EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Agreement”), effective as of August 6, 2008 (“Effective Date”),
between Urigen Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and Xxxxxx X. Xxxxxxx (the “Employee”).
WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to employ the Employee in
the position set forth below, and the Employee desires to serve in that
capacity.
NOW,
THEREFORE, in consideration of the foregoing premises, the Company and Employee
hereby agree as follows:
1. Employment Period. The Company
shall employ the Employee, and the Employee shall serve the Company, on the
terms and conditions set forth in this Agreement, for a term of two years
commencing on the date hereof, unless earlier terminated in accordance with
Section 4 hereof (the “Initial Term” and, together with any subsequent term of
Employment, the “Employment Period”); provided that the term of employment
hereunder will automatically be renewed for successive one-year terms (each such
term a “Renewal Term”) unless either party shall, at least 30 days before such
date, provide written notice to the other party that the Employment Period will
not be extended.
2. Position
and Duties.
(a) The
Employee shall serve as Chief Financial Officer of the Company, reporting to the
Chief Executive Officer, with such duties and responsibilities as are
customarily assigned to such position, and such other duties and
responsibilities not inconsistent therewith as may be assigned to him from time
to time by the Board.
(b) During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Employee is entitled, the Employee shall devote his full-time efforts
to the business and affairs of the Company and use his best efforts to carry out
such responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Employee to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures or fulfill speaking
engagements, (iii) manage personal investments, (iv) engage in other business
activities, so long as such activities do not materially interfere with the
performance of his responsibilities as an employee of the Company in accordance
with this Agreement or violate the provisions of Section 8 of this
Agreement.
(c) Employee
shall not be required to change his domicile to perform his
duties. Employee agrees to perform a reasonable amount of travel in
order to perform his duties hereunder.
3. Compensation.
(a) Base Salary. During the first
contract year of the Initial Term, the Employee shall receive an annual base
salary (the “Annual Base Salary”) of $225,000. Employee will receive
an annual salary review by the Board, or an authorized committee thereof, on
each anniversary of the Effective Date. The Annual Base Salary shall be payable
in accordance with the Company’s payroll practices as in effect from time to
time. The Board or an authorized committee thereof may increase the Annual Base
Salary above the foregoing amounts at its discretion.
1
(b) Bonus. In addition to the
Annual Base Salary, the Employee shall be entitled to an annual bonus based upon
the discretion of the Board of Directors.
(c) Benefits. During the
Employment Period, the Employee and the Employee’s direct family shall be
entitled to participate in all benefit programs of the Company provided to
executives of similar rank, including, but not limited to, health insurance
coverage, as well as all welfare benefit plans, practices, policies and programs
provided by the Company or Parent, including, but not limited to any
comprehensive dental plan, retirement plans and profit sharing programs the
Company or Parent may provide to other employees from time to time.
(d) Expenses. During the
Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in carrying
out the Employee’s duties under this Agreement, provided that the Employee
complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts and similar documentation of such
expenses.
(e) Vacation. During the
Employment Period, the Employee shall be entitled to a paid annual vacation of
four weeks and other fringe benefits on such terms and conditions as may be
determined by the Board or authorized committee thereof from time to
time.
4. Termination
of Employment.
(a) Death or Disability. The
Employee’s employment shall terminate automatically upon the Employee’s death
during the Employment Period. The Company shall be entitled to terminate the
Employee’s employment because of the Employee’s Disability during the Employment
Period. “Disability” means that (i) the Employee is unable to perform the job
with or without a reasonable accommodation pursuant to the state and federal
disability discrimination laws or (ii) a physician selected by the Company or
its insurers, and acceptable to the Employee or the Employee’s guardian or legal
representative, made a finding of permanent physical or mental disability and
such disability is expected to result in death or to be of a continuous duration
of no less than twelve (12) months. A termination of the Employee’s employment
by the Company for Disability shall be communicated to the Employee by written
notice, and shall be effective on the 30th day after receipt of such notice by
the Employee (the “Disability Effective Date”), unless the Employee is able to,
and does, return to full-time performance of the Employee’s duties before the
Disability Effective Date or the employee establishes that he is not disabled
under this definition of Disability.
(b) By
the Company.
