EMPLOYMENT AGREEMENT
Exhibit 10.1
This EMPLOYMENT AGREEMENT (“Agreement”) made effective as of Sept 5th 2008 by and
between BioMimetic Therapeutics, Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxxxx
(the “Executive”).
In consideration of the mutual covenants contained in this Agreement, the parties hereby agree
as follows:
1. Employment. The Company agrees to employ the Executive and the Executive agrees to
be employed by the Company as Chief Financial Officer and to be responsible for the typical
management responsibilities expected of an officer holding such position and such other
responsibilities customarily pertaining to such office as may be assigned to Executive from time to
time by the Chief Executive Officer of the Company, all for the Period of Employment as provided in
Section 2 below and upon the terms and conditions provided in the Agreement.
2. Term. The period of Executive’s employment under this Agreement, will commence on
or about Sept 5, 2008, and shall continue through Sept 5, 2011 , , subject to extension or
termination as provided in this Agreement (“Period of Employment”).
3. Duties. During the Period of Employment, the Executive shall devote his full
business time, attention and skill to the business and affairs of the Company and its affiliates.
The Executive will perform faithfully the duties that may be assigned to him from time to time in
accordance herewith by the Chief Executive Officer.
4. Compensation. For all services rendered by the Executive in any capacity during
the Period of Employment, the Executive shall be compensated as follows:
(a) Base Salary. The Company shall pay the Executive an annual base salary of
$237,000.00 (“Base Salary”). Base Salary shall be payable according to the customary
payroll practices of the Company but in no event less frequently than twice each month. The
Base Salary shall be reviewed each fiscal period and shall be subject to increase according
to the policies and practices adopted by the Company from time to time.
(b) Incentive Compensation Award. The Executive shall also be eligible to
receive annual incentive bonuses consisting of cash and/or options to purchase Company
common stock consistent with annual incentive awards for other members of the senior
management team The payment of such bonuses shall be based on the performance and
satisfaction of specific milestones mutually agreed upon by the Chief Executive Officer and
the Executive, and shall be further based upon the Executive’s performance as evaluated by
the Chief Executive Officer.
(d) Additional Benefits. The Executive will be entitled to participate in all
employee benefit plans or programs and receive all benefits and perquisites for
which any salaried employees are eligible under any existing or future plan or program
established by the Company or its affiliates and available to similarly situated employees
of the Company, including participation in stock option plans. The Executive may participate
to the extent permissible under the terms and provisions of such plans or programs in
accordance with program provisions. These may include group hospitalization, health, dental
care, life or other insurance, sick leave plans, travel or accident insurance and disability
insurance. Nothing in this Agreement will preclude the Company or Company affiliates from
amending or terminating any of the plans or programs applicable to salaried employees or
senior executives as long as the total value of all benefits is not materially decreased.
The Executive will be entitled to an annual paid time off, consistent with the Company’s PTO
policy and Company holidays as determined by the Company. The Company will provide Executive
with sufficient equipment, supplies and resources to accomplish his duties and will purchase
and/or reimburse Executive for the cost of maintaining professional memberships.
5. Business Expenses and Other Expenses. The Company will reimburse the Executive for
all reasonable travel and other expenses incurred by the Executive in connection with the
performance of his duties and obligations under this Agreement.
6. Disability.
(a) In the event of disability of the Executive during the Period of Employment, the
Company will continue to pay the Executive according to the compensation provisions of this
Agreement during the period of his disability, until such time as any long term disability
insurance benefits accruing to the Executive are available. However, in the event the
Executive is disabled for a continuous period of three months, or for a total of 90 or more
days in any 270-day period, the Company may terminate the employment of the Executive. In
this case, normal compensation will cease, except for earned but unpaid Base Salary and his
monthly Base Salary as in effect at the time of the termination for a period of up to nine
(9) months (follow Paragraph 8 below).
(b) During the period the Executive is receiving payments of either regular
compensation or disability insurance described in this Agreement and to the extent
reasonable considering the Executive’s disability, the Executive will furnish information
and assistance to the Company and from time to time will make himself available to the
Company to undertake assignments consistent with his prior position with the Company. If
the Company fails to make a payment or provide a benefit required as part of the Agreement,
the Executive’s obligation to furnish information and assistance will end.
