Exhibit 99.2
EMPLOYMENT AGREEMENT
This Agreement is dated as of July 9, 2002, by and between Xxxxxx Xxxxxxxxx
("Executive") and Boston Life Sciences, Inc. ("BLSI" or the "Company").
RECITALS
Executive seeks to be employed by BLSI and the Company seeks to employ
Executive as its President and Chief Operating Officer. BLSI and the Executive
intend that the Executive shall serve the Company on the terms set forth below
and, to that end, deem it desirable and appropriate to enter into this
Agreement.
AGREEMENT
The parties hereto, in consideration of the mutual promises and
undertakings hereinafter set forth, agree as follows:
1. Term of Agreement. This Agreement shall be deemed effective as of July
8, 2002 (the "Effective Date"). Executive's employment shall continue on the
terms provided herein from the Effective Date until December 31, 2005, subject
to earlier termination as provided herein (such period of employment hereinafter
referred to as the "Employment Period").
2. Scope of Employment.
a. Nature of Services. During the Employment Period, Executive shall
be elected and serve as President and Chief Operating Officer of BLSI, and
shall have and diligently perform the duties and responsibilities of said
office
and such additional duties and responsibilities consistent therewith as
shall from time to time be assigned to him by the BLSI Board of Directors
(the "Board"). During the Employment Period, Executive shall be elected and
serve as a member of the Board, and will additionally join an operating
Management Committee comprised of the Company's Chief Executive Officer,
Chief Financial Officer and Chief Scientific Officer. Executive shall at
all times during the Employment Period report directly to BLSI's Chief
Executive Officer.
b. As Chief Operating Officer, Executive shall have reporting to him
those employees designated by the CEO. Currently, it is planned that the
following functional areas, headed by their respective managers shall
report to the Executive: Regulatory Affairs, Manufacturing and Protein
Development, Research & Development on products currently designated for
pre-clinical and clinical development, clinical trial management. The Chief
Scientific Officer shall continue to manage the scientific affairs of the
company (R&D, clinical, pre-clinical) on a day-to-day basis, but will
report to the Executive and, on a dotted line basis, also to the CEO for at
least the initial six months of Executive's employment.
The CEO shall remain directly involved with matters related to SEC
interaction, financing strategy, all legal affairs and strategy,
interaction with the Board,
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coordination and direction of major corporate strategy and policy
decisions. The CEO shall chair the management committee composed of the
CEO, COO, CSO and CFO. This committee will afford its members the
opportunity to discuss, supply input for, and establish major management
direction.
c. Extent of Services. Except for illness and approved vacation
periods, Executive shall devote substantially all of his working time and
best efforts to the performance of his duties and responsibilities under
this Agreement. However, Executive may (i) make any passive investments
where he is not obligated or required to, and shall not in fact, devote any
managerial efforts, (ii) participate in charitable or community activities
or in trade or professional organizations, and/or (iii) subject to Board
approval (which approval shall not be unreasonably withheld or withdrawn),
hold directorships in public companies, provided that the Board shall have
the right to limit such investments, participation and activities whenever
the Board shall reasonably believe that the time spent on such matters
infringes in any material respect upon the time required by Executive for
the proper performance of his duties under this Agreement or is otherwise
incompatible in any material regard with those duties.
3. Compensation and Benefits.
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a. Base Salary. For the first eighteen (18) months of the Employment
Period, Executive shall be paid a base salary at the annualized rate of
$275,000 per year, such base salary to be paid in the same manner and at
the same times as the Company shall pay base salary to other executive
employees. No longer than eighteen (18) months following the Effective Date
of this Agreement, Executive shall receive a formal performance evaluation,
at which time the Board shall award Executive such upward base pay
adjustment as it may determine in its discretion to be warranted by his
performance. However, the Board may elect to review the base pay of the
Executive earlier than 18 months, and will do so if the Executive assumes
additional responsibility and authority at the request of the Board.
b. Bonus Compensation. Executive will be eligible to receive an
incentive bonus with respect to each fiscal year or portion thereof during
the Employment Period. Such incentive bonus shall be payable (if at all) in
the sole discretion of the Board, based upon Executive's contribution to
the successful consummation of such strategic initiatives as the
establishment of a major joint venture/partnership involving Altropane,
Troponin or Inosine; the creation of a central nervous system-related
subsidiary involving Inosine and associated therapies; and/or the raising
of $10 million in additional financing for Company operations. Eighteen
(18) months following the Effective Date of this Agreement,
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and without limiting the foregoing, Executive will additionally become
eligible to receive other milestone-based bonuses to the extent the Board,
in its sole discretion, determines to award such bonuses to Company
management in general. The timing and amount of incentive and management
bonuses hereunder shall at all times remain in the exclusive discretion of
the Board.
