Exhibit 10.7
SOMAXON PHARMACEUTICALS, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "AGREEMENT") made and entered into as of August
15, 2003 between SOMAXON PHARMACEUTICALS, INC., a Delaware corporation (the
"COMPANY"), and Xxxxxxx Xxxxx who resides at 000 Xx Xxxxx Xxxxxx Xxxxx, Xx
Xxxxx, Xxxxxxxxxx 00000 ("EXECUTIVE").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Executive and Executive desires to
accept employment with Company upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, and intending to be legally bound hereby, it is hereby
agreed as follows:
1. Position and Duties. Executive shall diligently and
conscientiously devote Executive's full business time, attention, energy, skill
and best efforts to the business of the Company and the discharge of Executive's
duties hereunder. Executive's duties under this Agreement shall be to serve as
President and Chief Executive Officer, with the responsibilities, rights,
authority and duties customarily pertaining to such office and as may be
established from time to time by or under the direction of the Board of
Directors of the Company (the "BOARD") or its designees. Executive shall report
to the Board. Executive shall also act as an officer and/or director and/or
manager of such affiliates of the Company as may be designated by the Board from
time to time, commensurate with Executive's office, all without further
compensation, other than as provided in this Agreement.
2. Employment Term. Subject to the provisions contained in Paragraph
8, Executive's employment by the Company shall be for a term commencing on the
date hereof and expiring on the close of business on December 31, 2004 (the
"INITIAL TERM"); provided, however, the term of Executive's employment by the
Company shall continue for an indefinite period thereafter unless and until
either party shall give to the other 60 days advance written notice of
expiration of the term (the Initial Term and the period, if any, thereafter,
during which the Executive's employment shall continue are collectively referred
to as the "EMPLOYMENT TERM").
3. Place of Employment. Executive's performance of services under
this Agreement shall be rendered in San Diego County, California, subject to
necessary travel requirements of Executive's position and duties hereunder.
4. Compensation.
(a) Base Salary. The Company shall pay to Executive base
salary compensation at an annual rate of not less than $225,000. Following the
end of the Company's fiscal year 2003, and annually thereafter, the Board shall
review Executive's base salary in light of the performance of Executive and the
Company, and may, in its sole discretion, maintain or increase (but not
decrease) such base salary by an amount it determines to be appropriate.
Executive's annual base salary payable hereunder, as it may be maintained or
increased from time to time, is referred to herein as "BASE SALARY." Base Salary
shall be paid in equal installments in accordance with the Company's payroll
practices in effect from time to time for executive officers, but in no event
less frequently than monthly.
(b) Bonus Plan. The Company shall adopt a bonus program
providing for annual bonus awards to Executive and the Company's other eligible
employees dependent upon, among
other things, the achievement of certain performance levels by the Company, the
nature, magnitude and quality of the services performed by Executive for the
Company and the compensation paid for positions of comparable responsibility and
authority within the Company's industry (the "COMPANY EMPLOYEE BONUS PLAN").
(c) Equity Investment by Executive. Concurrently with the
signing of this Agreement, the Company is offering Executive, and Executive is
purchasing from the Company, pursuant to a Restricted Stock Purchase Agreement
substantially in the form attached hereto as Exhibit A, 450,000 shares of Common
Stock of the Company, for an aggregate purchase price of $45.00. Such shares of
Common Stock shall be subject to a right of repurchase at the original price
thereof according to a monthly vesting schedule over four years commencing
retroactive to May 1, 2003.
(d) Option Grants. In connection with the Company's subsequent
preferred stock financing or other significant capital raising transaction, the
Company shall adopt an equity incentive plan providing for the grant of stock
options and other stock awards to the Company's employees (the "OPTION PLAN").
The Board shall set grant to Executive an option to acquire a number of shares
deemed to be appropriate by the Board in its discretion in order to reward
Executive for services rendered to the Company and/or as an incentive for
continued service to the Company. Such option shall be subject to the terms and
conditions of the Option Plan, including vesting, exercise price and
termination, except as may be modified by this Agreement or an addendum hereto.
