EXHIBIT 10.10
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT dated as of March 12, 2001, between Antares
Pharma, Inc., a Minnesota corporation (the "Company"), and Xxxxx X. Xxxxxxxx,
Ph.D. (the "Executive").
BACKGROUND
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Company desires to employ Executive, and Executive desires to enter
into the employ of Company, on the terms and conditions contained in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 Employment; Acceptance of Employment. Company hereby employs
Executive and Executive hereby accepts employment by Company for the period and
upon the terms and conditions hereinafter set forth.
1.2 Capacity and Duties.
(a) Executive shall be employed by Company as its Chief
Executive Officer ("CEO") and, subject to the supervision of the
Company's Board of Directors (the "Board"), shall perform such duties
and shall have such authority as are consistent with his position as
CEO and shall perform such other duties as may from time to time
reasonably be specified by the Company's Board. As CEO Executive shall
report directly to the Board.
(b) If during Executive's employment hereunder the Board in
its discretion shall elect to have the functions of CEO and chief
operating officer ("COO") exercised for the Company by two persons,
Executive shall thereafter be employed by Company solely as its COO
and, subject to the supervision of the CEO, shall be responsible for
and have authority over the operations of the Company and shall perform
such other duties consistent with his position as COO as may from time
to time reasonably be specified by the CEO or by the Board. As COO
Executive shall report directly to the CEO.
(c) Executive shall devote his full working time, energy,
skill and best efforts to the performance of his duties hereunder, in a
manner which will faithfully and diligently further the business and
interests of Company, and shall not be employed by or participate or
engage in or be a part of in any manner the management or operation of
any business enterprise other than Company; provided, however, that
with the prior written consent of the Board, which shall not be
unreasonably withheld, Executive shall be entitled to serve as a member
of the board
of directors of another corporation so long as such service does not
interfere with Executive's performance of his duties hereunder.
SECTION 2. TERM OF EMPLOYMENT
2.1 Term. Executive's employment hereunder shall commence on March 12,
2001 and shall thereafter continue until terminated as hereinafter provided.
SECTION 3. COMPENSATION
3.1 Basic Compensation. As compensation for Executive's services
hereunder, Company shall pay to Executive a salary at the annual rate of
$275,000 (the "Base Salary"), payable in monthly installments.
3.2 Share Grants.
(a) In order further to encourage Executive's enhancement of
shareholder value, subject to Executive's being in the employ of the
Company hereunder at the time of each event listed below in this
Section 3.2 (a "Trigger Event") and subject to Section 4.4 herein, and
further subject to Company shareholder approval of each share grant
listed below which relates to a performance-based Trigger Event for
purposes of Section 162(m) of the Internal Revenue Code, Company shall
grant to Executive, on the occurrence of each Trigger Event, the number
of restricted Company common shares set forth below with respect to
such event. All restricted share grants hereunder shall be subject to
all of the provisions of this Employment Agreement and shall be
evidenced by written documents ("Grant Agreements") in such form as the
Board shall, from time to time, approve containing such provisions not
inconsistent with the terms of this Employment Agreement as the Board
shall deem necessary or advisable. Executive shall enter into and be
bound by the terms of each such Grant Agreement. All share grants
hereunder shall also be made in compliance with, or pursuant to
appropriate exceptions from, all applicable federal and state
securities laws, and shall be subject to all such restrictions, if any,
as the Company, in its discretion, deems such laws to require.
Trigger Event No. of Shares
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1. Within 30 days of commencement of Executive's
employment hereunder (Section 2.1) 48,000
2. The first anniversary of the commencement of
Executive's employment hereunder. 40,000
3. The effective date of the first registration statement
filed with the Securities and Exchange Commission for
an underwritten public distribution of Company common
shares, by the Company, for cash. 40,000
4. The date by which Company common shares shall have had
a closing price of at least $13 per share, as duly
reported for
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trading on NASDAQ or a national securities exchange,
for each of 60 consecutive trading days. 40,000
5. The Company's execution, by not later than the second
anniversary of the commencement of Executive's
employment hereunder, of its third agreement with a
pharmaceutical, biotechnology or similar company for a
development project that the Board regards as having
been initiated and brought to an executed agreement
with Company during Executive's employment hereunder. 48,000
(b) Upon the making of a restricted share grant, Company shall
issue a certificate in the name of Executive representing the common
shares subject to the grant. All such certificates shall bear a legend
indicating that they are subject to the terms of this Employment
Agreement. Upon issuance of each such certificate, the Executive shall
immediately execute a stock power or other instrument of transfer,
appropriately endorsed in blank, to be held with the certificates by
Company pursuant to the terms of this Employment Agreement. Only full
shares shall be issued under the Plan.