(c) The term “disability” will have the same meaning as under any disability insurance
provided pursuant to this Agreement or otherwise.
7. Death. In the event of the death of the Executive during the Period of Employment,
the Company’s obligation to make payments under this Agreement shall cease as of the date of death,
except for earned but unpaid Base Salary.
8. Effect of Termination of Employment.
(a) If the Executive’s employment terminates due to a Without Cause Termination, as
defined below, the Company will provide the Executive nine (9) months’ Base Salary as in
effect at the time of the termination plus an appropriately prorated amount of the previous
year’s cash bonus on the Company’s regular payroll dates, less any amount the Executive
receives from another employer. Additionally, the benefits and perquisites described in this
Agreement as in effect at the date of termination of employment will be continued for nine
(9) months to the extent permissible under the law and consistent with the tax status of
such benefit plans. Furthermore, all outstanding stock options, restricted stock,
restricted stock units, and any other unvested equity incentives shall become fully
exercisable and vested as of the Date of Termination and shall remain exercisable for their
stated terms.
(b) All Without Cause Termination severance compensation provided for herein shall be
expressly conditioned upon the Executive executing an agreement that releases the Company
and its officers, directors, employees, stockholders, consultants, affiliates, successors
and assigns, from any and all liability, causes of action, suits, damages, claims and
demands whatsoever arising from or resulting in any way from the Executive’s employment with
the Company or the Company’s operations, including but not limited to any and all contract
and tort claims either directly or indirectly arising from or resulting in any way from the
Company’s activities leading to or associated with the termination of employment.
Notwithstanding the foregoing, this Section 9(b) shall only be enforceable provided that the
Company has obtained a similar provision in all outstanding Employment
Agreement(s) for Vice
President level position(s) within the Company.
(c) If the Executive’s employment terminates due to Termination for Cause (as defined
below), breach of this Agreement by Executive or resignation by Executive, earned but unpaid
Base Salary will be paid on a pro-rated basis for the year in which the termination occurs.
No other payments will be made or benefits provided by the Company.
(d) For this Agreement, the following terms have the following meanings:
(i) “Termination for Cause” means termination of the Executive’s employment by
the Company’s Chief Executive Officer or Board of Directors acting in good faith by
the Company by written notice to the Executive specifying the event relied upon for
such termination, due to the Executive’s willful misconduct with respect to his
duties under this Agreement, including but not limited to conviction for a felony or
a common law fraud, which has resulted or is likely to result in substantial
economic damage to the
Company. Executive will be provided a reasonable opportunity prior to any
determination for “Cause”, to present his case before the Board of Directors of the
Company with counsel.
(ii) “Without Cause Termination” means “constructive termination” or actual
termination of the Executive’s employment other than due to death, disability,
Termination for Cause, or resignation by Executive. Constructive Termination
includes, a significant change to job scope or job responsibilities, or a relocation
of Company headquarters of more than 50 miles, or failure to renew or extend this
contract of employment.
9. Other Duties of the Executive during and after the Period of Employment.
(a) The Executive will, with reasonable notice during or after the Period of
Employment, furnish information as may be in his possession and cooperate with the Company
as may reasonably be requested in connection with any claims or legal actions in which the
Company is or may become a party.
(b) The Executive recognizes and acknowledges that all non-public information
pertaining to the affairs, business, clients, customers or other relationships of the
Company, as hereinafter defined, is confidential and is a unique and valuable asset of the
Company. Access to and knowledge of this information are essential to the performance of
the Executive’s duties under this Agreement. The Executive will not during the Period of
Employment and for 36 months thereafter except to the extent reasonably necessary in
performance of the duties under this Agreement, or as required by law, give to any person,
firm, association, corporation or governmental agency any non-public information concerning
the affairs, business, clients, customers or other relationships of the Company. The
Executive will not make use of this type of information for his own purposes or for the
benefit of any person or organization other than the Company. All records, memoranda, etc,
relating to the business of the Company, whether made by the Executive or otherwise coming
into his possession, are confidential and will remain the property of the Company.