5. Benefits. As soon as financially feasible for the Company, the
Company shall adopt a reasonably comprehensive benefits package for the
participation of Executive, which shall include, but not necessarily be limited
to, the following: medical, dental, vision, disability, life insurance,
accidental death & dismemberment, medical savings and 401(k) plans. Executive
shall be eligible to participate in all employee benefit programs of the Company
offered from time to time during the Employment Term by the Company to employees
or executive officers of Executive's rank, to the extent that Executive
qualifies under the eligibility provisions of the applicable plan or plans, in
each case consistent with the Company's then-current practice as approved by the
Board from time to time. Except to the extent financially feasible for the
Company, the foregoing shall not be construed to require the Company to
establish such plans or to prevent the modification or termination of such plans
once established, and no such action or failure thereof shall affect this
Agreement. Executive recognizes that the Company has the right, in its sole
discretion, to amend, modify or terminate its benefit plans without creating any
rights in Executive.
6. Vacation. Executive shall be entitled to paid vacation and sick
time ("PTO") of up to four weeks per calendar year, with such number of weeks
being pro-rated for the remainder of the 2003 calendar year. Executive may
roll-over unused PTO time from one calendar year to another, subject to a
maximum of six weeks of accrued PTO.
7. Business Expenses. The Company shall promptly reimburse Executive
for Executive's reasonable and necessary expenditures for travel, entertainment
and similar items made in furtherance of Executive's duties under this Agreement
consistent with the policies of the Company as applied to all executive
officers. Executive shall document and substantiate such expenditures as
required by the policies of the Company as applied to all executive officers,
including an itemized list of all expenses incurred, the business purposes for
which such expenses were incurred, and such receipts as Executive reasonably has
been able to obtain.
2
8. Termination of Employment.
(a) Death or Disability.
(i) In the event of Executive's death during the
Employment Term, the Employment Term shall automatically terminate.
(ii) Each of the Company and Executive shall have the
right to terminate the Employment Term in the event of Executive's Disability.
"DISABILITY" as used in this Agreement shall have meaning set forth in Section
22(e)(3) of the Internal Revenue Code, which as of the date of this Agreement is
as follows: "An individual is permanently and totally disabled if he is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months." A termination of Executive's employment by either
party for Disability shall be communicated to the other party by written notice,
and shall be effective on the 10th day after receipt of such notice by the other
party (the "DISABILITY EFFECTIVE DATE"), unless Executive returns to full-time
performance of Executive's duties before the Disability Effective Date.
(b) By the Company. The Company shall have the right to
terminate the Employment Term for Cause. "CAUSE" as used in this Agreement shall
mean:
(i) Executive's breach of any of the covenants contained
in Paragraphs 11 and 12 of this Agreement;
(ii) Executive's conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final jurisdiction for
any crime involving moral turpitude or punishable by imprisonment in the
jurisdiction involved;
(iii) Executive's commission of an act of fraud, whether
prior to or subsequent to the date hereof upon the Company;
(iv) Executive's continuing repeated willful failure or
refusal to perform Executive's duties as required by this Agreement (including,
without limitation, Executive's inability to perform Executive's duties
hereunder as a result of chronic alcoholism or drug addiction and/or as a result
of any failure to comply with any laws, rules or regulations of any governmental
entity with respect to Executive's employment by the Company);
(v) Executive's gross negligence, insubordination or
material violation of any duty of loyalty to the Company or any other material
misconduct on the part of Executive;
(vi) Executive's commission of any act which is
detrimental to the Company's business or goodwill; or
(vii) Executive's breach of any other provision of this
Agreement, provided that termination of Executive's employment pursuant to this
subsection (vii) shall not constitute valid termination for good cause unless
Executive shall have first received written notice from the Board stating with
specificity the nature of such breach and affording Executive at least fifteen
(15) days to correct the breach alleged.
Nothing in this Paragraph 8(b) shall prevent Executive from challenging the
Board's determination that Cause exists or that Executive has failed to cure any
act (or failure to act) that purportedly formed the basis for the Board's
determination, under the arbitration procedures set forth in Paragraph 22 below.
