EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Agreement (this “Agreement”),
dated
as of January
26, 2006, by and between MANHATTAN PHARMACEUTICALS, INC., a Delaware corporation
with principal executive offices at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx
Xxxx 00000 (the “Company”),
and
Xxxx X. Xxxxxx, M.D. Ph.D.,
residing at 000 Xxxx 00xx
Xxxxxx,
Xxxxxxxxx #00X, Xxx Xxxx, Xxx Xxxx 00000 (the
“Employee”).
W
I T N E S S E T H:
WHEREAS,
the Company desires to employ the Employee as Chief Medical Officer of the
Company, and the Employee desires to serve the Company in such capacity, upon
the terms and subject to the conditions contained in this
Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Employment.
(a) Services.
The
Employee will be employed by the Company as its Chief
Medical Officer.
The
Employee will report to the Chief Executive Officer of the Company and shall
perform such duties as are consistent with his position as Chief
Medical Officer (the “Services”).
The
Employee agrees to perform such duties faithfully, to devote substantially
all
of his working time, attention and energies to the business of the Company,
and
while he remains employed, not to engage in any other business activity that
is
in conflict with his duties and obligations to the Company without the prior
written consent of the Chief Executive Officer of the Company.
(b) Acceptance.
Employee hereby accepts such employment and agrees to render the
Services.
2. Term.
The
employment of the Employee by the Company as provided in Section 1 shall be
for
a period of three (3) years commencing on February 1, 2006 (the “Effective
Date”),
unless
sooner terminated in accordance with the provisions of Section 8 below (the
“Term”);
provided, however, that the Term shall be extended automatically for additional
one-year periods unless one party shall advise the other in writing at least
60
days before the initial expiration of the Term or an anniversary date thereof
that this Agreement shall no longer be so extended. Notwithstanding
anything to the contrary contained herein, Sections 5 and 6 shall survive the
expiration or termination hereof.
3. Best
Efforts; Place of Performance.
(a) The
Employee shall devote substantially all of his business time, attention and
energies to the business and affairs of the Company and
shall
use his best efforts to advance the best interests of the Company and shall
not
during the Term be actively engaged in any other business activity, whether
or
not such business activity is pursued for gain, profit or other pecuniary
advantage, that will interfere with the performance by the Employee of his
duties hereunder or the Employee’s availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.
(b) The
duties to be performed by the Employee hereunder shall be performed primarily
at
the principal office of the Company in New York, New York, subject to reasonable
travel requirements on behalf of the Company, or
such
other place as the Board of Directors of the Company (the “Board”)
may
reasonably designate. Notwithstanding the foregoing, the Company may be
relocated to another city within the United States with consent of the
Board.
4. Compensation.
As full
compensation for the performance by the Employee of his duties under this
Agreement, the Company shall pay the Employee as follows:
(a) Base
Salary.
The
Company shall pay Employee a salary (the “Base
Salary”)
equal
to Two Hundred Seventy-Five Thousand Dollars ($275,000.00) per year. Payment
shall be made in accordance with the Company’s normal payroll
practices.
(b) Guaranteed
Bonus.
The
Company shall pay Employee a cash bonus of $50,000, payable in two equal
installments (the “Guaranteed
Bonus”).
The
first installment of $25,000 shall be paid to the Employee on the date that
is
six (6) months after the Effective Date and the second installment of $25,000
shall be paid to the Employee on the first anniversary of the Effective Date,
provided, however, that the Employee is still employed by the Company on the
applicable date of payment.
(c) Annual
Milestone Bonus.
At
the
discretion of the Chief Executive Officer, in conjunction with the Board, the
Employee shall receive a bonus on each anniversary of the Effective Date during
the Term (the “Annual
Milestone Bonus”)
in an
amount up to thirty percent (30%) of his Base Salary, based on the attainment
by
the Employee of certain financial, clinical development and business milestones
(the
“Milestones”)
as
established annually by the Chief Executive Officer, in conjunction with the
Board, after consultation with the Employee, prior
to
the start of each anniversary of this Agreement.
