EMPLOYMENT AGREEMENT
Exhibit
10.1
EMPLOYMENT
AGREEMENT
dated
October 31, 2007 by and between NexMed, Inc., a Nevada corporation (the
"Company") and Xxxxxxxx Xxxxxx (the "Executive").
WHEREAS,
the Company desires to continue to employ Executive and to enter into
an
agreement (the "Agreement") embodying the terms of such employment;
WHEREAS,
the Company considers it essential to its best interests and the best interests
of its stockholders to xxxxxx the continued employment of Executive by the
Company during the term of this Agreement; and
WHEREAS,
Executive is willing to accept and continue his employment on the terms
hereinafter set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and
for
other good and valuable consideration, the parties agree as follows:
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1.
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Term
of Employment.
Subject to earlier termination in accordance with the provisions
of
Section 6 of this Agreement, Executive shall be employed by the
Company
pursuant to the terms of this Agreement for a period commencing
on October
31, 2007 (the "Effective Date") and ending on October 31, 2008
(the
"Initial Term of Employment"); provided,
however,
that,
the term of employment under this Agreement (the "Employment Term")
shall
renew automatically for one-year terms on each successive October
30th,
unless and until either party gives at least 60 days advance written
notice to the other that the Employment Term should not be automatically
extended. The Executive shall be employed “at will” and his employment can
be terminated at any time by either the Company or the Executive,
subject
to the provisions of Section 6
below.
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2.
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Position.
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(a)
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During
the Employment Term, Executive shall be employed by the Company
as Vice
President and Chief Operating Officer, and shall have such duties,
authority, and responsibility as are commensurate with his position,
subject to the direction of the Company's Chief Executive Officer
(the
“CEO”).
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(b)
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During
the Employment Term, Executive shall devote all of his business
time and
attention to the performance of his duties hereunder faithfully
and to the
best of his abilities and shall not undertake employment with,
or
participate in, the conduct of the business affairs of any other
person,
corporation, or entity; provided,
that,
nothing shall preclude Executive from (i) with the prior written
approval
of the CEO, serving in due course as a director, trustee or member
of a
committee of any organization or (ii) participating in the affairs
of any
recognized charitable organizations, or in any community affairs,
of
Executive's choice.
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(c)
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Executive's
duties hereunder shall be performed for the Company worldwide,
with
principle place of business at the Company's headquarters in East
Windsor,
New Jersey.
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3.
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Compensation.
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(a)
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Base
Salary.
During the Employment Term, the Company shall pay Executive a base
salary,
subject to increase at the discretion of the Board of Directors
of the
Company (the "Board"), at the annual rate of $225,000
(the "Base Salary"), payable in regular installments in accordance
with
the Company's usual payroll practices. Such base salary will be
adjusted
to $250,000 annually following the Company’s receipt of an anticipated
cash infusion of $5 Million from a licensing
partner.
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(b)
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Bonus.
With respect to each calendar year during the Employment Term,
Executive
shall be eligible to earn an annual bonus award (the "Bonus") in
an amount
not to exceed 50% of Executive’s annual Base Salary. The amount of the
Bonus shall be determined by the Board, or the Compensation Committee
of
the Board (the "Compensation Committee"), in its sole discretion,
based
upon the achievement by the Company of objective performance measures
established and determined by the Board or the Compensation Committee
in
consultation with Executive no later than the end of the first
month of
such calendar year. The Bonus with respect to each calendar year
in the
Employment Term shall be paid as promptly as practicable following
the
delivery of the Company's audited financial statements for such
year, but
not later than March 15 of the calendar year following the calendar
year
in which the Bonus is earned. Unless otherwise stated herein, the
Bonus
shall not accrue until the date on which it is paid, and Executive
must be
employed on the date the Bonus is paid in order to receive the
Bonus,
except that Executive’s continuous employment is not required pursuant to
Sections 6(b)(2) and 6(c)(2).
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(c)
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Stock
Option Grants.
