Exhibit 10.18
AMENDED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of August 8, 2005, by and between IMARX THERAPEUTICS, INC., a
Delaware corporation (the "Company"), and XXXX X. XXXXX ( "Executive") and
replaces the Executive Employment Agreement dated July 12, 2004 (the "Former
Agreement").
WITNESSETH:
WHEREAS, the Company desires to retain the services of Executive, and
Executive desires to be employed by the Company, on the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the Company and Executive, intending to be
legally bound, hereby agree as follows:
1. Employment. The Company agrees to employ Executive as President and
Chief Executive Officer of the Company, and Executive accepts such employment
and agrees to perform full-time employment services for the Company, subject to
Section 3.2 and the Third Amended and Restated Certificate of Incorporation and
Bylaws of the Company, as amended from time to time (the "Organizational
Documents"), and the resolutions of the Board of Directors of the Company (the
"Board"), for the period and upon the other terms and conditions set forth in
this Agreement.
2. Term. The term of Executive's employment hereunder (the "Term") shall
commence upon the date of execution of the Former Agreement and shall continue
until this Agreement is terminated as set forth in Section 5 below.
3. Position and Duties.
3.1. Service with the Company. During the Term of this Agreement,
Executive agrees to perform the duties of the President and Chief Executive
Officer of the Company as set forth in the Organizational Documents and such
other duties as the Board may from time to time prescribe that are consistent
with the duties of a Chief Executive Officer of a company of the size and nature
of the Company. In addition, during the Term, Executive shall serve without any
additional compensation on the Company's Board. The Company agrees that
Executive shall remain a member of its Board, and furthermore that should the
Executive be relieved of his position as CEO as a result of the hiring of or
promotion of a person to that position, then Executive shall automatically be
appointed to position as Chairman of the Board and Chief Scientific Officer. The
position of Executive as member of the Board does not depend upon continued
employment by Company.
3.2. No Conflicting Duties. Executive hereby confirms that he is
under no contractual commitments inconsistent with his obligations set forth in
this Agreement, and that
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during the Term of this Agreement, he will not render or perform services, or
enter into any contract to do so, for any other corporation, firm, entity or
person that are inconsistent with the provisions of this Agreement or
Executive's fiduciary obligations to the Company. Except as otherwise provided
herein, Executive shall not serve as a director of any other corporation (except
nonprofit organizations to the extent such service does not materially affect
Executive's performance of his duties for the Company) without the prior
approval of the Board of Directors. Company acknowledges that Executive is
Professor of Radiology and Bioengineering at the University of Arizona and
furthermore approves Executive to work up to 6 days per month at the University
of Arizona (or other University) in research, administration, teaching and/or
clinical work.
4. Compensation and Benefits.
4.1. Base Salary. (a) As compensation for all services to be
rendered by Executive under this Agreement, the Company shall pay to Executive
during the Term an annual salary of $250,000 (the "Base Salary"). Subject to
Section 4.1(b), the Base Salary shall be reviewed at least annually and changed
at the discretion of the Board (or its Compensation Committee), provided,
however, that the Base Salary may not be decreased without the written consent
of the Executive. The Company shall pay the Base Salary to Executive in
accordance with the Company's normal payroll procedures and policies.
(b) If Executive's Base Salary is increased at any time, it shall not
thereafter be decreased during the Term of this Agreement, unless such decrease
is the result of a general reduction (on the same percentage basis) affecting
the base salaries of all other executive officers of the Company and such
decrease does not result in a Base Salary of less than $200,000.
4.2. Annual Bonus. With respect to each full fiscal year until the
Termination Date, Executive shall be eligible to receive an annual bonus award
of up to 50% of Base Salary, payable quarterly, as determined by annual
pre-determined milestones, attached as Exhibit A, which shall be mutually
agreeable to Executive and the Board (or its Compensation Committee) in its sole
discretion.
