EMPLOYMENT AGREEMENT
Exhibit
10.27
This
employment agreement is effective as of January 31, 2011 between TARGETED
MEDICAL PHARMA (“Employer”) and Xxxx Xxxxxxxx (“Executive”).
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1.
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Employer
shall employ Executive as Vice President of Strategy and Operations or in
such other capacity or capacities Employer’s board may from time to time
prescribe.
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2.
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The
Executive shall serve at the discretion of the Board of Directors and,
upon mutual agreement, may be assigned other titles and duties as long as
the financial terms of this Agreement are not
altered.
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3.
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Executive
shall have the right to vendor other services for compensation or engage
in other business activities as long as it does not detract from
Executive’s performance herein.
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4.
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During
his employment, Executive shall devote such time, interest, and effort to
the performance of this agreement as may be fairly and reasonable
necessary.
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5.
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During
the employment term, Executive shall not, directly or indirectly, whether
as a partner, employee, creditor, shareholder, or otherwise, promote,
participate, or engage in any activity or other business competitive with
Employer’s business.
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6.
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In
addition, Executive, while employed, shall not take any action without
Employer’s prior written consent to establish, form, or become employed by
a competing business on termination of employment by
Employer.
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7.
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If,
during the term of this agreement, Executive shall not be vested by
Employer with the responsibilities of acting as its Vice President of
Strategy and Operations by lawful Board Action, the Board will have the
authority to designate other titles and duties of the Executive by mutual
agreement. If mutual agreement between the Board and the Executive are not
achieved, Executive shall be employed as an advisor and consultant to
Employer so that Employer may benefit from Executive’s experience. It is
expressly agreed that Executive’s services as an advisor and consultant
will be required at such times and places as will result in the least
inconvenience to Executive, having in mind his other business commitments
during that period which may obligate him to perform his services under
such other commitments before performing the advisory services under this
agreement. While Executive is employed as an advisor and
consultant by Employer, Employer shall pay Executive all compensation
benefits provided for in this agreement. During the course for
his employment as an advisor and consultant, Executive shall not compete,
directly or indirectly, with
Employer.
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8.
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Subject
to earlier termination as provided in this agreement, Executive shall be
employed for a term beginning January 31, 2011 and ending December 31,
2013. Upon signature, all of the terms of this agreement are
effective immediately and this agreement herein supersedes any prior
employment agreements.
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9.
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Unless
the parties agree otherwise in writing, during the employment
term Executive shall perform the services he is required
to perform under this agreement at Employer’s offices or at Executive’s
home, provided, however, that Employer may from time to time require
Executive to travel temporarily to other locations on Employer’s
business.
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10.
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Employer
shall pay a base salary to Executive at the rate of $140,000 per year
(“Base Salary”), payable in bi-weekly
installments.
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i.
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Bonus: For
the period of January 31, 2011 to December 31, 2013, Executive shall be
entitled to receive cash bonuses at the Company’s
discretion.
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ii.
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Equity
Compensation: Executive received options to purchase 7,395
(adjusted for the Reorganization) shares of common stock following the
90th
day of the effectiveness of his employment with TMP. Such options fully
vested on the 91st day after the effective date of Executive’s employment,
which was May 16, 2010. In addition, pursuant to Executive’s July 28, 2010
promotion letter, Executive received additional options to purchase 73,945
shares (adjusted for the Reorganization) common stock, which options shall
vest pro rata on a monthly basis over a two year
period.
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iii.
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Executive’s
options to purchase stock shall be exercisable by Executive at any time
during the period of employment or within three years of termination of
employment or, upon death of the Executive, by his estate, within six
months of after date of death.
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iv.
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The
Basic Salary shall be reviewed by the Compensation Committee of the
Company’s Board of Directors on an annual basis and may be revised upon
mutual agreement between Company and
Executive.
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D&O
Insurance. The Company shall cover the Executive under
directors and officers liability insurance during and, while potential liability
exists, after the Term in the same amount and to the same extent as the Company
covers its other directors and officers.
12. EXPENSES
During the Employment Period, the Employer shall reimburse the Executive for all
reasonable business expenses in accordance with applicable policies and
procedures then in force, including, without limitation, travel, lodging, and
other expenses incurred by him.
