STAR SCIENTIFIC, INC. AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.80
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into
effective as of March 14, 2011 (the “Effective Date”), by and between STAR SCIENTIFIC, INC., a
Delaware corporation (the “Company”), and Xxxxxx Xxxxxx, MD, MPH (“Executive”).
RECITALS
A. The Company, through its subsidiary ROCK CREEK PHARMACEUTICALS, INC., (“ROCK CREEK”) is
engaged in the research and development of botanical based products for the treatment of tobacco
dependence, non-nicotine nutraceuticals that may assist persons who have ceased tobacco use and
others maintain a healthy and a balanced metabolism as well as products that would utilize certain
MAO agents in tobacco to treat a range of neurological diseases including Alzheimer’s disease,
Xxxxxxxxx’x disease, Schizophrenia, and Depression.
B. Executive was recruited to assume the position of Senior Vice President, Medical/Clinical
Director of ROCK CREEK and has served in that capacity for the past three years under an Executive
Employment Agreement that expires on March 17, 2011.
C. The Company wishes to continue to have the benefit of the Executive’s professional skills
and services, as an employee of STAR SCIENTIFIC, INC., with the understanding that Executive will
be providing services exclusively for ROCK CREEK.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree to restate the terms of Executive’s employment
with the Company and to continue his employment on the terms set forth below:
1. Employment and Duties.
(a) Position. The Company hereby continues to employ Executive, and Executive hereby
continues to accept employment with the Company, as the Senior Vice President, Medical/Clinical
Director of its wholly-owned subsidiary, ROCK CREEK.
(b) Duties. Executive agrees to devote his best efforts to perform all duties
assigned to him by the CEO of ROCK CREEK, including specifically responsibility for coordinating
all aspects of ROCK CREEK’s efforts relating to the development of a range of products utilizing
botanical based compounds and/or other appropriate compounds intended for smoking or smokeless
tobacco therapy and/or cessation, nutraceuticals assisting in maintaining a healthy metabolism and
related products for the treatment or therapy of a range of neurological diseases, including but
not limited to, Alzheimer’s disease, Xxxxxxxxx’x disease, Schizophrenia, and Depression, and such
other duties as may be assigned to Executive from time to time (“Duties”), in a trustworthy,
professional, business-like and loyal manner.
(c) Reporting. Executive shall report to the CEO of ROCK CREEK relating to ROCK
CREEK’S new product development efforts and any other business matters assigned to Executive.
(d) Place of Employment. Executive shall continue to perform his services from the
Company’s office in Gloucester, Massachusetts (the “Massachusetts Office”). The Massachusetts
Office shall be the primary office from which Executive shall perform his services hereunder, with
the further understanding that this position will entail travel to, and attending meetings at, the
Company’s other offices and manufacturing facilities, not to exceed a maximum of twenty (20) days
travel per quarter.
(e) Change of Duties. Subject to the provisions of Section 4(g) herein, the Duties of
the Employee may be modified from time to time by mutual written consent of the Company and the
Employee without resulting in a rescission of this Agreement.
The mutual written consent of the Company and the Employee shall constitute execution of that
modification. Notwithstanding any such change, the employment of the Employee shall be construed
as continuing under this Agreement as so modified.
(f) Devotion of Time to Company’s Business. During the Term of this Agreement (as
such term is defined in Section 1(g) hereof, Executive agrees (i) to devote the primary portion of
his productive time, ability and attention to the business of the Company during normal working
hours, and (ii) not to acquire, hold or retain, whether directly or indirectly, more than a two
percent (2%) interest in any business competing with or similar in nature to the business of the
Company or any of its Affiliates (as such term is defined below). For purposes of this Agreement,
“Affiliates” shall mean any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under the common control of, the Company and the term “Person”
shall mean any individual, group of individuals or entity.
