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EXHIBIT 10.26
Employment Agreement between Xxxxx X. Xxxxxx and the Registrant dated
February 1, 1995.
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EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of February, 1995
by and between XXXXX X. XXXXXX (hereinafter referred to "EMPLOYEE") and Noven
Pharmaceuticals, Inc., a Delaware Corporation having its principal office at
00000 X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000 (hereinafter referred to as the
"COMPANY").
WITNESSETH:
WHEREAS, EMPLOYEE is currently employed as Vice President of
Operations of the COMPANY and has been so employed since April, 1993;
WHEREAS, a principal inducement of the COMPANY for entering into this
Agreement is the continued employment of EMPLOYEE to provide his unique
qualifications, knowledge, skill and ability in conducting and developing the
business of the COMPANY and its subsidiaries, in accordance with the terms of
this Agreement;
WHEREAS, EMPLOYEE desires to perform such duties and functions for the
COMPANY and its subsidiaries as described herein, subject to the terms and
conditions of this Agreement; and
WHEREAS, the Compensation Committee of the Board of Directors of the
COMPANY has approved the terms and conditions of the employment of EMPLOYEE as
set forth herein and has authorized the execution and delivery of this
Agreement.
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NOW, THEREFORE, for and in consideration of the mutual covenants
herein and such other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties agree as
follows:
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1. EMPLOYMENT
The COMPANY hereby employs EMPLOYEE as a full-time EMPLOYEE of
the COMPANY to perform the duties and functions set forth in Section 3, and
EMPLOYEE hereby accepts such employment and agrees to perform such duties and
functions upon the terms and conditions contained herein.
2. TERM
(a) The term of this Agreement shall be for a period of two
(2) years commencing January 1, 1995, unless sooner terminated in accordance
with the terms, provisions and conditions set forth herein.
(b) Upon the mutual agreement of the COMPANY and EMPLOYEE, the
term of this Agreement may be extended for additional periods, on the terms,
provisions and conditions set forth herein. Any such extension shall be made no
later than sixty (60) days prior to the termination of the original two (2)
year term.
3. DUTIES
EMPLOYEE shall, and does hereby agree to, perform the
following duties and functions, and any additional duties and functions as may
be from time to time assigned to EMPLOYEE by the President of the COMPANY, in
connection with his employment:
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(a) To perform such duties customarily incident to the office
of Vice President of Operations of the COMPANY, and such other duties and
functions assigned by the President of the COMPANY from time to time.
(b) To promote the interests of the COMPANY and assist in its
business and scientific dealings with other companies, academic institutions
and medical/business groups.
(c) To devote such effort, time and skill to the affairs of
the COMPANY as is reasonable necessary to competently perform his duties and
functions, and not participate in any outside business or academic activities
which would prevent such performance of duties and functions. EMPLOYEE agrees
to accept no outside employment of any kind, whether as a consultant, guest
lecturer or otherwise, without the prior written approval of the President of
the COMPANY.
4. COMPENSATION
(a) Salary and Bonus:
(i) THE COMPANY shall pay EMPLOYEE an annual base
salary of One Hundred Sixty Thousand Dollars (U.S. $160,000). For each
subsequent year, the Compensation Committee of the Board of Directors shall
have the authority to increase the annual base salary at any time during the
remainder of the term of this
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Agreement or any extension thereof.
(ii) EMPLOYEE shall be entitled to receive a bonus
beginning December 1995 and each December thereafter; provided however, that
the determination of (i) whether EMPLOYEE shall receive any bonus and (ii) the
amount and form of payment of any such bonus, shall be solely in the discretion
of the Compensation Committee of the Board of Directors.
(iii) Compensation pursuant to 3(a) and (b) shall be
paid to EMPLOYEE with the same frequency as other executives of the COMPANY are
compensated.
(iv) EMPLOYEE'S annual base salary shall be
automatically increased minimally each year during the term of this Agreement,
or any extension thereof, beginning with the year 1996 without action by the
COMPANY or EMPLOYEE, by an amount which shall be necessary to adjust such
annual base salary to keep pace with the increases in the cost of living. The
COMPANY shall compute the increase, if any, as promptly as practicable at the
end of each year during the term of this Agreement, or any extension thereof,
using the "Revised Consumers Price Index - Cities" (hereinafter the "Index")
published by the United States Bureau of Labor Statistics, as the basis of such
compensation, with October 1994 as the base year and the corresponding Index
number for the month of October
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each anniversary thereafter as the current Index number. Appropriate
adjustments shall be promptly made in case there is a published amendment of
the Index figures upon which the computation is based. If publication of the
Index is discontinued, the parties hereto shall accept comparable statistics on
the cost of living in Miami, Florida as computed and published by an agency of
the United States or by a responsible financial periodical of recognized
authority then to be mutually agreed upon by the parties.