13. OTHER
BENEFITS During the Employment Period, the Executive shall be eligible to
participate at no cost or expenses to him in welfare planes and programs, group
life insurance plan, medical and dental insurance plan, and accident and
disability insurance plan (“Benefit Plans”) applicable generally to executives
and/or senior executives of the Employer.
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(i)
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receive
his full Base Salary and
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(ii)
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participate
in the Benefit Plans.
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(i)
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the
Company shall pay the Executive’s estate or designated beneficiary, as
soon a practicable after the Date of Termination, any Base Salary
installments due in the month of death and for a period of 6 months
thereafter and any reimbursable expenses, accrued or owing the Executive
hereunder as of the Date of
Termination.
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c.
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(i)
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the
Company shall pay the Executive, as soon as practicable after the Date of
Termination, any base salary for 6 months and any reimbursable expenses,
accrued or owing the Executive hereunder for services as of the Date of
Termination
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(i)
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the
Employer shall pay the Executive, after the Date of Termination, any base
Salary and any reimbursable expenses accrued or owing the Executive
hereunder for services as of the Date of Termination. For the purpose of
this agreement a change of control in company shall not be deemed
employers termination for Cause in reference to the
Executive.
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(i)
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the
Company shall pay the Executive, as soon as practicable after the Date of
Termination, any base salary for 6 months and any reimbursable expenses,
accrued or owing the Executive hereunder for services as of the Date of
Termination.
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(i)
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Subject
to Company policy, a vacation each year of four weeks, which may accrue
from year to year but not to exceed twelve (12) weeks total,
and
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(ii)
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Ten
additional holidays customarily observed by companies similar to Employer,
and during such time, Executive’s compensation shall be paid in full;
provided, however, that is Executive does not take all or a portion of the
vacation time to which he is entitled hereunder, Employer shall compensate
Executive therefore on such terms as Employer and Executive may mutually
agree.
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(iii)
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Executive
shall be entitled to participate in all pension, profit sharing and
similar plans of Employer, on no less favorable terms and conditions as
are available to the executives of
Employer.
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(i)
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upon
the Executive’s conviction for the commission of a felony (or a plea of
nolo contender thereto);
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(ii)
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any
act or omission involving theft or fraud with respect to the Company, its
subsidiaries, customers or
suppliers;
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(iii)
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reporting
to work under the influence of alcohol or illegal drugs or the use of
illegal drugs causing causing public disgrace to the
Company;
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(iv)
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willful
misconduct or gross negligence with respect to the Company;
and
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(v)
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failure
by the Executive substantially to perform his duties hereunder (other than
any such failure resulting from the Executives incapacity due to
Disability).
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For
purposes hereof, no act or failure to act by the Executive shall be considered
‘willful’ unless done or omitted to be done by him not in good faith or without
reasonable belief that his action or omission was in the best interest of the
Employer or contrary to a formal resolution of the Board or
Manager. Cause shall not exist unless and until there shall have been
delivered to the Executive a copy of a resolution, duly adopted by the
Affirmative vote of not less than two thirds of the entire membership of the
Board at a meeting of the Board held for the purpose thereof and an opportunity
for him, together with his counsel, to be heard before the Board at such
meeting, finding that in the good faith option of the Board, the Executive was
guilty of conduct set forth above in clause (ii) of this Paragraph and
specifying the particulars thereof in detail. The Date of Termination
shall be the date specified in the Notice of Termination; provided, however,
that, in the case of a termination for Cause under (ii) above, the Date of
Termination shall not be earlier tan 30 days after delivery of the Notice of
Termination. Anything herein to the contrary notwithstanding, if,
following a termination of the Executive’s employment b the Employer for Cause
based upon the conviction of the Executive for a felony, such conviction is
overturned in a final determination on appeal, the Executive shall be entitled
to the payments and the economic equivalent of the benefits the Executive would
have received if his employment had been terminated by the Employer without
Cause.
