EMPLOYMENT AGREEMENT
Exhibit 10.2
This
Agreement (the “Agreement”), dated as of December 27, 2007 (the
“Effective Date”) by and between DOR BioPharma, Inc., a Delaware corporation
having a place of business at 000 Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxx, XX 00000
(the “Corporation”), and Xxxx Xxxxxxxxxxxxxxx, an individual (the
“Employee”).
W
I T N E
S S E T H:
WHEREAS,
the Corporation desires to employ Employee as Chief Financial Officer, and
the
Employee desires to be employed by the Corporation as Chief Financial Officer,
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:
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1.
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EMPL0YMENTDUTIES
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The
Corporation engages and employs Employee, and Employee hereby accepts engagement
and employment, as Chief Financial Officer and a member of the board of
directors reporting to the Chief Executive Officer of the Corporation, and
shall
perform high quality, full-time service to the Corporation to direct, supervise
and have responsibility for the operations of the Corporation, including, but
not limited to: (i) directing and supervising the financial and operational
efforts of the Corporation; (ii) managing the other executives and personnel
of
the Corporation; and (iii) evaluating, negotiating, structuring and implementing
financial transactions of the Corporation, and such other activities as may
be
reasonably requested by the Chief Executive Officer or the Board of Directors
of
the Corporation. While the Employee remains employed by the Corporation, the
Corporation shall use its best efforts to nominate and reelect Employee as
a
member of the Board of Directors of the Corporation. Employee acknowledges
and
understands that his employment may entail significant travel on behalf of
the
Corporation.
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2.
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EMPLOYMENTTERM
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Employee’s
employment hereunder shall
be for a period of three (3) years, unless extended by mutual agreement of
the
parties (the “Term”).
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3.
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COMPENSATION
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As
compensation for the performance of
Employee’s duties on behalf of the Corporation, Employee shall be compensated as
follows:
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(a)
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(i) The
Corporation
shall pay Employee an annual base salary (“Base Salary”) of two hundred
thousand dollars ($200,000) per annum, payable in accordance with
the
usual payroll period of the
Corporation.
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(ii) The
Corporation shall pay employee a minimum annual bonus of fifty thousand dollars
($50,000), payable at the end of each calendar year in prorated amount if
necessary. Such bonus may be increased at the recommendation of the
CEO and by the approval of the Board of Directors.
(b) All
options granted to Employee will be granted pursuant to the Corporation’s
Employee Stock Option Plan and the Corporation’s standard Stock Option
Agreement. All options granted to Employee shall be exercisable for a
period of one year following termination of this agreement, subject to extension
in the discretion of the Stock Option Plan administrator. All options
and warrants previously granted to Employee in connection with his prior service
as Board member will remain exercisable throughout the intended life of said
options and warrants regardless of employment status of Employee. Upon a change
in control due to merger or acquisition, all Employee options shall become
fully
vested, and be exercisable for a period of 3 years after the merger or
acquisition (unless they would have expired sooner pursuant to their natural
term). In the event of death of Employee during Term, all unvested
options shall immediately vest and remain exercisable for the rest of their
natural term and become property of Employee’s immediate family.
(c) 750,000
shares of common stock of the Corporation will be issued to Employee immediately
prior to the completion of a transaction, or series or combination of related
transactions, negotiated by the Corporation’s Board of Directors whereby,
directly or indirectly, a majority of the Corporation’s capital stock or a
majority of its assets are transferred from the Corporation and/or our
stockholders to a third party.
(d) The
Corporation shall withhold all applicable federal, state and local taxes; social
security; workers compensation contributions; and such other amounts
as may be required by law or agreed upon by the parties with respect to the
compensation payable to the Employee pursuant to section 3(a)
hereof.
(e) The
Corporation shall reimburse Employee for all normal, usual and necessary
expenses incurred by Employee in furtherance of the business and affairs of
the
Corporation, including reasonable travel and entertainment, against receipt
by
the Corporation of appropriate vouchers or other proof of Employee’s
expenditures and otherwise in accordance with the policy of the
Corporation.
(f) During
the Term, Employee shall be entitled to a maximum of four (4) weeks paid
vacation per annum. Unused vacation may be carried over to successive
years.
(g) The
Corporation shall make available to Employee and his dependents such medical,
disability, life insurance and such other benefits as the Corporation makes
available to its other senior officers and directors. Employee may
elect to have the Corporation reimburse Employee for payments made to his own
family medical plan.
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4.
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REPRESENTATIONS
AND WARRANTIES BY EMPLOYEE AND
CORPORATION
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(a) Employee
hereby represents and warrants to the Corporation as follows:
(i) Neither
the execution and delivery of this Agreement nor the performance by Employee
of
his duties and other obligations hereunder violate or will 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 Employee
is a
party or by which he is bound.
(ii) Employee
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 Employee enforceable
against him in accordance with its terms. No approvals or consents of any
persons or entities are required for Employee to execute and deliver this
Agreement or perform his duties and other obligations hereunder.