The
Milestones for the first year of this Agreement shall be established by the
Chief Executive Officer, in conjunction with the Board, after consultation
with
the Employee, subsequent to, but not more than sixty (60) days following, the
Effective Date. The Milestones for each subsequent year shall be established
by
the
Chief
Executive Officer, in conjunction with the Board, after consultation with the
Employee, at least sixty (60) days prior to each anniversary of this Agreement.
The Annual Milestone Bonus shall be payable either as a lump-sum payment or
in
installments as determined by the Company in its sole discretion.
(c) Withholding.
The
Company shall withhold all applicable federal, state and local taxes and social
security and such other amounts as may be required by law from all amounts
payable to the Employee under this Section 4.
(d) Initial
Option.
As
additional compensation for the Services, the Company shall grant the Employee
an option to purchase 300,000 shares of the Common Stock of the Company at
a
price per share equal to the last closing sale price of the Company’s Common
Stock on the Effective Date (the “Initial
Option”).
The
Initial Option shall (i) be governed by the Company’s 2004 Stock Option Plan;
(ii) vest in three equal installments of 100,000 shares on the first, second
and
third anniversary of the Effective Date; (iii) be exercisable for 10 years
from
the date of grant; and (iv) remain exercisable for 90 days from the date that
the Employee is no longer an employee of the Company, subject, in each case,
to
the provisions of Section 9 below. In connection with such grant, the Employee
shall enter into the Company’s standard stock option agreement which will
incorporate the foregoing vesting schedule and the provisions contained in
Section 9 hereof.
(e) Expenses.
The
Company shall reimburse the Employee for all normal, usual and necessary
expenses incurred by the Employee in furtherance of the business and affairs
of
the Company, including reasonable travel and entertainment, upon timely receipt
by the Company of appropriate vouchers or other proof of the Employee’s
expenditures and otherwise in accordance with any expense reimbursement policy
as may from time to time be adopted by the Company.
(f) Other
Benefits.
The
Employee shall be entitled to all rights and benefits for which he shall be
eligible under any benefit or other plans (including, without limitation,
dental, medical, medical reimbursement and hospital plans, pension plans,
employee stock purchase plans, profit sharing plans, bonus plans and other
so-called "fringe" benefits) as the Company shall make available to its senior
executives from time to time.
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(g) Vacation.
The
Employee shall, during the Term, be entitled to a vacation of three (3)
nonconsecutive weeks per annum,
in
addition to holidays observed by the Company.
The
Employee shall not be entitled to carry any vacation forward to the next year
of
employment and shall not receive any compensation for unused vacation
days.
5. Confidential
Information and Inventions.
(a) The
Employee recognizes and acknowledges that in the course of his duties he is
likely to receive confidential or proprietary information owned by the Company,
its affiliates or third parties with whom the Company or any such affiliates
has
an obligation of confidentiality. Accordingly, during and after the Term, the
Employee agrees to keep confidential and not disclose or make accessible to
any
other person or use for any other purpose other than in connection with the
fulfillment of his duties under this Agreement, any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. “Confidential and Proprietary Information”
shall include, but shall not be limited to, confidential or proprietary
scientific or technical information, data, formulas and related concepts,
business plans (both current and under development), client lists, promotion
and
marketing programs, trade secrets, or any other confidential or proprietary
business information relating to development programs, costs, revenues,
marketing, investments, sales activities, promotions, credit and financial
data,
manufacturing processes, financing methods, plans or the business and affairs
of
the Company or of any affiliate or client of the Company. The Employee expressly
acknowledges the trade secret status of the Confidential and Proprietary
Information and that the Confidential and Proprietary Information constitutes
a
protectable business interest of the Company. The Employee agrees: (i) not
to
use any such Confidential and Proprietary Information for himself or others;
and
(ii) not to take any Company material or reproductions (including but not
limited to writings, correspondence, notes, drafts, records, invoices, technical
and business policies, computer programs or disks) thereof from the Company’s
offices at any time during his employment by the Company, except as required
in
the execution of the Employee’s duties to the Company. The Employee agrees to
return immediately all Company material and reproductions (including but not
limited, to writings, correspondence, notes, drafts, records, invoices,
technical and business policies, computer programs or disks) thereof in his
possession to the Company upon request and in any event immediately upon
termination of employment.
