EXHIBIT 10.3
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EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made this 31
day of August, 2002 by and between Xxxxx X. XxXxxxx ("Xx. XxXxxxx") and
BioDelivery Sciences International, Inc. (the "Company").
WHEREAS, the Company is engaged in the business of researching and
developing drug delivery technologies; and
WHEREAS, the Company and Xx. XxXxxxx are willing to continue the employment
relationship, on the terms, conditions and covenants set forth in this
Agreement;
NOW, THEREFORE, in consideration of Xx. XxXxxxx'x continued employment with
the Company and other good and valuable consideration, receipt of which Xx.
XxXxxxx and the Company hereby acknowledge, Xx. XxXxxxx and the Company agree,
as follows:
1. Position. Xx. XxXxxxx agrees to continue his employment as Secretary,
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Treasurer and Chief Financial Officer of the Company. He further agrees to
perform the job duties and to carry out the responsibilities of that position,
as determined by the Chief Executive Officer from time to time.
2. Xx. XxXxxxx'x Effort. Xx. XxXxxxx agrees to devote his full working time
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and best efforts, skill and attention to his position and to the business and
interests of the Company. However, at the discretion of the Board of Directors,
Xx. XxXxxxx may be reduced from a full-time employee to a part time employee
upon 30 days written notice.
3. Salary. The Company shall pay Xx. XxXxxxx compensation for services
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rendered in the amount of One Hundred Eighty Five Thousand Dollars ($185,000)
per annum payable on a monthly basis. Further, the Company, from time to time,
shall pay Xx. XxXxxxx such bonuses, additional compensation or other benefits as
may be determined by the Executive Compensation Committee of the Board of
Directors. In particular, the company shall pay Xx. XxXxxxx a one-time bonus of
$17,500 upon the signing of the first term sheet for a license to the Company's
technology exceeding $1M in up-front payments and another $17,500 bonus upon the
Company receiving the upfront payment of said $1M license. Any changes in Xx.
XxXxxxx'x duties or compensation, shall not in any way affect the promises of
Xx. XxXxxxx as set forth in this Agreement. Furthermore, Xx. XxXxxxx shall be
reimbursed for expenses properly documented as per the Company's policy.
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Where Xx. XxXxxxx'x status is changed from a full-time to a part-time
employee pursuant to Section 2 above, Xx. XxXxxxx'x salary of $185,000 will be
reduced pro rata assuming a 40 hour work week for a full-time employee.
4. Termination. This Agreement and the status and obligations of Mr.
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XxXxxxx thereunder as an employee of the Company (except for the provisions of
paragraph 5 through 8 inclusive) shall cease and terminate effective upon the
close of business August 31, 2005 unless further extended by the parties hereto
in writing; provided, that upon such date said termination shall not affect all
rights that Xx. XxXxxxx may have pursuant to any of the Company's retirement
plans, supplementary retirement plans, profit sharing and savings plans,
healthcare, 401 (k) any other employee benefit plans sponsored by the Company,
which, in accordance with its terms, is applicable to Xx. XxXxxxx.
4.1 Death or Disability. This Agreement shall automatically terminate
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upon the death of Xx. XxXxxxx and all of his rights hereunder, including
the rights to receive compensation and benefits, except as otherwise
required by law, shall terminate. The Company may, at its option, terminate
this Agreement in the event that Xx. XxXxxxx shall be physically or
mentally incapacitated which shall make him unable to perform the duties
assigned to him for more than ninety (90) days in any one hundred eighty
(180) day period. In the event of a dispute as to whether Xx. XxXxxxx is
physically or mentally unable to perform his duties hereunder, the Company
shall select an impartial physician to make a determination as to Xx.
XxXxxxx'x incapacity, if any. Xx. XxXxxxx agrees to submit to appropriate
medical examinations for the purposes of such determination. Such
termination shall not affect Xx. XxXxxxx'x rights and obligations under
paragraphs 5 through 9 inclusive, 11 through 14 inclusive, all of which
shall survive the early termination or expiration of this Agreement.
4.2 The Company's Right to Terminate with Notice. The Company may
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terminate this Agreement upon 30 days prior notice to Xx. XxXxxxx. In case
of termination under this section, the Company may elect to pay Xx. XxXxxxx
a base rate of $185,000, or the part-time status reduced rate pursuant to
Sections 2 and 3 of this Agreement, for a period of six months, in lieu of
permitting him to continue working. Aside from payment as herein provided,
the Company shall have no further obligations to Xx. XxXxxxx following
termination.
