Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this ____ day of December 1995, by and
between IMRE Corporation. a Delaware corporation having its principal office at
000 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Company") and
Xxx X. Xxxxxxxx, M.D., Ph.D. (the "Employee").
WHEREAS, the Company desires to employ the Employee in an executive
capacity as Chief Executive Officer and Vice Chairman on the terms and
conditions set forth herein; and the Employee is willing to accept and undertake
such employment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the Company and the Employee agree as follows:
ARTICLE 1
EMPLOYMENT; TERM; DUTIES
1.1 EMPLOYMENT. Upon the terms and conditions hereinafter set forth,
the Company hereby employs the Employee, and the Employee hereby accepts
employment, as Chief Executive Officer of the Company.
1.2 TERM. Unless sooner terminated as provided in Article 5 hereof,
the Employee's employment hereunder shall be for a term commencing on
December 11, 1995 and ending on December 31, 2000. The actual term of
employment hereunder, giving effect to any early termination of employment under
Article 5 hereof, is referred to as the "Term."
1.3 DUTIES. During the Term, the Employee shall perform such
executive duties for the Company and for its subsidiaries, consistent with his
position hereunder and as typically associated with the duties of a Chief
Executive Officer of a publicly-held corporation, as reasonably may be assigned
to him from time to time by the Board of Directors of the Company. Except as
contemplated by Section 1.5, the Employee shall devote his entire business time,
attention and energies to the performance of his duties hereunder. Without
limiting his responsibilities to the Board of Directors of the Company as a
whole, there shall be no subordination of the Employee's authority hereunder to
a Chairman of the Board or to any other individual person.
1.4 EXCLUSIVE AGREEMENT. The Employee represents and warrants to the
Company that he is not a party to any agreement or arrangement, whether written
or oral, in effect which would prevent the Employee from rendering the services
contemplated hereunder to the Company during the Term.
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1.5 OTHER ACTIVITY. Notwithstanding the foregoing, but subject to
his fiduciary duties to the Company under applicable law, the Company
acknowledges and understands that Employee may serve as a director of other
companies not in competition with the Company in the field of research,
development, manufacture or sales of Protein A Immunoadsorbtion Columns, and may
continue to serve as a consultant to Cytel Corporation; provided, however, that
the performance of such services shall not restrict or limit in any manner the
Employee's ability to perform his duties hereunder; and further provided, that
the Employee agrees, for the period before the Company relocates its offices to
the San Diego metropolitan area, to spend as much time in Seattle, Washington as
reasonably is required for him to perform his duties hereunder.
1.6 INSURANCE. The Company shall obtain, and shall use its
commercially reasonable best efforts to maintain during the Term, Director's and
Officer's Insurance and Product Liability Insurance policies, with full defense
coverage, of at least $3,000,000 and $16,000,000, respectively, with regard to
all actions undertaken by the Employee in his capacity as an officer, director
and employee of the Company. In addition, the Company shall research and use
its commercially reasonable best efforts to obtain and maintain during the Term
additional Director's and Officer's Insurance coverage for the Employee in the
amount of $2,000,000.
ARTICLE 2
COMPENSATION
2.1 BASE SALARY. For all services rendered by the Employee hereunder
and in consideration of all covenants and conditions undertaken by him pursuant
to this Agreement, the Company shall pay the Employee an annual base salary
("Base Salary") of $240,000 per year in equal semi-monthly installments,
retroactive to December 11, 1995. Each year during the Term, the Board of
Directors of the Company shall review the Base Salary with a view to determining
whether it would be appropriate to increase such Base Salary. The annual base
salary payable to the Employee hereunder, as it may be so increased, thereafter
shall constitute the Base Salary.
If the first or last month of the Term is not a full calendar month,
then any calculation of Base Salary for such period shall be prorated for the
number of days in such months during which the Employee was employed.