(b) Except
with prior written authorization by the Company, the Employee agrees not to
disclose or publish any of the Confidential and Proprietary Information, or
any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time during or after his employment with the Company.
(c) Notwithstanding
the foregoing, Confidential and Proprietary Information shall not include any
information or material which the Employee can establish through competent
proof: (i) is or becomes generally available to the public other than as a
result of disclosure thereof by the Employee; (ii) is lawfully received by
the
Employee on a non-confidential basis from a third party that is not itself
under
an obligation of confidentiality or non-disclosure to the Company with respect
to such information; (iii) was in the Employee's possession at the time of
disclosure by the Company and was not acquired, directly or indirectly from
the
Company; or (iv) is required to be publicly disclosed by law or by regulation;
provided, however, that in such event Employee shall provide the Company with
prompt advance notice of such disclosure so that the Company has the opportunity
if it so desires to seek a protective order or other similar protection. If,
in
the absence of a protective or other similar order, the Employee is legally
compelled to disclose Confidential and Proprietary Information, such
Confidential and Proprietary Information (and only such Confidential and
Proprietary Information) may be disclosed in such proceeding without liability
hereunder; provided, however, that the Employee shall give the Company written
notice of the Confidential and Proprietary Information to be disclosed as far
in
advance of its disclosure as is practical and, upon the Company’s request and
expense, the Employee shall use all reasonable efforts to obtain assurances
that
confidential treatment will be accorded to such Confidential and Proprietary
Information in such proceeding.
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(d) The
Employee agrees that all inventions, discoveries, improvements and patentable
or
copyrightable works (“Inventions”)
initiated, conceived or made by him, either alone or in conjunction with others,
during the Term shall be the sole property of the Company to the maximum extent
permitted by applicable law and, to the extent permitted by law, shall be “works
made for hire” as that term is defined in the United States Copyright Act (17
U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
copyrights, trade secret rights, and other intellectual property or other rights
in connection therewith. The Employee hereby assigns to the Company all right,
title and interest he may have or acquire in all such Inventions; provided,
however, that the Board may in its sole discretion agree to waive the Company’s
rights pursuant to this Section 5(d) with respect to any Invention that is
not
directly or indirectly related to the Company’s business. The Company
acknowledges that as of the Effective Date, the Employee has undertaken certain
activities prior to the Effective Date and that pursuant thereto has developed
the Inventions and/or engaged in such specific activities set forth on
Annex
A
hereto,
and that pursuant to the foregoing sentence, the Board has waived the Company’s
rights with respect to such Inventions and/or activities as they are in
existence on the Effective Date. Notwithstanding the foregoing, nothing in
this
Section 5(d) shall be construed to limit, restrict or modify in any way
Executive’s obligations under this Agreement, including without limitation
Section 3(a) and Section 6 hereof. The Employee further agrees to assist the
Company in every proper way (but at the Company’s expense) to obtain and from
time to time enforce patents, copyrights or other rights on such Inventions
in
any and all countries, and to that end the Employee will execute all documents
necessary:
(i) to
apply
for, obtain and vest in the name of the Company alone (unless the Company
otherwise directs) letters patent, copyrights or other analogous protection
in
any country throughout the world and when so obtained or vested to renew and
restore the same; and
(ii) to
defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.
(e) The
Employee acknowledges that while performing the Services under this Agreement
the Employee may locate, identify and/or evaluate patented or patentable
inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which
may
be of potential interest to the Companay or one of its affiliates (the
“Third
Party Inventions”).
The
Employee understands, acknowledges and agrees that all rights to, interests
in
or opportunities regarding, all Third-Party Inventions identified by the
Company, any of its affiliates or either of the foregoing persons’ officers,
directors, employees (including the Employee), agents or consultants during
the
Term shall be and remain the sole and exclusive property of the Company or
such
affiliate and the Employee shall have no rights whatsoever to such Third-Party
Inventions and will not pursue for himself or for others any transaction
relating to the Third-Party Inventions which is not on behalf of the Company;
provided, however, that the Company acknowledges and agrees that Employee may,
with the Company’s prior written consent, discuss the development of any Third
Party Inventions that the Employee has located, identified and/or evaluated,
and
which the Company has decided not to pursue, solely with Paramount Biosciences,
LLC (“Paramount”). Notwithstanding the foregoing, the Company acknowledges and
agrees that Employee shall be permitted to discuss the development of any Third
Party Inventions that the Employee has located, identified and/or evaluated,
and
which each of the Company and Paramount has decided not to pursue in accordance
with the foregoing, provided that such discussions are consented to in advance
by each of the Company and Paramount and that such discussions do not conflict
with or interfere in any way with Executive’s obligations under this Agreement,
including without limitation Section 3(a) and Section 6 hereof.
