Contract
Exhibit
10.1
This
EMPLOYMENT AGREEMENT (the "Agreement")
is
dated as of August 19, 2008 by and between ARNO
THERAPEUTICS, INC.,
a
Delaware corporation with principal executive offices at 00 Xxx Xxxxxxx Xx.,
Xxxxx 000, Xxxxxxxxx, XX 00000 (the "Company"),
and
XX.
XXXXX
XXXXXX,
an
individual residing at ___________________________ (the "Executive").
WHEREAS,
the Company desires to employ Executive as Chief Executive Officer of the
Company; and
WHEREAS,
Executive desires to accept such employment upon the terms and conditions
contained in this Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the parties hereby
agree as follows:
1. Term
of Employment.
The
Executive’s employment by the Company shall commence on September 3, 2008 (the
“Effective
Date”)
and
continue for a period of two (2) years from the Effective Date unless
terminated earlier
as set
forth in Section 8 below (the “Employment
Term”)
provided,
however,
that
the Employment Term shall be automatically extended for an additional one-year
period, on an annual basis, unless the Company or Executive provides the
other
party with at least 90 days' prior written notice prior to the end of the
then
Term of the intent to not renew the contract ("Notice
of Non-Renewal").
2. Position.
a. During
the Employment Term, Executive shall serve as Chief Executive Officer of
the
Company. In such position, Executive shall, subject to any limitations or
other
directions determined from time to time by the Board of Directors of the
Company
(the "Board"),
which
limitations and/or directions shall be consistent with state and federal
law,
have such duties and authority as are consistent with the position of Chief
Executive Officer of a company of similar size and nature,
including:
(i)
Developing clinical, regulatory and business strategy of the Company and
managing its implementation;
(ii)
Overseeing corporate hiring and supervising the performance of
management;
(iii)
Maintaining active, honest communication with the Board;
(iv)
Developing and maintaining strong relationships with the Company’s key
investors, collaborators, potential collaborators, customers, potential
customers, media, analysts and the general public on behalf of the Company;
(v)
Enhancing corporate visibility through active participation in investor meetings
and industry conferences;
(vi)
Identifying and assessing new commercial opportunities; and
(vii)
Managing and leading corporate financing activities, public relations and
intellectual property portfolio.
b. Directorship.
As of
the Effective Date, the Board shall appoint Executive to serve as a director
of
the Company. The Company shall thereafter use its best efforts to cause the
Executive to remain a member of the Board throughout the Employment Term
and
shall include him in the management slate of nominees for election as a director
at every stockholders meeting during the Employment Term at which his term
as a
director would otherwise expire. The Executive agrees to accept such nomination
and election, and to serve during the Employment Term, as director of the
Company, without any additional compensation other than as specified in this
Agreement. Upon
the
expiration of the Employment Term or the earlier termination of Executive’s
employment pursuant to Section 8, unless otherwise agreed, Executive shall
be
deemed to have resigned from the Board and shall forfeit his position as
a
director of the Company.
c. During
the Employment Term, Executive shall devote his full business time and attention
to the performance of his duties hereunder, which shall be performed primarily
at the offices of the Company, which are currently located in Fairfield,
New
Jersey. Without the prior written consent of the Board, Executive shall not
engage in any other business, profession or occupation for compensation or
otherwise that would conflict or interfere with the rendition of his services
hereunder or adversely affect or negatively reflect upon the Company.
Notwithstanding the foregoing, Executive shall be entitled to spend two business
days per quarter working with the Gates Foundation.
3. Base
Salary.
During
the Employment Term, the Company shall pay Executive a base salary
("Base
Salary")
at an
annual rate of Three Hundred Seventy Five Thousand Dollars ($375,000.00),
payable in regular installments in accordance with the Company's usual payroll
practices in effect from time to time. The Board (or a designated committee
thereof) may, in its sole discretion, increase such Base Salary from time
to
time.
4. Bonus
Compensation.
a. Performance
Bonus.
During
the Employment Term, Executive shall also be eligible to receive an annual
cash
performance bonus (the "Performance
Bonus").
The
amount of such Performance Bonus shall be determined at the discretion of
the
Board, or a designated committee thereof, which amount may be up to fifty
percent (50%) of Executive’s Base Salary in the event of exceptional
performance. The Board, or such designated committee, shall use as guidance
for
the determination of the Performance Bonus certain corporate and individual
goals (the “Performance
Goals”),
which
shall be established within 30 days of the Effective Date of this Agreement
by
the Executive and the Board (or a designated committee thereof), and renewed
annually on a calendar year basis, with the first calendar year being pro-rated
as discussed otherwise herein, by the Executive and the Board (or a designated
committee thereof). Any Performance Bonus will be paid to the Executive within
30 days of the end of each calendar year during the Employment
Term.
