Exhibit 10(b)
Executive Employment Agreement
This Executive Employment Agreement ("Agreement"), is entered into as of
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April 3, 2000, by and between OXIS International, Inc., its affiliated,
related, parent or subsidiary corporations (the "Company") located at 0000 X.
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Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000-0000, and Xxxxxxxx X. Xxxxx
("Executive") residing in Portland, OR (collectively, the "parties").
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RECITALS
Executive and the Company desire that Company employ Executive as the
President and Chief Executive Officer of OXIS Health Products for the Period
of Employment (as defined below), upon the following terms and conditions.
AGREEMENT
ACCORDINGLY, the parties hereto agree as follows:
1. General Release of Claims. In exchange for the consideration set forth in
this Agreement, the parties agree to execute a release agreement with terms
modeled on the General Release of Claims I, attached hereto as Exhibit A and
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agreed to by the parties ("Release I"), in accordance with the terms thereof.
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2. Period of Employment
a. Initial Term. Effective March 31, 2000, the Company shall employ
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Executive to render Services (as defined below) to the Company in the position
and with the duties and responsibilities described in Section 3 for a term of
twelve (12) months (the "Period of Employment"), unless the Period of Employment
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is terminated sooner in accordance with Section 8 below.
b. Renewal. This Agreement will be automatically renewed one time for an
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additional one (1) year period (without any action taken by either party) on the
last day of the Period of Employment, unless either party gives the other
written notice of termination at least sixty (60) days before the last day of
the Period of Employment.
c. Non-Renewal. If either party gives notice of termination in accordance
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with Section 2 (b), and Executive signs a release agreement with terms modeled
on the General Release of Claims II, attached hereto as Exhibit B, Executive
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shall receive a continuation of his then-current salary for six (6) months after
the Period of Employment; and, notwithstanding any vesting or termination
provisions contained in Executive's applicable Stock Option Grants with the
Company, Executive's unvested Options (as defined in Section 4 below) shall
immediately vest eighteen (18) months after the effective date of this Agreement
and Executive shall be able to exercise his vested Options at any time
subsequent to the period of employment until a date one year after the eighteen
(18) month anniversary of the effective date of this Agreement, and otherwise in
accordance with and subject to Executive's applicable Stock Option Grants with
the Company (collectively, "Non-Renewal Benefits").
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3. Position, Duties, Responsibilities
a. Position. During the Period of Employment, the Company will employ
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Executive in the position of President and Chief Executive Officer of the
Company's subsidiary, OXIS Health Products, Inc. Executive shall be responsible
for the daily operations of OXIS Health Products,
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assist with the divestiture of OXIS Health Products and other non-related
technology ("Divestiture"), and shall perform any other duties that may be
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reasonably assigned by the Company (collectively, "Services"). Executive
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shall report to the Company's Board of Directors, who have assigned Special
Advisor Xxx X. Xxxxxx as its designee to interface with Executive on a daily
basis.
b. Other Activities. During the Period of Employment, Executive will not,
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except upon the prior written consent of the Company's Board of Directors or
designee, which consent shall not be unreasonably withheld: (i) accept any
other full-time employment, or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage) in the field
of ethical pharmaceuticals that is or may be in direct competition with the
business of the Company.
4. Compensation. In exchange for Services and the other consideration he
provides under this Agreement, Executive shall be entitled to an annual base
salary of one hundred and eighty-two thousand dollars ($182,000.00) payable
in accordance with the Company's regular payroll practices. In addition, the
Board of Directors has awarded Executive options to purchase shares of the
Company's Common Stock under, in accordance with, and subject to Executive's
applicable Stock Option Grants (certain of the options under the 2000 Stock
Option Agreement are subject to shareholder approval) with the Company
(collectively, "Options"). Executive will not be entitled to any cash or
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other bonus for 1999.
In addition, Executive's entitlement to shares under the 2000 Stock Option
Grant may be accelerated in accordance with the terms thereof, as set forth
in the Board of Directors' consent document dated January 31, 2000. Executive
will be eligible to participate in the Company's benefit plans (including
vacation and health insurance) as stated in the Company's employment policies
(and as may be amended from time to time in the Company's sole discretion),
provided that Executive shall receive such benefits at the same level
provided from time to time to other senior executives of Company.
