EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.48
THIS AGREEMENT, dated as of January 19, 2007, is between Inhibitex, Inc., a Delaware
corporation (the “Company”), and Xxxxxxx X. Xxxxx (the “Executive”).
WHEREAS, the Company and the Executive are parties to an Executive Employment Agreement dated
as of February 20, 2004 (the “Prior Agreement”) and wish to amend and restate the Prior Agreement
in its entirety based on a compensation package approved by the Compensation Committee of the
Board of Directors (the “Board”) on December 18, 2006;
WHEREAS, the Company desires to assure itself of the Executive’s employment in an executive
capacity and to compensate him for such employment; and
WHEREAS, the Executive is willing to be employed by the Company upon the terms and subject to
the conditions contained in this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged,
the parties agree as follows:
Section 1. Position, Duties and Responsibilities.
(a) During the Term (as defined in Section 2), the Executive shall
serve as the Chief Executive Officer, President and Chief Financial Officer of the
Company consistent with the by-laws of the Company, and shall be responsible for the duties
identified in the attached Appendix I, such other duties as are attendant to such offices and such
other managerial duties and responsibilities with the Company, its affiliates, subsidiaries or
divisions consistent with such position as may be assigned by the Board. The Executive shall devote
his full energies, interest, abilities and productive time to the business and affairs of the
Company and to promoting its best interests. The Executive acknowledges and agrees that although
his duties shall be performed from the Company’s offices in the Atlanta, Georgia metropolitan area
or at such other places as shall be necessary according to the needs, business and opportunities of
the Company, the performance by the Executive of his duties hereunder may require substantial
travel from time to time by the Executive. The Executive further agrees that, during the Term, the
Company shall be the Executive’s sole employer.
(b) The Executive agrees to accept election and to serve during all or
any part of the Term as a director of the Company without any compensation therefor
other than that specified in this Agreement, if elected to such position by the Board or the
stockholders of the Company. The Company agrees that (i) the Board, at its next meeting
(or as soon thereafter as reasonably practicable), will appoint Executive to the Board, and
(ii) at all times thereafter during the Term, the Company shall include the Executive in
the management slate for election as a director at every stockholders’ meeting at which
his term as a director would otherwise expire. At the request of the Board, following
termination or expiration of this Agreement, the Executive promptly shall tender his
resignation as a director of the Company.
(c) Executive understands that the provisions of any employee
handbooks, personnel manuals and any and all other written statements of or regarding
personnel policies, practices or procedures that are or may be issued by the Company (the
“Company Policies”) do not and shall not constitute a contract of employment and do not
and shall not create any vested rights; and that any such provisions may be changed,
revised, modified, suspended, canceled, or eliminated by the Company at any time, in its
sole discretion, with or without notice.
(d) Executive shall comply with all applicable Company Policies,
which may be in effect from time to time during the Term. Copies of all such Company
Policies may be examined in the Human Resource Department for the Company. If a
provision in any policy conflicts with this Agreement, the terms of this Agreement shall
prevail.
(e) For up to a one (1) year period following any termination of the
Executive’s employment, upon the request of the Company, the Executive shall
reasonably cooperate with the Company in all matters relating to the winding up of
pending work on behalf of the Company and the orderly transfer of work to other
employees of the Company. The Executive shall also cooperate in the defense of any
action brought by any third party against the Company that relates in any way to the
Executive’s acts or omissions while employed by the Company. The Company shall
reimburse the Executive for his reasonable out-of-pocket costs incurred in connection
with such cooperation.
Section 2. Term of Employment.
The initial term (the “Initial Term”) of this Agreement shall commence on December 30, 2006
and continue through December 30, 2007 (the “Initial Expiration Date”). On each anniversary of the
Initial Expiration Date, this Agreement will be renewed automatically for an additional one (1)
year period (the “Extended Term”) (without any action by either party) on the last day of the
Initial Term and on each anniversary thereof, unless the Executive’s employment under this
Agreement is earlier terminated in accordance with Section 4. Executive may elect not to renew his
or her employment under this Agreement for any reason upon sixty (60) days written notice. For
purposes of this Agreement, “Term” means the Initial Term and, as extended, the Extended Term.
Section 3. Compensation; Benefits; Expenses.
(a) Base Salary. For all services rendered by the Executive hereunder during the
Term, the Company shall pay the Executive an annual salary equal to Three Hundred Fifty Thousand
dollars ($350,000), less standard deductions and withholdings, payable in equal installments at the
times and pursuant to the procedures regularly established for the payment of salaries generally to
employees, and as they may be amended by the Company during the Term. The Executive’s salary will
be reviewed
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from time to time by the Board, a committee of the Board, or otherwise in accordance with the
Company’s established procedures for adjusting salaries, and be subject to increases (but not
decrease, except pursuant to an across-the-board salary reduction as described in Section
4(a)(iv)(B)) pursuant to such procedures. The Executive’s ceasing to serve as the Chief Financial
Officer of the Company shall not result in a reduction in such salary.
