EXHIBIT 10.25
EXECUTION COPY
XXXXX X XXXXXXXXX EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 25, 1996 between Discovery
Laboratories, Inc., a Delaware corporation with its principal place of BUSINESS
AT 000 XXXXXXX Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"),
and Xxxxx X. Xxxxxxxxx, an individual, residing at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ the Employee as Vice President
of Regulatory Affairs of the Company commencing on a date which shall be
mutually agreed to between the Company and the Employee (the "Employment
Date"), on the terms and conditions herein provided; and
WHEREAS, the Employee desires to accept such employment on the terms
and conditions herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and the
agreements hereinafter set forth, and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:
A. EMPLOYMENT
1. Employment. The Company hereby employs the Employee, and
the Employee hereby accepts such employment, upon the terms and conditions set
forth in this Agreement.
2 Term. The term of the Employee's employment under this
Agreement (the "Base Term") shall commence on the Employment Date, and, unless
terminated earlier as provided in this Agreement, shall continue up to and
including the day immediately preceding the third anniversary date of the
Employment Date; provided that, the Employee and the Company may by mutual
agreement agree to extend this Agreement for an additional three (3) year term
(each~such term, a "Renewal Term" and together with the Base Term and all other
Renewal Terms, the "Term") upon written notice to the Company no less than
ninety (90) days prior to the expiration of the Term.
3. Duties and Services. During the Term, the Employee shall
serve the Company as Vice President of Regulatory Affairs which duties shall
include without limitation: (a) acting as the Company's liaison with the United
States Food and Drug Administration in connection with any and all of the
projects of the Company, (b) devoting to the affairs of the Company all of the
Employee's business time and attention; (c) rendering services to the Company
in a manner reasonably satisfactory to the Company; (d) using best efforts to
promote the interests of the Company and (e) performing no acts contrary to
such interests.
4. Salary. For all services rendered by the Employee, the
Company shall pay the Employee an annual salary ( the "Salary") in the
following amounts:
(a) From the Employment Date to December 31, 1997, an
annual salary in the amount equal to One Hundred Forty Thousand Seven Hundred
Eighty Five Dollars ($140,785.00); and
(b) From January 1, 1998 until the end ~the Term, the
annual salary shall be the sum of (i) One Hundred Forty Thousand Seven Hundred
Eighty Five Dollars ($140,785.00), (ii) any adjustments for cost of living
expenses using the percentage difference between the applicable year's
"Consumer Price Index" published by the Bureau of Labor Statistics of the U.S.
Department of Labor, All Items, New York, N.Y.-Northeastern, N.J., all urban
consumers (presently denominated "CPI-U") (the "Price Index") and the Price
Index for the preceding year, and (iii) an increase in Salary comparable to any
increases in compensation received by all other officers of similar position
and responsibilities in the Company solely in connection with the general
compensation policies of the Company. For the avoidance of doubt, any increase
in the compensation of any other officer of the Company arising out of an
agreement with the Company shall not entitle the Employee to a similar increase
pursuant to the terms of this Section (A)(4)(b)(iii)
The salary shall be payable in accordance with the Company's
general payroll practices.
5. Vacation. The Employee shall be entitled each year to three
(3) weeks of paid vacations consistent with the policies of the Company.
6. Other benefits. During the Term, the Employee shall be
entitled to the following benefits:
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(a) Term life insurance, which DEATH BENEFITS SHALL
BE IN AN AMOUNT equal to twice the then prevailing Salary of the Employee; and
(b) The Employee shall participate in an equitable
manner, and to receive benefits under the Company's medical and dental
insurance plans (if any) now or hereafter made available by the Company to its
employees generally.