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b. Merger
and Acquisition Bonus. Upon
a
Merger
or Acquisition (as defined below) where the Company is ascribed an aggregate
valuation equal to or above those amounts set forth below, the Executive
will be
paid the following amounts:
(i)
$100,000 where the Company’s aggregate valuation is greater than $100,000,000
but less than $150,000,000;
(ii)
$150,000 where the Company’s aggregate valuation is greater than or equal to
$150,000,000 but less than $200,000,000;
(iii)
$200,000 where the Company’s aggregate valuation is greater than or equal to
$200,000,000 but less than $250,000,000;
(iv)
$250,000 where the Company’s aggregate valuation is greater than or equal to
$250,000,000; and
(v)
$500,000 where Company’s aggregate valuation is greater than or equal to
$300,000,000.
c. In
the
event of a Merger or Acquisition, the applicable Merger or Acquisition Bonus
shall be paid on the effective date of such Merger or Acquisition.
d. For
purposes of this Agreement, a “Merger
or Acquisition”
shall
mean the
disposition by the Company (whether direct or indirect, by sale of assets
or
stock, merger, consolidation or otherwise) of all or substantially all of
its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company). Notwithstanding
the foregoing, no transaction shall be considered a Merger or Acquisition
under
this Agreement, and no bonus shall be paid, pursuant to this Section
4(b):
(i)
if
the Company’s stockholders existing prior to such transaction(s) hold in the
aggregate more than fifty percent (50%) of the securities or assets of the
surviving or resulting company; or
(ii)
in
connection with a private placement of equity securities of the Company in
connection with a financing of the Company’s on-going operations; or
(iii)
for
any transaction ascribing a valuation to the Company of less than Seventy
Five
Million Dollars ($75,000,000); provided, however, that such a transaction
may be
considered as part of a series of transactions that gives rise to a Merger
or
Acquisition.
5. Equity.
a. Employment
Options. On
the
Effective Date, the Company shall grant to Executive stock options (the
"Employment
Options"),
pursuant to the Company's 2005 Stock Option Plan, to purchase Four
Hundred Thirty Thousand (430,000) shares
of
common stock of the Company, par value $0.0001 per share (the "Common
Stock").
The
Employment Options shall be
incentive stock options issued as provided in Internal Revenue Code Section
422
and shall generally vest
and
become exercisable, if at all, in two equal annual installments of Two
Hundred Fifteen Thousand (215,000) shares of Common Stock
on each
anniversary of the Effective Date (each date on which Employment Options
vest is
hereinafter referred to as a “Vesting
Date”).
The
Employment Options shall have a 10 year term and shall be exercisable at
an
exercise price per share equal to the closing price of the Common Stock on
the
Effective Date as reported on the OTC Bulletin Board or such other securities
exchange or market on which the Common Stock is then eligible for trading.
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b. Performance
Options. Promptly
following the Effective Date, the Company shall grant to the Executive options
(the “Performance
Options”)
to
purchase Four
Hundred Thirty Thousand (430,000) shares
of
Common Stock.
The
Performance Options shall be
incentive stock options issued as provided in Internal Revenue Code Section
422.
Except as otherwise provided herein, contingent
upon the
successful achievement of the Performance Goals, the
Performance Options shall vest as follows:
(i)
Up to
71,667 Performance Options shall vest, if at all, on December 31,
2008;
(ii)
Up
to 215,000 Performance Options shall vest, if at all, on December 31, 2009;
and
(iii)
Up
to 143,333 Performance Options shall vest, if at all, on the second anniversary
of the Effective Date
To
the
extent any installment of the Performance Options subject to each vesting
period
described above does not vest, the unvested portion of such installment shall
immediately and automatically expire and Executive shall have no further
rights
thereto. The
Performance Options shall have a 10 year term and shall be exercisable at
an
exercise price per share equal to the closing price of the Common Stock on
the
Effective Date as reported on the OTC Bulletin Board or such other securities
exchange or market on which the Common Stock is then eligible for
trading.
c. Technology
Options.
In
the
event that the Company acquires by license, acquisition or otherwise, an
additional biotechnology product or series of biotechnology products (a
“Technology”)
for
development that is first identified by the Executive, then the Company shall
grant to the Executive options (the “Technology
Options”)
to
purchase a number of shares of Common Stock, as follows:
(i)
One
Hundred Thousand (100,000) shares of Common Stock of the Company for a
Technology that is in pre-clinical development;
(ii)
Two
Hundred Thousand (200,000) shares of Common Stock of the Company for a
Technology that is currently being studied in a Phase I human clinical trial,
as
defined in 21 C.F.R. §312(a);
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(iii)
Four Hundred Thousand (400,000) shares of Common Stock of the Company for
a
Technology that is currently being studied in a Phase II human clinical trial,
as defined in 21 C.F.R. §312(b).
(iv)
Any
such Technology Options issued to the Executive shall vest immediately upon
the
date of grant and shall be exercisable for a period of five (5) years at
an
exercise price per share equal to the fair market value of the Common Stock
on
the date of the grant of such Technology Options, as determined in accordance
with the Company’s stock option pricing policies then in effect.
d. The
parties specifically acknowledge and agree that the equity provisions of
this
Employment Agreement supersede any and all prior or subsequent agreements,
including but not limited to any stock option agreement(s), relating to grant
of
equity options to the Executive. To the extent there is a disagreement of
the terms of this Employment Agreement and a prior or subsequent stock option
agreement, including but not limited to those dealing with change of control
and
vesting, then the terms of this Agreement shall control.
