AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.42
AMENDED
AND RESTATED
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”), dated
December 14, 2009 (the “Effective Date”), is
made and entered into by and between NexMed, Inc., a Nevada corporation (the
“Company”) and
Xxxxxx X. Xxx (the “Executive”), and
amends and restates that certain Employment Agreement between the parties, dated
October 3, 2007 (the “Prior
Agreement”).
WHEREAS, the Company desires to
continue to employ Executive and to enter into this Agreement in connection with
the Company’s acquisition of Bio-Quant, Inc. pursuant to that certain Agreement
and Plan of Merger by and among the Company, BQ Acquisition Corp., Bio-Quant,
Inc. and certain other parties thereto (the “Merger
Agreement”);
WHEREAS, the Company considers it
essential to its best interests and the best interests of its stockholders to
xxxxxx the continued employment of Executive by the Company during the term of
this Agreement; and
WHEREAS, Executive is willing to accept
and continue her employment on the terms hereinafter set forth in this Agreement
and to forego any severance payments to which she may otherwise be entitled
under the Prior Agreement.
NOW, THEREFORE, in consideration of the
premises and mutual covenants herein and for other good and valuable
consideration, the parties agree as follows:
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1.
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Term of
Employment. Subject to the terms and conditions set forth in
Section 6 of this Agreement, Executive’s employment with the Company shall
be “at will,” and the Company and Executive shall each have the right to
terminate Executive’s employment hereunder. The term of Executive’s
employment hereunder is referred to herein as the “Employment
Term.”.
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2.
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Position.
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(a)
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During
the Employment Term, Executive shall be employed by the Company as
Executive Vice President, and shall have such duties, authority, and
responsibility as are commensurate with her position, subject to the
direction of the Company's Board of Directors (the “Board”).
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(b)
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During
the Employment Term, Executive shall devote all of her business time and
attention to the performance of her duties hereunder faithfully and to the
best of her abilities and shall not undertake employment with, or
participate in, the conduct of the business affairs of any other person,
corporation, or entity; provided, that
nothing shall preclude Executive from (i) with the prior approval of the
Board, serving as a director, trustee or member of another business
organization or (ii) participating in the affairs of any recognized
charitable organizations, or in any community affairs, of Executive's
choice.
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(c)
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Executive's
duties hereunder shall be performed for the Company worldwide, with
principal business activities expected to be at the Company's offices in
East Windsor, New Jersey and/or San Diego,
California.
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3.
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Compensation.
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(a)
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Base Salary.
During the Employment Term, the Company shall pay Executive a base salary,
subject to increase at the discretion of the Board, at the annual rate of
$280,000 (the “Base Salary”),
payable in regular installments in accordance with the Company's usual
payroll practices.
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(b)
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Bonuses.
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(i)
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Annual Bonus.
With respect to each calendar year during the Employment Term, Executive
shall be eligible to earn an annual bonus award (the “Bonus”) in an
amount not to exceed 50% of Executive’s annual Base Salary. The amount of
the Bonus shall be determined by the Board, or the Compensation Committee
of the Board (the “Compensation
Committee”), in its sole discretion, based upon the achievement by
the Company of objective performance measures established and determined
by the Board or the Compensation Committee in consultation with Executive
no later than the end of the first month of such calendar year. The Bonus,
if any, with respect to each calendar year in the Employment Term shall be
paid as promptly as practicable following the delivery of the Company's
audited financial statements for such year, but not later than March 15 of
the calendar year following the calendar year for which the Bonus is
payable. Unless otherwise stated herein, the Bonus shall not accrue until
the date on which it is paid, and Executive must be employed on the date
the Bonus is paid in order to receive the
Bonus.
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(ii)
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Signing Bonus.
In addition to the Bonus, Executive will receive a one-time signing bonus
of $50,000, payable in two installments of $25,000 each due 60 and 90 days
from the Effective Date (the “Signing
Bonus”).
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(iii)
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Incentive
Bonus. In addition to the Bonus and the Signing Bonus, Executive
shall be entitled to receive a one-time bonus with a value of $100,000,
payable one-half in cash and one-half in Company common stock (valued at
the fair market value of the stock one day prior to the date of payment)
(the “Incentive
Bonus”). The Incentive Bonus shall be earned, if at all, within a
one-year period from the Effective Date upon the achievement of certain
performance and integration goals to be established by the Company’s
Compensation Committee. Upon the achievement of such goals, Executive’s
right to receive the Incentive Bonus shall be fully vested and not subject
to any further performance or service requirements. The Incentive Bonus,
to the extent earned, shall be paid only upon the Executive’s termination
of service with the Company.
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(c)
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Stock Option
Grants. The Compensation Committee shall consider annually whether
to grant any equity-based compensation awards to the Executive in
accordance with the terms and subject to the conditions of the Company’s
equity compensation plans.
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(d)
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Other Equity
Awards.
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(i)
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Commencing
with the execution of this Agreement and each anniversary thereafter
during the Employment Term, the Executive shall receive an annual grant of
restricted common stock from the Company’s equity compensation plans with
a grant-date fair value of $20,000 (measured with reference to the
Company’s closing stock price on the NASDAQ stock market on the date of
grant) and that vests over a one-year period from the date of grant. The
unvested shares shall be subject to a right of reacquisition by the
Company to the extent that the Executive does not remain in the continuous
service of the Company during the vesting period. This grant is subject to
the Company’s stockholders approving an increase in the number of shares
available under the Company’s equity compensation
plans.