(A) The
Company may terminate the Employee’s employment during the Employment Period for
Cause or without Cause. “Cause” means:
(i) Employee
having, in the reasonable judgment of the Company, committed an act which if
prosecuted and resulting in a conviction would constitute a fraud, embezzlement,
or any felonious offense (specifically excepting simple misdemeanors not
involving acts of dishonesty and all traffic violations);
2
(ii) the
Employee’s theft, embezzlement, misappropriation of or intentional and malicious
infliction of damage to the Company’s property or business
opportunity;
(iii) the
Employee’s repeated abuse of alcohol, drugs or other substances as determined by
an independent medical physician; or
(iv) the
Employee’s engagement in gross dereliction of duties, refusal to perform
assigned duties consistent with his position, his knowing and willful breach of
any material provision of this Agreement continuing after written notice from
the Company or repeated violation of the Company’s written policies after
written notice.
(B) A
termination of the Employee’s employment by the Company for Cause shall be
effectuated by giving the Employee written notice (“Notice of Termination for
Cause”) of the termination, setting forth the conduct of the Employee that
constitutes Cause. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
60 days after the notice is given). Employee will be immediately
advised of any allegations of conduct covered by clause (A) above and will be
provided a period of thirty (30) days from the date of the written notice to
defend himself against such allegations and to take any appropriate remedial
action. If Employee shows that the allegations are untrue or takes appropriate
remedial action to address the allegations, the Company will not terminate the
Employee’s employment for Cause.
(C) A
termination of the Employee’s employment by the Company without Cause shall be
effected by giving the Employee written notice of the termination at least 6
months (180 days) prior to the termination date or by providing the employee
with compensation that would have been earned by Employee during the six months
period, in lieu of such notice and the severance benefits in section 5(a)
below.
(c) By the
Employee.
(A) The
Employee may terminate employment with or without Good Reason. “Good
Reason” means:
(i) a
material reduction in the Employee's responsibilities, compensation, or
title;
(ii) any act
of the Company requiring that the Employee relocate
Employee's
living residence outside of the San Francisco Bay Area;
(iii) the
assignment to the Employee of any duties inconsistent in any respect with
paragraph (a) of Section 2 of this Agreement, other than actions that are not
taken in bad faith and are remedied by the Company within thirty (30) days after
receipt of notice thereof from the Employee;
3
(iv) any
failure by the Company to comply with any provision of Section 3 of this
Agreement, other than failures that are not taken in bad faith and are remedied
by the Company within thirty (30) days after receipt of notice thereof from the
Employee;
(v) the
occurrence of a Non-Negotiated Change in Control of the Company (as defined
below); or
(vi) the
Company’s material breach of this Agreement.
For
purposes of this Agreement, “Non-Negotiated Change in Control” means any one or
more of the following occurrences:
(x) Any
individual, corporation (other than the Company, any trustees or other
beneficiary holding securities under any employee benefit plan of the Company,
or any Company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company possessing more than fifty percent (50%) of the voting
power for the election of directors of the Company;
(y) There
shall be consummated any consolidation, merger, or other business combination
involving the Company or the securities of the Company in which holders of
voting securities of the Company immediately prior to such consummation own, as
a group, immediately after such consummation, voting securities of the Company
(or, if the Company does not survive such transaction, voting securities of the
entity surviving such transaction) having less than fifty percent (50%) of the
total voting power in an election of directors of the Company (or such other
surviving corporation); or
(z) There
shall be consummated any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company (on a consolidated basis) to a party which is not
controlled by or under common control with the Company.
(d) A
termination of employment by the Employee for Good Reason shall be effectuated
by giving the Company written notice (“Notice of Termination for Good Reason”)
of the termination, setting forth the conduct of the Company that constitutes
Good Reason. A termination of employment by the Employee for Good Reason shall
be effective on the fifth business day following the date when the Notice of
Termination for Good Reason is given, unless the notice sets forth a later date
(which date shall in no event be later than 30 days after the notice is
given).
4
(e) A
termination of the Employee’s employment by the Employee without Good Reason
shall be effected by giving the Company written notice of the termination at
least sixty (60) days prior to the termination date, where it is reasonable for
the Employee to provide such notice.