(c) Common shares issued as a restricted share grant may not
be sold, exchanged, transferred, pledged, hypothecated, or otherwise
disposed of until they are vested. Executive shall be vested in each
restricted share grant made hereunder on the third anniversary of the
commencement of Executive's employment hereunder as stated in Section
2.1, above. Except as expressly provided in this Employment Agreement
all common shares covered by restricted share grants that have not yet
vested as provided in the immediately preceding sentence shall be
deemed immediately forfeited by Executive upon any termination of
Executive's employment pursuant to Section 4.1, 4.2 or 4.4, below; but
all common shares covered by restricted share grants that have not yet
vested as provided in the immediately preceding sentence shall be
vested on the effective date of any termination of Executive's
employment by Company, without cause, pursuant to Section 4.3, below.
(d) Executive shall be entitled to receive dividends paid on,
and shall have the right to vote, common shares issued pursuant to
restricted share grants made hereunder but which have not vested or
been forfeited as provided in Section 3.2(c) above.
(e) Effective immediately upon Executive's becoming eligible
for any payment pursuant to Section 3.8, below, (i) Company shall have
no further obligations under this Section 3.2 to grant restricted
Company common shares to Executive upon the occurrence of any of the
Trigger Events, and (ii) all common shares covered by restricted share
grants that have not vested as provided in Section 3.2(c), above, shall
be deemed immediately forfeited by Executive.
3.3 Employee Benefits. In addition to the compensation provided for in
Sections 3.1 and 3.2, Executive shall be entitled during the term of his
employment to participate in Company's healthcare and other employee benefit
plans and benefit programs as may from time to time be provided for other
executives of Company whose duties, responsibilities, and compensation are
reasonably comparable to those of Executive.
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3.4 Vacation. Executive shall be entitled to a vacation of five weeks
during each calendar year during the term of his employment, during which time
his compensation shall be paid in full.
3.5 Expense Reimbursement. During the term of his employment, Company
shall reimburse Executive for all reasonable expenses incurred by him in
connection with the performance of his duties hereunder in accordance with its
regular reimbursement policies as in effect from time to time and upon receipt
of itemized vouchers therefor and such other supporting information as Company
may reasonably require.
3.6 Automobile. During the term of his employment, Company shall pay
Executive an allowance of $1500 per month for an automobile for his use in
connection with the performance of his duties hereunder and shall reimburse him
for all expenses reasonably incurred by him for the maintenance and operation,
including fuel of such automobile in connection with the performance of his
duties hereunder in accordance with its regular reimbursement policies as in
effect from time to time upon receipt of itemized vouchers therefor and such
other supporting information as Company may reasonably require.
3.7 Provisions for Possible Move of Executive Offices. If during
Executive's employment hereunder the Company moves its principal executive
offices from Minneapolis, Minnesota to Pennsylvania:
(i) Company shall reimburse Executive for the
reasonable moving expenses (as pre-approved by the Board), not
to exceed $30,000, incurred by him in moving his principal
place of residence to within reasonable commuting distance of
the Company's relocated executive offices; and
(ii) Company shall, if necessary, also assist
Executive in the move of his principal place of residence by
making available a bridge loan, in such amount, for such
period and on such terms as Company and Executive may agree
upon.