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(ii)
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Commencing
with the execution of this Agreement and each anniversary thereafter
during the Employment Term, the Executive shall receive an annual grant of
250,000 shares of restricted common stock from the Company’s equity
compensation plans that vests over a one-year period from the date of
grant. This grant is subject to the Company’s stockholders approving an
increase in the number of shares available under the Company’s equity
compensation plans.
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(iii)
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As
promptly as practicable after the execution of this Agreement, Executive
shall be awarded one-time stock grant consisting of 1,000,000 shares of
the Company’s common stock. The shares shall be fully vested on the date
of grant.
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(e)
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Relocation
Expenses. In connection with Executive’s planned move to San Diego,
California, which is expected to be completed within six months following
the consummation of this Agreement, the Company will pay $25,000 to
Executive for such relocation, payable in a lump sum on the Effective
Date.
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4.
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Employee
Benefits. During the Employment Term, Executive shall be eligible
for inclusion, to the extent permitted by law, as a full-time employee of
the Company or any of its subsidiaries, in any and all of the following
plans, programs, and policies in effect at the time: (i) pension, profit
sharing, savings, and other retirement plans and programs, (ii) life and
health (medical, dental, hospitalization, short-term and long-term
disability) insurance plans and programs, (iii) stock option and stock
purchase plans and programs, (iv) accidental death and dismemberment
protection plans and programs, (v) travel accident insurance plans and
programs, (vi) vacation policy (Executive shall have six weeks of paid
vacation per calendar year), and (vii) other plans and programs sponsored
by the Company or any subsidiary for employees or executives generally,
including any and all plans and programs that supplement any or all of the
foregoing types of plans or programs. Nothing in this Agreement shall
preclude the Company or any of its subsidiaries or affiliates from
terminating or amending any employee benefit plan or program from time to
time after the date of this
Agreement.
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5.
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Business Expenses and
Perquisites. The Company shall reimburse to Executive, or pay
directly, all reasonable expenses incurred by Executive in connection with
the business of the Company, and its subsidiaries and affiliates,
including but not limited to business-class travel, reasonable
accommodations, and entertainment, subject to documentation in accordance
with the Company's policy.
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6.
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Termination.
Subject to this Section 6, either party may terminate this Agreement at
any time and from time to time. In the event of the termination of
Executive's employment, the Employment Term shall end on the day of such
termination.
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(a)
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By the Company for
Cause. The Company may, for Cause, terminate Executive’s employment
hereunder at any time by written notice to Executive. For purposes of this
Agreement, the term “Cause” shall
mean Executive’s (i) engaging in fraud against the Company or
misappropriation of funds of the Company, (ii) disregard or failure to
follow specific and reasonable directives of the Board, (iii) willful
failure to perform her duties as Executive Vice President of the Company,
(iv) willful misconduct resulting in material injury to the Company, (v)
violation of the terms of the Intellectual Property Agreement referred to
in Section 11 below, (vi) conviction of, or Executive’s plea of guilty or
no contest to, a felony or any crime involving as a material element fraud
or dishonesty, or (vii) material breach (not covered by clauses (i)
through (vi) of this paragraph) of any of the other provisions of this
Agreement; provided, that, in the
case of subclauses (ii), (iii) or (vii), Cause shall not exist if the act
or omission deemed to constitute Cause is cured (if curable) by Executive
within thirty (30) days after written notice thereof to Executive by the
Company. For purposes of the foregoing, no act, or failure to act, on
Executive’s part shall be considered “willful” unless done, or omitted to
be done, by Executive other than in good faith, and without reasonable
belief that her action or omission was in furtherance of the interests of
the Company.
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In the
event of the termination of Executive’s employment under this Section 6(a) for
Cause, the Employment Term shall end on the day of such termination and the
Company shall pay to Executive, no later than the payroll cycle following
Executive’s termination, in one lump sum: (i) any accrued but unpaid Base
Salary, less applicable deductions, including salary in respect of any accrued
and accumulated vacation due to Executive at the date of such termination; and
(ii) any amounts owing, but not yet paid, pursuant to Section 5
hereof.
Except as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement
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(b)
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Disability or
Death. If Executive should suffer a Permanent Disability, the
Company may terminate Executive’s employment hereunder upon ten (10) or
more days’ prior written notice to Executive. If Executive should pass
away during the term of this Agreement, Executive’s employment shall be
deemed terminated on his date of death. For purposes of this Agreement, a
“Permanent
Disability” shall be deemed to have occurred only when Executive
has qualified for benefits (including satisfaction of any applicable
waiting period) under the Company’s or a subsidiary’s long-term disability
insurance arrangement. In the event of the termination of Executive’s
employment hereunder by reason of Permanent Disability or death, the
Employment Term shall end on the day of such termination and the Company
shall pay, no later than the payroll cycle following Executive’s
termination, to Executive or Executive’s legal representative (in the
event of Permanent Disability), or any beneficiary or beneficiaries
designated by Executive to the Company in writing, or to Executive’s
estate if no such beneficiary has been so designated (in the event of
Executive’s death), a single lump sum payment of: (i) any accrued but
unpaid Base Salary, less applicable deductions, including salary in
respect of any accrued and accumulated vacation, due to Executive at the
date of such termination; (ii) any amounts owing, but not yet paid,
pursuant to Section 5 hereof.
