EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Agreement, dated November 19, 1999, by and between Lakaro
Biopharmaceuticals, Inc. ("Lakaro"), a Delaware corporation having an address at
000 Xxxxx Xx., Xxx'xxxx Xx'xx, Xxxxxxxxx, Xxxxxx 00000 and Xxxxxxxx Xxxx, an
individual residing at 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx (the "President")
WITNESSETH:
WHEREAS, the Corporation desires to employ the President as President of
Lakaro and the President desires to be employed by the Lakaro as President of
Lakaro, all pursuant to the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is agreed as follows:
1. EMPLOYMENT DUTIES
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(a) Lakaro hereby engages and employs the President, and the President
accepts engagement and employment, as President of Lakaro, to direct, supervise
and have responsibilities for the scientific and research affairs of Lakaro and
for any other appropriate areas and tasks which the Board of Directors and/or
the Chief Executive Officer may assign to him. The President acknowledges and
agrees that the performance by the President of his duties hereunder may require
significant domestic and international travel by the President. In addition,
the President realizes that he may be required to spend a substantial amount of
time in Jerusalem, Israel.
(b) The President shall devote substantially all of his gainful time to the
discharge of his duties and responsibilities under this Agreement.
2. TERM
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The President's employment hereunder shall be for a term of three (3) years
commencing on the Effective Date and continuing through the third anniversary of
the Effective Date (the "Initial Term"), with successive one-year renewals
thereafter (the "Renewal Terms") unless sooner terminated as hereinafter
provided, or by notice of either party not less than 90 days prior to the
expiration of each term.
3. COMPENSATION
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(a) As compensation for the performance of his duties on behalf of Lakaro,
the President shall be compensated as follows:
(i) Upon the next meeting of the Corporation's Board of Directors, the
Corporation will grant (the "Initial Grant") the President options (the
"Options") to purchase 130,000 shares of the Common Stock of the Corporation at
an exercise price equal to $0.15 per share (the "Exercise Price"), which options
shall be exercisable for a period of 10 years from the date of issuance. Should
any change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments shall be made to
(i) the total number and/or class of securities subject to such options and (ii)
the Exercise Price in order to reflect such change and thereby preclude a
dilution or enlargement under such options.
(ii) The stock options shall vest as follows: one-third on the closing
of the next equity investment in Lakaro; one-sixth six months from the date of
grant; one-sixth twelve months from the date of grant; one-sixth eighteen months
from the date of grant; and one-sixth twenty four months from the date of grant;
but immediate vesting shall occur upon a change of control of the Corporation as
described in paragraph 10(a)(iii)C below.
(iii) At the discretion of the Board of Directors, the President
shall be entitled to an annual grant of subsequent stock options each of which
shall have the same antidilution protection as described in Section 3 paragraph
(a)(i) above.
(b) Lakaro shall reimburse the President for all normal, usual and
necessary expenses incurred by the President in furtherance of the business and
affairs of Lakaro, including travel and entertainment, against receipt by Lakaro
of appropriate vouchers or other proof of the President's expenditures and
otherwise in accordance with such Expense Reimbursement Policy as may from time
to time be adopted by the Board of Directors of Lakaro.
(c) The President shall be, during the term of this Agreement, entitled to
four (4) weeks of vacation per year as well as all statutory holidays.
(d) Lakaro shall adopt as part of the Corporation's Bylaws a broad form
indemnity of all actions taken in good faith by the officers and directors of
the Corporation.
(e) Subject to Section 10(c) below, the President must be an employee of
Lakaro at the time any compensation is due in order to receive such
compensation. In addition, no options shall vest after the termination of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES
BY THE PRESIDENT AND LAKARO
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(a) The President hereby represents and warrants to Lakaro as follows:
(i) Neither the execution and delivery of this Agreement nor the
performance by the President of his duties and other obligations hereunder
violate any statute, law, determination or award, or conflict with or constitute
a default under (whether immediately, upon the giving of notice or lapse of time
or both) any prior employment agreement, contract, or other instrument to which
the President is a party or by which he is bound.
(i) The President has the full right, power and legal capacity to
enter and deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation
of the President enforceable against him in accordance with its terms. No
approvals or consents of any persons or entities are required for the President
to execute and deliver this Agreement or perform his duties and other
obligations hereunder.
(b) Lakaro hereby represents and warrants to the President as follows:
(i) Lakaro is duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite corporate power and
authority to own its properties and conduct its business in the manner presently
described.
