EMPLOYMENT AGREEMENT
This Agreement, dated as of February 14,
2007 (this “Agreement”), is between CORMEDIX INC., a Delaware corporation with
principal executive offices at 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the “Company”), and Xxxx Xxxxxx, M.D., residing at 0
Xxxxxx Xxxxx, Xxxxxxx, XX 00000 (the “Employee”).
WITNESSETH:
WHEREAS, the Company desires to employ the
Employee as Chief Medical Officer of the Company, and the Employee desires to serve the
Company in those capacities, 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 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
and the Board of Directors of the Company (the
“Board”).
(b) Acceptance. Employee hereby accepts such employment and agrees to render the
Services.
2. Term. The Employee’s employment under this Agreement (as it
may be extended, the “Term”)
shall commence on March 1, 2007 (the “Commencement
Date”)
and shall continue for a term of three (3) years, unless sooner terminated pursuant to Section 8
below; 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 sixty (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, 6 and 9
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 the New York, New York metropolitan area, subject to reasonable
travel requirements on behalf of the Company, or such other place as the
Board may reasonably designate. Notwithstanding the foregoing, the Company may
be relocated to another area or 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 Twenty Thousand Dollars ($220,000.00) per year. Payment
shall be made in accordance with the Company’s
normal payroll practices. The Board of Directors shall annually review the Base
Salary to determine whether an increase in the amount
thereof is warranted.
(b) Annual
Milestone Bonus.
At the discretion of the Board, the Employee
shall receive an annual bonus based on Employee’s
performance during each calendar year during the Term (the “Annual
Milestone Bonus”)
in an amount of up to thirty percent (30%) of his Base Salary (pro rated for any
partial calendar year of service), based on the attainment by the Employee of
certain financial, clinical development and business milestones (the
“Milestones”).
Milestones
for each calendar year shall be established by the Chief Executive Officer, in
conjunction with the Board, after consultation with the Employee, not more than
sixty (60) days following the beginning of each calendar year. The Annual
Milestone Bonus shall
be payable in cash as a lump-sum payment
no later than seventy-five (75) days after the end of each calendar
year.
(c) Restricted
Shares. As additional
compensation for the Services to be rendered by the Employee pursuant to this
Agreement, the Company
shall issue and sell to the Employee a number of restricted shares of common
stock, par value $0.001 (the “Common
Stock”), of the Company (the “Restricted
Shares”) representing two percent (2.0%)
of the outstanding Common Stock of the
Company (excluding certain
shares of Common Stock issued to management of the Company). The aggregate
purchase price for the Restricted Shares shall equal One Hundred Six Dollars
($106), which the Company represents is equal to the fair market value of those
Restricted Shares as of the date of purchase. The
Restricted Shares, to the extent unvested, shall be held in escrow at Paramount
BioSciences, LLC. On each anniversary of the Commencement Date, one-third
(33.3%) of the original number of Restricted Shares,
subject to stock splits,
subdivisions, or other similar transactions, shall vest, subject to the terms of
this Agreement, and the Escrow Agent shall release such vested shares to the
Employee. In connection with such grant, the Employee shall enter into the
Company’s standard restricted stock agreement attached
hereto as Exhibit
A and the escrow agreement
attached hereto as Exhibit
B which will incorporate
the foregoing provisions regarding the lapsing of the risk of forfeiture with
respect to the Restricted Shares and the relevant provisions contained in
Section 9 below. No Restricted Shares granted
hereunder shall vest unless the Employee is a current employee of the Company,
unless specifically stated herein.
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(d) 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.
(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, prescription drug reimbursement plans,
short and long term disability plans, life insurance and other so-called
“fringe” benefits) as the Company shall make
available to its senior executives from time to time. In addition, until such
time as the Company establishes, and Employee becomes
eligible to participate in, a benefits program, the Company (i) shall reimburse
the Employee for his actual and documented costs incurred in maintaining his
current insurance plans pursuant to COBRA; and (ii) shall reimburse the Employee for his actual and
documented costs incurred in obtaining short and long term disability insurance
on terms substantially similar to those provided by such previous employer,
provided that the amounts reimbursed pursuant to the foregoing clauses (i) and (ii) shall not exceed One
Thousand Five Hundred Dollars ($1,500) in the aggregate per
month.
(g) Vacation. The Employee shall be entitled to a
vacation of four (4) weeks per annum, in addition to holidays observed by the
Company, to be taken in
accordance with the Company’s employee policies, and subject to the
requirement that no more than two weeks be taken consecutively and that all
vacation is subject to the prior approval of the Chief Executive Officer. Subject to the
Company’s vacation policy as in effect from time to time, the
Employee may not be entitled to carry any vacation forward to the next year of
employment and may 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 as soon as practicable following his termination
of employment.
