EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of October 1, 1998, by and between Maxim Pharmaceuticals, Inc.,
(the "Company"), and Xxxx X. Xxxxxx ("Executive"). The Company and Executive
are hereinafter collectively referred to as the "Parties," and individually
referred to as a "Party."
RECITALS
A. The Company desires assurance of the association and services
of Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on
the terms and conditions set forth in this Agreement.
B. Executive desires to be in the employ of the Company, and is
willing to accept such employment on the terms and conditions set forth in
this Agreement.
AGREEMENT
In consideration of the foregoing recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration,
the Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 The Company hereby employs Executive, and Executive hereby
accepts employment by the Company, upon the terms and conditions set forth in
this Agreement, effective as of the date first set forth above ("Commencement
Date"). This Agreement shall continue in effect for a period beginning with
the Commencement Date and ending December 31, 2000, unless terminated earlier
pursuant to Section 5 below.
1.2 Executive shall be the Vice-President, Finance, Chief Financial
Officer and Corporate Secretary of the Company and shall serve in such other
capacity or capacities as the Chief Executive Officer and/or the Company's
Board of Directors ("Board") may from time to time prescribe.
1.3 Executive shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the Company and
which are normally associated with the position Vice-President, Finance,
Chief Financial Officer and Corporate Secretary of the Company, consistent
with the Bylaws of the Company, as well as its general employment policies
and practices, including, but not limited to management of the corporate
administrative activities, record keeping and reporting requirements,
preparation and review of corporate documents related to regulatory
requirements and board activities, preparation of budgets and strategic
business plans, analysis for acquisitions and other business transactions,
investor relations and development and maintenance of financial community
relationships necessary for raising additional debt and/or equity capital.
However, at all times during his employment Executive shall be subject to the
direction and policies from time to time established by the Board.
1.4 Unless the Parties otherwise agree in writing, during the term
of this Agreement, Executive shall perform the services he is required to
perform pursuant to this Agreement at the Company's offices, located at 0000
Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 000 or at any other place at which the Company
maintains an office; provided, however, that the Company may from time to
time require Executive to travel temporarily to other locations in connection
with the Company's business.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 During his employment by the Company, Executive shall devote
his full business energies, interest, abilities and productive time to the
proper and efficient performance of his duties under this Agreement.
2.2 During the term of this Agreement, Executive shall not engage
in competition with the Company, either directly or indirectly, in any manner
or capacity, as adviser, principal, agent, partner, officer, director,
employee, member of any association or otherwise, in any phase of the
business of developing, manufacturing and marketing of products which are in
the same field of use or which otherwise compete with the products or
proposed products of the Company.
2.3 Ownership by Executive, as a passive investment, of less than
one percent (1%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a
national securities exchange or publicly traded in the over-the-counter
market shall not constitute a breach of this paragraph.
3. COMPENSATION OF EXECUTIVE.
3.1 While employed by the Company, as compensation for proper and
satisfactory performance of all duties to be performed hereunder, the Company
shall pay Executive an annual base salary of One Hundred Seventy Thousand
Dollars, $170,000 per year (the "Base Salary"), payable in regular periodic
payments in accordance with Company policy. Such salary shall be prorated
for any partial year of employment on the basis of a 365-day fiscal year. In
addition, Executive will be eligible for an incentive bonus of up to 20% of
base salary, based upon defined milestone, during the agreement period.
3.2 Executive's compensation may be changed from time to time by
mutual agreement of Executive and the Board.
3.3 All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to
be collected or withheld by the Company.
3.4 Executive shall be entitled to vacation and illness days
consistent with the Company's standard practice for its employees generally.
3.5 Executive shall, at the discretion of the Board, be entitled to
participate in the benefits for which he is eligible under the terms and
conditions of the standard Company benefits which may be in effect from time
to time and provided by the Company.