(b) Incentive Compensation. The Executive shall be eligible to
participate in such bonus and incentive (including stock option and other equity-based)
compensation plans of the Company, if any, in which other executives of the Company
are generally eligible to participate, as the Board or a Committee thereof shall determine
from time to time in its sole discretion, subject to and in accordance with the terms and
provisions of such plans. Subject to the terms and conditions of such bonus and incentive
compensation plans, the Executive shall be eligible for annual cash incentive
compensation of up to 50% of the then annual gross salary.
(c) Benefits. The Company shall provide the Executive with the right
to participate in and to receive benefits from the group life, group disability, and medical
plans and all similar benefits made generally available to similarly situated executives of
the Company. The amount and extent of benefits to which the Executive is entitled shall
be governed by the specific benefit plan or plans, as such may be amended from time to
time.
(d) Equity Incentives. The Executive will be granted under the
Inhibitex, Inc. Amended and Restated 2004 Stock Incentive Plan 280,000 shares of
restricted common stock, par value $0,001 per share, on the terms set forth in the
restricted stock grant agreement entered into by the Executive and the Company. Such
grant shall vest as provided in the restricted stock grant agreement.
(e) Reimbursement of Expenses. It is contemplated that in connection
with the Executive’s Employment hereunder, he may be required to incur business,
entertainment and travel expenses. The Company agrees to promptly reimburse the
Executive in full for all reasonable out-of-pocket business, entertainment and other
related expenses (including all reasonable expenses of travel and living expenses while
away from home on business or at the request of, and in service of, the Company)
incurred or expended by him incident to the performance of his duties hereunder,
provided that the Executive properly account for such expenses in accordance with the
policies and procedures established by the Board and applicable to the executives of the
Company.
(f) Vacations; Personal Days. During the Term, the Executive shall be
entitled to no less than five (5) weeks vacation with pay during each calendar year of his
employment hereunder provided that the vacation days taken do not materially interfere
with the operations of the Company. Such vacation may be taken, in the Executive’s
discretion, at such time or times as are not inconsistent with the reasonable business
needs of the Company. The Executive shall also be entitled to all paid holidays and
personal days given by the Company to its executives. Vacation, holiday and personal
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days shall additionally be subject to applicable Company Policies.
Section 4. Termination.
(a) The Executive’s employment under this Agreement may be terminated under the
following circumstances:
(i)
Death. The Executive’s employment shall immediately terminate
upon his death.
(ii) Disability. In the event the Executive shall be unable to render
the services or perform his duties hereunder by reason of “Disability,” as such term is
defined in the Company’s Long-Term Disability Plan, as the same shall be amended from
time to time; the Company shall have the right to terminate this Agreement immediately
upon notice to the Executive.
(iii) Termination of Employment by the Company for Cause. The Company
may terminate the employment of the Executive immediately for Cause (as hereinafter
defined). The term “Cause,” as used herein, shall mean (1) the Executive’s willful
misconduct, gross negligence, dishonesty or fraud in the performance of his duties
hereunder, (2) the material breach of this Agreement by the Executive after notice of
such breach and a reasonable opportunity to cure, (3) the Executive’s willful refusal or
failure to perform his duties hereunder or under any lawful directive of the Board or the
Chairman of the Board, as the case may be, which is consistent with his title and
position after notice of such failure and a reasonable opportunity to cure, or (4) the
conviction, plea of guilty or nolo contendere of the Executive in respect of any
felony or other crime involving moral turpitude, dishonesty, theft or unethical business
conduct.
(iv) Termination of Employment by Executive for Good Reason. The
Executive may resign and terminate his employment hereunder for Good Reason (as defined
below) by providing a written notice thereof within sixty (60) days from the occurrence
of the event that the Executive is deeming Good Reason. For purposes of this Agreement,
“Good Reason” shall mean there has occurred, without the express written consent of the
Executive:
(A) the assignment to the Executive of any duties materially
inconsistent with his status as the Chief Executive Officer of the
Company or a substantial diminution in the nature or status of his
responsibilities; provided, that neither the Executive’s ceasing to
serve as the Company’s Chief Financial Officer nor the failure of
the stockholders to elect the Executive as a director shall be a
“Good Reason”;
(B) a reduction by the Company in the Executive’s Base Salary
as in effect on the date hereof or as the same may be increased
from time to time except for across-the-board salary reductions
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similarly affecting all executives of the Company;
(C) (1) the relocation of the Company’s principal executive offices
to a location outside the Atlanta, Georgia metropolitan area or (2)
the Company’s requiring the Executive to perform his duties
anywhere other than the Company’s principal executive offices;
provided, that required travel on the Company’s business to an
extent substantially consistent with the Executive’s responsibilities
shall not constitute “Good Reason”;
(D) the failure by the Company to continue in effect without any
material adverse change any compensation plan in which the
Executive was participating or the failure by the Company to
continue the Executive’s participation therein, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan or participation;
(E) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by
the Executive under the Company’s employee stock ownership,
life insurance, medical, health-and-accident, or disability plans in
which the Executive was participating, the taking of any action by
the Company which would directly or indirectly materially reduce
any of such benefits or deprive the Executive of any other material
fringe benefits enjoyed by the Executive, or the failure by the
Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the
Company’s normal vacation policy, except for across-the-board
changes in such benefits similarly affecting all executives of the
Company; or
(F) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this
Agreement, as contemplated in Section 16 hereof.