Confidential information shall not include information that (i) becomes generally available
to the public other than as a result of disclosure by the Executive, (ii) was available to
the Executive on a non-confidential basis prior to disclosure to the Executive in connection
with his duties to the Company, provided that the source of such information is not known to
the Executive to be bound by a confidentiality agreement or other contractual obligation of
confidentiality to the Company or (iii) becomes available to the Executive on a
non-confidential basis from a source other than the Company (or any agent, employee or
affiliate of Company) provided such source is not known to the Executive to be bound by a
confidentiality agreement or other contractual obligation of confidentiality to the Company.
(c) During the Period of Employment, the Executive will not use his status with the
Company to obtain loans, goods or services from another organization on terms that would not
be available to him in the absence of his relationship to the
Company. During the period of his employment and for a period of 12 months thereafter,
the Executive will not directly or indirectly manage, consult or work for, serve as
employee, officer, director, consultant, agent or subcontractor for, finance, or own any
part of or exercise management control over any business or entity wherein the Executive is
directly or indirectly engaged in the development and/or commercialization of a Competitive
Product. A “Competitive Product” shall mean any product that contains recombinant
platelet-derived growth factor, recombinant insulin-like growth factor, or any recombinant
osteoinductive protein, including bone morphogenetic proteins. In addition, during such 12
month period Executive will not engage, directly or indirectly, in any business activity or
enterprise which is a “Competitive Activity”. For purposes hereof, “Competitive Activity”
means the making of investments in or the provision of capital to any enterprise, or to any
person in connection with any enterprise, with respect in which the Company has invested or
provided capital or proposed, in writing, to invest or provide capital during the term of
the Executive’s employment, or to pursue any similar investment opportunity with any
individual or enterprise introduced to the Executive or Company directly in connection with
the performance of the Executive’s duties to the Company during the term of his employment,
in each case in the area of musculoskeletal tissue regeneration. This restriction shall not
apply to any investment opportunity that has been declined by the Company. The Executive
acknowledges that the covenants contained herein are reasonable as to geographic and
temporal scope. For a twelve month period after termination of the Period of Employment for
any reason, the Executive will not solicit to hire any employee of the Company or solicit
any employee to leave the employ of the Company.
(d) The Executive acknowledges that his breach or threatened or attempted breach of any
provision of Section 9 would cause irreparable harm to the Company not compensable in
monetary damages and that the Company shall be entitled, in addition to all other applicable
remedies, to a temporary and permanent injunction and a decree for specific performance of
the terms of Section 9 without being required to prove damages or furnish any bond or other
security.
(e) The Executive shall not be bound by the provisions of Section 9 in the event of the
default by the Company in its obligations under this Agreement that are to be performed upon
or after termination of this Agreement.
(f) For purposes of Section 9, the “Company” shall include any person or entity that,
directly or indirectly, controls or is controlled by the Company or is under common control
with the Company.
10. Indemnification; Litigation. The Executive and the Company previously entered into
an Indemnification Agreement dated May 12, 2006 (“Indemnification Agreement”) under which the
Company has agreed to indemnify the Executive from and against certain liability associated with
his providing services as an executive of the Company. The parties hereby reaffirm the
Indemnification Agreement, which shall remain effective together with this Employment Agreement.
In the event of a conflict between this Agreement and the Indemnification Agreement, the
Indemnification Agreement shall supersede this Agreement.
11. Effect of Change in Control.
(a) In the event there is a Change in Control (as defined below) and within the twelve
(12) month period following such event Executive is terminated in a Without Cause
Termination, or Executive elects to resign upon written notice to the Company following an
event that constitutes Good Reason (as defined below), all outstanding stock options,
restricted stock, restricted stock units, and any other unvested equity incentives shall
become fully exercisable and vested as of the Date of Change of Control and shall remain
exercisable for their stated terms. Without limiting the foregoing, any Without Cause
Termination or resignation for Good Reason that occurs within three (3) months prior to a
Change in Control shall be deemed to be made in contemplation of such Change in Control. In
addition, the Company shall pay Executive upon such termination or resignation, in exchange
for Executive agreeing to not solicit any of the then current customers or employees of the
Company all payments due under Section eight (8) above.