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(f) Employee
agrees that he will promptly disclose to the Company, or any persons designated
by the Company, all improvements and Inventions made or conceived or reduced
to
practice or learned by him, either alone or jointly with others, during the
Term.
(g) The
provisions of this Section 5 shall survive any termination of this
Agreement.
6. Non-Competition,
Non-Solicitation and Non-Disparagement.
(a) The
Employee understands and recognizes that his services to the Company are special
and unique and that in the course of performing such services the Employee
will
have access to and knowledge of Confidential and Proprietary Information (as
defined in Section 5) and the Employee agrees that, during the Term and for
a
period of twelve
(12) months
thereafter, he shall not in any manner, directly or indirectly, on behalf of
himself or any person, firm, partnership, joint venture, corporation or other
business entity (“Person”),
enter
into or engage in any business which is engaged in any business directly or
indirectly competitive with the business of the Company, either as an individual
for his own account, or as a partner, joint venturer, owner, executive,
employee, independent contractor, principal, agent, consultant, salesperson,
officer, director or shareholder of a Person in a business competitive with
the
Company within the geographic area of the Company’s business, which is deemed by
the parties hereto to be worldwide. The Employee acknowledges that, due to
the
unique nature of the Company’s business, the loss of any of its clients or
business flow or the improper use of its Confidential and Proprietary
Information could create significant instability and cause substantial damage
to
the Company and its affiliates and therefore the Company has a strong legitimate
business interest in protecting the continuity of its business interests and
the
restriction herein agreed to by the Employee narrowly and fairly serves such
an
important and critical business interest of the Company. For purposes of this
Agreement, the Company shall be deemed to be actively engaged on the date hereof
in the development and commercialization of drugs for the treatment of obesity
and dermatologic conditions and novel application drug delivery systems for
presently marketed prescription and over-the-counter drugs and providing
consulting services in connection therewith, and in the future in any other
business in which it actually devotes substantive resources to study, develop
or
pursue. Notwithstanding the foregoing, nothing contained in this Section 6(a)
shall be deemed to prohibit the Employee from (i) acquiring or holding, solely
for investment, publicly traded securities of any corporation, some or all
of
the activities of which are competitive with the business of the Company so
long
as such securities do not, in the aggregate, constitute more than three percent
(3%) of any class or series of outstanding securities of such
corporation.
(b) During
the Term and for a period of 18 months thereafter, the Employee shall not,
directly or indirectly, without the prior written consent of the
Company:
(i) solicit
or induce any employee of the Company or any of its affiliates to leave the
employ of the Company or any such affiliate; or hire for any purpose any
employee of the Company or any affiliate or any employee who has left the
employment of the Company or any affiliate within one year of the termination
of
such employee’s employment with the Company or any such affiliate or at any time
in violation of such employee’s non-competition agreement with the Company or
any such affiliate; or
(ii) solicit
or accept employment or be retained by any Person who, at any time during the
term of this Agreement, was an agent, client or customer of the Company or
any
of its affiliates where his position will be related to the business of the
Company or any such affiliate; or
(iii) solicit
or accept the business of any agent, client or customer of the Company or any
of
its affiliates with respect to products, services or investments similar to
those provided or supplied by the Company or any of its affiliates.
-5-
(c) The
Company and the Employee each agree that both during the Term and at all times
thereafter, neither party shall directly or indirectly disparage, whether or
not
true, the name or reputation of the other party or any of its affiliates,
including but not limited to, any officer, director, employee or shareholder
of
the Company or any of its affiliates.