(v) Terminations
other than for Cause, Good Reason, Disability or upon Death. In
addition to the foregoing, either party may terminate this Agreement at any time, by
providing thirty (30) days prior written notice of his or its desire to terminate.
(b) Notice of Termination. Any termination of the Executive’s employment by the
Company or by the Executive (other than a termination pursuant to Section 4(a)(i) above) shall be
communicated by written notice of termination to the other party.
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(c) Date of Termination. “Date of Termination” shall mean (i) if the
Executive’s employment is terminated by his death, the date of his death or (ii) in all other
circumstances, the date specified in the notice of termination.
Section 5. Compensation Upon Termination.
(a)
Compensation Upon Termination Upon Death. In the event of the
death of the Executive during the Term, the Executive’s designated beneficiary, or, in the
absence of such designation, the estate or other legal representative of the Executive
(collectively, the “Estate”) shall be paid, within thirty (30) days of the Executive’s death,
an amount equal to the sum of the Executive’s unpaid salary and any earned but unpaid
bonuses through the Date of Termination. The Estate shall be entitled to other death
benefits in accordance with the terms of the Company’s benefit programs and plans.
(b) Compensation Upon Termination for Disability. If the Executive’s
employment hereunder is terminated for Disability, the Executive shall be entitled to
receive (if entitled thereto) disability compensation and benefits in accordance with the
Company’s benefit programs and plans. In addition, Executive shall be entitled to
received unpaid salary and any earned but unpaid bonuses through the Date of
Termination, as soon as practicable following termination of employment, but in no event
more than two and one half months after the year in which his termination occurs.
(c) Compensation Upon Termination for Cause. If the Executive’s
employment is terminated by the Company for Cause, the Company shall pay the
Executive his salary through the Date of Termination as soon as practicable following
termination of employment, but in no event more than two and one half months after the
year in which his termination occurs, and the Company shall have no further obligations
to the Executive under this Agreement.
(d) Compensation Upon Termination Upon a Change in Control (other
than for Cause, Disability or upon Death).
(i) If the Executive’s employment is terminated by the Executive for Good
Reason or by the Company within one (1) year after the consummation of a Change in
Control (as hereafter defined) (or in contemplation of a Change in Control that is
reasonably likely to occur) for any reason other than pursuant to Section 4(a)(i),
4(a)(ii) or 4(a)(iii) hereof, the Company, within sixty (60) days of the Date of
Termination, shall pay to the Executive (or in the event of the Executive’s death, the
Executive’s estate) a lump-sum cash amount equal to the sum of (x) the Executive’s unpaid
salary through the Date of Termination; plus (y) any bonus compensation earned
and unpaid through the Date of Termination; provided, however, that any
bonus compensation conditioned upon the satisfaction of performance goals shall not be
paid unless such performance goals have been satisfied; plus (z) the product of
(A) a fraction the numerator of which is the number of months in the Change in Control
Severance Period (as hereafter defined) and the denominator of which is 12 and (B) the
sum of (1) Executive’s annual base salary as then in effect and
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(2) the bonus or incentive compensation paid to the Executive in respect of the most
recent fiscal year prior to the year in which the Change in Control occurs (provided that
if the notice of termination is delivered during 2007 or during 2008 but prior to the
Company’s determination of Executive’s bonus for 2007, the bonus or incentive
compensation shall be deemed to be $175,000). In addition, Executive shall receive a lump
sum payment equal to the present value of the premium payments that would be made by the
Company if Executive were to continue to be covered under the Company’s group health,
life and disability insurance for the Change in Control Severance Period, which amount
shall be determined by the Company in its sole discretion. The “Change in Control
Severance Period” shall be twenty-four (24) months, commencing on the Date of
Termination. In no event shall any amount payable under this Section 5(d)(i) be paid
later than two and one half months after the year in which Executive’s termination
occurs; provided however, that in the event that any payment made pursuant to this
Section 5(d)(i) is deemed to constitute a “deferral of compensation” under Section 409 A
of the Code, notwithstanding any other provisions herein, Executive shall not receive
payment of any of the lump sum amounts described in this Section 5(d)(i) until the
earlier of (A) six months following Executive’s “separation from service” with the
Company (as such phrase is defined in Section 409A of the Code) or (B) Executive’s death.