(b) Stock:
(i) EMPLOYEE shall be entitled to receive options for stock of
the COMPANY in accordance with the prevailing policies and practices of the
COMPANY then in effect, based upon performance by EMPLOYEE of his duties and
functions; provided, however, that the determination to grant any such stock
options shall be solely in the opinion and discretion of the COMPANY's
executive management with the approval of the Chairman of the Executive
Compensation/Stock Option Committee of the Board of Directors.
(ii) As additional consideration for entering into this
Agreement, EMPLOYEE hereby agrees to the cancellation of options for 100,000
shares of common stock granted on April 12, 1993 at $10.50 per share. COMPANY
shall issue new seven (7) year options in the amount of 100,000 shares at $7.75
per share, the closing price
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on February 1, 1995. Such options shall be dated February 1, 1995.
(c) Employee Benefits:
(i) Nothing contained in this Agreement shall be construed to
limit EMPLOYEE'S participation in or entitlement to any medical, health and
insurance plan or coverage, or any other EMPLOYEE benefit to which EMPLOYEE
would otherwise be entitled, in accordance with the prevailing policies and
practices of the COMPANY then in effect, in the absence of this Agreement.
5. NON-COMPETITION
(a) During the term of this Agreement, and for a period of two
(2) years following termination of the services of EMPLOYEE with the COMPANY
unless waived in writing by a majority vote of the Board of Directors of the
COMPANY, EMPLOYEE shall not, directly or indirectly, whether as principal,
agent, shareholder (except as set forth below) or in any other capacity,
whether or not compensation is received, engage or participate in any activity
for, be employed by, assist or have an equity interest in (other than as a
passive investor of no more than ten percent (10%) with no involvement in the
management or conduct of the affairs of business of such entity) any business
or other entity which is or plans to develop, manufacture, market or sell any
pharmaceutical product designed to compete directly with the
transdermal/transoral or topical products
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of the COMPANY and its subsidiaries which are under active development or are
manufactured, marketed or sold during the term of this Agreement.
(b) EMPLOYEE acknowledges that the provisions of Section 5(a)
are reasonably necessary for the purposes of protecting the COMPANY'S
legitimate business interests and goodwill. It is accordingly the intention of
the parties that this Section 5(a) be enforceable to the fullest extent
permissible under applicable law. EMPLOYEE agrees, however, that in the event
any restriction or limitation of Section 5(a), or any portion thereof, shall be
declared or held to be invalid or unenforceable by a court of competent
jurisdiction, then such restriction or limitation shall be deemed amended to
substitute or modify it, as either or both may be necessary, to render it valid
and enforceable.
(c) EMPLOYEE acknowledges and agrees that a breach or
threatened breach of Section 5 of this Agreement will cause irreparable injury
to COMPANY'S legitimate business interests and goodwill. The COMPANY shall
accordingly be entitled to injunctive relief from a court of competent
jurisdiction without the posting of bond or security, in addition to any other
rights, remedies or damages available to the COMPANY.
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6. TERMINATION
(a) This agreement may be terminated upon mutual agreement in
writing of the COMPANY and EMPLOYEE.
(b) This Agreement may be terminated by the COMPANY for
cause, for breach of Section 5(a), or for any intentional breach of any
material term, provision or condition of this Agreement. For purposes of
this Agreement, the term "cause" when used with reference to the termination
of the services of EMPLOYEE, shall mean the termination by vote of a majority
of the Board of Directors of the COMPANY, after giving EMPLOYEE (i) not less
than ten (10) days prior written notice stating the specific action proposed
to be taken and the grounds therefor and (ii) a reasonable opportunity to
respond to such notice at a meeting of the Board of Directors of the COMPANY,
that one of the following events has occurred and such event and/or condition
is the reason for termination:
(i) Willful, substantial or continuing neglect or
inattention by EMPLOYEE of or to the duties in Section 3;
(ii) Willful misconduct or gross negligence of
EMPLOYEE in connection with the performance of such duties; or
(iii) The refusal of EMPLOYEE to perform any of the
duties described in Section 3 or elsewhere in the Agreement, or the
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reasonable instructions of the President of the Company.