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(i)
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On
October 3, 2007, the Compensation Committee approved a grant to
Executive
of an option to purchase an aggregate of 175,000 shares of the
Company's
Common Stock (the "Option") based on the closing price of the Company’s
Common Stock on October 31, 2007 of $1.43 per
share. The Option vests in three installments: 25,000 Stock Option
Shares
on October 31, 2008; 50,000 Stock Option Shares on October 31,
2009; and
100,000 Stock Option Shares on October 31, 2010, assuming continuous
and
uninterrupted employment until such dates. The Company will provide
the
Executive the ability to perform a cashless exercise of all Stock
Options,
in accordance with the vesting
schedule.
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(ii)
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The
Option is subject to The NexMed, Inc. Stock Option and Long-Term
Incentive
Compensation Plan (the "Option Plan") and the applicable stock
option
agreement.
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(iii)
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In
addition to the foregoing, the Compensation Committee may recommend
to the
Board that additional stock options be granted to Executive in
accordance
with the terms and subject to the conditions of the Option
Plan.
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(iv)
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All
of Executive's outstanding but unvested stock options shall vest
immediately upon the occurrence of a Change in Control (as defined
in
Appendix A hereto).
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(d)
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Stock
Grants.
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(i)
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On
October 3, 2007, the Compensation Committee approved a grant to
Executive
of an aggregate of 75,000 shares of the Company’s Restricted Common Stock.
This Grant vests in three equal installments (33.33% of the Stock
Grants,
which represents 25,000 Stock Shares) on October 31, 2008, October
31,
2009, and October 31, 2010, respectively, assuming continuous and
uninterrupted employment until such
dates.
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(ii)
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On
October 3, 2007, the Compensation Committee approved a grant to
Executive
of an aggregate of 50,000 shares of the Company’s Common Stock. This Grant
will vest upon the Executive’s execution of a licensing/development
agreement valued at over $5 Million, provided that
such agreement is executed within 18 months of Executive’s employment
start date and assuming continuous and uninterrupted employment
until such
date.
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(iii)
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All
of Executive’s outstanding but unvested stock grants provided under this
Section shall vest immediately upon the occurrence of a Change
in Control
(as defined in Appendix A of the
Agreement).
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4.
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Employee
Benefits.
During the Employment Term, Executive shall be eligible for inclusion,
to
the extent permitted by law, as a full-time employee of the Company
or any
of its subsidiaries, in any and all of the following plans, programs,
and
policies in effect at the time: (i) pension, profit sharing, savings,
and
other retirement plans and programs, (ii) life and health (medical,
dental, hospitalization, short-term and long-term disability) insurance
plans and programs, (iii) stock option and stock purchase plans
and
programs, (iv) accidental death and dismemberment protection plans
and
programs, (v) travel accident insurance plans and programs, (vi)
vacation
policy (Executive shall have four weeks of vacation per calendar
year),
and (vii) other plans and programs sponsored by the Company or
any
subsidiary for employees or executives generally, including any
and all
plans and programs that supplement any or all of the foregoing
types of
plans or programs.
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5.
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Business
Expenses and Perquisites.
The Company shall reimburse to Executive, or pay directly, all
reasonable
expenses incurred by Executive in connection with the business
of the
Company, and its subsidiaries and affiliates, including but not
limited to
business-class travel, reasonable accommodations, and entertainment,
subject to documentation in accordance with the Company's policy.
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6.
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Termination.
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(a)
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By
the Company for Cause.