3.8 Sale or Merger of the Company. Except as provided in Section 4.4
herein, if, within 12 months of the commencement of Executive's employment
hereunder as specified in Section 2.1, the Company sells all or substantially
all of its assets to an unaffiliated third party, or merges with or into an
unaffiliated third party in a transaction in which the Company is not the
surviving entity, then, and subject in either case to consummation of such
transaction, the Company shall pay Executive either (i) two percent of the
aggregate cash, securities or other consideration received by the Company from
the sale of all or substantially all of its assets, or (ii) an amount, in cash,
equal to two percent of the value (as of the date of consummation of the merger)
of the aggregate cash, securities or other consideration distributed to the
Company's shareholders in the merger; provided, however, that the Company shall
have no obligation to make any payment to Executive under this Section 3.8 if,
following consummation of the sale of assets or merger transaction, Executive is
employed as the chief executive or chief operating officer of the acquiring or
surviving entity in the transaction.
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SECTION 4. TERMINATION OF EMPLOYMENT
4.1 Death of Executive. Executive's employment hereunder shall
immediately terminate upon his death, upon which Company shall continue to pay
to Executive's estate the compensation provided for in Section 3.1 herein for a
period of 120 days. All Company common shares covered by restricted share grants
made hereunder prior to Executive's death shall be vested as of his date of
death.
4.2 Termination for Cause. Executive's employment hereunder shall
terminate immediately upon notice that Company is terminating Executive for
"cause" (as defined herein), in which event Company shall not thereafter be
obligated to make any further payments hereunder other than amounts payable
under Sections 3.1, 3.5 and 3.6 herein which are accrued under this Agreement as
of the date of such termination in accordance with generally accepted accounting
principles. As used herein, "cause" shall include, without limitation, the
following:
(i) dishonesty or fraud committed in connection with
Executive's employment, theft or misappropriation or
embezzlement of Company's funds;
(ii) conviction of any felony, crime involving fraud
or misrepresentation, or of any other crime (whether or not
connected with his employment) the effect of which is likely
to adversely affect the Company or its affiliates;
(iii) material breach of Executive's obligations
under this Agreement; or
(iv) conduct contrary to the best interests of the
Company.
4.3 Termination by Company Without Cause. Company in its sole
discretion may terminate Executive's employment hereunder by written notice to
Executive at any time. Following such termination, Company shall continue to pay
Executive his Base Compensation, in monthly installments, for a period of six
months from the date of termination, but shall not be obligated to make any
other payments hereunder other than amounts payable under Sections 3.5 and 3.6
herein which are accrued under this Agreement as of the date of termination in
accordance with generally accepted accounting principles. Upon making such
payments, Company shall have no further obligation to Executive hereunder.
4.4 Termination by Executive. Executive may terminate his employment
hereunder upon 120 days' prior written notice to Company at any time.
Notwithstanding the provisions of Sections 3.2 and 3.8 above, at no time
following Executive's giving of notice of the termination of his employment
hereunder shall Executive be entitled to any grant of Company Shares upon the
occurrence of any of the Trigger Events specified in Section 3.2 or to any
payments pursuant to Section 3.8. If prior to the effective date of any
termination of Executive's employment pursuant to this Section 4.4 Executive
shall have received grants of restricted Company common shares with respect to
at least three of the Trigger Events listed in Section 3.2(a), above, all
Company common shares covered by such prior restricted share grants shall be
vested as of such effective date of termination.
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SECTION 5. RESTRICTIVE COVENANTS
5.1 Confidentiality.
(a) Executive shall not, either during or after his employment
with Company, directly or indirectly use, publish or otherwise disclose
or divulge to any third party any trade secrets, confidential or
proprietary information of Company other than as required by law or in
the ordinary course of Company business (including, without limitation,
any such information concerning customers, vendors, services, products,
processes, pricing policies, business plans or records, any technical
or financial information or data, or any information relating to the
history or prospects of Company or any of its stockholders).
"Confidential" information includes, without limitation, all
unpublished information and all information and data which is not
generally known by the industry.
(b) Executive shall not, either during or after his employment
with Company, directly or indirectly copy, reproduce or remove from
Company's premises, except in the ordinary course of Company business,
trade secrets, confidential or proprietary information of Company (in
any medium) or any Company documents, files or records (including
without limitation any invoices, customer correspondence, business
cards, orders, computer records or software, or mailing, telephone or
customer lists). All such documents, files and records, and all other
memoranda, notes, files, records, lists and other documents made,
compiled or otherwise acquired by Executive in the course of his
employment with Company are and shall remain the sole property of
Company and all originals and copies thereof shall be delivered to the
Company upon termination of employment for whatever reason.
