EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of this 15th
day of December, 2000 (the "EFFECTIVE DATE"), by and between BioSante
Pharmaceuticals, Inc. (the "COMPANY") and Xxxx Xxxxxx, Ph.D. ("EMPLOYEE").
RECITALS
WHEREAS, the Company desires to employ Employee and Employee desires to
accept Employment with the Company pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Employee hereby agree as follows:
ARTICLE I
EMPLOYMENT SERVICES
1.1. EMPLOYMENT. The Company hereby employs Employee as Vice
President of Clinical Development and Employee hereby accepts such employment,
upon the terms and conditions of this Agreement.
1.2. TERM OF EMPLOYMENT. The term of Employee's employment under
this Agreement shall be for an initial period commencing on January 1, 2001, and
ending on December 31, 2001 (the "INITIAL TERM"). Following the expiration of
the Initial Term, this Agreement shall automatically renew for one-year periods
(each such one-year period is referred to as a "RENEWAL TERM") and continue
until the earlier of (i) the Company providing Employee thirty (30) days written
notice prior to the expiration of either the Initial Term or any Renewal Term of
its desire to terminate this Agreement or (ii) Employee providing the Company
thirty (30) days prior written notice prior to the end of either the Initial
Term or any Renewal Term of her desire to terminate this Agreement. The Initial
Term and any Renewal Term(s) are collectively referred to as the "EMPLOYMENT
TERM." Notwithstanding the provisions of this SECTION 1.2, this Agreement may be
terminated prior to the expiration of the Initial Term or any Renewal Term in
accordance with the provisions of SECTION 3.1 hereof.
1.3. ACTIVITIES AND DUTIES DURING EMPLOYMENT.
(a) Employee represents and warrants to the Company that she
has no other commitments or obligations of any kind to anyone else
which would hinder or interfere with her acceptance of her obligations
hereunder, or the exercise of her best efforts as an employee of the
Company.
(b) During the Employment Term, Employee shall diligently
perform such duties and responsibilities consistent with the position
set forth in SECTION 1.1 and, in
furtherance thereof, such duties and responsibilities as the Company's
president and chief executive officer (the "CEO"), shall from time to
time assign her. Employee shall be Vice President of Clinical
Development of the Company with responsibility as is typical for
executives with a similar title in similar entities, subject to the
overall control and authority of the Company's CEO and the Company's
board of directors (the "BOARD"). Employee shall initially report to
the CEO. Thereafter, Employee shall report to the person designated by
the CEO. Employee shall be based at, and shall perform her duties at,
an office located in Lincolnshire, Illinois, or the surrounding
suburban areas. Employee shall travel to other locations at such times
as may be appropriate to her performance of her duties and
responsibilities under this Agreement.
(c) During the Employment Term, Employee agrees to devote, on
a full time basis, all of her business hours, attention and skills to
the business and affairs of the Company.
ARTICLE II
COMPENSATION
2.1. BASE SALARY. The Company shall pay Employee an annual base
salary in the amount of One Hundred Eighty Thousand and 00/100 Dollars
($180,000.00), payable in accordance with the Company's standard payroll
practices. During the Employment Term, the CEO shall give Employee an annual
performance review and the CEO and the compensation committee of the Board shall
review the base salary of Employee annually, and make such adjustments to such
base salary as it deems reasonable and appropriate.
2.2. BONUS COMPENSATION. Commencing on January 1, 2002, the
Company may, at its option, pay Employee a bonus in cash or otherwise in an
amount determined by the CEO, in consultation with the compensation committee of
the Board, up to a maximum of 30% of Employee's annual base salary.
2.3. WITHHOLDINGS AND DEDUCTIONS. All compensation payable to
Employee pursuant to this Agreement shall be subject to such withholdings and
deductions by the Company as are required by law.
2.4. REIMBURSEMENT OF EXPENSES. The Company shall reimburse
Employee for all reasonable and necessary expenses incurred by Employee while
performing her duties under this Agreement, subject to provision by Employee of
documentation satisfactory to the Company.