4.3. Stock Options. (a) As of the commencement of the Term of this
Agreement, the Company shall grant (the "Original Grant") to Executive an
incentive stock option to purchase 600,000 shares of the Company's common stock
(the "Shares"), pursuant to the Company's 2000 Stock Plan (the "Plan"), which
shall have a term of ten years, shall vest and be exercisable as hereinafter set
forth, and shall otherwise be in the form attached hereto as Exhibit C. The
Original Grant shall, to the extent permissible, be for "incentive stock
options" and otherwise shall be for "nonqualified stock options", and the
exercise price per share shall be the fair market value of the Company's common
stock at the time of grant as determined by the Board in its good faith
discretion. Subject to Executive being employed hereunder at the time of each
vesting, as applicable, the Original Grant shall vest and become exercisable as
follows: 45,000 shares shares shall vest annually on each anniversary date
following the Effective Date of the Former Agreement over four years; and
420,000 shares shall vest according to the milestones
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established in Exhibit B. In addition, a portion of the unvested Options shall
vest as described in Sections 6.3 and 7 hereof. If the Company's common stock is
registered under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company shall use its good faith efforts to register under
the Securities Act of 1933 on Form S-8 (or any successor form) all common stock
issued and/or issuable under the 2000 Stock Plan, including the Shares subject
to the Original Grant and all other stock options or incentives granted or
awarded to Executive under the 2000 Stock Plan, and its good faith efforts to
qualify such common stock for sale under such state securities or `blue sky'
laws as the Company shall determine are required to issue the shares of common
stock under the 2000 Stock Plan and for the resale of such shares by the
recipients thereof, provided that the Company shall have no obligation to
qualify such stock in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
qualification, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act.
4.4. Participation in Benefit Plans. Executive shall be included to
the extent eligible thereunder in any and all plans of the Company providing
general benefits for the Company's executive employees, including, without
limitation, medical, dental, vision, short and long term disability insurance,
life insurance, 401(k) plan, sick days, vacation, and holidays. Executive's
participation in any such plan or program shall be subject to the provisions,
rules, and regulations applicable thereto. In addition, during the Term of this
Agreement, Executive shall be eligible to participate in all non-qualified
deferred compensation and similar compensation, incentive, bonus, profit sharing
and stock plans offered, sponsored or established by Company on substantially
the same or a more favorable basis as any other employee of Company.
4.5. Business Expenses. In accordance with the Company's policies
established from time to time, the Company will pay or reimburse Executive for
all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate supporting documentation. During the Term of this Agreement, the
Company shall at its expense provide Executive with reasonable office space and
furnishings (including without limitation desk and lap top computers) at the
Company's principal executive offices, and a cell telephone.
4.6. Key Man Life Insurance. During the Term of this Agreement, the
Company shall have the option of purchasing and paying the premiums for a "Key
Man" life insurance policy relating to Executive in a coverage amount determined
by the Company, and the Company shall be named as the beneficiary of such
policy. Executive represents and warrants that he currently is insurable for
such policy on an unrated basis and agrees to fully cooperate with the Company
in obtaining the policy.
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5. Termination.
5.1. Disability. At the Company's election, Executive's employment
and this Agreement shall terminate upon Executive's becoming totally or
permanently disabled for a period of ninety (90) days or more in any twelve (12)
month period. For purposes of this Agreement, the term "totally or permanently
disabled" or "total or permanent disability" means Executive's inability on
account of sickness or accident, whether or not job-related, to engage in
regularly or to perform adequately his assigned duties under this Agreement and
Executive is qualified and eligible to receive disability benefits under the
disability policies maintained by the Company for Executive.
5.2. Death of Executive. Executive's employment and this Agreement
shall terminate immediately upon the death of Executive.
5.3. Termination for Cause. The Company may terminate Executive's
employment and this Agreement at any time for "Cause" (as hereinafter defined)
immediately upon written notice to Executive. As used herein, the term "Cause"
shall mean that Executive shall have (i) been convicted of a felony; or (ii)
committed a single act of fraud, embezzlement, or breach of trust, or (iii)
committed an act of willful misconduct or gross negligence resulting in a
material loss to the Company, or (iv) materially violated any material written
Company policy or rules of the Company, unless cured by Executive within 30 days
following written notice thereof to Executive, or (v) refused to follow the
reasonable written directions given by the Board or its designee or materially
breached any covenant or obligation under this Agreement or other agreement with
the Company, unless cured by Executive within 30 days following written notice
thereof to Executive.