6. Employee
Benefits.
During
the Employment Term, Executive shall be entitled to: (a) participation in
the
Company's health, dental and other welfare benefit as in effect from time
to
time; (b) up to four (4) non-consecutive weeks of vacation per year; and
(c)
sick leave and holidays in accordance with the Company's policies as in effect
from time to time (collectively, "Employee
Benefits"),
on a
basis no less favorable than those benefits generally made available to other
senior executives of the Company or, as applicable, to the Company's employees
generally. The Company shall reimburse the Executive for the premiums
attributable to a term life insurance policy for the Executive in an amount
equal to Two Million Dollars ($2,000,000). Executive shall be designated
as a
named insured on directors and officers’ liability insurance of the Company
providing policy limits of not less than Two Million Dollars ($2,000,000),
and
Executive shall be provided evidence of such insurance within 30 days of
the
date of this Agreement.
7. Business
Expenses.
During
the Employment Term, reasonable business expenses incurred by Executive in
the
performance of his duties hereunder shall be reimbursed by the Company in
accordance with the Company's policies in effect from time to time.
8. Termination.
Notwithstanding any provision to the contrary contained herein, this Agreement
and Executive's employment with the Company may be terminated by either party
at
any time and for any reason.
Notwithstanding any other provision of this Agreement, the provisions of
this
Section 8 shall exclusively govern Executive's rights upon termination of
employment with the Company.
a. By
the
Company For Cause or By Executive Resignation Without Good
Reason.
(i)
The
Employment Term and Executive's employment hereunder may be terminated by
the
Company for Cause (as defined below) and shall terminate automatically upon
Executive's resignation without Good Reason (as defined in Section 8(c)(ii)).
5
(ii)
For
purposes of this Agreement, "Cause"
shall
mean: (A) Executive's willful failure to adequately perform material duties
or
obligations hereunder, or willful misconduct by Executive in respect of such
duties or obligations,
including, without limitation, willful
failure, disregard or refusal by Executive to abide
by
specific objective and lawful directions received by him in writing constituting
an action of the Board;
(B)
any
willful, intentional or grossly negligent act by Executive having the reasonably
foreseeable effect of actually and substantially injuring, whether financial
or
otherwise, the business reputation of the Company; (C)
Executive's indictment of any felony; (D) Executive being convicted of a
misdemeanor involving moral turpitude
that
causes,
or
could reasonably be expected to cause, substantial
harm to
the Company or its reputation; (E) the
determination by the Company, after a reasonable and good-faith investigation
by
the Company following a written allegation by another employee of the Company,
that Executive engaged in some form of harassment prohibited
by law
(including, without limitation, age, sex or race discrimination);
provided, however, that Cause shall not exist under clause (E) unless the
Company gives written notice to Executive where such notice describes
with particularity the alleged act(s) at issue and has given Executive an
opportunity to be heard at a meeting of the Board with or without counsel,
and
the
Board
provides Executive with a summary of its findings; (F) any
misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony) by Executive; and (G)
a
material breach by Executive of this Agreement.
(iii)
If
Executive's employment is terminated by the Company for Cause, or if Executive
resigns without Good Reason, Executive shall be entitled to receive: (A)
his
Base Salary through the date of such termination; (B) any Performance Bonus
earned but unpaid as of the date of termination for any previously completed
year of employment; (C) reimbursement for any unreimbursed business expenses
properly incurred by Executive prior to the date of such termination in
accordance with Company policy; and (D) such Employee Benefits, if any, as
to
which Executive may be entitled under the employee benefit plans of the Company
for Executive (the amounts described in clauses (A) through (D) hereof being
referred to as the "Accrued
Rights").
Additionally, if Executive's employment is terminated by the Company for
Cause,
or if Executive resigns without Good Reason, then (1) all unvested Employment
and Performance Options shall expire immediately, and (2) the Executive shall
have a period of 90 days to exercise any and all currently vested Employment
Options and Performance Options, after which time all Employment and Performance
Options shall expire.
(iv)
Following a termination of Executive's employment by the Company for Cause
or
resignation by Executive without Good Reason, except as set forth in Section
8(a)(iii), Executive shall have no further rights to any compensation or
any
other benefits under this Agreement;
provided, however, following the termination or expiration of this Agreement
for
any reason, and notwithstanding any provision herein to the contrary, the
Executive will continue to be covered under any directors and officers liability
insurance maintained by the Company to the some extent as other former officers
and directors of the Company.
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b. Disability
or Death.
(i)
The
Employment Term and Executive's employment hereunder shall terminate
automatically upon Executive's death and may be terminated by the Company
if
Executive becomes physically or mentally incapacitated and is, therefore,
unable
for a period of six (6) consecutive calendar months or for an aggregate of
nine
(9) calendar months in any twelve (12) calendar consecutive month period
to
perform Executive's duties (such incapacity is hereinafter referred to as
"Disability").