(b) The
Corporation hereby represents and warrants to Employee as follows:
(i) The
Corporation 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
contemplated.
(ii) The
Corporation has full power and authority to enter into this Agreement and to
incur and perform its obligations hereunder. This Agreement constitutes the
legal, valid and binding obligation of the Corporation enforceable against
it in
accordance with its terms. Except as expressly set forth herein, no approvals
or
consents of any persons or entities are required for Corporation to execute
and
deliver this Agreement or perform its duties and other obligations
hereunder.
(iii) The
execution, delivery and performance by the Corporation of this Agreement does
not conflict with or result in a breach or violation of or constitute a default
under (whether immediately, upon the giving of notice or lapse of time or both)
the certificate of incorporation or by-laws of the Corporation, or any agreement
or instrument to which the Corporation is a party or by which the Corporation
or
any of its properties may be bound or affected.
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5.
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NON-COMPETITION
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(a)
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Employee
understands and recognizes that his services to the Corporation are
special and unique and agrees that, during the term of this Agreement
and
for a period of two (2) years following the termination of the Employee’s
employment with the Corporation (or one (1) year in the event that
the
Employee is terminated within 1 year of the Effective Date), employee
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
competitive with the Corporation’s business or research activities, either
as an individual for his own account, or as a partner, joint venturer,
executive, agent, consultant, salesperson, officer, director of a
Person
operating or intending to operate in the area of the use of any of
the
compounds owned or licensed by the Corporation during the time of
his
employ.
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(b)
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During the
Term and for two
(2) years (or one (1) year in the event that the Employee is terminated
within 1 year of the Effective Date) following the termination of
the
Employee’s employment with the Corporation, Employee shall not, directly
or indirectly, without the prior written consent of the
Corporation:
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(i) interfere
with, disrupt or attempt to disrupt any past, present or prospective
relationship, contractual or otherwise ,
between the Corporation and any of its licensors, licensees, clients,
customers, suppliers, employees, consultants or other related parties, or
solicit or induce for hire any of the employees or agents of the Corporation,
or
any such individual who in the past was employed or retained by the Corporation
within six (6) months of the termination of said individual’s employment or
retention by the Corporation; or
(ii) solicit
or accept employment or be retained by any party who, at any time during the
term of this Agreement, was a customer or supplier of the Corporation or any
of
its affiliates or any licensor or licensee thereof where his position will
be
related to the business of the Corporation.
(c) In
the event that Employee breaches any provisions of this Section 5 or
there is a threatened
breach, then,
in addition to any other rights which the Corporation may have, the Corporation
shall be entitled without the posting of a bond or other security to injunctive
relief to enforce the restrictions contained herein.
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6.
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CONFIDENTIALINFORMATION
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(a) Employee
agrees that during the course of his employment or at any time after
termination, he will not disclose or make accessible to any other person, the
Corporation’s or any of its subsidiaries’ or affiliates’, (collectively the
“Affiliates”) products, services and technology, both current and under
development, promotion and marketing programs, business plans, lists, customer
lists, product or licensing opportunities, investor lists, trade secrets and
other confidential and proprietary business information of the Corporation
or
the Affiliates. Employee agrees: (i) not to use any such information for himself
or others; and (ii) not to take any such material or reproductions thereof
in
any form or media from the Corporation’s facilities at any time during his
employment by the Corporation, except as required in Employee’s duties to the
Corporation. Employee agrees immediately to return all such material and
reproductions thereof in his possession to the Corporation upon request and
in
any event upon termination of employment.
(b) Except
with prior written authorization by the Corporation, Employee agrees not to
disclose or publish any of the confidential, technical or business information
or material of the Corporation, to any suppliers, licensors, licensees,
customers, partners or other third parties to whom the Corporation owes an
obligation of confidence, at any time during or after his employment with the
Corporation.
(c) Employee
hereby assigns to the Corporation all right, title and interest he may have
or
acquire in all inventions (including patent rights) developed by Employee during
the term of this Agreement (hereinafter the “Inventions”) and agrees that all
Inventions shall be the sole property of the Corporation and its assigns, and
the Corporation and its assigns shall be the sole owner of all patents,
copyrights and other rights in connection therewith. Employee further agrees
to
assist the Corporation in every proper way (but at the Corporation’s expense) to
obtain and from time to time enforce patents, copyrights or other rights on
said
Inventions in any and all countries. Employee hereby irrevocably designates
counsel to the Corporation as Employee’s agent and attorney-in-fact to do all
lawful acts necessary to apply for and obtain patents and copyrights and to
enforce the Corporation’s rights under this Section. This Section shall survive
the termination of this Agreement for any reason.
(d) The
Employee recognizes that in the course of his duties hereunder, he may receive
from Affiliates or others information which may be considered “material,
nonpublic information” concerning a public company that is subject to the
reporting requirements of the Securities and Exchange Act of 1934, as amended.