5.4. Resignation. Executive's employment and this Agreement shall
terminate on the earlier of the date that is one (1) month following the written
submission of Executive's resignation to the Company or the date such
resignation is accepted by the Company.
5.5. Termination Without Cause. The Company may terminate
Executive's employment and this Agreement without cause upon written notice to
Executive. Termination "without cause" shall mean termination of employment on
any basis (including no reason or no cause) other than termination of
Executive's employment hereunder pursuant to Sections 5.1, 5.2, 5.3, or 5.4.
5.6. Surrender of Records and Property. Upon termination of his
employment with the Company, Executive shall deliver promptly to the Company all
credit cards, computer equipment, cellular telephone, records, manuals, books,
blank forms, documents, letters, memoranda, notes, notebooks, reports, data,
tables, calculations or copies thereof, that are the property of the Company and
that relate in any way to the business, strategies, products, practices,
processes, policies or techniques of the Company, and all other property, trade
secrets and confidential information of the Company, including, but not limited
to, all documents that in whole or in part contain any trade secrets or
confidential information of the Company that in any
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of these cases are in his possession or under his control, and Executive shall
also remove all such information from any personal computers that he owns or
controls.
6. Compensation Upon the Termination of Executive's Employment.
6.1. In the event that Executive's employment and this Agreement are
terminated pursuant to Section 5.1 (Disability), 5.3 (Cause), or 5.4
(Resignation), then Executive shall be entitled to receive Executive's then
current Base Salary through the date his employment is terminated, and such
other amounts that accrued prior to the termination date and are required to be
paid to him pursuant to any employee benefit plan in accordance with such plan
and/or by law, but no other compensation of any kind or amount.
6.2. In the event Executive's employment and this Agreement are
terminated pursuant to Section 5.2 (Death), Executive's beneficiary or a
beneficiary designated by Executive in writing to the Company, or in the absence
of such beneficiary, Executive's estate, shall be entitled to receive
Executive's then current Base Salary through the end of the month in which his
death occurs, and such other amounts that accrued prior to the termination date
and are required to be paid to him pursuant to any employee benefit plan in
accordance with such plan and/or by law, but no other compensation of any kind
or amount.
6.3. Unless Section 7 applies, in the event Executive's employment
and this Agreement are terminated by the Company pursuant to Section 5.5
(Without Cause) or by Executive for "Good Reason" (as defined below), (A) the
Company shall pay to Executive, as a severance allowance, his then current
monthly Base Salary for the six (6) month period following the date of
termination, paid on the Company's regular paydays throughout that 6-month
period, followed by a one-time lump sum payment (the "Lump Sum Payment") on the
next regular payday of an amount equal to six months of his then current monthly
Base Salary (i.e. one-half of his annual Base Salary), for a total severance
allowance equal to one (1) year of his Base Salary, and such other salary that
accrued prior to the termination date and amounts required to be paid to him
pursuant to any employee benefit plan in accordance with such plan and/or by
law; and (B) Executive shall receive accelerated vesting for twelve (12) months
from the date of Executive's termination for all stock options granted by the
Company to Executive before or after the Commencement Date and extension of the
option exercise period for an additional twelve (12) months beyond the period
set forth in Exhibit A attached hereto for such exercise, provided, however,
that such stock options shall not be extended beyond the date on which they
would have terminated had Executive continued to be employed by the Company; but
no other compensation or benefits of any kind. Executive shall be entitled to
receive these benefits and payments only if he complies with his continuing
obligations to the Company as set forth in this Agreement, provided, however,
that any deductions to the benefits described in Section 6.3(A) are subject only
to the offsets set forth in Section 13.4, and provided, further, that with
respect to the benefits described in Section 6.3(B), the Company shall not deny
any such benefits unless it has provided written notice to Executive of any
claimed breach of such continuing obligations and Executive has cured each such
breach within fifteen days after receipt of such written notice of breach and
the exercise period of any such options shall be tolled during such fifteen (15)
day period or any longer period required to resolve any disputed claim of
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breach of such continuing obligations, and provided, further, that the foregoing
shall not limit Executive's ability to exercise any such options that had vested
prior to the date of termination of his employment which he exercises within
ninety (90) days after such termination date.
