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Exhibit 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made this 15th day of
June, 1998, by and between Demeter BioTechnologies Ltd., a Colorado corporation
("Corporation"), and Xxxxxxx X. Xxxxxxx, an individual residing in the
Commonwealth of Pennsylvania ("Employee").
PREAMBLE
A. The Corporation is engaged in the business of research and
development of lytic peptides and related substances for agricultural,
nutritional, medical and other possible commercial applications (the
"Corporation's Business"); and
B. The Employee is an employee, shareholder, director and officer of
the Company; and
C. The Corporation and the Employee desire to set forth in writing the
terms under which the Employee will continue his employment
relationship with the Corporation.
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth in this agreement and intending to be legally
bound, the Parties to this agreement agree as follows:
SECTION 1. EMPLOYMENT. The Corporation agrees to employ the Employee and the
Employee agrees to accept the employment in accordance with the terms and
conditions described in this Agreement.
SECTION 2. DUTIES. The Employee shall serve as President and Chief Executive
Officer of the Corporation and, in addition to accepting such employment, agrees
to perform such duties as may be set from time to time by the Board of Directors
of the Corporation or its designee. The Employee shall make available to the
Corporation his best efforts, knowledge, and experience. The Employee shall use
his full time, best efforts, skills and abilities to faithfully and diligently
perform and manage the day to day operations of the Corporation as directed by
its Board of Directors or its designee.
SECTION 3. EXTENT OF SERVICES. Except to the extent otherwise provided in this
Agreement, the Employee shall devote his full time, attention, and energies to
the performance of his duties and shall not be engaged in any other business
activity, whether or not pursued for gain, profit or other pecuniary advantage.
The Employee shall at all times faithfully and to the best of his ability
perform his duties under this Agreement. The duties shall be rendered at the
Corporation's offices in Pittsburgh, Pennsylvania, or at such other place or
places and at such times as the needs of the Corporation may from time-to-time
require.
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SECTION 4. TERM. Unless earlier terminated in accordance with Section 6, the
initial term of this Agreement shall begin on June 1st, 1998 ("Effective Date"),
and shall continue for a one (1) year period (the "Initial Term"). After the
Initial Term, this Agreement will automatically renew on such terms and
conditions as are in effect at the time of renewal or as may be agreed between
the Parties unless either the Employee or the Corporation elects not to renew
this Agreement and notifies the other party in writing at least ninety (90) days
prior to the expiration date hereof.
SECTION 5. COMPENSATION.
5.1 Base Compensation. The Employee will receive a base salary of One Hundred
Twenty Thousand Dollars ($120,000.00) per year, payable in accordance with the
Corporation's standard payroll procedures and Federal, State, and local
employment tax regulations. The Employee's Base Compensation will be reviewed at
least annually by the Corporation's Compensation Committee of the Board of
Directors and increases, if any, will be made at the sole discretion of the
Board of Directors.
5.2 Bonuses and Profit Sharing. The Employee shall be eligible for
performance-based bonuses, but there is no assurance that bonuses will be paid.
Bonuses will be paid, if at all, in the sole discretion of the Corporation's
Board of Directors. The Employee shall be eligible for participation in any
Stock Option Plans established from time to time by the Corporation.
5.3 IND Bonuses. As an incentive to further the commercial applications of the
Corporation's peptide technology, the Corporation agrees that during the term of
this Agreement and any renewals or extensions thereof the Employee will receive
for each initial new drug application (an "IND") of the Corporation submitted to
the Federal Food and Drug Agency (the "FDA"), a IND Bonus of not less than Five
Thousand Dollars ($5,000.00) and not greater than Fifty Thousand Dollars
($50,000.00), such amount to be determined by the Board of Directors of the
Corporation (or its committee designee) in its sole discretion; provided,
however, that if an IND is submitted to the FDA on or before May 31, 1999, the
IND Bonus for such submission shall be no less than Twenty Five Thousand Dollars
($25,000).