c. Stock Options. Executive shall be awarded BLSI stock options
under the Company's 1998 Omnibus Stock Option Plan for an aggregate amount
of 750,000 shares of common stock, said options to be exercisable in
accordance with the following vesting schedule:
(i) Options to purchase 150,000 shares of common stock, at the
current fair market value (on the date of employment) exercisable
twelve (12) months following the Effective Date of this Agreement;
(ii) Options to purchase 100,000 shares of common stock, at the
current fair market value (unless restricted to a $2 exercise price by
the terms of one specific private placement currently in negotiation)
exercisable eighteen (18) months following the Effective Date of this
Agreement;
(iii) Options to purchase 100,000 shares of common stock, at an
exercise price of $3 per share, exercisable twenty-four (24) months
following the Effective Date of this Agreement;
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(iv) Options to purchase 200,000 shares of common stock, at an
exercise price of $4 per share, exercisable thirty (30) months
following the Effective Date of this Agreement; and
(v) Options to purchase 200,000 shares of common stock, at an
exercise price of $5 per share, exercisable thirty-six (36) months
following the Effective Date of this Agreement.
All unvested options shall expire coincident with the termination of
Executive's employment for any reason. Provided, however, in the event
Executive's employment hereunder is terminated within the first twelve (12)
months following the Effective Date of this Agreement for reasons other
than "Cause" as defined below, 150,000 of Executive's unvested options
shall accelerate and become immediately exercisable, at fair market value,
for a period of twenty-four (24) months from the date of termination.
All additional vested options in accordance with the Company Stock
Option Plan shall remain exercisable for a period of ninety (90) days
following the termination of Executive's employment hereunder for reasons
other than "Cause" as defined below. In the event Executive's employment
hereunder is terminated for "Cause," all options shall terminate
immediately and Executive shall forfeit any option rights he may have to
purchase shares of common stock.
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Except as expressly provided herein, all option shares will be subject
to the terms and conditions of the 1998 Omnibus Stock Option Plan governing
the timing and other requirements for their exercise.
d. Policies and Fringe Benefits. Executive shall be subject to BLSI
policies applicable to Company executives generally, and shall be eligible
to receive all fringe benefits (viz., group health and dental insurance,
disability insurance, vacation, and 401k plan participation) that may be in
effect from time to time on the same terms and conditions made available to
the Company's Chief Executive Officer.
4. Termination of Employment.
a. BLSI shall have the right to terminate Executive's employment at any
time and for any reason, with or without cause. Executive may resign his
employment for any reason on thirty (30) days' written notice to the
Company.
b. The Employment Period shall terminate when Executive dies, or when
Executive becomes disabled and, by reason of such disability, Executive is
unable to perform the essential requirements of his job for at least six
(6) continuous months.
c. Whenever the Employment Period shall terminate, Executive shall
resign all offices and other positions he holds with the Company and any
affiliated entities.
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5. Benefits Upon Termination of Employment.
a. Voluntary Termination of Employment by Executive. If Executive
terminates his employment during the Employment Period, Executive shall
receive all accrued wages earned to date and shall be entitled to no other
benefits of any kind from the Company.
b. Termination of Employment by Company for Cause. If BLSI terminates
Executive's employment during the Employment Period for Cause, Executive
shall receive all accrued wages earned to date and shall be entitled to no
other benefits of any kind from the Company.
c. Termination of Employment by Company Without Cause. If BLSI
terminates Executive's employment during the Employment Period for reasons
other than Cause, Executive shall, subject to his prior execution of a
general release of claims in favor of BLSI, receive six (6) months of base
salary continuation, payable in accordance with the regular payroll
practices of the Company. For purposes of this Agreement, "Cause" shall
mean: (i) dishonesty by Executive in the performance of his duties; (ii)
commission of a felony or plea of nolo contendere to a felony charge; (iii)
gross neglect of duties or persistently unsatisfactory performance of such
duties which, in the reasonable judgment of the Board, remains unrectified
following written notice to the Executive specifying same; (iv) material
breach by Executive of any of the terms of this
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Agreement; and/or (v) any other conduct by Executive that is materially
harmful to the business or interests of BLSI.
d. Executive shall have the right to request arbitration as set forth in
Section 12 hereof if he believes that Termination of Employment with Cause
is unfairly or improperly used to prejudice his interests and rights under
this contract, and may also request arbitration where he believes
termination without cause has unreasonably deprived him of compensation
rights under this contract.