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(i)
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an
assignment to the Executive of any duties materially inconsistent with his
positions, duties, responsibilities and status with the Employer or any
materials limitation of the powers of the Executive not consistent with
the powers of the Executive contemplated by Paragraph 2
hereof;
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(ii)
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any
removal of the Executive from, or any failure to re-elect the Executive
to, the positions specified in the Agreement; or a reduction in the
Executives Base Salary from time to
time.
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(iii)
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the
failure of the Company to continue in effect any Benefit Plan that was in
effect on the date hereof or provide the Executive with Equivalent
benefits;
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(iv)
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any
other material breach by the Company of this Agreement;
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In the
event of a termination for Cause, the Date of Termination shall be the date
specified in the Notice of Termination, which shall be no more than 30 days
after the Notice of Termination.
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(i)
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Executive
recognizes that Executive’s position with the Company require Considerable
responsibility and trust, and, in reliance on Executive’s loyalty, the
Company may entrust Executive with highly sensitive confidential,
restricted and proprietary information Involving Trade Secrets and
Confidential Information.
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(ii)
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For
purposes of this Agreement, a “Trade Secret” is any scientific or
technical information, design, process, procedure, formula or improvement
that is valuable and not generally known to competitors of the Company.
“Confidential Information” is any data or information, other than trade
Secrets, that is important, competitively sensitive, and not generally
know by the public, including, but not limited to, the Company’s business
plans, business prospects, training manuals, product development plans,
bidding and pricing procedures, market strategies, internal performance
statistics, financial data, confidential personnel information concerning
Executives of the Company, supplier data, operational or administrative
plans, policy manuals, and terms and conditions of contracts and
agreements. The term “Trade Secret” and “Confidential Information” shall
not apply to information which is (i) already in Executive’s possession
(unless such information was used in connection with formulating the
Company’s business plans, obtained by Executive from the Company or was
obtained by Executive in the course of Executive’s employment by the
Company), or (ii) required to be disclosed by any applicable
law.
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(iii)
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Except
as required to perform Executive’s duties hereunder, executive will not
use or disclose any Trade Secrets or Confidential Information of the
Company during employment, at any time after termination of employment and
prior to such time as they cease to be Trade Secrets or Confidential
Information.
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(iv)
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Upon
the request of the Company and, in any event, upon the termination of
employment hereunder, Executive will surrender to the company all
memoranda, notes, records, plans, manuals or other documents pertaining to
the Company’s business or Executive’s employment ( including all copies
thereof). Executive will also leave with the Company all materials
involving Trade Secrets or Confidential Information of the company. All
such information and materials, whether or not made or developed by
Executive, shall be the sole and exclusive property of the Company, and
Executive hereby assigns to the company all of Executive’s right, title
and interesting and to any and all of such information and
materials.
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Executive
herby covenants and agrees that for a period commencing on the date hereof and
ending twelve (12) months after ceasing employment with the Employer for any
reason, he shall not:
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(v)
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Compete
in any way with the employer without the Employer’s prior written
consent.
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(vi)
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Interfere
with the relationship of the Employer and any executive, agent or
representative.
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(vii)
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Divert,
or attempt to cause the diversion from the employer, any business with
which the Employer has been actively engaged in during any part of the
past two (2) year period preceding the Termination Date, nor interfere
with relationships of the Employer with policyholders, dealers,
distributors, marketers, sources of supply, or
customers.
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Specific
Enforcement. Executive specifically acknowledges and agrees that the
restrictions set forth herein are reasonable and necessary to protect the
legitimate interest of the Company and that the Employer would not have entered
into this Agreement in the absence of such restrictions. Executive further
acknowledges and agrees that any violation of the provisions hereof will result
in irreparable injury to the Employer, that the remedy at law for any violation
of threatened violation will be inadequate and that in the event of any such
breach, the Employer, in addition to any other remedies or damages available to
I at law or in equity, shall be entitled to temporary injunctive relief before
trial from any court of competent jurisdiction as a matter of course, and to
permanent injunctive relief without the necessity of proving actual
damages.