(f) Notwithstanding
anything in this Agreement to the contrary, in no event will any amount which
otherwise would be payable under or pursuant to this Agreement be payable to
Employee to the extent such amount, together with all other amounts payable and
benefits provided to Employee under or pursuant to this Agreement and/or under
any other plan(s), agreements and/or arrangement(s) arising out of Employee’s
employment relationship with Company and/or any direct or indirect subsidiary of
Company (including without limitation any such amounts payable by any affiliate
of Company or any acquirer of any of the stock or assets of Company or any
affiliate of such acquirer), if paid to Employee, would result in Employee
receiving an “excess parachute payment” for purposes of Section 280G of the
Internal Revenue Code of 1986, as amended. The
determination of whether a payment under or pursuant to this Agreement would
result in Employee receiving an excess parachute payment (but for the
provisions of this Section 4) shall be made by counsel for Company reasonably
selected by Company and acceptable to Employee, after consultation with
Company’s independent auditor.
(g) No Waiver. The failure to set
forth any fact or circumstance in a Notice of Termination for Cause or a Notice
of Termination for Good Reason shall not constitute a waiver of the right to
assert, and shall not preclude the party giving notice from asserting, such fact
or circumstance in an attempt to enforce any right under or provision of this
Agreement.
(h) Date of Termination. The “Date
of Termination” means the date of the Employee’s death, the Disability Effective
Date, the date on which the termination of the Employee’s employment by the
Company for Cause or by the Employee for Good Reason is effective, or the date
on which the Company gives the Employee notice of a termination of employment
without Cause or the Employee gives the Company notice of a termination of
employment without Good Reason, as the case may be.
5
5. Obligations
of the Company upon Termination.
(a) Termination for Reasons Other Than
for Cause, Death or Disability, or Good Reason. If, during the Employment
Period, the Company terminates the Employee’s employment, for any reason other
than for Cause, Death or Disability, or the Employee terminates his employment
for Good Reason, the Company shall (i) pay the Employee’s accrued but unpaid
portion of the Annual Base Salary and Bonus, if any, (the “Accrued Obligations”)
to the Employee in a lump sum in cash within thirty (30) days after the Date of
Termination, and (ii) continue to pay the Annual Base Salary for a period of
twelve (12) months from the date of termination, provided, however,
if (i) during the twelve (12) month period immediately following a
Non-Negotiated Change of Control, Employee is terminated at any time by Employer
without Cause or Employee terminates his employment for Good Reason (other than
simply the occurrence of a Non Negotiated Change of Control), the Company shall
pay to the Employee a lump sum in cash within thirty (30) days after the Date of
Termination in an amount equal to twenty four (24) months of the Annual Base
Salary.
(b) Termination for Cause or Resignation
for other than a Good Reason. If the Employee’s employment is terminated
by the Company for Cause during the Employment Period, or if the Employee
terminates his employment during the Employment Period other than for Good
Reason, the Company shall pay Employee the Accrued Obligations.
6. Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Employee’s continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Employee may qualify,
nor, subject to paragraph (f) of Section 4, shall anything in this Agreement
limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its affiliated companies.
Vested benefits and other amounts that the Employee is otherwise entitled to
receive under any plan, policy, practice or program of, or any contract or
agreement with, the Company or any of its affiliated companies on or after the
Date of Termination shall be payable in accordance with such plan, policy,
practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
7. Covenant
of Employee.
(a) Employee
recognizes that the services to be performed by him pursuant to this Agreement
are special, unique and extraordinary. The parties confirm that it is
reasonably necessary for the protection of the Company’s goodwill that Employee
agree, and accordingly, Employee does hereby agree and covenant that Employee
will not, directly or indirectly, except for the benefit of the
Company:
(i) become an
officer, director, more than 2% stockholder, partner, associate, employee,
owner, proprietor, agent, creditor, independent contractor, co-venturer or
otherwise, or be interested in or associated with any other corporation, firm or
business engaged in the Territory (as hereinafter defined) in the same or any
similar business competitive with that of the Company (including the Company’s
present and future subsidiaries and affiliates) while an employee of the
Company;
6
(ii) solicit,
cause or authorize, directly or indirectly, to be solicited for or on behalf of
himself or third parties from parties who were customers of the Company
(including the Company’s present and future subsidiaries and affiliates) at any
time while an employee of the Company;
(iii) solicit,
or cause or authorize, directly or indirectly, to be solicited for employment
for or on behalf of himself or third parties, any persons who were at any time
during the Employment Period hereunder, employees of the Company (including the
Company’s present and future subsidiaries and affiliates) (except for general
solicitations made to the public at large) for a period of one year from the
date the Employee’s employment was terminated; or
(iv) use the
tradenames, trademarks, or trade dress of any of the products of the Company
(including the Company’s present and future subsidiaries and affiliates); or any
substantially similar tradename, trademark or trade dress likely to cause, or
having the effect of causing, confusion in the minds of manufacturers,
customers, suppliers and retail outlets and the public generally.