2.2 BONUSES.
(a) In addition to the Base Salary, the Company may pay the
Employee a cash bonus (the "Bonus Amount") equal to an amount up to 25% of the
Base Salary with respect to a fiscal year within 90 days after the end of such
fiscal
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year. The Bonus Amount, if any, shall be based on the performance of the
Employee during a fiscal year, as evaluated by the Board of Directors in its
sole discretion. It is acknowledged and agreed that, while no such Bonus Amount
shall be withheld unreasonably, the determination and the payment of the Bonus
Amount to the Employee shall be at the sole discretion of the Board of Directors
of the Company which may consider, among other matters, the financial condition
of the Company at the time. In exercising its discretion pursuant to this
subsection, the Board of Directors shall act in a manner at least as favorable
to the Employee as governs the award of bonuses to other executive officers and
key employees of the Company.
(b) In addition to the Bonus Amount, if any, the Company shall
pay the employee a one-time sign-on bonus payable as follows:
(i) $50,000 on the closing of an approximately $1 million
bridge financing, currently scheduled to occur in December 1995;
(ii) $50,000 on the closing of an anticipated equity
financing (the "Equity Financing"), scheduled to occur in the first calendar
quarter of 1996 and expected to raise gross proceeds of approximately $6 million
(the "Equity Financing Bonus"); and
(iii) $85,000 on December 31, 1996 (the "1996 Signing
Bonus").
(c) In the event of a sale by the Company of all, or
substantially all, of its assets prior to the conversion or redemption of any
classes of outstanding preferred stock of the Company issued in connection with
any equity financing after the date hereof, and provided that the Employee prior
to such time has exercised any and all stock options provided under Section
4.1(a) hereof exercisable by such Employee, the Company shall pay Employee on
the consummation of such sale, a bonus in an amount equal to 8% of the net
proceeds payable to the holders of the preferred stock of the Company of such
sale.
2.3 STOCK OPTIONS. The Company shall issue to the Employee options
to purchase shares of the Company's common stock (the "Common Stock") as
provided in Article 4 of this Agreement.
2.4 DEDUCTIONS. The Company shall deduct from the compensation
described in Sections 2.1 and 2.2 any Federal, state or city withholding taxes,
social security contributions and any other amounts which may be required to be
deducted or withheld by the Company pursuant to any federal, state or city laws,
rules or regulations.
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2.5 DISABILITY ADJUSTMENTS. Any compensation otherwise payable to
the Employee pursuant to Section 2.1 in respect of any period during which the
Employee is disabled (as contemplated in Section 5.1) shall be reduced by any
amounts paid to the Employee for loss of earnings or the like under any
disability insurance plan or policy, the premiums for which are paid for in
their entirety by the Company.
ARTICLE 3
COMPENSATION
3.1 BENEFITS. During the Term, the Employee shall be entitled to
participate in such compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension plans and
retirements plans as the Company may make available to its other executive
officers, including, specifically, a $1 million term life insurance policy, to
be paid for by the Company, provided that the Employee is insurable at
reasonable rates for a person of his age, with the Employee's family as the
designated beneficiaries thereof. In addition, the Employee shall be entitled
to include his family in the Company's life, health and hospitalization plans
under terms applicable to families of its other executive officers.
3.2 EXPENSES. The Company agrees that the Employee is authorized to
incur reasonable and customary expenses in the performance of his duties
hereunder, including travel and entertainment costs, and upon presentation of
appropriate documentation thereof, the Company promptly shall pay or reimburse
the Employee for such reasonable expenses. It is understood and agreed that the
Company intends to relocate its corporate headquarters to San Diego, California,
and that, until such time as such relocation occurs, the reasonable travel and
lodging expenses of Employee relating to the performance of his duties at the
Company's current corporate headquarters in Seattle, Washington shall be deemed
reimbursable expenses of Employee. In the event that any reimbursement by the
Company of expenses of the Employee hereunder is deducted by the Company, and
results in additional taxes due and payable by the Employee, the Company shall
pay to the Employee an additional sum equal to the amount of such additional tax
liability of the Employee.
3.3 VACATIONS. During each full year of the Term, the Employee shall
be entitled to four (4) weeks of paid vacation, to be taken at times determined
by the Employee which do not unreasonably interfere with the performance of his
duties hereunder.