(g) Term. Unless sooner terminated as provided in Section 4 hereof, the term of this
Agreement shall commence on March 14, 2011 and shall continue for a term of three years through
March 14, 2014 (the “Term”), and shall be renewable for successive twelve (12) month terms (each, a
“Renewal Term”) at the option of the Company. Notice of renewal, if applicable, shall be given to
Executive in writing at least thirty (30) days prior to the end of the Term or the applicable
Renewal Term, as the case may be. The Term, together with any Renewal Terms shall be referred to
in this Agreement as the “Term of this Agreement.” If the Company does not provide notice of its
intent to renew the Term of this Agreement in accordance with this paragraph, the Agreement shall
continue on a month-to-month basis until either party notifies the other of the intent not to
continue the Agreement on a month-to-month basis. Notice of intent not to continue the Agreement
on a month-to-month basis shall be effective if provided by the Company to Executive at least
fifteen (15) days prior to the completion of the then-current monthly term. Executive shall use
his best efforts to provide the same advance notice, but his failure to do so shall not in any way
be deemed a breach of the terms of this Agreement, and his notice of intent not to continue the
Agreement on a month-to-month basis shall be effective as and when stated therein. Should the
Company accept Executive’s notice of termination of the Agreement on a month-to-month basis prior
to the effective date set forth by Executive in such notice of termination, the Company shall
continue to pay Executive’s Base Salary through the date of termination specified by Executive in
such notice of termination.
(h) Observance of Company Rules, Regulations and Policies. Executive shall duly,
punctually and faithfully perform and observe any and all rules, regulations and policies which the
Company or which ROCK CREEK may now have or hereafter establish governing the conduct of its
business or its employees to the extent such rules, regulations and policies are not in conflict
with this Agreement. Executive shall promptly provide written notice to the Board of Directors of
the Company and ROCK CREEK of any such apparent conflict of which Executive becomes aware.
2. Compensation.
(a) Base Salary. During the Term of this Agreement, the Company shall pay to
Executive a base salary of three hundred thirty thousand dollars per year ($330,000) in increments
of approximately twenty seven thousand five hundred dollars ($27,500) per month (the “Base
Salary”), payable on a regular basis in accordance with the Company’s standard payroll procedures.
(b) Stock Option.
(i) Stock Option Grant. The parties acknowledge and agree that as additional
incentive, the Compensation Committee will recommend and upon Board approval, the Company will
grant to Executive Stock Options (the “Options”) to purchase up to three hundred thousand (300,000)
shares of Common Stock of the Company at fair market value as of the date of grant, pursuant to the
Company’s standard form of stock option agreement under its 2008 Incentive Award Plan (the “Plan”).
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(ii) Vesting. Subject the performance criteria set forth in subsection (iii) the
Options shall vest and become exercisable on the following schedule so long as he remains an
employee of the Company through the dates set forth below:
| Number of Shares | Date Vested | |||
100,000 |
March 14, 2011 | |||
100,000 |
March 14, 2012 | |||
100,000 |
Xxxxx 00, 0000 | |||
(xxx) Performance Criteria: The exercise of the Options, or any portion thereof,
shall be further contingent on the Company achieving either of the following two performance
criteria and the Company’s Compensation Committee confirming that one of the required performance
criteria have been satisfied.
| • | Introduction into the market for sale a new dietary supplement (nutraceutical) | ||
| • | Entry into an agreement with a major tobacco company (including one of the top three U.S. tobacco companies) for licensing and/or sale of one of the Company’s three pending modified risk applications filed under Section 911 of the FDA Tobacco Act. |
If neither performance criteria is satisfied, then Executive will not be entitled to exercise
any portion of the Options, regardless of whether all or a portion of the Options shall have vested
according to the schedule set forth in subsection (ii).
(iv) Termination. To the extent not then fully vested, the Options shall immediately
terminate upon termination of Executive’s employment with the Company: (A) by the Company for Cause
(as such term is defined in Section 4(c) hereof); or (B) voluntarily by Executive (as such term is
defined in Section 4(f) hereof).
(v) Other Option Terms. All other terms of the Options shall be determined in
accordance with the Plan.
(c) Vacation. Executive shall be entitled to a minimum of four weeks annual vacation
time with full pay or for such longer period as the Company may provide in its standard policies
and practices for the Company’s other executive employees who hold a position at a level comparable
to Executive’s position.
(d) Other Benefits and Bonus Opportunities. Executive shall participate in and have
the benefits of all present and future vacation, holiday, paid leave, unpaid leave, life, accident,
disability, dental vision and health insurance plans, pension, profit-sharing and savings plans and
all other plans and benefits to the same extent such coverage is provided to the Company’s other
employees. In addition, Executive shall be eligible to participate in and have the benefit of any
and all other incentive plans that the Company may establish or make generally available to other
executive employees who hold positions at a level comparable to Executive’s position.
