Exhibit 10(a)
Executive Employment Agreement
This Executive Employment Agreement ("Agreement"), is entered into as of April
---------
3, 2000, by and between OXIS International, Inc., its affiliated, related,
parent or subsidiary corporations (the "Company") located at 0000 X. Xxxxxx
-------
Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000-0000, and Xxx X. Xxxxxxx ("Executive")
---------
residing in Clackamas County, Oregon (collectively, the "parties").
RECITALS
Executive and the Company desire that Executive continue as its Chief Financial
Officer for the Period of Employment (as defined below), upon the following
terms and conditions.
AGREEMENT
ACCORDINGLY, the parties hereto agree as follows:
1. General Release of Claims. In exchange for the consideration set forth in
this Agreement, the parties agree to execute a release agreement with terms
modeled on the General Release of Claims I, attached hereto as Exhibit A
---------
and agreed to by the parties ("Release I"), in accordance with the terms
---------
thereof.
2. Period of Employment
a. Initial Term. Effective March 31, 2000, the Company shall employ
------------
Executive to render Services (as defined below) to the Company in the
position and with the duties and responsibilities described in Section 3
for a term of twelve (12) months (the "Period of Employment"), unless the
--------------------
Period of Employment is terminated sooner in accordance with Section 8
below.
b. Renewal. This Agreement will be automatically renewed one time
-------
for an additional one (1) year period (without any action taken by either
party) on the last day of the Period of Employment, unless either party
gives the other written notice of termination at least sixty (60) days
before the last day of the Period of Employment.
c. Non-Renewal. If either party gives notice of termination in
-----------
accordance with Section 2 (b), and Executive signs a release agreement with
terms modeled on the General Release of Claims II, attached hereto as
Exhibit B, Executive shall receive a continuation of his then-current
---------
salary for six (6) months after the Period of Employment; and,
notwithstanding any vesting or termination provisions contained in
Executive's applicable Stock Option Grants with the Company, Executive's
unvested Options (as defined in Section 4 below) shall immediately vest
eighteen (18) months after the effective date of this Agreement and
Executive shall be able to exercise his vested Options at any time
subsequent to the period of employment until a date one year after the
eighteen (18) month anniversary of the effective date of this Agreement,
and otherwise in accordance with and subject to Executive's applicable
Stock Option Grants with the Company (collectively, "Non-Renewal
-----------
Benefits").
---------
3. Position, Duties, Responsibilities
a. Position. During the Period of Employment, the Company agrees to
--------
continue to employ Executive and Executive agrees to continue in the
Company's employ as its Chief Financial Officer. Executive shall perform
all duties appropriate to that position, as well as such other
responsibilities as may reasonably be assigned by the Company including,
but not limited to,
1
assisting the Company's Special Advisor with the divestiture of OXIS Health
Products and other non-related technology ("Divestiture") (collectively,
-----------
"Services"). Executive shall report to the Company's Chief Executive Officer.
--------
b. Other Activities. During the Period of Employment, Executive will not,
----------------
except upon the prior written consent of the Company's CEO, which consent
shall not be unreasonably withheld: (i) accept any other full-time
employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) in the field of
ethical pharmaceuticals that is or may be in direct competition with the
business of the Company.
4. Compensation. In exchange for Services and the other consideration he
provides under this Agreement, Executive shall be entitled to an annual
base salary of one hundred and thirty-five thousand dollars ($135,000.00)
payable in accordance with the Company's regular payroll practices. In
addition, the Board of Directors has awarded Executive options to purchase
shares of the Company's Common Stock under, in accordance with, and subject
to Executive's applicable Stock Option Grants (certain of the options under
the 2000 Stock Option Agreement are subject to shareholder approval) with
the Company (collectively, "Options"). Executive will not be entitled to
-------
any cash or other bonus for 1999. In addition, Executive's entitlement to
shares under the 2000 Stock Option Grant may be accelerated in accordance
with the terms thereof, as set forth in the Board of Directors' consent
document dated January 31, 2000. Executive will be eligible to participate
in the Company's benefit plans (including vacation and health insurance) as
stated in the Company's employment policies (and as may be amended from
time to time in the Company's sole discretion), provided that Executive
shall receive such benefits at the same level provided from time to time to
other senior executives of Company.