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ARTICLE 4
STOCK OPTIONS
4.1 STOCK OPTIONS.
(a) Subject to Section 4.1(f) hereof, the Company shall grant to
the Employee, pursuant to an Incentive Stock Option Plan to be adopted by the
Company, ten year incentive stock options (qualified to the extent permitted by
law) to purchase 8% of the Company's Common Stock outstanding on the date
hereof, on a fully diluted basis (after allocation of new options to management,
employees, directors and consultants, and including issued and to-be-issued
warrants) at an exercise price equal to $1.50 per share (the "Options"). The
Options shall contain anti-dilution provisions that prevent dilution of the
percentage of the Company's Common Stock which may be purchased by the Employee
on exercise of the Options as a result of issuance of the Company's securities
subsequent to the occurrence of the Equity Financing by the Company, and all
additional options granted pursuant to such anti-dilution provisions shall be at
the same exercise price as the original Options. Except as provided in clauses
(b), (c) and (d) hereof, 25% of the Options shall vest immediately upon the
granting thereof by the Company and the remainder shall vest ratably and daily
over four (4) years from the date of grant.
(b) In the event of a termination (as described in Article 5),
and except as otherwise provided in Section 4.1(c) and 4.1(d) hereof, all
Options which have not vested as of the Termination Date shall cease vesting and
shall be cancelled as of the Termination Date. All vested Options shall be
cancelled ninety (90) days after the Termination Date, except that, in the event
of a termination pursuant to Section 5.2(b) or 5.4 hereof, the exercise period
for the Options shall be extended, at the election of the Employee in his sole
discretion, for five (5) years following the Termination Date.
(c) Upon the Employee's death or Disability (as defined in
Section 5.1 below), all Options shall vest immediately and all Option rights
provided for under this Agreement shall transfer to the Employee's designated
beneficiary. All Options shall be cancelled ninety (90) days after the
Employee's death or Disability, except that, at the election of the Employee's
designated beneficiary in his or her sole discretion, the exercise period for
the Options shall be extended for five (5) years following the Employee's death
or Disability.
(d) Notwithstanding anything to the contrary in the foregoing,
in the event of a termination of this Agreement in any of the cases identified
in Section 5.2(b) or 5.4 hereof, all Options shall vest immediately upon such
Termination Date. In addition, all Options shall vest immediately upon the
consummation of any merger, consolidation, corporate reorganization or transfer
of
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all or substantially all the assets of the Company, whether or not the Employee
continues as Chief Executive Officer of the surviving entity.
(e) The Company may grant Employee options to purchase the
Company's Common Stock in addition to the Options at such times and on such
terms as may be decided from time to time by the Board of Directors, in its sole
discretion.
(f) Notwithstanding anything herein to the contrary, it is
understood and agreed that any grant of Options pursuant to the Incentive Stock
Option Plan contemplated by this Article 4 is wholly contingent on the Company's
obtaining shareholder approval subsequent to the date hereof for the adoption of
such Incentive Stock Option Plan and to increase the number of shares of
currently authorized Common Stock of the Company to such number so as to allow
for the grant of the Options (the "Shareholder Consent"). The Company shall use
its best efforts to create such Incentive Stock Option Plan within thirty (30)
days of the date hereof and to obtain the adoption and approval of the Board of
Directors therefor as soon as practicable thereafter, and the Company shall
grant the Options to the Employee simultaneously with the closing of the Equity
Financing; provided, however, that if the Equity Financing has not closed by
February 15, 1996, the Options shall be granted promptly upon the written
request of the Employee. The Company shall use its best efforts to obtain the
Shareholder Consent at the 1996 annual meeting of shareholders. In the event
the Company is unable to obtain the Shareholder Consent, the Company shall use
its best efforts to obtain the Shareholder Consent at the next succeeding annual
meeting of shareholders.
ARTICLE 5
DEATH; DISABILITY; TERMINATION
5.1 DEATH; DISABILITY. The Employee's employment hereunder shall
terminate upon his death or, at the election of the Company, by written notice
to the Employee if the Employee becomes Disabled (as such term is hereinafter
defined). In the event of a termination of the Employee's employment for death
or Disability, the Company shall pay the Employee (or his legal representatives,
as the case may be) an amount equal to Employee's Base Salary for one year,
reduced (but not to a negative number) by any amounts paid or to be paid to the
Employee (or his legal representatives, as the case may be) by insurance
provided by the Company pursuant to Section 3.1 hereof.
