MIDDLEBROOK PHARMACEUTICALS, INC. AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.35
XXXXXXXXXXX PHARMACEUTICALS, INC.
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made
this 8th day of April 2008 by and between Xxxxxx X. Low, a resident of Vienna, Virginia, (the
“Employee”), and Xxxxxxxxxxx Pharmaceuticals, Inc., a corporation organized and existing
under the laws of the State of Delaware and formerly known as Advancis Pharmaceutical Corporation
(the “Company”).
BACKGROUND
The Company is engaged in the business of developing, improving and promoting antibiotic
therapies and the delivery and dosage of antibacterials, as well as extending the market and patent
life of important anti-infectives and oncology (as may be modified or expanded by the Company
during the term of this Agreement, collectively and individually, the “Business”).
The Company desires to employ the Employee and the Employee desires to be employed by the
Company, upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties, subject to the terms and conditions set forth herein,
agree as follows:
1. Employment and Term. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company, as Vice President, Finance & CFO (the
“Position”), commencing on November 1, 2005 (the “Commencement Date”). Employee is
employed by the Company on an at will basis. The Employee shall be entitled to terminate this
Agreement at any time upon ninety (90) days prior written notice to the Company. The Company shall
be entitled to terminate this Agreement at any time subject to the provisions of Section 8 hereof.
(The entire period of time during which the Employee is employed by the Company is referred to
herein as the “Term”).
2. Duties. During the Term, the Employee shall serve the Company faithfully and to
the best of his/her ability and shall devote his/her full time, attention, skill and efforts to the
performance of the duties required by or appropriate for the Position. Subject to the oversight of
the President and CEO, the Employee shall (i) have responsibility for the planning, directing and
prioritizing financial activities and (ii) such duties and responsibilities as may be assigned to
him/her from time to time by the President & CEO. The Employee shall perform such duties and
responsibilities at the Company’s facility located in Germantown, Maryland or at such other
location as may be mutually agreed upon by the Company and the Employee in accordance with the
business needs of the Company. The Employee, as Vice President, Finance & CFO shall report to the
President & CEO.
3. Other Business Activities. Except with the prior written consent of the
Company in its sole discretion, the Employee shall not engage, directly or indirectly, during the
Term, in any other business activities or pursuits whatsoever, except activities in connection with
charitable or civic activities, personal investments and serving as an executor, trustee or in
other similar fiduciary capacity; provided that any such activities do not interfere with the
performance of his/her responsibilities and obligations pursuant to this Agreement.
4. Compensation. The Company shall pay the Employee, and the Employee hereby agrees
to accept, as compensation for all services to be rendered to the Company and for the Employee’s
intellectual property covenants and assignments and covenant not to compete, as provided in
Sections 6 and 7 hereof, the compensation set forth in this Section 4.
4.1 Salary. The Company shall pay the Employee a base salary at the annual rate of
Two Hundred Sixty Thousand Dollars ($260,000.00) (as the same may hereafter be adjusted, the
“Salary”) during the Term of this Agreement. The Salary shall be inclusive of all
applicable income, social security and other taxes and charges that are required by law to be
withheld by the Company (collectively, “Taxes”) and shall be paid and withheld in
accordance with the Company’s normal payroll practice for its executive employees from time to time
in effect. The Salary shall be subject to increase at the option and in the sole discretion of the
Company based upon the demonstrated performance of the Employee.
4.2 Bonus. Upon the execution of this Agreement, the Employee shall be eligible to be
awarded an annual cash bonus, which bonus shall be determined by the President & CEO and the Board
of Directors of the Company (the “Board of Directors”) and shall be at a target amount of
twenty-five percent (25%) of Salary paid during such applicable period, less Taxes, provided that
the Employee shall have achieved all of his/her performance objectives established for such period.
Such bonus shall be determined and paid no later than the 15th day of the third month of such
succeeding calendar year.
4.3 Fringe Benefits. The Employee shall be entitled to participate in the following
programs and receive the following benefits (collectively, the “Benefits”) in accordance
with the following provisions.
(a) The Employee shall be entitled to participate in any retirement, health or dental programs
generally made available to executive employees of the Company.