Any
question as to the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in writing by
a
qualified independent physician agreed upon by the Company and Executive
("Independent
Physician").
The
Independent Physician shall be (i) licensed in the State of Executive’s
residence; (ii) be Board certified in the medical specialty at issue; and
(iii)
have experience in disability determinations.
Executive hereby agrees to make himself available and
to
cooperate in any reasonable examination by an Independent Physician.
Company
agrees to pay the costs of the Independent Physician and all related expenses.
The Company shall maintain the confidentiality of all medical information
which
it receives pursuant to this Agreement and to abide by the requirements of
Health Insurance Portability and Accountability Act of 1996, as
amended.
(ii)
If,
prior to the first anniversary of the Effective Date, the Executive's employment
is terminated for either death or Disability, then the Executive, or
Executive's
designated beneficiary, if any, otherwise the personal representative
of
Executive's Estate
(as the
case may be), shall be entitled to: (A) the Accrued Rights; (B) one half
of the
Performance Bonus, if any, that Executive would have been entitled to receive
in
respect of the fiscal year in which such termination occurs, payable when
such
Performance Bonus would have otherwise been payable had Executive's employment
not terminated (a “Pro-Rata
Bonus”); (C)
continued payment of his then current Base Salary and Employee Benefits for
a
period of 180 calendar days following any such termination; (D) all unvested
Employment Options scheduled to vest on the next Vesting Date immediately
following such termination shall immediately vest and remain exercisable
for a
period of 360 calendar days, after which date all Employment Options shall
expire; (E) other than as described in the immediately preceding sentence,
all
unvested Employment Options shall immediately and automatically expire; (F)
all
vested Performance Options shall remain exercisable for a period of 360 calendar
days, after which date all Performance Options shall expire; and (G) all
unvested Performance Options shall immediately and automatically
expire.
(iii)
If,
on or after the first anniversary of the Effective Date, the Executive's
employment is terminated for either death or Disability, then Executive,
or
Executive's
designated beneficiary, if any, otherwise the personal representative
of
Executive's Estate
(as the
case may be), shall be entitled to: (A) the Accrued Rights; (B) the full
Performance Bonus, if any, that Executive would have been entitled to receive
in
respect of the fiscal year in which such termination occurs, payable when
such
Performance Bonus would have otherwise been payable had Executive's employment
not terminated; (C)
continued payment of his then current Base Salary and Employee Benefits for
a
period of 360 calendar days following any such termination; (D) all unvested
Employment Options scheduled to vest on the next Vesting Date immediately
following such termination shall immediately vest and remain exercisable
for a
period of 360 calendar days, after which date all vested Employment Options
shall expire, provided, however, that in no event shall the period for
exercising the Employment Options extend beyond the original terms of such
awards; (E) other than as described in section (D) above, all unvested
Employment Options shall immediately and automatically expire; (F) all vested
Performance Options shall remain exercisable for a period of 360 calendar
days,
after which date all vested Performance Options shall expire, provided, however,
that in no event shall the period for exercising the Performance Options
extend
beyond the original terms of such awards; and (G) all unvested Performance
Options shall immediately and automatically expire.
7
c. By
the
Company Without Cause or Resignation by Executive for Good
Reason.
(i)
The
Employment Term and Executive's employment hereunder may be terminated by
the
Company without Cause or by Executive's resignation for Good Reason.
(ii)
For
purposes of this Agreement, "Good
Reason"
shall
mean: (A) any material
diminution
by the Company of Executive's (1) title of Chief Executive Officer, (2) duties,
or (3) Base Salary; or (B) a
material breach by the Company of any of the provisions contained herein,
which,
if capable of being cured, is not cured by the Company within thirty (30)
days
after written notice thereof by Executive to the Company; (C) relocation
of
Company’s principal executive office more than 50 miles without the Executive’s
consent; or (D) if at any time the Executive shall be removed from the Board
of
Directors other than as a result of a termination of this Agreement.
(iii)
If,
prior to the first anniversary of the Effective Date, the Executive's employment
is terminated by the Company without Cause, or if Executive resigns for Good
Reason, Executive shall be entitled to the following compensation and benefits:
(A) the Accrued Rights; (B) subject to Executive's continued compliance with
the
provisions of Sections 9 and 10, continued payment of his then current Base
Salary and Employee Benefits for a period of 180 days following such
termination; (C) subject to Executive's continued compliance with the provisions
of Sections 9 and 10, an amount equal to one-half of the Performance Bonus,
if
any, that the Executive would have earned for the year in which such termination
occurs; (D) unvested Employment Options scheduled to vest on the next Vesting
Date immediately following such termination shall immediately vest and remain
exercisable for a period of 360 days, after which date all Employment Options
shall expire; (F) other than as described in (D) above, all unvested Employment
Options shall immediately and automatically expire; (F) all vested Performance
Options shall remain exercisable for a period of 360 days, after which date
all
Performance Options shall expire immediately expire; and (G) all unvested
Performance Options shall immediately and automatically expire.