8. Confidentiality;
Return of Property
(a) The
Employee acknowledges that during the Employment Period he will receive
confidential information from the Company, the Parent and subsidiaries of the
Company (each a “Relevant Entity”). Accordingly, the Employee agrees
that during the Employment Period and thereafter, the Employee and his
affiliates shall not, except in the performance of his obligations to the
Company hereunder or as may otherwise be approved in advance by the Company,
directly or indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that he may learn or has learned by reason
of his association with any Relevant Entity. Upon termination of this Agreement,
the Employee shall promptly return to the Company any and all properties,
records or papers of any Relevant Entity, that may have been in his possession
at the time of termination, whether prepared by the Employee or others,
including, but not limited to, confidential information and keys. For purposes
of this Agreement, “confidential information” includes all data, analyses,
reports, interpretations, forecasts, documents and information concerning a
Relevant Entity and its affairs, including, without limitation with respect to
clients, products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business plans,
prospects or opportunities, (i) that the Company reasonably believes are
confidential or (ii) the disclosure of which could be injurious to a Relevant
Entity or beneficial to competitors of a Relevant Entity, but shall exclude any
information that (x) the Employee is required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law, (y)
is or becomes publicly available prior to the Employee’s disclosure or use of
the information in a manner violative of the second sentence of this Section
8(a), or (z) is rightfully received by Employee without restriction or
disclosure from a third party legally entitled to possess and to disclose such
information without restriction (other than information that he may learn or has
learned by reason of his association with any Relevant Entity). For purposes of
this Agreement, “affiliate” means any entity that, directly or indirectly, is
controlled by, or under common control with, the Employee. For
purposes of this definition, the terms “controlled” and under common control
with” means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of such person, whether through the
ownership of voting stock, by contract or otherwise.
7
(b) Injunction. Notwithstanding
any other provisions of this Agreement, Employee acknowledges and agrees that in
the event of a violation or threatened violation of any of the provisions of
this Section 8, Employer shall have no adequate remedy at law and shall
therefore be entitled to enforce each such provision by temporary or permanent
injunctive or mandatory relief obtained in any court of competent jurisdiction
without the necessity of proving damage or posting any bond or other security,
and without prejudice to any other remedies that may be available at law or in
equity.
9. Successors.
(a) This
Agreement is personal to the Employee and, without the prior written consent of
the Company, shall not be assignable by the Employee otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Employee’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
10. Miscellaneous.
(a) This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of California, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified except by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All
notices and other communications under this Agreement shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
If to the
Employee:
Xxxxxx X.
Xxxxxxx
0000
Xxxxx Xxxxx
Xxxxxxx,
XX 00000
If to the
Company:
President
000
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
8
or to
such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 10. Notices and communications
shall be effective when actually received by the addressee.
(c) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
If any provision of this Agreement shall be held invalid or unenforceable in
part, the remaining portion of such provision, together with all other
provisions of this Agreement, shall remain valid and enforceable and continue in
full force and effect to the fullest extent consistent with law.
(d) Notwithstanding
any other provision of this Agreement, the Company may withhold from amounts
payable under this Agreement all federal, state, local and foreign taxes that
are required to be withheld by applicable laws or regulations.
(e) The
failure of the Employee or the Company to insist upon strict compliance with any
provision of, or to assert any right under, this Agreement shall not be deemed
to be a waiver of such provision or right or of any other provision of or right
under this Agreement.
(f) The
Employee and the Company acknowledge that this Agreement supersedes any other
agreement between them concerning the subject matter hereof.
(g) This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and which together shall constitute one
instrument.
[Signature
Page follows]
9
IN
WITNESS WHEREOF, the Employee has hereunto set the Employee’s hand and, pursuant
to the authorization of its Board, the Company has caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.
|
|
|||
|
|
By:
|
/s/ Xxxxx Xxxxxx | |
| Xxxxx Xxxxxx | |||
| Chairman | |||
| EMPLOYEE | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxx | |
| Xxxxxx X. Xxxxxxx | |||
10
