EXEGENICS INC. 4400 Biscayne Blvd Suite 900 Miami, Florida 33137
EXHIBIT 10.18
March 29, 2007
Xxxxxx X. Xxxxx
000 Xxxxxxxx Xx
Xxxxxx Xxxxxxx, XX 00000
000 Xxxxxxxx Xx
Xxxxxx Xxxxxxx, XX 00000
Dear Xxx:
I am sending you this letter (this “Employment Letter”) to memorialize the understanding
between you and eXegenics Inc. (the “Company”) regarding your employment terms with the Company and
its wholly owned subsidiary, Acuity Pharmaceuticals, LLC (the “Subsidiary”). This Employment
Letter sets forth the terms of your employment with the Company as approved by the Company’s board
of directors. You may indicate your agreement with these terms by signing and dating the enclosed
duplicate original of this Employment Letter and returning the same to me.
1. Position. You will serve the Company and Acuity as its Executive Vice President and you
will have responsibilities and obligations which are commensurate with this position. You will
report to the Chief Executive Officer of the Company. You will also serve the Subsidiary in the
same capacity, provided that no additional compensation or benefits will be provided for any
services provided to any affiliate of the Company, and notwithstanding anything to the contrary set
forth herein, a termination of employment or Change in Control at the Subsidiary level shall not
trigger any payments or acceleration of any vesting of securities hereunder.
2. Place of Employment. The Company will have its principal place of business in and around
the city of Miami in the State of Florida. When reasonably requested by the Company, you will be
required to relocate to the Miami area to be closer to the Company’s principal office. The exact
timeframe for your relocation will be determined in the coming weeks and you will be afforded a
reasonable period of time to complete your relocation. Prior to the date of your relocation, you
will be required to make yourself available in Miami when reasonably requested by the Company. It
is contemplated that you will spend up to ten (10) days per month in Miami prior to your
relocation. You will be reimbursed for your documented travel expenses prior to the time for
relocation.
3. Reimbursement for Relocation. When the Company requires that you relocate to the Miami
area, you will be reimbursed for your documented relocation expenses (which will include moving
expenses, travel expenses for you and your family, temporary housing for up to three months and
customary closing costs (excluding points,
concessions and pre-paid expenses such as insurance,
taxes, homeowner’s warranties, etc.) for your purchase of a residence in the Miami area), which
will be grossed up for taxes. If, within one year from the date of your relocation, your
employment with the Company is terminated for Cause or if you voluntarily terminate your employment
with the Company other than for Good Reason, you will be required to refund all of the relocation
monies paid by the Company, including the tax gross-up.
4. Term of Employment. The term of your employment with the Company (the “Employment Period”)
shall commence on the date of this Employment Letter (the “Effective Date”) and, unless earlier
terminated in accordance with the terms of the Employment Letter, shall end on the first
anniversary of the Effective Date. Except as provided in the Employment Letter, on the first
anniversary of the Effective Date and on each subsequent anniversary thereof, the Employment Period
shall be automatically extended for one additional year unless either you or the Company shall have
given to the other party written notice of non-extension at least thirty (30) days prior to such
anniversary.
5. Salary. You will be paid a salary at the annual rate of $210,000, payable in monthly
installments in accordance with the Company’s prevailing payroll practices for executive employees.
This salary will be subject to adjustment pursuant to the Company’s employee compensation policies
in effect from time to time. All forms of compensation from the Company will be subject to
reduction to reflect applicable withholding and payroll taxes.
6. Benefits. You will be entitled to participate in such benefit programs as are generally
made available to other executives of the Company. If you are then an employee in good standing
you will be entitled to four (4) weeks paid vacation each year and sick days and other holidays in
accordance with the Company’s then prevailing policies to be established from time to time for
executive employees. Unused vacation time will not accrue beyond, and must be used within, three
months of the end of each year.
7. Bonus. Within ten days of the Effective Date, you will be paid a bonus of $30,000, which
represents your bonus for fiscal year 2006. Going forward, you will be eligible for an annual
merit bonus, potentially to be paid each year, in accordance with the procedures established by the
Company for executive employees. Your targeted bonus for the first year will be equal to
approximately 30% of your base salary and will be based on criteria established from time to time
by the Company. These criteria will include, but not be limited to, your accomplishments against
set objectives, the Company’s success and your general contributions to the Company’s success, the
general fiscal position of the Company and additional factors to be deemed appropriate by the
Company’s senior management and board of directors. Payment of any bonus shall be at the sole
discretion of the Company. The bonus you receive may be below or above the target or may not be paid at
all. Any bonus paid for a period of time which is less than 12 months will be paid pro rata for
such time period. You must be an employee in good standing at the time of
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any potential payment.
Any bonus, if paid, will be paid prior to the end of the first fiscal quarter following the fiscal
year for which a bonus is to be paid.
