THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.2
THIRD
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS
THIRD
AMENDMENT TO EMPLOYMENT AGREEMENT (this
“Amendment”)
made
this 9th
day of
July, 2008 by and between ACURA
PHARMACEUTICALS, INC.,
a New
York corporation (the “Corporation”)
and
XXX X. XXXXXX (the
“Employee”).
RECITALS
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A.
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The
Corporation and the Employee executed an employment agreement dated
as of
April 5, 2004, which was subsequently amended (as amended, the
“Employment
Agreement”).
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B.
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The
Corporation and the Employee now desire to further amend the Employment
Agreement as provided herein to provide (i) for a bonus payment
to
Employee provided he remains employed by the Corporation through
December
31, 2008 and (ii) at Employee’s request, for a reduction in Employee’s
duties to the Corporation during the period January 1, 2009 through
December 31, 2010.
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NOW,
THEREFORE,
in
consideration of the mutual covenants and undertakings herein contained,
the
parties agree as follows:
1. A
new
Section 3(c) is added to the Agreement as follows:
“(c)
Retention
Bonus.
If
Employee remains as a full-time employee with the Corporation through December
31, 2008 then he shall be entitled to a one-time bonus payment of Three Hundred
Fifteen Thousand Dollars ($315,000) (the “Bonus Payment”), payable by the
Corporation to the Employee on December 31, 2008. If Employee ceases to be
a
full-time employee for any reason prior to December 31, 2008, then he shall
not
be entitled to the Bonus Payment; provided,
however,
that
the Bonus Payment will remain payable if the Employee’s employment is terminated
(i) by the Corporation (or its successor) without Cause or following a Change
of
Control, or (ii) by the Employee for Good Reason.
2. Effective
January 1, 2009, assuming Executive’s employment with the Corporation has not
terminated prior thereto, the Agreement shall be further amended and replaced
in
its entirety effective as of such date by the Amended and Restated Employment
Agreement attached hereto as Exhibit
A.
During
the period through December 31, 2008, the Employment Agreement, as amended
by
this Amendment, shall govern the employment relationship between the Corporation
and Employee. Commencing January 1, 2009, the Amended and Restated Employment
Agreement, attached hereto as Exhibit
A,
shall
govern the employment relationship between the Corporation and
Employee.
3. Except
as
expressly amended by this Amendment, the Employment Agreement remains in
full
force and effect. Capitalized terms used herein shall have the same meaning
as
in the Employment Agreement unless otherwise defined herein. This Amendment
shall be governed and construed and enforced in accordance with the local
laws
of the State of New York applicable to agreements made and to be performed
entirely in New York.
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4. This
Amendment may be executed in one or more facsimile or original counterparts,
each of which shall be deemed an original, but all of which taken together
will
constitute one and the same instrument.
IN
WITNESS WHEREOF,
the
parties have executed this Amendment as of the date first above
written.
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By:
/s/ Xxxxxx
X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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President
and Chief Executive Officer
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EMPLOYEE
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By:
/s/ Xxx
X. Xxxxxx
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Xxx
X. Xxxxxx
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EXHIBIT
A
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
(the
"Agreement")
effective as of the 1st day of January, 2009 (the “Effective Date”) by and
between ACURA
PHARMACEUTICALS, INC.,
a New
York corporation (the "Corporation"),
with
administrative offices at 000 X. Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000
and
XXX X. XXXXXX,
residing at 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxx 00000 (the
"Employee").
W
I T N E S S E T H
WHEREAS,
Employee has been employed by the Corporation pursuant to an Executive
Employment Agreement dated as of April 5, 2004, as amended (the “Original
Agreement”); and
WHEREAS,
the
Employee desires to reduce his role with the Corporation commencing January
1,
2009; and
WHEREAS,
the
parties hereto have agreed to amend and restate the Original Agreement, as
provided herein;
NOW,
THEREFORE,
in
consideration of the mutual covenants and undertakings herein contained,
the
parties agree as follows:
1. Employment,
Duties and Acceptance.