For the purposes of this Agreement, the Employee shall be deemed to be
"Disabled" or have a "Disability" if as a result of the occurrence of mental or
physical disability during the Term he has been unable to perform his duties
hereunder for six (6) consecutive months or one hundred eighty (180) days in any
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twelve (12) consecutive month period, as determined in good faith by the Board
of Directors of the Company; provided, however, that if the Employee develops a
mental or physical disability during the Term, and it is determined, in the
reasonable professional judgment of an independent, objective and qualified
medical expert in the field of such disability, that the Employee will be unable
to perform his duties hereunder and that such disability will continue for six
(6) consecutive months or one hundred eighty (180) days in any twelve (12)
consecutive month period, then the Company shall be permitted to terminate the
Employee's employment immediately, subject to payment by the Company of the
Employee's Base Salary for the full six (6) months or one hundred eighty (180)
days of such Disability in addition to the termination payment by the Company in
an amount equal to Employee's Base Salary for one year as provided above.
In the event that the employment of the Employee hereunder is
terminated by the Company upon the Employee's death or Disability, the
Employee's family, for a period of two (2) years from the Termination Date,
shall be entitled to maintain coverage under the Company's health and
hospitalization insurance plans on the same terms as existed prior to such
Termination Date, subject to the payment of applicable costs therefor by the
Employee's representatives, and further subject to the policies and provisions
of such insurance carriers and applicable law.
The Employee acknowledges that the payments referred to in this
Section 5.1 constitute the only payments to which the Employee (or his legal
representatives, as the case may be) shall be entitled to receive from the
Company under this Agreement in the event of a termination of his employment for
death or Disability, and that except for such payments, and subject to Section
4.1(c) hereof, the Company shall have no further liability or obligation to his
(or his legal representatives, as the case may be) under this Agreement.
The date of any termination of employment under this Section 5.1 or
Section 5.2, 5.3 or 5.4 is referred to herein as the "Termination Date."
5.2 TERMINATION OF EMPLOYMENT BY EMPLOYEE.
(a) Notwithstanding any provision to the contrary herein, unless
otherwise provided herein or unless otherwise provided by law, the Employee at
any time, upon thirty (30) days' written notice to the Company, may terminate
his employment by the Company hereunder. Except as otherwise provided in
Section 5.2(b) below, the Company shall not be liable to Employee for the
payment of any amount on such termination.
(b) In the event that the Employee terminates his employment
following (i) an uncured material breach of this Agreement by the Company,
(ii) the
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consummation of a merger, consolidation, corporate reorganization or acquisition
of all or substantially all the assets of the Company which does not provide for
the Employee to assume the duties of Chief Executive Officer of the surviving
entity, (iii) the filing by the Company under any state or Federal bankruptcy or
insolvency laws, (iv) the failure by the Company to relocate its corporate
headquarters to the San Diego, California metropolitan area within one (1) year
from the date hereof, (v) the failure of the Company to consummate the Equity
Financing prior to August 1996, (vi) any action by the Company, Board of
Directors or shareholders which would constitute a demotion of the Employee,
whether formal or de facto (E.G., reduction of his authority or incidents of
office), the failure of necessary action to be taken to elect the Employee as
Chief Executive Officer and Vice Chairman of the Company, or any action being
taken to remove him from either or both such positions), or (vii) the failure of
the Company to institute and adopt an Incentive Stock Option Plan and award the
Options to the Employee as provided in Article 4 hereof, or the failure of the
Company to obtain the Shareholder Consent as provided in Section 4.1(f) hereof
within thirty (30) days after the date of the 1997 annual meeting of
shareholders established by the By-laws of the Company, then such termination by
the Employee shall be deemed for all purposes, including for purposes of
severance payments and benefits provided under Section 5.4 hereof, to be a
termination by the Company of the employment of the Employee hereunder without
cause pursuant to Section 5.4. The Company shall have thirty (30) days
following receipt of written notice by the Employee to the Company of the
material breach described in item (i) above, setting forth in reasonable detail
the matters constituting such breach, to cure such breach.