6.4. The provisions of Section 6 shall not affect Executive's
participation in or terminating distributions and vested rights under, any
pension, profit sharing, insurance or other employee benefit plan of the Company
to which Executive is entitled pursuant to the terms of such plans.
7. Change in Control. In the event a Change in Control (as defined below)
occurs and, in the six month periods preceding or following the Change in
Control, Executive's employment and this Agreement are terminated by the Company
or its successor, assigns or transferee pursuant to Section 5.5 (Without Cause)
or by Executive for "Good Reason" (as defined below), then the Company shall,
within thirty (30) days after occurrence of the last of these conditions (the
"Trigger Date"), pay Executive a lump sum amount equal to one hundred percent
(100%) of Executive's then current annual Base Salary (less applicable
withholdings). In addition, one hundred percent (100%) of Executive's unvested
options (whether granted before or after the Commencement Date) as of the
Trigger Date, shall automatically vest as of the Trigger Date and the exercise
period for all such stock options shall be extended an additional twelve (12)
months.
7.1. Definition of Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have
occurred if, at any time during the Term, any of the following events occurs:
7.1.1. if the Company does not have a class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"):
7.1.1.1. any person, as that term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act, becomes a beneficial owner (as
defined in Rule 13d-3 under the Exchange Act or any successor rule
or regulation), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding Voting Stock, as defined below, provided,
however, that for purposes of this paragraph, the term "person"
shall exclude (A) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its
subsidiaries, (B) a person who beneficially owns 25% or more of the
Company's outstanding Voting Stock on the Effective Date, or (C) any
person who becomes such a beneficial owner in connection with the
Company's financing.
7.1.1.2. the Company is merged, consolidated or reorganized
into or with another corporation or other legal person (an
"Acquiring Person") or securities of the Company are exchanged for
securities of an Acquiring Person, and as a result of such merger,
consolidation, reorganization or exchange less than a majority of
the combined voting power of the then outstanding
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securities of the Acquiring Person immediately after such
transaction are held, directly or indirectly, in the aggregate by
the holders of securities entitled to vote generally in the election
of directors ("Voting Stock") of the Company immediately prior to
such transaction;
7.1.1.3. the Company, in any transaction or series of related
transactions, sells or otherwise transfers, directly or indirectly,
all or substantially all of its assets, on a consolidated basis, to
an Acquiring Person, and less than a majority of the combined voting
power of the then outstanding securities of the Acquiring Person
immediately after such sale or transfer are held, directly or
indirectly, in the aggregate by the holders of Voting Stock of the
Company immediately prior to such sale or transfer; or
7.1.1.4. during any period of two consecutive years,
commencing upon the closing of the Company's private placement
financing and the appointment of the Board of Directors in
connection therewith, individuals who at the beginning of any such
period constitute the directors of the Company cease for any reason
to constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's stockholders, of each
director of the Company first elected during such period was
approved by at least a majority vote of the directors of the Company
then still in office who were directors of the Company at the
beginning of any such period;
OR
7.1.2. if the Company has a class of securities registered under
Section 12 of the Exchange Act:
7.1.2.1. any person, as that term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act, becomes, is discovered to be,
or files a report on Schedule 13D or 14D-1 (or any successor
schedule, form or report) disclosing that such person is, a
beneficial owner (as defined in Rule 13d-3 under the Exchange Act or
any successor rule or regulation), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding Voting Stock,
provided, however, that for purposes of this paragraph, the term
"person" shall exclude (A) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its subsidiaries, (B) a person who becomes such a beneficial owner
in connection with the Company's initial public offering of common
stock or (C) any person who was a shareholder of the Company
immediately prior to the Company's initial public offering of common
stock; OR
7.1.2.2. any of the events described in Sections 7.1.1.2, 7.1.1.3 or
7.1.1.4.
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Notwithstanding the foregoing, a transaction shall not constitute a Change in
Control if its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company's securities
immediately before such transaction.