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In
addition, upon a termination under this Section 6(b), and upon the satisfaction
of the conditions set forth herein: (1) Executive shall receive a pro rata Bonus
for the calendar year in which such termination occurs, equal to the Bonus she
would have received, to the extent all criteria for such a Bonus have been met
(with the exception of the requirement that Executive be employed on the date
the Bonus is to be paid), for the calendar year of said termination multiplied
by a fraction, the numerator of which is the number of days in such year
preceding and including the date of termination, and the denominator of which is
365. Said pro-rata Bonus shall be paid at the same time as the Bonus would have
been paid had Executive remained employed by the Company through the date of
payment, but in any event, not later than March 15 of the calendar year
following the calendar year for which the Bonus is payable; (2) Executive shall
receive any unpaid Bonus for the calendar year preceding her termination, to the
extent that all criteria for such bonus have been met (with the exception of the
requirement that Executive be employed on the date the Bonus is to be paid).
Said Bonus shall be paid at the same time as the Bonus would have been paid had
Executive remained employed by the Company through the date of payment; and (3)
all of Executive’s outstanding but unvested equity awards granted pursuant to
Sections 3(c) and 3(d) of this Agreement shall vest immediately. The payment of
any Bonus pursuant to clause (1) or clause (2) above and the acceleration of
Executive’s options and stock pursuant to clause (3), are conditioned upon
Executive (or her legal representative) signing a release in favor of the
Company, as provided for in Section 6(f).
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(c)
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By the Company without
Cause. The Company may, without Cause, terminate Executive’s
employment hereunder at any time upon ten (10) or more days’ written
notice to Executive. The Company, in its sole discretion, may provide the
Executive with ten (10) days’ pay in lieu of notice. In the event
Executive’s employment is terminated pursuant to this Section 6(b), the
Employment Term shall end on the effective date of termination of the
Employment Term (the “Date of
Termination”), and the Company shall pay to Executive, no later
than the payroll cycle following Executive’s termination, in one lump sum:
(i) any accrued but unpaid Base Salary, less applicable deductions,
including salary in respect of any accrued and accumulated vacation, due
to Executive at the date of such termination, and (ii) any amounts owing,
but not yet paid, pursuant to Section 5
hereof.
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In
addition, upon a termination under this Section 6(c) and upon the satisfaction
of the conditions set forth herein: (1) Executive shall receive a pro rata Bonus
for the calendar year in which such termination occurs, equal to the Bonus she
would have received, to the extent all criteria for such a Bonus have been met
(with the exception of the requirement that Executive be employed on date the
Bonus is to be paid), for the calendar year of said termination multiplied by a
fraction, the numerator of which is the number of days in such year preceding
and including the date of termination, and the denominator of which is 365. Said
pro-rata Bonus shall be paid at the same time as the Bonus would have been paid
had Executive remained employed by the Company through the date of payment, but
in any event, not later than March 15 of the calendar year following the
calendar year for which the Bonus is payable; (2) Executive shall receive any
unpaid Bonus for the calendar year preceding her termination, to the extent that
all criteria for such bonus have been met (with the exception of the Executive
being employed on the date the Bonus is to be paid). Said Bonus shall be paid at
the same time as the Bonus would have been paid had Executive remained employed
by the Company through the date of payment; and (3) all of Executive’s
outstanding but unvested equity awards granted pursuant to Sections 3(c) and
3(d) of this Agreement shall vest immediately. The payment of any Bonus pursuant
to clause (1) or clause (2) above or the acceleration of Executive’s options and
stock pursuant to clause (3) are conditioned upon Executive signing a release in
favor of the Company, as provided for in Section 6(g).
Except as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(d)
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Resignation by
Executive for Good Reason. If any of the events described below
occurs during the Employment Term, Executive may terminate Executive’s
employment hereunder for Good Reason by written notice to the Company
identifying the event or omission constituting Good Reason not more than
one (1) month following the occurrence of such event and, in the case of
subclauses (ii), (iii), or (iv) below, a failure by the Company to cure
such act or omission within thirty (30) days after receipt of such written
notice. In the event that Executive elects to terminate employment
pursuant to this Section 6(d), the Employment Term and Executive’s
employment hereunder will be terminated effective as of the later of
thirty-one (31) days after the Company’s receipt of Executive’s notice of
termination or thirty-one (31) days after the event, and Executive’s
resignation for Good Reason pursuant to this Section 6(d) shall be treated
for all purposes as a termination without Cause pursuant to Section 6(c)
and the provisions of Section 6(c) shall apply to such termination,
including the payment of the Severance Amount. The occurrence of any of
the following events without Executive’s consent shall permit Executive to
terminate Executive’s employment for “Good Reason”
pursuant to this Section 6(d):
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(i)
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A
“Change in
Control” (as defined in Appendix A
attached hereto) occurs;
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(ii)
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The
failure by the Company to observe or comply in any material respect with
any of the material provisions of this
Agreement;
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(iii)
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A
material diminution in Executive’s
duties;
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(iv)
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The
assignment to Executive of duties that are materially inconsistent with
Executive’s duties or that materially impair Executive’s ability to
function as the Executive Vice President of the Company;
or
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(v)
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The
relocation of Executive’s primary office from a location that is more than
50 miles from both (a) the Company’s executive office that constitutes
Executive’s primary office location at the time of relocation and (b)
Executive’s primary residence at the time of such
relocation.
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Except as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement.
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(e)
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By Executive without
Good Reason. Executive may terminate the Employment Term and
Executive’s employment hereunder at any time without Good Reason upon
thirty (30) days advance written notice to the Company. In the event
Executive’s employment is terminated pursuant to this Section 6(e), the
Company shall pay to Executive, no later than ten (10) days after the last
day of Executive’s employment, in one lump sum, the sum of (i) any accrued
but unpaid Base Salary, less applicable deductions, including salary in
respect of any accrued and accumulated vacation, due to Executive at the
date of such termination, (ii) any amounts owing, but not yet paid,
pursuant to Section 5 hereof, and (iii) any unpaid portions of the Signing
Bonus and the Incentive Bonus.
