Ohr Pharmaceutical Inc. 10-Q
Exhibit 10.36
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of
August 9, 2013 (the “Effective Date”), by and between Ohr Pharmaceutical Inc., a Delaware Corporation with a place
of business at 000 0xx xxxxxx, 00xx xxxxx, Xxx Xxxx, XX 00000 (the “Company”) and Xxx Xxxxxxxxxx of Spring Valley,
NY (the “Employee”).
WHEREAS, the Company and the Employee entered into an Employment
Agreement effective as of March 9, 2012 (the “2012 Employment Agreement”);
WHEREAS, the Company increased Employee’s salary
to $125,000 per year effective January 1, 2013; and
WHEREAS, the Company and the Employee wish to ratify the
terms, covenants, and conditions for the Employee’s continued employment with the Company through this agreement (“Employment
Agreement”).
NOW, THEREFORE, in consideration of the mutual agreements
herein set forth, the parties hereto agree as follows:
| 1. | Duties. From and after the Effective Date, and based upon the terms and conditions set forth
herein, the Company agrees to employ the Employee and the Employee agrees to be employed by the Company, as the Company’s
Vice President of Business Development and Chief Financial Officer. During the Term of this Employment Agreement (as defined in
Section 2 below), the Employee agrees to devote substantially all of his working time to the position he holds with the Company
and to faithfully, industriously, and to the best of his ability, experience and talent, perform the duties that are assigned to
him. The Employee shall observe and abide by the reasonable corporate policies and decisions of the Company in all business matters
disclosed to employee. |
| 3. | Compensation. During the Term of this Employment Agreement, the Company shall pay, and the
Employee agrees to accept as full consideration for the services to be rendered by the Employee hereunder, compensation consisting
of the following: |
| A. | Salary. Beginning on the first day of the Term of this Employment Agreement, and applied
retroactively to January 1, 2013, the Company shall pay the Employee a salary of One Hundred Twenty Five Thousand Dollars ($125,000)
per year, payable in semi-monthly or monthly installments as requested by the Employee. Further, the Company agrees to review the
Employee’s base salary on an annual basis. |
| B. | Bonus. The Compensation, Nominating and Governance Committee (the “Committee) of the
Board of Directors will, on an annual basis, review the performance of the Company and of the Employee and will pay such bonus,
as it deems appropriate, in its discretion, to the Employee based upon such review. Such review and bonus shall be consistent with
any bonus plan adopted by the Committee, which covers the executive officers and employees of the Company generally. |
| C. | Benefits. During the Term of this Employment Agreement, the Employee will receive such employee
benefits as are generally available to all employees of the Company. Additionally, the Company will provide the Employee with health
insurance coverage substantially the same as what is currently being provided to him. |
| D. | Stock Options. The Committee of the Board of Directors may, from time-to-time, grant stock
options, restricted stock purchase opportunities and such other forms of stock-based incentive compensation as it deems appropriate,
in its discretion, to the Employee. The terms of the relevant award agreements shall govern the rights of the Employee and the
Company thereunder in the event of any conflict between such agreement and this Employment Agreement. |
| E. | Expenses. The Company shall reimburse the Employee for all reasonable out-of-pocket expenses
incurred by him in the performance of his duties hereunder, including expenses for travel, entertainment and similar items, promptly
after the presentation by the Employee, from time-to-time, of an itemized account of such expenses. |
| A. | For Cause. The Company may terminate the employment of the Employee prior to the end of
the Term of this Employment Agreement “for cause.” Termination “for cause” shall be defined as a termination
by the Company of the employment of the Employee occasioned by the failure by the Employee to cure a willful breach of a material
duty imposed on the Employee under this Employment Agreement within 15 days after written notice thereof by the Company or the
continuation by the Employee after written notice by the Company of a willful and continued neglect of a duty imposed on the Employee
under this Employment Agreement. In the event of termination by the Company “for cause,” all salary, benefits and other
payments shall cease at the time of termination, and the Company shall have no further obligations to the Employee. |
| B. | Resignation. If the Employee resigns for any reason, all salary, benefits and other payments
(except as otherwise provided in paragraph G of this Section 4 below) shall cease at the time such resignation becomes effective.