(ii) Notwithstanding any other provision herein to the contrary, in the event
that the Executive becomes entitled to any payments under Section 5(d)(i) (“Termination
Payments”) and any portion of such Termination Payments, when combined with any other
payments or benefits provided to the Executive (including, without limiting the
generality of the foregoing, by reason of any stock options), in the absence of this
Section 5(d)(ii), would be subject to the tax (the “Excise Tax”) imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), then (subject to Section
5(d)(iii) hereof) the amount payable to the Executive under Section 5(d)(i) shall be
reduced such that none of the amounts payable to the Executive under Section 5(d)(i) and
any other payments or benefits received or to be received by the Executive in connection
with a Change in Control or the termination of the Executive’s employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement with
the Company, any person whose actions result in a Change in Control or any person having
such a relationship with the Company or such person as to require attribution of stock
ownership between the parties under Section 318(a) of the Code) shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code. For purposes
of applying the foregoing sentence, if in the opinion of tax counsel selected by the
Company’s independent auditors prior to the Change in Control and reasonably acceptable
to the Executive, such payments or benefits (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code, then such amounts shall be excluded from any such calculation. Furthermore, in
determining the maximum amount of the payments to the Executive which would not
constitute a parachute payment within the meaning of Sections 280G(b)(l) and (4), the
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value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code or any applicable proposed or final
Treasury Regulations promulgated under the Code.
(iii) If the net after-tax amount of the Termination Payments which would be
payable to the Executive in the absence of the reduction described in Section 5(d)(ii)
above exceeds the net after-tax amount of the Termination Payments which would be payable
to the Executive if the reduction described in Section 5(d)(ii) above were applicable,
then the reduction to the Executive’s Termination Payments described in Section 5(d)(ii)
above shall not be applicable. For purposes of computing such net after-tax amounts, the
Termination Payments shall be treated as subject to Federal income tax and any state and
local income taxes (based upon the residence of the Executive at the time the first
amount of Termination Payments is to be paid hereunder) at the highest marginal rate of
income tax imposed upon individuals (but without assuming any reduction in Federal income
taxes that could be obtained from the deduction of any such state or local taxes if paid
in such year), shall be subject only to the Medicare portion of the F.I.C.A tax and, in
calculating the net after-tax amount of the Termination Payments which would otherwise be
payable to the Executive if the reduction described in Section 5(d)(ii) above were not
applicable, any applicable Excise Tax, and all such taxes shall be computed based upon
the tax rates in effect for the calendar year in which the first amount of Termination
Payments are to be paid hereunder. The determination of the net after-tax amounts will be
made by the Company’s independent auditors prior to the Change in Control, whose
determination will be binding on both the Executive and the Company.
(iv) For purposes of this Agreement, a “Change in Control” of the Company shall
mean (A) the consummation of a merger or consolidation of the Company in which the
stockholders of the Company immediately prior to such merger or consolidation would not,
immediately after the merger or consolidation, beneficially own (as such term is defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), directly or indirectly, shares representing in the aggregate 45% or more of the
combined voting power of the securities of the corporation issuing cash or securities in
the merger or consolidation (or of its ultimate parent corporation, if any); (B) the
stockholders of the Company approve a plan of complete liquidation or dissolution of the
Company, or there is consummated an agreement for the sale or disposition by the Company
of all or substantially all of the Company’s assets, other than a sale or disposition by
the Company of all or substantially all of the Company’s assets to an entity, at least
45% of the combined voting power of the voting securities of which are owned by persons
in substantially the same proportion as their ownership of the Company immediately prior
to such sale; (C) during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board, including for this purpose any new
director whose election or nomination for election by the Company’s
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stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period or whose election or
nomination for election was previously so approved but excluding for this purposes any
such new director whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, corporation, partnership, group,
association or other entity or Person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) other than the Board, cease for any reason to constitute a majority
thereof; or (D) such other similar transaction not specifically identified above, which
in the sole discretion of the Board of Directors (or committee thereof) effectively
constitutes a change in control of the Company.
(e) Compensation Upon All Other Terminations, If the Company terminates this
Agreement for any reason other than pursuant to Section 4(a)(i), 4(a)(ii), 4(a)(iii) or Section
5(d) or if Executive terminates his employment for Good Reason, then the Company shall pay
Executive a lump sum equal to the sum of (w) Executive’s unpaid salary through the Date of
Termination; plus (x) any bonus compensation earned and unpaid through the Date of Termination;
provided, however, that any bonus compensation conditioned upon the satisfaction of
performance goals shall not be paid unless such performance goals are actually satisfied;
plus (y) the Executive’s salary for the Severance Period if such salary would have
continued to be paid during the Severance Period, as determined by the Company in its sole
discretion; plus (z) the product of (1) a fraction the numerator of which is the number of
months in the Severance Period and the denominator of which is 12 and (2) the bonus or incentive
compensation paid to the Executive in respect of the most recent fiscal year prior to the year in
which the Date of Termination occurs. In addition, Executive shall receive a lump sum payment
equal to the present value of the premium payments that would be made by the Company if Executive
were to continue to be covered under the Company’s group health, life and disability insurance for
the Severance Period, which amount shall be determined by the Company in its sole discretion. If
the Executive voluntarily terminates this Agreement other than for Good Reason, then the Company
shall pay Executive his salary and any earned but unpaid bonuses through the Date of Termination in
a lump sum and the Company shall have no further obligations to the Executive under this Agreement.