5.3 TERMINATION OF EMPLOYMENT WITH CAUSE. In addition
to any other remedies available to it at law, in equity or as set forth in this
Agreement, the Company shall have the right, upon written notice to the
Employee, to immediately terminate his employment hereunder if the Employee
(a) evidences a pattern of willful breach in any material respect of any
material provision of this Agreement or a pattern of willful violation of any
reasonable policies or orders of the Board of Directors and such pattern of
willful breach or violation does not cease within thirty (30) days after the
Employee's receipt of written notice thereof from the Board of Directors of the
Company setting forth in reasonable detail the matters constituting such
pattern; or (b) has been convicted of a felony.
5.4 TERMINATION OF EMPLOYMENT WITHOUT CAUSE.
(a) Notwithstanding any provision to the contrary herein and
unless otherwise provided by law, the Company, at any time upon thirty (30)
days' written notice to the Employee, in its sole and absolute discretion and
for any or no reason, may terminate the employment of the Employee hereunder
without cause. In such event, the Company shall pay the Employee, within ten
(10) days following
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the Termination Date, an amount equal to the Employee's Base Salary less
(i) $50,000, if the Equity Financing Bonus has been paid prior to the
Termination Date and (ii) $85,000, if the 1996 Signing Bonus has been paid prior
to the Termination Date.
(b) In the event that the employment of the Employee hereunder
is terminated by the Company without cause, all Options shall vest immediately
upon the Termination Date as provided in Section 4.1(d) hereof. If the Options
have not been granted to the Employee as of the Termination Date, the Company
shall pay to the Employee, within ten (10) days following the Termination Date,
an additional payment equal to the Employee's Base Salary, I.E., in addition to
the payment described in Section 5.4(a).
(c) In the event that the employment of the Employee hereunder
is terminated by the Company without cause, the Company, at no cost to the
Employee and for a period of two (2) years from the Termination Date, shall
continue to provide the Employee with at least the same group life, health,
accident, disability and hospitalization insurance plans as were in effect with
respect to the Employee on the date of such termination, and shall continue to
provide coverage for the Employee's family on the same terms as existed prior to
such Termination Date.
(d) The Employee acknowledges that the payments referred to in
Section 5.2 and this Section 5.4 constitute the only payments which the Employee
shall be entitled to receive from the Company under this Agreement in the event
of any termination pursuant to Section 5.2, 5.3 and this Section 5.4, and that
except for such payments and such other obligations as are expressly provided
herein the Company shall have no further liability or obligation to him under
this Agreement.
(e) The Employee shall have no duty to mitigate damages in order
to receive any severance payments and benefits provided in this Section 5.4.
ARTICLE 6
TAG-ALONG RIGHTS
6.1 TAG-ALONG RIGHTS. The Company shall grant the Employee such
rights to participate in sales by principal stockholders or the Company of the
Common Stock, as shall be set forth in that certain Tag-Along Rights Agreement
being executed concurrently herewith.
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ARTICLE 7
REGISTRATION RIGHTS
7.1 REGISTRATION OF EMPLOYEE STOCK.
(a) As soon as practicable after the consummation of the Equity
Financing, but in no event later than September 30, 1996, the Company, upon the
Employee's written request, shall use all reasonable efforts to prepare and file
with the Securities and Exchange Commission a registration statement and such
other documents, if then required, as may be necessary to permit a public
offering and sale of shares of the Common Stock acquired by the Employee prior
to the date hereof or granted to the Employee pursuant to the terms hereof or
granted to the Employee in connection with the Options (the "Registrable Stock")
in compliance with the provisions of the Securities Act of 1933, as amended (the
"Securities Act"). If the Employee does not sell the Registrable Stock within a
reasonable period of time after such registration, the Company need not maintain
the effectiveness of such registration; provided, however, if the Company fails
to maintain the effectiveness of such registration, the Employee thereafter may
re-exercise his rights under this subsection, without limitation, but he may not
do so earlier than ninety (90) days after the applicable registration statement
has become ineffective. If the Employee is no longer employed by the Company at
the time of his request for registration hereunder, the Employee must provide
written notice to the Company that he intends to sell the Registrable Stock
within a reasonable period of time after such registration.