3
(c) By Executive.
(i) Executive shall have the right to terminate the
Employment Term for Good Reason (as defined below), upon 30 days' written notice
to the Board given within 60 days following the occurrence of an event
constituting Good Reason; provided that the Company shall have 20 days after the
date such notice has been given to the Board in which to cure the conduct
specified in such notice. Executive's continued employment during such 20-day
period shall not constitute Executive's consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason hereunder.
(ii) For purposes of this Agreement "GOOD REASON" shall
mean:
(1) a change in Executive's position or
responsibilities (including reporting responsibilities) that represents a
substantial reduction in the position or responsibilities as in effect
immediately prior thereto; the assignment to Executive of any duties or
responsibilities that are materially inconsistent with such position or
responsibilities; or any removal of Executive from or failure to reappoint or
reelect Executive to any of such positions, except in connection with the
termination of Executive's employment for Cause, as a result of his or her
Disability or death, or by Executive other than for Good Reason;
(2) a reduction in Executive's Base Salary other
than in connection with a general reduction in wages for all employees of the
Company and its parent and subsidiaries, if any;
(3) the Company requiring Executive (without
Executive's consent) to be based at any place outside a 50-mile radius of his or
her initial place of employment with the Company, except for reasonably required
travel on the Company's business;
(4) the Company's failure to provide Executive
with compensation and benefits substantially equivalent (in terms of benefit
levels and/or reward opportunities) to those provided for under each of the
Company's material employee benefit plan, program and practice as in effect from
time to time; or
(5) any material breach by the Company of its
obligations to Executive under this Agreement.
(iii) Subject to the notice period set forth in
Paragraph 2 above, Executive shall have the right to terminate his or her
employment hereunder without Good Reason by providing the Company with a written
notice of termination, and such termination shall not in and of itself be a
breach of this Agreement.
4
(d) Termination Payments.
(i) If the Employment Term is terminated pursuant to
Paragraph 8(a)(i) (i.e., death), the Company shall pay to Executive (a) his or
her accrued but unpaid Base Salary through the date of termination (plus all
accrued and unpaid expenses reimbursable in accordance with Paragraph 7), (b)
any accrued but unused PTO, and (c) at the discretion of the Board, an annual
bonus for the year in which Executive's death or Disability occurs, prorated
through the date of death or Disability, based on the Board's good-faith
estimate of the actual amount, if any, that would have been payable for such
year under the Company Employee Bonus Plan (assuming Executive had remained
employed by the Company through the end of such year) in accordance with
Paragraph 4(b).
(ii) If the Employment Term is terminated pursuant to
Paragraph 8(a)(ii) (i.e., Disability), the Company shall pay to Executive (a)
his or her accrued but unpaid Base Salary through the date of termination (plus
all accrued and unpaid expenses reimbursable in accordance with Paragraph 7),
(b) any accrued but unused PTO, (c) an amount equal to Executive's actual Base
Salary (not including any bonus payable) for the 12 month period immediately
prior to such termination, payable in 12 equal installments during the 12 month
period following such termination, and (d) at the discretion of the Board, an
annual bonus for the year in which Executive's death or Disability occurs,
prorated through the date of death or Disability, based on the Board's
good-faith estimate of the actual amount, if any, that would have been payable
for such year under the Company Employee Bonus Plan (assuming Executive had
remained employed by the Company through the end of such year) in accordance
with Paragraph 4(b).