The “Severance Period” shall be eighteen (18) months, commencing on the Date of Termination.
Notwithstanding the foregoing, if notice of termination is delivered during 2007, (i) the Severance
Period shall be twenty-four (24) months, commencing on the Date of Termination; and (ii) for
purposes of clause (z)(2) of this Section 5(e), the bonus shall be deemed to be $175,000. All
amounts payable under this Section 5(e) by reason of Executive’s termination for Good Reason shall
be paid in cash in a lump-sum on the date that is six months plus one day after the Date of
Termination, or upon Executive’s death, if earlier. All amounts payable under this Section 5(e) for
any other reason shall be paid no later than two and one half months after the year in which
Executive’s termination occurs; provided however, that in the event that any payment made pursuant
to this Section 5(e) is deemed to constitute a “deferral of compensation” under Section 409A of the
Code, notwithstanding any other provisions herein, Executive shall not
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receive payment of any of the lump sum amounts described in this Section 5(e) until the
earlier of (A) six months following Executive’s “separation from service” with the Company (as
such phrase is defined in Section 409A of the Code) or (B) Executive’s death.
(f) Notwithstanding anything else contained herein, the obligation of the Company to
make any severance payments to the Executive hereunder shall be conditioned upon the execution and
delivery by the Executive of a release from liability in favor of the Company substantially in the
form attached hereto as Appendix II.
Section 6. Confidentiality.
(a) Each Item, Trade Secret and piece of Confidential Information (in each case, as defined
below) that has come or comes into Executive’s possession by reason of his employment are the
property of the Company and shall not be used by Executive in any way except in the course of his
employment by, and for the benefit of the Company. Executive will not remove any Items from
premises owned or leased by the Company except as his duties shall require, and upon termination of
his employment, all Items (including any copies or excerpts thereof) will be turned over to the
Chairman of the Board of the Company.
(b) Executive will preserve as confidential all Confidential Information that has
been or may be obtained by him. Executive will not, without written authority from
the Company, use for his own benefit or purposes, or disclose to others, either
during his employment or for two (2) years thereafter, any Confidential
Information or any copy or notes made from any Item embodying Confidential
Information except as required by his employment with the Company or to the extent
disclosure is or may be required by a statute, by a court of law, by any
governmental agency having supervisory authority over the business of the Company
or by any administrative or legislative body (including a committee thereof) with
jurisdiction to order him to divulge, disclose or make accessible such
information, provided, however, that the Executive shall give the Company notice
of any such request or demand for such information upon his receipt of same and
the Executive shall reasonably cooperate with the Company in any application the Company may make seeking a
protective order barring disclosure by the Executive. Executive understands that
his obligations with respect to Confidential Information shall continue for two
years after termination of his employment with the Company. These restrictions
concerning use and disclosure of Confidential Information shall not apply to
information which is or becomes publicly known by lawful means, or comes into
Executive’s possession from sources not under an obligation of confidentiality to
the Company.
(c) Executive agrees to hold in confidence all Trade Secrets of the Company that came into his
knowledge during or in connection with his employment by the Company and shall not disclose,
publish or make use of at any time after the date hereof such Trade Secrets without the prior
written consent of the Company for as long as the information remains a Trade Secret.
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(d) Executive understands that any entrusting of Confidential Information or Trade
Secrets to him by the Company is done in reliance on a confidential relationship arising out of his
employment with the Company. Executive further understands that Confidential Information or Trade
Secrets that he may acquire or to which he may have access, especially with regard to research and
development projects and findings, formulae, designs, formulation, processes, the identity of
suppliers, customers and patients, methods of manufacture, and cost and pricing data is of great
value to the Company.
(e) Executive agrees that following termination of his employment with the Company Executive
will, if at all possible before answering but in any event as soon thereafter as practicable, make
every effort to contact the Company’s General Counsel if Executive is served with a subpoena or
other legal process asking for a deposition, testimony or other statement, or other potential
evidence to be used in connection with any lawsuit to which the Company is a party or involving
Executive’s employment with the Company or any Confidential Information or Trade Secret of the
Company.