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(i)
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Employer
and Executive herby agree that any Inventions made, developed, perfected,
devised, conceived or reduced to practice by Executive during the term of
this agreement are the sole property of Executive except those Inventions
which are contemplated and developed on behalf of the company, or
pharmaceutical as defined by the Food and Drug Administration, medical
foods as defined by the Food and Drug Administration or a dietary
supplement in accordance with the provisions of the so-called Dietary
Supplement Health and Education Act of 1994, of which are not covered by
the Dietary Supplement Health and Education Act of 1994 and are
to be ingested, inhaled, or applied to the skin as a cream or other
topical, however specifically excluding inventions which to be injected
into the body of an animal, including a human being, which shall be the
sole property of Employer, subject only to the rights granted Executive by
Employer in accordance with this
Agreement.
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(ii)
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Any
patent application filed by Executive for Inventions which are the
property of Employer pursuant to this paragraph shall be filed in the name
of Executive, and not later than the date on which the said patent
application is approved and letter patent are issued, Executive shall
cause an assignment of the said patent to be filed with the United States
patent and Trademark Office showing an unconditional assignment of the
said patent to Employer.
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Employer
shall indemnify and hold Executive harmless from and against any and all
liabilities, losses, damages, costs and expenses including, but not limited to,
court costs and attorneys’ fee which Executive may incur as a result of any
contention, liability, obligation, claim or cause of action (including, but not
limited to, claims for indemnity or contribution) brought against Executive
seeking damages or injunctive relief as a result of any set of
Executive performed within the scope of his employment
hereunder. Employer covenants that:
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(i)
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it
will advance to Executive all reasonable sums of money which executive
shall become liable to pay by reason of any of the foregoing, including
but not limited to, such sums as may be required for bonds and legal fees
and expenses,
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(ii)
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it
will make such payment to Executive promptly as such fees and expenses are
incurred, and
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(iii)
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it
will pay when due any damages
awarded.
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A.
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GOVERNING
LAW AND JURISDICTION. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California. Each of the
parties hereto consents to such jurisdiction for the enforcement of this
Agreement and matters pertaining to the transaction and activities
contemplated herby.
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Party
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Address
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Employer:
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0000
Xxxxxxx Xxxx Xxxxxx, Xxxxx 000
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Xxx
Xxxxxxx, Xxxxxxxxxx 00000
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Executive:
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Xxxx
Xxxxxxxx
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0000
Xxxxxxx Xxxxxx #00
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Xxx
Xxxxxxx, XX 00000
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All such
notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; five (5) business days
after deposit in any United States Post Office in the Continental United States,
postage prepaid, if mailed; when answered back, if telefaxed; and when receipt
is acknowledged or confirmed, if telecopied.
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(iii)
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he
has the power and authority to enter into this Agreement,
and
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(iv)
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the
execution, delivery and performance of this Agreement does not and will
not violate the terms of any agreement or other instruments to which he is
a party or by which he is bound. Employer further represents and warrants
to Executive that this Agreement has been duly authorized by all necessary
corporate action and has been duly and validly executed and delivered by
Employer and constitutes the valid and binding obligation of Employer,
enforceable against Employer in accordance with its
terms.
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G.
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NUMBER
AND GENDER. Whenever the singular number is used in this
Agreement and when required by context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders and
the word “person” shall include corporation, firm partnership or other
form of association.
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H.
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FAILURE
TO OBJECT NOT A WAIVER. The failure of either Party to
this Agreement to object to or to take affirmative action with respect to
any conduct of the other which is in violation of the terms of
this Agreement, shall not be construed as a waiver of the
violation or breach or of future violation, breach or wrongful
conduct.
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K.
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FUTHER
ASSURANCE. Form time each party will execute and deliver such further
instruments and will take such other action as any other Party may
reasonably request in order to discharge and perform their obligations and
agreements hereunder and to give effect to the intentions expressed in
this Agreement.
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26. If
any provision of this agreement is held invalid or unenforceable, the remainder
of this agreement shall nevertheless remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
Executed
by the parties as of the day and year first above written.
EMPLOYER
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2/8/2011
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By |
/s/ Xxxxxxx Xxxxx
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Xxxxxxx
Xxxxx MD, CEO
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| EXECUTIVE | |||||
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| Dated: | 2/8/2011 | By | /s/ Xxxx Xxxxxxxx | ||
| Xxxx Xxxxxxxx | |||||
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