(b) The Company shall have the right to include in any
registration statement filed pursuant to this Section 7.1 other securities of
the Company then proposed to be distributed.
7.2 PIGGYBACK REGISTRATION.
(a) If the Company proposes to register shares of Common Stock
or securities convertible into or exercisable for Common Stock under the
Securities Act (other than pursuant to a registration statement on Form S-4 or
S-8 or any successor form, or filed in connection with an exchange offer or an
offering of securities solely to the existing shareholders or employees of the
Company), solely where such sale will be both for the Company's account and for
the account of a selling shareholder, then the Company shall give written notice
of such proposed filing to the Employee at least ten (10) days before the
anticipated filing date, and such notice shall offer the Employee the
opportunity to register such number of shares of Registrable Stock as the
Employee may request. The Employee shall notify the Company in writing
specifying whether or not it elects to include any Registrable Stock in such
registration statement within five (5) days after delivery of the Company's
notice to the Employee. The Company shall use its best efforts to
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cause the managing underwriter or underwriters of a proposed underwritten
offering to permit the Employee to include such securities in such offering on
the same terms and conditions as any similar securities of the Company included
therein; provided, however, that if the managing underwriter or underwriters of
such offering determines that the total amount or kind of securities which it or
the Company, and any other persons or entities, intend to include in such
offering is such as to materially and adversely affect the success of such
offering, then the amount of Registrable Stock requested to be offered for the
account of the Employee shall be reduced or limited, on a pro rata basis with
the securities of all persons and entities other than the Company participating
in the offering, to the extent required by such managing underwriter.
Notwithstanding the foregoing, if, at any time after giving written notice of
its intention to register Common Stock or other securities convertible into or
exercisable for Common Stock and prior to the effectiveness of the registration
statement filed in connection with such registration, the Company determines for
any reason either not to effect such registration or to delay such registration,
the Company, at its election, by delivery or written notice to the Employee,
(i) in the case of a determination not to effect registration, may relieve
itself of its obligations to register any Registrable Stock in connection with
such registration, or (ii) in the case of determination to delay the
registration, may delay the registration of such Registrable stock for the same
period as the delay in the registration of such other shares of Common Stock or
other securities convertible into or exercisable for Common Stock.
(b) Notwithstanding anything to the contrary herein, if the
Company registers shares of Common Stock or securities convertible into or
exercisable for Common Stock under the Securities Act in an underwritten public
offering and
(i) the Employee owns unregistered Registrable Stock at the
time such underwritten public offering is registered under the Securities Act,
the Employee shall agree to refrain from exercising the registration rights
granted in this Article 7 with respect to such Registrable Stock for such period
of time as the managing underwriter of such underwritten public offering deems
reasonable; or
(ii) the Employee owns Registrable Stock which has been
registered under the Securities Act pursuant to Section 7.1 or this Section 7.2
hereof prior to the time such underwritten public offering is registered under
the Securities Act, the Employee shall agree that it will not sell, distribute,
offer to sell, contract to sell, agree to sell, grant any option to purchase, or
agree to offer, sell or otherwise transfer or dispose of (nor announce any
offer, sale, grant of an option to purchase or otherwise dispose of), directly
or indirectly, any such registered Registrable Stock for such period of time as
the managing underwriter of such underwritten public offering deems reasonable.
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(c) FURNISH INFORMATION. The Employee shall furnish to the
Company such reasonable information regarding the Employee, the Registrable
Stock, and the intended method of disposition of such securities as are required
to effect the registration of Registrable Stock as to which the Employee has
requested registration.
(d) EXPENSES OF REGISTRATION. All expenses incident to the
Company's performance of or compliance with this Article 7 including, without
limitation, all registration and filing fees, fees and expenses of complying
with state securities or blue sky laws, printing expenses and fees and
disbursements of counsel for the Company and of independent public accountants
(including the expense of any special audit), but excluding underwriting
commissions and discounts and the fees and disbursements of counsel for the
Employee, shall be borne by the Company. The Employee shall bear his own pro
rata share (calculated according to the number of his shares as a fraction of
the total number of shares covered by such registration statement) of all
underwriting commissions and discounts incurred in connection with any offering
of Registrable Stock with respect to a registration pursuant to this Article 7,
as well as his expenses if he has counsel separate from counsel for the Company.