(f) For purposes of this Agreement: (i) “Confidential Information” means information relating
to the present or planned business of the Company which has not been released publicly by
authorized representatives of the Company. Executive understands that Confidential Information may
include, for example, discoveries, inventions, know-how and products, customer, patient, supplier
and competitor information, sales, pricing, cost, and financial data, research, development,
marketing and sales programs and strategies, manufacturing, marketing and service techniques,
processes and practices, and regulatory strategies. Executive understands further that Confidential
Information also includes all information received by the Company under an obligation of
confidentially to a third party; (ii) “Items” include documents, reports, drawings, photographs,
designs, specifications, formulae, plans, samples, research or development information, prototypes,
tools, equipment, proposals, marketing or sales plans, customer information, customer lists,
patient lists, patient information, regulatory files, financial data, costs, pricing information,
supplier information, written, printed or graphic matter, or other information and materials that
concern the Company’s business that come into Executive’s possession or about which Executive has
knowledge by reason of his employment; and (iii) “Trade Secrets” include all information, including
a formula pattern, process, compilation, program, device, method, or technique that (A) derives
independent economic value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by other persons who can obtain economic value from its
disclosure or use, (B) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy; and (C) otherwise satisfies the requirements of the Georgia Trade Secrets
Act.
Section 7. Proprietary Information.
(a) All Inventions (as defined below) related to the present or planned business of the
Company, which have been or are conceived or reduced to practice by Executive, either alone or with
others, during the period of his employment or during a
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period of one (1) year after termination of such employment, whether or not done during his
regular working hours, are the sole property of the Company. The provisions of this paragraph shall
not apply to an invention for which no equipment, supplies, facilities or confidential or trade
secret information of the Company was used and which was developed entirely on Executive’s own
time, unless (a) the invention relates to (i) the business of the Company, or (ii) the Executive’s
actual or demonstrably anticipated research or development for the Company, or (b) the invention
results from any work performed by Executive for the Company.
(b) Executive will disclose promptly and in writing to the Company, through his
supervisor, all Inventions which are covered by this agreement, and Executive agrees to assign to
the Company or its nominee all his right, title, and interest in and to such Inventions. Executive
agrees not to disclose any of these Inventions to others, without the express consent of the
Company. Executive will, at any time during or after his employment, on request of the Company,
execute specific assignments in favor of the Company or its nominee of his interest in and to any
of the Inventions covered by this agreement, as well as execute all papers, render all assistance,
and perform all lawful acts which the Company considers necessary or advisable for the preparation,
filing, prosecution, issuance, procurement, maintenance or enforcement of patent applications and
patents of the United States and foreign countries for these Inventions, and for the transfer of
any interest Executive may have. Executive will execute any and all papers and documents required
to vest title in the Company or its nominee in the above Inventions, patent applications, patents,
and interests. Executive understands that if he is not employed by the Company at the time he is
requested to execute any document under this Section 7(b), Executive shall receive fifty dollars
($50.00) for the execution of each document, and one hundred fifty dollars ($150.00) per day of
each day or portion thereof spent at the request of the Company in the performance of acts pursuant
to this Section 7(b), plus reimbursement for any out-of-pocket expenses incurred by Executive at
the Company’s request in such performance. Executive further understands that the absence of a
request by the Company for information, or for the making of an oath, or for the execution of any
document, shall in no way be construed to constitute a waiver of the Company’s rights under this
agreement. Should the Company be unable to secure the Executive’s signature on any document
necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Invention, whether due to the Executive’s mental or physical incapacity
or any other cause, the Executive hereby irrevocably designates and appoints the Company and each
of its duly authorized officers and agents as the Executive’s agent and attorney in fact, to act
for and in the Executive’s behalf and stead and to execute and file any such document, and to do
all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other rights or protections with the same force and effect as if executed and
delivered by the Executive.
(c) Executive has disclosed to the Company all continuing obligations which he has with
respect to the assignment of Inventions to any previous employers, and Executive claims no previous
unpatented Inventions as his own, except for those which have been reduced to practice and which
are shown on a schedule, if any, attached to this agreement. Executive understands that the Company
does not seek any confidential or
12
trade secret information which Executive may have acquired from a previous employer, and
Executive will not disclose to or utilize any such information on behalf of the Company.
(d) All writings and other works which may be copyrighted (including computer programs) which
are related to the present or planned business of the Company and are prepared by Executive during
his employment by the Company shall be, to the extent permitted by law, works made for hire, and
the authorship and copyright of the work shall be in the Company’s name. To the extent that such
writings and works are not works for hire, Executive agrees to the wavier of “moral rights” in such
writings and works, and to assign to the Company all Executive’s right, title and interest in and
to such writings and works, including copyright.
(e) Executive will permit the Company and its agents to use and distribute any pictorial
images which are taken of him during his employment by the Company as often as desired for any
lawful purpose. Executive waives all rights of prior inspection or approval and release the Company
and its agents from any and all claims or demands which Executive may have on account of the lawful
use of publication of such pictorial images.
