EXHIBIT 10.2
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 Xxxxxx Xxxxxx, M.D.,
an individual residing at 40 Xxxxx, Jerusalem, Israel (the "CEO")
WITNESSETH:
WHEREAS, the Corporation desires to employ the CEO as Chief Executive
Officer of Lakaro and the CEO desires to be employed by the Lakaro as CEO 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 CEO, and the CEO accepts
engagement and employment, as CEO of Lakaro, to direct, supervise and have
responsibilities for the daily operations of Lakaro, including, but not limited
to: (i) directing and supervising the business and research and development
efforts of Lakaro; (ii) managing the other executives and personnel of Lakaro
and (iii) evaluating, negotiating, structuring and implementing business
transactions with Lakaro's customers, partners and suppliers, and to perform
such other services and duties as the Board of Directors of Lakaro shall
determine. The CEO acknowledges and agrees that the performance by the CEO of
his duties hereunder may require significant domestic and international travel
by the CEO. In addition, the CEO realizes that he may be required to spend a
substantial amount of time in Jerusalem, Israel.
(b) The CEO 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 CEO'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 CEO 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 CEO options (the "Options") to
purchase 300,000 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 CEO 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 CEO for all normal, usual and necessary
expenses incurred by the CEO 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 CEO'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 CEO 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 CEO 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 CEO AND Lakaro
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(a) The CEO hereby represents and warrants to Lakaro as follows:
(i) Neither the execution and delivery of this Agreement nor the
performance by the CEO 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 CEO
is a party or by which he is bound.
(ii) The CEO 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 CEO enforceable against him in accordance with its terms. No approvals or
consents of any persons or entities are required for the CEO to execute and
deliver this Agreement or perform his duties and other obligations hereunder.
(b) Lakaro hereby represents and warrants to the CEO 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
------------------------
(a) The CEO 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 CEO
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 CEO's duties
to Lakaro. The CEO 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 CEO from disclosing or using any information which the CEO can show
by written documentation was in the public domain or enters into the public
domain through no improper act on the CEO'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 CEO after leaving Lakaro.
(b) Except with prior written authorization by Lakaro, the CEO 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 CEO for cause.
6. NON-COMPETITION
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(a) The CEO 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, CEO, 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 CEO 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 CEO 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
CEO 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 CEO 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 CEO 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 CEO 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 CEO 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 applications, 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 CEO 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 CEO 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 CEO, 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, CEO 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) CEO'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 CEO and that, at all times, CEO 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, CEO 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 CEO 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. CEO hereby
assigns to Lakaro all right, title and interest he may have or acquire in all
Inventions. CEO 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
CEO 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 CEO'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 CEO at his normal
and usual rate after the expiration of the Term for time actually spent by the
CEO at Lakaro's request on such assistance.
9. NON-SOLICITATION
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During the Term, and for 12 months thereafter, CEO 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 CEO'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 CEO; or
(B) the total disability of the CEO.
(ii) Termination by the Board of Directors of Lakaro for just cause.
Any of the following actions by the CEO shall constitute just cause:
(A) Material breach by the CEO of Sections 5, 6, 7, 8, or 9 of this Agreement;
or
(B) Material breach by the CEO of any provision of this Agreement other than
Sections 5, 6, 7, 8 or 9 which is not cured by the CEO 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 CEO constituting gross negligence, recklessness or
willful misconduct in respect of the CEO's obligation to Lakaro which has or is
likely to result in material, economic damage to Lakaro.
(iii) Termination by the CEO 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 CEO; or
(B) A failure to elect or reelect the CEO to the office of CEO of Lakaro or
other change by Lakaro of the CEO's function, duties or responsibilities such
that the CEO 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 CEO's employment other than for serious, willful
misconduct in respect of the CEO'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 CEO's prior consent.
(iv) Termination by Lakaro without cause. Notwithstanding anything in
this Agreement, Lakaro may terminate the CEO'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 CEO 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 CEO.
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
--------------------------
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
-----------------------------
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
--------------
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, Lakaro, its successors and assigns, and upon the
CEO and his legal representatives. This Agreement constitutes a personal
service agreement, and the performance of the CEO's obligations hereunder may
not be transferred or assigned by the CEO.
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 CEO 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/ Xxxxxx Xxxxxx, M.D.
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Name: Xxxxxx Xxxxxx, M.D.
LAKARO BIOPHARMACEUTICALS, INC.
By: /s/ Xxx Xxxxxxxxxxxx
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Name: Xxx Xxxxxxxxxxxx
Title: Secretary