(iv)
If,
on or after the first anniversary of the Effective Date, the Executive's
employment is terminated by the Company without Cause, or if Executive resigns
for Good Reason, Executive shall be entitled to the following compensation
and
benefits: (A) the Accrued Rights; (B) subject to Executive's continued
compliance with the provisions of Sections 9 and 10, continued payment of
his
then current Base Salary and Employee Benefits for a period of 360 calendar
days
following such termination; (C) subject to Executive's continued compliance
with
the provisions of Sections 9 and 10, an amount equal to the Performance Bonus,
if any, that the Executive would have earned for the year in which such
termination occurs; (D) unvested Employment Options scheduled to vest
on
the
next Vesting Date immediately following such termination shall
immediately vest and remain exercisable for a period of 360 calendar days,
after
which date all Employment Options shall expire; provided, however, that in
no
event shall the period for exercising the Employment Options extend beyond
the
original terms of such awards; (E) all vested Performance Options shall remain
exercisable for a period of 360 calendar days, after which date all Performance
Options shall expire immediately expire; provided, however, that in no event
shall the period for exercising the Performance Options extend beyond the
original terms of such awards; and (F) all unvested Performance Options shall
expire immediately.
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(v)
Following Executive's termination of employment by the Company without Cause
(other than by reason of Executive's death or Disability) or by Executive's
resignation for Good Reason, all Employment Options which were not then vested
(or did not become vested pursuant to Section 8(c)(iii) or (iv) hereof) shall
immediately and automatically expire and, except as set forth in this Section
8(c)(iii) or (iv), Executive shall have no further rights to any compensation
or
any other benefits under this Agreement.
d. By
the
Company upon a Change of Control.
(i)
If,
prior to the first anniversary of the Effective Date, the Executive's employment
is terminated as a result of a Change of Control, as defined in the Company’s
2005 Stock Option Plan, Executive shall be entitled to receive the following
compensation and benefits: (A) the Accrued Rights; (B) subject to Executive's
continued compliance with the provisions of Sections 9 and 10, continued
payment
of his then current Base Salary and Employee Benefits for a period of 180
calendar days following such termination; (C) subject to Executive's continued
compliance with the provisions of Sections 9 and 10, an amount equal to the
Performance Bonus, if any, that the Executive would have earned for the year
in
which such termination occurs; (D) all unvested Employment Options and
Performance Options shall immediately vest and remain exercisable for a period
of 360 calendar days, after which date all Employment Options and Performance
Options shall expire immediately; provided, however, that in no event shall
the
period for exercising the Employment Options or the Performance Options extend
beyond the original terms of such awards.
(ii)
If,
on or after the first anniversary of the Effective Date, the Executive's
employment is terminated as a result of a Change of Control, as defined in
the
Company’s 2005 Stock Option Plan, Executive shall be entitled to receive the
following compensation and benefits: (A) the Accrued Rights; (B) subject
to
Executive's continued compliance with the provisions of Sections 9 and 10,
continued payment of his then current Base Salary and Employee Benefits for
a
period of 360 calendar days following such termination; (C) subject to
Executive's continued compliance with the provisions of Sections 9 and 10,
an
amount equal to the Performance Bonus, if any, that the Executive would have
earned for the year in which such termination occurs; (D) all unvested
Employment Options and Performance Options shall immediately vest and remain
exercisable for a period of 360 calendar days, after which date all Employment
Options and Performance Options shall expire immediately; provided, however,
that in no event shall the period for exercising the Employment Options or
the
Performance Options extend beyond the original terms of such
awards..
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e. Expiration
of Employment Term.
In the
event either party delivers a Notice of Non-Renewal, unless Executive's
employment is terminated prior to the expiration of the Employment Term pursuant
to paragraphs (a), (b), (c) or (d) of this Section 8, Executive shall be
entitled to receive the Accrued Rights. Upon expiration
of the then Term
following either party's election not to extend the Employment Term, (i)
any
unvested Employment Options and Performance Options shall expire, and (ii)
any
vested Employment Options and Performance Options shall remain exercisable
for a
period of one
hundred eighty (180) days
from the
date the
Employment Term ends;
provided, however, that in no event shall the period for exercising the
Employment Options or the Performance Options extend beyond the original
terms
of such awards. Further, except as set forth in this Section 8(e), Executive
shall have no further rights to any compensation or any other benefits under
this Agreement; provided,
however, that following the termination or expiration of this Agreement for
any
reason, and notwithstanding any provision herein to the contrary, the Executive
will continue to be covered under any directors and officers liability insurance
maintained by the Company to the some extent as other former officers and
directors of the Company.
f. Notice
of Termination.