The Company may, for Cause, terminate Executive's employment hereunder
at
any time by written notice to Executive. For purposes of this Agreement,
the term "Cause" shall mean Executive's (i) engaging in fraud against
the
Company or misappropriation of funds of the Company, (ii) disregard
or
failure to follow specific and reasonable directives of the Board,
(iii)
willful failure to perform his duties as Vice President and Chief
Operating Officer of the Company, (iv) willful misconduct resulting
in
material injury to the Company, (v) violation of the terms of the
Non-Disclosure and Inventions Agreement between Executive and NexMed
(U.S.A.), Inc., a wholly-owned subsidiary of the Company, dated
October
31, 2007 (the "Non-Disclosure Agreement") attached hereto as Appendix
"B",
(vi) conviction of, or Executive's plea of guilty or no contest
to, a
felony or any crime involving as a material element fraud or dishonesty,
or (vii) material breach (not covered by clauses (i) through (vi)
of this
paragraph) of any of the other provisions of this Agreement; provided,
that,
in the case of subclauses (ii), (iii) or (vii), Cause shall not
exist if
the act or omission deemed to constitute Cause is cured (if curable)
by
Executive within thirty (30) days after written notice thereof
to
Executive by the Company. For purposes of the foregoing, no act,
or
failure to act, on Executive's part shall be considered "willful"
unless
done, or omitted to be done, by Executive other than in good faith,
and
without reasonable belief that his action or omission was in furtherance
of the interests of the Company.
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In
the
event of the termination of Executive's employment under this Section 6(a)
for
Cause, the Employment Term shall end on the day of such termination and the
Company shall pay to Executive, no later than the payroll cycle following
Executive’s termination, in one lump sum: (i) any accrued but unpaid Base
Salary, less applicable deductions, including salary in respect of any accrued
and accumulated vacation due to Executive at the date of such termination;
and
(ii) any amounts owing, but not yet paid, pursuant to Section 5
hereof.
Except
as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(b)
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Disability
or Death.
If Executive should suffer a Permanent Disability, the Company
may
terminate Executive's employment hereunder upon ten (10) or more
days'
prior written notice to Executive. If Executive should pass away
during
the term of this Agreement, Executive’s employment shall be deemed
terminated on his date of death. For purposes of this Agreement,
a
"Permanent Disability" shall be deemed to have occurred only when
Executive has qualified for benefits (including satisfaction of
any
applicable waiting period) under the Company's or a subsidiary's
long-term
disability insurance arrangement (the "LTD Policy"). In the event
of the
termination of Executive's employment hereunder by reason of Permanent
Disability or death, the Employment Term shall end on the day of
such
termination and the Company shall pay, no later than the payroll
cycle
following Executive’s termination, to Executive or Executive's legal
representative (in the event of Permanent Disability), or any beneficiary
or beneficiaries designated by Executive to the Company in writing,
or to
Executive's estate if no such beneficiary has been so designated
(in the
event of Executive's death), a single lump sum payment of: (i)
any accrued
but unpaid Base Salary, less applicable deductions, including salary
in
respect of any accrued and accumulated vacation, due to Executive
at the
date of such termination; (ii) any amounts owing, but not yet paid,
pursuant to Section 5 hereof.
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In
addition, upon a termination under this Section 6(b), and upon the satisfaction
of the conditions set forth herein: (1) Executive shall receive a pro rata
Bonus
for the calendar year in which such termination occurs, equal to the Bonus
he
would have received, to the extent all criteria for such a Bonus have been
met
(with the exception of the requirement that Executive be employed on the
date
the Bonus is to be paid), for the calendar year of said termination multiplied
by a fraction, the numerator of which is the number of days in such year
preceding and including the date of termination, and the denominator of which
is
365. Said pro-rata Bonus shall be paid at the same time as the Bonus would
have
been paid had Executive remained employed by the Company through the date
of
payment, but in any event, not later than March 15 of the calendar year
following the calendar year in which the Bonus is earned; (2) Executive shall
receive any unpaid Bonus for the calendar year preceding his termination,
to the
extent that all criteria for such bonus have been met (with the exception
of the
requirement that Executive be employed on the date the Bonus is to be paid).
Said Bonus shall be paid at the same time as the Bonus would have been paid
had
Executive remained employed by the Company through the date of payment; (3)
Executive’s next-scheduled but unvested stock options granted pursuant to
Section 3(c) of this Agreement shall vest immediately; and (4) Executive’s
next-scheduled but unvested stock granted pursuant to Section 3(d) of this
Agreement shall vest immediately. The payment of the Bonuses and the
acceleration of Executive’s options and stock are conditioned upon Executive (or
his legal representative) signing a release in favor of the Company, as provided
for in Section 6(f).