5. Proprietary Information
a. Company Information. Executive agrees during his employment with the
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Company and for a period of three years thereafter, to hold in strictest
confidence, and not to use or disclose to any person, firm or corporation any
Proprietary Information of the Company. "Proprietary Information" means any
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Company proprietary or confidential information, technical data, trade secrets
or know-how. This includes, but is not limited to, research, product plans,
products, services, customer lists, customers, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other Company
business information. This information shall remain confidential whether it was
disclosed to Executive either directly or indirectly in writing, orally or by
drawings or observation. Proprietary Information does not include any of the
foregoing items which has become publicly known and made generally available
through no wrongful act of Executive or others who were under confidentiality
obligations as to the items involved.
b. Former Employer Information. Executive agrees that he will not, during
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his employment with the Company, improperly use or disclose any proprietary
information or trade secrets, or bring onto the premises of the Company any
proprietary information belonging to any former or concurrent employer or other
person or entity.
c. Third Party Information. Executive recognizes that the Company has
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received and in the future will receive confidential or proprietary information
from third parties. Executive agrees to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to
any person, firm or corporation or to use it except as necessary in carrying out
his work for the Company consistent with the Company's agreement with such third
party.
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d. No Conflict. Executive represents and warrants that Executive's
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execution of this Agreement, his employment with the Company, and the
performance of his proposed duties under this Agreement shall not violate any
obligations he may have to any former employer (or other person or entity),
including any obligations with respect to proprietary or confidential
information of any other person or entity.
6. Inventions
a. Inventions Retained and Licensed. Executive has attached, as Exhibit C,
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a list describing all inventions, original works of authorship, developments,
improvements, and trade secrets which were made by Executive prior to
Executive's employment with the Company ("Prior Inventions"), which belong to
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Executive, and which relate to the Company's actual and/or proposed business,
products or research and development. If, in the course of his employment with
the Company, Executive incorporates into a Company product, process or machine a
Prior Invention owned by Executive or in which Executive has an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made, modify, use and
sell such Prior Invention as part of or in connection with such product, process
or machine.
b. Assignment of Inventions. Except as provided in Section 6.e below,
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Executive agrees that he will promptly make full written disclosure to the
Company, will hold in trust for the sole right and benefit of the Company, and
hereby assign to the Company, or its designee, all Executive's right, title, and
interest in and to any and all inventions, original works of authorship,
developments, concepts, improvements, designs, discoveries, ideas, trademarks or
trade secrets, whether or not patentable or registrable under copyright or
similar laws, which Executive may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to practice
("Inventions"), while Executive is employed by the Company and within the course
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and scope of employment. Executive further acknowledges that all original works
of authorship which are made by Executive (solely or jointly with others) within
the course and scope of and during his employment with the Company and which are
protectible by copyright are "works made for hire", as that term is defined in
the United States Copyright Act. Executive understands and agrees that the
decision whether or not to commercialize or market any invention developed by
Executive solely or jointly with others is within the Company's sole discretion
and for the Company's sole benefit and that no royalty will be due to Executive
as a result of the Company's efforts to commercialize or market any such
invention.
c. Maintenance of Records. Executive agrees to keep and maintain adequate
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and current written records of all Inventions made by Executive (solely or
jointly with others) during Executive's employment with the Company and subject
to license or assignment under Section 6.a or 6.b. The records will be in the
form of notes, sketches, drawings, and any other format that may be specified by
the Company. The records will be available to and remain the sole property of
the Company at all times.
d. Patent and Copyright Registrations. Executive agrees to assist the
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Company, or its designee, at the Company's expense, in every proper way, to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries. Executive will disclose to the Company all pertinent information
and data which is necessary for the execution of all applications,
specifications, oaths, assignments and all other instruments necessary to apply
for and obtain such rights and in order to assign and convey to the Company, its
successors, assigns, and nominees the sole and exclusive rights, title and
interest in and to such Inventions, and any copyrights, patents, mask
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work rights, or other intellectual property rights relating thereto. Executive
further agrees that Executive's obligation to execute or cause to be executed,
when it is in Executive's power to do so, any such instrument or papers shall
continue after the termination of this Agreement for a reasonable duration. If
the Company is unable, because of Executive's mental or physical incapacity or
for any other reason, to secure Executive's signature to apply for or to pursue
any application for any United States or foreign patents or copyright
registrations covering Inventions or original works of authorship assigned to
the company as above, then Executive hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as Executive's agent and
attorney in fact, to act for and in Executive's behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters- patent or copyright
registrations thereon with the same legal force and effect as if executed by
Executive.
e. Exception to Assignments. The provisions of this Agreement requiring
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assignment of Inventions to the Company do not apply to any invention which
qualifies for protection or different treatment under the provisions of any
applicable state law. Executive will advise the Company promptly in writing of
any inventions that Executive believes meet the criteria of any applicable state
law which affects ownership of Inventions.