(iii) If the Employment Term is terminated by Executive
pursuant to Paragraph 8(c) (i.e., Good Reason), if the Company elects not to
renew the Employment Term in accordance with Paragraph 2 or if the Company
terminates the Employment Term other than pursuant to Paragraphs 8(a) or 8(b),
the Company shall pay to Executive the following, which Executive acknowledges
to be fair and reasonable, as Executive's sole and exclusive remedy, in lieu of
all other remedies at law or in equity, for such termination:
(a) Executive's accrued but unpaid Base Salary
through the date of termination (plus all accrued and unpaid expenses
reimbursable in accordance with Paragraph 7);
(b) any accrued but unused PTO;
(c) at the discretion of the Board, an annual
bonus for the year in which the Employment Term is terminated, prorated through
the date of termination, based on the Board's good-faith estimate of the actual
amount, if any, that would have been payable for such year under the Company
Employee Bonus Plan (assuming Executive had remained employed by the Company
through the end of such year) in accordance with Paragraph 4(b);
(d) subject to Paragraphs 8(d)(vi) and 8(e)(iii)
below, an amount equal to Executive's actual Base Salary (not including any
bonus payable) for the 12 month period immediately prior to such termination,
payable in 12 equal installments during the 12 month period following such
termination;
(e) the Company shall pay all costs which the
Company would otherwise have incurred to maintain all of Executive's health,
welfare and retirement benefits (either on the same or substantially equivalent
terms and conditions) if Executive had continued to render services to the
Company for 12 continuous months after the date of his or her termination of
employment;
5
(f) notwithstanding any provision to the contrary
in Executive's options under the Option Plan or other plan (including, without
limitation, the expiration dates or vesting provisions thereof) the unvested
portion, if any, of such options shall be deemed to have vested with respect to
the number of shares that would have vested had Executive remained employed by
the Company for 12 months following such termination, and Executive shall have
180 days from the date of termination to exercise such options; and
(g) the shares of Common Stock purchased by
Executive under the Restricted Stock Purchase Agreement referred to in Paragraph
4(c) above shall vest in the manner set forth in such agreement.
(iv) If the Employment Term is terminated by the Company
pursuant to Paragraph 8(b) (i.e., Cause), or Executive terminates the Employment
Term other than pursuant to Paragraphs 8(a) or 8(c), without limiting or
prejudicing any other legal or equitable rights or remedies which the Company
may have upon such breach by Executive, the Company shall pay Executive his or
her accrued but unpaid Base Salary and any accrued but unused PTO (plus all
accrued and unpaid expenses reimbursable in accordance with Paragraph 7) through
the date of termination.
(v) In addition to the foregoing, upon the termination
of Executive's employment, Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with the
terms and provisions of any other benefit, compensation, incentive, medical,
disability or life insurance plans, programs or agreements of the Company in
effect upon such termination.
(vi) Executive shall not be required to mitigate amounts
payable under this Agreement by seeking other employment or otherwise; provided,
however, if the termination giving rise to the payments described in Paragraph
8(d)(iii)(d) above results from the Executive's termination of the Employment
Term pursuant to Paragraph 8(c) (i.e., Good Reason), then during the 12 month
period specified in Paragraph 8(d)(iii)(d) above, any compensation, income, or
benefits earned by or paid to Executive (in cash or otherwise) by any company,
business, enterprise, or other employer other than the Company (whether as an
employee of, or consultant or independent contractor to, such employer, or
otherwise) shall reduce the amount of severance payments payable pursuant to
Paragraph 8(d)(iii)(d) on a dollar-for-dollar basis.
(vii) The termination payments described above shall
supercede any severance program, plan or policy that may be adopted by the
Company with respect to its employees generally, and the terms of this Paragraph
8(d) shall control in the event of any discrepancy with such severance program,
plan or policy.
(e) Change of Control.
(i) In the event of any Change of Control (defined
below) during the Employment Term, notwithstanding any provision to the contrary
in Executive's options under the Option Plan or other plan (including, without
limitation, the expiration dates or vesting provisions thereof) (1) 50% of any
unvested portion of such options shall be deemed to have vested and Executive
shall have 180 days from the closing of such Change of Control to exercise such
options and (2) the remaining unvested portion of such options shall vest on the
date that is 12 months from the closing of such Change of Control and Executive
shall have an additional 180 days from such date to exercise such options. In
addition, in the event of any Change of Control, the shares of Common Stock
purchased by Executive under the Restricted Stock Purchase Agreement referred to
in Paragraph 4(c) above shall vest in the manner set forth in such agreement.