(e) Withholding. The parties shall comply with all applicable withholding
requirements in connection with all compensation payable to Executive, including the Commonwealth
of Massachusetts where Executive is domiciled.
3. Expense Reimbursement.
(a) General Business Expenses. The Company shall reimburse Executive for all business
travel and other out-of-pocket expenses reasonably incurred by Executive in the course of
performing his duties under this Agreement. All reimbursable expenses shall be appropriately
documented and shall be in reasonable detail and in a format and manner consistent with the
Company’s expense reporting policy, as well as applicable federal and state tax record keeping
requirements.
4. Termination and Rights on Termination. This Agreement shall terminate upon the
occurrence of any of the following events:
(a) Death. Upon the death of Executive, in which event the Company shall, within
thirty (30) days of receiving notice of such death, pay Executive’s estate all salary then due and
payable and all accrued vacation pay, if any, in each case payable or accrued through the date of
death. Executive’s estate shall not be entitled to any severance compensation.
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(b) Disability. Upon the mental or physical Disability (as such term is defined
below) of Executive, in which event the Company shall, within thirty (30) days following the
determination of Disability, pay Executive all salary then due and payable and all accrued vacation
pay, if any, in each case payable or accrued through the date of determination of Disability. For
purposes of this Agreement, “Disability” shall mean a physical or mental condition, verified by a
physician designated by the Company, which prevents Executive from carrying out one or more of the
material aspects of his assigned duties for at least ninety (90) consecutive days, or for a total
of ninety (90) days in any six (6) month period. Executive shall not be entitled to any severance
compensation.
(c) Termination by the Company For Cause. The Company may terminate this
Agreement at any time for Cause (as such term is defined below). In this event, the Company shall,
within fifteen (15) days following such termination, pay Executive all salary and all accrued
vacation pay, if any, then due and payable through the date of termination. Executive shall not be
entitled to any severance compensation. For purposes of this Agreement, “Cause” shall mean:
(a) A material act of dishonesty in connection with Executive’s responsibilities
as an employee;
(b) Executive’s commission of, or plea of nolo contendere to, a felony of a
nature which in the sole opinion of the Company renders the Executive unsuitable for
continued employment;
(c) Executive’s willful refusal to follow reasonable and appropriate directives
of the CEO;
(d) Executive’s gross negligence or willful misconduct in the performance of his
duties as an employee of the Company;
(e) Executive’s failure to perform his assigned duties to a reasonably acceptable
level, if the Company has provided Executive with written notice of same and a
reasonable opportunity (at least 30 days) to cure the deficiencies.
(d) Termination by the Company Without Cause. The Company may terminate this
Agreement at any time, subject to the provisions of Section 1(g) herein, without cause. In this
event, provided that such termination of employment constitutes a “separation from service” as
defined in Treasury Regulation Section 1.409A-1(h) (“Separation from Service”), the Company shall
continue to pay Executive his then-current Base Salary in effect as of the date of termination for
the balance of the Term of this Agreement (the “Severance Payments”), as well as all accrued
vacation time as of the date of termination. Severance Payments under this subsection shall be
made at the same time and in the same manner as such salary would have been paid if Executive had
remained in active employment until the end of the Term in accordance with the Company’s normal
payroll practices as in effect on the date of Executive’s Separation from, provided that (i)
Executive has executed a waiver and release of claims agreement in the Company’s customary form
(the “Release”), which Release may be amended by the Company to reflect changes in applicable laws
and regulations, and (ii) Executive has not revoked such Release within the applicable revocation
period set forth in such Release.
(e) No Termination by Merger; Transfer of Assets or Dissolution. This
Agreement shall not be terminated by any dissolution of the Company resulting from either merger
and/or consolidation in which the Company is not the consolidated or surviving corporation or other
entity or transfer of all or substantially all of the assets of the Company. In such event, the
rights, benefits, and obligations herein shall automatically be deemed to be assigned to the
surviving or resulting corporation or other entity or to the transferee of the assets, as the case
may be, with the consent of Executive.
(f) Voluntary Termination by Executive. Executive may terminate this Agreement at any
time without cause and without Good Reason by giving the Company thirty (30) days written notice.
In this event, the Company shall pay Executive, in accordance with its regular payroll practices,
all salary and accrued vacation time due and payable through the date of termination. Executive
shall not be entitled to any severance compensation.