(b) A “Change in Control” shall be deemed to have occurred if (i) a tender offer shall
be made and consummated for the ownership of more than fifty percent (50%) of the
outstanding voting securities of the Company, (ii) the Company shall be merged or
consolidated with another corporation or entity and as a result of such merger or
consolidation less than fifty percent (50%) of the outstanding voting securities of the
surviving or resulting corporation or entity shall be owned in the aggregate by the former
shareholders of the Company, as the same shall have existed immediately prior to such merger
or consolidation, (iii) the Company shall sell all or substantially all of its assets to
another corporation or entity which is not a wholly-owned subsidiary, or (iv) a person,
within the meaning of Section 3(a)(9) or of Section 13 (d)(3) (as in effect on the date
hereof) of the Securities and Exchange Act of 1934 (“Exchange Act”), shall acquire more than
fifty percent (50%) of the outstanding voting securities of the Company (whether directly,
indirectly, beneficially, or of record). For purposes hereof, ownership of voting
securities shall take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange
Act.
(c) A resignation for “Good Reason” shall be deemed to have occurred if the Executive
resigns his employment with the Company after the occurrence of any of the following events,
to which the Executive has not expressly consented in writing: (i) a material reduction in
the Executive’s Base Salary (other than one
applicable to all executive officers); (ii) a material reduction in job duties, authority,
responsibilities and requirements inconsistent with the Executive’s position with the
Company and the Executive’s prior duties, authority, responsibilities, and requirements or a
change in the Executive’s reporting relationship such that Executive is no longer reporting
to the CEO; (iii) a relocation of the Executive to a facility or location more than fifty
(50) miles from the address of the Company’s headquarters office as of the effective date of
this Agreement, or (iv) material breach by the Company of any of the material covenants
herein.
12. Consolidation; Merger or Sale of Assets. Nothing in this Agreement shall preclude
the Company from consolidating or merging into or with, or transferring all or substantially all of
its assets to, another corporation that assumes this Agreement and all obligations and undertakings
of the company hereunder. Upon such a consolidation, merger or sale of assets, the term “the
Company” as used will mean the other corporation and this Agreement shall continue in full force
and effect.
13. Modification. This Agreement may not be modified or amended except in writing
signed by the parties. No term or condition of this Agreement will be deemed to have been waived,
except in writing by the party charged with waiver. A waiver shall operate only as to the specific
term or condition waived and will not constitute a waiver for the future or act on anything other
than that which is specifically waived.
14. Governing Law. This Agreement has been executed and delivered in the State of
Tennessee and its validity, interpretation, performance and enforcement shall be governed by the
laws of that state.
15. Notices. All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been made when delivered or mailed first-class postage
prepaid by registered mail, return receipt requested, or when delivered if by hand, overnight
delivery service or confirmed facsimile transmission, to the following:
(a) If to the Company, to:
Chief Executive Officer, BioMimetic Therapeutics, Inc., 000 Xxxxxx Xxxx Xxxx,
Xxxxxxxx, XX 00000, with a copy to:
c/o Xxxx Manner, Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, 1800 AmSouth Center, 000
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other address as may have
been furnished to the Executive by the Company in writing; or
(b) If to the Executive, at: 0000 Xxxx Xx., Xxxxxxxxx, XX 00000, or such other
address as may have been furnished to the Company by the Executive in writing.
16. Binding Agreement. This Agreement shall be binding on the parties’ successors,
heirs and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the 30th day of
September 2008.
| EXECUTIVE |
||||
| /s/ Xxxxx Xxxxxxx | ||||
| Xxxxx Xxxxxxx | ||||
| BIOMIMETIC THERAPEUTICS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Xxxxxx X. Xxxxx | ||||
| President and Chief Executive Officer | ||||