2.5. BENEFIT PLANS; VACATION. During the Employment Term,
Employee shall be entitled to receive all fringe benefits and perquisites and to
participate in all benefit programs normally available to other employees
holding positions similar to that of Employee hereunder (subject to all
applicable eligibility rules thereof), as may be in effect from time to time,
including such insurance or other benefit programs as may be implemented by the
Company. During the Employment Term, Employee shall be entitled to receive three
weeks of paid
-2-
vacation annually. Employee's ability to carry over vacation from year to year
is subject to company policy as described in the Company's employee handbook.
2.6. KEY-PERSON INSURANCE POLICY. During the Employment Term, the
Company may, in its sole discretion, maintain "key-person" life insurance
coverage (the "POLICY") with respect to Employee. Employee shall submit to any
reasonable physical exam required. The Company shall be the sole beneficiary of
the Policy and nothing contained herein or through any course of dealing shall
create any interest of Employee in the Policy. At such time as the Company
elects to terminate its ownership of the Policy, it will notify Employee of said
determination and allow her a reasonable period of time to elect to continue the
coverage for her benefit by means of Employee paying the Company an amount equal
to the unamortized prepaid premium and the cash value of the Policy. Thereafter,
Employee will be responsible to make all further payments due under the Policy.
2.7. AUTOMOBILE ALLOWANCE. The Company shall provide Employee with a
monthly stipend of Six Hundred and 00/100 Dollars ($600.00) for automobile use.
ARTICLE III
TERMINATION
3.1. TERMINATION OF AGREEMENT. Notwithstanding SECTION 1.2 hereof,
the Employment Term shall terminate immediately upon the occurrence of any of
the following events: (a) death of Employee; (b) Legal Disability of Employee,
as defined in SECTION 3.2; (c) election by the Company to terminate Employee for
Cause, as defined in SECTION 3.4; (d) election by the Company (whether for Cause
or not) during the first six months of the Initial Term; (e) by either the
Company or Employee for any reason (whether for Cause or not) upon the
expiration of thirty (30) days from the date when the terminating party gives
written notice to the other party; or (f) election by Employee to terminate this
Agreement for Good Reason, as defined in SECTION 3.9 of this Agreement.
3.2. LEGAL DISABILITY. For the purposes of this Agreement, the term
"LEGAL DISABILITY" shall mean the inability of Employee, due to illness,
accident or other physical or mental incapacity, to perform substantially all of
her regular duties as an employee of the Company for a period (whether
continuous or periodic) of six (6) months during any twelve (12) month period,
or a physical or mental incapacity in which there is no hope of recovery within
eight (8) months. In the event that there is any dispute as to Employee's Legal
Disability, a determination shall be made at the written request of either the
Company or Employee sent to the other (and within thirty (30) days after such
request) by a majority of three physicians, one of whom shall be selected and
paid by Employee, one selected and paid by the Company and the third selected by
the two physicians so selected with the cost of such third physician being borne
equally by Employee and the Company.
3.3. EFFECT OF TERMINATION UPON DEATH OR LEGAL DISABILITY. In the event
Employee is terminated for death or Legal Disability, this Agreement shall
immediately terminate and the
-3-
Company shall pay Employee or Employee's estate all amounts due through the date
of termination and shall owe Employee, or Employee's estate, no further amounts
under this Agreement.
3.4. CAUSE. The term "CAUSE" as used herein shall mean any of the
following acts or omissions:
(a) Employee's theft, embezzlement or other act of dishonesty;
(b) A material default by Employee in the performance or
observance of any promise or undertaking of Employee under this
Agreement, including, without limitation, willful failure to follow
instructions of the CEO or the Board, which default shall continue for
a period of thirty (30) days after written notice thereof from the
Company to Employee;
(c) The commission of an act or acts by Employee in the
performance of her duties hereunder amounting to gross negligence or
willful or wanton misconduct, as determined by the Company in the
exercise of its reasonable judgment; or
(d) Employee's conviction of, or guilty or nolo contendre plea
to, or confession of, a Class A-type felony or a felony involving moral
turpitude.
3.5. EFFECT OF TERMINATION FOR CAUSE. In the event Employee is
terminated for Cause, this Agreement shall immediately terminate and the Company
shall pay Employee all amounts due through the date of termination and shall owe
Employee no further amounts under this Agreement.