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Except as
specifically set forth in Section 9 hereof, the Company shall have no further
obligations to Executive under this Agreement
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(f)
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Release.
Notwithstanding any other provision of this Agreement to the contrary,
Executive acknowledges and agrees that any and all payments and benefits
to which Executive is entitled under Section 6(b), 6(c) or 6(d), with the
exception of accrued salary, accrued vacation payments, and payments
pursuant to Section 5 of this Agreement, are conditioned upon and subject
to Executive’s first executing a general waiver and release (and the
expiration of any associated revocation period), in such reasonable and
customary form as shall be prepared by the Company, of all claims
Executive may have against the Company, and related entities and
individuals.
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7.
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Required Postponement
for Specified Executives.
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(a)
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Specified Executive
Delay. Notwithstanding anything in this Agreement to the contrary,
if required by section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and if
Executive is considered a Specified Executive (as defined herein) and
payment of any amounts under this Agreement is required to be delayed for
a period of six months after separation from service pursuant to Section
409A of the Code, payment of such amounts shall be delayed as required by
section 409A, and the accumulated amounts shall be paid in a lump sum
payment within five days after the end of the six-month period. If
Executive dies during the postponement period prior to the payment of
benefits, the amounts withheld on account of section 409A shall be paid to
the personal representative of Executive’s estate within 60 days after the
date of Executive’s death.
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(b)
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“Specified
Executive” shall mean an employee who, at any time during the
12-month period ending on the identification date, is a “specified
employee” under section 409A of the Code, as determined by the
Compensation Committee of the Board or its delegate. The determination of
Specified Executives, including the number and identity of persons
considered officers and the identification date, shall be made by the
Compensation Committee or its delegate in accordance with the provisions
of section 409A of the Code and the regulations issued
thereunder.
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8.
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No Mitigation;
Employee Benefit Plans. Executive shall not be required to mitigate
amounts payable to her under this Agreement by seeking other employment or
otherwise, and there shall be no offset against amounts payable to
Executive under this Agreement on account of Executive's subsequent
employment. Amounts payable to Executive under this Agreement shall not be
offset by any claims that the Company may have against Executive, and such
amounts payable to Executive under this Agreement shall not be affected by
any other circumstances, including, without limitation, any counterclaim,
recoupment, defense, or other right that the Company may have against
Executive or others; provided, however, that
payments made to Executive as a result of the termination of Executive's
employment hereunder shall not be considered as includible compensation
with respect to any employee benefit plans maintained by the Company,
except to the extent otherwise required by
law.
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9.
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Indemnification.
In the event that Executive is made a party or threatened to be made a
party to any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (a “Proceeding”),
by reason of Executive's employment with, or serving as an officer of, the
Company, the Company shall indemnify and hold Executive harmless, and
defend Executive to the fullest extent authorized by the laws of the state
in which the Company is incorporated, as the same exist and may hereafter
be amended, against any and all claims, demands, suits, judgments,
assessments, and settlements (collectively the “Claims”),
including all expenses incurred or suffered by Executive in connection
therewith (excluding, however, any legal fees incurred by Executive for
Executive's own counsel, except as otherwise provided in this Section 9,
and excluding any Proceedings initiated by executive), and such
indemnification shall continue as to Executive even after Executive is no
longer employed by the Company hereunder, and shall inure to the benefit
of Executive's heirs, executors, and administrators; provided, however,
that, Executive promptly gives written notice to the Company of any
such Claims (although Executive's failure to promptly give notice shall
not affect the Company's obligations under this Section 9 except to the
extent that such failure prejudices the Company or its ability to defend
such Claims). The Company shall have the right to undertake, with counsel
or other representatives of its own choosing, the defense or settlement of
any Claims. In the event that the Company shall fail to notify Executive,
within ten days of its receipt of Executive's written notice, that the
Company has elected to undertake such defense or settlement, or if at any
time the Company shall otherwise fail to diligently defend or pursue
settlement of such Claims, then Executive shall have the right to
undertake the defense, compromise, or settlement of such Claims, in which
event the Company shall hold Executive harmless from any legal fees
incurred by Executive for Executive's counsel. Neither Executive nor the
Company shall settle any Claims without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed. In the
event that the Company submits to Executive a bona fide settlement offer
from the claimant of Claims (which settlement offer shall include as an
unconditional term thereof the giving by the claimant or the plaintiff to
Executive a release from all liability in respect of such Claims), and
Executive refuses to consent to such settlement, then thereafter the
Company's liability to Executive for indemnification hereunder with
respect to such Claims shall not exceed the settlement amount included in
such bona fide settlement offer, and Executive shall either assume the
defense of such Claims or pay the Company's attorneys' fees and other
out-of-pocket costs incurred thereafter in continuing the defense of such
Claims. Regardless of which party is conducting the defense of any such
Claims, the other party, with counsel or other representatives of its own
choosing and at its sole cost and expense, shall have the right to consult
with the party conducting the defense of such Claims and its counsel or
other representatives concerning such Claims and Executive and the
respective counsel or other representatives shall cooperate with respect
to such Claims. The party conducting the defense of any such Claims and
its counsel shall in any case keep the other party and its counsel (if
any) fully informed as to the status of such Claims and any matters
relating thereto. Executive and the Company shall provide to the other
such records, books, documents, and other materials as shall reasonably be
necessary for each to conduct or evaluate the defense of any Claims, and
will generally cooperate with respect to any matters relating thereto.