4. EXPENSE REIMBURSEMENT.
4.1 Executive shall be entitled to receive prompt reimbursement of
all reasonable business and travel expenses incurred by Executive in
connection with the business of the Company. Such expenses must be properly
accounted for under the policies and procedures established by the Company.
5. TERMINATION.
5.1 The Company may terminate Executive's employment under this
Agreement "for cause" by delivery of written notice to Executive specifying
the cause or causes relied upon for such termination. If Executive's
employment under this Agreement is terminated by the Company for cause under
this section, Executive shall be entitled to receive only accrued Base Salary
and other accrued benefits required by law, prorated to the date of
termination. Executive will not be entitled to severance pay, pay in lieu of
notice or any other such compensation. Grounds for the Company to terminate
this Agreement "for cause" shall be limited to the occurrence of any of the
following events:
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5.1.1 If Executive is in material breach of any provision of
this Agreement;
5.1.2 Executive's engaging or in any manner participating in
any activity which is competitive with or intentionally injurious to the
Company or which violates any provision of Section 7 of this Agreement;
5.1.3 Executive's commission of any fraud against the Company
or use or appropriation for his personal use or benefit of any funds or
properties of the Company not authorized by the Board to be so used or
appropriated;
5.1.4 Executive's conviction of any crime involving dishonesty
or moral turpitude;
5.1.5 Conduct by Executive which in good faith and reasonable
determination of the Board demonstrates gross unfitness to serve.
Any notice of termination given pursuant to this Section 5.1 shall
effect termination as of the date specified in such notice or, in the event
no such date is specified, on the last day of the month in which such notice
is delivered or deemed delivered as provided in Section 9 below.
5.2 The Company may terminate the Executive's employment at any
time without cause upon delivery of written notice to the Executive. Any
notice of termination given pursuant to this Section 5.2 shall effect
termination as of the date specified in such notice or, in the event no such
date is specified, on the last day of the month in which such notice is
delivered or deemed deliverable as provided in Section 9 below. If such
termination shall occur under this Section 5.2, then Executive shall be
entitled to continuation of Base Salary and health benefits for a period of
six (6) months from said date of termination with such Base Salary
continuation to be at the rate set forth in Section 3.1 or, as the case may
be, at the rate of Executive's then current Base Salary in effect as of the
date of termination.
5.3 The parties may mutually agree at any time to terminate this
Agreement upon such terms and conditions as may be agreed upon in writing.
5.4 This Agreement shall terminate without notice upon the date of
Executive's death or the date when Executive becomes "completely disabled" as
that term is defined in Section 6.2
5.5 Notwithstanding any provision to the contrary herein, unless
otherwise provided herein or unless otherwise provided by law, Executive may
at any time terminate his employment with the Company hereunder. In such
event, the Company shall not be liable to Executive for the payment of any
amount other than accrued Base Salary and other accrued benefits required by
law, prorated to the date of termination. Executive will not be entitled to
severance pay, pay in lieu of notice or any other such compensation.
6. DEATH OR DISABILITY DURING TERM OF EMPLOYMENT.
6.1 Upon termination of Executive's employment pursuant to Section
5.4, Executive or his estate or personal representative, as the case may be,
shall be entitled to receive Executive's Base Salary and benefits for a
period of one month following the date of death or the date when Executive
becomes completely disabled.
6.2 The term "completely disabled" as used in this Agreement shall
mean the inability of Executive to perform the essential functions of his
position under this Agreement by reason of any incapacity, physical or
mental, which the Board of the Company, based upon medical advice or an
opinion provided by a licensed physician acceptable to the Board of the
Company and approved by the Executive, which approval shall not be
unreasonably withheld, determines to have incapacitated Executive from
satisfactorily performing any or all essential functions of his position for
the Company during the foreseeable future. Based upon such medical advice or
opinion, the determination of the
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Board of the Company shall be final and binding and the date such
determination is made shall be the date of such complete disability for
purposes of this Agreement.
