EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made by and between SAMARITAN
PHARMACEUTICALS, INC. a Nevada Corporation ("Company") and Xxxxxx Xxxx, an
individual ("Executive"), as of June 1, 2004 (the "Effective Date"), who agree
as follows:
1. Recitals. This Agreement is made with reference to the following material
facts:
1.1 Executive is presently employed by Company pursuant to an oral
agreement.
1.2 The parties desire to continue Executive's employment with the
Company pursuant to the written agreement set forth herein.
2. Employment.
2.1 Company hereby engages and employs Executive in the capacity of
Chief Drug Development Officer, as of the Effective Date (the "Employment"). The
Company's Board of Directors (the "Board") may also provide such additional
designations of title to Executive as the Board, in its discretion, may deem
appropriate. Executive agrees to perform the executive duties and functions
customarily associated with the offices of Chief Drug Development Officer and as
specified from time to time by the Board.
2.2 Except for legal holidays, vacations and absences due to temporary
illness or as otherwise permitted pursuant to company policy, Executive shall
devote a majority of his time, attention and energies to the business of the
Company. Executive represents and warrants to the Company that he is under no
restriction, limitation or other prohibition to perform his duties as described
herein.
3. Term. The term of this Agreement (the "Term"), shall commence on the
Effective Date hereof and shall continue for a period of four (4) years
thereafter unless terminated earlier as provided hereinafter.
4. Compensation.
4.1. Base Salary. Executive's initial salary shall be $300,000 per
annum. This salary level will be reviewed at least annually by the Board, but
will not be reduced without Executive's prior written consent. This annual
salary of $300,000 shall be payable in equal by-weekly installments before
deductions for employment taxes and other deductions mandated by law. The amount
of unpaid salary may be paid upon determination of the Employer or the Employee
at any time, in stock or converted to shares of Common Stock of the Company. The
amount of stock issued shall equal to the amount due divided by the lowest close
price of the stock quoted on the exchange or medium where the stock is trading,
for the period for which the salary has been earned divided by (1- Rdiscount)
one minues the current discount rate for restricted stock offered by the
company. Additionally, prior to the end of each year of employment and
commencement of the next year of employment under this Agreement, the parties
agree to mutually set an increase in the then Annual Salary considering such
factors as performance, cash flow, increases to other members of management,
revenues and other considerations.
4.2 Bonus.
a) The Executive shall receive bonus payments in accordance to
the following schedule: $50,000 for FDA approval to move to Phase III or Phase
II/III for HIV drug SP-01A and $50,000 for each Investigational New Drug
Applications "Granted" by the FDA.
b) The Executive shall also receive a one time signing bonus
of 100,000 options at $1.00 with an expiration of three years.
c) Upon moving, a flat rate of $30,000 for moving expenses for
relocating to Las Vegas.
4.3 Stock Options. The Executive shall receive a grant of 1,200,000
options. One quarter (1/4) of said Stock Options shall vest every year. The
price of the options shall $1.08 with a term of 10 years. Upon termination of
Executive, as provided hereinafter, Executive's said 1,200,000 options (vested
and non-vested) shall expire within 30 days.
4.4 Retirement Benefits. Company shall provide Executive with the
opportunity to participate in all of Company's qualified defined benefit and
defined contribution retirement plans, subject to the eligibility and
participation requirements of such plans.
4.5 Vacation. Executive shall receive three (3) weeks paid vacation
each year which shall be taken in accordance with the Company's vacation policy.
Executive shall also receive all the paid holidays observed by the Company, and
any other paid absence days established by Company policy.
4.6 At-Will Employment. Executive agrees that Executive's employment
and compensation from Company can be terminated, with or without cause, and
without notice, at any time, at the option of either Executive or Company.
Executive understands that no executive or Company representative, other the
Company's Board of Directors, has authority to enter into an agreement for
employment with Company for any specific period of time, or to make any
agreement contrary to the foregoing. Any such agreement must be in writing.
5. Other Covenants of the Parties.
5.1. Intellectual Property Rights.
(a) Executive shall promptly and fully inform Company of, and
disclose to Company, any and all ideas, concepts, themes, inventions, designs,
creations, improvements and discoveries that he makes during the term of this
Agreement, whether individually or jointly in collaboration with others, which
are, at the time any such item is conceived or reduced to practice, related to
Company's business or to actual or demonstrably anticipated research or
development of Company, or which result from any work performed by Executive for
Company.
(b) Executive agrees that any and all ideas, concepts, themes,
inventions, designs, creations, improvements or discoveries conceived, developed
or written by Executive either individually, or jointly in collaboration with
others, which are related to Company's business, whether patentable or
unpatentable or copyrightable or uncopyrightable, shall belong to and be the
sole and exclusive property of Company.
(c) Executive shall assist Company in obtaining patents or
copyright registration on such intellectual properties an execute all documents
and do all things necessary to enable Company to obtain and enforce full an
exclusive title to such properties which are related to Company's business.
5.2. Non-Competition. The Employee agrees that he will not, jointly or
collectively as a participant in a partnership, sole proprietorship, corporation
or other entity, or as an operator, investor, shareholder, partner, director,
employee, consultant, manager, advisor or in any other capacity whatsoever,
either directly or indirectly, during the term of this Agreement, do any of the
following:
(i) establish or pursue, directly or indirectly, the same or
similar business as that of the Employer wherever pursued by
Employer; or
(ii) directly or indirectly request or advise any past, present or
future customers or suppliers of the Employer to withdraw,
curtail or cancel any of their business or other
relationships.