(b) The Employee shall be entitled to participate in all vacation, life and disability
insurance and other fringe benefit programs of the Company to the extent and on the same terms and
conditions as are accorded to other executive employees of the Company.
4.4 Reimbursement of Expenses. During the Term, the Employee shall be reimbursed for
items of travel, food and lodging and miscellaneous expenses reasonably incurred by him/her on
behalf of the Company, provided that such expenses are incurred, documented and submitted to the
Company, all in accordance with the reimbursement policies of the Company as in effect from time to
time. For purposes of satisfying Section 409A of the
Page 2 of 16
Internal Revenue Code of 1986, as amended (the “Code”), the parties agree that the amounts
reimbursed under this Section 4.4 for one calendar year shall not affect the amounts reimbursed for
other calendar years, and reimbursement payments, if any, shall in all events be made no later than
the 15th day of the third month of the calendar year following the calendar year in which the
applicable expense is incurred.
5. Confidentiality. The Employee recognizes and acknowledges that the Proprietary
Information (as hereinafter defined) is a valuable, special and unique asset of the Company. As a
result, both during the Term and thereafter, the Employee shall not, without the prior written
consent of the Company, for any reason either directly or indirectly divulge to any third-party or
use for his/her own benefit, or for any purpose other than the exclusive benefit of the Company,
any confidential, proprietary, business and technical information or trade secrets of the Company
or of any subsidiary or affiliate of the Company (the “Proprietary Information”) revealed,
obtained or developed in the course of his/her employment with the Company. Proprietary
Information shall include any confidential or proprietary information or trade secrets relating to
any patents or other intellectual property assigned by the Employee to the Company. Proprietary
Information also shall include, but shall not be limited to the intangible personal property
described in Section 6(b) hereof and, in addition, technical information, including research
design, results, techniques and processes; apparatus and equipment design; computer software;
technical management information, including project proposals, research plans, status reports,
performance objectives and criteria, and analyses of areas for business development; and business
information, including project, financial, accounting and personnel information, business
strategies, plans and forecasts, customer lists, customer information and sales and marketing
plans, efforts, information and data. In addition, “Proprietary Information” shall include
all information and materials received by the Company or Employee from a third party subject to an
obligation of confidentiality and/or non-disclosure. Nothing contained herein shall restrict the
Employee’s ability to make such disclosures during the course of his/her employment as may be
necessary or appropriate to the effective and efficient discharge of the duties required by or
appropriate for the Position or as such disclosures may be required by law. Furthermore, nothing
contained herein shall restrict the Employee from divulging or using for his/her own benefit or for
any other purpose any Proprietary Information that is readily available to the general public so
long as such information did not become available to the general public as a direct or indirect
result of the Employee’s breach of this Section 5. Failure by the Company to xxxx any of the
Proprietary Information as confidential or proprietary shall not affect its status as Proprietary
Information under the terms of this Agreement.
6. Property.
6.1 Removal and Distribution. All right, title and interest in and to Proprietary
Information shall be and remain the sole and exclusive property of the Company. During the Term,
the Employee shall not remove from the Company’s offices or premises any documents, records,
notebooks, files, correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to the Company,
unless necessary or appropriate in accordance with the duties and responsibilities required by or
appropriate for the Position and, in the event that such materials or property are removed, all of
the foregoing shall be returned to their proper files or places of safekeeping as
Page 3 of 16
promptly as possible after the removal shall serve its specific purpose. The Employee shall not
make, retain, remove and/or distribute any copies of any of the foregoing for any reason
whatsoever, except as may be necessary in the discharge of the assigned duties and shall not
divulge to any third person the nature of and/or contents of any of the foregoing or of any other
oral or written information to which he may have access or with which for any reason he may become
familiar, except as disclosure shall be necessary in the performance of the duties; and upon the
termination of his/her employment with the Company, the Employee shall return to the Company all
originals and copies of the foregoing then in his/her possession or under his/her control, whether
prepared by the Employee or by others.