5. Proprietary Information
a. Company Information. Executive agrees during his employment with
-------------------
the Company and for a period of three years thereafter, to hold in
strictest confidence, and not to use or disclose to any person, firm or
corporation any Proprietary Information of the Company. "Proprietary
-----------------------
Information" means any Company proprietary or confidential information,
technical data, trade secrets or know-how. This includes, but is not
limited to, research, product plans, products, services, customer lists,
customers, markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, finances or other Company business
information. This information shall remain confidential whether it was
disclosed to Executive either directly or indirectly in writing, orally or
by drawings or observation. Proprietary Information does not include any of
the foregoing items which has become publicly known and made generally
available through no wrongful act of Executive or others who were under
confidentiality obligations as to the items involved.
b. Former Employer Information. Executive agrees that he will not,
---------------------------
during his employment with the Company, improperly use or disclose any
proprietary information or trade secrets, or bring onto the premises of the
Company any proprietary information belonging to any former or concurrent
employer or other person or entity.
c. Third Party Information. Executive recognizes that the Company
-----------------------
has received and in the future will receive confidential or proprietary
information from third parties. Executive agrees to hold all such
confidential or proprietary information in the strictest confidence and not
to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out his work for the Company consistent with the
Company's agreement with such third party.
d. No Conflict. Executive represents and warrants that Executive's
-----------
execution of this Agreement, his employment with the Company, and the
performance of his proposed duties under this Agreement shall not violate
any obligations he may have to any former employer (or
2
other person or entity), including any obligations with respect to proprietary
or confidential information of any other person or entity.
6. Inventions
a. Inventions Retained and Licensed. Executive has attached, as
--------------------------------
Exhibit C, a list describing all inventions, original works of authorship,
---------
developments, improvements, and trade secrets which were made by Executive prior
to Executive's employment with the Company ("Prior Inventions"), which belong to
----------------
Executive, and which relate to the Company's actual and/or proposed business,
products or research and development. If, in the course of his employment with
the Company, Executive incorporates into a Company product, process or machine a
Prior Invention owned by Executive or in which Executive has an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made, modify, use and
sell such Prior Invention as part of or in connection with such product, process
or machine.
b. Assignment of Inventions. Except as provided in Section 6.e
------------------------
below, Executive agrees that he will promptly make full written disclosure to
the Company, will hold in trust for the sole right and benefit of the Company,
and hereby assign to the Company, or its designee, all Executive's right, title,
and interest in and to any and all inventions, original works of authorship,
developments, concepts, improvements, designs, discoveries, ideas, trademarks or
trade secrets, whether or not patentable or registrable under copyright or
similar laws, which Executive may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to practice
("Inventions"), while Executive is employed by the Company and within the course
----------
and scope of employment. Executive further acknowledges that all original works
of authorship which are made by Executive (solely or jointly with others) within
the course and scope of and during his employment with the Company and which are
protectible by copyright are "works made for hire", as that term is defined in
the United States Copyright Act. Executive understands and agrees that the
decision whether or not to commercialize or market any invention developed by
Executive solely or jointly with others is within the Company's sole discretion
and for the Company's sole benefit and that no royalty will be due to Executive
as a result of the Company's efforts to commercialize or market any such
invention.
c. Maintenance of Records. Executive agrees to keep and maintain
----------------------
adequate and current written records of all Inventions made by Executive (solely
or jointly with others) during Executive's employment with the Company and
subject to license or assignment under Section 6.a or 6.b. The records will be
in the form of notes, sketches, drawings, and any other format that may be
specified by the Company. The records will be available to and remain the sole
property of the Company at all times.
d. Patent and Copyright Registrations. Executive agrees to assist
----------------------------------
the Company, or its designee, at the Company's expense, in every proper way, to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries. Executive will disclose to the Company all pertinent information
and data which is necessary for the execution of all applications,
specifications, oaths, assignments and all other instruments necessary to apply
for and obtain such rights and in order to assign and convey to the Company, its
successors, assigns, and nominees the sole and exclusive rights, title and
interest in and to such Inventions, and any copyrights, patents, mask work
rights, or other intellectual property rights relating thereto. Executive
further agrees that Executive's obligation to execute or cause to be executed,
when it is in Executive's power to do so, any such instrument or papers shall
continue after the termination of this Agreement for a
3
reasonable duration. If the Company is unable, because of Executive's mental or
physical incapacity or for any other reason, to secure Executive's signature to
apply for or to pursue any application for any United States or foreign patents
or copyright registrations covering Inventions or original works of authorship
assigned to the company as above, then Executive hereby irrevocably designates
and appoints the Company and its duly authorized officers and agents as
Executive's agent and attorney in fact, to act for and in Executive's behalf and
stead to execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters-patent or
copyright registrations thereon with the same legal force and effect as if
executed by Executive.
e. Exception to Assignments. The provisions of this Agreement
------------------------
requiring assignment of Inventions to the Company do not apply to any invention
which qualifies for protection or different treatment under the provisions of
any applicable state law. Executive will advise the Company promptly in writing
of any inventions that Executive believes meet the criteria of any applicable
state law which affects ownership of Inventions.