5.4 Benefits. The Employee shall receive four weeks of vacation a year, and
comparable sick leave, group medical insurance and other fringe benefits as are
made available to full-time employees of the Corporation as may be from time to
time established by the Board of Directors of the Corporation.
5.5 Expenses. The Corporation shall reimburse the Employee for all reasonable
out-of-pocket expenses incurred by the Employee in fulfilling his duties under
this Agreement. The Employee shall provide the Corporation with written evidence
of such expenses as required for compliance with the Internal Revenue Code (as
amended), and the Employee shall fully comply with the Corporation's policies
regarding pre-authorization of expenditures as may be defined from time to time
by its Board of Directors. The Employee agrees to reimburse the Corporation
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immediately for any expense reimbursement to the Employee that is disallowed by
the Internal Revenue Service, which reimbursement may not be waived by the
Corporation.
SECTION 6. TERMINATION.
6.1 For Cause. The Corporation may terminate the Employee's employment at any
time "for cause" with immediate effect upon delivering written notice to the
Employee. For purposes of this Agreement, "for cause" shall include: (a)
embezzlement, theft, larceny, material fraud, or other acts of dishonesty; (b)
gross neglect or intentional disregard of Employee's duties under this Agreement
or any other material violation by the Employee of this Agreement which is not
cured with thirty (30) days after written warning from the Corporation; (c)
conviction of or entrance of a plea of guilty or nolo contendere to a felony;
(d) conviction of any crime involving moral turpitude; (e) gross insubordination
or repeated insubordination after written warning from the Corporation; (f)
unauthorized disclosure by the Employee of the confidences of the Corporation;
or (g) material and continuing failure by the Employee to perform the duties
described in Section 2 above in a quality and professional manner for thirty
(30) days after written warning from the Corporation. Upon termination for
cause, the Corporation's sole and exclusive obligation will be to pay the
Employee his compensation for a period of one (1) months after the date of
termination and the amount of any unused vacation or sick leave benefits earned
through the date of termination.
6.2 Upon Death. In the event of the Employee's death during the Term of the this
Agreement, the Corporation's sole and exclusive obligation will be to pay to the
Employee's spouse, if living, or to his estate, if his spouse is not then
living, the Employee's compensation for a period of six (6) months after the
date of death and the amount of any unused vacation or sick leave benefits
earned through the date of death.
6.3 Upon Disability. The Corporation may terminate the Employee's employment
upon the Employee's total disability. The Employee shall be deemed to be totally
disabled if he is unable to perform his duties under this Agreement by reason of
mental or physical illness or accident. Upon termination by reason of the
Employee's disability, the Corporation's sole and exclusive obligation will be
to continue to pay the Employee his salary for a period of six (6) months after
the date of termination, plus the amount of any unused vacation and sick leave
benefits earned through the date of termination.
6.4 Without Cause. During the Term of this Agreement and only by action of its
Board of Directors, the Corporation may terminate the Employee's employment
without cause upon ninety (90) days written notice and with a continuation of
payment to the Employee his salary after termination for (6) six months, plus
the amount of any unused vacation or sick leave benefits earned through the date
of termination.
6.5 By the Employee. The Employee may terminate this Agreement at any time upon
ninety (90) days written notice to the Corporation.
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6.6 Termination by the Board of Directors. Any determination to terminate the
Employee's employment under this Section 6 shall be made only by the Board of
Directors of the Corporation.
SECTION 7. COVENANT NOT TO COMPETE.
7.1 Covenant. During the term of this Agreement the Employee will not directly
or indirectly:
7.1.1 enter into or attempt to enter into the "Restricted Business" (as
defined below);
7.1.2 induce or attempt to persuade any former, current or future
employee, agent, manager, consultant, director, or other participant in the
Corporation's Business to terminate such employment or other relationship in
order to enter into any relationship with the Employee, any business
organization in which the Employee is a participant in any capacity whatsoever,
or any other business organization in competition with the Corporation's
Business; or
7.1.3 use contracts, proprietary information, trade secrets,
confidential information, customer lists, mailing lists, goodwill, or other
intangible property used or useful in connection with the Corporation's
Business.
