KEY EMPLOYEE AGREEMENT
To: Xxxxxxx X. Xxxxx, Ph.D.
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000 March 25, 1996
The undersigned, MacroChem Corporation, a Delaware corporation (the
"Company"), hereby agrees with you as follows:
1. Position and Responsibilities.
1.1 You shall serve as Vice President of Operations for the Company,
(or in such other executive capacity as shall be designated by the Board of
Directors and reasonably acceptable to you) and shall perform the duties
customarily associated with such capacity from time to time and at such
place or places as the Company shall designate are appropriate and
necessary in connection with such employment.
1.2 You will, to the best of your ability, devote your full time and
best efforts to the performance of your duties hereunder and the business
and affairs of the Company. You agree to perform such executive duties as
may be assigned to you by or on authority of the Company's Board of
Directors from time to time.
1.3 You will duly, punctually and faithfully perform and observe any
and all reasonable rules and regulations which the Company may now or shall
hereafter establish governing the conduct of its business.
2. Term of Employment.
2.1 Subject to the provisions hereof, specifically including, without
limitation, Section 2.2, the term of your employment shall be indefinite.
2.2 The Company shall have the right to terminate your employment at
any time under this Agreement in any of the following ways:
(a) on thirty (30) days prior written notice to you upon your
disability (disability shall be defined as your inability to perform
duties under this Agreement for an aggregate of sixty (60) days, which
need not be consecutive, out of any one hundred twenty (120) day
period due to mental or physical disability or incapacity); you shall
be provided benefits under the Company's workers compensation and
disability insurance policies, to the extent and upon the terms and
conditions of such plans that are in effect at the time;
(b) immediately without prior notice to you by the Company for
"Cause", as hereinafter defined, provided however, that prior to any
such termination for Cause, you have had a reasonable opportunity to
be heard thereon;
(c) immediately without prior notice to you in the event of the
bankruptcy or liquidation of the Company or the appointment of a
receiver of the assets of the Company instigated by a creditor of the
Company that is not an affiliate thereof.
(d) at any time without Cause, provided the Company shall be
obligated to pay to you after such termination an amount equal to six
(6) month's Base Salary, plus benefits provided by the Company to you
at the time of such termination for such period, less applicable taxes
and other required withholdings and any amounts you may owe to the
Company. If the financial condition of the Company so warrants, the
Board of Directors of the Company may, in its sole discretion, delay
payment of such amounts due under this paragraph 2.2(d) until such
time as the Board of Directors deems that such monies are available.
2.3 You shall have the right to terminate your employment hereunder
for any reason, upon not less than two (2) weeks' prior written notice to
the Company.
2.4 "Cause" for the purpose of Section 2 of this Agreement shall
include: (i) the falseness or material inaccuracy of any of your warranties
or representations herein; (ii) your willful failure or refusal to comply
with explicit directives of the Board of Directors of the Company or to
render the services required herein; (iii) fraud or embezzlement involving
assets of the Company, its customers, suppliers or affiliates or other
misappropriation of the Company's assets or funds; (iv) your conviction of
a criminal offense carrying a potential sentence of more than twelve months
in jail; (v) the willful breach or habitual neglect of your obligations
under this Agreement or your duties as an employee of the Company; and (vi)
use of non-prescription or illegal drugs affecting your ability to perform
the duties hereunder.
2.5 If your employment is terminated because of your death, all
obligations of the Company hereunder shall cease, except with respect to
amounts and obligations accrued to you, including accrued vacation pay,
insurance, vested stock options, and out-of-pocket expenses, through the
last day of the month during which your death has occurred.
3. Compensation. You shall receive the compensation and benefits set forth
on Exhibit A hereto ("Compensation") for all services to be rendered by you
hereunder and for your transfer of property rights if any, pursuant to an
agreement relating to proprietary information and inventions of even date
herewith attached hereto as Exhibit C between you and the Company (the
"Proprietary Information and Inventions Agreement").
4. Other Activities During Employment.
4.1 You will not, during the term of this Agreement, undertake or
engage in any other employment, occupation or business enterprise, other
than one in which you are an inactive investor, that would interfere with
your obligations to the Company.
