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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
AGREEMENT, dated this 6th day of November, 1996 between Nastech
Pharmaceutical Company Inc., a Delaware corporation ("Employer") with offices
at 00 Xxxxxx Xxxxx, Xxxxxxxxx, XX and Xxxxxx X. Xxxxx ("Employee").
W I T N E S S E T H :
WHEREAS, the Employer and Employee wish to enter into an employment
and compensation arrangement on the following terms and conditions;
1. Employment. Subject to the terms and conditions of this
Agreement, including specifically Section 12, Employer agrees to employ
Employee for a period of three (3) years commencing from the effective date of
this Agreement to serve as the Chief Financial Officer ("CFO") and to serve in
such capacities consistent with his position as CFO as the Employer may from
time to time designate. Employee hereby accepts such employment and agrees to
devote his full time and best efforts to the duties provided herein.
2. Compensation. For services rendered to Employer during the term
of this Agreement, Employer shall compensate Employee with a salary, payable in
accordance with Employer's standard payroll practices in effect, from time to
time, of $165,000 per annum. Employee's salary may be adjusted for merit and/or
cost of living increases, as determined by Employer in its sole discretion.
3. Stock Options. As further compensation, Employee shall be
issued 40,000 incentive stock options (subject to allowable limitations
set forth in the Internal Revenue Code of 1986, as amended, hereinafter "stock
options") upon the commencement of his employment. The stock options shall be
issued at the fair market value of the Employer's common stock as of the date
of this Agreement and shall then be vested at 33 1/3% per full year of service
(and shall not be vested for interim periods on a pro-rata basis, except as
otherwise provided in the applicable Stock Option Agreement) from the date of
initial employment, over a three year period, all of the foregoing to be in
accordance with the provisions of Employer's Stock Option Plan, as may be
amended from time to time, which is incorporated by reference herein.
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The Common Stock to be issued upon the exercise of said options has not
been registered under the Securities Act of 1933 (the "Act"), and may not be
sold or disposed of unless (i) a registration statement covering those shares
becomes effective under the Act, or (ii) if an exemption from registration
becomes available. Employer is not under any obligation to register the shares
under the Act. Employer shall use its best efforts to timely file all reports,
statements and other documents as may be required under the Securities and
Exchange Act of 1934 to keep available the exemption under Rule 144 of the Act
or other comparable rules or regulations of the Securities and Exchange
Commission.
4. Expenses. Employer shall pay or reimburse Employee for all expenses
normally reimbursed by Employer, reasonably incurred by him in furtherance of
his duties hereunder and authorized and approved by the Employer upon
submission by him of vouchers or an itemized list thereof prepared in
compliance with such rules relating thereto as the Employer may, from time to
time, adopt and as may be required in order to permit such payments as proper
deductions to Employer under the Internal Revenue Code of 1986, as amended, and
the rule and regulations adopted pursuant thereto now or hereafter in effect.
5. Relocation Costs . To assist Employee with relocation, Employer shall
promptly reimburse employee upon submission of expenses, up to an aggregate
amount of $20,000, for the following which may be taxable to you: (i) usual and
customary expenses incurred in the sale of a home; (ii) reasonable expenses
incurred in moving furniture, normal household goods and personal belongings to
the new location; (iii) reasonable and customary closing costs incurred in
buying a new home, including attorney's fees, title insurance and other closing
expenses other than mortgage loan origination fees, (iv) transportation costs
and temporary quarters in moving Employee's family, and (v) miscellaneous
expenses related to a move to help cover out of pocket expenses you may incur
during your relocation.
In consideration of the substantial expenses which are anticipated to be
incurred by Employer in conjunction with Employee's relocation, Employee agrees
that, should he resign his employment with Employer other than for Good Reason,
as hereinafter defined, at any time prior to twelve (12) months following the
assumption of his employment, he shall reimburse Employer on the last day
worked for a portion of the relocation costs, as defined above. The expenses
shall be
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prorated over twelve (12) months, and the portion for which Employee must
reimburse Employer will be payable in full upon the last day of employment.
Example: If termination of employment occurred after only five (5) months,
the amount payable by Employee would be determined as follows:
Total relocation costs paid by Employer $20,000
Less tax benefit (assume 40%)(includes carryover) (8,000)
Out of pocket costs incurred by Employer 12,000
Divided by number of months 12
Monthly amount $ 1,000
Payable by employee: 12-5months = 7 x $1,000 $ 7,000
6. Temporary Living Expenses. Employer shall provide and pay promptly upon
Employee's submission of expense vouchers, up to an aggregate of $10,000, for
temporary living expenses in the Long Island area, as necessary for the
Employee. Such temporary living expenses shall consist of an apartment or
similar residence, plus other expenses including utilities, an auto and
transportation (weekly) between the Employee's current residence in Florida and
Long Island. Any unused temporary living expenses may be used by the Employee
to cover relocation costs as set forth in Section 5
7. Benefits. The Employee shall be entitled to participate in or be
covered by any Health and/or Retirement and Executive Compensation plans
adopted by the Employer from time to time.