This Section 9 shall remain in effect after this Agreement is terminated,
regardless of the reasons for such termination. The indemnification
provided to Executive pursuant to this Section 9 shall not supersede or
reduce any indemnification provided to Executive under any separate
agreement, or the By-Laws of the Company; in this regard, it is intended
that this Agreement shall expand and extend Executive's rights to receive
indemnification.
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10.
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Withholding.
The Company shall have the right to deduct and withhold from all payments
to Executive hereunder all payroll taxes, income tax withholding and other
federal, state and local taxes and charges which currently are or which
hereafter may be required by law to be so deducted and
withheld.
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11.
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Additional
Agreements. As a condition to her continued employment hereunder,
Executive shall execute and deliver to the Company a Confidential
Information and Intellectual Property Agreement in the form attached
hereto as Exhibit A (the
“Intellectual
Property Agreement”), which shall be incorporated herein by
reference. Executive and the Company hereby agree that such Intellectual
Property Agreement shall supersede the Confidential Information and
Intellectual Property Agreement between Executive and NexMed (U.S.A.),
Inc., a wholly-owned subsidiary of the Company, dated October 4, 2000 (the
“Prior IP
Agreement”), and that upon execution and delivery of the
Intellectual Property Agreement, the Prior IP Agreement shall terminate
and be of no further force or
effect.
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12.
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Non-Assignability.
Executive's rights and benefits hereunder are personal to Executive, and
shall not be alienated, voluntarily or involuntarily assigned, or
transferred.
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13.
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Binding Effect.
This Agreement shall be binding upon the parties hereto, and their
respective assigns, successors, executors, administrators, and heirs. In
the event the Company becomes a party to any merger, consolidation, or
reorganization, this Agreement shall remain in full force and effect as an
obligation of the Company or its successor(s) in interest. None of the
payments provided for by this Agreement shall be subject to seizure for
payment of any debts or judgments against Executive or Executive's
beneficiary or beneficiaries, nor shall Executive or any such beneficiary
or beneficiaries have any right to transfer or encumber any right or
benefit hereunder.
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14.
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Entire Agreement;
Modification.
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(a)
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This
Agreement supersedes all prior agreements (including the Prior Agreement
and the Prior IP Agreement), with the exception of the Intellectual
Property Agreement, and all other agreements (or portions thereof) that
deal with confidentiality or intellectual property. This Agreement sets
forth the entire understanding among the parties hereto with respect to
the subject matter hereof, may not be changed orally, and may be changed
only by an agreement in writing signed by the parties
hereto.
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(b)
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Executive
acknowledges that from time to time, the Company may establish, maintain
and distribute manuals, handbooks or personnel policies, and officers or
other representatives of the Company may make written or oral statements
relating to personnel policies and procedures. Such manuals, handbooks and
statements are intended only for general guidance. No policies, procedures
or statements of any nature by or on behalf of the Company (whether
written or oral, and whether or not contained in any manual or handbook or
personnel policies), and no acts or practices of any nature, shall be
construed to modify this Agreement or to create express or implied
obligations of any nature to
Executive.
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15.
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Notices. All
notices and communications hereunder shall be in writing, sent by
certified or registered mail, return receipt requested, postage prepaid;
by facsimile transmission, with proof of the time and date of receipt
retained by the transmitter; or by hand-delivery properly receipted. The
actual date of receipt as shown by the return receipt therefore, the
facsimile transmission sheet, or the hand-delivery receipt, as the case
may be, shall determine the date on which (and, in the case of a
facsimile, the time at which) notice was given. All payments required
hereunder by the Company to Executive shall be sent postage prepaid, or,
at Executive's election, shall be transferred to Executive electronically
to such bank account as Executive may designate in writing to the Company,
including designation of the applicable electronic address. The foregoing
items (other than any electronic transfer to Executive) shall be addressed
as follows (or to such other address as the Company and Executive may
designate in writing from time to
time):
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To the
Company:
NexMed,
Inc.
0000
Xxxxx Xxxxx Xx., Xxxxx 000
Xxx
Xxxxx, XX 00000
Attention:
Chief Executive Officer
To
Executive:
Xxxxxx X.
Xxx
c/o
NexMed, Inc.
0000
Xxxxx Xxxxx Xx., Xxxxx 000
Xxx
Xxxxx, XX 00000
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16.
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Section 409A of the
Code. This Agreement is intended to comply with section 409A of the
Code and its corresponding regulations, to the extent applicable.
Accordingly, all provisions herein, or incorporated herein by reference,
shall be construed and interpreted to comply with section 409A of the Code
and any applicable exceptions thereunder. Notwithstanding anything in this
Agreement to the contrary, payments may only be made under this Agreement
upon an event and in a manner permitted by section 409A of the Code, to
the extent applicable. As used in the Agreement, the term “termination of
employment” shall mean Executive’s separation from service with the
Company within the meaning of section 409A of the Code and the regulations
promulgated thereunder. For purposes of section 409A, the right to a
series of payments under the Agreement shall be treated as a right to a
series of separate payments. Any amounts payable solely on account of an
involuntary separation from service of Executive within the meaning of
section 409A of the Code shall be excludible from the requirements of
section 409A of the Code, either as involuntary separation pay or as
short-term deferral amounts to the maximum possible extent. All
reimbursements and in-kind benefits provided under the Agreement shall be
made or provided in accordance with the requirements of section 409A of
the Code, including, where applicable, the requirement that (i) any
reimbursement shall be for expenses incurred during Executive’s lifetime
(or during a shorter period of time specified in this Agreement), (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits
provided, during a calendar year may not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or
before the last day of the calendar year following the year in which the
expense is incurred, and (iv) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another
benefit.