(ii) Lakaro has the full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
(iii) The execution, delivery and performance by Lakaro of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, or upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of Lakaro, or
any agreement or instrument to which Lakaro is a party or by which Lakaro or any
of its properties may be bound or affected.
5. CONFIDENTIAL INFORMATION
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(a) The President agrees that during the course of his employment and at
any time thereafter, he will not disclose or make accessible to any other
person, Lakaro's products, services and technology, both current and under
development, promotion and marketing programs, lists, trade secrets and other
confidential and proprietary business information of Lakaro or any of its
clients. The President agrees: (i) not to use any such information for himself
or others; and (ii) not to take any such material or reproductions thereof from
Lakaro's facilities at any time during his employment by Lakaro, except as
required in the President's duties to Lakaro. The President agrees immediately
to return all such material and reproductions in his possession to Lakaro upon
request and in any event upon termination of employment. Nothing in the
foregoing shall be construed to prevent the President from disclosing or using
any information which the President can show by written documentation was in the
public domain or enters into the public domain through no improper act on the
President's part or on the part of any of Lakaro's employees or was in his
possession prior to his joining Lakaro or disclosed properly to the President
after leaving Lakaro.
(b) Except with prior written authorization by Lakaro, the President agrees
not to disclose or publish any of the confidential, technical or business
information or material of Lakaro, its clients or any other party to whom Lakaro
owes an obligation of confidence, at any time during or for a period of two
years after his employment with Lakaro except in the event of involuntary no
cause termination by Lakaro or a termination by the President for cause.
6. NON-COMPETITION
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(a) The President understands and recognizes that his services to Lakaro
are special and unique and agrees that, during the term of this Agreement, and
for a period of 12 months from the date of termination of his employment
hereunder, he shall not in any manner, directly or indirectly, on behalf of
himself or any person, firm, partnership, joint venture, corporation or other
business entity ("Person"), enter into or engage in any business directly
competitive with Lakaro's business, either as an individual for his own account,
or as a partner, joint venturer, President, agent, consultant, salesperson,
officer, director or shareholder of a Person operating or intending to operate
within the area that Lakaro is, at the date of termination, conducting its
business (the "Restricted Businesses"); provided, however, that nothing herein
will preclude the President from holding one percent (1%) or less of the stock
of any publicly traded company or from holding a position with a Person who does
not engage in a business directly competitive with the Restrictive Businesses so
long as the President works in a division of such Person which carries on a bona
fide business which is not directly competitive with the Restricted Businesses.
(b) For a period of 12 months after the termination of this Agreement, the
President shall not interfere with or disrupt or attempt to disrupt Lakaro's
business relationship with any of its customers, or solicit any of the employees
of Lakaro.
(c) In the event that the President breaches any provisions of this Section
6 or there is a threatened breach, then, in addition to any other rights which
Lakaro may have, Lakaro shall be entitled, without the posting of a bond or
other security, to injunctive relief to enforce the restrictions contained
herein. In the event that an actual proceeding is brought in equity to enforce
the provisions of this Section 6, the President shall not argue as a defense
that there is an adequate remedy at law nor shall Lakaro be prevented from
seeking any other remedies which may be available.
7. OWNERSHIP OF PROPRIETARY INFORMATION
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(a) The President agrees that all information that has been created,
discovered or developed by Lakaro, its subsidiaries, affiliates, successors or
assigns (collectively, the "Affiliates") (including, without limitation,
information relating to the development of Lakaro's business created,
discovered, developed or made know to Lakaro or the Affiliates by President
during the Term and information relating to Lakaro's customers, suppliers,
consultants, and licensees) and/or in which property rights have been assigned
or otherwise conveyed to Lakaro or the Affiliates, shall be the sole property of
Lakaro or the Affiliates, as applicable, and Lakaro or the Affiliates, as the
case may be, shall be the sole owner of all patents, copyrights and other rights
in connection therewith, including but not limited to the right to make
application for statutory protection. All of the aforementioned information is
hereinafter called "Proprietary Information." By way of illustration, but not
limitation, Proprietary Information includes trade secrets, processes,
discoveries, structures, inventions, designs, ideas, works of authorship,
copyrightable works, trademarks, copyrights, formulas, data, know-how, show-how,
improvements, inventions, product concepts, techniques, information or
statistics contained in, or relating to, marketing plans, strategies, forecasts,
blueprints, sketches, records, notes, devices, drawings, customer lists, patent
applications, continuation applications, continuation-in-part appications, file
wrapper continuation applications and divisional applications and information
about Lakaro's or the Affiliates' employees and/or consultants (including,
without limitation, the compensation, job responsibility and job performance of
such employees and/or consultants).