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(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) 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 that relate to the business of the
Company 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(c)
with respect to any
Invention. 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.
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(d) 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 Company 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.
(e)
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.
(f)
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 and the Employee
agrees that, during the Term and for a period of six (6) 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 (a “Subsequent
Employer”), 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 the United States; provided, however, that the Employee may
enter into or engage in any
Subsequent Employer as long as the Employee does not provide services to that
portion or portions of such Subsequent Employer’s business that is directly or
indirectly competitive with the business of the Company. 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
in the development and commercialization of therapeutics (including
drugs, medical devices and vaccines) for
those indications in which the Company or any of its direct or indirect
subsidiaries is actively engaged or has taken reasonable steps to become engaged
at the time of the termination of the Employee’s employment or during the
two year period prior thereto.
Notwithstanding the foregoing, nothing contained in this Section 6(a) shall be
deemed to prohibit the Employee from 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.
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(b) The Employee hereby acknowledges and agrees that the covenant
against competition provided for pursuant to Section 6(a) is reasonable with
respect to its duration, geographic area and scope. If, at the time of enforcement of this
Section 6, a court holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographic area legally permissible under such circumstances will be
substituted for the duration, scope or area stated herein.
(c) During the Term and for a period of six
(6) 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 where his position will be related to the business of
the Company; or
(iii) solicit or accept the business of
any agent, client or customer of the Company with respect to products or
services similar to those
provided or supplied by the Company.
(d) 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.
(e) 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 Company and the Employee agree that
any such action for injunctive or equitable relief shall be heard in a state or federal court
situated in the County and State of New York and each of the
parties hereto agrees to accept service of process by registered or certified mail
and to otherwise consent to the personal jurisdiction of such courts. The
Employee agrees that in an action pursuant to Sections 5 or 6, that if the Company makes a prima facie
showing that the Employee has violated or apparently intends to violate any of
the provisions of Sections 5 or 6, the Company need not prove either damage or
irreparable injury in order to obtain injunctive relief.
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(f) Each of the rights and remedies
enumerated in Section 6(e) 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. 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.
(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.
(ii) Employee will not use any confidential information or trade
secrets of any third party in his employment by the Company in violation of the
terms of the agreements under which he had access to or knowledge of such
confidential information or trade secrets.
(iii) 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 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;
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(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 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 or the Board;
(iv) The Employee’s conviction 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 an
allegation by an employee, contractor or customer 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; or
(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 Company due to the
Employee’s Disability. For purposes of this
Agreement, a termination for “Disability” shall occur (i) when 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 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.
(c) The Employee’s employment hereunder may be terminated
by the Board upon the occurrence of a Change of Control. For purposes of this
Agreement, “Change of
Control” means, following the Commencement
Date:
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(i) the acquisition by any Person
(including a group of Persons within the meaning of Section l3(d)(3) or l4(d)(2)
of the Exchange Act) of beneficial ownership of any capital stock of the
Company, if, after such acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 50% or more of the combined voting
power of the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company
Voting
Securities”); or
(ii) the consummation of a merger,
consolidation, reorganization, recapitalization or share exchange involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (a “Business
Combination”), unless, immediately following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors of the resulting or acquiring
corporation in such Business Combination (which shall include, without limitation, a corporation which
as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
of the Outstanding Company
Voting Securities immediately prior to such Business
Combination.
(d) The Employee’s employment hereunder may be terminated
by the Employee with or without Good Reason. For purposes of this Agreement,
“Good
Reason” shall mean: (i) 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), (ii) any relocation of the place of employment of the Employee more
than thirty (30) miles from the New York, New York city limits and more than sixty (60) miles from the
Employee’s address listed herein and located outside the state of New Jersey;
and (iii) any material adverse change in his title, duties or
responsibilities.
(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 Annual Milestone Bonus and expense reimbursement
amounts through the date of
his death or Disability. All Restricted Shares and stock options held by the
Employee (the “Stock
Options”) that are scheduled to vest on the next
succeeding anniversary of the Commencement Date shall be accelerated and deemed
to have vested as of the
termination date. All Restricted Shares and 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.
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(b) If the Employee’s employment is terminated by the
Company for Cause or by the
Employee other than for Good Reason, then the Company shall pay to the Employee
his Base Salary and unreimbursed expenses through the date of his termination
and the Employee shall have no further entitlement to any other compensation or
benefits from the Company. All Restricted
Shares and Stock Options that have not vested as of the date of termination
shall be forfeited to the Company as of such date.