7.1.4 or, for a period of one year after the termination of this
Agreement directly or indirectly violate this agreement by conduct of any kind
or in any way in violation the covenants contained in paragraphs 7.1.1 or 7.1.2.
7.1.5 The violation of the terms of paragraph 7.1.4 at any time during
the term of this Agreement shall be grounds for dismissal for cause, and at any
time after the termination hereof shall be a breach of the Covenant
Confidentiality Agreement
7.2 Indirect Activity. The term "indirectly," as used in Section 7.1 above,
includes acting as a paid or unpaid director, officer, agent, representative,
employee of, or consultant to any enterprise, or acting as a proprietor of an
enterprise, or holding any direct or indirect participation in any enterprise as
an owner, partner, limited partner, member, joint or co-venture participant,
shareholder, or creditor.
7.3 Restricted Business. The term "Restricted Business" means any business which
is engaged in activities which are similar to the Corporation's Business.
Nevertheless, the Employee may own less than five percent of the outstanding
equity securities of a corporation that is engaged in the Restricted Business if
the equity securities of such corporation are listed for trading on a national
stock exchange or are registered under the Securities Exchange Act of 1934.
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SECTION 8. SEVERABILITY. The covenants set forth in Section 7 above shall be
construed as a series of separate covenants, one for each county in each of the
states of the United States to which such restriction applies. If, in any
judicial proceeding, a court of competent jurisdiction shall refuse to enforce
any of the separate covenants deemed included in this Agreement, or shall find
that the term or geographic scope of one or more of the separate covenants is
unreasonably broad, the Parties shall use their best good faith efforts to
attempt to agree on a valid provision which shall be a reasonable substitute for
the invalid provision. The reasonableness of the substitute provision shall be
considered in light of the purpose of the covenants and the reasonable
protectable interests of the Corporation and the Employee. The substitute
provision shall be incorporated into this Agreement. If the Parties are unable
to agree on a substitute provision, then the invalid or unreasonably broad
provision shall be deemed deleted or modified to the minimum extent necessary to
permit enforcement.
SECTION 9. CONFIDENTIALITY. The Employee acknowledges that he will develop and
be exposed to information that is or will be confidential and proprietary to the
Corporation.
9.1 Information. The information includes but is not limited to research
techniques, funding sources, trade secrets and other patent worthy information,
marketing plans, pricing data, product plans, contracts, customer lists, mailing
lists, goodwill, miscellaneous confidential information, or other intangible
intellectual or otherwise propriety property used or useful in connection with
the Corporation's Business whether in written, photographic, digital, or in any
other form of storage or retention as may be used by the Corporation.
9.2 Authorized Use. All such information shall be deemed confidential to the
extent not publicly known. The Employee agrees to make use of such information
only in the performance of his duties under this Agreement, to maintain such
information in confidence and to disclose the information only in connection
with fully authorized activities pursuant to this agreement or lawful order of a
court, exchange or other governmental authority of competent jurisdiction, and
agrees that he shall not use such information for his own personal benefit or
for the benefit of third parties in any fashion.
9.3 Return of Confidential Information. Upon termination of his employment with
the Corporation, all documents, records, notebooks, computer files and similar
repositories containing confidential information of the Corporation, including
copies thereof, then in the Employee's possession, whether prepared by him or
others, shall be promptly returned to the Company. If at any time after the
termination of employment the Employee determines that he has any confidential
information in his possession or control, he shall immediately return to the
Company all such confidential information, including all copies and portions
thereof.
