EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as June
1, 1997 by and between Acute Therapeutics, Inc. a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxx, M.D. ("Executive").
WHEREAS, the company and the Executive desire that the Executive
be employed by the Company and that the terms and conditions of such employment
be defined;
NOW, THEREFORE, in consideration of the employment of the Executive
by the Company, the Company and Executive agree as follows:
1. Term of the Agreement. The Company shall employ Executive as Vice
President for Clinical Research and Executive shall accept employment for a
period of three (3) years commencing on June 1, 1997 (the "Commencement Date")
and continuing until May 31, 2000 (the "Employment Period") subject, however, to
prior termination as hereinafter provided Section 5.
2. Executive's Duties and Obligations.
a. Duties. Executive shall serve as Vice President for
Clinical Research. Executive shall be responsible for the overall conduct of
protocol development for existing and future drug candidates within the
Company's pipeline and for overall conduct of clinical trial according to
current Good Clinical practices.
b. location of Employment. Executive's principal place of
business shall be at Company's office located at 0000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000.
c. Proprietary Information and Inventions Agreement. Upon
commencement of employment with the Company, Executive shall execute the
Company's standard form of Intellectual Property and Confidential Information
Agreement (the "Confidentiality Agreement") a copy of which is attached to this
Agreement as Exhibit A.
3. Devotion of Time to Company's Business
a. Full Time Efforts. During his employment with the Company,
Executive shall, subject to the provisions set forth in Section 3.b., devote
substantially all of his business time, attention and efforts to the high
quality performance of his duties to the Company.
b. No Other Employment. During his employment with the
company, Executive shall not, whether directly or indirectly, render any
services of a commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of the Company's Executive Committee or Board of Directors.
Notwithstanding this Section 3.b., as specifically agreed by the Company and
Executive, Executive may engage in activities related to the field of
neonatology at the hospital of his choice, private patient and research and
attendance at professional meetings, provided that Executive's time spent at
such activities
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shall not interfere with the performance of his contractual obligations under
this Agreement.
c. Non-Competition During Employment. During the term of this
Agreement, and for eighteen months after its termination, Executive shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity (i) compete with Acute Therapeutics, Inc.
in the business or research areas of surfactant replacement therapy and other
areas which Acute Therapeutics, Inc. may enter while he remains employed, or
(ii) directly or indirectly solicit or employ any employees of the Company,
provided, however, that Executive shall not be precluded or prohibited from
owning passive investments including passive investments in publicly-held
securities in other institutions so long as such ownership does not require his
participation in any manner with the institution and provided further that the
provisions set forth in Exhibit A, and in this Section 3 shall not be applicable
in the event Executive's employment is terminated by the Company without Good
Cause, or by the Executive for good cause as defined in Section 5.
4. Compensation and Benefits
a. Base Compensation. During the term of this Agreement, the
company shall pay to Executive base annual compensation of Two Hundred Thousand
dollars ($200,000), payable
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in installments according to the Company's payroll schedule, less all required
tax withholdings as required by law.
b. Insurance Benefits. During his employment with the Company,
the Company shall provide reasonable medical and disability benefits to
Executive and to Executive's family. In addition, the Company will provide
Executive with term life insurance upon his life on behalf of Executive's
beneficiaries in the amount of Executive's annual salary for the term of this
Agreement.
c. Stock Option. The Board of Directors of the Company will
grant to Executive an incentive stock option to purchase 16,000 shares of Common
Stock, $.001 par value of the Company, subject to appropriate adjustments in the
event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares, at an exercise price equal to $ 0.75 per
share. The Company shall not make any change in stock option benefit which would
dilute or otherwise adversely effect the percentage of shares offered to the
Executive hereunder.
d. Participation in Benefits. Executive shall be entitled to
participate in and receive the benefits in any plan of the Company, in addition
to those specifically referred to in this Agreement, relating to pension, profit
sharing, stock options, or other retirement benefits, disability and medical
coverage or reimbursement plans that the Company may adopt for the benefit of
its executives and employees which are now in
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existence or may come into existence hereafter. Nothing paid to Executive under
any plan or arrangement presently in effect or made available in the future
shall be deemed to be in lieu of the compensation payable pursuant to Section
4.a.
e. Vacation. Executive shall be entitled to a paid vacation
during each year of the term of this Agreement. The vacation benefit shall
consist of not less than three (3) weeks during each year at times mutually
acceptable between the Company and Executive.
f. Relocation Allowances.