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11
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17.
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Governing Law;
Jurisdiction. This Agreement shall be governed by, and construed
and enforced according to, the domestic laws of the State of California
without giving effect to the principles of conflict of laws thereof, or
such principles of any other jurisdiction, which could cause the
application of the substantive law of any jurisdiction other than the
State of California. The Company and Executive agree that the state or
federal courts located in San Diego, California shall have exclusive
jurisdiction to hear and determine any dispute which may arise under this
Agreement.
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18.
|
Severability.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of
this Agreement, and each other provision of the Agreement shall be
severable and enforceable to the extent permitted by
law.
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19.
|
Headings. The
headings of the Sections hereof are provided for convenience only and are
not to serve as a basis for interpretation or construction, and shall not
constitute a part, of this
Agreement.
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20.
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Signature in
Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same
instrument.
|
12
IN
WITNESS WHEREOF, Executive has hereunto set her hand and the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
|
/s/ Xxxxxx X. Xxx
|
|
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Xxxxxx
X. Xxx
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|
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NEXMED,
INC.
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|
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By:
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/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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|
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Chief Executive Officer
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APPENDIX
A
Change in
Control
For the
purpose of this Agreement, a “Change in Control”
shall be deemed to have taken place if:
A.
Individuals who, on the date hereof, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof, whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that, no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;
B. Any
“Person” (as
such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934
(the “Exchange
Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Voting Securities”);
provided, however, that, the event described in this paragraph B shall not be
deemed to be a Change in Control by virtue of any of the following acquisitions:
(i) by the Company or any subsidiary of the Company in which the Company owns
more than 50% of the combined voting power of such entity (a “Subsidiary”), (ii) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, (iii) by any underwriter temporarily holding the
Company’s Voting Securities pursuant to a public offering of such Voting
Securities, (iv) pursuant to a Non-Qualifying Transaction (as defined in
paragraph C immediately below), (v) pursuant to any acquisition by Executive or
by any Person which is an “affiliate” (within the meaning of 17 C.F.R. §
230.405) of Executive (an “Excluded
Person”);
C. The
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its Subsidiaries
that requires the approval of the Company’s stockholders, whether for such
transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination:
(i) more than 50% of the total voting power of (A) the corporation resulting
from such Business Combination (the “Surviving
Corporation”), or (B) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Company (the “Parent Corporation”),
is represented by the Company’s Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which the Company’s Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of the
Company’s Voting Securities among the holders thereof immediately prior to the
Business Combination, (ii) no Person (other than (A) any employee benefit plan
(or related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation or (B) an Excluded Person is or becomes the beneficial owner,
directly or indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
and (iii) at least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (i), (ii) and (iii)
above shall be deemed to be a “Non-Qualifying Transaction”);
D. A sale
of all or substantially all of the Company’s assets, other than to an Excluded
Person;
E. The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or
F. Such
other events as the Board may designate.
Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to occur
(i) solely as a result of the Closing or any of the transactions contemplated
under the Merger Agreement or (ii) solely because any person acquires beneficial
ownership of more than 50% of the Company’s Voting Securities as a result of the
acquisition of the Company’s Voting Securities by the Company which reduces the
number of the Company’s Voting Securities outstanding; provided, that, if after
such acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.
EXHIBIT
A
CONFIDENTIALITY AND
INTELLECTUAL PROPERTY AGREEMENT
NEXMED,
INC.
Employee
Confidentiality and Assignment Agreement
In consideration and as a condition of
my employment or continued employment by NexMed, Inc. (the “Company”), I agree as
follows:
1. Proprietary
Information. I agree that all
information, whether or not in writing, concerning the Company’s business,
technology, business relationships or financial affairs which the Company has
not released to the general public (collectively, “Proprietary
Information”) is and will be the exclusive property of the
Company. By way of illustration, Proprietary Information may include
information or material which has not been made generally available to the
public, such as: (a) corporate information,
including plans, strategies, methods, policies, resolutions, negotiations or
litigation; (b) marketing
information, including strategies, methods, customer identities or other
information about customers, prospect identities or other information about
prospects, or market analyses or projections; (c) financial information,
including cost and performance data, debt arrangements, equity structure,
investors and holdings, purchasing and sales data and price lists; and (d) operational and technological
information, including plans, specifications, manuals, forms, templates,
software, designs, methods, procedures, formulas, discoveries, inventions,
improvements, concepts and ideas; and (e) personnel information,
including personnel lists, reporting or organizational structure, resumes,
personnel data, compensation structure, performance evaluations and termination
arrangements or documents. Proprietary Information also includes
information received in confidence by the Company from its customers or
suppliers or other third parties.
2. Recognition
of Company’s Rights. I will not, at
any time, without the Company’s prior written permission, either during or after
my employment, disclose any Proprietary Information to anyone outside of the
Company, or use or permit to be used any Proprietary Information for any purpose
other than the performance of my duties as an employee of the
Company. I will cooperate with the Company and use my best efforts to
prevent the unauthorized disclosure of all Proprietary Information. I
will deliver to the Company all copies of Proprietary Information in my
possession or control upon the earlier of a request by the Company or
termination of my employment.
3. Rights of
Others. I understand that
the Company is now
and may hereafter be subject to non-disclosure or confidentiality agreements
with third persons which require the Company to protect or refrain from use of
Proprietary Information. I agree to be bound by the terms of such
agreements in the event I have access to such Proprietary
Information.