8. Noncompetition.
A. The Employee agrees that, except in accordance with his duties under
this Agreement on behalf of the Employer, he will not during the term of this
Agreement:
Participate in, be employed in any capacity by, serve as director,
consultant, agent or representative for, or have any material direct interest
in any enterprise (other than as a passive investor in a publicly traded
company) which is engaged in the business of distributing, selling or otherwise
trading in products which are competitive to any of the Employer's technology
or products distributed, sold or otherwise traded in by the Employer during the
term of the Employee's
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employment with the Employer, or which are competitive to any products being
actively developed, with the bona fide intent to market same, by the Employer
during the term of the Employee's employment with the Employer;
B. The Employee hereby agrees that damages and any other remedy
available at law would be inadequate to redress or remedy any loss or damage
suffered by the Employer upon any breach of the terms of this Section 8 by the
Employee, and the Employee therefore agrees that the Employer, in addition to
recovering on any claim for damages or obtaining any other remedy available at
law, also may enforce the terms of this Section 8 by injunction or specific
performance, and may obtain any other appropriate remedy available in equity.
9. Assignment of Patents. Employee shall disclose fully to the Employer
any and all discoveries of a scientific nature relating to Employer's business
he shall make and any and all ideas, concepts or inventions of a scientific
nature relating to Employer's business which he shall conceive or make during
his period of employment, or during the period of six months after his
employment shall terminate, which are in whole or in part the result of his
work with the Employer. Such disclosure is to be made promptly after each
discovery or conception, and the discovery, idea, concept or invention will
become and remain the property of the Employer, whether or not patent
applications are filed thereon. Upon request and at the expense of the
Employer, the Employee shall make application through the patent solicitors of
the Employer for letters patent of the United States and any and all other
countries at the discretion of the Employer on such discoveries, ideas and
inventions, and to assign all such applications to the Employer, or at its
order, forthwith, without additional payment by the Employer during his period
of employment and for reasonable compensation for time actually spent by the
Employee at such work at the request of the Employer after the termination of
the employment. He is to give the Employer, its attorneys and solicitors, all
reasonable assistance in preparing and prosecuting such applications and, on
request of the Employer, to execute all papers and do all things that may be
reasonably necessary to protect the right of the Employer and vest in it or its
assigns the discoveries, ideas or inventions, applications and letters patent
herein contemplated. Said cooperation shall also include all actions
reasonably necessary to aid the Employer in the defense of its rights in the
event of litigation.
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10. Trade Secrets.
(a) In the course of the term of this Agreement, it is anticipated that
the Employee shall have access to secret or confidential technical and
commercial information, records, data, specifications, systems, formulas,
methods, plans, policies, inventions, material and other knowledge
("Confidential Material") owned by the Employer and its subsidiaries. The
Employee recognizes and acknowledges that included within the Confidential
Material are the Employer's confidential commercial information, technology,
methods of manufacture, clinical studies, pre-clinical data and related
materials, all as they may exist from time to time, and that they are valuable
special and unique aspects of the Employer's business. All such Confidential
material shall be and remain the property of the Employer. Except as required
by his duties to the Employer, the Employee shall not, directly or indirectly,
either during the term of his employment or at any time thereafter, disclose or
disseminate to anyone or make use of, for any purpose whatsoever, any
Confidential Material. Upon termination of his employment, the Employee shall
promptly deliver to the Employer all Confidential Material (including all
copies thereof) which are in the possession or under the control of the
Employee. The Employee shall not be deemed to have breached this Section 10 if
the Employee shall be specifically compelled by lawful order of any judicial,
legislative, or administrative authority or body to disclose any confidential
material or else face civil or criminal penalty or sanction.
(b) The Employee hereby agrees that damages and any other remedy
available at law would be inadequate to redress or remedy any loss or damage
suffered by the Employer upon any breach of the terms of this Section 10 by the
Employee, and the Employee therefore agrees that the Employer, in addition to
recovering on any claim for damages or obtaining any other remedy available at
law, also may enforce the terms of this Section 10 by injunction or specific
performance, and may obtain any other appropriate remedy available in equity.
11. Vacation. Employee shall be entitled to vacation (with a minimum of
two weeks vacation which shall not accrue or accumulate from year to year),
sick days, personal days and holidays as shall be governed by Employer's
standard personnel policies, which shall be provided to Employee. In addition,
Employer grants Employee two weeks vacation to be taken during the period from
December, 1996 to February, 1997.
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12. Termination.
(a) Employee's employment with Employer shall be "at will". Either
Employer or the Employee may terminate this Agreement and Employee's employment
at any time, with or without Cause or Good Reason (as such terms are defined
below), in its or his sole discretion, upon thirty (30) days' prior written
notice of termination.