(c) This Agreement shall terminate upon the death or permanent
disability of EMPLOYEE. For purposes of this Agreement, the term "permanent
disability" when used with reference to the termination of the services of
EMPLOYEE shall mean a mental or physical illness or condition which renders
EMPLOYEE incapable of performing EMPLOYEE'S duties and functions with the
COMPANY for a period of one hundred eighty (180) consecutive days during the
term of this Agreement or any extension thereof, as determined by the Board of
Directors of the COMPANY, who shall also determine the date of onset of
permanent disability. In such event, the COMPANY shall pay EMPLOYEE, or his
designated beneficiaries, estate or legal representatives the death and
disability payments as set forth in Section 7.
(d) In the event that the COMPANY shall cease operations
without the transfer of its business, in whole or in part, to a successor, this
Agreement shall terminate as of the last day of the month on which the COMPANY
ceases operation with the same force and effect as if such last day of the
month were originally set as the termination date thereof.
7. DISABILITY. DEATH AND SEVERANCE PAYMENTS
In the event of termination of this Agreement under any
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of the following conditions, the COMPANY shall provide the payments and/or
benefits to EMPLOYEE as follows:
(a) Disability: In the event that EMPLOYEE shall become
disabled and terminated for such disability pursuant to Section 6(c), then
EMPLOYEE shall continue to receive his annual salary at the date of onset of
such disability for the remaining term of this Agreement or any extension
thereof; provided, however that payment of such salary shall be reduced by
the amount of any disability payments received by EMPLOYEE from any insurance
policy or policies paid for by the COMPANY.
(b) Death: EMPLOYEE'S designated beneficiaries, legal
representatives or estate shall receive for a period of one year or the
remaining term of this Agreement or any extension thereof, whichever is less,
the compensation EMPLOYEE would have otherwise received as an active EMPLOYEE
pursuant to Sections 4(a).
(c) Severance: If EMPLOYEE is terminated pursuant to
Section 6(b) or resigns or leaves the COMPANY, through no act of the COMPANY,
then EMPLOYEE shall receive no payments and/or benefits after the date of
termination. If EMPLOYEE is terminated pursuant to Section 6(a), then EMPLOYEE
shall receive all compensation to which EMPLOYEE would be entitled under this
Agreement.
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(d) Stock Options: Any unvested options shall terminate in
accordance with the Stock Option Plan in the event that EMPLOYEE does not, for
any reason, remain in the employ of the COMPANY or in the event that EMPLOYEE
is terminated pursuant to Section 6(b) herein.
8. NOTICES
Any notice required or permitted to be given under this
Agreement shall be in writing and made by certified mail, return-receipt
requested, postage prepaid or by hand delivery, telex or facsimile, and shall
be deemed to have been given upon receipt or actual notice.
9. WAIVER
Any failure on the part of the COMPANY to insist upon the
performance of this Agreement, or any part thereof, at any time or from time to
time, shall not constitute a waiver of any right, or future performance of any
term, provision or covenant, under this Agreement.
10. ASSIGNMENT
This Agreement shall inure to the benefit of and be binding on
(a) the COMPANY's successors and assigns, including without limitation, any
person or entity which may acquire substantially all of the COMPANY'S assets or
business, or with or
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into which the COMPANY may be merged, consolidated, liquidated or otherwise
combined and (b) so far as legally possible, on EMPLOYEE'S heirs,
administrators, executors and legal representatives.
11. SEVERABILITY
The invalidity or unenforceability of any term, provision or
condition of this Agreement shall not impair or affect the validity or
enforceability of any other term, provision or condition. In the event of such
invalidity or enforceability, the term, provision or condition shall, in so far
as possible, be substituted or modified to implement the purpose thereof in a
valid or enforceable way.
12. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, both substantive and
procedural, without regard to choice-of-law principles. Venue for any legal
proceeding relating to or arising from this Agreement shall be exclusively in
Dade County, Florida.
13. ENTIRE AGREEMENT
This Agreement, together with the Confidential Disclosure and
Invention Agreement attached hereto and executed contemporaneously herewith and
all prior stock agreements and/or
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grants, contains the entire understanding and agreement of parties with respect
to the subject matter hereof, and supersedes all prior understandings and
agreements directed thereto. No modification, amendment, alteration or waiver
shall be valid or binding except as may be specifically authorized herein or by
a written document duly executed by the parties or their representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first written above.
NOVEN PHARMACEUTICALS, INC. XXXXX X. XXXXXX
By:
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX, DIRECTOR,
CHAIRMAN OF EXECUTIVE
COMPENSATION/STOCK OPTION
COMMITTEE
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