7. Post-Termination Activity
a. Executive acknowledges that the pursuit of the activities forbidden by
this subsection would necessarily involve the use or disclosure of Proprietary
Information in breach of this Agreement, but that proof of such a breach would
be extremely difficult. To forestall this use or disclosure, Executive agrees
that, during the Severance Period (if any) or for a period of one year after the
Period of Employment, whichever is longer, Executive shall not, without the
Company's prior written consent (i) divert or attempt to divert from the Company
any business of any kind in which the Company is then engaged; (ii) employ,
solicit for employment, or recommend for employment any person employed by the
Company (except where providing such job related references as are common in the
industry); or (iii) except as otherwise addressed in this Agreement, accept
employment with another company directly involved in developing the technology
then in development for the Company at the time of Executive's termination in
any state in which the Company conducts its business.
b. In addition, because Executive acknowledges the difficulty of
establishing when any intellectual property, invention, or proprietary
information was first conceived or developed by Executive, or whether it
resulted from access to Proprietary Information or Company equipment, supplies,
facilities, or data, Executive agrees that any intellectual property, invention,
or proprietary information related to the development of ethical pharmaceuticals
shall be rebuttably presumed to be an Invention, if reduced to practice by
Executive or with the aid of Executive within one (1) year after termination of
the Period of Employment. Executive may rebut such presumption by producing
evidence which establishes to a preponderance that such intellectual property,
invention, or proprietary information was first conceived or developed by
Executive after the termination of the Period of Employment, or did not
otherwise result from access to Proprietary Information or Company equipment,
supplies, facilities, or data.
8. Termination of Employment
a. Termination by Company not for Cause. At any time, the Company may
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terminate the Period of Employment for any reason other than for Cause (as
defined below) by providing Executive fourteen (14) days' advance written
notice. The Company shall pay to Executive all compensation due and owing
through the last day actually worked and Executive shall be entitled
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to Severance in accordance with Section 9 below, subject to the conditions
therein. In the event Company terminates the Period of Employment not for Cause,
Executive shall be released from the obligations of Section 7 .a (iii) above. In
addition, the Company may decline to allow the renewal of the Agreement in
accordance with Section 2 .b. above, regardless of the existence of Cause, but
in such case shall be obligated to provide only the benefits set forth in
Section 2 .c above.
b. Termination by Company for Cause. At any time, and without prior notice,
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the Company may terminate the Period of Employment for Cause (as defined below).
The Company shall pay Executive all compensation then due and owing through the
last day actually worked. Executive will not be entitled to Severance. "Cause"
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shall mean Executive's: (i) Commission of a felony involving moral turpitude;
(ii) Repeated failure to perform services in accordance with the reasonable
requests of superiors within the course and scope of Executive's duties; (iii)
Commission of a material fraud, misappropriation, embezzlement or other act of
gross dishonesty which resulted in material loss, damage or injury to the
Company; or (iv) Death. Notwithstanding anything herein, however, if the Period
of Employment is terminated by reason of the death of Executive, all unvested
Options shall immediately vest and shall be exercisable by Executive's estate or
heirs for two years thereafter, otherwise in accordance with the terms of his
applicable Stock Option Grants with the Company.
c. By Executive Not for Good Reason. At any time, Executive may terminate
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the Period of Employment for any reason other than Good Reason (as defined
below) by providing the Company fourteen (14) days' advance written notice. The
Company shall have the option, in its complete discretion, to make termination
of the Period of Employment effective at any time prior to the end of such
notice period, provided the Company pays Executive all compensation due and
owing through the last day actually worked. Thereafter, all of the Company's
obligations under this Agreement shall immediately and forever cease, except for
those required by law, except for those which expressly survive termination of
this Agreement and except that notwithstanding any vesting or termination
provisions contained in Executive's applicable Stock Option Grants with the
Company, Executive's unvested Options shall immediately vest upon such
termination and Executive shall be able to exercise his vested Options for one
year thereafter, otherwise in accordance with the terms of his applicable Stock
Option Agreements with the Company. Executive, however, will not be entitled to
Severance.
d. By Executive for Good Reason. At any time, and without prior notice,
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Executive may terminate the Period of Employment for Good Reason (as defined
below). The Company shall pay Executive all compensation due and owing through
the last day actually worked, and Executive shall be entitled to Severance in
accordance with Section 9 below, subject to the conditions therein. Thereafter,
all obligations of the Company and Executive under this Agreement shall
terminate, except for those which expressly survive termination of this
Agreement. Neither the Company's giving of notice of termination in accordance
with Section 2.b nor its termination of the Period of Employment for Cause shall
constitute "Good Reason" for Executive to terminate the Period of Employment.