7. Reimbursement. The Company shall reimburse the Employee for
the following costs:
(a) All business and traveling EXPENSES REASONABLY
INCURRED BY THE Employee in connection with the performance of the Employee's
services for the Company upon presentation of supporting documentation and
prior approval by the Chief Executive Officer of the Company; provided that (i)
such expenses shall be consistent with the Company's travel policies, (ii) the
Employee shall reasonably utilize the least expensive mode of transportation in
traveling on behalf of the Company and (iii) the Employee shall share hotel
rooms, if necessary, in traveling on behalf of the Company;
(b) All reasonable moving expenses and costs in
connection with the Employee's relocation of his principal residence to the New
York City metropolitan area; provided that, prior to such move, the Employee
shall submit to the Company three (3) estimates for moving expenses and costs,
and the Company may choose either (x) one of the three (3) estimates provided
by the Employee or (y) an estimate obtained by it from a reputable interstate
mover that complies with Interstate Commerce Commission (ICC) regulations, and
the Employee shall use the estimate chosen by the Company. Furthermore, the
Employee shall complete moving his principal residence to the New York City
metropolitan area within six (6) months from the date of this Agreement,
provided that such time may be extended an additional two (2) months upon
mutual consent of the parties; and
(c) All reasonable costs and expenses in connection
with the sale of the Employee's principal residence including realtor fees and
commissions, legal, bank fees and all applicable federal, state and municipal
taxes; provided that, notwithstanding anything herein to the contrary, in no
event shall the Company pay to the Employee any amounts under this Section
(A)(7)(c) which in the aggregate shall exceed Twenty Thousand Dollars
($20,000.00).
8. Bonuses. The Employee shall receive a performance bonus
(the "Bonus") at the end of each calendar year to be determined by the Chief
Executive Officer of the Company; provided that, (a) in no event shall the
Bonus
be less than five percent (5%) or greater than twenty percent (20%) of the then
prevailing Salary, and (b) the 1996 and 1997 Bonus shall be prorated for the
number of days worked by the Employee in 1996 and 1997, and shall be paid to
the Employee on December 31, 1997.
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9. Stock Options. So long as this Agreement shall be in full
force and effect, the Company shall agree to sell to the Employee One Hundred
Thousand (100,000) shares of common stock of the Company at an exercise price
of $0.20 per share; provided that, the stock options shall vest on the dates
set forth in the following schedule:
(a) Twenty Five Thousand (25,000) shares shall vest
upon execution and delivery of this Agreement by the parties hereto;
(b) Twenty Five Thousand (25,000) shares shall vest
upon the first anniversary date of the Employment Date,
(c) Twenty Five Thousand (25,000) shares shall vest
upon the second anniversary date of the Employment Date; and
(d) Twenty Five Thousand (25,000) shares shall vest
upon the day immediately preceding the third anniversary date of the Employment
Date.
The Employee shall be permitted to exercise such stock options in accordance
with the Discovery Laboratories, Inc. Stock Option Agreement executed and
delivered by the Company in favor of the Employee, a form of which is attached
hereto as Exhibit B (the "Stock Option Agreement"). For the avoidance of doubt,
in the event that the terms set forth in this Section (A)(9) are inconsistent
with the terms of the Stock Option Agreement, the terms in the Stock Option
Agreement shall govern.
B. TERMINATION OF EMPLOYMENT
1. Termination. The Company may terminate the Employee's
employment and the term of this Agreement, with or without cause, by thirty
(30) days' prior written notice to the Employee; provided however, that the
Company may terminate without any prior notice to the Employee in the event the
Employee fails to perform the Employee's duties and responsibilities in any
material respect or commits any material breach of this Agreement or in the
event the Employee's employment is terminated for cause. The date which the
Company shall terminate the Employee's employment and the term of this
Agreement hereinafter referred to as the "Termination Date." For the purposes
of this Section (B)(1), the term "for cause" shall mean a cause which would
legally justify the Company to terminate the Employee's employment and the term
of this Agreement.
The Employee may terminate the Employee's employment and the
term of this Agreement, with or without cause, by thirty (30) days' prior
written notice to the Company; provided however, that the Employee may
terminate without any prior notice to the Company in
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the event the Company fails to perform its duties in any material respect or
commits any material breach of THIS AGREEMENT.