(b) The President further agrees that at all times, both during the
Term and after the termination of this Agreement, he will keep in confidence and
trust all Proprietary Information, and he will not use or disclose any
Proprietary Information or anything directly relating to it without the written
consent of Lakaro or the Affiliates, as appropriate, except as may be necessary
in the ordinary course of performing his duties hereunder and except for
academic, non-commercial research purposes with the prior written approval of
the Board of Directors. The President acknowledges that the Proprietary
Information constitutes a unique and valuable asset of Lakaro and each Affiliate
acquired at great time and expense, which is secret and confidential and which
will be communicated to President, if at all, in confidence in the course of his
performance of his duties hereunder, and that any disclosure or other use of the
Proprietary Information other than for the sole benefit of Lakaro or the
Affiliates would be wrongful and could cause irreparable harm to Lakaro or the
Affiliates, as the case may be.
Notwithstanding the foregoing, the parties agree that, at all such
times, President is free to use (i) information in the public domain not as a
result of a breach of this Agreement, (ii) information lawfully received from a
third party and (iii) President's own skill, knowledge, know-how and experience
to whatever extent and in whatever way he wishes, in each case consistent with
his obligations as President and that, at all times, President is free to
conduct any non-commercial research not relating to Lakaro's business.
8. DISCLOSURE AND OWNERSHIP OF INVENTIONS
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(a) During the Term, President agrees that he will promptly disclose
to Lakaro, or any persons designated by Lakaro, all improvements, inventions,
designs, ideas, works of authorship, copyrightable works, discoveries,
trademarks, copyrights, trade secrets, formulas, processes, structures, product
concepts, marketing plans, strategies, customer lists, information about
Lakaro's or the Affiliates' employees and/or consultants (including, without
limitation, job performance of such employees and/or consultants), techniques,
blueprints, sketches, records, notes, devices, drawings, know-how, data, whether
or not patentable, patent applications, continuation applications, continuation-
in-part applications, file wrapper continuation applications and divisional
applications, made or conceived or reduced to practice or learned by him, either
alone or jointly with others, during the Term (all said improvements,
inventions, designs, ideas, works of authorship, copyrightable works,
discoveries, trademarks, copyrights, trade secrets, formulas, processes,
structures, product concepts, marketing plans, strategies, customer lists,
information about Lakaro's or the Affiliates' employees and/or consultants,
techniques, blueprints, sketches, records, notes, devices, drawings, know-how,
data, patent applications, continuation applications, continuation-in-part
applications, file wrtapper continuation applications and divisional
applications shall be collectively hereinafter called "Inventions").
(b) The President agrees that all Inventions shall be the sole
property of Lakaro to the maximum extent permitted by applicable law and to the
extent permitted by law shall be "works made for hire" as that term is defined
in the United States Copyright Act (17 USCA, Section 101). Lakaro shall be the
sole owner of all patents, copyrights, trade secret rights, and other
intellectual property or other rights in connection therewith. President hereby
assigns to Lakaro all right, title and interest he may have or acquire in all
Inventions. President further agrees to assist Lakaro in every proper way (but
at Lakaro's expense) to obtain and from time to time enforce patents, copyrights
or other rights on said Inventions in any and all countries, and to that end the
President will execute all documents necessary:
(i) to apply for, obtain and vest in the name of Lakaro alone (unless
Lakaro otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.
(c) The President's obligation to assist Lakaro in obtaining and
enforcing patents and copyrights for the Inventions in any and all countries
shall continue beyond the Term, but Lakaro agrees to compensate the President at
his normal and usual rate after the expiration of the Term for time actually
spent by the President at Lakaro's request on such assistance.
9. NON-SOLICITATION
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During the Term, and for 12 months thereafter, President shall not,
directly or indirectly, without the prior written consent of Lakaro:
(a) solicit or induce any employee of Lakaro or any Affiliate to leave
the employ of Lakaro or any Affiliate or hire for any purpose any employee of
Lakaro or any Affiliate or any employee who has left the employment of Lakaro or
any Affiliate within six months of the termination of said employee's employment
with Lakaro; or
(b) solicit or accept employment or be retained by any party who, at
any time during the Term, was a customer or supplier of Lakaro or any Affiliate
where his position will be related to the business of Lakaro; or
(c) solicit or accept the business of any customer or supplier of
Lakaro or any Affiliate with respect to products similar to those supplied by
Lakaro.