3.6. EFFECT OF TERMINATION OTHER THAN FOR CAUSE, UPON DEATH OR FOR
LEGAL DISABILITY DURING THE FIRST SIX MONTHS OF THE INITIAL TERM. In the event
Employee is terminated (with or without Cause) during the first six months of
the Initial Term, this Agreement shall immediately terminate and the Company
shall pay Employee all amounts due through the date of termination and shall owe
Employee no further amounts under this Agreement.
3.7. EFFECT OF TERMINATION OTHER THAN FOR CAUSE, UPON DEATH OR FOR
LEGAL DISABILITY DURING THE FINAL SIX MONTHS OF THE INITIAL TERM . In the event
Employee is terminated other than for Cause during the final six months of the
Initial Term or if this Agreement is not renewed after the Initial Term, the
Company shall (i) pay Employee a severance benefit equal to Employee's base
salary for the shorter of (A) six months or (B) the date upon which Employee
obtains full-time employment or returns to consulting (such period is the
"INITIAL TERM SEVERANCE PERIOD"); (ii) continue to allow Employee to participate
during the Initial Term Severance Period, at the Company's expense, in the
Company's group health and dental insurance programs; and (iii) reimburse
Employee for any and all unused vacation days accrued to the date of such
termination. The compensation provided for in this SECTION 3.7 will constitute
Employee's sole and exclusive remedy for such termination. Employee will not be
entitled to any other
-4-
termination or severance payment which might otherwise be payable under any
other agreement between Employee and the Company or under any policy of the
Company.
3.8. EFFECT OF TERMINATION OTHER THAN FOR CAUSE, UPON DEATH OR FOR
LEGAL DISABILITY FOR ANY RENEWAL TERM . In the event Employee is terminated
other than for Cause during any Renewal Term or if this Agreement is not renewed
after any Renewal Term, the Company shall (i) pay Employee a severance benefit
equal to Employee's base salary for the shorter of (A) twelve months or (B) the
date upon which Employee obtains full-time employment or returns to consulting
(such period is the "RENEWAL TERM SEVERANCE PERIOD"); (ii) continue to allow
Employee to participate during the Renewal Term Severance Period, at the
Company's expense, in the Company's group health and dental insurance programs;
and (iii) reimburse Employee for any and all unused vacation days accrued to the
date of such termination. The compensation provided for in this SECTION 3.8 will
constitute Employee's sole and exclusive remedy for such termination. Employee
will not be entitled to any other termination or severance payment which might
otherwise be payable under any other agreement between Employee and the Company
or under any policy of the Company.
3.9. TERMINATION FOR GOOD REASON. Notwithstanding any other
provisions of this Agreement, Employee shall be entitled to terminate this
Agreement upon thirty (30) days written notice to the Company for Good Reason,
as defined in this SECTION 3.9. "Good Reason" means: (i) the Company's exclusion
or removal of Employee from participation in any fringe benefit or compensation
plan, retirement plan, life insurance plan, health or disability plan available
to other personnel of the Company holding comparable positions to that of
Employee; provided; however, that nothing in this SECTION 3.9 shall prevent the
Company from discontinuing or altering any fringe benefit so long as Employee is
not treated differently than other employees of the Company holding comparable
positions, (ii) the reduction of her base salary or car allowance so long as
such reduction in base salary or car allowance (A) is not required of other
personnel of the Company holding comparable positions to that of Employee or (B)
is not related to a material adverse change in the Company's business, financial
condition, results of operations or prospects. If Employee terminates this
Agreement for Good Reason, the Company will pay Employee the amounts, and
provide her with the following benefits: if such termination is effective during
the final six months of the Initial Term under this Agreement, the severance
benefit and other benefits described in SECTION 3.7 of this Agreement, and if
such termination is effective during any Renewal Term, the severance benefit and
other benefits described in SECTION 3.8 of this Agreement.
3.10. PROPERTY OF THE COMPANY. Upon termination of her employment
with the Company, Employee shall surrender to the Company any and all material,
including, but not limited to, manuals, reports, documents, protocols, INDs,
preclinical and clinical results, lists of the Company's vendors and customers,
computer programs, methods of designing such programs, software, plans,
drawings, proposals, designs, product information, confidential purchasing and
market research information, Confidential Information (as defined in SECTION 4.2
below) and the like (including all copies thereof) that she has in her
possession, custody or control relating to the business of the Company, its
affiliates or its customers. Employee
-5-
acknowledges that all such materials are and shall remain the property of the
Company solely and that Employee has no right, title or other interest in or to
such materials.