6.2 Developments.
(a) The Employee acknowledges that all right, title and interest in and to any and all
writings, documents, inventions, discoveries, ideas, developments, information, computer programs
or instructions (whether in source code, object code, or any other form), algorithms, formulae,
plans, memoranda, tests, research, designs, innovations, systems, analyses, specifications, models,
data, diagrams, flow charts, and/or techniques (whether patentable or non-patentable or whether
reduced to written or electronic form or otherwise) that the Employee creates, makes, conceives,
discovers or develops, either solely or jointly with any other person, at any time during the Term,
whether during working hours or at the Company’s facility or at any other time or location, and
whether upon the request or suggestion of the Company or otherwise, (collectively,
“Intellectual Work Product”) shall be the sole and exclusive property of the Company. The
Employee shall promptly disclose to the Company all Intellectual Work Product, and the Employee
shall have no claim for additional compensation for the Intellectual Work Product, except for any
excluded Intellectual Work Product that is wholly unrelated to the pharmaceutical industry, in the
broadest sense, provided that such Intellectual Work Product is not conceived, discovered or
developed, either solely or jointly with any other person during working hours or at the Company’s
facility or using any other Company resource.
(b) The Employee acknowledges that all the Intellectual Work Product that is copyrightable
shall be considered a work made for hire under United States Copyright Law. To the extent that any
copyrightable Intellectual Work Product may not be considered a work made for hire under the
applicable provisions of the United States Copyright Law, or to the extent that, notwithstanding
the foregoing provisions, the Employee may retain an interest in any Intellectual Work Product, the
Employee hereby irrevocably assigns and transfers to the Company any and all right, title, or
interest that the Employee may have in the Intellectual Work Product under copyright, patent, trade
secret and trademark law, in perpetuity or for the longest period otherwise permitted by law,
without the necessity of further consideration. The Company shall be entitled to obtain and hold
in its own name all copyrights, patents, trade secrets, and trademarks with respect thereto.
(c) The Employee shall reveal promptly all information relating to any such Intellectual
Property to the Board of Directors, and, at the Company’s expense, shall cooperate with the Company
and execute such documents as may be necessary or appropriate (i) in the event that the Company
desires to seek copyright, patent or trademark
Page 4 of 16
protection, or other analogous protection, thereafter relating to the Intellectual Work Product,
and when such protection is obtained, renew and restore the same, or (ii) to defend any opposition
proceedings in respect of obtaining and maintaining such copyright, patent or trademark protection,
or other analogous protection.
(d) In the event the Company is unable after reasonable effort to secure the Employee’s
signature on any of the documents referenced in Section 6.2 (c) hereof, whether because of the
Employee’s physical or mental incapacity or for any other reason whatsoever, the Employee hereby
irrevocably designates and appoints the Company and its duly authorized officers and agents as the
Employee’s agent and attorney-in-fact, to act for and on the behalf and stead to execute and file
any such documents and to do all other lawfully permitted acts to further the prosecution and
issuance of any such copyright, patent or trademark protection, or other analogous protection, with
the same legal force and effect as if executed by the Employee.
(e) The Employee represents that the innovations, designs, systems, analyses, ideas, and all
copyrights, patents, trademarks and trade names, or similar intangible personal property
(collectively, the “Pre-existing Property”) identified on Schedule I hereof
comprise all of the innovations, designs, systems, analyses, ideas and all copyrights, patents,
trademarks and trade names, or similar intangible personal property that the Employee has made or
conceived of prior to the date hereof, and same are excluded from the operation of the other
provisions of this Section 6.2. In the event that the Employee learns of any Pre-existing Property
that he inadvertently failed to include in Schedule I, and the circumstances surrounding the
failure of such inclusion are reasonably satisfactory to the Company, the Employee and the Company
shall jointly amend Schedule I to include such property.