1.1 Services.
Commencing on the Effective Date the Corporation shall continue the employment
of the Employee pursuant to the terms of this Agreement for the Term (as
defined
in Section 2 hereof), to render services to the Corporation of ten (10) weeks
per year, at such times as mutually agreed by the Corporation's Chief Executive
Officer ("CEO") and the Employee, as the Corporation's Senior Scientific
Advisor, subject to the direction of the CEO and the Corporation's Board
of
Directors. In connection therewith, the Employee shall assist and advise
the
Corporation with the development of product candidates and such other tasks
as
may be further reasonably be requested to be performed by the CEO, to whom
the
Employee shall report, and to use his commercially reasonable best efforts,
skill and abilities to promote the interests of the Corporation and its
subsidiary. The Employee shall perform the services for the Corporation from
his
home office and by traveling to the Corporation's facilities and such other
locations as shall be agreed by the Employee and CEO from time to time,
including, without limitation, the locations of contract research organizations,
clinical trial sites, and other locations required for meetings or presentations
with prospective investors, counsel, prospective pharmaceutical partners
and
other locations as the CEO shall determine to be in the best business interests
of the Corporation. The Employee acknowledges and agrees that the change
in the
Employee’s title, reduction in responsibilities, service hours, and compensation
is being effected at the request of the Employee and will not constitute
or be
deemed grounds for the Employee’s “Good Reason” termination as provided in
Section 7.5 of the Original Agreement.
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1.2 Acceptance.
The
Employee hereby accepts the terms of continued employment with the Corporation
and commencing on the Effective Date, and agrees to render the services
described in Section 1.1 hereof.
2.
Term
of Employment.
The
term of the Employee’s employment under this Agreement shall commence on the
Effective Date and shall expire on December 31, 2010 (the “Term”),
unless sooner terminated pursuant to Section 7 of this Agreement.
3.
Compensation.
In
consideration of the services to be rendered by the Employee pursuant to
this
Agreement, the Corporation shall pay the Employee an aggregate annual base
salary of One Hundred Twenty Thousand Dollars ($120,000) (the "Base
Salary"),
payable in equal weekly installments in accordance with the Corporation’s
customary payroll practices, less such deductions or amounts to be withheld
as
required by applicable laws and regulations.
4.
Expenses.
The
Corporation shall pay or reimburse the Employee for all reasonable expenses
which are incurred in accordance with the Corporation’s expense policy in force
from time to time and which are actually incurred or paid by the Employee
during
the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Corporation may reasonably require. Such expenses shall
include, but not be limited to, business travel, travel to corporate facilities
and related temporary living expenses, meals and lodging, and business
entertainment.
5.
Additional
Benefits.
In
addition to the compensation and expenses to be paid under Sections 3 and
4
hereof, the Employee will be entitled to such rights and benefits for which
he
may be eligible (as a part time employee) under any insurance or retirement
plan
of the Corporation as the Board of Directors shall adopt from time to time
in
its sole and absolute discretion for the benefit of employees of the
Corporation.
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6.
Stock
Options/Restricted Stock Units.
The
Employee and the Corporation acknowledge and agree that the stock options
and
restricted stock unit awards issued to the Employee by the Corporation as
of the
date of this Agreement shall remain in full force and effect and the Employee’s
right to exercise such stock options and to receive distributions under such
restricted stock units shall be as provided in the respective award agreements
and the plans pursuant to which such stock options and restricted stock unit
awards were issued; provided, however, that with respect to the stock options
granted to the Employee on May 23, 2008 exercisable for up to 160,000 shares
of
the Corporation’s common stock, in the event of the termination of the
Employee’s employment (a) by the Employee, the Employee may exercise such
options to the extent vested at the date of termination during the forty
(40)
day period following the date of termination, and (b) by the Corporation,
the
Employee may exercise such options to the extent vested at the date of
termination during the twelve (12) month period following the date of
termination.
7.
Termination.
The
Corporation may terminate the Employee’s employment with the Corporation for any
reason at any time during the Term upon written notice. The Corporation's
obligation to pay compensation or any other amounts payable hereunder to
or for
the benefit of the Employee shall terminate on the earlier to occur of (i)
the
date the Employee terminates his employment, (ii) the date the Corporation
terminates the Employee’s employment, and (iii) the date of death of the
Employee, except for accrued and unpaid Base Salary and expenses to the date
of
termination or death.
8.
Protection
of Confidential Information.
