EMPLOYMENT AGREEMENT
EXHIBIT 10.1
This Employment Agreement (the “Agreement”), dated February 6, 2010 by and between Adeona Pharmaceuticals, Inc., a corporation organized under the laws of the State of Nevada (the “Corporation”), and Xxxxx X. Xxx, M.D., M.B.A., an individual (the “Employee” or the “CEO”).
1. EMPLOYMENT; DUTIES
(a) The Corporation hereby engages and employs the Employee as Chairman, Chief Executive Officer and President of the Corporation, and Employee hereby accepts such engagement and employment as Chairman, Chief Executive Officer and President of the Corporation, for the term
of this Agreement as long as CEO desires to serve. It is expected that the employment duties of CEO will include reporting directly to the Board of Directors of the Corporation for the full time high quality performance of directing, supervising and having responsibility for all aspects of the company’s operations and the general affairs of the Corporation as directed by the Board of Directors.
(b) The CEO shall devote substantially all of his professional time under this Agreement at the Corporation’s executive offices and manufacturing facility in Xxx Arbor or clinical laboratory in Chicago or traveling on corporate business, with travel to and from Employee’s
residence to the Corporation’s Xxx Arbor or Chicago locations to be at Employee’s own expense.
(c) The Corporation shall provide a computer, cellular phone and office for the Employee.
2. TERM
The term of the Employee’s employment shall be three years from the execution date of this Agreement unless terminated earlier under Section 8 of this Agreement.
3. COMPENSATION
(a) As compensation for the performance of his duties on behalf of the Corporation, Employee shall receive the following:
(i) Base Salary. Employee shall receive a base salary of one hundred ninety nine thousand dollars ($199,000) per year (the “Base Salary”), payable
semi-monthly.
(ii) Bonus. On the first of each calendar year while employed, the Employee may be entitled to receive a discretionary performance bonus based upon the sales
and profitability of the Corporation payable in cash or equity in the sole and absolute discretion of both the Compensation Committee and the Board of Directors of the Corporation.
(iii) Discretionary Transactional Bonus. In connection with a significant transaction consummated by the Corporation or its subsidiaries in which the Employee
is directly or indirectly involved in, the Employee may be entitled to receive a discretionary transactional bonus payable in cash or equity in the sole and absolute discretion of both the Compensation Committee and the Board of Directors of the Corporation.
(iv) Stock Options. The Employee shall receive a non-restricted option to purchase the Corporation’s publicly traded common stock equal to four hundred
thousand (400,000) shares exercisable at the market price per share on the date of issue. One hundred thousand (100,000) of these options will vest immediately and the remaining will vest monthly on each monthly anniversary of the start date of employment and for thirty six (36) successive months while employed by the Corporation and such options will remain exercisable for a period of ten years from the date of grant, unless terminated earlier. Other terms of the option shall be according to the Company’s
existing stock option plan.
(b) The Corporation shall reimburse Employee for all normal, usual and necessary expenses incurred by Employee, including all travel, lodging and entertainment, against receipt by the Corporation, as the case may be, of appropriate vouchers or other proof of Employee’s
expenditures and otherwise in accordance with such Expense Reimbursement Policy as may from time to time be adopted by the Corporation.
(c) The Corporation shall provide Employee with full advance indemnification to the extent permitted by Delaware law, including indemnification for activities at all subsidiaries.\
(d) The Employee shall be entitled to three (3) weeks paid vacation per year while employed, accruing quarterly and sick leave in accordance with the Corporation’s policies. The Corporation shall provide Employee and his family with healthcare coverage pursuant to the
Corporation’s healthcare insurance policy plan.
4. REPRESENTATIONS AND WARRANTIES BY EMPLOYEE
(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 violates 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 his 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.
(iii) Employee understands that some or all of the stock received by Employee pursuant to section 3(a) (iii) hereof will not be registered under the United States Securities Act of 1933 (the “1933 Act”), and acknowledges
that he will be obligated to agree, as a condition to the issuance thereof, that he will acquire such stock for his own account for investment and not with a view to, or for resale in connection with a distribution thereof, and will bear the economic risk of his investment in such stock for an indefinite period of time.
6. CONFIDENTIAL INFORMATION
(a) Employee agrees that during the course of his employment or at any time thereafter, he will not disclose or make accessible to any other person, the Corporation’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 the Corporation or any affiliates or any of their clients. Employee agrees: (i) not to use any such information for himself or others, and (ii) not to take any such material or reproductions thereof from the Corporation’s facilities at any time during his employment by 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, its clients or any other party
to whom the Corporation owes an obligation of confidence, at any time during or after his employment with the Corporation.
(c) In the event that Employee breaches any provisions of this Section 6 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. In the event that an actual proceeding is brought in equity to enforce the provisions of this Section 6, Employee shall not urge as a defence that there is an adequate remedy at law, nor shall the Corporation be prevented from seeking any other remedies which may be available. In addition, Employee agrees that in event that he breaches the covenants in this Section 6, in addition to any other rights that the Corporation
may have, Employee shall be required to pay to the Corporation any amounts he receives in connection with such breach.