(g) Termination by Executive for Good Reason. Executive may terminate this Agreement
at any time for Good Reason by giving the Company thirty (30) days written notice terminating this
Agreement for Good Reason (as such term is defined below), provided that such notice is delivered
to the Company within sixty (60) days following the occurrence of the event constituting Good
Reason. In that event, the Company shall pay Executive the Severance Payments subject to the terms
and provisions of Section 4(d) hereof. For purposes of this Agreement, “Good Reason” shall mean
the occurrence of any of the following events without the prior written consent of Executive:
(i) A material diminution in Executive’s positions, duties, responsibilities,
functions or status with the Company, or the removal of Executive from, or failure to
reelect Executive to, any of such positions;
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(ii) A material reduction by the Company of Executive’s Base Salary or benefits
provided to Executive pursuant to Section 2(d) (other than changes generally
applicable to all participants in such plans or arrangements); or
(iii) Any other material breach by the Company of this Agreement which is not
cured within twenty (20) days of delivery of written notice thereof by Executive to
the Company.
For purposes of clarification, and not limitation, a material breach shall include, among other
things, a change in geographic location of the Massachusetts Office to a location that is more than
fifteen (15) miles from Rockport or Gloucester, Massachusetts or a requirement that Executive
travel more than twenty (20) days per quarter, in violation of the provisions of Section 1(d) of
this Agreement.
(h) Effect of Termination. All rights and obligations of the Company and
Executive under this Agreement shall cease as of the effective date of termination, except that the
obligations of the Company and Executive under this Section 4 and Executive’s obligations under
Sections 5 and 6 hereof shall survive such termination in accordance with their respective terms.
(i) Timing of Payments. If, at the time Executive’s employment hereunder is
terminated, the Company determines that Executive is a “specified employee,” as defined in Section
409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder
(“Section 409A”), any and all amounts payable under this Section 4 that would constitute deferred
compensation subject to Section 409A, as determined by the Company in its sole discretion, and that
would (but for this sentence) be payable within six (6) months following the effective date of
termination of employment, shall instead be paid on the date that follows the effective date of
termination of employment by six (6) months, as a lump-sum amount. Thereafter, any amounts still
owed to Executive pursuant to this Section 4 in connection with his termination of employment shall
be paid in accordance with Section 4(a) through (g), as applicable.
Additionally, in the event that the Company or Executive reasonably determines, after the
Effective Date, that any amounts payable under this Section 4 may be subject to Section 409A, the
Company and Executive shall work together to adopt such amendments to this Agreement, adopt other
policies or procedures (including amendments, policies and procedures with retroactive effect), or
take any other commercially reasonable actions necessary or appropriate to (i) exempt the payments
and benefits payable under this Agreement from Section 409A and/or preserve the intended tax
treatment of the payments and benefits provided with respect to this Agreement or (ii) comply with
the requirements of Section 409A. For the avoidance of doubt, nothing in this Section 4(i) shall
obligate the Company to incur any material cost or liability, including providing gross-ups for any
additional taxes that Executive may incur under Section 409A with respect to amounts payable under
this Section 4.
5. Restriction on Competition.
(a) Covenant Not to Compete. The parties acknowledge that the Company is placing
Executive in a position of great trust, responsibility and authority by virtue of this Agreement,
and as a result, that Executive will be exposed to the Company’s most sensitive commercial and
proprietary information. The parties also recognize and acknowledge that by virtue of his
position, Executive will come to be identified closely with the Company in the business and
industries in which the Company operates. Executive further acknowledges that the Company’s
interests in protecting its confidential information and its relationships are both significant and
difficult to quantify economically. Therefore, Executive agrees that during the Term of this
Agreement and for a period of twelve (12) months from the termination of this Agreement, Executive
shall not, without the prior written consent of the Company, either directly or indirectly, for
himself or on behalf of or in conjunction with any other Person (i) own, manage, operate, control,
be employed by, participate in, render services to, or be associated in any manner with the
ownership, management, operation or control of, any business similar to the type of business
conducted by the Company or any of its Affiliates (which are described in Recitals, Section A
above), including, specifically, ROCK CREEK, within any of the geographic territories in which the
Company or any of its Affiliates conducts business, provided, however, that nothing contained
herein shall preclude Executive from purchasing or owning less than two percent (2%) of the stock
or other securities of any company with securities traded on a nationally recognized securities
exchange; (ii) solicit business of the same or similar type being carried on by the Company or any
of its Affiliates from any Person or entity known by Executive to be a customer of the Company or
any of its Affiliates, whether or not Executive had personal contact with such Person or entity
during and by reason of Executive’s employment with the Company,
or (iii) solicit any employee or contractor of the Company to terminate that relationship or
endeavor or attempt in any way to interfere with or induce a breach of any contractual relationship
that the Company or any of its Affiliates may have with any employee, customer, contractor,
supplier, representative or distributor.