7. Covenant not to Compete.
7.1 Restrictions. Provided that the Company is in compliance with Section 8.6 hereof,
if applicable, the Employee shall not, during the Term and for a period of one (1) year thereafter
(the “Restricted Period”), except as an employee of the Company and in order to carry out
the Employee’s duties hereunder, do any of the following directly or indirectly without the prior
written consent of the Company in its sole discretion:
(a) engage or participate, directly or indirectly, in any business activity competitive with
the Business or the business of the Company or any of the Company’s subsidiaries or affiliates as
conducted during the Term;
(b) become interested (as owner, stockholder, lender, partner, co-venturer, director, officer,
employee, agent, consultant or otherwise) in any person, firm, corporation, association or other
entity engaged in any business that is competitive with the Business or of the business of the
Company or any subsidiary or affiliate of the Company as conducted during the Term, or become
interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee,
agent, consultant or otherwise) any portion of the business of any person, firm, corporation,
association or other entity where such portion of such business is competitive with the Business of
the Company or the business of any subsidiary or
Page 5 of 16
affiliate of the Company as conducted during the Term (notwithstanding the foregoing, the Employee
may hold not more than one percent (1%) of the outstanding securities of any class of any
publicly-traded securities of a company that is engaged in activities referenced in this Section
7.1.
(c) solicit, call on or transact or engage in any business activity with, either directly or
indirectly, any (i) customer with whom the Company shall have dealt at any time during the one (1)
year period immediately preceding the termination of the Employee’s employment hereunder, or (ii)
corporate partner, collaborator, independent contractor or supplier with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the termination of the
Employee’s employment hereunder;
(d) influence or attempt to influence any then current or prospective supplier, customer,
corporate partner, collaborator, or independent contractor of the Company to terminate or modify
any written or oral agreement or course of dealing with the Company; or
(e) influence or attempt to influence any person either (i) to terminate or modify an
employment, consulting, agency, distributorship or other arrangement with the Company, or (ii) to
employ or retain, or arrange to have any other person or entity employ or retain, any person who
has been employed or retained by the Company as an employee, consultant, agent or distributor of
the Company at any time during the one (1) year period immediately preceding the termination of the
Employee’s employment hereunder.
7.2 Acknowledgment. The Employee acknowledges that he has carefully read and
considered the provisions of this Section 7. The Employee acknowledges that the foregoing
restrictions will limit his/her ability to earn a livelihood in a business competitive with the
Business, but he nevertheless believes that he has received and will receive sufficient
consideration and other benefits in connection with the payment by the Company of the compensation
set forth in Sections 4 and 8.6 to justify such restrictions, which restrictions the Employee does
not believe would prevent him/her from earning a living in businesses that are not competitive with
the Business and without otherwise violating the restrictions set forth herein.
8. Early Termination. The Employee’s employment hereunder may be terminated during
the Term upon the occurrence of any one of the events described in this Section 8. Upon
termination, the Employee shall be entitled only to such compensation and benefits as described in
this Section 8. The word “termination” as used throughout the Agreement with respect to the
Employee’s employment hereby refers to a “separation from service” by the Employee from the
Company, as defined by Treasury Regulation §1.409A-1(h).
Page 6 of 16
8.1 Involuntary Termination.
(a) Termination for Disability.
(i) In the event of the disability of the Employee such that the Employee is unable to perform
the duties and responsibilities hereunder to the full extent required by this Agreement by reasons
of illness, injury or incapacity for a period of more than one hundred eighty (180) consecutive
days or more than one hundred eighty (180) days, in the aggregate, during any three hundred
sixty-five (365) day period (“Disability”), the Company shall have the right to terminate
Employee’s employment hereunder by written notice to the Employee.
(ii) In the event of a termination of the Employee’s employment hereunder pursuant to Section
8.1(a)(i), the Employee will be entitled to receive all accrued and unpaid (as of the date of such
termination) Salary and applicable Benefits; provided that the Employee has complied with all of
his/her obligations under this Agreement and continues to comply with all of his/her surviving
obligations hereunder listed in Section 10 and a pro-rata percentage of the bonus (provided in
Section 4.2) for the last fiscal year of the Company prior to the date of Employee’s termination.
All the foregoing payments shall be paid within thirty (30) days following the termination date.
Except as specifically set forth in this Section 8.1(a)(ii) or as provided by applicable law, the
Company shall have no liability or obligation to the Employee for compensation or benefits
hereunder by reason of, or subsequent to, such termination.
