EXHIBIT 10.24
EXECUTION COPY
XXXX X. XXXXXXXXXXX EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November , 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 Xxxx X. Xxxxxxxxxxx, M.D., an individual residing at 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxx Xxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ the Employee as Vice President
of Clinical 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.
3. Duties and Services. During the Term, the Employee shall
serve the Company as Vice President of Clinical Affairs which duties shall
include without limitation: (a) overseeing the design and conduct of the
Company's clinical programs, (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 Fifty Five Thousand Dollars
($155,000.00); and
(b) From January 1, 1998 until the end of the Term,
the annual salary shall be the sum of (i) One Hundred Fifty Five Thousand
Dollars ($ 155,000.00), (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
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,
such expenses shall be consistent with the Company's travel policies; and
(b) Any monthly parking fees which the Employee
incurs in parking his car at or near his office; provided, that, notwithstanding
anything herein to the contrary, in no event shall the Company be required
under this Section 7(b) to reimburse the Employee for any amounts, which in the
aggregate for any month, would exceed Three Hundred Dollars ($300.00).
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8. Bonuses. The Employee shall receive a performance bonus
(the "Bonus") which shall be equal to twenty five percent (25%) of the then
prevailing Salary, 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.
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. "
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 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
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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 six (6) monthly installments; 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
Employee shall obtain employment during the six (6) months immediately
succeeding the Termination Date, then the remaining monthly installments which
the Company shall pay the Employee shall be reduced by the monthly compensation
received by the Employee from his successor employer, except that, in no event
shall such amount be less than zero.
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, the Company shall continue to pay the Employee the compensation
provided in Section 1 (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, unless prior to the end of such
period, the Employee is able to perform in all material respects the services
required to be performed under this Agreement, in which event this Agreement
shall continue in full force and effect to the end of the Term as if the
Employee had not been incapacitated or disabled. If the Employee shall be
unable to resume the performance in all material respects of the services
required to be performed under this Agreement for a period of six months from
the date of such incapacitation or disability, this Agreement shall be deemed
terminated at the end of such six-month period.
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.
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
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threatened breach of such sections and to secure their enforcement.
D. MISCELLANEOUS
1. Assignabilitv. 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:
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:
Xx. Xxxx Xxxxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telephone: 000-000-0000
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
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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-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
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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 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 10 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO
TO WAIVER OF ITS OR THEIR 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
XXXX X. XXXXXXXXXXX, M.D.
(Signature of Xxxx X. Xxxxxxxxxxx, M.D. appears here)
November 20, 1996