Further, he agrees that the restrictions contained herein are reasonable
restraints upon the Employee and any violation of the terms of this Section
could have a substantial detrimental effect on Employer. Employee has carefully
considered the nature and extent of the restrictions imposed hereunder and the
rights and remedies conferred upon Employer under the provisions of this
Section, and hereby acknowledges and agrees that same are reasonable in time and
territory, are designed to eliminate competition which would otherwise be unfair
to Employer, do not stifle the Employee's inherent skill and experience, would
not operate as a bar to the Employee's sole means of support, are fully required
to protect the legitimate interest of Employer and do not confer a benefit upon
Employer disproportionate to the detriment of Employee. Any damages resulting
from violation of any of the covenants contained in this Section will be
difficult to ascertain and for that reason agree that Employer shall be entitled
to an injunction from any court of competent jurisdiction restraining any
violation of any or all of this Section, either directly or indirectly, and such
right to injunction shall be in addition to whatever other remedies Employer may
have.
The parties acknowledge that this Section has been called to the parties'
attention and the parties understand it is a material covenant and that without
this Section this Agreement, and all documents executed pursuant hereto, would
not have been entered into by Employer. It is hereby further recognized and
agreed that this Section, the prevailing party shall be entitled to recover any
and all reasonable attorneys' fees and other costs of litigation, through
appeals; if any provision of this Section is held to be unenforceable, such
enforcement term of immediately lesser effect shall be substituted. Employee has
had access to certain valuable information concerning the Employer including,
without limitation, contracts, business plans, customer, employee and supplies
lists, trade secrets, financial performance and prospects, and therefore agrees
that any and all such information, even though it may have been contributed,
developed or acquired by Employee, will become the exclusive property of
Employer and Employee will not directly or indirectly disclose any such
information, unless necessary and pursuant to this Agreement.
6. General Provisions.
6.1 Gender. Wherever the context shall require, all words herein in the
masculine gender shall be deemed to include the feminine or neuter gender, all
singular words shall include the plural, and all plural shall include the
singular.
6.2 No Assignment. Neither party may assign this Agreement without the
prior written consent of the other.
6.3 Complete Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes all
previous oral and written agreements and all contemporaneous oral negotiations,
commitments, writings and understandings.
6.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Nevada.
6.6 Modifications and Waivers. No waiver or modification of this
Agreement shall be binding unless it is in a writing signed by both parties
hereto.
6.7 Severability. In the event any provision or provisions of this
Agreement is or are to be held invalid, the remaining provisions of this
Agreement shall not be affected thereby.
6.8 Legal Fees. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of any alleged
dispute, breach or default in connection with this Agreement, the successful or
prevailing party shall be entitled to recover all of its costs incurred in such
action or proceeding, including without limitation its actual attorneys' fees
and disbursements, in addition to any other relief to which it may be entitled.
6.9 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing, served personally on, or mailed by
certified or registered United States mail to, the party to be charged with
receipt hereof. Notices and other communications served by mail shall be deemed
given hereunder seventy-two (72) hours after deposit of such notice or
communication in the United States Post Office as certified or registered mail
with postage prepaid and duly addressed to the receiving party as follows, or at
such other address as such party has designated in a written notice given as
provided herein:
To Company: To Executive:
Samaritan Pharmaceuticals, Inc Xxxxxx Xxxxxx Xxxx
000 Xxxxxxxxxx Xxxxxx Xxxxx 101 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000 Xxx Xxxxx, Xxxxxx 00000
6.10 Construction. The language of this Agreement shall be construed
simply and according to its fair meaning, and shall not be construed for or
against any party hereto as a result of the source of its draftsmanship.
6.11 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or an alleged breach of this Agreement, shall be settled by
arbitration administered by the American Arbitration Association, and judgment
on the award rendered by the arbitrator(s) may be entered in the District Court
in and for Xxxxx County, Nevada. In case of a dispute, any party may commence
arbitration by giving written notice to the others of its desire to do so. Each
party hereto agrees that service of process for an arbitration proceeding will
be deemed completed when a notice of another party's desire to arbitrate is
received by such party. Each party hereby agrees that any such arbitration shall
be held in Las Vegas, Nevada and consents to the jurisdiction of the District
Court in and for Xxxxx County for entering of any judgment. The arbitrator shall
have authority equal to that of a District Court Judge to grant equitable relief
in an action pending in Xxxxx County District Court in which all parties have
appeared. Judgment upon the Arbitrator's award may be entered as if after trial
in accordance with Nevada law. Should any party fail to pay fees as required,
any other party may advance the same and shall be entitled to a judgment from
the arbitrator in the amount of such fees plus interest. Any award issued by the
arbitrator shall bear interest at the judgment rate in effect in the State of
Nevada from the date determined by the arbitrator.
6.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, even though the parties
do not sign the same counterpart.
IN WITNESS WHEREOF the parties hereto do hereby execute and make effective this
Agreement as of the Effective Date.
COMPANY: EXECUTIVE:
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxx Xxxx
-------------------- -----------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxxxx Xxxx
Title: Independent Director Title: Chief Drug Development Officer
By: /s/ Xxxxxx Holden
------------------
Name: Xxxxxx Xxxxxx
Title: Independent Director
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Independent Director
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