Except
as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(c)
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By
the Company without Cause.
The Company may, without Cause, terminate Executive’s employment hereunder
at any time upon ten (10) or more days’ written notice to Executive. The
Company, in its sole discretion, may provide the Executive with
ten (10)
days’ pay in lieu of notice. In the event Executive’s employment is
terminated pursuant to this Section 6(c), the Employment Term shall
end on
the day of such termination and the Company shall pay to Executive,
no
later than the payroll cycle following Executive’s termination, in one
lump sum: (i) any accrued but unpaid Base Salary, less applicable
deductions, including salary in respect of any accrued and accumulated
vacation, due to Executive at the date of such termination, and
(ii) any
amounts owing, but not yet paid, pursuant to Section 5 hereof.
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In
addition, upon a termination under this Section 6(c) and upon the satisfaction
of the conditions set forth herein: (1) Executive shall receive a pro rata
Bonus
for the calendar year in which such termination occurs, equal to the Bonus
he
would have received, to the extent all criteria for such a Bonus have been
met
(with the exception of the requirement that Executive be employed on date
the
Bonus is to be paid), for the calendar year of said termination multiplied
by a
fraction, the numerator of which is the number of days in such year preceding
and including the date of termination, and the denominator of which is 365.
Said
pro-rata Bonus shall be paid at the same time as the Bonus would have been
paid
had Executive remained employed by the Company through the date of payment,
but
in any event, not later than March 15 of the calendar year following the
calendar year in which the Bonus is earned; (2) Executive shall receive any
unpaid Bonus for the calendar year preceding his termination, to the extent
that
all criteria for such bonus have been met (with the exception of the Executive
being employed on the date the Bonus is to be paid). Said Bonus shall be
paid at
the same time as the Bonus would have been paid had Executive remained employed
by the Company through the date of payment; (3) Executive’s next-scheduled but
unvested stock options granted pursuant to Section 3(c) of this Agreement
shall
vest immediately; (4) Executive’s next-scheduled but unvested stock granted
pursuant to Section 3(d) of this Agreement shall vest immediately; and (5)
Executive shall receive severance payments (the “Severance”) in an amount equal
to the Executive’s annual Base Salary at the time of such termination of six
months plus one week for every fully completed year of service, up to one
year,
and payable in regular installments in accordance with the Company’s usual
payroll practices beginning thirty (30) days following Executive’s date of
termination. The payment of the Bonuses and the Severance, as well as the
acceleration of Executive’s options and stock, are conditioned upon Executive
signing a release in favor of the Company, as provided for in Section
6(f).
Except
as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(d)
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By
Executive for Good Reason.
If any of the events described below occurs during the Employment
Term,
Executive may terminate Executive's employment hereunder for Good
Reason
by written notice to the Company identifying the event or omission
constituting Good Reason not more than one (1) month following
the
occurrence of such event and, in the case of subclauses (ii), (iii),
or
(iv) below, a failure by the Company to cure such act or omission
within
thirty (30) days after receipt of such written notice. In the event
that
Executive elects to terminate employment pursuant to this Section
6(d),
the Employment Term and Executive's employment hereunder will be
terminated effective as of the later of thirty-one (31) days after
the
Company's receipt of Executive's notice of termination or thirty-one
(31)
days after the event, and Executive's termination for Good Reason
pursuant
to this Section 6(d) shall be treated for all purposes as a termination
without Cause pursuant to Section 6(c) and the provisions of Section
6(c)
shall apply to such termination. The occurrence of any of the following
events without Executive's consent shall permit Executive to terminate
Executive's employment for "Good Reason" pursuant to this Section
6(d):
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(i)
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A
"Change in Control" (as defined in Appendix A hereto) occurs;
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(ii)
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The
failure by the Company to observe or comply in any material respect
with
any of the material provisions of this
Agreement;
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(iii)
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A
material diminution in Executive's
duties;
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(iv)
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The
assignment to Executive of duties that are materially inconsistent
with
Executive’s duties or that materially impair Executive’s ability to
function as the Vice President and Chief Operating Officer of the
Company;
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(v)
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The
relocation of Executive’s primary office from a location that is more than
twenty five (25) miles from both (a) the Company’s executive offices at
the time of relocation and (b) Executive’s primary residence at the time
of such relocation; or
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(vi)
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The
Company providing Executive with a notice of non-renewal of this
Agreement
by the Company under Section 1.