Any
purported termination of employment by the Company or by Executive (other
than
due to Executive's death) shall be communicated by at least 30 days’ prior
written notice to the other party hereto in accordance with the provisions
of
this Agreement ("Notice
of Termination"),
which
notice shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision
so
indicated. In lieu of such 30 day notice, the Company may pay the Executive
the
compensation he would otherwise have been entitled to during such 30 day
period.
g. To
the
extent any provision of this Agreement may be deemed to provide a benefit
to
Executive that is treated as non-qualified deferred compensation pursuant
to
Section 409A of the Internal Revenue Code of 1986, as amended, such
provision shall be interpreted in a manner that qualifies for any applicable
exemption from compliance with Section 409A or, if such interpretation
would cause any reduction of benefit(s), such provision shall be interpreted
(if
reasonably possible) in a manner that complies with Section 409A and does
not cause any such reduction.
h. Payments
to Executive.
Except
as otherwise provided herein, all payments required to be made by the Company
to
Executive under this Section 8 in connection with the termination of Executive's
employment shall be payable in regular installments in accordance with the
Company's usual payroll practices. The obligations of the Company to make
any
payments described in Sections 8(b)(ii)(B) and (C), 8(c)(iii)(B) and (C),
8(c)(iv)(B) and (C), and 8(d)(iii)(B) and (C) and its obligations under Sections
8(b)(iii), 8(c)(iii)(E), 8(c)(iv)(E) and (F), and 8(d)(iii)(E) shall be subject
to Executive's
continued compliance with his obligations under Sections 9 and 10
hereof.
In
the
event that the Executive brings any claims against the Company, the Company
shall, in addition to any other rights that the Company may have at law or
at
equity, have the right to cease making any of the payments described in Section
8. The
Company shall have no obligation to pay any compensation or provide any benefits
to Executive except as expressly set forth in this Section 8.
9. Non-Competition
and Non-Solicitation.
10
a. Executive
understands and recognizes that his services to the Company are special and
unique and that in the course of performing such services Executive will
have
access to and knowledge of Confidential and Proprietary Information (as defined
in Section 10 below) and Executive agrees that, during the Employment Term
and
for a period of six (6) months
(or 12
months if Executive's employment is terminated by Executive without Good
Reason)
thereafter, he shall not in any manner, directly or indirectly, on behalf
of
himself or any natural person, firm, partnership, joint venture,
corporation,
limited
liability company
or other
business entity ("Person"),
enter
into or engage in any business that is directly or indirectly competitive
with
the Company’s Business (as defined below), 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, member 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 worldwide; provided,
however,
that if
a Person's business has multiple lines or segments, some of which are not
competitive with the Company's Business, nothing herein shall prevent Executive
from being employed by, working for or assisting that line or segment of
such
Person's business that is not competitive with the Company's Business. Executive
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 Executive narrowly
and fairly serves such an important and critical business interest of the
Company. Notwithstanding the foregoing, nothing contained in this Section
9(a)
shall be deemed to prohibit Executive from acquiring or holding, solely for
investment purposes, publicly traded securities of any corporation or other
entity, 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 or other entity.
For
purposes of this Agreement, "Company's
Business"
shall
be the development of novel therapeutics for the treatment of cancer, which
shall be specifically limited to the investigation, development, and/or testing
of compounds developed by the Company during the tenure of the Executive’s
employment.
b. During
the Employment Term and for a period of 12 months thereafter (or six (6)
months
in the case of clause (b)(ii)), Executive shall not, directly or indirectly,
without the prior written consent of the Company: (i)
solicit or induce any person
who, at any time during the preceding twelve (12) months, was an employee
of the Company or any of its subsidiaries or of
Two
River
Group Holdings, LLC ("Two
River")
to
leave the employ of the Company or such subsidiaries or Two River
or hire,
or assist any other Person in hiring, any such employee;
or
(ii)
solicit the business of any agent, client or customer of the Company or any
of
its subsidiaries with respect to products or services similar to and competitive
with those provided or supplied by the Company or any of its
subsidiaries.
c. The
Company and Executive mutually agree that both during the Employment 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, and in the
case
of the Company, including any officer, director or material shareholder of
the
Company. Notwithstanding the foregoing, nothing in this Agreement shall preclude
the parties hereto or their successors from making truthful statements in
the
proper performance of their jobs or that are required by applicable law,
regulation or legal process, and the parties shall not violate this provision
in
making truthful statements in response to disparaging statements made by
the
other party.
11
d. In
the
event that Executive breaches any provisions of this Section 9 or Section
10,
then, in addition to any other rights that the Company may have, the Company
shall be entitled
to cease
making any payments to Executive under Section 8 hereof, cancel any options
that
vested under Section 8 hereof, recover any amounts paid under Section 8 hereof
(including amounts received by Executive in respect of any options that became
vested under Section 8) other than payments in respect of the Accrued Rights
and
seek
injunctive relief to enforce the restrictions contained in such Sections,
which
injunctive relief shall be in addition to any rights or remedies available
to
the Company under the law or in equity. The
Executive’s agreement to the terms and conditions contained in this section
shall in no way be considered his consent to the entry of such relief, and
the
Executive and the Company agree that no such relief will be sought until
notice
is given to the Executive and a 14 day period in which the Executive has
to cure
the alleged violation lapses.
e. The
rights and remedies enumerated in Section 9(d) shall be independent of, 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. If any of the covenants contained
in this Section 9, or any part of any of them, is hereafter construed or
adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies, which shall
be
given full effect without regard to the invalid portions. If any of the
covenants contained in this Section 9 is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power
to
reduce the duration and/or area of such provision and in its reduced form
such
provision shall then be enforceable. No such holding of invalidity or
unenforceability in one jurisdiction shall bar or in any way affect the
Company's right to the relief provided in this Section 9 or otherwise in
the
courts of any other state or jurisdiction within the geographical scope of
such
covenants as to breaches of such covenants in such other respective states
or
jurisdictions, such covenants being, for this purpose, severable into diverse
and independent covenants.
f. The
provisions of this Section 9 shall survive the termination of Executive's
employment for any reason.