At the time of any such resignation, the Company shall pay the Employee the value |
| | of any accrued but unused vacation time, and the amount of all accrued but previously unpaid base
salary through the date of such termination. The Company shall promptly reimburse the Employee for the amount of any expenses incurred
prior to such termination by the Employee as required under paragraph F of Section 3 above. |
| C. | Disability, Death. The Company may terminate the employment of the Employee prior to the
end of the Term of this Employment Agreement if the Employee has been unable to perform his duties hereunder or a similar job for
a continuous period of six (6) months due to a physical or mental condition that, in the opinion of a licensed physician, will
be of indefinite duration or is without a reasonable probability of recovery for a period of at least six (6) months. The Employee
agrees to submit to an examination by a licensed physician of his choice in order to obtain such opinion, at the request of the
Company, made after the Employee has been absent from his place of employment for at least six (6) months. The Company shall pay
for any requested examination. However, this provision does not abrogate either the Company’s or the Employee’s rights
and obligations pursuant to the Family and Medical Leave Act of 1993, and a termination of employment under this paragraph C shall
not be deemed to be a termination for cause. |
If during the Term of this Employment Agreement, the
Employee dies or his employment is terminated because of his disability, all salary, benefits and other payments shall cease at
the time of death or disability, provided, however, that the Company shall provide such health, dental and similar insurance or
benefits as were provided to Employee immediately before his termination by reason of death or disability, to Employee or his family
for the longer of twelve (12) months after such termination or the full un-expired Term of this Employment Agreement on the same
terms and conditions (including cost) as were applicable before such termination. In addition, for the first six (6) months of
disability, the Company shall pay to the Employee the difference, if any, between any cash benefits received by the Employee from
a Company-sponsored disability insurance policy and the Employee’s salary hereunder in accordance with paragraph A of Section
3 above. At the time of any such termination, the Company shall pay the Employee, the value of any accrued but unused vacation
time, and the amount of all accrued but previously unpaid base salary through the date of such termination. The Company shall promptly
reimburse the Employee for the amount of any expenses incurred prior to such termination by the Employee as required under paragraph
F of Section 3 above.
Notwithstanding the foregoing, if the Company reasonably
determines that any of the benefits described in this paragraph C may not be exempt from federal income tax, then for a period
of six (6) months after the date of the Employee’s termination, the Employee shall pay to the Company an amount equal to
the stated taxable cost of such coverages. After the expiration of the
six-month period, the Employee shall receive from the
Company a reimbursement of the amounts paid by the Employee.
| D. | Termination without Cause. A termination without cause is a termination of the employment
of the Employee by the Company that is not “for cause” and not occasioned by the resignation, death or disability of
the Employee. If the Company terminates the employment of the Employee without cause, (whether before the end of the Term of this
Employment Agreement or, if the Employee is employed by the Company under paragraph E of this Section 4 below, after the Term of
this Employment Agreement has ended) the Company shall, at the time of such termination, pay to the Employee the severance payment
provided in paragraph F of this Section 4 below together with the value of any accrued but unused vacation time and the amount
of all accrued but previously unpaid base salary through the date of such termination and shall provide him with all of his benefits
under paragraph C of Section 3 above for the longer of six (6) months or the full un-expired Term of this Employment Agreement.