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Except
as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(e)
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By
Executive without Good Reason.
Executive may terminate the Employment Term and Executive's employment
hereunder at any time without Good Reason upon thirty (30) days
advance
written notice to the Company. In the event Executive's employment
is
terminated pursuant to this Section 6(e), the Company shall pay
to
Executive, no later than ten (10) days after the last day of Executive's
employment, in one lump sum, the sum of (i) any accrued but unpaid
Base
Salary, less applicable deductions, including salary in respect
of any
accrued and accumulated vacation, due to Executive at the date
of such
termination, and (ii) any amounts owing, but not yet paid, pursuant
to
Section 5 hereof.
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Except
as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(f)
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Release.
Notwithstanding any other provision of this Agreement to the contrary,
Executive acknowledges and agrees that any and all payments and
benefits
to which Executive is entitled under this Section 6(b), 6(c), or
6(d),
with the exception of accrued salary, accrued vacation payments,
and
payments pursuant to Section 5 of this Agreement, are conditioned upon and
subject to Executive's first executing a Confidential Separation
Agreement
including a general waiver and release (and the expiration of any
associated revocation period), in such reasonable and customary
form as
shall be prepared by the Company, of all claims Executive may have
against
the Company, and related entities and individuals.
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7.
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Required
Postponement for Specified
Services.
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(a)
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Specified
Executive Delay.
Notwithstanding anything in this Agreement to the contrary, if
required by
section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”)
and if Executive is considered a Specified Executive (as defined
herein)
and payment of any amounts under this Agreement is required to
be delayed
for a period of six months after separation from service pursuant
to
Section 409A of the Code, payment of such amounts shall be delayed
as
required by section 409A, and the accumulated amounts shall be
paid in a
lump sum payment within five days after the end of the six-month
period.
If Executive dies during the postponement period prior to the payment
of
benefits, the amounts withheld on account of section 409A shall
be paid to
the personal representative of Executive’s estate within 60 days after the
date of Executive’s death.
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(b)
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“Specified
Executive”
shall mean an employee who, at any time during the 12-month period
ending
on the identification date, is a “specified employee” under section 409A
of the Code, as determined by the Compensation Committee of the
Board or
its delegate. The determination of Specified Executives, including
the
number and identity of persons considered officers and the identification
date, shall be made by the Compensation Committee or its delegate
in
accordance with the provisions of section 409A of the Code and
the
regulations issued thereunder.
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8.
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No
Mitigation; Employee Benefit Plans.
Executive shall not be required to mitigate amounts payable to
him under
this Agreement by seeking other employment or otherwise, and there
shall
be no offset against amounts payable to Executive under this Agreement
on
account of Executive's subsequent employment. Amounts payable to
Executive
under this Agreement shall not be offset by any claims that the
Company
may have against Executive, and such amounts payable to Executive
under
this Agreement shall not be affected by any other circumstances,
including, without limitation, any counterclaim, recoupment, defense,
or
other right that the Company may have against Executive or others.
Provided,
however,
that,
payments made to Executive as a result of the termination of Executive's
employment hereunder shall not be considered as includible compensation
with respect to any employee benefit plans maintained by the Company,
except to the extent otherwise required by law.
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9.
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Indemnification.