(d) In
the
event that the Employee breaches any provisions of Section 5 or this Section
6
or there is a threatened breach, then, in addition to any other rights which
the
Company may have, the Company shall (i) be entitled, without the posting of
a
bond or other security, to injunctive relief to enforce the restrictions
contained in such Sections and (ii) have the right to require the Employee
to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments and other benefits (collectively “Benefits”)
derived or received by the Employee as a result of any transaction constituting
a breach of any of the provisions of Sections 5 or 6 and the Employee hereby
agrees to account for and pay over such Benefits to the Company.
The
Employee agrees that in an action pursuant to clause 6(d)(i), that if the
Company makes a prima facie showing that the Employee has violated or apparently
intends to violate any of the provisions of this Section 6, the Company need
not
prove either damage or irreparable injury in order to obtain injunctive
relief.
(e) Each
of
the rights and remedies enumerated in Section 6(d) shall be independent of
the
others and shall be in addition to and not in lieu of any other rights and
remedies available to the Company at law or in equity. If any of the covenants
contained in this Section 6, or any part of any of them, is hereafter construed
or adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies which shall be
given full effect without regard to the invalid portions. If any of the
covenants contained in this Section 6 is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power
to
reduce the duration and/or area of such provision and in its reduced form such
provision shall then be enforceable. No such holding of invalidity or
unenforceability in one jurisdiction shall bar or in any way affect the
Company’s right to the relief provided in this Section 6 or otherwise in the
courts of any other state or jurisdiction within the geographical scope of
such
covenants as to breaches of such covenants in such other respective states
or
jurisdictions, such covenants being, for this purpose, severable into diverse
and independent covenants.
(f) In
the
event that an actual proceeding is brought in equity to enforce the provisions
of Section 5 or this Section 6, the Employee shall not urge as a defense that
there is an adequate remedy at law nor shall the Company be prevented from
seeking any other remedies which may be available. The Employee agrees that
he
shall not raise in any proceeding brought to enforce the provisions of Section
5
or this Section 6 that the covenants contained in such Sections limit his
ability to earn a living.
(g) The
provisions of this Section 6 shall survive any termination of this
Agreement.
7. Representations
and Warranties by the Employee.
The
Employee hereby represents and warrants to the Company as follows:
(i) Neither
the execution or delivery of this Agreement nor the performance by the Employee
of his duties and other obligations hereunder violate or will violate any
statute, law, determination or award, or conflict with or constitute a default
or breach of any covenant or obligation under (whether immediately, upon the
giving of notice or lapse of time or both) any prior employment agreement,
contract, or other instrument to which the Employee is a party or by which
he is
bound.
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(ii) The
Employee has the full right, power and legal capacity to enter and deliver
this
Agreement and to perform his duties and other obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Employee
enforceable against him in accordance with its terms. No approvals or consents
of any persons or entities are required for the Employee to execute and deliver
this Agreement or perform his duties and other obligations
hereunder.
8. Termination.
The Employee’s employment hereunder shall be terminated upon the Employee’s
death and may be terminated as follows:
(a) The
Employee’s employment hereunder may be terminated by the Chief Executive Officer
of the Company for Cause. Any of the following actions by the Employee shall
constitute “Cause”:
(i) The
willful failure, disregard or refusal by the Employee to perform his duties
hereunder;
(ii) Any
willful, intentional or grossly negligent act by the Employee having the effect
of injuring, in a material way (whether financial or otherwise and as determined
in good-faith by the Chief Executive Officer of the Company), the business
or
reputation of the Company or any of its affiliates, including but not limited
to, any officer, director, executive or shareholder of the Company or any of
its
affiliates;
(iii) Willful
misconduct by the Employee
in
respect of the duties or obligations of the Employee under this
Agreement,
including, without limitation, insubordination with respect to directions
received by the Employee from the Chief Executive Officer of the
Company;
(iv) The
Employee’s indictment of any felony or a misdemeanor involving moral turpitude
(including entry of a nolo contendere plea);
(v) The
determination by the Company, after a reasonable and good-faith investigation
by
the Company following a written allegation by another employee of the Company,
that the Employee engaged in some form of harassment prohibited
by law
(including, without limitation, age, sex or race discrimination);
(vi) Any
misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony);
(vii) Breach
by
the Employee of any of the provisions of Sections
5, 6 or 7 of
this
Agreement; and
(viii) Breach
by
the Employee of any provision of this Agreement other than those contained
in
Sections
5, 6 or 7 which
is
not cured by the Employee within thirty (30) days after notice thereof is given
to the Employee by the Company.