7. Post-Termination Activity
a. Executive acknowledges that the pursuit of the activities
forbidden by this subsection would necessarily involve the use or disclosure of
Proprietary Information in breach of this Agreement, but that proof of such a
breach would be extremely difficult. To forestall this use or disclosure,
Executive agrees that, during the Severance Period (if any) or for a period of
one year after the Period of Employment, whichever is longer, Executive shall
not, without the Company's prior written consent (i) divert or attempt to divert
from the Company any business of any kind in which the Company is then engaged;
(ii) employ, solicit for employment, or recommend for employment any person
employed by the Company (except where providing such job related references as
are common in the industry); or (iii) except as otherwise addressed in this
Agreement, accept employment with another company directly involved in
developing the technology then in development for the Company at the time of
Executive's termination in any state in which the Company conducts its business.
b. In addition, because Executive acknowledges the difficulty of
establishing when any intellectual property, invention, or proprietary
information was first conceived or developed by Executive, or whether it
resulted from access to Proprietary Information or Company equipment, supplies,
facilities, or data, Executive agrees that any intellectual property, invention,
or proprietary information related to the development of ethical pharmaceuticals
shall be rebuttably presumed to be an Invention, if reduced to practice by
Executive or with the aid of Executive within one (1) year after termination of
the Period of Employment. Executive may rebut such presumption by producing
evidence which establishes to a preponderance that such intellectual property,
invention, or proprietary information was first conceived or developed by
Executive after the termination of the Period of Employment, or did not
otherwise result from access to Proprietary Information or Company equipment,
supplies, facilities, or data.
8. Termination of Employment
a. Termination by Company not for Cause. At any time, the Company
------------------------------------
may terminate the Period of Employment for any reason other than for Cause (as
defined below) by providing Executive fourteen (14) days' advance written
notice. The Company shall pay to Executive all compensation due and owing
through the last day actually worked and Executive shall be entitled to
Severance in accordance with Section 9 below, subject to the conditions therein.
In the event Company terminates the Period of Employment not for Cause,
Executive shall be released from the obligations of Section 7 .a (iii) above.
In addition, the Company may decline to allow the
4
renewal of the Agreement in accordance with Section 2 .b. above, regardless of
the existence of Cause, but in such case shall be obligated to provide only the
benefits set forth in Section 2 .c above.
b. Termination by Company for Cause. At any time, and without
--------------------------------
prior notice, the Company may terminate the Period of Employment for Cause (as
defined below). The Company shall pay Executive all compensation then due and
owing through the last day actually worked. Executive will not be entitled to
Severance. "Cause" shall mean Executive's: (i) Commission of a felony involving
-----
moral turpitude; (ii) Repeated failure to perform services in accordance with
the reasonable requests of superiors within the course and scope of Executive's
duties; (iii) Commission of a material fraud, misappropriation, embezzlement or
other act of gross dishonesty which resulted in material loss, damage or injury
to the Company; or (iv) Death. Notwithstanding anything herein, however, if the
Period of Employment is terminated by reason of the death of Executive, all
unvested Options shall immediately vest and shall be exercisable by Executive's
estate or heirs for two years thereafter, otherwise in accordance with the terms
of his applicable Stock Option Grants with the Company.
c. By Executive Not for Good Reason. At any time, Executive may
--------------------------------
terminate the Period of Employment for any reason other than Good Reason (as
defined below) by providing the Company fourteen (14) days' advance written
notice. The Company shall have the option, in its complete discretion, to make
termination of the Period of Employment effective at any time prior to the end
of such notice period, provided the Company pays Executive all compensation due
and owing through the last day actually worked. Thereafter, all of the Company's
obligations under this Agreement shall immediately and forever cease, except for
those required by law, except for those which expressly survive termination of
this Agreement and except that notwithstanding any vesting or termination
provisions contained in Executive's applicable Stock Option Grants with the
Company, Executive's unvested Options shall immediately vest upon such
termination and Executive shall be able to exercise his vested Options for one
year thereafter, otherwise in accordance with the terms of his applicable Stock
Option Agreements with the Company. Executive, however, will not be entitled to
Severance.
d. By Executive for Good Reason. At any time, and without prior
----------------------------
notice, Executive may terminate the Period of Employment for Good Reason (as
defined below). The Company shall pay Executive all compensation due and owing
through the last day actually worked, and Executive shall be entitled to
Severance in accordance with Section 9 below, subject to the conditions therein.