7.2. Definition of Good Reason. As used in this Agreement, "Good
Reason" means any of the following: (i) a material reduction in Executive's
title, status, authority, or responsibility at the Company, including without
limitation the failure of Executive to be elected to the Board of Directors of
the Company during the Term for any reason other than termination of Executive's
employment pursuant to Section 5.3; or (ii) a material reduction in the benefits
in effect for the Executive, and comparable reductions have not been made in the
benefit of the other members of senior management of the Company; or (iii)
except with Executive's prior written consent, relocation of Executive's
principal place of employment to a location more than 25 miles from the
Company's executive offices in Tucson, Arizona; or (iv) ) any breach by the
Company of its material obligations under this Agreement unless such breach is
cured within 30 days after written notice of breach from Executive.
8. Release. As a condition precedent to the Company's obligation to
provide Executive with the amounts set forth in Section 6.3 or Section 7,
Executive must first execute and deliver to the Company a mutual legal release
in the form attached hereto as Exhibit B, with such changes as the Company deems
necessary in order to maintain the breadth of such release in the event of
changes in applicable laws, rules or regulations, it being the intent of the
parties that the release be as broad as possible.
9. Ventures. If, during the Term of this Agreement, Executive is engaged
in or associated with the planning or implementing of any project, program, or
venture involving the Company and a third party or parties, all rights in the
project, program, or venture shall belong to the Company and shall constitute a
corporate opportunity belonging exclusively to the Company. Except as approved
in writing by the Board, Executive shall not be entitled to any interest in such
project, program, or venture or to any commission, finder's fee, or other
compensation in connection therewith other than the Base Salary to be paid to
Executive as provided in this Agreement.
10. Restrictions.
10.1. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
10.1.1. "Trade Secrets" means information that is not
generally known about the Company or its business, including without limitation
about its products, recipes, projects, designs, developmental or experimental
work, computer programs, data bases, know-how, processes, business partners,
manufacturers, customers, suppliers, business plans, marketing plans and
strategies, financial or personnel information, and information obtained from
third parties under confidentiality agreements. "Trade Secrets" also means
formulas,
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patterns, compilations, programs, devices, methods, techniques, or processes
that derive independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value
from its disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy. In particular, the parties
agree and acknowledge that the following list, which is not exhaustive and is to
be broadly construed, enumerates some of the Company's Trade Secrets, the
disclosure of which would be wrongful and would cause irreparable injury to the
Company: (i) pharmaceutical manufacturing; (ii) formulation technology; (iii)
pricing information; (iv) product development, marketing, sales, customer,
manufacturer and supplier information related to any Company product or service
available commercially or in any stage of development during Executive's
employment with the Company; and (v) Company marketing and business strategies,
ideas, and concepts. Executive acknowledges that the Company's Trade Secrets
were and are designed and developed by the Company at great expense and over
lengthy periods of time, are secret, confidential, and unique, and constitute
the exclusive property of the Company.
10.1.2. "Restricted Field" means the business of developing,
manufacturing, licensing and selling (i) perfluorocarbon (excluding
perfluorocarbon used as a propellant) or ultrasound energy-mediated therapy or
drug delivery products, (ii) targeted in vivo ultrasound diagnostics, and/or
(iii) non-energy mediated nanoparticle hydrophobic drug delivery formulations
(excluding liposomal formulations).
10.1.3. "Non-Competition Period" means a period of 12 months
after the termination of Executive's employment with the Company unless a court
of competent jurisdiction determines that that Period is unenforceable under
applicable law because it is too long, in which case the Non-Competition Period
shall be for the longest of the following periods that the court determines is
reasonable under the circumstances: 11 months, 10 months, 9 months, 8 months, 7
months, or 6 months after the termination of Executive's employment with the
Company.
10.1.4. "Business Territory" means the entire United States,
unless a court of competent jurisdiction determines that that geographic scope
is unenforceable under applicable law because it is too broad, in which case the
Business Territory shall be amended by eliminating geographical areas and states
from the following list until the Business Territory is determined to be
reasonable: Alabama, Alaska, Arizona, Arkansas, California, Colorado,
Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North
Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington,
District of Columbia, West Virginia, Wisconsin, Wyoming, Pima County, Arizona,
Maricopa County, Arizona, Tucson, Arizona, Phoenix, Arizona. The parties
acknowledge and agree that if any of the geographic areas or States listed above
are required by law to be eliminated, it would be fair and appropriate to do so
in the inverse order of the volume of revenue received or projected to be
received by the Company from such area or State at the time of determination.