4.3 Termination for Cause. Notwithstanding the immediately preceding
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paragraph or anything elsewhere herein contained to the contrary, the
Company may terminate this Agreement and all of its obligations to Xx.
XxXxxxx, with notice but effective immediately, in the event that: (a) Xx.
XxXxxxx breaches any term of this Agreement; (b) if Xx. XxXxxxx is
convicted of or enters a no contest plead to any felony or crime involving
moral turpitude, or if he pleads guilty to a lesser included offence or
crime in exchange for withdrawal of a felony indictment, felony charge by
information, or is charged with a crime involving moral turpitude, whether
the charge arises under the laws of the United States or any other state
therein; (iii) Xx. XxXxxxx fails to perform the duties and obligations
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assigned him by the Board of Directors of the Company; (iv) the Company
reasonably suspects that he has engaged in illegal drug or substance use or
abuse; (v) he wrongfully appropriates for personal use or benefit any
property or money of the Company entrusted to him by the Company; (vi) he
disregards any legal directions of the Chief Executive Officer or the Board
of Directors of the Company; (vii) he materially violates Company policies
or procedures; (viii) he takes any actions that might damage the reputation
of the Company or its ability to receive approvals of its drug delivery
systems from the Food and Drug Adminstration (excluding, however, actions
protected by "whistleblower" legislation); or (ix) Xx. XxXxxxx resigns his
employment. In the event of termination for any of the reasons set forth
herein Xx. XxXxxxx shall be bound by all of the terms of this Agreement
that survive termination.
5. Confidentiality. Xx. XxXxxxx shall keep confidential, except as the
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Company may otherwise consent in writing, and not disclose, or make any use of
except for the benefit of the Company, at any time either during or subsequent
to Xx. XxXxxxx'x performance of services for the Company, any trade secrets,
knowledge, data or other information of the Company relating to products,
processes, know how, technical data, designs, formulas, test data, customer
lists, business plans, marketing plans and strategies, and product pricing
strategies or other subject matter pertaining to any business of the Company or
any of its clients, customers, consultants, licensees or affiliates which Xx.
XxXxxxx may produce, obtain or otherwise learn of during the course of Xx.
XxXxxxx'x performance of services and after its termination (collectively
"Confidential Information"). Xx. XxXxxxx shall not deliver, reproduce, or in any
way allow any such Confidential Information to be delivered to or used by any
third parties without the specific direction or consent of a duly authorized
representative of the Company. The terms of this paragraph shall survive
termination of this Agreement.
6. Return of Confidential Material. Upon the completion or other
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termination of Xx. XxXxxxx'x services for the Company, Xx. XxXxxxx shall
promptly surrender and deliver to the Company all records, materials, equipment,
drawings, documents, lab notes and books and data of any nature pertaining to
any invention, trade secret or confidential information of the Company or to Xx.
XxXxxxx'x services, and Xx. XxXxxxx will not take with him any description
containing or pertaining to any Confidential Information, knowledge or data of
the Company which Xx. XxXxxxx may produce or obtain during the course of his
services. The terms of this paragraph shall survive termination of this
Agreement.
7. Competition - For purposes of this Agreement "Competitive Activity"
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shall mean the development, manufacturing or sale of any lipid based drug
delivery system.
a. Xx. XxXxxxx will not do, or intend to do, any of the
following, either directly or indirectly, during Xx. XxXxxxx'x employment with
the Company and during the period of three (3) years after Xx. XxXxxxx'x
cessation of employment with the Company, anywhere in the world. In the event
that Xx. XxXxxxx'x improperly competes with the Company, the period during which
he engages in such competition shall not be counted in determining the duration
of the the three (3) year non-compete restriction.
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i. Own, manage, operate, control, consult for, be an officer or
director of, work for, or be employed in any capacity by any company,
eleemosynary institution or any other business, entity, agency or
organization which is in any way involved in the research,
development, distribution, sale or commercialization of lipid based
drug delivery technologies; or
ii. Solicit prior or current customers of the Company or any
entities with which the Company has undertaken joint studies or
developmental activities for any purpose in competition (as defined
herein) with the Company; or
iii. Solicit any then current employees employed by the Company
without the Company's consent.