Thereafter, all obligations of the Company and Executive under this Agreement
shall terminate, except for those which expressly survive termination of this
Agreement. Neither the Company's giving of notice of termination in accordance
with Section 2.b nor its termination of the Period of Employment for Cause shall
constitute "Good Reason" for Executive to terminate the Period of Employment.
"Good Reason" only shall exist if the Company undertakes any of the following
-----------
without Executive's prior consent: (i) The assignment to Executive of any
duties or responsibilities which result in any material diminution or material
adverse change of Executive's position, status or circumstances of employment; a
change in Executive's titles or offices that results in any material diminution
or material adverse change of Executive's position, status or circumstances of
employment; or any removal of Executive from or any failure to re-elect
Executive to any of such positions, except in connection with the termination of
his employment for Cause, retirement, or any other voluntary termination of
employment by Executive other than a termination of employment by Executive for
Good Reason; (ii) A reduction by the Company in Executive's base salary by
greater than ten (10)
5
percent; (iii) Any failure by the Company to continue in effect any benefit plan
or arrangement, including incentive plans or plans to receive securities of the
Company, in which Executive is participating as of the date hereof (hereinafter
referred to as "Benefit Plans"), or the taking of any action by the Company
which would materially adversely affect Executive's participation in or reduce
Executive's benefits under the Benefit Plans or deprive Executive of any fringe
benefit enjoyed by Executive as in effect on the date hereof; provided, however,
that no termination of employment by Executive for Good Reason shall be deemed
to occur based upon this subsection 8.d (iii) if the Company offers a range of
benefit plans and programs which, taken as a whole, are comparable to the
Benefit Plans offered Executive before the action; (iv) A relocation of the
Executive, or the Company's principal offices if Executive's principal office is
at such offices, to a location more than fifty (50) miles from the location at
which Executive was performing his duties as of the date hereof, except for
required travel by Executive on the Company's business to an extent
substantially consistent with Executive's business travel obligations as of the
date hereof; (v) Any material breach by the Company of any provision of this
Agreement; (vi) Any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company; (vii) Any directive to
Executive to perform any act which would expose him to personal legal liability
or which, viewed objectively, is likely to constitute an unethical act; or
(viii) Any conduct directed to Executive by Company or any condition under which
Executive works which constitutes constructive discharge under the principles of
the governing law.
9. Severance
a. In the event that the Period of Employment is terminated in
accordance with Sections 8.a or 8.d hereof and Executive signs a waiver
agreement with terms modeled on the General Waiver of Claims, attached hereto as
Exhibit D and agreed to by the parties (the "Waiver"), the Company shall
--------- ------
continue Executive's then current base salary and COBRA premiums in accordance
with the Company's normal payroll procedures for a period of twelve (12) months
(the "Severance Period"), and notwithstanding any vesting or termination
----------------
provisions contained in Executive's applicable Stock Option Grants with the
Company Executive's unvested Options shall immediately vest and Executive shall
have two years from the date of Executive's termination of employment to
exercise his vested options otherwise in accordance with the terms of his
applicable Stock Option Grants with the Company (collectively, "Severance"). In
the event the then current base salary is less than the compensation set out in
Section 4 of this Agreement, Executive shall be entitled to severance calculated
on the basis of the compensation set out in Section 4 of this Agreement.
b. Notwithstanding any other provision of this Agreement, Release I
or II, or the Waiver, at any time should Executive engage in or pursue any of
the activities described in Section 7 (except where advance consent has been
granted, or except where released from Section 7 .a (iii) by virtue of a
Termination by Company not for Cause or by virtue of a Termination by Executive
for Good Reason) or should Executive not fulfill his obligations in Section 10
below, the Company's obligation to pay and Executive's entitlement to any
Severance or Non-Renewal Benefits shall immediately and forever cease.
10. Termination Obligations.
Executive agrees that his obligations under Sections 5 and 6 of this
Agreement survive the expiration of this Agreement.
6
11. Alternative Dispute Resolution
a. The Company and Executive mutually agree that any controversy or
claim arising out of or relating to this Agreement or the breach thereof, or any
other dispute between the parties, shall be submitted to mediation before a
mutually agreeable mediator, which cost is to be borne equally by the parties
hereto. In the event the parties are unable to agree upon a mediator, the
mediator shall be Xxxxxxxx Xxxxxxxx or such person as Xxxxxxxx Mediation Inc.