4. Commitment
to Company; Avoidance of Conflict of Interest. While an employee
of the Company, I
will devote my full-time efforts to the Company’s business and I will not engage
in any other business activity that conflicts with my duties to the
Company. I will advise the president of the Company (or, if I am an
executive officer of the Company, the Company’s Board of Directors) or his or
her nominee at such time as any activity of either the Company or another
business presents me with a conflict of interest or the appearance of a conflict
of interest as an employee of the Company. I will take whatever
action is requested of me by the Company to resolve any conflict or appearance
of conflict which it finds to exist.
5. Developments. I will make full
and prompt disclosure to the Company of all inventions, discoveries, designs,
developments, methods, modifications, improvements, processes, algorithms,
databases, computer programs, formulae, techniques, trade secrets, graphics or
images, and audio or visual works and other works of authorship (collectively
“Developments”),
whether or not patentable or copyrightable, that are created, made, conceived or
reduced to practice by me (alone or jointly with others) or under my direction
during the period of my employment. I acknowledge that all work
performed by me is on a “work for hire” basis, and I hereby do assign and
transfer and, to the extent any such assignment cannot be made at present, will
assign and transfer, to the Company and its
successors and assigns all my right, title and interest in all Developments that
(a) relate to the business of the Company or any customer of the
Company or any of the products or services being researched, developed,
manufactured or sold by the Company or which may be used with such products or
services; or (b) result from tasks assigned to me by the Company; or (c) result
from the use of premises or personal property (whether tangible or intangible)
owned, leased or contracted for by the Company (“Company-Related
Developments”), and all related patents, patent applications, trademarks
and trademark applications, copyrights and copyright applications, and other
intellectual property rights in all countries and territories worldwide and
under any international conventions (“Intellectual Property
Rights”).
To
preclude any possible uncertainty, I have set forth on Exhibit A attached
hereto a complete list of Developments that I have, alone or jointly with
others, conceived, developed or reduced to practice prior to the commencement of
my employment with the Company that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (“Prior
Inventions”). If disclosure of any such
Prior Invention would cause me to violate any prior confidentiality agreement, I
understand that I am not to list such Prior Inventions in Exhibit A but am only
to disclose a cursory name for each such invention, a listing of the party(ies)
to whom it belongs and the fact that full disclosure as to such inventions has
not been made for that reason. I have also listed on Exhibit A all patents
and patent applications in which I am named as an inventor, other than those
which have been assigned to the Company (“Other Patent
Rights”). If no such disclosure is attached, I represent that
there are no Prior Inventions or Other Patent Rights. If, in the
course of my employment with the Company, I incorporate a Prior Invention into a
Company product, process or machine or other work done for the Company, I hereby
grant to the Company a nonexclusive, royalty-free, paid-up, irrevocable,
worldwide license (with the full right to sublicense) to make, have made,
modify, use, sell, offer for sale and import such Prior
Invention. Notwithstanding the foregoing, I will not incorporate, or
permit to be incorporated, Prior Inventions in any Company-Related Development
without the Company’s prior written consent.
As
required pursuant to Section 2872 of the California Labor Code, I acknowledge
that the Company has notified me that the provisions of this paragraph 5 do not
apply to an invention which qualifies fully under the provisions of Section 2870
of the California Labor Code. Specifically, such provisions do not
apply to, and I am not required to transfer to the Company, any invention
developed entirely on my own time without using the Company’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either (a) relate at the time of conception or reduction to practice of the
invention to the Company’s business, or actual or demonstrably anticipated
research or development of the Company; or (b) result from any work performed by
the Employee for the Company. However, I will also promptly disclose
to the Company any such Developments for the purpose of determining whether they
qualify for such exclusion. I understand that to the extent this
Agreement is required to be construed in accordance with the laws of any state
which precludes a requirement in an employee agreement to assign certain classes
of inventions made by an employee, this paragraph 5 will be interpreted not to
apply to any invention which a court rules and/or the Company agrees falls
within such classes. I also hereby waive all claims to any moral
rights or other special rights which I may have or accrue in any Company-Related
Developments.
6. Documents
and Other Materials. I will keep and
maintain adequate and current records of all Proprietary Information and
Company-Related Developments developed by me during my employment, which records
will be available to and remain the sole property of the Company at all
times.
All
files, letters, notes, memoranda, reports, records, data, sketches, drawings,
notebooks, layouts, charts, quotations and proposals, specification sheets, or
other written, photographic or other tangible material containing Proprietary
Information, whether created by me or others, which come into my custody or
possession, are the exclusive property of the Company to be used by me only in
the performance of my duties for the Company. Any property situated
on the Company’s premises and owned by the Company, including without limitation
computers, disks and other storage media, filing cabinets or other work areas,
is subject to inspection by the Company at any time with or without
notice. In the event of the termination of my employment for any
reason, I will deliver to the Company all files, letters, notes, memoranda,
reports, records, data, sketches, drawings, notebooks, layouts, charts,
quotations and proposals, specification sheets, or other written, photographic
or other tangible material containing Proprietary Information, and other
materials of any nature pertaining to the Proprietary Information of the Company
and to my work, and will not take or keep in my possession any of the foregoing
or any copies.
7. Enforcement
of Intellectual Property Rights. I will cooperate
fully with the Company, both during and after my employment with the Company,
with respect to the procurement, maintenance and enforcement of Intellectual
Property Rights in Company-Related Developments. I will sign, both
during and after the term of this Agreement, all papers, including
without limitation copyright applications, patent applications, declarations,
oaths, assignments of priority rights, and powers of attorney, which the Company
may deem necessary or desirable in order to protect its rights and interests in
any Company-Related Development. If the Company is unable, after
reasonable effort, to secure my signature on any such papers, I hereby
irrevocably designate and appoint each officer of the Company as my agent and
attorney-in-fact to execute any such papers on my behalf, and to take any and
all actions as the Company may deem necessary or desirable in order to protect
its rights and interests in any Company-Related Development.