(b) Termination by Death. In the event that the Employee dies during the Term, the
Employee’s employment hereunder shall be terminated thereby and the Company shall pay to the
Employee’s executors, legal representatives or administrators an amount equal to the accrued and
unpaid portion of the Salary for the month in which he dies and a pro-rata percentage of the bonus
(provided in Section 4.2) for the last fiscal year of the Company prior to the date of Employee’s
termination. All the foregoing payments shall be paid within thirty (30) days following the
termination date. Except as specifically set forth in this Section 8.1(b) or as provided by
applicable law, the Company shall have no liability or obligation hereunder to the Employee’s
executors, legal representatives, administrators, heirs or assigns or any other person claiming
under or through him/her by reason of or subsequent to the Employee’s death.
8.2 Termination for Cause.
(a) The Company shall have the right to terminate the Employee’s employment hereunder at any
time for “cause” upon written notice to the Employee. For purposes of this Agreement, “cause”
shall mean the Employee’s (including, if the Employee is not a natural person, any employee of or
contractor to the Employee who is involved, directly or indirectly, in the provision of services to
the Company) (a) dishonesty, embezzlement, theft or fraudulent misconduct; (b) abuse of a
controlled substance that materially impairs the performance of the Employee’s duties to the
Company; (c) conduct adverse to the business,
Page 7 of 16
interests, or reputation of the Company; (d) material breach of any of the terms hereof or of any
agreement between the Company and the Employee, (including, but not limited to, terms relating to
non-disclosure, non-competition and invention assignment) which, if curable, remains uncured thirty
(30) days after the Employee receives written notice of such breach; or (e) commission of a felony.
(b) In the event of a termination of the Employee’s employment hereunder pursuant to Section
8.2(a), the Employee shall be entitled to receive all accrued but unpaid (as of the effective date
of such termination) Salary and Benefits. All the foregoing payments shall be paid within thirty
(30) days following the termination date. All Salary and Benefits shall cease at the time of such
termination, subject to the requirements of applicable law. Except as specifically set forth in
this Section 8.2, the Company shall have no liability or obligation hereunder by reason of or
subsequent to such termination.
8.3 Termination by the Company Without Cause. Notwithstanding anything to the
contrary set forth herein, the Company shall have the right to terminate the Employee’s employment
hereunder at any time before or after a Change in Control (as defined below), for any reason or no
reason, with or without cause, effective upon the date designated by the Company upon written
notice to the Employee.
8.4 Termination for Good Reason Following a Change in Control.
(a) The Employee shall have the right to terminate the Employee’s employment hereunder at any
time for Good Reason within twelve (12) months following a Change in Control.
(b) “Good Reason” means the occurrence of any one of the following without the Employee’s
consent:
(i) any requirement that the Employee relocate, by more than thirty-five (35)
miles, from the principal location where the Employee performs services for the
Company;
(ii) any material diminution in the Employee’s authority, duties or
responsibilities (other than a change due to a Disability); or
(iii) any material reduction in the Employee’s Salary or bonus.
Notwithstanding the forgoing, an event that is or would constitute grounds for a
resignation for a Good Reason shall not constitute such grounds for a resignation for
Good Reason if: (A) Employee does not send a notice of termination to the Company
within thirty (30) days after the event occurs; or (B) the Company reverses the action
or cures the default that would give rise to a termination for a Good Reason within
thirty (30) days after the delivery of the notice of termination.