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10.1.5. "Non-Solicitation Period" means a period of 12 months
after the termination of Executive's employment with the Company.
10.2. Non-Disclosure Obligations. Executive shall not at any time
during the period specified in Section 4.A. of the Invention and Confidential
Information Agreement attached hereto as Exhibit C, without the express written
consent of an officer of the Company, publish, disclose, or divulge to any
person, firm or corporation, or use directly or indirectly for the Executive's
own benefit or for the benefit of any person, firm, corporation or entity other
than the Company, any Trade Secrets of the Company.
10.3. Non-Competition Obligations. Executive acknowledges the
substantial amount of time, money, and effort that the Company has spent and
will spend in developing its products and other strategically important
information (including Trade Secrets), and agrees that during Executive's
employment with the Company hereunder and during the Non-Competition Period,
Executive will not, alone or with others, directly or indirectly, as an
employee, agent, consultant, advisor, owner, manager, lender, officer, director,
employee, partner, stockholder, or otherwise, engage in any Restricted Field
activities in the Business Territory, nor have any such relationship with any
person or entity that engages in Restricted Field activities in the Business
Territory; provided, however, that nothing in this Agreement will prohibit
Executive from owning a passive investment of less than one percent of the
outstanding equity securities of any company listed on any national securities
exchange or traded actively in any national over-the-counter market so long as
Executive has no other relationship with such company in violation of this
Agreement. The Non-Competition Period set forth in this Section 10.3 shall be
tolled during any period in which the Executive is in breach of the restriction
set forth in this Section 10.3.
10.4. Agreement Not to Solicit Customers. Executive agrees that
during Executive's employment with the Company hereunder and during the
Non-Solicitation Period, Executive will not, either directly or indirectly, on
Executive's own behalf or in the service or on behalf of others, solicit,
divert, or appropriate, or attempt to solicit, divert, or appropriate, to any
business that engages in Restricted Field activities in the Business Territory
(i) any person or entity whose account with the Company was sold or serviced by
or under the supervision of Executive during the twelve (12) months preceding
the termination of such employment, or (ii) any person or entity whose account
with the Company has been directly solicited at least twice by the Company
within the year preceding the termination of Executive's employment (the
"Customers"). The Non-Solicitation Period set forth in this Section 10.4 shall
be tolled during any period in which the Executive is in breach of the
restriction set forth in this Section 10.4.
10.5. Agreement Not to Solicit Employees. Executive agrees that
during Executive's employment with the Company hereunder and during the
Non-Solicitation Period, Executive will not, either directly or indirectly, on
Executive's own behalf or in the service or on the behalf of others solicit,
divert, or hire away, or attempt to solicit, divert, or hire away any person
then employed by the Company, nor encourage anyone to leave the Company's
employ. The Non-Solicitation Period set forth in this Section 10.5 shall be
tolled during any period in which the Executive is in breach of the restriction
set forth in this Section 10.5.
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10.6. Defamatory Statements. Executive agrees that during
Executive's employment with the Company hereunder and thereafter, he will not,
either directly or indirectly, defame the reputation, character, or image of the
Company or its products, services, employees, directors, or officers.
10.7. Reasonableness. Executive and the Company agree that the
covenants set forth in this Agreement are appropriate and reasonable when
considered in light of the nature and extent of the Company's business.
Executive further acknowledges and agrees that (i) the Company has a legitimate
interest in protecting the Company's business activities and its current,
pending, and potential Trade Secrets; (ii) the covenants set forth herein are
not oppressive to Executive and contain reasonable limitations as to time,
scope, geographical area, and activity; (iii) the covenants do not harm in any
manner whatsoever the public interest; (iv) Executive's chosen profession,
trade, or business is in manufacturing, developing, and marketing pharmaceutical
drugs, products and devices (the "Profession") (v) the Restricted Field is only
a very small or limited part of the Profession, and Executive can work in many
different jobs in Executive's Profession besides those in the Restricted Field;
(vi) the covenants set forth herein do not completely restrain Executive from
working in Executive's Profession, and Executive can earn a livelihood in
Executive's Profession without violating any of the covenants set forth herein;
(vii) Executive has received and will receive substantial consideration for
agreeing to such covenants, including without limitation the consideration to be
received by Executive under this Agreement; (viii) if Executive were to work for
a competing company that engages in activities in the Restricted Field, there
would be a substantial risk that Executive would inevitably disclose Trade
Secrets to that company; (ix) the Company competes with other companies that
engage in Restricted Field Activities in the Business Territory, and if
Executive were to engage in prohibited activities in the Restricted Field within
the Business Territory, it would harm the Company; (x) the Company expends
considerable resources on hiring, training, and retaining its employees and if
Executive were to engage in prohibited activities during the Non-Solicitation
Period, it would harm the Company; and (xi) the Company expends considerable
resources acquiring, servicing, and retaining its Customers and if Executive
were to engage in prohibited activities during the Non-Solicitation Period, it
would harm the Company.
