in Blue Xxxx,
Pennsylvania.
b) Employee represents and covenants to Employer that
he is not subject to any agreement, covenant,
understanding or restriction which would prohibit
Employee from executing this Agreement and
performing his duties and responsibilities
hereunder, or would in any manner, directly or
indirectly, limit or affect the duties and
responsibilities which may now or in the future be
assigned to Employee by Employer.
1.4 Extent of Service; Noncompetition. During the Employment Term,
Employee agrees to use his best efforts to carry out his duties
and responsibilities under Section 1.3 hereof and to devote his
full time, attention and energy thereto. The foregoing shall
not be construed as preventing Employee from (a) serving as a
consultant or director for one or more other business
enterprises, (b) engaging in charitable or civic activities,
(c) teaching, or (d) making investments in other businesses or
enterprises; provided that such activities in the aggregate
shall not prevent him from discharging his duties and
responsibilities to Employer. During the Employment Term,
Employee may serve as a director of, but may not serve as a
consultant to, a business enterprise that is engaged in the
development of commercialization of technology which is
directly competitive with the technology then being developed
or commercialized by Employer. Nothing contained herein shall
be construed to limit or otherwise modify Employee's fiduciary
and other obligations under applicable state corporation laws
or state and federal securities laws.
1.5 Base Salary. For the services rendered by Employee hereunder,
Employer shall pay Employee and annual salary at the rate of
$225,000 for the initial year of the Employment Term, less
withholding required by law or agreed to by Employee, payable
in installments at such times as Employer customarily pays its
other executive officers. The annual base salary shall be
increased by the Board of Directors in its sole discretion.
1.6 Bonus and Other Benefits. During the Employment Term, Employee
shall be entitled to certain benefits and shall be eligible for
certain bonus compensation as follows:
(a) Employee shall be paid an annual bonus, which shall be
determined by Employer's Board of Directors or an
appropriate committee of such Board.
(b) Employee shall be entitled to all normal and usual
benefits provided by Employer to its executive
employees, including, but not limited to, participation
in profit sharing, disability, health, hospitalization
and retirement plans and such other benefits as the
Board of Directors of Employer may from time to time
determine based upon the benefits paid to other
executive officers of Employer.
(c) Employee shall be eligible to receive such stock options
or other forms of stock grants as shall be determined by
Employer's Board of Directors or an appropriate
committee of such Board.
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(d) Employee shall be entitled to paid vacation time during
the Employment Term in accordance with Employer's then
existing vacation policy for its executive employees.
1.7 Severance Compensation
(a) If Employer terminates this Agreement, other than for
"cause" pursuant to Section 4 hereof during the
Employment Term, Employer shall pay to Employee an
amount equal to 100% of Employee's base annual salary,
in effect at the date of such termination.
(b) Such severance compensation shall be payable in full
within thirty days after the date of termination of this
Agreement other than for "cause" pursuant to Section 4
hereof.
1.8 Expenses.
Employee shall be reimbursed for the reasonable business
expenses incurred by him in connection with his performance of
services hereunder during the Employment Term upon presentation
of an itemized account and written proof of such expenses.
2. Confidentiality. The Employee agrees that he will not at any time,
either during or subsequent to the Employment Term, unless given express consent
in writing by the Employer, either directly or indirectly use or communicate to
any person or entity any confidential information of any kind concerning matters
affecting or relating to the names, addresses, buying habits or practices of any
of Employer" clients or customers; Employer" marketing methods, programs,
formulas, patterns, compilations, devices, methods, techniques or processes and
related data; the amount of compensation paid by Employer to employees and
independent contractors and other forms of their employment or contractual
relationships; other information concerning Employer's manner of operations.
(The foregoing shall not be deemed to prohibit the disclosure of information
which (i) is, at the time of disclosure, in the public domain other than as a
result of Employee's breach of this Agreement, or (ii) can be demonstrated by
Employee to be known by Employee on the date of his commencement of employment.)
The Employee agrees that the above information and items are important, material
and confidential trade secrets and that they affect the successful conduct of
the Employer's business and its good will. The Employee agrees that all business
procured by Employee while employed by the Employer is and shall remain the
permanent and exclusive property of the Employer. Employee further agrees that
Employer's relationship with each of its employees and independent contractors
is a significant and valuable asset of the employer. Any interference with the
Employer's business, property, confidential information, trade secrets, clients,
customers, employees or independent contractors by the Employee or any
employee's agents during or after the term of this Agreement shall be deemed a
material breach of this Agreement.
3. Equitable Relief.
(a) Employee acknowledges that the restrictions contained in
Section 2 hereof are reasonable and necessary to protect the
legitimate interests of Employer and that any violation of such
restrictions would result in irreparable injury to Employer. If
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the period of time or other restrictions specified in Section 2
should be adjudged unreasonable at any proceeding, then the
period of time or such other restrictions shall be reduced by
the elimination or reduction of such portion thereof so that
such restrictions may be enforced in a manner adjudged to be
reasonable. Employee acknowledges that Employer shall be
entitled to preliminary and permanent injunctive relief for a
violation of any such restrictions without having to prove
actual damages or to post bond; Employer shall also be entitled
to an equitable accounting of all earnings, profits and other
benefits arising from such violation, which rights shall be
cumulative and in addition to any other rights or remedies to
which Employer may be entitled in law or equity
(b) Employee agrees that until the expiration of the covenants
contained in Section 2 of this Agreement, he will provide, and
that Employer may similarly provide, a copy of the covenants
contained in such Sections to any business or enterprise (i)
which he may directly or indirectly own, manage, operate,
finance, join, control or participate in the ownership,
management, operation, financing, control or control of, or
(ii) with which he may be connected with as an officer,
director, employee, partner, principal, agent, representative,
consultant or otherwise, or in connection with which he may use
or permit his name to be used.