6
(ii) In the event the Employment Term is terminated
following a Change of Control, the provisions of Paragraph 8(d) shall apply
according to the circumstances of the termination. For the avoidance of doubt,
if following a Change of Control the Employment Term is terminated by Executive
pursuant to Paragraph 8(c) (i.e., Good Reason), if the Company elects not to
renew the Employment Term in accordance with Paragraph 2 or if the Company
terminates the Employment Term other than pursuant to Paragraphs 8(a) or 8(b),
notwithstanding any provision to the contrary in Executive's options under the
Option Plan or other plan (including, without limitation, the expiration dates
or vesting provisions thereof) any unvested portion of such options shall be
deemed to have vested and Executive shall have 180 days from the date of
termination to exercise such options.
(iii) "CHANGE OF CONTROL" shall mean (1) a merger or
consolidation of the Company with or into any other corporation or other entity
or person or (2) a sale, lease, exchange or other transfer in one transaction or
a series of related transactions of all or substantially all the Company's
outstanding securities or all or substantially all the Company's assets;
provided that the following shall events shall not constitute a "Change of
Control": (A) a merger or consolidation of the Company in which the holders of
the voting securities of the Company immediately prior to the merger or
consolidation hold at least a majority of the voting securities in the Successor
Corporation immediately after the merger or consolidation; (B) a sale, lease,
exchange or other transaction in one transaction or a series of related
transactions of all or substantially all of the Company's assets to a wholly
owned subsidiary corporation; (C) a mere reincorporation of the Company; or (D)
a transaction undertaken for the sole purpose of creating a holding company that
will be owned in substantially the same proportion by the persons who held the
Company's securities immediately before such transaction.
9. Services Unique. Executive recognizes that Executive's services
hereunder are of a special, unique, unusual, extraordinary and intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated for in damages, and in the event of a breach of this
Agreement by Executive (particularly, but without limitation, with respect to
the provisions hereof relating to the exclusivity of Executive's services and
the provisions of Paragraph 11), the Company shall, in addition to all other
remedies available to it, be entitled to equitable relief by way of an
injunction and any other legal or equitable remedies. Anything to the contrary
herein not withstanding, the Company may seek such equitable relief in a federal
or state court in California and Executive hereby submits to jurisdiction in
those courts.
10. Proprietary Information and Inventions Agreement. As a condition
of employment, Executive will be required to sign and comply with the
Proprietary Information and Inventions Agreement in the form attached hereto as
Exhibit B which prohibits unauthorized use or disclosure of the Company's
proprietary information. In Executive's work for the Company, Executive will be
expected not to use or disclose any confidential information, including trade
secrets, of any former employer or other person to whom you have an obligation
of confidentiality. Rather, Executive will be expected to use only that
information which is generally known and used by persons with training and
experience comparable to Executive's, which is common knowledge in the industry
or otherwise legally in the public domain, or which is otherwise provided or
developed by the Company. Executive agrees that he or she will not bring onto
Company premises any unpublished documents or property belonging to any former
employer or other person to whom Executive has an obligation of confidentiality.
7
11. Minimum Business Hours; Non-Solicitation; etc.
(a) Minimum Business Hours. As an exempt, salaried employee,
Executive will be expected to work such hours as required by the nature of
Executive's work assignments.
(b) Nonsolicitation of Employees or Consultants. Executive
agrees that for a period of one year after termination of the Employment Term
(the "NONSOLICITATION PERIOD"), Executive will not directly or indirectly induce
or solicit any of the Company's employees or consultants to leave their
employment.
(c) Nonsolicitation of Customers. Executive agrees that all
customers of the Company or any of its subsidiaries for which Executive has or
will provide services during the Employment Term, and all prospective customers
from whom Executive has solicited business while in the employ of the Company,
shall be solely the customers of the Company or such subsidiary. Executive
agrees that, for the Nonsolicitation Period, Executive shall neither directly
nor indirectly solicit business as to products or services competitive with
those of the Company or any of its subsidiaries, from any of the Company's or
any of its subsidiaries' customers with whom Executive had contact within one
year prior to Executive's termination.