5.2 Inventions and Improvements. During the term of his employment,
Executive shall promptly communicate to Company all ideas, discoveries and
inventions which are or may be useful to Company or its business. Executive
acknowledges that all ideas, discoveries, inventions, and improvements which are
made, conceived, or reduced to practice by him and every item of knowledge
relating to Company's business interests (including potential business
interests) gained by him during his employment hereunder are the property of
Company, and Executive hereby irrevocably assigns all such ideas, discoveries,
inventions, improvements, and knowledge to Company for its sole use and benefit,
without additional compensation. The provisions of this Section shall apply
whether such ideas, discoveries, inventions, improvements or knowledge are
conceived, made or gained by him alone or with others, whether during or after
usual working hours, whether on or off the job, whether applicable to matters
directly or indirectly related to Company's business interests (including
potential business interests), and whether or not within the specific realm of
his duties. It shall be conclusively presumed that ideas, inventions, and
improvements relating to Company's business interests or potential business
interests conceived during the one year period following termination of
employment are, for the purposes of this Agreement, conceived prior to
termination of employment. Executive shall, upon request of Company, but at no
expense to Executive, at any time during or after his employment with Company,
sign all instruments and documents reasonably requested by Company and otherwise
cooperate with Company to protect its right to such ideas, discoveries,
inventions, improvements, and knowledge, including applying for, obtaining, and
enforcing patents and copyrights thereon in any and all countries.
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5.3 Noncompetition. During the term of Executive's employment and for
one year after any termination of employment, Executive shall not directly or
indirectly: (i) engage, anywhere in the United States or Europe, in the
development, manufacture, assembly, design, distribution or marketing of any
product, process or equipment for transdermal drug delivery or jet injection
drug delivery, or of any product or equipment substantially similar to or in
competition with any product or equipment which at the time of Executive's
termination Company was developing for future manufacture, sale or distribution;
(ii) be or become a stockholder, partner, owner, officer, director or employee
or agent of, or a consultant to or give financial or other assistance to, any
person or entity considering engaging in any such activities or so engaged; or
(iii) solicit or contact any person who is an employee of Company with a view to
the engagement or employment of such employee by Executive or by any other
person or entity; provided, however, that nothing herein shall prohibit the
Executive and his affiliates from owning, as passive investors, in the aggregate
not more than 5% of the outstanding publicly traded stock of any corporation so
engaged. The duration of the Executive's covenants set forth in this Section
shall be extended by a period of time equal to the number of days, if any,
during which the Executive is in violation of the provisions hereof. The
provisions of this Section 5.3 shall not apply in the event of the termination
of Executive's employment by Company, without cause, pursuant to Section 4.3,
above.
5.4 Injunctive and Other Relief.
(a) Executive acknowledges and agrees that the covenants
contained herein are fair and reasonable in light of the consideration
paid hereunder and that damages alone shall not be an adequate remedy
for any breach by Executive of his covenants contained herein and
accordingly expressly agrees that, in addition to any other remedies
which Company may have, Company shall be entitled to injunctive relief
in any court of competent jurisdiction for any breach or threatened
breach of any such covenants by Executive. Nothing contained herein
shall prevent or delay Company from seeking, in any court of competent
jurisdiction, specific performance or other equitable remedies in the
event of any breach or intended breach by Executive of any of its
obligations hereunder.
(b) Notwithstanding the equitable relief available to Company,
the Executive, in the event of a breach of his covenants contained in
Section 5 hereof, understands and agrees that the uncertainties and
delay inherent in the legal process would result in a continuing breach
for some period of time, and therefore, continuing injury to Company
until and unless Company can obtain such equitable relief. Therefore,
in addition to such equitable relief, Company shall be entitled to
monetary damages for any such period of breach until the termination of
such breach, in an amount deemed reasonable to cover all actual and
consequential losses, plus all monies received by Executive as a result
of said breach and all costs and attorneys' fees incurred by Company in
enforcing this Agreement. If Executive should use or reveal to any
other person or entity any confidential information, this will be
considered a continuing violation on a daily basis for so long a period
of time as such confidential information is made use of by Executive or
any such other person or entity.