The Employee agrees not to:
(i) Buy
or sell any security, option, bond or warrant while in possession of relevant
material, nonpublic information received from Affiliates or others in connection
herewith;
(ii) Provide
Affiliates with information with respect to any public company that may be
considered material, nonpublic information; or
(iii) Provide
any person with material, nonpublic information, received from Affiliates,
including any relative, associate, or other individual who intends to, or may
otherwise directly or indirectly benefit from, such information.
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7.
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TERMINATION
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(a) The
Employee’s employment hereunder shall begin on the Effective Date and shall
continue for the period set forth in Section 2 hereof unless renewed by mutual
agreement or sooner terminated upon the first to occur of the following
events:
(i) The
death of the Employee;
(ii) One
year following the merger or consolidation in which either more than fifty
percent of the voting power of the Corporation is transferred or the Corporation
is not the surviving entity, or sale or other disposition of all or
substantially all the assets of the Corporation;
(iii) Termination
by the Board of Directors of the Corporation for Just Cause. Any of the
following actions by the Employee shall constitute “Just Cause”:
(A) Material
breach by the Employee of Section 1, Section 5 or Section 6 of
this Agreement;
(B) Material
breach by the Employee of any provision of this Agreement other than Section
5
or Section 6 which is not cured by the Employee within thirty (30) days of
notice thereof from the Corporation;
(C) Any
action by the Employee to intentionally harm the Corporation or any action
of
gross negligence by the Employee; or
(D) The
conviction of the Employee of a felony.
(iv) Termination
by the Employee for Just Cause. Any of the following actions or omissions by
the
Corporation shall constitute just cause, subject to the notice and cure
requirements below, provided that the Employee terminates employment with the
Corporation within one year following the initial existence of one or more
of
the following conditions, without the consent of the Executive:
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(A)
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Material
diminution of base salary;
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(B)
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Material
diminution of the Employee’s authority, duties or
responsibilities;
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(C)
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Material
change in the geographic location in which the Employee provides
services
to the Corporation; or
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(D)
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Material
breach by the Corporation of any provision of this Agreement which
is not
cured by the Corporation within thirty (30) days of notice thereof
from
the Employee.
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The
Employee must provide notice to the Corporation of the existence of the “just
cause” condition not later than 90 days of its initial existence and the
Corporation shall have 30 days from the date of the Employee notice to cure
the
condition giving rise to such notice.
(b) Upon
termination by the Corporation pursuant to either subparagraph (i) or (iii)
of
paragraph (a) above or by Employee other than pursuant to subparagraph (iv)
of
paragraph (a) above, the Employee (or his estate in the event of termination
pursuant to subparagraph (i)) shall be entitled to receive the Base Salary
plus
Bonus accrued but unpaid as of the date of termination including any vacation
time accrued but not taken.
(c) Upon
termination by the Corporation without Just Cause or pursuant to subparagraphs
(ii) or (iv) of paragraph (a) above, then the term of the Agreement as set
forth
in Section 2 hereof shall be deemed to have been terminated as of such date
and
(i) the Corporation shall pay to the Employee, six (6) months salary and any
accrued Bonuses payable upon the normal payroll periods of the Corporation
including any vacation accrued but not taken. No unvested options
shall vest beyond the termination date, except where previously noted in Section
3 (b) or at the discretion of the Stock Option Plan
Administrator. Health benefits and life insurance will also be
maintained for Employee (or his dependents in the event of termination pursuant
to subparagraph (i)) by Company during severance period.
(d) Upon
the cessation of service to the Company by Employee for any reason, Employee
will immediately resign from the Board of Directors of the Company.
(e) Not
withstanding any of the foregoing, Sections 5 and 6 shall survive the
termination or expiration of this Agreement.
8. NOTICES
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
therefor; one (1) day after being sent by Federal Express or similar overnight
delivery; or three (3) 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.
9. SEVERABILITYOFPROVISIONS
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, such provision shall be interpreted so as to remain enforceable to
the
maximum extent permissible consistent with applicable law and 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.
10. ENTIREAGREEMENTMODIFICATION
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.
11. BINDING
EFFECT
The
rights, benefits, duties and obligations under this Agreement shall inure to,
and be binding upon, the Corporation, its successors and assigns, and upon
Employee and his legal representatives. This Agreement constitutes a personal
service agreement, and the performance of Employee’s obligations hereunder may
not be transferred or assigned by Employee.
12. NON-WAIVER
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.
13. GOVERNING
LAW
This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New Jersey without regard to principles of
conflict of laws.
14. HEADINGS
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.
DOR
BIOPHARMA, INC.
By:
/s/
Xxxxxxxxxxx X. Xxxxxxx
Xxxxxxxxxxx
X. Xxxxxxx, Ph.D.
Chief
Executive Officer
EMPLOYEE:
By:
/s/
Xxxx Xxxxxxxxxxxxxxx
Xxxx
Xxxxxxxxxxxxxxx