11. Other Agreements. Executive reaffirms Executive's obligations set
forth in the Invention and Confidential Information Agreement attached hereto as
Exhibit C, which Executive has executed and delivered herewith. Executive
further acknowledges and agrees that he will comply with all other Company
policies and procedures.
12. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of Executive, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity (i) with or into which the Company may merge or consolidate, (ii) to
which the Company may sell or transfer all or substantially all of its assets or
(iii) of which at least a majority of the equity investment and of the voting
control is owned, directly or indirectly, by, or is under common ownership with,
the Company. Upon such assignment by the Company, the Company shall attempt to
obtain the assignees' written agreement enforceable by
11
Executive to assume and perform, from and after the date of such assignment, the
terms, conditions, and provisions imposed by this Agreement upon the Company.
13. Other Provisions.
13.1. Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Arizona
without reference to conflicts of law provisions thereof.
13.2. Injunctive Relief. Executive agrees that it would be difficult
to compensate the Company fully for damages for any violation of the provisions
of this Agreement. Accordingly, Executive specifically agrees that the Company
shall be entitled to temporary and permanent injunctive relief to enforce the
provisions of this Agreement. This provision with respect to injunctive relief
shall not, however, diminish the right of the Company to claim and recover
damages in addition to injunctive relief.
13.3. Prior Agreements. This Agreement and its exhibits contain the
entire agreement of the parties relating to the subject matter hereof and
supersedes all prior agreements and understanding with respect to such subject
matter, 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.
13.4. Withholding Taxes and Right of Offset. The Company may
withhold from all payments and benefits under this Agreement all federal, state,
city, or other taxes as shall be required pursuant to any law or governmental
regulation or ruling. Executive agrees that the Company may offset any payments
owed to Executive pursuant to this Agreement by any amounts owed by Executive to
the Company pursuant to Section 4.7.1 or for travel advances, provided that
following a termination of Executive's employment pursuant to Section 5.5
(Without Cause) or resignation by Executive for Good Reason, only the "Lump Sum
Payment" payable pursuant to Section 6.3(A) shall be subject to any such offset.
13.5. Amendments. No amendment or modification of this Agreement
shall be deemed effective unless made in writing signed by Executive and the
Company.
13.6. No Waiver. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived, and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
13.7. Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted from this
Agreement and the remainder
12
of such provision and of this Agreement shall be unaffected and shall continue
in full force and effect.
13.8. Indemnification. Executive shall be entitled as an officer and
director to be indemnified by the Company under the Organizational Documents, as
set forth therein, and to receive the benefits, if any, of any director and
officer liability insurance obtained by the Company in its discretion from time
to time, subject to the terms, provisions and conditions of any such insurance.
13.9. Headings. The headings in this Agreement are included solely
for reference purposes and shall not be considered in the interpretation or
construction of this Agreement.
13.10. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be delivered
personally, by overnight courier or similar means, by United States certified or
registered mail, return receipt requested, postage prepaid, or sent by facsimile
transmission with written confirmation of receipt, at the addresses specified
below or such other addresses as the parties may designate by like notice. Any
such notice shall be effective upon receipt if delivered personally, by
overnight courier or by United States certified or registered mail, or on the
next business day following transmittal if sent by facsimile transmission.
IF TO THE COMPANY: ImaRx Therapeutics, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxx, XX 00000
Attn: Chairman of the Board
Telephone: 000-000-0000
Facsimile: 000-000-0000
COPY TO: Xxxxxx Xxxxxxx, P.A.