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(b) No Breach for Activities Deemed Not Competitive. It is further agreed that, in
the event that Executive shall cease to be employed by the Company and enter into a business or
pursue other activities that, at such time, are not in competition with the Company or any of its
Affiliates, Executive shall not be chargeable with a violation of this Section 5 if the Company
subsequently enters the same (or a similar) competitive business or activity.
(c) Severability. The parties desire the provisions of this Section 5 to be
enforceable to the greatest degree possible. Therefore, the covenants in this Section 5 are
severable and separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provision of this Section 5 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of competent
jurisdiction to exceed the maximum time period or geographic area, as applicable, that such court
deems reasonable and enforceable, such time period or geographic area shall be deemed to be, and
thereafter shall become, the maximum time period or largest geographic area that such court deems
reasonable and enforceable and this Agreement shall automatically be considered to have been
amended and revised to reflect such determination.
(d) Fair and Reasonable. Executive has carefully read and considered the provisions
of this Section 5 and, having done so, agrees that the restrictive covenants in this Section 5
impose a fair and reasonable restraint on Executive, are reasonably required to protect the
interests of the Company, its Affiliates and their respective officers, directors, employees and
stockholders and that the provisions would not unduly restrict his ability to make an adequate
living following the termination of his employment with the Company. It is further agreed that the
Company and Executive intend that such covenants be construed and enforced in accordance with the
changing activities, business and locations of the Company throughout the term of these covenants.
6. Confidential Information.
(a) Confidential Information. Executive hereby agrees to hold in strict confidence
and not to disclose to any third party any of the confidential and proprietary business, financial,
technical, economic, sales and/or other types of proprietary business information relating to the
Company or any of its Affiliates (including all trade secrets) in whatever form, whether oral,
written, or electronic (collectively, the “Confidential Information”), to which Executive has, or
is given (or has had or been given), access during the course of his employment with the Company.
It is agreed that the Confidential Information is confidential and proprietary to the Company
because such Confidential Information encompasses technical know-how, trade secrets, or technical,
financial, organizational, sales or other valuable aspects of the business and trade of the Company
or its Affiliates, including without limitation, technologies, products, processes, plans, clients,
personnel, operations and business activities. This restriction shall not apply to any
Confidential Information that (a) becomes known generally to the public through no fault of
Executive, (b) is required by applicable law, legal process, or any order or mandate of a court or
other governmental authority to be disclosed, or (c) is reasonably believed by Executive, based
upon the advice of legal counsel, to be required to be disclosed in defense of a lawsuit or other
legal or administrative action brought against Executive; provided, however, that in the case of
clause (b) or (c), Executive shall give the Company reasonable advance written notice of the
Confidential Information intended to be disclosed and the reasons and circumstances surrounding
such disclosure, in order to permit the Company to seek a protective order or other appropriate
request for confidential treatment of the applicable Confidential Information.
(b) Return of Company Property. In the event of termination of Executive’s employment
with the Company for whatever reason or no reason, (a) Executive agrees not to copy, make known,
disclose or use, any of the Confidential Information without the Company’s prior written consent,
and (b) Executive or Executive’s personal representative shall return to the Company (i) all
Confidential Information, (ii) all other records, designs, patents, patent applications, business
plans, financial statements, manuals, memoranda, lists, correspondence, reports, records, charts,
advertising materials and other data or property delivered to or compiled by Executive by or on
behalf of the Company or its respective representatives, vendors or customers that pertain to the
business of the Company or any of its Affiliates, whether in paper, electronic or other form, and
(iii) all keys, credit cards, vehicles and other property of the Company. Executive shall not
retain or cause to be retained any copies of the foregoing. Executive hereby agrees that all of
the foregoing shall be and remain the property of the Company and the applicable Affiliates and be
subject at all times to their discretion and control.