(i) The Company shall pay the amount of Fifteen Thousand
Dollars ($15,000.00) to Executive towards reimbursement of relocation expenses
for which no accounting shall be required from Executive by Company if, and only
if, Executive relocates to a location in or in proximity to Doylestown, Bucks
County, Pennsylvania prior to the consummation of an initial public offering of
the Company's securities
(ii) If and only if the Company has not paid a payment
to Executive pursuant to subsection f(i) above, and the Company has consummated
an initial public offering of the Company's securities, then the Company shall
reimburse Executive or otherwise provide for or pay all reasonable expenses
incurred by Executive in relocating his residence from its existing location to
a location in or in proximity to Doylestown, Bucks County, Pennsylvania,
including settlement costs of selling his present residence, settlement costs
related to the purchase
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of his relocated residence, transportation and costs of moving personalty from
his existing residence to the relocation.
g. Other Expenses. The Company shall reimburse Executive or
otherwise provide for or pay for all expenses (including but not limited to
meals, entertainment, travel, automobile and lodging expenses) incurred by
Executive in the course of performing his duties under this Agreement.
5. Termination of Employment.
a. Termination for Good Cause. The Company may terminate
Executive's employment at any time for "Good Cause," as herein defined. For the
purposes of this Agreement, "Good Cause" shall mean (i) gross misconduct, (ii)
gross neglect of duties, (iii) acts involving moral turpitude, (iv) material
breach by Executive of this Agreement or the Confidentiality Agreement or (v)
any act or omission involving fraud, embezzlement, or misappropriation of any
property or proprietary information of the Company by Executive which is not
cured or cannot be cured by Executive within fifteen (15) days after receipt of
written notice from the Company. if the Company terminates Executive's
employment for Good Cause, Executive shall have a right to unpaid compensation
and other benefits accrued and unpaid through the last day of Executive's
employment.
b. Termination by Executive for Good Cause. Executive may
terminate his employment at any time for "Good Cause" as herein defined. "Good
Cause" shall mean (i) a failure by Company to comply with any material
provisions of the
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Agreement which failure has not been cured in fifteen (15) days
after notice given by Executive to Company, (ii) without Executive's express
written consent, the assignment to Executive of any duties inconsistent with
Executive's position, duties, responsibilities and status with the Company,
(iii) the failure of Company to continue in effect any bonus, benefit or
compensation plan, life insurance plan. health and accident plan, or any other
benefit plan in which Executive is participating, (iv) the taking of any action
by Company which would adversely affect Executive's benefits under such plans,
or (v) any purported termination of Executive's employment which is not
effective pursuant to Section 5.a of this Agreement.
If Executive terminates his employment for Good Cause pursuant to
this Section 5.b., the Company shall immediately pay all compensation and
benefits accrued and unpaid through the last day of Executive's employment. In
addition, Executive shall receive a severance payment equal to Executive's base
compensation, payable at normal Company payroll dates, for a period six months.
Executive shall not be required to set off or mitigate the amount of any payment
provided for under this Section 5.b. for payments received or to be received by
Executive from other employment or consulting income.
c. Death or Disability. This Agreement shall terminate if
Executive dies or is mentally or physically "Disabled" as herein defined. For
the purposes of this Agreement, "Disabled" shall mean a mental or physical
condition
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that renders Executive incapable of performing his duties and obligations under
this Agreement for three (3) or more consecutive months or for a total of six
(6) months during any twelve (12) consecutive months; provided, that during such
period the Company shall give Executive at least thirty (30) days' written
notice that it considers the time period for disability to be running. If this
Agreement is terminated under this paragraph 5.c., Executive or his estate shall
be entitled to any unpaid compensation (illegible) and other (illegible)
disability benefits accrued through the last day of Executive's employment but
shall not be entitled to any severance benefits.
6. Miscellaneous.
a. Governing Law. this Agreement shall be interpreted, construed,
governed and enforced according to the laws of the Commonwealth of Pennsylvania.
b. Amendments. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by the
parties hereto.
c. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
construed, if possible, so as to be enforceable under applicable law, else, such
provisions shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
d. Successors and Assigns. The rights and obligations of the Company
under this Agreement shall inure to
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the benefit of and shall be binding upon the successors and assigns of the
Company including, without limitation, any person, partnership or corporation
which may acquire all or substantially all of the Company's assets and business,
or with or into which the Company may be consolidated or merged. Executive shall
not be entitled to assign any of his rights or obligations under this Agreement.
e. Notices. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or two
days after deposit in the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the other party at the address shown below
such party's signature, or at such other address or addresses as either party
shall designate to the other in accordance with this paragraph 6.e.
f. Entire Agreement. This Agreement, including the exhibits attached
hereto, constitutes the entire agreement between the parties with respect to the
employment of Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date set forth above.
ACUTE THERAPEUTICS, INC.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxx, Ph.D.
Its, President
Address: 0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, M.D.
Address: 000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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