Because
the Employee's services for the Corporation will bring him into close contact
with all the confidential affairs thereof, and plans for future developments,
the Employee agrees to the following:
8.1 Secrecy.
During
the Term and for five (5) years after the date of termination of the Employee’s
employment, to preserve the confidential nature of, and not disclose, reveal,
or
make accessible to anyone other than the Corporation’s officers, directors,
employees, consultants or agents, otherwise within the scope of his employment
duties and responsibilities hereunder, any and all documents, information,
knowledge or data of or pertaining to the Corporation, its subsidiaries or
affiliates or pertaining to any other individual, firm, corporation,
partnership, joint venture, business, organization, entity or other person
with
which the Corporation or any of its subsidiaries or affiliates may do business
during the Term (including licensees, licensors, manufacturers, suppliers
and
customers of the Corporation or any of its subsidiaries or affiliates) and
which
is not in the public domain, including trade secrets, "know how", names and
lists of licensees, licensors, manufacturers, suppliers and customers,
development plans or programs, statistics, manufacturing and production methods,
processes, techniques, pricing, marketing methods and plans, specifications,
advertising plans and campaigns or any other matters, and all other confidential
information of the Corporation, its subsidiaries and affiliates (hereinafter
referred to as "Confidential
Information").
The
restrictions on the disclosure of Confidential Information imposed by this
Section 8.1 shall not apply to any Confidential Information that was part
of the
public domain at the time of its receipt by the Employee or becomes part
of the
public domain in any manner and for any reason other than an act by the
Employee, unless the Employee is legally compelled (by applicable law,
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose such Confidential Information, in
which
event the Employee shall provide the Corporation with prompt notice of such
requirement so that the Corporation may seek a protective order or other
appropriate remedy, and if such protective order or other remedy is not
obtained, the Employee shall exercise reasonable efforts in good faith to
obtain
assurance that confidential treatment will be accorded such Confidential
Information.
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8.2 Return
Memoranda, etc.
To
deliver promptly to the Corporation on termination of his employment, or
at any
other time the Corporation may so request, all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies
thereof) relating to the Corporation's business and all property associated
therewith, which the Employee may then possess or have under his
control.
8.3 Non-competition.
Provided that this Agreement has not been breached by the Corporation, the
Employee agrees that he shall not at any time prior to one (1) year after
the
expiration or termination of his employment with the Corporation, own, manage,
operate, be a director or an employee of, or a consultant to any person,
business, corporation, partnership, trust, limited liability company or other
firm or enterprise ("Person")
which
is engaged in marketing, selling or distributing products or in developing
product candidates in the United States which are directly competitive with
products or product candidates in development as evidenced by the current
written product development plan and/or business plan of the Corporation
at the
time of termination of the Employee's employment and/or described in the
Corporation’s most recent filing on Form 10-K with the Securities and Exchange
Commission as of the date of the termination of the Employee’s employment.
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If
any of
the provisions of this section, or any part thereof, is hereinafter construed
to
be invalid or unenforceable, the same shall not affect the remainder of such
provision or provisions, which shall be given full effect, without regard
to the
invalid portions. If any of the provisions of this section, or any part thereof,
is held to be unenforceable because of the duration of such provision, the
area
covered thereby or the type of conduct restricted therein, the parties agree
that the court making such determination shall have the power to modify the
duration, geographic area and/or other terms of such provision and, as so
modified, said provision shall then be enforceable. In the event that the
courts
of any one or more jurisdictions shall hold such provisions wholly or partially
unenforceable by reason of the scope thereof or otherwise, it is the intention
of the parties hereto that such determination not bar or in any way affect
the
Corporation's right to the relief provided for herein in the courts of any
other
jurisdictions as to breaches or threatened breaches of such provisions in
such
other jurisdictions, the above provisions as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent
covenants.
8.4 Injunctive
Relief.
The
Employee acknowledges and agrees that, because of the unique and extraordinary
nature of his services, any breach or threatened breach of the provisions
of
Sections 8.1, 8.2, or 8.3 hereof will cause irreparable injury and incalculable
harm to the Corporation, and the Corporation shall, accordingly, be entitled
to
injunctive and other equitable relief for such breach or threatened breach
and
that resort by the Corporation to such injunctive or other equitable relief
shall not be deemed to waive or to limit in any respect any right or remedy
which the Corporation may have with respect to such breach or threatened
breach.
8.5 Expenses
of Enforcement of Covenants.
In the
event that any action, suit or proceeding at law or in equity is brought
to
enforce the covenants contained in Section 8.1, 8.2, or 8.3 hereof or to
obtain
money damages for the breach thereof, the party prevailing in any such action,
suit or other proceeding shall be entitled upon demand to reimbursement from
the
other party for all expenses (including, without limitation, reasonable
attorneys' fees and disbursements) incurred in connection
therewith.
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8.6 Non-Solicitation.
The
Employee covenants and agrees not to (and not to cause or direct any Person
to)
hire or solicit for employment any employee of the Corporation or any of
its
subsidiaries or affiliates. The prohibitions of this Section 8.6 shall apply
for
twelve (12) months following the termination of the Employee’s
employment.