The fees and expenses of complying with state blue sky laws shall be borne by
the sellers of securities included in such registration if and to the extent
that the appropriate administrative official of such state requires that such
sellers (rather than the Company) pay such fees and expenses.
(e) INDEMNIFICATION AND CONTRIBUTION. In the event any shares
of Registrable Stock are included in a registration statement under this
Article 7:
(i) To the extent permitted by law, the Company shall
indemnify, defend and hold harmless the Employee, any underwriter (as defined in
the Securities Act), any other person or entity selling securities in such
registration statement, and each director and officer of, and person, if any,
who controls such underwriter or such other person or entity within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; provided, however, that the indemnity agreement
contained in this subsection (i) shall not apply to amounts paid in settlement
of any such loss, claim,
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damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by, or which results from
the bad faith or gross negligence of, the Employee or any underwriter for the
Employee.
(ii) To the extent permitted by law, the Employee shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other person or entity selling securities in such registration statement,
and each director and officer of, and person, if any, who controls such
underwriter or such other person or entity, against any losses, claims, damages
or liabilities (joint or several) to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or such other
person or entity or director, officer or controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs as a result of
written information furnished by the Employee in his capacity as a shareholder
of the Company (as distinguished from information provided by the Employee in
his capacity as an officer or director of the Company) expressly for use in
connection with such registration or results from the bad faith or gross
negligence of the Employee; provided, however, that the Employee's
indemnification obligation hereunder shall be limited to an amount equal to the
net proceeds received by the Employee pursuant to the registration of
Registrable Securities hereunder; and further provided, that the indemnity
agreement contained in this subsection shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Employee, which consent shall
not be unreasonably withheld.
(iii) Promptly after receipt by an indemnified party under
this Section 7.2(e) of notice of the commencement of any action (including any
governmental action), such indemnified party shall deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof wit counsel mutually satisfactory to the parties.
An indemnified party shall have the right to retain its own counsel, however,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party, unless (x) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, (y) the
indemnifying party has failed timely to assume the
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defense and employ counsel, or (z) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all indemnified parties). The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 7.2(e), but the omission so to deliver written notice to the
indemnifying party shall not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 7.2(e).
(iv) If the indemnification provided for in subsection (i)
and (ii) of this Section 7.2(e) is unavailable or insufficient to hold harmless
an indemnified party under such subsection in respect of any losses, claims,
damages or liabilities or action in respect thereof or referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
the Employee on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or actions as well as any
other relevant equitable considerations, including the failure to give the
notice required under such subsections. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the Company on
the one hand, or the Employee, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Employee agree that it would
not be just and equitable if contribution pursuant to this Section 7.2(e)(iv)
were determined by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to above in
this subsection. No person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
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(v) The obligations of the Company and the Employee under
this Section 7.2(e) shall survive the completion of any offering of Registrable
Stock in a registration statement under this Article 7.
ARTICLE 8
INVENTIONS; NON-DISCLOSURE
8.1 INVENTIONS. Subject to the provisions of Section 2870 of the
California Labor Code, all processes, technologies and inventions (collectively,
"Inventions"), including new contributions, improvements, discoveries,
trademarks and trade names, conceived, developed, invented, made or found by the
Employee, alone or with others, during the Term of his employment by the
Company, whether or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of the Company's
facilities or materials, and which relate to the business of the Company, shall
be the property of the Company and shall be promptly and fully disclosed by the
Employee to the Company. The Employee shall perform all necessary acts
(including, without limitation, executing and delivering any confirmatory
assignments, documents or instruments requested by the Company) to vest title to
any such Invention in the Company and to enable the Company, at its expense, to
secure and maintain domestic and/or foreign patents or any other rights for such
Inventions.