(b) Without limiting the foregoing Section 12(a), (i) the Employee may
terminate his employment with the Employer at any time for Good Reason, or (ii)
the Employer may terminate his employment at any time for Cause. "Good Reason"
shall mean death, Disability (as defined below) or a termination of employment
as a result of a substantial diminution in the Employee's responsibilities, or
base salary below $165,000 or a demotion in title or CFO status. "Cause" shall
mean (i) the Employee's willful, repeated or neglectful failure to perform his
duties hereunder or to comply with any reasonable or proper direction given by
or on behalf of the Employer's Chief Executive Officer and approved by the
Board of Directors following five (5) days written notice to such effect, other
than any Employee's refusal to execute any document or statement that contains
erroneous or misleading financial information; (ii) the Employee being guilty
of serious misconduct on the Company's premises or elsewhere, whether during
the performance of his duties or not, which may cause damage to the reputation
of the Employer or render it difficult for the Employee to satisfactorily
continue to perform his duties; (iii) the Employee being found guilty in a
criminal court of any offense of a nature likely to affect the reputation of
the Employer or to prejudice its interests if the Employee were to continue to
be employed by the Employer; (iv) the Employee's commission of any act of
fraud, theft or dishonesty, or any intentional tort against the Company; or (v)
the Employee's violation of any of the material terms, covenants,
representations or warranties contained in this Agreement.
(c) "Disability" shall mean that the Employee, in the good faith
determination of the Board of Directors of the Employer, is unable to render
services of the character contemplated hereby and that such inability (i) may
be expected to be permanent, or (ii) may be expected to continue for a period
of at least three (3) consecutive months (or for shorter periods totaling more
than six (6) months during any period of twelve consecutive months).
Termination resulting from Disability may only be effected after at least
thirty (30) days written notice by the Employer of its intention to terminate
the Employee's employment.
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(d) "Termination Date" shall mean (i) if this Agreement is terminated on
account of death, the date of death; (ii) if this Agreement is terminated for
Disability, the date established by the Company pursuant to Section 12(c)
hereof; (iii) if this Agreement is terminated by the Employer, the date on
which a notice of termination is given to the Employee; (iv) if the Agreement
is terminated by the Employee, the date the Employee ceases work; or (v) if
this Agreement expires by its terms, the last day of the term of this
Agreement.
13. Severance.
(a) If (i) the Employer terminates the employment of the Employee against
his will and without Cause, or (ii) the Employee terminates his employment for
Good Reason (excluding death or Disability), (x) during the first eighteen (18)
months of the term of this Agreement, the Employee shall be entitled to receive
salary and vacation accrued through the Termination Date plus one year's salary
payable in one lump-sum at the Termination Date, or (y) following the first
eighteen (18) months of the term of this Agreement, the Employee shall be
entitled to receive salary and vacation accrued through the Termination Date
plus six month's salary payable in one lump-sum at the Termination Date.
Notwithstanding the foregoing, the Employer shall not be required to pay any
severance pay for any period following the Termination Date if the Employer
violates the provisions of Section 8, Section 9 or Section 10 of this
Agreement. In such event, the Employer shall provide written notice to the
Employee detailing such violation.
(b) If (i) the Employee voluntarily terminates his employment other than
for Good Reason, (ii) the Employee's employment is terminated due to death or
Disability, or (iii) the Employee is terminated by the Employer for Cause, then
the Employee shall be entitled to receive salary and accrued vacation through
the Termination Date only.
(c) In addition to the provisions of Section 13(a) and 13(b) hereof, to
the extent COBRA shall be applicable to the Employer or as provided by law, the
Employee shall be entitled to continuation of group health plan benefits for a
period of one (1) year following the Termination Date if the Employee makes the
appropriate conversion and payments.
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(d) The Employee acknowledges that, upon termination of his employment,
he is entitled to no other compensation, severance or other benefits other than
those specifically set forth in this Agreement or the Stock Option Agreement.
14. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail, return receipt requested to his residence in the case of the
Employee, or to its principal office in the case of the Employer, or to such
other addresses as they may respectively designate in writing.
15. Entire Agreement; Waiver. This Agreement contains the entire
understanding of the parties and may not be changed orally but only by an
agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought. Waiver of or failure to
exercise any rights provided by this Agreement in any respect shall not be
deemed a waiver of any further or future rights.
16. Assignment. Employee's rights hereunder are personal to and shall
not be transferable nor assignable by the Employee. This Agreement shall bind
and inure to the benefit of the Employee and the Employer and their respective
legal representatives, successors and assigns.
17. Arbitration. Any and all claims, disputes, or controversies arising
out of or related to this Agreement, or the breach thereof, shall be resolved
exclusively by arbitration in Suffolk County, New York, in accordance with the
rules of the American Arbitration Association then in existence. The
determination or award rendered therein shall be binding and conclusive upon
the parties, and judgment may be entered thereon in accordance with applicable
law in any court having jurisdiction. No party shall be entitled to seek or be
awarded punitive damages.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
19 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute
one and the same instrument.
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IN WITNESS WHEREOF, NASTECH PHARMACEUTICAL COMPANY INC. has caused this
instrument to be signed by a duly authorized officer and the Employee has
hereunto set his hand the day and year first above written.
NASTECH PHARMACEUTICAL COMPANY INC.
By /s/Xxxxx X. Xxxxx
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/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
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