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(c) Assignment of Intellectual Property. Executive agrees that all patentable or
otherwise registrable designs, ideas, processes, methods, formulas, scientific and mathematical
models, reports, programs, software, systems, materials, notes, records, drawings, inventions,
improvements, developments and trade secrets (collectively, the “Inventions”) conceived, created,
discovered, developed, prepared, made or suggested by Executive, solely or in collaboration with
others, in or in connection with the performance of services hereunder shall be solely and
exclusively owned by the Company and that Executive shall have no property interest therein.
Executive further agrees to assign (or cause to be assigned), without further consideration, and
does hereby assign to the Company all of his right, title and interest, free and clear of all liens
and encumbrances of any kind whatsoever, in and to all Inventions and all copyright or other
proprietary rights therein or relating thereto.
(d) Further Acts. Upon the request of the Company, Executive shall execute all
documents necessary to effectuate the assignment of his rights in the Inventions to the Company.
In the event that any Invention, or any portion thereof, shall be deemed by the Company to be
patentable or otherwise registrable anywhere in the world, Executive shall assist the Company to
obtain letters patent or other applicable registrations thereon and shall execute all documents and
do or cause to be done all other things necessary or proper to obtain letters patent or other
applicable registrations and to vest in the Company full title thereto. In addition, Executive
shall assist the Company to enforce any patent, copyright or other right or protection relating to
any Invention, or any portion thereof, and shall execute all documents and do or cause to be done
all other things necessary or proper in connection therewith.
7. Corporate Opportunities.
(a) Duty to Notify. During the Term of this Agreement, in the event that Executive
shall become aware of any business opportunity related to the business of the Company (as described
in Recitals, Section A above and as modified by the Company from time to time) Executive shall
promptly notify the Board of Directors of such opportunity. Executive shall not appropriate for
himself or for any other Person or entity other than the Company (or any Affiliate) any such
opportunity unless, as to any particular opportunity, the Board of Directors fails to take
appropriate action within thirty (30) days. Executive’s duty to notify the Board of Directors and
to refrain from appropriating all such opportunities for thirty (30) days shall neither be limited
by, nor shall such duty limit, the application of the general laws relating to the fiduciary duties
of an agent or employee.
(b) Failure to Notify. In the event that Executive fails to notify the Board of
Directors or so appropriates any such opportunity without the express written consent of the Board
of Directors, Executive shall be deemed to have violated the provisions of this Section
notwithstanding the following:
| (i) | The capacity in which Executive shall have acquired such opportunity; or | ||
| (ii) | The probable success in the hands of the Company of such opportunity. |
8. No Prior Agreements. Executive hereby represents to the Company that to the best of his
knowledge, the execution of this Agreement by Executive, his employment by the Company, and the
performance of his duties hereunder will not violate or be a breach of any agreement with a former
employer, client or any other Person or entity. To the extent that Executive had any oral or
written employment agreement, consulting agreement or understanding with the Company, this
Agreement shall automatically supersede such agreement or understanding, and upon execution of this
Agreement by Executive and the Company, such prior agreement or understanding automatically shall
be deemed to have been terminated and shall be null and void.
9. Representation. Executive acknowledges that he (a) has reviewed this Agreement in its
entirety, and/or (b) has had an opportunity to obtain the advice of separate legal counsel prior to
executing this Agreement, and (c) fully understands all provisions of this Agreement.
10. Assignment; Binding Effect. Executive understands that he has been selected for
employment by the Company on the basis of his personal and professional qualifications, experience
and skills. Executive agrees, therefore, that he cannot assign or delegate all or any portion of
his performance under this Agreement. This Agreement may not be assigned or transferred by the
Company without the prior written consent of Executive. Subject to the preceding two sentences,
this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors, and assigns. Notwithstanding
the foregoing, if Executive accepts employment with an Affiliate, unless Executive and his new
employer agree otherwise in writing, this Agreement shall automatically be deemed to have been
assigned to such new employer
(which shall thereafter be an additional or substitute beneficiary of the covenants contained
herein, as appropriate), with the consent of Executive, such assignment shall be considered a
condition of employment by such new employer, and references to the “Company” in this Agreement
shall be deemed to refer to such new employer.
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11. Complete Agreement; Waiver; Amendment. This Agreement is not a promise of future
employment. Executive has no oral representations, understandings or agreements with the Company
or any of its officers, directors or representatives covering the same subject matter as this
Agreement. This Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Executive with respect to the subject matter hereof and thereof,
and cannot be varied, contradicted, or supplemented by evidence of any prior or contemporaneous
oral or written agreements. This Agreement may not be later modified except by a further writing
signed by a duly authorized officer of the Company and Executive, and no term of this Agreement may
be waived except by a writing signed by the party waiving the benefit of such term.