The Company shall promptly reimburse the Employee for the amount of any expenses incurred prior to such termination by the Employee
as required under paragraph F of Section 3 above. |
If the Company terminates the employment of the Employee
because it has ceased to do business or substantially completed the liquidation of its assets or because it has relocated to another
city and the Employee has decided not to relocate also, such termination of employment shall be deemed to be without cause.
| E. | End of the Term of this Employment Agreement. Except as otherwise provided in paragraphs
F and G of this Section 4 below, the Company may terminate the employment of the Employee at the end of the Term of this Employment
Agreement without any liability on the part of the Company to the Employee but, if the Employee continues to be an employee of
the Company after the Term of this Employment Agreement ends, his employment shall be governed by the terms and conditions of this
Agreement, but he shall be an employee at will and his employment may be terminated at any time by either the Company or the Employee
without notice and for any reason not prohibited by law or no reason at all. If the Company terminates the employment of the Employee
at the end of the Term of this Employment Agreement, the Company shall, at the time of such termination, pay to the Employee the
severance payment provided in paragraph F of this Section 4 below together with the value of any accrued but unused vacation time
and the amount of all accrued but previously unpaid base salary through the date of such termination. The Company shall promptly
reimburse the Employee for the amount of any reasonable expenses incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above. |
| X. | Xxxxxxxxx. If the employment of the Employee is terminated by the Company, at the end of
the Term of this Employment Agreement or, without |
| | cause (whether before the end of the Term of this Employment Agreement or, if the Employee is employed
by the Company under paragraph E of this Section 4 above, after the Term of this Employment Agreement has ended), the Employee
shall be paid, as a severance payment at the time of such termination, the amount equal to 50% of the base salary in effect at
the time of termination together with the value of any accrued but unused vacation time without duplication. |
| | | |
| G. | Change of Control Severance. In addition to the rights of the Employee under the Company’s
employee benefit plans (paragraphs C of Section 3 above) but in lieu of any severance payment under paragraph F of this Section
4 above, if there is a Change in Control of the Company (as defined below) and the employment of the Employee is concurrently or
within 12 months of the Change of Control terminated (a) by the Company without cause, (b) by the expiration of the Term of this
Employment Agreement, or (c) by the resignation of the Employee because he has reasonably determined in good faith that his titles,
authorities, responsibilities, salary, bonus opportunities or benefits have been materially diminished, that a material adverse
change in his working conditions has occurred, that his services are no longer required in light of the Company’s business
plan, or the Company has breached this Employment Agreement, the Company shall pay the Employee, as a severance payment, at the
time of such termination, the amount of Two Hundred Fifty Thousand Dollars ($250,000) together with the value of any accrued but
unused vacation time, and the amount of all accrued but previously unpaid base salary through the date of termination and shall
provide him with all of this benefits under paragraph C of Section 3 above for the longer of twelve (12) months or the full un-expired
Term of this Employment Agreement. The Company shall promptly reimburse the Employee for the amount of any expenses incurred prior
to such termination by the Employee as required under paragraph F of Section 3 above. Notwithstanding the foregoing, before the
Employee may resign pursuant to Section 4(G)(c) above, the Employee shall deliver to the Company a written notice of the Employee’s
intent to terminate his employment pursuant to Section 4(G)(c), and the Company shall have been given a reasonable opportunity
to cure any such act, omission or condition within Thirty (30) days after the Company’s receipt of such notice. |
For the purpose of this Employment Agreement, a Change
in Control of the Company has occurred when: (a) any person (defined for the purposes of this paragraph G to mean any person within
the meaning of Section 13 (d) of the Securities Exchange Act of 1934 (the “Exchange Act”)), other than Ohr, an employee
benefit plan created by its Board of Directors for the benefit of its employees, or a participant in a transaction approved by
its Board of Directors for the principal purpose of raising additional capital, either directly or indirectly, acquires beneficial
ownership (determined under Rule 13d-3 of the Regulations promulgated by the Securities and Exchange Commission under Section 13(d)
of the Exchange Act) of securities issued by Ohr having
forty five percent (45%) or more of the voting power
of all the voting securities issued by Ohr in the election of Directors at the next meeting of the holders of voting securities