"Good Reason" only shall exist if the Company undertakes any of the following
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without Executive's prior consent: (i) The assignment to Executive of any duties
or responsibilities which result in any material diminution or material adverse
change of Executive's position, status or circumstances of employment; a change
in Executive's titles or offices that results in any material diminution or
material adverse change of Executive's position, status or circumstances of
employment; or any removal of Executive from or any failure to re-elect
Executive to any of such positions, except in connection with the
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termination of his employment for Cause, retirement, or any other voluntary
termination of employment by Executive other than a termination of employment by
Executive for Good Reason; (ii) A reduction by the Company in Executive's base
salary by greater than ten (10) percent; (iii) Any failure by the Company to
continue in effect any benefit plan or arrangement, including incentive plans or
plans to receive securities of the Company, in which Executive is participating
as of the date hereof (hereinafter referred to as "Benefit Plans"), or the
taking of any action by the Company which would materially adversely affect
Executive's participation in or reduce Executive's benefits under the Benefit
Plans or deprive Executive of any fringe benefit enjoyed by Executive as in
effect on the date hereof; provided, however, that no termination of employment
by Executive for Good Reason shall be deemed to occur based upon this subsection
8.d (iii) if the Company offers a range of benefit plans and programs which,
taken as a whole, are comparable to the Benefit Plans offered Executive before
the action; (iv) A relocation of the Executive, or the Company's principal
offices if Executive's principal office is at such offices, to a location more
than fifty (50) miles from the location at which Executive was performing his
duties as of the date hereof, except for required travel by Executive on the
Company's business to an extent substantially consistent with Executive's
business travel obligations as of the date hereof; (v) Any material breach by
the Company of any provision of this Agreement; (vi) Any failure by the Company
to obtain the assumption of this Agreement by any successor or assign of the
Company; or (vii) Any directive to Executive to perform any act which would
expose him to personal legal liability or which, viewed objectively, is likely
to constitute an unethical act ; or (viii) Any conduct directed to Executive by
Company or any condition under which Executive works which constitutes
constructive discharge under the principles of the governing law.
9. Severance
a. In the event that the Period of Employment is terminated in accordance
with Sections 8.a or 8.d hereof and Executive signs a waiver agreement with
terms modeled on the General Waiver of Claims, attached hereto as Exhibit D and
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agreed to by the parties (the "Waiver"), the Company shall continue Executive's
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then current base salary and COBRA premiums in accordance with the Company's
normal payroll procedures for a period of twelve (12) months (the "Severance
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Period"), and notwithstanding any vesting or termination provisions contained in
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Executive's applicable stock option Grants with the Company Executive's unvested
Options shall immediately vest and Executive shall have two years from the date
of Executive's termination of employment to exercise his vested options
otherwise in accordance with the terms of his applicable Stock Option Agreements
with the Company. In the event the then current base salary is less than the
compensation set out in Section 4 of this Agreement, Executive shall be entitled
to severance calculated on the basis of the compensation set out in Section 4 of
this Agreement.
b. Notwithstanding any other provision of this Agreement, Release I or II,
or the Waiver, at any time should Executive engage in or pursue any of the
activities described in Section 7 (except where advance consent has been
granted, or except where released from Section 7 .a (iii) by virtue of a
Termination by Company not for Cause or by virtue of a Termination by Executive
for Good Reason) or should Executive not fulfill his obligations in Section 10
below, the Company's obligation to pay and Executive's entitlement to any
Severance or Non-Renewal Benefits shall immediately and forever cease.
10. Termination Obligations.
Executive agrees that his obligations under Sections 5 and 6 of this
Agreement survive the expiration of this Agreement.