(c) If the
Employee’s
employment is terminated by the Company (or its successor) within thirty
(30) days prior to or sixty (60) days following 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 two (2) times the amount the
Company has raised in gross proceeds through the sale of Equity Securities, 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, and, notwithstanding any provision of this Agreement to the
contrary, all non-competition and
non-solicitation obligations of the Employee under Section 6 of this Agreement
shall last for three (3) months. All Restricted Shares and Stock Options that
are scheduled to vest on the next succeeding anniversary of the Commencement
Date shall be accelerated
and deemed to have vested as of the termination date. All Restricted Shares and
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. As used herein, “Equity
Securities” shall
mean shares of Common Stock, preferred stock, options, warrants or other rights
to purchase Common Stock or securities or evidences of indebtedness convertible
into or exchangeable for shares
of Common Stock.
(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) (including, without limitation, any
termination as a result of
the Company’s nonrenewal of this Agreement), or by
the Employee for Good Reason, 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 Restricted Shares and Stock Options that
are scheduled to vest during the Term shall be accelerated and deemed to
have vested as of the termination date. The Company’s obligation under clause (i) 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) Notwithstanding anything in this
Agreement or any other agreement between the Employee and the Company to the
contrary, in the event that the Company determines that the provisions of Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), relating to “excess parachute payments” (as defined in the Code) shall be
applicable to any payment or benefit received or to be received by Employee,
then the total amount of payments or benefits payable to
Employee shall be reduced
to the largest amount such that the provisions of Section 280G of the Code
relating to “excess parachute payments” shall no longer be applicable. Should
such a reduction be required, the Company shall determine which payment or
benefit to reduce or
eliminate.
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(g) The provisions of this Section 9 shall
survive any termination of this Agreement.
10. Compliance
with Code Section 409A.
(a) If any payment, compensation or other
benefit provided to the Employee in connection with his employment termination is determined, in
whole or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of
the Code (“Section
409A”) and the Employee is a specified
employee as defined in Section 409A(2)(B)(i), no part of such payments shall be paid before
the day that is six (6) months plus one (1) day after the termination date (the
“New
Payment
Date”). The aggregate of any payments
that otherwise would have been paid to the Employee during the period between
the termination date and
the New Payment Date shall be paid to the Employee in a lump sum on such New
Payment Date. Thereafter, any payments that remain outstanding as of the day
immediately following the New Payment Date shall be paid without delay over the
time period originally scheduled, in
accordance with the terms of this Agreement.
(b) The parties acknowledge and agree that
the interpretation of Section 409A and its application to the terms of this
Agreement is uncertain and may be subject to change as additional guidance and
interpretations become available. Anything to the contrary herein notwithstanding, all benefits or
payments provided by the Company to the Employee that would be deemed to
constitute “nonqualified deferred
compensation” within the meaning of Section 409A are
intended to comply with Section 409A. If, however, any such benefit or payment is deemed to not
comply with Section 409A, the Company and the Employee agree to renegotiate in
good faith any such benefit or payment (including, without limitation, as to the
timing of any severance payments payable hereof) so that either (i) Section 409A will not apply
or (ii) compliance with Section 409A will be achieved; provided, however, that
any resulting renegotiated terms shall provide to the Employee the after-tax
economic equivalent of what otherwise has been provided to the Employee pursuant to the terms of
this Agreement, and provided further, that any deferral of payments or other
benefits shall be only for such time period as may be required to comply with
Section 409A.
11. 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.
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(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 National Rules for the Resolution of Employment
Disputes 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 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 below in paragraph (i) of this Section 11 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
Employee’s rights and obligations hereunder, may
not be assigned by the Employee. The Company may assign its rights, together
with its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or
assets.
(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, demands or other communications desired or
required to be given by any party to any other party hereto shall be in writing
and shall be deemed effectively given upon (i) personal delivery to the party to
be notified, (ii) upon confirmation of receipt of telecopy or other electronic facsimile transmission,
(iii) one business day after deposit with a reputable overnight courier, prepaid
for priority overnight delivery, or (iv) five days after deposit with the United
States Post Office, postage prepaid, in each case to such party at the address set forth on
the signature page hereto, or to such other addresses and to the attention of
such other individuals as any party shall have designated to the other
parties by notice given in the foregoing manner.
(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.
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(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.
(l) As used in this Agreement, 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.
Additionally, 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.
By: /s/ Xxxxx
Xxxxxx, M.D.
Name: Xxxxx Xxxxxx, M.D.
Title: President and Chief Executive
Officer
EMPLOYEE
/s/ Xxxx Xxxxxx, M.D.
Xxxx Xxxxxx, M.D.