10. TERMINATION
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(a) This President's employment hereunder shall begin on the Effective Date
and shall continue for the period set forth in Section 2 hereof unless sooner
terminated upon the first to occur of the following events:
(i) (A) The death of the President; or
(B) the total disability of the President.
(ii) Termination by the Board of Directors of Lakaro for just cause.
Any of the following actions by the President shall constitute just cause:
(A) Material breach by the President of Sections 5, 6, 7,
8, or 9 of this Agreement; or
(B) Material breach by the President of any provision of
this Agreement other than Sections 5, 6, 7, 8 or 9
which is not cured by the President within 30 days of
notice from Lakaro; or in the event the breach is not
curable within 30 days; the commencement of action(s)
to cure within said 30 days and the diligent pursuit of
the cure thereafter, provided such breach may be
completely cured; or
(C) Any action by the President constituting gross
negligence, recklessness or willful misconduct in
respect of the President's obligation to Lakaro which
has or is likely to result in material, economic damage
to Lakaro.
(iii) Termination by the President for just cause. Any of the
following actions or omissions by Lakaro shall constitute just cause.
(A) Material breach by Lakaro of any provision of this Agreement
which is not cured by Lakaro within 30 days of notice thereof from the
President; or
(B) A failure to elect or reelect the President to the office of
President of Lakaro or other change by Lakaro of the President's
function, duties or responsibilities such that the President is no
longer the highest ranking Officer of Lakaro; or
(C) A "change in control," which shall mean a merger or
consolidation in which either more than 50% of the
voting power of Lakaro is transferred or Lakaro is not
the surviving entity, or sale or other disposition of
all or substantially all the assets of Lakaro; or
(D) Termination of the President's employment other than for
serious, willful misconduct in respect of the President's obligations
to the Corporation, including, but not limited to, final conviction for
a felony or perpetration of a common-law fraud which has or is likely
to result in material economic damage to the Corporation; or
(E) Relocation to a geographic area without the President's
prior consent.
(iv) Termination by Lakaro without cause. Notwithstanding anything in
this Agreement, Lakaro may terminate the President's employment without cause
upon 90 days prior notice.
(b) Upon termination by Lakaro for any reason other than the reasons set
forth in subparagraph (i) or (ii) of paragraph (a) above, or upon termination by
the President for any reason set forth in subparagraph (iii) of paragraph (a)
above, then the Options shall immediately vest and become exercisable at the
option of the President.
11. NOTICES
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Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given: when delivered personally against
receipt thereof; one (1) business day after being sent by Federal Express or
similar overnight delivery; or three (3) business days after being mailed
registered or certified mail, postage prepaid, return receipt requested, to
either party at the address set forth above, or to such other address as such
party shall give by notice hereunder to the other party.
12. SEVERABILITY OF PROVISIONS
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If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
13. ENTIRE AGREEMENT MODIFICATION
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This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
14. BINDING EFFECT
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The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, Lakaro, its successors and assigns, and upon the
President and his legal representatives. This Agreement constitutes a personal
service agreement, and the performance of the President's obligations hereunder
may not be transferred or assigned by the President.
15. NON-WAIVER
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The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
16. GOVERNING LAW
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This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York without regard to principles
of conflicts of law. Any litigation commenced pursuant to the terms of the
Agreement shall only be prosecuted and defended in the city, county and state of
New York. Additionally, the prevailing party in any litigation shall be
entitled to an additional award of the recoupment of its attorney fees, cost and
expenses.
17. REMEDIES FOR BREACH
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The President understands and agrees that any breach of Sections 5, 6, 7, 8
or 9 of this Agreement by the Executive could cause irreparable damage to Lakaro
and to the Affiliates, and that monetary damages alone would not be adequate
and, in the event of such breach, Lakaro shall have, in addition to any and all
remedies of law, the right to an injunction, specific performance or other
equitable relief to prevent or redress the violation of Lakaro's rights under
such Sections.
18. HEADINGS
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The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EMPLOYEE:
By:/s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
LAKARO BIOPHARMACEUTICALS, INC.
By:/s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx Title: Secretary