6. Confidential Information and Restricted Activities.
a. Confidential Information. During the course of Executive's employment
with BLSI, Executive will learn of Confidential Information, as defined
below, and may develop Confidential Information on behalf of the Company.
Executive agrees that he will never disclose to any person or entity
(except as required by applicable law or for the proper performance of his
duties and responsibilities to the Company), or use for his own or others'
benefit or gain, any Confidential Information obtained by Executive
incident to his employment or any other association Executive may have with
the Company. Executive understands that this restriction shall continue to
apply after Executive's employment terminates, regardless of the reason for
such termination. For purposes of this Agreement, Confidential Information
means
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any and all information of BLSI that is not generally known by others with
whom it does business or competes, or with whom it plans to or might do
business or compete, and any and all information, publicly known in part or
not, which if disclosed by the Company could assist in competition against
it. Confidential Information includes, without limitation, processes,
methods, techniques, systems, formulas, patterns, models, devices,
compilations and procedures used in connection with the Company's product
development activities; information concerning the identity and needs of
Company customers and business partners, and the products the Company
provides to customers and business partners; price and cost data maintained
in connection with the Company's dealings with customers and business
partners; the financial performance, marketing plans, product development
goals and strategic initiatives and objectives of the Company; the persons
and organizations with whom the Company has business relationships and the
substance of such relationships; and any other information, of whatever
nature, which gives the Company an opportunity to obtain an advantage over
competitors who do not know or use such information. Confidential
Information also includes information received by the Company from any
third person or entity on the understanding, express or implied, that it
will not be disclosed outside of the Company.
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b. Protection of Documents. All documents, records, software, log books,
tapes and other media of every kind and description relating to the
business, present or otherwise, of BLSI and any copies thereof
("Documents"), whether or not prepared by Executive, shall be the sole and
exclusive property of the Company. Executive agrees to safeguard all
Documents and to surrender to the Company, at the time his employment
terminates or at such earlier time as the Company may specify, all
Documents then in his possession or control.
c. Non-Competition. Executive acknowledges and agrees that the following
restrictions on his activities during and after his employment are
necessary to protect the good will, Confidential Information and other
legitimate business interests of BLSI, and that these restrictions are an
integral part of this Agreement:
(i) While Executive is employed by the Company, and during the
one-year period immediately following termination of his employment for
any reason (the "Non-Competition Period"), Executive shall not, directly
or indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer, distributor, merchant or otherwise, engage in any
business activity competitive with BLSI. For purposes of this section
"business activity competitive" shall mean a company engaged in the
production, marketing or development of any (1)
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antiangiogenic drug or therapy, (2) any central nervous system
regenerative agent, (3) and Xxxxxxxxx'x and/or ADHD diagnostic of
therapeutic agent. It is also understood that Executive's duties with
BLSI are full-time and preclude other employment outside the company
unless with the consent of the company.
(ii) Executive agrees that, during the Non-Competition Period, he
will not (1) hire any employee of BLSI or seek to persuade any
employee of the Company to discontinue employment, (2) solicit or
encourage any customer of BLSI or independent contractor providing
services to the Company to terminate or diminish its relationship with
the Company, or (3) seek to persuade any customer or prospective
customer of BLSI to conduct with anyone else any business or activity
that such customer or prospective customer conducts, has conducted or
could conduct with the Company.
d. Notice of New Business Activities. Executive agrees that, until
the expiration of two (2) weeks after the conclusion of the Non-Competition
Period, Executive will give notice to BLSI of each new business activity he
plans to undertake, at least two (2) weeks prior to beginning any such
activity. The notice shall state the name and address of the person or
entity for whom such activity is
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to be undertaken, and the nature of Executive's business relationship and
position with such person or entity.