Page 8 of 16
(c) “Change in Control” means: (i) the acquisition (other than from the Company) in
one or more transactions by any Person, as defined below, of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of
thirty-three percent (33%) or more of (A) the then outstanding shares of the securities of the
Company, or (B) the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the “Company Voting Stock”); (ii)
the closing of a sale or other conveyance of assets representing fifty percent (50%) or more of the
fair market value of the Company’s consolidated assets (in a single transaction or in a series of
related transactions); (iii) the dissolution or liquidation of the Company; (iv) a change in the
composition of the Board of Directors, as a result of which, fewer than one-half of the incumbent
directors after such change are directors who either (A) had been directors of the Company
twenty-four (24) months prior to such change or (B) were elected, or nominated for election, to the
Board of Directors with the approval of at least a majority of the directors who had been the
Company’s directors twenty-four (24) months prior to such change and who were still in office at
the time of the election or nomination; or (v) the effective time of any merger, share exchange,
consolidation, or other business combination involving the Company if immediately after such
transaction persons who hold a majority of the outstanding voting securities entitled to vote
generally in the election of directors of the surviving entity (or the entity owning one hundred
percent (100%) of such surviving entity) are not persons who, immediately prior to such
transaction, held a majority of the Company Voting Stock; provided, however, that a Change in
Control shall not include (X) a public offering of capital stock of the Company; (Y) any
distribution of capital stock of the Company by a partnership or limited liability company to a
partner of such partnership or member of such limited liability company in respect of the interest
of such partner or member and without the payment of additional consideration; or (Z) any
transaction pursuant to which shares of capital stock of the Company are transferred or issued to
any trust, charitable organization, foundation, family partnership or other entity controlled
directly or indirectly by, or established for the benefit of any of the current or former executive
officers of the Company or their immediate family members (including spouses, children,
grandchildren, parents, and siblings, in each case to include adoptive relations), or transferred
to any such immediate family members. For purposes of this definition of Change in Control, a
“Person” means any individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended, other than: employee benefit plans
sponsored or maintained by the Company or by affiliates controlled by the Company, or an
underwriter of the common stock of the Company in a registered public offering.
8.5 Termination for Good Reason In the Event of a Potential Change in Control.
(a) The Employee shall have the right to terminate the Employee’s employment hereunder at any
time following a Potential Change in Control if after a Potential Change in Control there is a Good
Reason event and such Good Reason event was the result of a request or direction given by a Person
seeking to effectuate a Change in Control.
(b) “Potential Change in Control” means (i) the Company
Page 9 of 16
enters into a definitive agreement, the consummation of which would result in the occurrence
of a Change in Control; or (ii) any Person publicly announces an intention to take actions which,
if consummated, would constitute a Change in Control.
8.6 Severance Benefits. In the event of a termination of the Employee’s employment
hereunder without cause before or after a Change in Control pursuant to Section 8.3 or for Good
Reason within twelve (12) months following a Change in Control pursuant to Section 8.4(a) or
following a Potential Change in Control pursuant to Section 8.5, the Employee shall be entitled to
receive the following:
(a) All accrued but unpaid (as of the effective date of such termination) Salary and a
pro-rata percentage of the bonus (provided in Section 4.2) for the last fiscal year of the Company
prior to the date of the Employee’s termination provided that the Employee has complied with all of
his/her obligations under this Agreement and continues to comply with all of his/her surviving
obligations hereunder listed in Section 10. All the foregoing payments shall be paid within
thirty (30) days following the termination date. All Salary shall cease at the time of such
termination, except as required under applicable law. Except as specifically set forth in this
Section 8, the Company shall have no liability or obligation hereunder by reason of or subsequent
to such termination.
(b) Severance pay in the form of a lump sum payment within sixty (60) days of such
termination, in an amount equal to the present value of the Salary that the Employee would have
earned if the Employee had continued working for the Company during the twelve (12) month period
immediately following the Employee’s date of termination, where such present value is to be
determined using a discount rate equal to the applicable short-term federal rate prescribed under
Section 1274(d) of the Code in effect for the month prior to the month in which the Employee’s
termination of employment under Sections 8.3 or 8.4 occurs. Such payment shall be subject to all
Taxes.
(c) All Benefits to which he was entitled on the date preceding his/her termination for a
period of twelve (12) additional months following termination, made in accordance with any terms
applicable to such Benefits. All reimbursements and in-kind benefits provided under this Section
8.6(c), shall be made or provided in accordance with the requirements of Section 409A of the Code,
including, where applicable, the requirement that (i) any reimbursement shall be for expenses
incurred during the Employee’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits
to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be
made on or before the last day of the calendar year following the year in which the expense is
incurred (or such earlier date if specified in this Agreement), and (iv) the right to reimbursement
or in-kind benefits is not subject to liquidation or exchange for another benefit.