4.2 You hereby agree that during your employment hereunder, you will
not, directly or indirectly, engage (a) individually, (b) as an officer,
(c) as a director, (d) as an employee, (e) as a consultant, (f) as an
advisor, (g) as an agent (whether a salesperson or otherwise), (h) as a
broker, or (i) as a partner, coventurer, stockholder or other proprietor
owning directly or indirectly more than five percent (5%) interest in any
firm, corporation, partnership, trust, association, or other organization
which is engaged in the development and licensing of transdermal delivery
products or any other line of business in competition with, or engaged in
or under demonstrable development by the Company (such firm, corporation,
partnership, trust, association, or other organization being hereinafter
referred to as a "Prohibited Enterprise"), without the consent of the
Company, which consent will not be unreasonably withheld. Except as may be
shown on Exhibit B hereto, you hereby represent that you are not engaged in
any of the foregoing capacities (a) through (i) in any Prohibited
Enterprise.
5. Former Employers.
5.1 You represent and warrant that your employment by the Company will
not conflict with and will not be constrained by any prior employment or
relationship whether oral or written. You represent and warrant that you do
not possess confidential information arising out of any such employment or
relationship which, in your best judgment, would be utilized in connection
with your employment by the Company in the absence of Section 5.2.
5.2 If, in spite of the second sentence of Section 5.1, you should
find that confidential information belonging to any former employer might
be usable in connection with the Company's business, you will not
intentionally disclose to the Company or use on behalf of the Company any
such confidential information; but during your employment by the Company
you will use in the performance of your duties all information which is
generally known and used by persons with training and experience comparable
to your own, which is common knowledge in the industry or otherwise legally
in the public domain.
6. Proprietary Information and Inventions. You agree to execute, deliver
and be bound by the provisions of the Proprietary Information and Inventions
Agreement attached hereto as Exhibit C.
7. Post-Employment Activities.
7.1 For a period of two (2) years after the termination or expiration,
for any reason, of your employment with the Company hereunder, absent the
Company's prior written approval, you will not directly or indirectly
engage in activities similar or reasonably related to those in which you
shall have engaged hereunder during the two years immediately preceding
termination or expiration, nor render services similar or reasonably
related to those which you shall have rendered hereunder during such time
to, any person or entity whether now existing or hereafter established
which directly competes with (or proposes or plans to directly compete
with) the Company, or in other areas where the Company carries on a
substantial amount of business ("Direct Competitor"). Nor shall you entice,
induce or encourage any of the Company's other employees to engage in any
activity which, were it done by you, would violate any provision of the
Proprietary Information and Inventions Agreement or this Section 7.
7.2 The provisions of this Section 7 shall be of no force or effect if
the Agreement is terminated as set forth in Section 2.2(c) hereof. No
provision of this Agreement shall be construed to preclude you from
performing the same services which the Company hereby retains you to
perform for any person or entity which is not a Direct Competitor of the
Company upon the expiration or termination of your employment (or any
post-employment consultation) so long as you do not thereby violate any
term of this Agreement or the Proprietary Information and Inventions
Agreement.
8. Remedies. Your obligations under the Proprietary Information and
Inventions Agreement and the provisions of Sections 6, 7, 8 and 9 of this
Agreement (as modified by Section 10, if applicable) shall survive the
expiration or termination of your employment with the Company in accordance with
the terms thereof. You acknowledge that a remedy at law for any breach or
threatened breach by you of the provisions of the Proprietary Information and
Inventions Agreement or Section 7 hereof would be inadequate and you therefore
agree that the Company shall be entitled to injunctive relief in case of any
such breach or threatened breach.
9. Assignment. Subject to Section 2.2(c), this Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by reorganization, merger or
consolidation and any assignee of all or substantially all of its business and
properties, but, except as to any such successor or assignee of the Company,
neither this Agreement nor any rights or benefits hereunder may be assigned by
the Company or by you, except by operation of law or by a further written
agreement by the parties hereto.
10. Interpretation. IT IS THE INTENT OF THE PARTIES THAT in case any one or
more of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. MOREOVER, IT IS THE
INTENT OF THE PARTIES THAT if any one or more of the provisions contained in
this Agreement is or becomes or is deemed invalid, illegal or unenforceable or
in case any provision shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provision shall be
construed by amending, limiting and/or reducing it to conform to applicable laws
so as to be valid and enforceable or, if it cannot be so amended without
materially altering the intention of the parties, it shall be stricken and the
remainder of this Agreement shall remain in full force and effect.