0000 X. Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO EXECUTIVE: Xxxx X. Xxxxx, MD
0000 X. Xxxxxxx Xx.
Xxxxxx, XX 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
13.11. No Mitigation Obligation. It will be difficult, and may be
impossible, for Executive to find reasonably comparable employment following the
termination of Executive's
13
employment with the Company, and the noncompetition covenant contained in
Section 10.1 hereof will further limit the employment opportunities for
Executive. Accordingly, the parties hereto expressly agree that the payments
provided for in Section 6.3 and Section 7 by the Company to Executive will be
liquidated damages, and that Executive shall not be required to seek other
employment, or otherwise, to mitigate any payment provided for hereunder.
13.12. Remedies Cumulative. Remedies under this Agreement of either
party hereto are in addition to any remedy or remedies to which such party is
entitled or may become entitled at law or in equity.
13.13. Attorneys' Fees. In the event suit is brought to enforce the
terms of this Agreement or to collect any moneys due hereunder, or to collect
money damages for breach hereof, the prevailing party shall be entitled to
recover, in addition to any other remedy, reimbursement for reasonable
attorneys' fees, court costs, costs of investigation and other related expenses
incurred in connection therewith.
13.14. Counterparts. This Agreement may be executed in any number of
counterparts, all such counterparts shall be deemed to constitute one and the
same instrument, and each of said counterparts shall be deemed an original
hereof.
13.15. Survivability. Sections 4.3, 6, 7, 8, 10 and 13 of this
Agreement shall survive the termination of this Agreement and the termination of
Executive's employment with the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
"COMPANY": IMARX THERAPEUTICS, INC.
By: /S/Xxxx Xxxx
-----------------------------
Name: Xxxx Xxxx
Title: Chief Financial Officer
"EXECUTIVE": /S/ Xxxx X. Xxxxx
--------------------------------
XXXX X. XXXXX
14
EXHIBIT A
BONUSABLE MILESTONES FOR THE YEAR ENDING JUNE 30, 2006
BONUSABLE MILESTONE BONUS EXPIRATION BONUS AS A
DATE PERCENTAGE OF
BASE SALARY
--------------------------------------------------------------------------------
a) Allowance of introduction of September 30, 2005 a) 5%,
MRX-815 into clinical trials, or
or b) 10%
b) Allowance of introduction of
MRX-815 into clinical trials with
device indication
Execution and approval by the Board December 31, 2005 10%
and licensee of a licensing
contract for SonoLysis with
milestone payments of greater than
$5 million, provided however, no
Bonus payment will be made until
the Company has received
unreimbursable cash payments under
the contract of at least $500,000
Completion of an IPO or private March 28, 2006 10%
placement of $20 million or greater
Completion of Phase II/Feasibility March 31, 2006 10%
study in ischemic stroke (n=40
patients)
Execution and approval by the Board June 30, 2006 10%
and licensee of a licensing
contract for ImaRx technology other
than SonoLysis and vulnerable
plaque with milestone payments of
greater than $5 million, provided
however, no Bonus payment will be
made until the Company has received
unreimbursable cash payments under
the contract of at least $500,000
EXHIBIT B
EXECUTIVE OPTION VESTING MILESTONES
GRANT MILESTONE GRANT EXPIRATION SHARES
DATE
--------------------------------------------------------------------------------
Execution and approval by the Board and December 31, 2005 100,000
licensee of a licensing contract for
SonoLysis with milestone payments of
greater than $5 million, provided
however, no Bonus payment will be made
until the Company has received
unreimbursable cash payments under the
contract of at least $500,000
Completion of an IPO or private March 28, 2006 100,000
placement of $20 million or greater
Achieve a liquidity event or market December 31, 2008 100,000
capitalization as a public company of
over $400M for 20 consecutive trading
days
FDA approval of SonoLysis for stroke December 31, 2009 120,000
EXHIBIT C
[2000 STOCK OPTION AGREEMENT]
EXHIBIT D
[FORM OF RELEASE]
EXHIBIT E
[INVENTION AND CONFIDENTIAL INFORMATION AGREEMENT]