8. Non-Solicitation. During my
employment and for a period of twelve (12) months following the termination of
my employment for any reason (the “Restricted Period”),
I will not, directly or indirectly, in any manner, other than for the benefit of
the Company, solicit, entice or attempt to persuade any other employee or
consultant of the Company to leave the services of the Company for any
reason. I acknowledge and agree that if I violate any of the
provisions of this paragraph 8, the running of the Restricted Period will be
extended by the time during which I engage in such violation(s).
9. Government
Contracts. I acknowledge
that the Company may have from time to time agreements with other persons or
with the United States Government or its agencies which impose obligations or
restrictions on the Company regarding inventions made during the course of work
under such agreements or regarding the confidential nature of such
work. I agree to comply with any such obligations or restrictions
upon the direction of the Company. In addition to the rights assigned under
paragraph 5, I also assign to the Company (or any of its nominees) all rights
which I have or acquired in any Developments, full title to which is required to
be in the United States under any contract between the Company and the United
States or any of its agencies.
2
10. Prior
Agreements. I hereby
represent that, except as I have fully disclosed previously in writing to the
Company, I am not bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of my employment with the
Company or to refrain from competing, directly or indirectly, with the business
of such previous employer or any other party. I further represent
that my performance of all the terms of this Agreement as an employee of the
Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by me in confidence or in
trust prior to my employment with the Company. I will not disclose to the
Company or induce the Company to use any confidential or proprietary information
or material belonging to any previous employer or others.
11. Remedies
upon Breach.
I understand that the restrictions contained in this
Agreement are necessary for the protection of the business and goodwill of the
Company and I consider them to be reasonable for such purpose. Any
breach of this Agreement is likely to cause the Company substantial and
irrevocable damage and therefore, in the event of such breach, the Company, in addition to
such other remedies which may be available, will be entitled to specific
performance and other injunctive relief.
12. Use of
Voice, Image and Likeness. I give the
Company permission to use any and all of my voice, image and likeness, with or
without using my name, in connection with the products and/or services of the
Company, for the purposes of advertising and promoting such products and/or
services and/or the Company, and/or for other purposes deemed appropriate by the
Company in its reasonable discretion, except to the extent expressly prohibited
by law.
13. Publications
and Public Statements. I will obtain the
Company’s written approval before publishing or submitting for publication any
material that relates to my work at the Company and/or incorporates any
Proprietary Information. To ensure that the Company delivers a
consistent message about its products, services and operations to the public,
and further in recognition that even positive statements may have a detrimental
effect on the Company in certain securities transactions and other contexts, any
statement about the Company which I create, publish or post during my period of
employment and for six (6) months thereafter, on any media accessible by the
public, including but not limited to electronic bulletin boards and
Internet-based chat rooms, must first be reviewed and approved by an officer of
the Company before it is released in the public domain.
14. No
Employment Obligation. I understand that
this Agreement does not create an obligation on the Company or any other
person to continue my employment. I acknowledge that, unless
otherwise agreed in a formal written employment agreement signed on behalf of
the Company by an authorized officer, my employment with the Company is at will
and therefore may be terminated by the Company or me at any time and for any
reason.
15. Survival
and Assignment by the Company. I understand that
my obligations under this Agreement will continue in accordance with its express
terms regardless of any changes in my title, position, duties, salary,
compensation or benefits or other terms and conditions of employment. I further
understand that my obligations under this Agreement will continue following the
termination of my employment regardless of the manner of such termination and
will be binding upon my heirs, executors and administrators. The
Company will have the right to assign this Agreement to its affiliates,
successors and assigns. I expressly consent to be bound by the
provisions of this Agreement for the benefit of the Company or any parent,
subsidiary or affiliate to whose employ I may be transferred without the
necessity that this Agreement be resigned at the time of such
transfer.
16. Disclosure
to Future Employers. I will provide a copy of
this Agreement to any prospective employer, partner or coventurer prior to
entering into an employment, partnership or other business relationship with
such person or entity.
17. Severability. In case any
provisions (or portions thereof) contained in this Agreement shall, for any
reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect the other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein. If, moreover, any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, it shall be construed by
limiting and reducing it, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
18. Interpretation. This Agreement
will be deemed to be made and entered into in the State of California, and will
in all respects be interpreted, enforced and governed under the laws of the
State of California. I hereby agree to consent to personal
jurisdiction of the state and federal courts situated within San Diego County,
California for purposes of enforcing this Agreement, and waive any objection
that I might have to personal jurisdiction or venue in those
courts.
[End of
Text]
3
I
UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. BY SIGNING
BELOW, I CERTIFY THAT I HAVE READ IT CAREFULLY AND AM SATISFIED THAT I
UNDERSTAND IT COMPLETELY.
IN WITNESS WHEREOF, the undersigned has
executed this agreement as a sealed instrument as of the date set forth
below.
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Signed:
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(Employee’s
full name)
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Type or print name:
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|||||
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Social Security Number:
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Date:
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||||
EXHIBIT
A
To: NexMed,
Inc.
From: ____________________
Date: _____________________
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SUBJECT:
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Prior
Inventions
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The following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
the Company that have been made or conceived or first reduced to practice by me
alone or jointly with others prior to my engagement by the Company:
No
inventions or improvements
See
below:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Additional
sheets attached
The
following is a list of all patents and patent applications in which I have been
named as an inventor:
None
See
below:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