8.7 Assignment
of Invention.
All
discoveries, inventions, improvements and innovations, whether patentable
or not
(including all data and records pertaining thereto), which Employee may have
invented, discovered, originated or conceived of during the Term of his
employment with the Corporation prior to the date of the Amendment or may
invent, discover, originate or conceive during the Term of this Agreement
and
which directly relate to the business of the Corporation or any of its
subsidiaries as described in the Corporation’s filings with the Securities and
Exchange Commission, shall be the sole and exclusive property of the
Corporation. Employee shall promptly and fully disclose each and all such
discoveries, inventions, improvements or innovations to the Corporation.
Employee shall assign to the Corporation his entire right, title and interest
in
and to all of his discoveries, inventions, improvements and innovation described
in this Section 8.7 and any related U.S. or foreign patent and patent
applications, shall execute any instruments reasonably necessary to convey
or
perfect the Corporation’s ownership thereof, and shall assist the Corporation in
obtaining, defending and enforcing its rights therein. The Corporation shall
bear all expenses it authorizes to be incurred in connection with such activity
and shall pay the Employee reasonable compensation for time spent by the
Employee in performing such duties at the request of the Corporation after
the
termination of his employment, for a period not to exceed three (3)
years.
9.
Indemnification.
The
Corporation will defend, indemnify and hold harmless the Employee, to the
maximum extent permitted by applicable law and the by-laws of the Corporation,
against all claims, costs, charges and expenses incurred or sustained by
him in
connection with any action, suit or other proceeding to which he may be made
a
party by reason of his being an officer, director or employee of the Corporation
or of any subsidiary or affiliate thereof.
10. Notices.
All
notices, requests, consents and other communications required or permitted
to be
given hereunder, shall be in writing and shall be deemed to have been duly
given
if delivered personally or sent by facsimile, with confirmation of receipt,
or
mailed first-class, postage prepaid, by registered or certified mail (notices
sent by mail shall be deemed to have been given three (3) business days after
the date sent), to the parties at their respective addresses herein above
set
forth or to such other address as either party shall designate by notice
in
writing to the other in accordance herewith.
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11. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
local laws of the State of New York applicable to agreements made and to
be
performed entirely in New York.
12. Captions.
The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
13. Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject
matter
hereof including the Original Agreement. Employee acknowledges that upon
the
Effective Date he will not be entitled to any severance payment under the
Original Agreement or any bonuses for any calendar year after 2008. No
representation, promise or inducement has been made by either party that
is not
embodied in this Agreement, and neither party shall be bound by or liable
for
any alleged representation, promise or inducement not so set forth.
14. Assignability.
This
Agreement, and the Employee's rights and obligations hereunder, may not be
assigned by the Employee. The Corporation may assign its rights, together
with
its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets; in any
event
the rights and obligations of the Corporation hereunder shall be binding
on its
successors or assigns, whether by merger, consolidation or acquisition of
all or
substantially all of its business or assets.
15. Amendments.
This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, only by a written instrument
executed by both of the parties hereto, or in the case of a waiver, by the
party
waiving compliance. No superseding instrument, amendment, modification,
cancellation, renewal or extension hereof shall require the consent or approval
of any person other than the parties hereto. The failure of either party
at any
time or times to require performance of any provision hereof shall in no
manner
affect the right at a later time to enforce the same. No waiver by either
party
of the breach of any term or covenant contained in this Agreement, whether
by
conduct or otherwise, in any one or more instances, shall be deemed to be,
or
construed as, a further or continuing waiver of any such breach, or a waiver
of
the breach of any other term or covenant contained in this
Agreement.
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16. Counterparts.
This
Agreement may be executed in one or more facsimile or original counterparts,
each of which shall be deemed an original, but all of which taken together
will
constitute one and the same instrument.
17. Severability.
The
provisions of this Agreement shall be deemed severable, and if any part of
any
provision is held illegal, void or invalid under applicable law, such provision
may be changed to the extent reasonably necessary to make the provision,
as so
changed, legal, valid and binding. If any provision of this Agreement is
held
illegal, void or invalid in its entirety, the remaining provisions of this
Agreement shall not in any way be affected or impaired but shall remain binding
in accordance with their terms.
18. In
witness whereof, the parties have executed this Agreement as of July _____,
2008.
By:
Xxxxxx
X.
Xxxxxxx
President
and Chief Executive Officer
EMPLOYEE
By:
Xxx
X.
Xxxxxx
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