(f) For purposes of this Agreement, “Invention” shall mean all ideas, potential marketing and
sales relationships, inventions, experiments, copyrightable expression, research, plans for
products or services, marketing plans, reports, strategies, processes, computer software
(including, without limitation, source code), computer programs, original works of authorship,
characters, know-how, trade secrets, information, data, developments, discoveries, improvements,
modifications, technology, algorithms, database schema, designs, and drawings, whether or not
subject to patent or copyright protection, made, conceived, expressed, developed, or actually or
constructively reduced to practice by the Executive solely or jointly with others prior to or
during the Term, which refer to, are suggested by, or result from any work which (i) the Executive
has performed prior to the Term of this Agreement, (ii) the Executive may perform during his
employment, or (iii) from any information obtained from the Company or any affiliate of the
Company, and shall not be limited to the meaning of “Invention” under the United States patent
laws.
Section 8. Agreement Not to Compete.
(a) While employed by the Company and for a period equal to the greater of (x) one (1)
year and (y) the severance period (or the deemed severance period set forth in clause (z)(A) of the
first sentence of Section 5(d)(i) in the event of a termination of employment upon a Change in
Control or in Section 5(e) in the event of termination of Executive’s employment during 2007)
thereafter, the Executive shall not, directly or indirectly, anywhere in the United States:
(i) render services which are substantially similar to the services performed
by Executive for the Company during the last year of the Term of this Agreement to any
person, corporation, partnership or other entity
13
which competes with the Company (or any subsidiary) in the business of developing or
manufacturing antibody-based immunotherapeutics to prevent or treat infections caused by
staphylococcal or fungal organisms;
Executive agrees that this covenant is especially appropriate because, if he worked for a
competitor, he would inevitably make business decisions by relying on his knowledge of
the Company’s Confidential Information and Trade Secrets; thus, he would inevitably
provide competitors with the Company’s Confidential Information and Trade Secrets. The
Company’s Confidential Information and Trade secrets are not generally known by others in
the industry, and they would provide an unfair advantage for competitors. Further, the
Company recognizes that there are some companies who provide many products and services,
some of which may be competitive and some which may not be. Accordingly, this covenant
only prohibits Executive from performing the same or substantially the same services for
that section, division, group, subsidiary, affiliate or operating unit of a competitor
that actually develops or manufactures antibody-based immunotherapeutic products to
prevent or treat infections caused by staphylococcal or fungal organisms;
(ii) solicit for employment of any person who was employed by the Company (or
any subsidiary) during the Executive’s employment with the Company and with whom the
Executive had contact during the last year of his employment with the Company; or
(iii) call on or solicit, directly or indirectly for the purpose of providing
immunotherapeutics (and related services) to prevent or treat infections caused by
staphylococcal or fungal organisms, any person or entity known by the Executive to be a
customer of the Company (or of any subsidiary), or with which the Company (or any
subsidiary) was in negotiations to become a customer of the Company (or such subsidiary),
as the case may be, during the Executive’s employment with the Company, and with whom the
Executive had direct contact. For purpose of this section, “contact” means interaction
between the Executive and the client within the last year of Executive’s employment to
further the business relationship or perform services for the client, and interaction
between the Executive and prospective client within the last year of Executive’s
employment to develop a business relationship.
(b) If any of the restrictions contained in this Section 8 shall be deemed by any court of
competent jurisdiction to be unenforceable by reason of the extent, duration or geographical scope
thereof, or otherwise, then the parties agree that such court shall modify such restriction, only
to the extent necessary to render it enforceable and, in its reduced form, such restriction shall
then be enforced, and in its reduced form this Section 8 shall be enforceable in the manner
contemplated hereby.
(c) The Executive and the Company agree to revise the specific description of the Company’s
line of business set forth in Section 8(a) as appropriate to reflect any material change in the
Company’s business due to an in-licensing, merger,
14
acquisition or similar strategic
transaction.
Section 9. Company Resources.
Executive may not use any of the Company’s (or any affiliate’s) equipment for personal
purposes without written permission from the Company. The Executive may not give access to the
Company’s (or any affiliate’s) offices or files to any person not in the employ of the Company
without written permission of the Company.
Section 10. Injunctive Relief.
Executive understands and agrees that the Company will suffer irreparable harm in the event
that the Executive breaches any of the Executive’s obligations under Sections 6, 7, 8 or 9 hereof
and that monetary damages will be inadequate to compensate the Company for such breach.
Accordingly, the Executive agrees that, in the event of a breach or threatened breach by the
Executive of any of the provisions of Sections 6, 7, 8 or 9 hereof, the Company shall be entitled
to appropriate injunctive relief, in addition to any other in addition to any other rights,
remedies or damages available to the Company at law or in equity.
Section 11. Severability.
In the event any of the provisions of this Agreement shall be held by a court or other
tribunal of competent jurisdiction to be unenforceable, the other provisions of this Agreement
shall remain in full force and effect.