(d) Employee recognizes that in the course of his duties hereunder, he may receive from the Corporation or others information which may be considered “material, non-public information” concerning a public company
that is subject to the reporting requirements of the United States Securities and Exchange Act of 1934, as amended. Employee agrees not to:
(i) Buy or sell any security, option, bond or warrant while in possession of relevant material, non-public information received from the Corporation or others in connection herewith, and
(ii) Provide the Corporation with information with respect to any public company that may be considered material, non-public information, unless first specifically agreed to in writing by the Corporation.
7. INVENTIONS DISCOVERED BY THE EMPLOYEE
The Employee shall promptly disclose to the Company any invention, improvement, discovery, process, formula, or method or other intellectual property, whether or not patentable or copyrightable (collectively, "Inventions"), conceived or first reduced to practice by the CEO, either alone or
jointly with others, while performing services hereunder (or, if based on any Confidential Information, within one (1) year after the Term), (a) which pertain to any line of business activity of the Company, whether then conducted or then being actively planned by the Company, with which the CEO was or is involved, (b) which is developed using time, material or facilities of the Company, whether or not during working hours or on the Company premises, or (c) which directly relates to any of the CEO's work during
the Term, whether or not during normal working hours. The CEO hereby assigns to the Company all of the CEO's right, title and interest in and to any such Inventions. During and after the Term, the CEO shall execute any documents necessary to perfect the assignment of such Inventions to the Company and to enable the Company to apply for, obtain and enforce patents, trademarks and copyrights in any and all countries on such Inventions, including, without limitation, the execution of any instruments and the giving
of evidence and testimony, without further compensation beyond the CEO's agreed compensation during the course of the CEO's employment. All such acts shall be done without cost or expense to CEO. CEO shall be compensated for the giving of evidence or testimony after the term of CEO's employment at the rate of $2,000/day. Without limiting the foregoing, the CEO further acknowledges that all original works of authorship by the CEO, whether created alone or jointly with others, related to the CEO's employment with
the Company and which are protectable by copyright, are "works made for hire" within the meaning of the United States Copyright Act, 17 U.S .C. (S) 101, as amended, and the copyright of which shall be owned solely, completely and exclusively by the Company. If any Invention is considered to be work not included in the categories of work covered by the United States Copyright Act, 17 U. S. C. (S) 101, as amended, such work is hereby assigned or transferred completely and exclusively to the Company. The CEO hereby
irrevocably designates counsel to the Company as the CEO's agent and attorney-in-fact to do all lawful acts necessary to apply for and obtain patents and copyrights and to enforce the Company's rights under this Section. This Section 5 shall survive the termination of this Agreement. Any assignment of copyright hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights" (collectively "Moral Rights"). To the extent
such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, the CEO hereby waives such Moral Rights and consents to any action of the Company that would violate such Moral Rights in the absence of such consent. The CEO agrees to confirm any such waivers and consents from time to time as requested by the Company.
8. TERMINATION
(a) Employee’s employment hereunder shall continue as set forth in Section 2 hereof unless terminated upon the first to occur of the following events:
(i) The death or disability of Employee,
(ii) Termination by the Corporation for Just Cause.
(iii) Termination by the Corporation without Just Cause.
(For the purpose of this Agreement, termination for “Just Cause” shall mean a termination for gross insubordination; acts of embezzlement or misappropriation of funds; fraud; dereliction of fiduciary obligation; conviction of a felony, a willful unauthorized disclosure of confidential information belonging to the Corporation
or entrusted to the Corporation by a client; a material violation of any provision of the Agreement which is not cured by the Employee within 15 days of receiving written notice of such violation by the Corporation; being under the influence of drugs (other than prescription medicine or other medically-related drugs to the extent that they are taken in accordance with their directions) during the performance of Employee’s duties under this Agreement, engaging in behavior that would constitute grounds for
liability for harassment (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines or any other applicable state or local regulatory body) or other egregious conduct that violates laws governing the workplace; Termination for Just Cause shall also include the failure of the President to perform his written assigned tasks, where such failure is attributable to the fault of the President. In this event, the Corporation will first provide a written warning of such failure and the allocation of
fault, and provide a reasonable time period to cure such failure, in no case less than thirty days.)
(iv) Material breach by the Corporation of any provision of this agreement that is not cured within fifteen (15) days of written notice thereof from the Employee, or.
(v) Termination by the Employee at any time.
The Corporation shall not be required to pay any severance to Employee in case of any termination of Employee’s employment.
9. NOTICES
Any notice or other communication under this Agreement shall be in person or in writing and shall be deemed to have been given (i) when delivered personally against receipt therefor, (ii) one (1) day after being sent by Federal Express or similar overnight delivery, (iii) 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, or (iv) when sent by facsimile, followed by oral confirmation and with a hard copy sent as in (ii) or (iii) above.
10. SEVERABILITY OF PROVISIONS
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 a 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.
11. ENTIRE AGREEMENT MODIFICATION
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.
12. 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 the Employee’s
obligations hereunder may not be transferred or assigned by the Employee.
13. 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.
14. GOVERNING LAW, DISPUTE RESOLUTION
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Michigan of the United States of America without regard to principles of conflict of laws.
15. HEADING
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.
Corporation:
By: ________________________________
Title: Authorized agent
Employee
____________________________________
Xxxxx X. Xxx