8. Reimbursement for Travel Expenses. The Company shall reimburse you for approved travel and
other out-of-pocket expenses incurred by you in the course of your employment consistent with
applicable procedures in place at any time.
9. Stock Options. Subject to (i) the adoption and approval of an equity incentive plan with
sufficient authorized shares by the stockholders of the Company, and (ii) the approval of the
Compensation Committee of the Board of Directors of the Company, you shall be granted an option to
purchase 500,000 shares of the Company’s common stock (subject to adjustment in the event of any
stock splits or reverse stock splits) . The exercise price per share for each new option grant
will be equal to the fair market value per share on the date the option is granted. The options
will be subject to the terms and conditions contained in a stock option agreement to be entered
into by you and the Company prior to the grant. The options shall vest in forty eight (48) monthly
installments from the date of grant.
10. Termination without Cause and Resignation for Good Reason or Non-extension of Employment
Before One Year Anniversary. The Company may terminate your employment hereunder without “Cause.”
If your employment is terminated by the Company without “Cause,” you terminate your employment with
the Company for “Good Reason” or the Company delivers to you a notice of non-extension, in
accordance with Section 4 hereof, prior to the one-year anniversary of the Effective Date (which
initial non-renewal shall be treated as a termination for purposes of this Section 10), the Company
shall pay you all amounts accrued but unpaid as of the effective date of such termination. In
addition, you shall continue to receive your then applicable base salary and benefits for twelve
(12) months thereafter (the “Severance Period”). Any outstanding equity awards granted to you
which would have vested during the Severance Period shall vest automatically upon such termination
and all vested equity awards shall be exercisable for one year from the effective date of
termination. All unvested equity awards shall be forfeited. In order to receive the severance
payments set forth in this Section 10, you will be required to enter into a customary separation
and release agreement with the Company which will include the extension of the non-competition
provision set forth in Section 12 during the Severance Period. Such separation agreement shall
provide that (i) any and all obligations of the Company to pay you accrued salary, bonus or
benefits shall survive and shall not be released or waived by you, (ii) any release shall not
restrict or adversely affect your ability to exercise any vested stock options or otherwise
infringe upon your ownership of any the Company securities, and (iii) you shall not be required to
release or waive any rights that you may have to be indemnified by Acuity or the Company (including
any rights to advance reimbursement for costs or expenses) pursuant to any
provision in Acuity’s or the Company’s certificate of incorporation, bylaws or as may be
otherwise provided for by law or contract.
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As used herein, “Good Reason” shall mean (i) any action by the Company which results
in any diminution in your salary or reporting requirements (ii) any action by the Company
which results in a material diminution in your position, authority, duties or
responsibilities contemplated by this Employment Letter, or (iii) material breach by the
Company of its obligations under this Employment Letter or (iv) the Company’s requiring you
to be based at any office or location other than a location within 30 miles from the
Company’s offices in Philadelphia, or within 30 miles from the Company’s offices in Miami,
except for travel reasonably required in connection with the performance of the your
responsibilities hereunder.
If you elect to terminate your employment for Good Reason, you shall first give the
Company written notice thereof, including reasonable evidence to support your finding of
Good Reason and a period of thirty (30) days (the “Good Reason Notice Period”) from the
date of such notice to cure such breach. If such breach is not cured by the Company by the
end of the Good Reason Notice Period with such cure being communicated to you in writing,
such termination shall be effective upon the first day after the expiration of the Good
Reason Notice Period.
11. Termination for Cause. The Company shall be permitted to terminate your employment
hereunder for Cause (as defined below). In the event of such termination, your compensation and
benefits shall cease as of the effective date of termination and the Company shall pay you all
amounts accrued but unpaid as of the date of such termination. The Company shall not thereafter be
obligated to make any further payments to you. In addition all outstanding equity awards granted
to you, vested or unvested, shall immediately be terminated.
As used herein, “Cause” shall mean (i) your commission of fraud in connection with
your employment or intentional theft, misappropriation or embezzlement of the Company’s
funds; (ii) your conviction of or the entering of a guilty plea or plea of no contest with
respect to, a felony, the equivalent thereof, or any other crime with respect to which
imprisonment is the punishment; (iii) your material breach of your obligations under this
Employment Letter,; (iv) your willful violation of any express direction or requirement
established by the Chief Executive Officer or Board of Directors in good faith ; (v) your
incompetence or misconduct in the performance of, or neglect of, your duties hereunder
which is materially detrimental to the Company ; (vii) your use of alcohol or other drugs
which interfere with the performance of your duties, or the conviction of or your entering
of a guilty plea or plea of no contest with respect to the use of any illegal drugs or
narcotics.
If the Company elects to terminate your employment for Cause pursuant to clauses
(iii), (iv), and (v) of the definition of “Cause” and the action or inaction prompting such
termination is capable of cure, the Company shall first give you written notice thereof,
including a description of the evidence upon which the
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Company has relied to support such
finding and, a period of thirty (30) days from the date of such notice to cure the action
or inaction giving rise to the written notice.