(b) The
Employee’s employment hereunder may be terminated by the Chief Executive Officer
of the Company due to the Employee’s Disability. For purposes of this Agreement,
a termination for “Disability”
shall
occur (i) when the Chief Executive Officer of the Company has provided a written
termination notice to the Employee supported by a written statement from a
reputable independent physician to the effect that the Employee shall have
become so physically or mentally incapacitated as to be unable to resume, within
the ensuing six (6) months, his employment hereunder by reason of physical
or
mental illness or injury, or (ii) upon rendering of a written termination notice
by the Chief Executive Officer of the Company after the Employee has been unable
to substantially perform his duties hereunder for 60 or more consecutive days,
or more than 90 days in any consecutive twelve month period, by reason of any
physical or mental illness or injury. For purposes of this Section 8(b), the
Employee agrees to make himself available and to cooperate in any reasonable
examination by a reputable independent physician retained by the
Company.
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(c) The
Employee’s employment hereunder may be terminated by the Chief Executive Officer
of the Company (or its successor) upon the occurrence of a Change of Control.
For purposes of this Agreement, “Change
of Control”
means
(i) the acquisition, directly or indirectly, following the date hereof by any
person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities if such person or his or its affiliate(s) do not own
in
excess of 50% of such voting power on the date of this Agreement, or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of
its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company).
(d) The
Employee’s employment hereunder may be terminated by the Employee for Good
Reason. For purposes of this Agreement, “Good
Reason”
shall
mean any reduction by the Company of the Employee’s compensation or benefits
payable hereunder (it being understood that a reduction of benefits applicable
to all employees of the Company, including the Employee, shall not be deemed
a
reduction of the Employee’s compensation package for purposes of this
definition).
(e) The
Employee’s employment may be terminated by the Company for any reason or no
reason.
9. Compensation
upon Termination.
(a) If
the
Employee’s employment is terminated as a result of his death or Disability, the
Company shall pay to the Employee or to the Employee’s
estate, as applicable, his
Base
Salary and any accrued but unpaid Bonus and expense reimbursement amounts
through the date of his death or Disability. All
of
Employee’s
stock options, including the Initial Option (the “Stock
Options”),
that
are
scheduled to vest on
the
next succeeding anniversary of the Effective Date
shall be
accelerated and deemed to have vested as of the termination date. All
Stock
Options that
have
not vested (or been deemed pursuant to the immediately preceding sentence to
have vested) as of the date of termination shall be forfeited
to the Company
as of
such date. Stock
Options that have vested as of the Employee’s termination shall remain
exercisable for ninety (90) days following such termination.
(b) If
the
Employee’s employment is terminated by the Chief Executive Officer of the
Company for Cause, then the Company shall pay to the Employee his Base Salary
through the date of his termination and the Employee shall have no further
entitlement to any other compensation or benefits from the Company. All
Stock
Options that
have
not vested as of the date of termination
shall be forfeited
to the Company
as of
such date. Stock
Options that have vested as of the Employee’s termination shall remain
exercisable for ninety (90) days following such termination.
(c) If
the
Employee’s employment is terminated by the Company (or its successor) upon the
occurrence of a Change of Control and on the date of termination pursuant to
Section 8(c) the fair market value of the Company’s Common Stock, in the
aggregate, as determined in good faith by the Board on the date of such Change
of Control, is less than $40,000,000, then the Company (or its successor, as
applicable) shall continue to pay to the Employee his Base Salary and benefits
for a period of three (3) months following such termination as well as any
expense reimbursement amounts owed through the date of termination. All Stock
Options that
are
scheduled to vest on
the
next succeeding anniversary of the Effective Date
shall be
accelerated and deemed to have vested as of the termination date.
All
Stock Options that have
not
vested
(or been
deemed pursuant to the immediately preceding sentence to have
vested)
as of
the date of termination shall be forfeited to the Company as of such date.