10. Confidential
Information and Inventions.
a. Executive
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 Employment
Term, Executive 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 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. Executive 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. Executive agrees not to: (i)
use
any such Confidential and Proprietary Information for strictly personal use
or
for others; and (ii)
permanently remove 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 his duties to the Company; provided,
however,
that
Executive shall not be prevented from using or disclosing any Confidential
and
Proprietary Information: (A)
that
Executive can demonstrate was known to him prior to the date of this Agreement;
(B)
that
is now, or becomes in the future, available to persons who are not legally
required to treat such information as confidential unless such persons acquired
the Confidential and Proprietary Information through acts or omissions of
Executive; or (C) that
he
is compelled to disclose pursuant to the order of a court or other governmental
or legal body having jurisdiction over such matter; provided
that
Executive shall give prompt written notice to the Company of such requirement,
disclose no more information than is so required, and cooperate with any
attempts by the Company to obtain a protective order or similar
treatment.
12
b. Except
with prior written authorization by the Company, Executive 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 a legal duty of confidence,
at
any time during or after his employment with the Company.
c. If
Executive creates, invents, designs, develops, contributes to or improves
any
works of authorship, inventions, intellectual property, materials documents
or
other work product relating to the Company's Business ("Inventions")
either
alone or with third parties, at any time during Executive's employment by
the
Company and within the scope of such employment and/or with the use of any
Company resources, Executive shall promptly and fully disclose same to the
Company and hereby irrevocably assigns, transfers and conveys, to the maximum
extent permitted by applicable law, all rights and intellectual property
rights
therein (including rights under patent, industrial property, copyright,
trademark, trade secret, unfair competition and related laws) to the Company
to
the extent ownership of any such rights does not vest originally in the Company.
The Company shall be the sole owner of all patents, copyrights, trade secret
rights, and other intellectual property or other rights in connection therewith.
Executive agrees that all Inventions, 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). Executive further agrees to assist the Company
(at
the Company's expense but without further remuneration) to obtain and from
time
to time enforce, protect, record or register patents, copyrights or other
rights
on such Inventions in any and all countries, and to that end Executive shall
execute all documents necessary to: (i)
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)
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. If the Company is
unable for any other reason to secure Executive's signature on any document
for
this purpose, 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
any
documents and to do all other lawfully permitted acts in connection with
the
foregoing
13
d. Executive
acknowledges that while performing the services under this Agreement Executive
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 ("Third
Party Inventions").
Executive 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 Executive), agents or consultants during
the
Employment Term shall be and remain the sole and exclusive property of the
Company or such affiliate and Executive shall have no rights whatsoever to
such
Third-Party Inventions and will not pursue for himself or for others any
transaction relating to Third-Party Inventions that is not on behalf of the
Company.
e. Upon
termination of Executive's employment with the Company for any reason, Executive
shall: (i) cease and not thereafter commence use of any Confidential and
Proprietary Information, Inventions, Third Party Inventions or other
intellectual property owned or used by the Company, its subsidiaries or
affiliates (including, without limitation, any trade secret, trademark, trade
name, logo, domain name or other source indicator); (ii) immediately destroy,
delete, or return to the Company, at the Company's option, all originals
and
copies in any form or medium (including memoranda, books, papers, plans,
computer files, letters and other data) in Executive's possession or control
(including any of the foregoing stored or located in Executive's office,
home,
laptop or other computer, whether or not Company property) that contain
Confidential and Proprietary Information or otherwise relate to the Company's
Business and the business of its affiliates and subsidiaries, except that
Executive may retain only those portions of any personal notes, notebooks
and
diaries that do not contain any Confidential and Proprietary Information;
and
(iii) notify and fully cooperate with the Company regarding the delivery
or
destruction of any other Confidential and Proprietary Information of which
Executive is or becomes aware.
f. Executive
shall not improperly use for the benefit of, bring to any premises of, divulge,
disclose, communicate, reveal, transfer or provide access to, or share with
the
Company any confidential, proprietary or non-public information or intellectual
property relating to, a former employer or other third party without the
prior
written permission of such third party. Executive shall comply with all relevant
policies and guidelines of the Company, including regarding the protection
of
confidential information and intellectual property and potential conflicts
of
interest. Executive acknowledges that the Company may amend any such policies
and guidelines from time to time, and that Executive remains at all times
bound
by their most current version.