12. Notice. All notices, requests, demands and other communications required or permitted
to be given under this Agreement shall be in writing and shall be given or made by personally
delivering the same to or sending the same by prepaid certified or registered mail, return receipt
requested, or by reputable overnight courier, or by facsimile machine to the party to which it is
directed at the address set out on the signature page to this Agreement or at such other address as
such party shall have specified by written notice to the other party as provided in this Section,
and shall be deemed to be given if delivered personally at the time of delivery, or if sent by
certified or registered mail as herein provided three (3) days after the same shall have been
posted, or if sent by reputable overnight courier upon receipt, or if sent by facsimile machine as
soon as the sender receives written or telephonic confirmation that the facsimile was received by
the recipient and such facsimile is followed the same day by mailing by prepaid first class mail.
13. Severability; Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and operative and, so far
as is reasonable and possible, effect shall be given to the intent manifested by the portion held
invalid and inoperative. This severability provision shall be in addition to, and not in place of,
the provisions of Section 5(c) above. The Sections headings herein are for reference purposes only
and are not intended in any way to describe, interpret, define or limit the extent or intent of
this Agreement or of any part hereof.
14. Equitable Remedy. Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the restrictive covenants set forth in Sections 5 and 6 hereof,
and because of the immediate and irreparable damage that would be caused to the Company for which
monetary damages would not be a sufficient remedy, it is hereby agreed that in addition to all
other remedies that may be available to the Company at law or in equity, the Company shall be
entitled to specific performance and any injunctive or other equitable relief as a remedy for any
breach or threatened breach of the aforementioned restrictive covenants.
15. Arbitration. Except as provided in Section 14 hereof, any unresolved dispute or
controversy arising under or in connection with this Agreement or otherwise concerning Executive’s
relationship with the Company, whether arising in contract, tort or otherwise, shall be settled
exclusively by arbitration conducted in accordance with the rules of the American Arbitration
Association applicable to the arbitration of employment disputes then in effect. The arbitrators
shall not have the authority to add to, detract from, or modify any provision hereof, nor to award
punitive damages to any injured party. A decision by a majority of the arbitration panel shall be
final and binding. Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. The arbitration proceeding shall be held in Boston, Massachusetts, or such other
location as the parties mutually agree. Notwithstanding the foregoing, either party shall be
entitled to seek injunctive or other equitable relief, including but not limited to that
contemplated by Section 14 hereof, from any court of competent jurisdiction, without the need to
resort to arbitration. Should judicial proceedings be commenced to enforce or carry out this
provision or any arbitration award, the prevailing party in such proceedings shall be entitled to
reasonable attorneys’ fees and costs in addition to other relief.
16. Governing Law and Governing Venue. Any or all disputes, disagreements, or litigation
relating to or under terms of this Agreement, including any arbitration or litigation relating to
any arbitration under Section 15, shall be litigated and/or arbitrated in the Commonwealth of
Massachusetts, unless otherwise mutually agreed by the parties. In order to effectuate this
provision, the parties expressly consent to personal jurisdiction in Massachusetts and to a
Massachusetts venue. This Agreement shall in all respects be construed according to the
substantive laws of the Commonwealth of Virginia, without regard to its conflict of laws
principles.
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17. Counterparts. This Agreement may be executed in any number of counterparts, each of
which may be executed by less than all of the parties to this Agreement, each of which shall be
enforceable against the parties actually executing such counterparts, and all of which together
shall constitute one instrument.
18. Signatures. The parties shall be entitled to rely upon and enforce a facsimile of any
authorized signatures as if it were the original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
{signature page follows}
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| COMPANY: | EXECUTIVE: | |||||||
| STAR SCIENTIFIC, INC. | ||||||||
By:
|
/S/ Xxxx X. Xxxxxx
|
/s/ Xxxxxx Xxxxxx
|
||||||
| (Signature) | (Signature) | |||||||
| Xxxx X. Xxxxxx, Chairman, President and Chief Operating Officer 0000 00xx Xxxxxx, X.X. Xxxxxxxxxx, X.X. 00000 |
Xxxxxx Xxxxxx, MD, MPH 00 Xxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxxxxxx 00000 |
|||||||
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