(d) Executive agrees that the covenants contained in this
Paragraph 11 are reasonable with respect to their duration, geographic area and
scope. If, at the time of enforcement of this Paragraph 11, a court holds that
the restrictions stated herein are unreasonable under the circumstances then
existing, the parties hereto agree that the maximum period, scope or geographic
area legally permissible under such circumstances will be substituted for the
period, scope or area stated herein.
12. Nondisparagement. Executive will not at any time during or after
the Employment Term directly (or through any other person or entity) make any
public statements (whether orally or in writing) which are intended to be
derogatory or damaging to the Company or any of its subsidiaries, their
respective businesses, activities, operations, affairs, reputations or prospects
or any of their respective officers, employees, directors, partners, agents or
shareholders; provided that Executive may comment generally on industry matters
in response to inquiries from the press and in other public speaking
engagements. The Company shall not at any time during or after the Employment
Term, directly (or through any other person or entity) make any public
statements (whether oral or in writing) which are intended to be derogatory or
damaging concerning Executive.
13. Indemnification; Directors & Officers Insurance.
(a) The Company shall indemnify Executive to the maximum
extent permitted by law and by the charter and bylaws of Company if Executive is
made a party, or threatened to be made a party, to any threatened or pending
legal action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer,
director, manager, member, partner or employee of the Company, in which capacity
Executive is or was serving at the Company's request, against reasonable
expenses (including reasonable attorneys' fees), judgments, fines and settlement
payments incurred by him or her in connection with such action, suit or
proceeding.
(b) Subject to approval of the Company's Board of Directors,
the Company will use reasonable commercial efforts to obtain and maintain
directors & officers insurance for the benefit of Executive and other executive
officers and directors with a level of coverage comparable to other companies in
the Company's industry at a similar stage of development.
8
14. Representation of the Parties. Executive represents and warrants
to the Company that Executive has the capacity to enter into this Agreement and
the other agreements referred to herein, and that the execution, delivery and
performance of this Agreement and such other agreements by Executive will not
violate any agreement, undertaking or covenant to which Executive is party or is
otherwise bound. The Company represents to Executive that it is duly formed and
is validly existing under the laws of the State of Delaware, that it is fully
authorized and empowered by action of its Board to enter into this Agreement and
the other agreements referred to herein, and that performance of its obligations
under this Agreement and such other agreements will not violate any agreement
between it and any other person, firm or other entity.
15. Key Man Insurance. The Company will have the right throughout
the Employment Term, to obtain or increase insurance on Executive's life in such
amount as the Board determines, in the name of the Company or and for its sole
benefit or otherwise, in the discretion of the Board. Upon reasonable advance
notice, Executive will cooperate in any and all necessary physical examinations
without expense to Executive, supply information, and sign documents, and
otherwise cooperate fully with the Company as the Company may request in
connection with any such insurance. Executive warrants and represents that, to
Executive's best knowledge, Executive is in good health and does not suffer from
any medical condition which might interfere with the timely performance of
Executive's obligations under this Agreement. To the extent the Company elects
to obtain a policy of insurance on the life of Executive, unless an alternative
life insurance benefit has been established for the Company's executive
officers, including Executive, the Company shall also obtain and pay for a whole
life insurance policy providing for payment of not less than the equivalent of
one year's Base Salary in benefits to Executive's designated beneficiaries (this
policy shall be in addition to any coverage provided by the Company's group life
insurance plan provided to employees generally).
16. Notices. All notices given under this Agreement shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) three business days after being mailed by first class certified
mail, return receipt requested, postage prepaid, (c) one business day after
being sent by a reputable overnight delivery service, postage or delivery
charges prepaid, or (d) on the date on which a facsimile is transmitted to the
parties at their respective addresses stated below. Any party may change its
address for notice and the address to which copies must be sent by giving notice
of the new addresses to the other parties in accordance with this Paragraph 18,
except that any such change of address notice shall not be effective unless and
until received.
If to the Company:
c/o Latham & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq./Xxxxxxx X. Xxxxxx, Esq.
If to Executive, to Executive's address set forth above.