Section 12. Survival.
Sections 1(d) and 4 through 16 shall survive the termination of this Agreement for any reason.
Section 13. Representations, Warranties, and Covenants.
Executive represents, warrants, and covenants that the Executive’s performance of all the
terms of this Agreement and any services to be rendered as an employee of the Company do not and
will not breach any fiduciary or other duty or any covenant, agreement or understanding (including,
without limitation, any agreement relating to any proprietary information, knowledge or data
acquired by the Executive in confidence, trust or otherwise prior to the Executive’s employment by
the Company) to which the Executive is a party or by the terms of which the Executive may be bound.
The Executive further covenants and agrees not to enter into any agreement or understanding, either
written or oral, in conflict with the provisions of this Agreement.
Section 14. Accounting for Profits; Indemnification.
Executive covenants and agrees that, if the Executive shall violate any of the
Executive’s covenants or agreements contained in Sections 6, 7, 8 or 9 hereof, the Company shall be
entitled to an accounting and repayment of all profits, compensation,
15
royalties, commissions, remunerations or benefits which the Executive directly or indirectly
shall have realized or may realize relating to, growing out of or in connection with any such
violation; such remedy shall be in addition to and not in limitation of any injunctive relief or
other rights or remedies to which the Company is or may be entitled at law or in equity or
otherwise under this Agreement. The Executive hereby agrees to defend, indemnify and hold harmless
the Company against and in respect of: (a) any and all losses and damages resulting from, relating
or incident to, or arising out of any misrepresentation or breach by the Executive of any of the
Executive’s representations, warranties, covenants or agreements made or contained in this
Agreement; and (b) any and all actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable attorneys’ fees) incident to the foregoing.
Section 15. General.
This Agreement supersedes and replaces any existing agreement between the Executive and the
Company relating generally to the same subject matter and may be modified only in a writing signed
by the parties hereto. Failure to enforce any provision of the Agreement shall not constitute a
waiver of any term herein. The Executive agrees that he will not assign, transfer, or otherwise
dispose of, whether voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement. Any purported assignment, transfer, or disposition shall be null and void.
Nothing in this Agreement shall prevent the consolidation of the Company with, or its merger into,
any other corporation, or the sale by the Company of all or substantially all of its properties or
assets, or the assignment by the Company of this Agreement and the performance of its obligations
hereunder. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legal representatives, successors, and permitted
assigns, and shall not benefit any person or entity other than those enumerated above. The use of
any gender herein shall be applicable to all genders.
Section 16. Executive Acknowledgment.
Executive acknowledges (a) that he has consulted with: or has had the opportunity to consult
with independent counsel of his own choice concerning this Agreement and has been advised to do so
by the Company, and (b) that he has read and understands the Agreement, is fully aware of its legal
effect, and has entered into it freely based on his own judgment.
[Signatures appear on the following page.]
16
Appendix I
Chief Executive Officer and President Job Description
The Chief Executive Officer and President (CEO) will report to the Board of Directors and will be
responsible for all aspects of the company. He will serve as a business partner to the Board of
Directors and other members of the executive team. Also, the CEO will provide leadership and
direction to ensure the development of relevant business information and continued growth for the
Company consistent with the plans accepted by the Board of Directors.
Chief Financial Officer Job Description
This position will be responsible for all financial and accounting activities of the Company. The
CFO will serve as a business partner to the other members of the executive team. Also, the CFO
will provide leadership and direction to ensure the development of relevant business information,
accurate accounting systems, and timely financial plans and reports.
The CFO will also ensure that correct financial controls are in place so that the Company’s assets
are adequately protected, the use of funds is optimized, and appropriate cash flow is generated.
Further, the CFO will ensure the maintenance of a capital structure needed to implement the
corporate strategy.
The CFO will, among other responsibilities;
| • | Maintain commercial and investment banking relations to meet the Company’s future capital needs, and develop and maintain a dialog with members of the financial community. | |
| • | Support corporate and business development activities with the financial analysis necessary to evaluate partnerships, joint ventures and capital expenditures as needs arise; and suggest funding alternatives for such opportunities. | |
| • | Prepare appropriate financial, and if necessary, regulatory documents; interview and hire investment bankers and co-lead the “road show” and public offering of the company. | |
| • | Provide analysis of financial results and forecasts to management. Recommend and take appropriate action to ensure that financial forecasts reflect a sound position from both a business and financial standpoint. | |
| • | Implement and continuously improve the Company’s accounting systems, procedures and internal controls so that the accounting records provide accurate and timely information in accordance with generally-accepted accounting principals and in compliance with applicable security and tax jurisdictions. | |
| • | Lead the establishment and maintenance of financial control policies and procedures so that company assets are protected and asset returns are optimized. | |
| • | Any other responsibilities reasonably assigned by the Board. |
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