e. Reasonableness of Restrictions/Remedies for Breach. In signing
this Agreement, Executive gives BLSI assurance that he has carefully read
and considered all the terms and conditions of this Agreement, including
the restraints imposed under this Section 6. Executive agrees without
reservation that these restraints are necessary for the reasonable and
proper protection of the Company, and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and
geographic area. Executive further agrees that, were he to breach any of
the covenants contained in this Section 6, the damage to the Company would
be irreparable. Executive therefore agrees that the Company, in addition to
any other remedies available to it, shall be entitled to preliminary and
permanent injunctive relief against any breach or threatened breach of any
of those covenants, without having to post bond, and shall be entitled to
all reasonable attorney's fees and expenses incurred in connection with the
enforcement of such covenants. Executive and BLSI further agree that, in
the event that any provision of this Section 6 is determined by a court of
competent jurisdiction to be unenforceable by reason of its being extended
over too great a time period, too large a geographic area or too great a
range of activities, that provision shall be deemed to be modified to
permit its
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enforcement to the maximum extent permitted by law. Finally, Executive and
BLSI agree that the one-year duration of the Non-Competition Period shall
be tolled, and shall not run, during any period of time in which Executive
is in breach of the provisions of this Section 6.
7. Intellectual Property. Executive agrees to promptly and fully disclose
to BLSI all Intellectual Property, as defined below. Executive hereby assigns
and agrees to assign to BLSI (or as otherwise directed by the Company) his full
right, title and interest in all Intellectual Property. Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights
and other proprietary rights, and to do such other acts (including, among
others, the execution and delivery of instruments of further assurance or
confirmation) requested by the Company to assign the Intellectual Property to
the Company and to permit the Company to enforce any patents, copyrights and
other proprietary rights in the Intellectual Property. Executive agrees that he
will not charge the Company for time spent in complying with these obligations.
All copyrightable works that Executive creates shall be considered "work made
for hire". In signing this Agreement, Executive represents that there is no
Intellectual Property in which he claims any personal right, title or interest.
For purposes of this Agreement, "Intellectual Property" means inventions,
discoveries, developments, methods, processes, improvements, compositions,
works, concepts and ideas (whether or not patentable or copyrightable or
constituting trade
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secrets) conceived, made, created, developed or reduced to practice by Executive
(whether alone or with others and whether or not during normal business hours or
on or off Company premises) during Executive's employment that relate in any way
to the business, products or practices of BLSI or to any prospective activity of
the Company.
8. Conflicting Agreements. Executive hereby represents and warrants that
his signing of this Agreement and the performance of his obligations under it
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar restrictions that would affect the performance of his
obligations under this Agreement. Executive agrees that he will not disclose to
or use on behalf of BLSI any proprietary or confidential information of a third
party without that party's consent.
9. Withholding. All payments made by BLSI under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.
10. Assignment. Neither Executive nor BLSI may make any assignment of this
Agreement or any interest in it, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this Agreement without Executive's
consent in the event that the Company shall hereafter effect a reorganization,
consolidate with, or merge into any entity or transfer all or substantially all
of its properties or assets to another person or
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entity. This Agreement shall inure to the benefit of and be binding upon
Executive and the Company, and each of their respective successors, executors,
administrators, heirs and permitted assigns.
11. Severability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
12. Arbitration of Disputes. Any dispute among the parties hereto as to
the interpretation or application of this Agreement, or concerning Executive's
employment at the Company or the termination thereof, shall be resolved
exclusively by binding arbitration in accordance with the rules and procedures
of the American Arbitration Association.
13. Miscellaneous. This Agreement sets forth the entire agreement between
Executive and BLSI, and replaces all prior and contemporaneous communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of Executive's employment. This Agreement may not be modified or
amended, and no breach shall be deemed to be waived, unless agreed to in writing
by Executive and an expressly authorized representative of the Company. The
headings
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and captions in this Agreement are for convenience only, and in no way define or
describe the scope or content of any provision of this Agreement. This is a
Massachusetts contract and shall be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to the conflict of
laws principles thereof.
14. Notices. Any notices provided for in this Agreement shall be in
writing and shall be effective when delivered in person or deposited in the
United States mail, postage prepaid, and addressed to Executive at his last
known address on the books of the Company or, in the case of BLSI, to it at its
principal place of business, attention of the Chief Executive Officer, or to
such other address as either party may specify by notice to the other actually
received.
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
BOSTON LIFE SCIENCES, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx,
Chief Executive Officer
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