In the event that the Company shall terminate the Employee's
employment and the term of this Agreement without cause, the Company shall pay
to the Employee an amount equal to one-half of the then prevailing annual
Salary of the Employee, payable in two (2) consecutive quarterly installments,
the first installment which shall be payable upon the Termination Date and the
second installment shall be payable on the third monthly anniversary date
thereafter (each such quarterly period, hereinafter referred to as a
"Compensation Period"); provided that, (a) the Employee shall not make any
statements to any other person which shall be contrary to the Company's
interests and the Employee shall not have breached any covenant, term or
provision of this Agreement or the Non-Competition Agreement (as such term is
hereinafter defined), and (b) in the event that the Employee shall obtain
employment during the six (6) months immediately succeeding the Termination
Date, then (i) any remaining installment which the Company shall pay to the
Employee shall be reduced by the compensation received by the Employee from his
successor employer during such Compensation Period, except that, in no event
shall such amount be less than zero, and (ii) the Employee shall return to the
Company an- amount equal to the compensation received by the Employee from his
successor employer for any remaining days in any Compensation Period for which
the Company has already paid to the Employee the installment for such
Compensation Period, provided that, in no event shall such amount be greater
than the pro rata portion of the installment received by the Employee from the
Company during such Compensation Period in accordance with this Section (B)(l).
2. Disability of Employee. If the Employee is incapacitated or
disabled during the Term by accident, sickness or otherwise so as to render the
Employee physically or mentally incapable of performing in all material
respects the services required to be performed by the Employee under this
Agreement for any of the following periods: (a) ninety (90) consecutive days,
or (b) ninety (90) days within any six (6) month period (the "Disability
Period"), then the term of this Agreement shall terminate on the last day of
such Disability Period. In the event that this Agreement is terminated pursuant
to this Section (B)(2), the Company shall continue to pay the Employee the
compensation provided in Section (A)(4) for the shorter of (i) the remainder of
the Term or (ii) the period ending at the end of the month that is six months
from the date of such incapacitation or disability.
3. Death of Employee. If the Employee dies during the Term,
this Agreement shall terminate as of the date of the Employee's death. In the
event of such termination, the Employee's estate shall be entitled to receive
the Employee's regular salary pursuant to Section (A)(4) through the last day
of the month in which the Employee's death occurs.
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C. RESTRICTIVE COVENANTS OF THE EMPLOYEE
1. Confidentiality. Non-Solicitation. Non-Competition and
Patents and Copyrights. As a condition precedent to the Company's obligations
under this Agreement, the Employee shall execute and deliver to the Company an
original of the Proprietary Information and Inventions, Non-Solicitation and
Non-Competition Agreement (the "Non-Competition Agreement"), in substantially
the form and substance set forth in Exhibit A hereto. The Employee agrees to
abide by the terms and conditions of the Non-Competition Agreement. Any breach
of the Non-Competition Agreement shall be deemed a material breach of this
Agreement.
2. Injunctive Relief. The Employee acknowledges that a breach
or threatened breach of the Non-Competition Agreement will cause the Company
irreparable injury and damage. The Employee therefore agrees that, in addition
to any other remedies that may be available to the Company, the Company shall
be entitled to an injunction and/or other equitable relief (without the
requirement of posting a bond or other security) to prevent a breach or
threatened breach of such sections and to secure their enforcement.
D. MISCELLANEOUS
1. Assignability. This Agreement is personal and
non-assignable by the Employee. It shall inure to the benefit of any
corporation or other entity with or into which the Company shall merge or
consolidate or to which the Company shall lease or sell all or substantially
all of its assets.
2. Representations. The Employee represents and warrants to
the Company that the Employee is not now under any obligation to any person,
firm or corporation, and has no other interest, which is inconsistent or in
conflict with this Agreement or the Non-Competition Agreement, or which would
prevent, limit or impair, in any way, the Employee's performance of any of the
covenants or duties hereinabove set forth.