17. Entire Agreement, Amendments, Waivers, Etc.
(a) No amendment or modification of this Agreement shall be
effective unless set forth in a writing signed by the Company and Executive. No
waiver by either party of any breach by the other party of any provision or
condition of this Agreement shall be deemed a waiver of any similar or
dissimilar provision or condition at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the waiving party.
9
(b) This Agreement, together with the Exhibits hereto and the
documents referred to herein and therein, sets forth the entire understanding
and agreement of the parties with respect to the subject matter hereof and
supersedes all prior oral and written understandings and agreements. There are
no representations, agreements, arrangements or understandings, oral or written,
among the parties relating to the subject matter hereof which are not expressly
set forth herein, and no party hereto has been induced to enter into this
Agreement, except by the agreements expressly contained herein.
(c) Nothing herein contained shall be construed so as to
require the commission of any act contrary to law, and wherever there is a
conflict between any provision of this Agreement and any present or future
statute, law, ordinance or regulation, the latter shall prevail, but in such
event the provision of this Agreement affected shall be curtailed and limited
only to the extent necessary to bring it within legal requirements.
(d) This Agreement shall inure to the benefit of and be
enforceable by Executive and Executive's heirs, executors, administrators and
legal representatives, by the Company and its successors and assigns. This
Agreement and all rights hereunder are personal to Executive and shall not be
assignable. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by operation of law or by agreement
in form and substance reasonably satisfactory to Executive, to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
(e) If any provision of this Agreement or the application
thereof is held invalid, the invalidity shall not affect the other provisions or
application of this Agreement that can be given effect without the invalid
provisions or application, and to this end the provisions of this Agreement are
declared to be severable.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
principles of conflict of laws.
19. Taxes. All payments required to be made to Executive hereunder,
whether during the term of Executive's employment hereunder or otherwise, shall
be subject to all applicable federal, state and local tax withholding laws.
20. Headings, Etc. The headings set forth herein are included solely
for the purpose of identification and shall not be used for the purpose of
construing the meaning of the provisions of this Agreement. Unless otherwise
provided, references herein to Exhibits and Paragraphs refer to Exhibits to and
Paragraphs of this Agreement.
21. Arbitration. Any dispute or controversy between Company and
Executive, arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by arbitration in San Diego,
California administered by the American Arbitration Association in accordance
with its Commercial Rules then in effect and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the
10
existence, content or results of any arbitration hereunder without the prior
written consent of Company and Executive. Each party shall bear its, his or her
costs and expenses in any arbitration hereunder and one-half of the arbitrator's
fees and costs; provided, however, that the arbitrator shall have the discretion
to award the prevailing party reimbursement of its, his or her reasonable
attorney's fees and costs.
22. Survival. Executive's obligations under the provisions of
Paragraphs 10, 11, and 12, as well as the provisions of Paragraphs 7, 8(d), 13
and 17 through and including 24, shall survive the termination or expiration of
this Agreement.
23. Confidentiality. The parties agree that the existence and terms
of this Agreement are and shall remain confidential. The parties shall not
disclose the fact of this Agreement or any of its terms or provisions to any
person without the prior written consent of the other party hereto; provided,
however, that nothing in this Paragraph 23 shall prohibit disclosure of such
information to the extent required by law, nor prohibit disclosure of such
information by Executive to any legal or financial consultant, all of whom shall
first agree to be bound by the confidentiality provisions of this Paragraph 23,
nor prohibit disclosure of such information within the Company in the ordinary
course of its business to those persons with a need to know, as reasonably
determined by the Company, or by the Company to any legal or financial
consultant.
24. Construction. Each party has cooperated in the drafting and
preparation of this Agreement. Therefore, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
* * * * *
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COMPANY:
SOMAXON PHARMACEUTICALS, INC.
By /s/ Xxxxx X. Xxxx
--------------------------------------------------
Name: Xxxxx X. Xxxx
Title: Sr. Vice President, Corporate &
Business Development
EXECUTIVE:
/s/ Xxxxxxx Xxxxx
----------------------------------------------------
XXXXXXX XXXXX