14
g. The
provisions of this Section 10 shall survive the termination of Executive's
employment for any reason.
11. Specific
Performance.
Executive acknowledges and agrees that the Company's remedies at law for
a
breach of any of the provisions of Section 9 or Section 10 may be
inadequate and the Company may suffer irreparable damages as a result of
such
breach. In recognition of this fact, Executive agrees that, in the event
of such a breach, in addition to any remedies at law or under this Agreement,
the Company shall be entitled to cease making any payments otherwise required
by
this Agreement and to seek equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available. The
Executive’s agreement to the terms and conditions contained in this section
shall in no way be considered his consent to the entry of such relief, and
the
Executive and the Company agree that no such relief will be sought until
notice
is given to the Executive and a 14 day period in which the Executive has
to cure
the alleged violation lapses.
12. Representations.
Executive
hereby represents and warrants to the Company as follows:
a. Neither
the execution nor delivery of this Agreement nor the performance by Executive
of
his duties and other obligations hereunder violate or will violate any
statute
or law or conflict with or constitute a default or breach of any covenant
or
obligation, including without limitation any non-competition restrictions,
to
any
prior employer under
(whether immediately, upon the giving of notice or lapse of time or both)
any
prior employment agreement, contract, or other instrument to which Executive
is
a party or by which he is bound,
or
under applicable law.
b. Executive
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 Executive enforceable
against him in accordance with its terms. No approvals or consents of any
persons or entities are required for Executive to execute and deliver this
Agreement or perform his duties and other obligations hereunder.
c. Executive
has not taken or retained (and will not take or retain) any documents or
files,
whether in hard copy or electronic form, which were created, collected or
received by Executive in connection with any prior employment, except for
documents and files relating solely to Executive’s compensation.
13. Miscellaneous.
a. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New Jersey, without regard to the conflicts of laws principles
thereof.
b. Arbitration.
Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 9 or 10 hereof), or regarding the interpretation thereof,
shall be exclusively decided by binding arbitration conducted in New
Jersey
in
accordance with the rules of the American Arbitration Association (the
"AAA")
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. Each of the parties agrees that service of
process in such arbitration proceedings shall be satisfactorily made upon
it if
sent by registered mail addressed to it at the address referred to in clause
(h)
below. The
costs
of such arbitration shall be borne by the Company. In the event Executive
prevails at arbitration, he shall be entitled to payment of reasonable
attorney’s fees in addition to all other relief awarded by the arbitrator.
Judgment on the arbitration award may be entered by any court of competent
jurisdiction.
15
c. Entire
Agreement/Amendments.
This
Agreement contains the entire understanding of the parties with respect to
the
employment of Executive by the Company. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect
to the subject matter herein other than those expressly set forth herein.
This
Agreement may not be altered, modified or amended except by written instrument
signed by the parties hereto.
d. No
Waiver.
The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver of such party's rights or
deprive such party of the right thereafter to insist upon strict adherence
to
that term or any other term of this Agreement.
e. Severability.
In the
event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining pro-visions of this Agreement shall not
be
affected thereby.
f. Assignment.
This
Agreement and all of Executive's rights and duties hereunder, shall not be
assignable or delegable by Executive or the Company, except as set forth
below.
Any purported assignment or delegation by Executive in violation of the
foregoing shall be null and void ab
initio
and of
no force and effect. This Agreement may be assigned by the Company only to
a
Person which is a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations
of
the Company hereunder shall become the rights and obligations of such successor
Person.
g. Successors;
Binding Agreement.
This
Agreement shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administra-tors, successors, heirs, distributees,
devisees and legatees.
h. Notice.
For the
purpose of this Agreement, notices and all other communications provided
for in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered by hand or overnight courier or three days after it has been
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below in this
Agreement, or to such other address as either party may have furnished to
the
other in writing in accordance herewith, except that notice of change of
address
shall be effective only upon receipt.
16
If
to the
Company:
00
Xxx
Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxx,
XX 00000
If
to
Executive:
To
the
most recent address of Executive set forth in the personnel records of the
Company.
i. Cooperation.
After
the termination of the Employment Term, Executive shall cooperate with the
Company in connection with any action or proceeding (or any appeal from any
action or proceeding) that relates to events occurring during Executive's
employment hereunder, but shall be done to the extent reasonably possible
in a
manner as to reduce interference in Executive's new position after his
employment hereunder ends. The Company shall reimburse Executive for any
reasonable out of pocket expenses he incurs in connection with such cooperation.
This provision shall survive any termination of this Agreement.
j. Withholding
Taxes.
The
Company may withhold from any amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
k. Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and
the
same instrument.
[Remainder
of Page Intentionally Left Blank]
17
IN
WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement
as of the day and year first above written.
By:
|
/s/
Xxxxx X. Xxxxx
|
||
Name:
Xxxxx
X. Xxxxx
|
|||
Title:
Secretary
and Director
|
|||
EXECUTIVE:
|
|||
/s/
Xxxxx Xxxxxx
|
|||
Xx.
Xxxxx Xxxxxx
|
18