8.2 NON-DISCLOSURE. The Employee, at any time during the Term and
thereafter, shall not, directly or indirectly, use, disclose or furnish to any
other person, firm or corporation except in the course of the proper performance
of his duties hereunder (a) any information of a confidential nature relating to
any process, technique or procedure of the Company; or (b) any information of a
confidential nature obtained as a result of his current or future relationship
with the Company, which information is not specifically a matter of public
record; or (c) any other trade secrets of the Company; except that the Employee
shall not be liable under the terms of this Section 8.2 for using, disclosing or
furnishing any of the foregoing which: (1) are or become generally available to
the public other than as a result of a disclosure in violation of this
Agreement; or (2) are generally known in any industry in which the Company is or
may become involved; or (3) are required to be disclosed by the Employee
pursuant to law or the order of a court of competent jurisdiction, or other
legal process or authority, it being understood, however, that the Employee
shall provide the Company with prompt notice of the requirement for such
disclosure as soon as practical after the Employee is notified thereof and prior
to its disclosure thereof so as to enable the Company to challenge the order
compelling such disclosure if the Company so desires. Promptly upon the
expiration or termination of the Employee's employment hereunder for any reason,
the Employee shall surrender to the Company all documents, drawings, work
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papers, lists, memoranda, records and other data (including all copies)
constituting or disclosing any of the foregoing information.
8.3 BREACH OF NON-DISCLOSURE PROVISION. In the event that the
Employee shall breach Section 8.2 hereof, or in the event that any such breach
is threatened by the Employee, in addition to and without limiting or waiving
any other remedies available to the Company at law or in equity, the Company
shall be entitled to immediate injunctive relief in any court having the
capacity to grant such relief, to restrain any such breach or threatened breach
and to enforce the provisions of Section 8.2. The Employee acknowledges and
agrees that there is no adequate remedy at law for any such breach or threatened
breach and, in the event that any action or proceeding is brought seeking
injunctive relief, the Employee shall not use as a defense thereto that there is
an adequate remedy at law.
8.4 REASONABLE RESTRICTIONS. The parties acknowledge that (a) the
agreements in this Article 8 are essential to protect the business and goodwill
of the Company, and (b) the foregoing restrictions are under all of the
circumstances reasonable and necessary for the protection of the Company and its
business.
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, distributees and successors; provided, that the obligations of the
Employee under this Agreement shall not be delegable by him.
9.2 NOTICES. All notices and other communications hereunder and all
legal process in regard hereto shall be validly given, made or served if in
writing, when delivered personally (by courier service or otherwise), or when
actually received when mailed by first-class certified or registered United
States mail, postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other party
in writing:
If to the Company:
IMRE Corporation
000 Xxxxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chairman of the Board of Directors
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If to the Employee:
Xxx X. Xxxxxxxx, M.D., Ph.D.
0000 Xxx Xxxxx
Xx Xxxxx, XX 00000
9.3 SEVERABILITY. If any provision of this Agreement, or portion
thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained' herein. In
addition, any such invalid or unenforceable provision or portion thereof shall
be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and
enforceable.
9.4 WAIVER. No waiver by a party hereto of a breach or default
hereunder by the other party shall be considered valid, unless in writing signed
by such first party, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or any other nature.
9.5 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements between the Company and the Employee, whether
written or oral, relating to any or all matters covered by and contained or
otherwise dealt with in this Agreement. No representation, warranty,
undertaking or covenant is made by either party hereto except as provided herein
and any representations, warranties undertakings or covenants not set forth
herein are specifically disclaimed. This Agreement does not constitute a
commitment of the Company with regard to the Employee's employment, express or
implied, other than to the extent expressly provided for herein.
9.6 AMENDMENT. No modification, change or amendment of this
Agreement or any of its provisions shall be valid, unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.
9.7 AUTHORITY. The parties each represent and warrant that they have
the power, authority and right to enter into this Agreement and to carry out and
perform the terms, covenants and conditions hereof.
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9.8 TITLES. The titles of the Articles and Sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.
9.9 APPLICABLE LAW. This Agreement, and all of the rights and
obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
internal laws of the State of California without giving effect to principals
relating to conflicts of law.
9.10 EXPENSES. The Company shall pay all costs and expenses,
including reasonable attorneys fees, incurred by the Employee with respect to
the negotiation, drafting and execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
IMRE CORPORATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
/s/ Xxx Xxxxxxxx
--------------------------------
Xxx X. Xxxxxxxx, M.D., Ph.D.
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