3. Notice. All notices and other communication hereunder shall
be in writing. All notices and communication hereunder shall be deemed to be
given on the date thereof if sent by personal delivery with receipt
acknowledged or by facsimile, or five (5) business days after if sent by
certified mail, return receipt requested. All notices or communications shall be
given to the respective parties at the following addresses, or such other
addresses as the parties may designate in writing, after giving notice in
accordance with this Section (D)(3):
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Notice to the Company, to:
Discovery Laboratories, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxx
Chief Executive Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice to the Employee, to:
Xxxxx X. Xxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 301 -663-3218
Facsimile:
4. Severability. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of any other provision. If any
provision of this Agreement is finally held to be invalid or unenforceable by a
court of competent jurisdiction, such provision shall be appropriately limited
and reduced (in time, duration, geographical scope, activity or subject) and
given effect to the extent it may be enforceable in accordance with applicable
law.
5. Headings. The headings to the sections of this Agreement
are for convenience of reference only and shall not be given any effect in the
construction or interpretation of this Agreement.
6. Governing Law. This Agreement has been executed and
delivered in the State of New York and shall be interpreted, enforced and
governed by the laws of the State of New York (without regard for the conflict
of laws principles applied by the Courts of the State of New York).
7. Jurisdiction. The Employee hereby irrevocably consents that
any legal action or proceeding against him or any of his assets with respect to
this Agreement or the Non-
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Competition Agreement may be brought in any jurisdiction where the Employee or
any of his assets may be found, or in any court of the State of New York or any
Federal court of the United States of America located in New York, New York,
United States of America, or both, as the Company may elect, and by execution
and delivery of this Agreement and the Non-Competition Agreement, the Employee
hereby irrevocably submits to and accepts with regard to any such action or
proceeding, for himself and in respect of his assets, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Company may
serve process in any manner permitted by applicable law or to bring any legal
action or proceeding or to obtain execution of judgment in any jurisdiction.
The Employee further agrees that final judgment against the Employee in any
action or proceeding in connection with this Agreement shall be conclusive and
may be enforced in any other jurisdiction within or outside the United States
of America by suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the fact and the amount of the Employee's
indebtedness. The Employee hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which the Employee may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the Non-Competition Agreement brought
in the State of New York, and hereby further irrevocably waives any claim that
any such suit, action or proceeding brought in the State of New York has been
brought in an inconvenient forum.
8. Expenses. If a party to this Agreement shall breach or
threaten to breach this Agreement, the other party agrees to pay on demand all
of the non-breaching party's costs of enforcing this Agreement, including, but
not limited to, reasonable attorneys' fees and expenses and court costs,
provided that, in each case, the party alleging such breach shall prevail in its
claim.
9. Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous oral and written agreements,
understandings, negotiations and discussions. This Agreement may not be amended
orally, nor shall any purported oral amendment or modification (even if
accompanied by partial or complete performance in accordance therewith) be of
any legal force or effect or constitute an amendment or modification of this
Agreement, but rather this Agreement may be amended or modified only by an
agreement in writing signed by the parties hereto.
10. WAIVER OF JURY TRIAL THE COMPANY AND THE EMPLOYEE TO THE
EXTENT THEY MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER
OR WITH RESPECT TO THIS AGREEMENT OR THE NON-COMPETITION AGREEMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE. TO
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THE EXTENT THEY MAY LEGALLY DO SO, THE COMPANY AND THE EMPLOYEE HEREBY AGREE
THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION (D)(10) WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS
RIGHT TO TRIAL BY JURY.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Agreement as of the date first above written.
DISCOVERY LABORATORIES, INC.
By: (Signature of Xxxxx X. Xxx, M.D. appears here)
Name: Xxxxx X. Xxx, M.D.
Title: Chief Executive Officer
XXXXX X. XXXXXXXXX
(Signature of Xxxxx X. Xxxxxxxxx appears here)
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