(d) Except as provided in subsections (a), (b) and (c) above, the Company shall have no
liability or obligation by reason of or subsequent to the termination of the employment
relationship between the Company and the Employee.
Page 10 of 16
(e) Notwithstanding anything in this Agreement to the contrary, in no event shall the Company
be obligated to pay or distribute to Employee any amount that constitutes nonqualified deferred
compensation within the meaning of Section 409A of the Code earlier than the earliest permissible
date under Section 409A of the Code that such amount could be paid without additional taxes or
interest being imposed under Section 409A of the Code.
9. Representations, Warranties and Covenants of the Employee.
9.1 Restrictions. The Employee represents and warrants to the Company that:
(a) There are no restrictions, agreements or understandings whatsoever to which the Employee
is a party which would prevent or make unlawful the Employee’s execution of this Agreement or the
Employee’s employment hereunder, or which is or would be inconsistent or in conflict with this
Agreement or the Employee’s employment hereunder, or, except as set forth in any agreements
previously provided to the Company, would prevent, limit or impair in any way the performance by
the Employee of the obligations hereunder; and
(b) The Employee has disclosed to the Company all restraints, confidentiality commitments or
other employment restrictions that he has with any other employer, person or entity.
9.2 Obligations to Former Employers. The Employee covenants that in connection with
his/her provision of services to the Company, he shall not breach any obligation (legal, statutory,
contractual or otherwise) to any former employer or other person, including, but not limited to
obligations relating to confidentiality and proprietary rights.
9.3 Obligations Upon Termination. Upon and after his/her termination or cessation of
employment with the Company and until such time as no obligations of the Employee to the Company
hereunder exist, the Employee (i) shall provide a complete copy of this Agreement to any
prospective employer or other person, entity or association engaged in the Business, with whom or
which the Employee proposes to be employed, affiliated, engaged, associated or to establish any
business or remunerative relationship prior to the commencement thereof and (ii) shall notify the
Company of the name and address of any such person, entity or association prior to his/her
employment, affiliation, engagement, association or the establishment of any business or
remunerative relationship.
10. Survival of Provisions. The provisions of this Agreement set forth in Sections 5,
6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of the Employee’s employment
hereunder.
11. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and the Employee and their respective successors, executors,
Page 11 of 16
administrators, heirs and/or assigns; provided that neither party shall make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the other party.
12. Notice. Any notice hereunder by either party shall be given by personal delivery
or by sending such notice by certified mail, return-receipt requested, or telecopied, addressed or
telecopied, as the case may be, to the other party at its address set forth below or at such other
address designated by notice in the manner provided in this section. Such notice shall be deemed
to have been received upon the date of actual delivery if personally delivered or, in the case of
mailing, two (2) days after deposit with the U.S. mail, or, in the case of facsimile
transmission, when confirmed by the facsimile machine report.
| (a) | if to the Company, to: | ||
| XxxxxxXxxxx Pharmaceuticals, Inc. 00000 Xxxxxx Xxxxxxx Xxxxxxx Xxxxxxxxxx, Xxxxxxxx 00000 Attention: Human Resources Facsimile: (000) 000-0000 |
|||
| (b) | if to the Employee, to: | ||
| Xxxxxx X. Low X.X. Xxx 000 Xxxxxx, Xxxxxxxx 00000-0000 |
13. Entire Agreement; Amendments. This Agreement contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and merges and
supersedes all prior and contemporaneous discussions, agreements, amendments and understandings of
every nature between the parties hereto relating to the employment of the Employee with the
Company. This Agreement may not be changed or modified, except by an agreement in writing signed
by each of the parties hereto.
14. Waiver. The waiver of the breach of any term or provision of this Agreement shall
not operate as or be construed to be a waiver of any other or subsequent breach of this Agreement.
15. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware, without regard to the principles of conflicts of laws of any
jurisdiction.