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11. Alternative Dispute Resolution
a. The Company and Executive mutually agree that any controversy or claim
arising out of or relating to this Agreement or the breach thereof, or any other
dispute between the parties, shall be submitted to mediation before a mutually
agreeable mediator, which cost is to be borne equally by the parties hereto. In
the event the parties are unable to agree upon a mediator, the mediator shall be
Xxxxxxxx Xxxxxxxx or such person as Xxxxxxxx Mediation Inc. designates. In the
event mediation is unsuccessful in resolving the claim or controversy, such
claim or controversy shall be resolved by arbitration as described below. The
claims covered by this Agreement ("Arbitrable Claims") include, but are not
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limited to, claims for wages or other compensation due; claims for breach of any
contract (including this Agreement) or covenant (express or implied); tort
claims; claims for discrimination (including, but not limited to, race, sex,
religion, national origin, age, marital status, medical condition, or
disability); claims for benefits (except where an Executive benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one), and claims for violation of any federal,
state, or other law, statute, regulation, or ordinance, except claims excluded
in the following paragraph. The parties hereto hereby waive any rights they may
have to trial by jury in regard to Arbitrable Claims.
b. Claims Executive may have for workers' compensation or unemployment
compensation benefits are not covered by this Agreement. Also not covered is
either party's right to obtain provisional remedies or interim relief from a
court of competent jurisdiction for any claim or controversy arising out of or
related to the unauthorized use, disclosure, or misappropriation of the
confidential and/or proprietary information of either party. Notwithstanding
anything in this Agreement to the contrary, however, should either party
initiate litigation in any court as authorized by this section, the other party
may assert any claims he or it may have as counterclaims or separate claims in
such court and shall not be obligated to resolve them by mediation and/or
arbitration.
c. Except as provided in Section 11.b, mediation and arbitration under
this Agreement shall be the exclusive remedy for all Arbitrable Claims. The
Company and Executive agree that arbitration shall be held in or near Multnomah
County, Oregon, or such location as the parties mutually agree upon, and shall
be in accordance with the then current Employment Dispute Resolution Rules of
the American Arbitration Association, before an arbitrator licensed to practice
law in the State of Oregon or such other forum as the parties have agreed upon.
The arbitrator shall have authority to award or grant legal, equitable, and
declaratory relief. Such arbitration shall be final and binding on the parties.
The Federal Arbitration Act shall govern the interpretation and enforcement of
this section pertaining to Alternative Dispute Resolution. The parties shall use
their best efforts to agree upon an Arbitrator. If the parties are unable to
agree upon an Arbitrator within 14 days of either party requesting arbitration
of a dispute, the Arbitrator shall be designated by Xxxxxxxx Xxxxxxxx or
Xxxxxxxx Mediation Inc.
d. This Agreement to mediate and arbitrate survives termination of the
Period of Employment.
12. Miscellaneous
a. Legal Fees. If any action at law or in equity or arbitration is
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necessary to enforce or interpret the terms of this Agreement, to the extent
permitted by law, the prevailing party shall be entitled to reasonable
attorneys' fees, costs, and necessary disbursements, in addition to any other
relief to which the prevailing party may be entitled.
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b. Entire Agreement. This Agreement (inclusive of exhibits and attachments
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and incorporated documents) represents the entire agreement and understanding
between the parties regarding its subject matter, supersedes and replaces any
and all prior agreements and understandings regarding its subject matter.
c. Amendments, Waivers. This Agreement may only be modified by a
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subsequent written agreement executed by the Chief Executive Officer of the
Company (after approval of the Company's Board of Directors) and Executive.
Failure to exercise any right under this Agreement shall not constitute a waiver
of such right.
d. Assignment; Successors and Assigns. This Agreement shall not be
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assignable by either party without the express written consent of the other.
e. Notices. All notices required or given herewith shall be addressed to
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the parties at the addresses designated above by registered mail, special
delivery, or by certified courier service. Executive shall notify Company in
writing of any change of address. Notice of change of address shall be effective
only when done in accordance with this Section.
f. Severability; Governing Law. If any provision of this Agreement, or its
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application to any person, place, or circumstance, is held by an arbitrator or a
court of competent jurisdiction to be invalid, unenforceable, or void, such
provision shall be enforced (by blue-penciling or otherwise) to the greatest
extent permitted by law, and the remainder of this Agreement and such provision
as applied to other persons, places, or circumstances shall remain in full force
and effect. This Agreement will be governed by the laws of the State of Oregon.
g. Acknowledgment. Company and Executive acknowledge that they have been
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afforded every opportunity to and have read this Agreement, are fully aware of
its contents and legal effect, and have chosen to enter into this Agreement
freely, without coercion, and based upon their own judgment.
The parties have duly executed this Agreement as of the date first written
above.
EXECUTIVE
/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
COMPANY
OXIS International, Inc.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: Chairman
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Chairman, Audit and
Compensation Committee
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