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SECTION 6. MISCELLANEOUS
6.1 Arbitration.
(a) All disputes arising out of or relating to this Agreement
which cannot be settled by the parties shall promptly be submitted to
and determined by a single arbitrator in Philadelphia, Pennsylvania,
pursuant to the rules and regulations then obtaining of the American
Arbitration Association; provided that nothing herein shall preclude
Company from seeking, in any court of competent jurisdiction, damages,
specific performance or other equitable remedies in the case of any
breach or threatened breach by Executive of Section 5 hereof. The
decision of the arbitrator shall be final and binding upon the parties,
and judgement upon such decision may be entered in any court of
competent jurisdiction.
(b) Discovery shall be allowed pursuant to the intendment of
the United States Federal Rules of Civil Procedure and as the
arbitrators determine appropriate under the circumstances.
(c) Such arbitrator shall be required to apply the contractual
provisions hereof in deciding any matter submitted to it and shall not
have any authority, by reason of this Agreement or otherwise, to render
a decision that is contrary to the mutual intent of the parties as set
forth in this Agreement.
6.2 Prior Employment. Executive represents and warrants that he is not
a party to any other employment, non-competition or other agreement or
restriction which could interfere with his employment with Company or his or
Company's rights and obligations hereunder; and that his acceptance of
employment with Company and the performance of his duties hereunder will not
breach the provisions of any contract, agreement, or understanding to which he
is party or any duty owed by him to any other person.
6.3 Severability. The invalidity or unenforceability of any particular
provision or part of any provision of this Agreement shall not affect the other
provisions or parts hereof. If any provision hereof is determined to be invalid
or unenforceable by a court of competent jurisdiction, Executive shall negotiate
in good faith to provide Company with protection as nearly equivalent to that
found to be invalid or unenforceable and if any such provision shall be so
determined to be invalid or unenforceable by reason of the duration or
geographical scope of the covenants contained therein, such duration or
geographical scope, or both, shall be considered to be reduced to a duration or
geographical scope to the extent necessary to cure such invalidity.
6.4 Assignment. This Agreement shall not be assignable by Executive,
and shall be assignable by Company only to any person or entity which may become
a successor in interest (by purchase of assets or stock, or by merger, or
otherwise) to Company in the business or a portion of the business presently
operated by it. Subject to the foregoing, this Agreement and the rights and
obligations set forth herein shall inure to the benefit of, and be binding upon,
the parties hereto and each of their respective permitted successors, assigns,
heirs, executors and administrators.
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6.5 Notices. All notices hereunder shall be in writing and shall be
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by telegram, fax or telecopy (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or to such other person and/or at
such other address as may be furnished in writing by any party hereto to the
other. Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given as provided in this Agreement; provided that nothing
herein shall be deemed to affect the right of any party to serve process in any
other manner permitted by law.
(a) If to Company:
Antares Pharma, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention:
With copies to:
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and
Drinker Xxxxxx & Xxxxx LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(b) If to Executive:
Xxxxx X. Xxxxxxxx, Ph.D.
00 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
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With a copy to:
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6.6 Entire Agreement and Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersedes all prior agreements and understandings with
respect thereto. Any amendment, modification, or waiver of this Agreement shall
not be effective unless in writing. Neither the failure nor any delay on the
part of any party to exercise any right, remedy, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of any right, remedy, power, or privilege
with respect to any other occurrence.
6.7 Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the internal laws of the State of
Minnesota (and United States federal law, to the extent applicable), without
giving effect to otherwise applicable principles of conflicts of law.
6.8 Headings; Counterparts. The headings of paragraphs in this
Agreement are for convenience only and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which, when taken together, shall be deemed
to constitute but one and the same Agreement.
6.9 Further Assurances. Each of the parties hereto shall execute such
further instruments and take such other actions as any other party shall
reasonably request in order to effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ANTARES PHARMA, INC.
By:
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Name:
Title:
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Xxxxx X. Xxxxxxxx, Ph.D.
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