Stock
Options that have vested as of the Employee’s termination shall remain
exercisable for ninety (90) days following such termination.
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(d) If
the
Employee’s employment is terminated by the Company other than as a result of the
Employee’s death or Disability and other than for reasons specified in Sections
9(b) or (c), then the Company shall (i) continue to pay to the Employee his
Base
Salary for a period of six (6) months following such termination, (ii) pay
the
Employee any expense reimbursement amounts owed through the date of termination,
and (iii) all Stock Options that are scheduled to vest during the Term shall
be
accelerated and deemed to have vested as of the termination date. Stock
Options that have vested as of the Employee’s termination shall remain
exercisable for ninety (90) days following such termination. The
Company’s obligation under clauses (i) and (ii) of this Section 9(d) shall be
subject to offset by any amounts otherwise received by the Employee from any
employment during the six (6) month period following the termination of his
employment.
(e) This
Section 9 sets forth the only obligations of the Company with respect to the
termination of the Employee’s employment with the Company, and the Employee
acknowledges that, upon the termination of his employment, he shall not be
entitled to any payments or benefits which are not expressly provided in Section
9.
(f) The
provisions of this Section 9 shall survive any termination of this
Agreement.
10. Miscellaneous.
(a) This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without giving effect to its principles
of conflicts of laws.
(b) Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 5 or 6 hereof), or regarding the interpretation thereof,
shall be finally settled by arbitration conducted in New York City in accordance
with the rules of the American Arbitration Association then in effect before
a
single arbitrator appointed in accordance with such rules. Judgment upon any
award rendered therein may be entered and enforcement obtained thereon in any
court having jurisdiction. The arbitrator shall have authority to grant any
form
of appropriate relief, whether legal or equitable in nature, including specific
performance. For the purpose of any judicial proceeding to enforce such award
or
incidental to such arbitration or to compel arbitration and for purposes of
Sections 5 and 6 hereof, the parties hereby submit to the non-exclusive
jurisdiction of the Supreme Court of the State of New York, New York County,
or
the United States District Court for the Southern District of New York, and
agree that service of process in such arbitration or court proceedings shall
be
satisfactorily made upon it if sent by registered mail addressed to it at the
address referred to in paragraph (g) below. The costs of such arbitration shall
be borne proportionate to the finding of fault as determined by the arbitrator.
Judgment on the arbitration award may be entered by any court of competent
jurisdiction.
(c) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, legal representatives, successors and permitted
assigns.
(d) This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive. The rights and obligations of the Company under
this
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the Company, including any successors or permitted
assigns in connection with any sale, transfer or other disposition of all or
substantially all of its business or assets.
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(e) This
Agreement cannot be amended orally, or by any course of conduct or dealing,
but
only by a written agreement signed by the parties hereto.
(f) The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as
a
waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver
of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
(g) All
notices, requests, consents and other communications, required or permitted
to
be given hereunder, shall be in writing and shall be delivered personally or
by
an overnight courier service or sent by registered or certified mail, postage
prepaid, return receipt requested, to the parties at the addresses set forth
on
the first page of this Agreement, and shall be deemed given when so delivered
personally or by overnight courier, or, if mailed, five days after the date
of
deposit in the United States mails. Either party may designate another address,
for receipt of notices hereunder by giving notice to the other party in
accordance with this Section 10(g).
(h) This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by
or
liable for any alleged representation, promise or inducement not so set
forth.
(i) As
used
in this Agreement, “affiliate” of a specified Person shall mean and include any
Person controlling, controlled by or under common control with the specified
Person.
(j) The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
(k) This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and
the
same instrument.
(k) As
used
in this Agree-ment, the masculine, feminine or neuter gender, and the singular
or plural, shall be deemed to include the others whenever and wherever the
context so requires. Addition-ally, unless the context requires otherwise,
"or"
is not exclusive.
[Remainder
of Page Intentionally Left Blank - Signature Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
MANHATTAN
PHARMACEUTICALS, INC.
By:
/s/
Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
President and Chief Executive Officer
EMPLOYEE
/s/
Xxxx
X. Xxxxxx
Xxxx
X.
Xxxxxx, M.D., Ph.D.
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