In the event that Executive is made a party or threatened to be
made a
party to any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (a "Proceeding"), by reason of
Executive's employment with, or serving as an officer of, the Company,
the
Company shall indemnify and hold Executive harmless, and defend
Executive
to the fullest extent authorized by the laws of the state in which
the
Company is incorporated, as the same exist and may hereafter be
amended,
against any and all claims, demands, suits, judgments, assessments,
and
settlements (collectively the "Claims"), including all expenses
incurred
or suffered by Executive in connection therewith (excluding, however,
any
legal fees incurred by Executive for Executive's own counsel, except
as
otherwise provided in this Section 9, and excluding any Proceedings
initiated by executive), and such indemnification shall continue
as to
Executive even after Executive is no longer employed by the Company
hereunder, and shall inure to the benefit of Executive's heirs,
executors,
and administrators; provided,
however,
that,
Executive promptly gives written notice to the Company of any such
Claims
(although Executive's failure to promptly give notice shall not
affect the
Company's obligations under this Section 9 except to the extent
that such
failure prejudices the Company or its ability to defend such Claims).
The
Company shall have the right to undertake, with counsel or other
representatives of its own choosing, the defense or settlement
of any
Claims. In the event that the Company shall fail to notify Executive,
within ten days of its receipt of Executive's written notice, that
the
Company has elected to undertake such defense or settlement, or
if at any
time the Company shall otherwise fail to diligently defend or pursue
settlement of such Claims, then Executive shall have the right
to
undertake the defense, compromise, or settlement of such Claims,
in which
event the Company shall hold Executive harmless from any legal
fees
incurred by Executive for Executive's counsel. Neither Executive
nor the
Company shall settle any Claims without the prior written consent
of the
other, which consent shall not be unreasonably withheld or delayed.
In the
event that the Company submits to Executive a bona fide settlement
offer
from the claimant of Claims (which settlement offer shall include
as an
unconditional term thereof the giving by the claimant or the plaintiff
to
Executive a release from all liability in respect of such Claims),
and
Executive refuses to consent to such settlement, then thereafter
the
Company's liability to Executive for indemnification hereunder
with
respect to such Claims shall not exceed the settlement amount included
in
such bona fide settlement offer, and Executive shall either assume
the
defense of such Claims or pay the Company's attorneys' fees and
other
out-of-pocket costs incurred thereafter in continuing the defense
of such
Claims. Regardless of which party is conducting the defense of
any such
Claims, the other party, with counsel or other representatives
of its own
choosing and at its sole cost and expense, shall have the right
to consult
with the party conducting the defense of such Claims and its counsel
or
other representatives concerning such Claims and Executive and
the
respective counsel or other representatives shall cooperate with
respect
to such Claims. The party conducting the defense of any such Claims
and
its counsel shall in any case keep the other party and its counsel
(if
any) fully informed as to the status of such Claims and any matters
relating thereto. Executive and the Company shall provide to the
other
such records, books, documents, and other materials as shall reasonably
be
necessary for each to conduct or evaluate the defense of any Claims,
and
will generally cooperate with respect to any matters relating thereto.
This Section 9 shall remain in effect after this Agreement is terminated,
regardless of the reasons for such termination. The indemnification
provided to Executive pursuant to this Section 9 shall not supersede
or
reduce any indemnification provided to Executive under any separate
agreement, or the By-Laws of the Company; in this regard, it is
intended
that this Agreement shall expand and extend Executive's rights
to receive
indemnification.
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10.
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Withholding.
The Company shall have the right to deduct and withhold from all
payments
to Executive hereunder all payroll taxes, income tax withholding
and other
federal, state and local taxes and charges which currently are
or which
hereafter may be required by law to be so deducted and withheld.
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11.
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Restrictive
Covenants.
The restrictive covenants contained in the Non-Disclosure and Inventions
Agreement, signed by Executive on October 31, 2007 and attached
hereto as
Appendix B, including but not limited to, Section 2 (Confidential
Material); Section 3 (Non-Solicitation); Section 4 (Non-Compete),
and
Section 5 (Intellectual Property and Inventions) are incorporated
by
reference as if fully set forth herein. Executive hereby reaffirms
his
obligations under that agreement.
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12.
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Non-Assignability.
Executive's rights and benefits hereunder are personal to Executive,
and
shall not be alienated, voluntarily or involuntarily assigned,
or
transferred.
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13.
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Binding
Effect.