11. Notices. Any notice which the Company is required to or may desire to
give you shall be given by personal delivery or registered or certified mail,
return receipt requested, addressed to you at your address of record with the
Company, or at such other place as you may from time to time designate in
writing. Any notice which you are required or may desire to give to the Company
hereunder shall be given by personal delivery or by registered or certified
mail, return receipt requested, addressed to the Company at its principal
office, or at such other office as the Company may from time to time designate
in writing. The date of personal delivery or five (5) days after the date of
mailing any notice under this Section 11 shall be deemed to be the date of
delivery thereof.
12. Waivers. No waiver of any right under this Agreement shall be deemed
effective unless contained in a writing signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any future such right or of any other right
arising under this Agreement. If either party should waive any breach of any
provision of this Agreement, he or it shall not thereby be deemed to have waived
any preceding or succeeding breach of the same or any other provision of this
Agreement.
13. Counsel. You acknowledge that you have had the opportunity to read this
Agreement in its entirety and to obtain the advice of counsel regarding its
terms and conditions.
14. Complete Agreement; Amendments. The foregoing including Exhibits A, B
and C attached hereto, is the entire agreement of the parties with respect to
the subject matter hereof, superseding any previous oral or written
communications, representations, understandings, or agreements with the Company
or any officer or representative thereof. Any amendment to this Agreement or
waiver by the Company of any right hereunder shall be effective only if
evidenced by a written instrument executed by the parties hereto, upon
authorization of the Company's Board of Directors.
15. Headings. The headings of the Sections contained in this Agreement are
inserted for convenience and reference only and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any provisions hereof,
and shall not be deemed to constitute a part hereof or to affect the meaning of
this Agreement in any way.
16. Counterparts. This Agreement may be signed in two counterparts, each of
which shall be deemed an original and both of which shall together constitute
one agreement.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts,
excluding its conflict of law principles.
If you are in agreement with the foregoing, please sign your name below and
also at the bottom of the Proprietary Information and Inventions Agreement,
whereupon both Agreements shall become binding in accordance with their terms.
Please then return this Agreement to the Company. (You may retain for your
records the accompanying counterpart of this Agreement enclosed herewith).
Very truly yours,
MACROCHEM CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx
President & C.E.O.
Read, Accepted and Agreed:
/s/ Xxxxxxx X. Xxxxx, Ph.D.
---------------------------
Xxxxxxx X. Xxxxx, Ph.D.
EXHIBIT A TO KEY EMPLOYEE AGREEMENT
COMPENSATION AND BENEFITS
OF XXXXXXX X. XXXXX, Ph.D.
1. Compensation. Your Base Salary shall be $150,000 per year, payable in
accordance with the Company's payroll policies. An increase in your Base Salary
shall be reviewed and adjusted from time to time by the Board of Directors of
the Company.
2. Vacation. You shall be entitled to all state statutory holidays, and
four (4) weeks paid vacation for the first year of employment. Thereafter, any
additional vacation time, over and above the vacation time already referred to
herein shall be determined by the Board of Directors.
3. Insurance and Benefits. You shall be eligible for participation in all
employee benefit plans which have been or may be established by the Company or
which the Company is required to maintain by law. Presently the Company pays 70%
of your premiums under a group medical insurance plan. This percentage shall be
the same percentage as is paid for all employees under such group medical
insurance plan and therefore is subject to change if, in the discretion of the
Board of Directors, the Company changes the percentage paid for all employees.
4. Sick Days and Excused Absence Days. You shall be entitled to
compensation for sick days and excused absence days in accordance with Company
policy.
5. Stock Options. You shall be granted an incentive stock option to
purchase up to 180,000 shares of the Common Stock of the Company, $.01 par value
per share, upon the terms and conditions set forth in the form of stock option
grant letter attached hereto. Future stock options may be granted by the Company
based in part on your performance.
EXHIBIT B TO KEY EMPLOYEE AGREEMENT
OUTSIDE EMPLOYMENTS AND DIRECTORSHIPS
OF XXXXXXX X. XXXXX, Ph.D.
NONE
EXHIBIT C TO KEY EMPLOYEE AGREEMENT
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
OF XXXXXXX X. XXXXX, Ph.D.
OMITTED