to be held for such purpose; (b) a majority of the Directors elected at any meeting of the holders of voting securities of Ohr
are persons who were not nominated for such election by the Board of Directors or a duly constituted committee of the Board of
Directors having authority in such matters; (c) the stockholders of Ohr approve a merger or consolidation of Ohr with another person
other than a merger or consolidation in which the holders of Ohr’s voting securities issued and outstanding immediately before
such merger or consolidation continue to hold voting securities in the surviving or resulting corporation (in the same relative
proportions to each other as existed before such event) comprising fifty one percent (51%) or more of the voting power for all
purposes of the surviving or resulting corporation; or (d) the stockholders of Ohr approve a transfer of substantially all of the
assets of Ohr to another person other than a transfer to a transferee, fifty one percent (51%) or more of the voting power of which
is owned or controlled by Ohr or by the holders of Ohr’s voting securities issued and outstanding immediately before such
transfer in the same relative proportions to each other as existed before such event. The parties hereto agree that for the purpose
of determining the time when a Change of Control has occurred that if any transaction results from a definite proposal that was
made before the end of the Term of this Employment Agreement but which continued until after the end of the Term of this Employment
Agreement and such transaction is consummated after the end of the Term of this Employment Agreement, such transaction shall be
deemed to have occurred when the definite proposal was made for the purposes of the first sentence of this paragraph G of this
Section 4.
| 4. | Benefit and Stock Plans. In the event that a benefit plan or Stock Plan which covers the
Employee has specific provisions concerning termination of employment, or the death or disability of an employee ( e.g., life insurance
or disability insurance), then such benefit plan or Stock Plan shall control the disposition of the benefits or stock options. |
| 5. | Proprietary Information Agreement. Employee has executed a Proprietary Information Agreement
as a condition of employment with the Company. The Proprietary Information Agreement shall not be limited by this Employment Agreement
in any manner, and the Employee shall act in accordance with the provisions of the Proprietary Information Agreement at all times
during the Term of this Employment Agreement. |
| 7. | Arbitration. Any dispute or controversy arising under or in connection with this Employment
Agreement shall be settled exclusively by arbitration in New York, NY, in accordance with the non-union employment arbitration
rules of the American Arbitration Association (“AAA”) then in effect. If specific non-union employment |
| | dispute rules are not in effect, then AAA commercial arbitration rules shall govern the dispute.
If the amount claimed exceeds $100,000, the arbitration shall be before a panel of three arbitrators. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction. The Company shall indemnify the Employee against and hold him harmless
from any attorney’s fees, court costs and other expenses incurred by the Employee in connection with the preparation, commencement,
prosecution, defense, or enforcement of any arbitration, award, confirmation or judgment in order to assert or defend any right
or obtain any payment under paragraph C of Section 4 above or under this sentence; without regard to the success of the Employee
or his attorney in any such arbitration or proceeding. |
| 8. | Governing Law. The Employment Agreement shall be governed by and construed in accordance
with the laws of the State of New York. |
| 9. | Validity. The invalidity or unenforceability of any provision or provisions of this Employment
Agreement shall not affect the validity or enforceability of any other provision of the Employment Agreement, which shall remain
in full force and effect. |
| 10. | Entire Agreement. This Employment Agreement constitutes the entire understanding between
the parties with respect to the subject matter hereof, superseding all negotiations, prior discussions, and preliminary agreements.
This Employment Agreement may not be amended except in writing executed by the parties hereto. |
| 11. | Effect on Successors of Interest. This Employment Agreement shall inure to the benefit of
and be binding upon heirs, administrators, executors, successors and assigns of each of the parties hereto. Notwithstanding the
above, the Employee recognizes and agrees that his obligation under this Employment Agreement may not be assigned without the consent
of the Company. |
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Employment Agreement as of the date first written above.
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| OHR PHARMACEUTICAL INC. |
EMPLOYEE |
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| By: /s/ Xxxx Xxxxxxxxx
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/s/ Xxx Xxxxxxxxxx
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| Xxxx Xxxxxxxxx |
Xxx Xxxxxxxxxx |
| Director |
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