This Agreement shall be binding upon the parties hereto, and their
respective assigns, successors, executors, administrators, and
heirs. In
the event the Company becomes a party to any merger, consolidation,
or
reorganization, this Agreement shall remain in full force and effect
as an
obligation of the Company or its successor(s) in interest. None
of the
payments provided for by this Agreement shall be subject to seizure
for
payment of any debts or judgments against Executive or Executive's
beneficiary or beneficiaries, nor shall Executive or any such beneficiary
or beneficiaries have any right to transfer or encumber any right
or
benefit hereunder.
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14.
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Entire
Agreement; Modification.
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(a)
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This
Agreement supersedes all prior agreements, with the exception of
the
Non-Disclosure and Inventions Agreement, and all other agreements
(or
portions thereof) that deal with confidentiality or intellectual
property.
This Agreement sets forth the entire understanding among the parties
hereto with respect to the subject matter hereof, may not be changed
orally, and may be changed only by an agreement in writing signed
by the
parties hereto.
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(b)
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Executive
acknowledges that from time to time, the Company may establish,
maintain
and distribute manuals, handbooks or personnel policies, and officers
or
other representatives of the Company may make written or oral statements
relating to personnel policies and procedures. Such manuals, handbooks
and
statements are intended only for general guidance. No policies,
procedures
or statements of any nature by or on behalf of the Company (whether
written or oral, and whether or not contained in any manual or
handbook or
personnel policies), and no acts or practices of any nature, shall
be
construed to modify this Agreement or to create express or implied
obligations of any nature to
Executive.
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15.
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Notices.
All notices and communications hereunder shall be in writing, sent
by
certified or registered mail, return receipt requested, postage
prepaid;
by facsimile transmission, with proof of the time and date of receipt
retained by the transmitter; or by hand-delivery properly receipted.
The
actual date of receipt as shown by the return receipt therefore,
the
facsimile transmission sheet, or the hand-delivery receipt, as
the case
may be, shall determine the date on which (and, in the case of
a
facsimile, the time at which) notice was given. All payments required
hereunder by the Company to Executive shall be sent postage prepaid,
or,
at Executive's election, shall be transferred to Executive electronically
to such bank account as Executive may designate in writing to the
Company,
including designation of the applicable electronic address. The
foregoing
items (other than any electronic transfer to Executive) shall be
addressed
as follows (or to such other address as the Company and Executive
may
designate in writing from time to time):
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10
To
the
Company:
NexMed,
Inc.
00
Xxxx
Xxxxxx Xxxxx
Xxxx
Xxxxxxx, XX 00000
Fax:
000-000-0000
Attention:
Chief Executive Officer
To
Executive:
Xxxxxxxx
Xxxxxx
0
Xxxxxxxxxxx Xxxxx
Xxxxxxxxx,
X.X. 00000
Fax:
000-000-0000
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16.
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Section
409A of the Code.
This Agreement is intended to comply with section 409A of the Code
and its
corresponding regulations, to the extent applicable. Notwithstanding
anything in this Agreement to the contrary, payments may only be
made
under this Agreement upon an event and in a manner permitted by
section
409A of the Code, to the extent applicable. As used in the Agreement,
the
term “termination of employment” shall mean Executive’s separation from
service with the Company within the meaning of section 409A of
the Code
and the regulations promulgated thereunder. For purposes of section
409A,
the right to a series of payments under the Agreement shall be
treated as
a right to a series of separate payments. All reimbursements and
in-kind
benefits provided under the Agreement shall be made or provided
in
accordance with the requirements of section 409A of the Code, including,
where applicable, the requirement that (i) any reimbursement shall
be for
expenses incurred during Executive’s lifetime (or during a shorter period
of time specified in this Agreement), (ii) the amount of expenses
eligible
for reimbursement, or in-kind benefits provided, during a calendar
year
may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before
the last
day of the calendar year following the year in which the expense
is
incurred, and (iv) the right to reimbursement or in-kind benefits
is not
subject to liquidation or exchange for another
benefit.
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17.
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Governing
Law; Jurisdiction.