SECTION 10. INVENTIONS. If at any time or times during Employee's employment
with the Company, he shall (whether before or after the execution of this
Agreement and either alone or with others) make, discover or reduce to practice
any invention, modification, discovery, design,
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development, improvement, process, software program, work of authorship,
documentation, formula, data, technique, know-how, secret or intellectual
property right whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection)(herein called "Developments") that (a) relates to the then current
business of the Company or any of the products or services being developed,
manufactured or sold by the Company, (b) results from tasks assigned to him by
the Company or (c) results from the use of premises or personal property
(whether tangible or intangible) owned, leased, licensed or contracted for by
the Company, or (d) relates in any manner to the proprietary information of the
Company, such Developments and the benefits thereof shall immediately become the
sole and absolute property of the Company and its assigns, and he shall promptly
disclose to the Company (or any persons designated by it) each such Development
and hereby assign any rights he may have or acquire in the Developments and
benefits and/or rights resulting therefrom to the Company and its assigns
without further compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto (with
all necessary plans and models) to the Company. Upon disclosure of each
Development to the Company, Employee shall, during his employment and at any
time thereafter, at the request and cost of the Company, sign, execute, make and
do all such deeds, documents, acts and things as the Company and its duly
authorized agents may reasonably require, including but not limited to the
following:
(i) to apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) letters patent, copyrights
or other analogous protection in any country throughout the world
and when so obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or
other analogous protection; or
(ii) to, in any other manner requested by the Company, acknowledge
that such Developments are Proprietary Information of the
Company.
In the event the Company is unable, after all diligent effort, to secure
Employee's signature on any letters patent, copyright, acknowledgment or other
analogous protection relating to a Development, whether because of my physical
or mental incapacity or for any other reason whatsoever, Employee hereby
irrevocably designate and appoint the Company through its duly authorized
officers as Employee's agent and attorney-in-fact, to act for and in Employee's
behalf to execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright or other analogous intellectual property protection thereon
with the same legal force and effect as if executed by the Employee.
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SECTION 11. REMEDIES. The Employee acknowledges that monetary damages would be
inadequate to compensate the Corporation for any breach by the Employee of the
covenants set forth in Sections 7, 9 and 10 above. The Employee acknowledges
that the claim for the payment of any damages for breach of the provisions
herein contained shall not preclude the Company from seeking injunctive or such
other forms of relief as may be obtained in a court of law or equity, but that
the Company, in lieu of or in addition to the remedy of damages, may seek
injunctive relief prohibiting the Employee from breaching the provisions of this
Section 7 & 9 Agreement.
SECTION 12. NOTICES. Any notice under this Agreement shall be in writing and
shall be effective when actually delivered in person or upon receipted delivery
via courier, insured parcel delivery service, Federal Express, registered or
certified U.S. mail, all postage prepaid and addressed to the Party at the
address stated in this Agreement or such other address as either Party may
designate by written notice to the other. Notice by facsimile shall be effective
as of the date and time transmitted provided the sending Party maintains written
evidence that the transmission was initiated and completed during normal
business hours, was successfully received by the addressee, and was in a legible
format.
SECTION 13. NO RELEASE. The terms of Sections 7 and 9 shall survive the
termination or expiration of this Agreement and the termination of this
Agreement or the expiration of the term of this Agreement shall not release
either Party from any obligations under Sections 7 and 9 or remedies pursuant to
Section 10.
SECTION 14. WAIVER. The waiver by either party of the breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach.
SECTION 15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
SECTION 16. ARBITRATION. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise relating in any way to this
Agreement or the Employee's employment with the Corporation, including any
dispute as to the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the Parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association in Pittsburgh, Pennsylvania or any
location of the Corporation's headquarters at the time of the referral, and
judgment upon the award rendered by arbitration may be entered in any court
having competent jurisdiction thereof.
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SECTION 17. AGREEMENT BINDING. This Agreement shall be binding upon the
respective heirs, executors, administrators, successors and assigns of the
Parties hereto.
SECTION 18. COUNTERPARTS. This Agreement may be executed in several counterparts
and all so executed shall constitute one Agreement, binding on all the Parties
hereto even though all the Parties are not signatories to the original or the
same counterpart.
IN WITNESS WHEREOF, the Parties to this Agreement have executed this
Agreement as of the date first written above.
ATTEST: DEMETER BIOTECHNOLOGIES LTD.
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Title: Title: Secretary/Treasurer
WITNESSED BY: EMPLOYEE
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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