4. Termination. This Agreement shall terminate prior to the expiration
of the term set forth in Section 1.1 above upon the occurrence of any one of the
following events:
4.1 Disability. In the event that Employee is unable fully to perform
his duties and responsibilities hereunder to the full extent
required by the Board of Directors of the Employer by reason of
illness, injury or incapacity for six consecutive months, during
which time he shall continue to be compensated as provided in
Section 1.5 hereof (less any payments due Employee under disability
benefit programs, including Social Security disability, workers'
compensation and disability retirement benefits), this Agreement
may be terminated by Employer, and Employer shall have no further
liability or obligation to Employee for compensation hereunder;
provided, however, that Employee will be entitled to receive the
payments prescribed under any disability benefit plan which may be
in effect for employees of Employer and in which he participated.
Employee agrees, in the event of any dispute under this Section 4.1
to submit to a physical examination by a licensed physician
mutually agreed on by Employee and the Board of Directors of
Employer.
4.2 Death. In the event that Employee dies during the Employment Term,
Employer shall pay to his executors, legal representatives or
administrators an amount equal to the installment of his salary set
forth in Section 1.5 hereof for the month in which he dies, and
thereafter Employer shall have no further liability or obligation
hereunder to his executors, legal representatives, administrators,
heirs or assigns or any other person claiming under or through him;
provided, however, that Employee's estate or designated
beneficiaries shall be entitled to receive the payments prescribed
for such recipients under any death benefit plan which may be in
effect for employees of the Employer and in which Employee
participated.
4.3 Cause. Notwithstanding any other provision hereof, Employer may
terminate this Agreement at any time for "cause". For purposes of
this Agreement, "cause" shall mean a material violation of a
written directive of the Company's Board of Directors, conviction
of a crime involving moral turpitude, willful misconduct which has
a material adverse effect on the Company as determined by a
majority of the Company's Board of Directors including each
independent Director.
5. Survival. Notwithstanding the termination of this Agreement by
reason of Employee's disability under Section 4.1 or for cause under Section
4.3, his obligations under Section 2 hereof shall survive and remain in full
force and effect for the periods therein provided, and the provisions for
equitable relief against Employee in Section 3 hereof shall continue in force.
6. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania.
7. Disputes and Arbitration. Any disputes arising hereunder, including
disputes arising from or relating to termination, shall be resolved by binding
arbitration. Notice of the demand for arbitration by either party shall be given
in writing to the other party to this Agreement. Upon such demand, the dispute
shall be settled by arbitration before a single arbitrator pursuant to the rules
of the American Arbitration Association (the "AAA"). Discovery shall be
permitted prior to arbitration and Pennsylvania law shall be applied. The
arbitrator shall be selected by the joint agreement of the parties, but if the
parties do not so agree within twenty days after the date of the notice referred
to above, the selection shall be made pursuant to the rules of, and from the
panels of arbitrators maintained by the AAA. Any award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto; provided,
however, that any such award shall be accompanied by written opinion of the
arbitrator giving the reasons for the award. Each party shall pay its own
expenses of arbitration and the expenses of the arbitrator shall be equally
shared by the parties. Nothing herein shall prevent the parties from settling
any dispute by mutual agreement at any time.
8. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to Employer, to:
InKine Pharmaceutical Company, Inc.
0000 Xxxxxx Xxxxxxx Xxxx
Xxxx 18, Suite 440
Blue Xxxx, PA 19422
Attention: CEO
If to Employee, to:
Xxxxxx Xxxx, M.D., X.X.
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
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Or to such other names or addresses as Employer or Employee, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.
9. Contents of Agreement: Amendment and Assignment.
(a) This Agreement supersedes all prior agreements and sets forth
the entire understanding among the parties hereto with respect
to the subject matter hereof and cannot be changed, modified,
extended or terminated except upon written amendment approved
by the Board of Directors of Employer and executed on its
behalf by a duly authorized officer. Without limitation,
nothing in this Agreement shall be construed as giving Employee
any right to be retained in the employ of Employer beyond the
expiration of the Employment Term, and Employee specifically
acknowledges that, unless this Agreement is renewed in
accordance with Section 1.2 hereof, he shall be an
employee-at-will of Employer thereafter, and thus subject to
discharge by Employer with or without cause and without
compensation of any nature.
(b) Employee acknowledges that from time to time, Employer may
establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other
representatives of Employer may make written or oral statements
relating to personnel policies and procedures. Such manuals,
handbooks and statements are intended only for general
guidance. No policies, procedures or statements of any nature
by or on behalf of Employer (whether written or oral, and
whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any
nature, shall be construed to modify this Agreement or to
create express or implied obligations of any nature to
Employee.
(c) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable
or delegatable in whole or in part by Employee.
10. Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.
11. Remedies Cumulative: No Waiver. No remedy conferred upon Employer
by this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by Employer in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by Employer from time to time and
as often as may be deemed expedient or necessary by Employer in its sole
discretion.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
Attest: INKINE PHARMACEUTICAL COMPANY, INC.
/s/ Xxxxxx X. Apple By: /s/ Xxxxxxx X. Xxxxx, M.D., Ph.D.
------------------------------------ ---------------------------------
CFO Xxxxxxx X. Xxxxx, M.D., Ph.D.
Chairman and CEO
/s/ Xxxxxx Xxxx, M.D., X.X.
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Xxxxxx Xxxx, M.D., X.X.
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