12. Disability. If you are incapacitated by accident, sickness or otherwise so as to render
you, for any period totaling 60 or more days during any consecutive twelve-month period, or in the
reasonable opinion of the Company’s board of directors, is mentally or physically incapable of
performing the services required of you under this Employment Letter, the Company may terminate
your employment immediately following such 60-day period by giving you written notice specifying
the effective date of termination. In the event of such a termination, the Company shall pay to
you all amounts accrued but unpaid under this Employment Letter as of the effective date of your
termination and thereafter shall not have any further obligation or liability under this Employment
Letter. In addition, all restricted shares, options and other securities shall remain outstanding
subject to their terms, except that all equity awards shall be exercisable by you for a period of
one (1) year following termination pursuant to this Section 12.
13. Death. Your employment with the Company shall automatically terminate in the event of
your death. In the event of such a termination, the Company shall pay to your estate or legal
representative all amounts accrued but unpaid under this Employment Letter as of the effective date
of your termination and thereafter shall not have any further obligation or liability under this
Employment Letter. In addition, all restricted shares, options and other securities shall remain
outstanding subject to their terms, except that all equity awards shall be exercisable by the
executors or administrators of your estate or by the your beneficiaries for a period of one (1)
year following termination pursuant to this Section 13.
14. Non-Competition Provision. During the term of your employment with the Company and for
one-year thereafter(so long Acuity is in compliance with its contractual obligations, if any, under
this Letter Agreement to provide you with any severance payments or benefits following a
termination event) you agree that you shall not engage or participate directly or indirectly in any
business which is, or as a result of your engagement or participation would become, competitive
with any aspect of the business of the Company and any specific applications or technologies in
which the Company has initiated significant plans to develop (the “Competing Business”), such
business currently being the development and commercialization of therapeutic compounds for the
treatment of ophthalmic disorders. During this period, you agree not to 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 engaged in any such Competing Business (other than
ownership of 3% or less of the outstanding securities of any publicly traded company).
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15. Continuing Obligations after Termination. You hereby acknowledge and agree that you have
entered into an Inventions and Proprietary Information Agreement, and that the terms, conditions
and covenants contained in such agreement remain in full force and effect and is not in any way
modified by the execution of this Letter Agreement.
16. Termination following a Change in Control. In the event that the Company shall terminate
your employment hereunder without Cause or you shall termination your employment hereunder for Good
Reason within one year following a “Change in Control” of the Company, then, in addition to all of
the payments and benefits provided by Section 10 of this Employment Letter, all outstanding equity
awards which are unvested as of such termination date shall automatically become vested and you
shall have a period of one (1) year from such date of termination to exercise any such equity
awards.
For purposes of this Section 16, a “Change in Control” shall be deemed to have occurred
if any person other than the Frost Group, LLC and its affiliates, is or becomes the
beneficial owner of 60% or more of the combined voting power of the Company’s then
outstanding securities; or the stockholders of the Company approve a merger or
consolidation of the Company with any other unrelated entity (which would not result in
the voting securities of the Company outstanding immediately prior thereto continuing
to represent more than 50% of the combined voting power of the Company or such
surviving entity outstanding immediately after such merger or consolidation) or the
sale of all or substantially all of the assets of the Company to any other unrelated
entity.
17. Your Termination Right. You may terminate this Employment Letter at any time for any
reason upon at least 30 days’ written notice to the Company. In the event of such a termination,
the Company shall pay to you all amounts accrued but unpaid under this Employment Letter as of the
effective date of your termination and thereafter shall not have any further obligation or
liability under this Employment Letter. In addition, all restricted shares, options and other
securities shall remain outstanding subject to their terms, except that all equity awards shall be
exercisable by you for a period of three (3) months following termination pursuant to this Section
17. All unvested equity awards shall be forfeited. Upon such a termination, the provisions of
this Letter Agreement, including Sections 14 and 15, shall remain in full force and effect.
18. Outside Activities. While you render services to the Company, you will not engage in any
other gainful employment, business or activity without the written consent of the Company. While
you render services to the Company, you also will not assist any person or organization in
competing with the Company, in preparing to compete with the Company or in hiring any employees of
the Company.
19. Amendment and Governing Law. This Employment Letter may not be amended or modified except
by an express written agreement signed by you and a duly authorized officer of the Company. The
terms of this Employment Letter and the resolution of any disputes will be governed by the laws of
the State of Florida.
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This Employment Letter contains all of the terms of your employment with the Company and
supersede any prior understandings or agreements, whether oral or written, between you and Acuity
Pharmaceuticals, Inc. or the Company. You may indicate your agreement with these terms and accept
this offer by signing and dating the enclosed duplicate original of this Employment Letter and
returning them to me.
Very truly yours,
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, M.D.
Chief Executive Officer and Chairman
Chief Executive Officer and Chairman
ACCEPTED AND AGREED TO:
/s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Date: ______________________
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