designates. In the event mediation is unsuccessful in resolving the claim or
controversy, such claim or controversy shall be resolved by arbitration as
described below. The claims covered by this Agreement ("Arbitrable Claims")
-----------------
include, but are not limited to, claims for wages or other compensation due;
claims for breach of any contract (including this Agreement) or covenant
(express or implied); tort claims; claims for discrimination (including, but not
limited to, race, sex, religion, national origin, age, marital status, medical
condition, or disability); claims for benefits (except where an Executive
benefit or pension plan specifies that its claims procedure shall culminate in
an arbitration procedure different from this one), and claims for violation of
any federal, state, or other law, statute, regulation, or ordinance, except
claims excluded in the following paragraph. The parties hereto hereby waive any
rights they may have to trial by jury in regard to Arbitrable Claims.
b. Claims Executive may have for workers' compensation or
unemployment compensation benefits are not covered by this Agreement. Also not
covered is either party's right to obtain provisional remedies or interim relief
from a court of competent jurisdiction for any claim or controversy arising out
of or related to the unauthorized use, disclosure, or misappropriation of the
confidential and/or proprietary information of either party. Notwithstanding
anything in this Agreement to the contrary, however, should either party
initiate litigation in any court as authorized by this section, the other party
may assert any claims he or it may have as counterclaims or separate claims in
such court and shall not be obligated to resolve them by mediation and/or
arbitration.
c. Except as provided in Section 11.b, mediation and arbitration
under this Agreement shall be the exclusive remedy for all Arbitrable Claims.
The Company and Executive agree that arbitration shall be held in or near
Multnomah County, Oregon, or such location as the parties mutually agree upon,
and shall be in accordance with the then current Employment Dispute Resolution
Rules of the American Arbitration Association, before an arbitrator licensed to
practice law in the State of Oregon or such other forum as the parties have
agreed upon. The arbitrator shall have authority to award or grant legal,
equitable, and declaratory relief. Such arbitration shall be final and binding
on the parties. The Federal Arbitration Act shall govern the interpretation and
enforcement of this section pertaining to Alternative Dispute Resolution. The
parties shall use their best efforts to agree upon an Arbitrator. If the parties
are unable to agree upon an Arbitrator within 14 days of either party requesting
arbitration of a dispute, the Arbitrator shall be designated by Xxxxxxxx
Xxxxxxxx or Xxxxxxxx Mediation Inc.
d. This Agreement to mediate and arbitrate survives termination of
the Period of Employment.
12. Miscellaneous
a. Legal Fees. If any action at law or in equity or arbitration is
----------
necessary to enforce or interpret the terms of this Agreement, to the extent
permitted by law, the prevailing party shall be entitled to reasonable
attorneys' fees, costs, and necessary disbursements, in addition to any other
relief to which the prevailing party may be entitled.
7
b. Entire Agreement. This Agreement (inclusive of exhibits and
----------------
attachments and incorporated documents) represents the entire agreement and
understanding between the parties regarding its subject matter, supersedes and
replaces any and all prior agreements and understandings regarding its subject
matter.
c. Amendments, Waivers. This Agreement may only be modified by a
-------------------
subsequent written agreement executed by the Chief Executive Officer of the
Company (after approval of the Company's Board of Directors) and Executive.
Failure to exercise any right under this Agreement shall not constitute a waiver
of such right.
d. Assignment; Successors and Assigns. This Agreement shall not be
----------------------------------
assignable by either party without the express written consent of the other.
e. Notices. All notices required or given herewith shall be
-------
addressed to the parties at the addresses designated above by registered mail,
special delivery, or by certified courier service. Executive shall notify
Company in writing of any change of address. Notice of change of address shall
be effective only when done in accordance with this Section.
f. Severability; Governing Law. If any provision of this Agreement,
---------------------------
or its application to any person, place, or circumstance, is held by an
arbitrator or a court of competent jurisdiction to be invalid, unenforceable, or
void, such provision shall be enforced (by blue-penciling or otherwise) to the
greatest extent permitted by law, and the remainder of this Agreement and such
provision as applied to other persons, places, or circumstances shall remain in
full force and effect. This Agreement will be governed by the laws of the State
of Oregon.
g. Acknowledgment. Company and Executive acknowledge that they have
--------------
been afforded every opportunity to and have read this Agreement, are fully aware
of its contents and legal effect, and have chosen to enter into this Agreement
freely, without coercion, and based upon their own judgment. The parties have
duly executed this Agreement as of the date first written above.
EXECUTIVE
/s/ Xxx X. Xxxxxxx
---------------------------
Xxx X. Xxxxxxx
COMPANY
OXIS International, Inc.
By: /s/ Xxx X. Xxxxxx
------------------------
Name: Xxx X. Xxxxxx
Title: Chairman
By: /s/ Xxxxxx Xxxx
------------------------
Name: Xxxxxx Xxxx
Title: Chairman, Audit and
Compensation Committee
8