This Agreement shall be governed by, and construed and enforced
according
to, the domestic laws of the State of New Jersey without giving
effect to
the principles of conflict of laws thereof, or such principles
of any
other jurisdiction, which could cause the application of the substantive
law of any jurisdiction other than the State of New Jersey. The
Company
and Executive agree that the state or federal courts of New Jersey
shall
have exclusive jurisdiction to hear and determine any dispute which
may
arise under this Agreement.
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11
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18.
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Severability.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of
this Agreement, and each other provision of the Agreement shall
be
severable and enforceable to the extent permitted by law.
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19.
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Headings.
The headings of the Sections hereof are provided for convenience
only and
are not to serve as a basis for interpretation or construction,
and shall
not constitute a part, of this Agreement.
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20.
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Signature
in Counterparts.
This Agreement may be signed in counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and
hereto
were upon the same instrument.
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IN
WITNESS WHEREOF, Executive has hereunto set his hand and the Company has
caused
this Agreement to be executed in its name on its behalf, all as of the day
and
year first above written.
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/s/
Xxxxxxxx
Xxxxxx
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Xxxxxxxx
Xxxxxx
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NEXMED,
INC.
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By:
/s/ Xxxxxx X.
Xxx
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Title:
President and Chief Executive
Officer
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12
Appendix
A
Change
in Control
For
the
purpose of this Agreement, a "Change in Control" shall be deemed to have
taken
place if:
A. Individuals
who, on the date hereof, constitute the Board (the "Incumbent Directors")
cease
for any reason to constitute at least a majority of the Board, provided that
any
person becoming a director subsequent to the date hereof, whose election
or
nomination for election was approved by a vote of at least two-thirds of
the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a
nominee
for director, without written objection to such nomination) shall be an
Incumbent Director; provided,
however,
that,
no
individual initially elected or nominated as a director of the Company as
a
result of an actual or threatened election contest with respect to directors
or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed
to
be an Incumbent Director;
B. Any
"Person" (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the Board
(the
"Voting Securities"); provided,
however,
that,
the
event described in this paragraph B shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (i) by the Company
or
any subsidiary of the Company in which the Company owns more than 25% of
the
combined voting power of such entity (a "Subsidiary"), (ii) by any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any
Subsidiary, (iii) by any underwriter temporarily holding the Company's Voting
Securities pursuant to a public offering of such Voting Securities, (iv)
pursuant to a Non-Qualifying Transaction (as defined in paragraph C immediately
below), (v) pursuant to any acquisition by Executive or by any Person which
is
an "affiliate" (within the meaning of 17 C.F.R. § 230.405) of Executive (an
"Excluded Person");
C. The
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its Subsidiaries
that requires the approval of the Company's stockholders, whether for such
transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business Combination: (i)
more
than 25% of the total voting power of (A) the corporation resulting from
such
Business Combination (the "Surviving Corporation"), or (B) if applicable,
the
ultimate parent corporation that directly or indirectly has beneficial ownership
of 100% of the voting securities eligible to elect directors of the Surviving
Company (the "Parent Corporation"), is represented by the Company's Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Company's Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion
as the voting power of the Company's Voting Securities among the holders
thereof
immediately prior to the Business Combination, (ii) no Person (other than
(A)
any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation or (B) an Excluded Person
is or
becomes the beneficial owner, directly or indirectly, of 25% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation,
the
Surviving Corporation) and (iii) at least a majority of the members of the
board
of directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time of the Board's approval
of the
execution of the initial agreement providing for such Business Combination
(any
Business Combination which satisfies all of the criteria specified in (i),
(ii)
and (iii) above shall be deemed to be a "Non-Qualifying Transaction");
13
D. A
sale of
all or substantially all of the Company's assets, other than to an Excluded
Person;
E. The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or
F. Such
other events as the Board may designate.
Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to
occur
solely because any person acquires beneficial ownership of more than 25%
of the
Company's Voting Securities as a result of the acquisition of the Company's
Voting Securities by the Company which reduces the number of the Company's
Voting Securities outstanding; provided,
that,
if
after such acquisition by the Company such person becomes the beneficial
owner
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person,
a
Change in Control of the Company shall then occur.
14