ARTICLE IV
RESTRICTIVE COVENANTS
4.1. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Employee will not
at any time (other than as may be required or appropriate directly in connection
with the performance by her of her duties hereunder), directly or indirectly,
use, communicate, disclose or disseminate any Confidential Information (defined
below) in any manner whatsoever (except as may be required under legal process
by subpoena or other court order or rule, or any compulsory process of any
agency of a governmental body). In the event disclosure of any Confidential
Information is required of Employee pursuant to the requirements of a government
agency, regulation, judicial order or by operation of law, Employee will notify
the Company of the requirement to make such disclosure as far in advance of the
disclosure as is possible and will assert the confidentiality of such
Confidential Information.
4.2. "CONFIDENTIAL INFORMATION" DEFINED. For purposes of this
Agreement, "Confidential Information" shall mean any and all information (oral
or written) relating to the Company or any person controlling, controlled by, or
under common control with the Company or any of its activities, including, but
not limited to, information relating to: technology, research, test procedures
and results, trade secrets, machinery and equipment; manufacturing processes;
financial information; products; identity and description of materials and
services used; purchasing; costs; pricing; customers and prospects; advertising,
promotion and marketing; and selling, servicing and information pertaining to
any governmental investigation, except such information which is known by
Employee prior to the beginning of the Initial Term of employment hereunder, or
which becomes known to Employee from a third person or other source not under a
duty of confidentiality, or which is disclosed on a non-confidential basis to
another party by an employee or other agent of the Company in a manner which
does not involve a breach of a duty of confidentiality by the disclosing party,
or which is generally in the public domain (such information not being deemed to
be in the public domain merely because it is embraced by more general
information which is in the public domain), other than as a result of a breach
of the provisions of SECTION 4.1 hereof.
4.3. NON-COMPETITION.Employee recognizes and acknowledges that
the business of the Company is highly competitive and that the services to be
performed by Employee for the Company are special and unique. Employee agrees
that, at any time during the Employment Term (other than with the consent of the
Company) and for a period of one year thereafter, Employee shall not engage or
participate in, directly or indirectly (whether as an officer, director,
employee, partner, consultant, equityholder, lender or otherwise), any business
that makes a product that competes with the Company's current or future products
including, but not limited to, calcium phosphate adjuvant or hormone replacement
gel products.
-6-
4.4. NON-SOLICITATION OF EMPLOYEES. Employee agrees that, during her
employment and for a period of one year thereafter, Employee shall not, directly
or indirectly, whether for Employee's account or for any other person or entity,
(i) solicit for employment or hire, or attempt to solicit for employment or
hire, any person who is employed by the Company, or, but for the violation of
this Agreement, would have been employed by the Company, or, who was employed by
the Company during the twelve (12) month period immediately preceding
termination of the Employee's employment with the Company or (ii) otherwise
interfere with the relationship between any such person, the Company and any
third party that has a business relationship or a potential business
relationship with the Company including, but not limited to, any collaborator,
licensor or licensee.
4.5. REMEDIES. The Company and Employee hereby agree that it is
impossible to measure solely in money the damages, which will accrue to the
Company by reason of Employee's failure to observe any of her obligations under
this ARTICLE IV. Therefore, if the Company shall institute any action or
proceeding to enforce such obligations or provisions, Employee hereby waives the
claim or defense that there is an adequate remedy at law and agrees in any such
action or proceeding not to interpose the claim or defense that such remedy
exists at law. Without limiting any other remedies that may be available to the
Company, Employee hereby specifically affirms the appropriateness of injunctive
or other equitable relief in any such action.
4.6. REASONABLE LIMITATIONS. The parties hereto stipulate and agree
that each of the terms of ARTICLE IV of this Agreement including, but not
limited to, the scope of the activities prohibited and the time limitation, is
reasonable. The parties further stipulate and agree that in the event a court
determines contrary to the agreement of the parties herein that any of the terms
of ARTICLE IV of this Agreement are unreasonable or contrary to public policy,
or invalid or unenforceable for any reason in fact, law or equity, then the
court shall limit the application of any such provision or term or modify any
provision or term to that which it finds reasonable, valid or enforceable and
shall enforce this Agreement as so limited or modified.