Xx. XxXxxxx and Company agree that the phrase "Xx. XxXxxxx'x cessation
of employment with the Company" as used in this Agreement, refers to any
separation from his employment at the Company either voluntarily or
involuntarily, either with cause or without cause, or whether the separation is
at the behest of the Company or Xx. XxXxxxx (hereinafter referred to and defined
as "Xx. XxXxxxx'x Cessation of Employment").
b. Should Xx. XxXxxxx'x status change from full-time to a part-time basis,
this Agreement expressly authorizes and permits Xx. XxXxxxx to continue his
relationship with Xxxxxxx Capital.
8. Other Obligations. All of Xx. XxXxxxx'x obligations under this Agreement
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shall be subject to any applicable agreements with, and policies issued by the
Company to which Xx. XxXxxxx is subject.
9. Confidential Information of Others. Xx. XxXxxxx represents that Mr.
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XxXxxxx'x performance of all the terms of this Agreement as employee to the
Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by Xx. XxXxxxx in confidence
or in trust, and Xx. XxXxxxx will not disclose to the Company, or the Company to
use, any confidential or proprietary information or material belonging to any
other person or entity. Xx. XxXxxxx will not enter into any agreement, either
written or oral, which is in conflict with this Agreement.
10. Injunctive Relief. Xx. XxXxxxx acknowledges that any breach or
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attempted breach by Xx. XxXxxxx of this Agreement or any provision hereof shall
cause the Company irreparable harm for which any adequate monetary remedy does
not exist. Accordingly, in the event of any such breach or threatened breach,
the Company shall be entitled to obtain injunctive relief, without the necessity
of posting a bond or other surety, restraining such breach or threatened breach.
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11. Modification. This Agreement may not be changed, modified, released,
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discharged, abandoned, or otherwise amended, in whole or in part, except by an
instrument in writing, signed by Xx. XxXxxxx and by the Company. Any subsequent
change or changes in Xx. XxXxxxx'x relationship with the Company or Xx.
XxXxxxx'x compensation shall not affect the validity or scope of this Agreement.
12. Entire Agreement. Xx. XxXxxxx acknowledges receipt of this Agreement,
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and agrees that with respect to the subject matter thereof, it is Xx. XxXxxxx'x
entire agreement with the Company, superseding any previous oral or written
communications, representations, understandings with the Company or any office
or representative thereof.
13. Severability. In the event that any paragraph or provision of this
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Agreement shall be held to be illegal or unenforceable, the entire Agreement
shall not fall on account thereof, but shall otherwise remain in full force and
effect, and such paragraph or provision shall be enforced to the maximum extent
permissible.
14. Successors and Assigns. This Agreement shall be binding upon Mr.
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XxXxxxx'x heirs, executors, administrators or other legal representatives and is
for the benefit of the Company, its successors and assigns.
15. Governing Law. This Agreement shall be governed by the laws of the
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State of New Jersey except for any conflicts of law rules thereof that might
direct the application of the substantive law of another state.
16. Counterparts. This Agreement may be signed in two counterparts, each of
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which shall be deemed an original and both of which shall together constitute
one agreement.
17. Arbitration. In the event the Xx. XxXxxxx, his spouse or any other
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person claiming benefits on behalf of or through Xx. XxXxxxx, has a claim or
dispute based upon this agreement including the interpretation or application of
the terms and provisions of this Agreement, the sole and exclusive remedy is for
that party to submit the dispute to binding arbitration in accordance with the
rules of arbitration of the American Arbitration Association in New Jersey. Any
arbitrator selected to arbitrate any such dispute will have the power to
interpret this Agreement. Any determination or decision by the arbitrator shall
be binding upon the parties and may be enforced in any court of law. The
expenses of the arbitrator will be paid 50% by the Company and 50% by Xx.
XxXxxxx, his spouse or other person, as the case may be. The parties agree that
this arbitration provision does not apply to the right of Xx. XxXxxxx to file a
charge, testify, assist or participate in any manner in an investigation,
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hearing or proceeding before the Equal Employment Opportunity Commission or any
other agency pertaining to any matters covered by this Agreement and within the
jurisdiction of the agency.
18. No Waiver. No waiver by the Company of any breach of this Agreement by
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Xx. XxXxxxx shall constitute a waiver of any subsequent breach.
19. Notice. Any notice hereby required or permitted to be given shall be
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sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party at the address of such party or such
othis address as shall have been designated by written notice by such party to
the other party.
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EXECUTED as of the date set forth below.
Dated: August 31, 2002.
BIODELIVERY SCIENCES INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
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Name: Xxxxxxx X. X'Xxxxxxx, Xx.
Title: President, CEO
/s/ Xxxxx X. XxXxxxx
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Xxxxx X. XxXxxxx
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