16. Invalidity. If any provision of this Agreement shall be determined to be void,
invalid, unenforceable or illegal for any reason, the validity and enforceability of all of the
remaining provisions hereof shall not be affected thereby. If any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such
Page 12 of 16
amendment to apply only to the operation of such provision in the particular jurisdiction in which
such adjudication is made; provided that, if any provision contained in this Agreement shall be
adjudicated to be invalid or unenforceable because such provision is held to be excessively broad
as to duration, geographic scope, activity or subject, such provision shall be deemed amended by
limiting and reducing it so as to be valid and enforceable to the maximum extent compatible with
the applicable laws of such jurisdiction, such amendment only to apply with respect to the
operation of such provision in the applicable jurisdiction in which the adjudication is made.
17. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.
18. Number of Days. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays and legal holidays; provided that, if the
final day of any time period falls on a Saturday, Sunday or day which is a legal holiday in
Delaware or Maryland, then such final day shall be deemed to be the next day which is not a
Saturday, Sunday or legal holiday.
19. Specific Enforcement. The Employee acknowledges that the restrictions contained
in Sections 5, 6, and 7 hereof are reasonable and necessary to protect the legitimate interests of
the Company and its affiliates and that the Company would not have entered into this Agreement in
the absence of such restrictions. The Employee also acknowledges that any breach by him/her of
Sections 5, 6, or 7 hereof will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. The Employee shall not, in any action or
proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that an
adequate remedy at law exists. In the event of such breach by the Employee, the Company shall have
the right to enforce the provisions of Sections 5, 6, and 7 of this Agreement by seeking injunctive
or other relief in any court, and this Agreement shall not in any way limit remedies of law or in
equity otherwise available to the Company.
20. Consent to Suit. Subject to the provisions of Section 21 hereof, any legal
proceeding arising out of or relating to this Agreement shall be instituted in the Court of
Chancery of New Castle County, or if such court does not have jurisdiction or will not accept
jurisdiction, in any state or federal court of general jurisdiction in the State of Delaware, and
each of the Company and the Employee hereby consents to the personal and exclusive jurisdiction of
such court and hereby waives any objection that either party may have to the laying of venue of any
such proceeding and any claim or defense of inconvenient forum. If an action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover, in addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.
21. Arbitration. Subject to the last sentence of this Section 21, if any dispute
arises over the terms of this Agreement between the parties to this Agreement, either Employee or
Company may submit the dispute to binding arbitration within thirty (30) days after such dispute
arises, to be governed by the evidentiary and procedural rules of the American Arbitration
Association (Commercial Arbitration). Employee and Company shall mutually
Page 13 of 16
select one (1) arbitrator within ten (10) days after a dispute is submitted to arbitration. In the
event that the parties do not agree on the identity of the arbitrator within such period, the
arbitrator shall be selected by the American Arbitration Association. The arbitrator shall hold a
hearing on the dispute in Wilmington, Delaware within thirty (30) days after having been selected
and shall issue a written opinion within fifteen (15) days after the hearing. The arbitrator shall
also decide on the allocation of the costs of the arbitration to the respective parties, but
Employee and Company shall each be responsible for paying the fees of their own legal counsel, if
legal counsel is obtained. Either Employee or Company, or both parties, may file the decision of
the arbitrator as a final, binding and unappealable judgment in a court of appropriate
jurisdiction. Notwithstanding the foregoing provisions of this Section 21 to the contrary, matters
in which an equitable remedy or injunctive relief is sought by a party, including but not limited
to the remedies referred to in Section 19 hereof, shall not be required to be submitted to
arbitration, if the party seeking such remedy or relief objects thereto, but shall instead be
subject to the provisions of Sections 19 and 20 hereof.
22. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall be deemed to be one and the same
instrument.
23. Authorization. In connection with the execution of this Agreement, the Employee
shall be provided with a copy of the resolutions of the Board of Directors authorizing the
execution of this Agreement on behalf of the Company.
[SIGNATURES ON FOLLOWING PAGE]
Page 14 of 16
IN WITNESS WHEREOF, the parties have caused this Executive Employment Agreement to be executed
the day and year first written above.
| XXXXXXXXXXX PHARMACEUTICALS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, Ph.D. | ||||
| President & CEO | ||||
| /s/ Xxxxxx X. Low | ||||
| Xxxxxx X. Low | ||||
Page 15 of 16
Schedule I
Preexisting Property:
Page 16 of 16