ARTICLE V
INVENTIONS
5.1. INVENTIONS OWNED BY THE COMPANY. Employee agrees that all
Inventions (as defined in SECTION 5.2 hereof) Employee has or hereafter makes,
conceives, reduces to practice or authors (either alone or with others) during
or within one year after the termination of the Employment Term will be the
Company's sole and exclusive property. Employee will, with respect to any such
Invention: (i) keep current, accurate, and complete records, which will belong
to the Company and be kept and stored on the Company's premises while Employee
is employed by the Company; (ii) promptly and fully disclose the existence and
describe the nature of the Invention to the Company in writing (and without
request); (iii) assign (and Employee does hereby assign) to the Company all of
Employee's rights to all Inventions, any applications Employee makes for patents
or copyrights in any country; and (iv) acknowledge and deliver promptly to the
Company any written instruments, and perform any other acts necessary in the
-7-
Company's opinion to preserve property rights in Inventions against forfeiture,
abandonment, or loss and to obtain and maintain patents and/or copyrights on
Inventions to vest the entire right and title to Inventions in the Company.
5.2. INVENTIONS. The term "INVENTIONS" as used in herein, means any
discoveries, improvements, creations, ideas and inventions, including without
limitation software and artistic and literary works (whether or not they can be
patented or copyrighted) that: (i) relate directly to the Company's business or
the Company's research or development during the Employment Term, (ii) result
from any work Employee performs for the Company; (iii) use the Company's
equipment, supplies, facilities or trade secret information; or (iv) Employee
develops during any time that Employee is obligated to perform her employment
duties.
ARTICLE VI
MISCELLANEOUS
6.1. NOTICES. All notices or other communications required or
permitted hereunder shall be in writing and shall be addressed as follows:
If to Employee:
Xxxx Xxxxxx, Ph.D.
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Hoogendoorn, Talbot, Xxxxxx, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
If to the Company:
BioSante Pharmaceuticals, Inc.
000 Xxxx Xxxx Xxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
-8-
with a copy to:
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others. Notices mailed in accordance with this
SECTION 6.1 shall be deemed given (i) the fifth day after they are mailed and
(ii) the next day after they are sent by reputable overnight courier service.
6.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and
permitted assigns. In the case of the Company, the successors and permitted
assigns hereunder shall include without limitation any affiliate of the Company
as well as the successors in interest to such affiliate (whether by merger,
liquidation (including successive mergers or liquidations) or otherwise). This
Agreement or any right or interest hereunder is one of personal service and may
not be assigned by Employee. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any person other than the parties
and successors and assigns permitted by this SECTION 6.2 any right, remedy or
claim under or by reason of this Agreement.
6.3. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Recitals
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein, and supersede all prior agreements,
understandings or letters of intent between the parties hereto. This Agreement
shall not be amended, modified or supplemented except by a written instrument
signed by each of the parties hereto.
6.4. INTERPRETATION. Article titles and section headings contained
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
6.5. EXPENSES. Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement. In the event that
the Company brings an action to enforce this Agreement including, but not
limited to, Sections 4.3 and 4.4, and is the prevailing party in such action,
Employee shall reimburse the Company for the reasonable costs and expenses,
including attorneys' fees, so incurred by the Company.
6.6. WAIVERS. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of
-9-
any breach of this Agreement shall be held to constitute a waiver of any other
or subsequent breach.
6.7. PARTIAL INVALIDITY. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
6.8. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement.
6.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to the conflicts of
law provisions) of the State of Illinois.
6.10. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. THE PARTIES
HERETO (i) WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND
ANY MATTER ARISING FROM OR RELATED TO THIS AGREEMENT; (ii) IRREVOCABLY SUBMIT TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN XXXX COUNTY,
ILLINOIS, OVER ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING
FROM OR RELATED TO THIS AGREEMENT; AND (iii) IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.
[signature page attached]
-10-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
COMPANY:
BIOSANTE PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Chief Executive Officer
EMPLOYEE:
/s/ Xxxx Xxxxxx, PH.D.
-------------------------------------------------
Xxxx Xxxxxx, Ph.D.
-11-