7. CONFIDENTIAL INFORMATION; NONSOLICITATION.
7.1 Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which
is not generally known in the trade, and which gives the Company an advantage
over its competitors who do not know or use it, including but not limited to,
techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information relating to the business, products, practices and
techniques of the Company, (hereinafter referred to as "Confidential
Information"). Executive will at all times regard and preserve as
confidential such Confidential Information obtained by Executive from
whatever source and will not, either during his employment with the Company
or thereafter, publish or disclose any part of such Confidential Information
in any manner at any time, or use the same except on behalf of the Company,
without the prior written consent of the Company. As a condition of this
Agreement, Executive will sign and return a copy of the Company's
"Proprietary Information and Inventions Agreement," attached as Exhibit A.
7.2 While employed by the Company and for one (1) year thereafter,
the Executive agrees that in order to protect the Company's confidential and
proprietary information from unauthorized use, that Executive will not,
either directly or through others, solicit or attempt to solicit any
employee, consultant or independent contractor of the Company to terminate
his or her relationship with the Company in order to become an employee,
consultant or independent contractor to or for any other person or business
entity; or the business of any customer, vendor or distributor of the Company
which, at the time of termination or one (1) year immediately prior thereto,
was listed on Company's customer, vendor or distributor list.
8. ASSIGNMENT AND BINDING EFFECT.
8.1 This Agreement shall be binding upon and inure to the benefit
of Executive and Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Because of the unique and
personal nature of Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be
assignable by Executive. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns and legal
representatives.
9. NOTICES.
9.1 All notices or demands of any kind required or permitted to be
given by the Company or Executive under this Agreement shall be given in
writing and shall be personally delivered (and receipted for) or mailed by
certified mail, return receipt requested, postage prepaid, addressed as
follows:
9.1.1 If to the Company:
XXXXX XXXXXXXXX
MAXIM PHARMACEUTICALS, INC.
0000 XXXXXXXXXX XXXXXX XXXX
XXXXX 000
XXX XXXXX, XX 00000
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9.1.2 If to Executive:
XXXX XXXXXX
MAXIM PHARMACEUTICALS, INC.
0000 XXXXXXXXXX XXXXXX XXXX
XXXXX 000
XXX XXXXX, XX 00000
Any such written notice shall be deemed received when personally delivered or
three (3) days after its deposit in the United States mail as specified
above. Either Party may change its address for notices by giving notice to
the other Party in the manner specified in this section.
10. CHOICE OF LAW.
10.1 This Agreement is made in San Diego, California. This
Agreement shall be construed and interpreted in accordance with the laws of
the State of California.
11. INTEGRATION.
11.1 This Agreement contains the complete, final and exclusive
agreement of the Parties relating to the subject matter of this Agreement,
and supersedes all prior oral and written employment agreements or
arrangements between the Parties.
12. AMENDMENT.
12.1 This Agreement cannot be amended or modified except by a
written agreement signed by Executive and the Company.
13. WAIVER.
13.1 No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term,
covenant, condition or breach shall not be deemed to be a waiver of any
preceding or succeeding breach of the same or any other term, covenant,
condition or breach.
14. SEVERABILITY.
14.1 The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid
or illegal. Such court shall have the authority to modify or replace the
invalid or unenforceable term or provision with a valid and enforceable term
or provision which most accurately represents the parties' intention with
respect to the invalid or unenforceable term or provision.
15. INTERPRETATION; CONSTRUCTION.
15.1 The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has been encouraged, and has consulted with, his own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised,
or had an opportunity to review and revise, this Agreement, and the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of
this Agreement.
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16. REPRESENTATIONS AND WARRANTIES.
16.1 Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing
each of the terms and covenants contained in this Agreement, and that his
execution and performance of this Agreement will not violate or breach any
other agreements between Executive and any other person or entity.
17. COUNTERPARTS.
17.1 This Agreement may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall contribute one
and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
The Company:
MAXIM PHARMACEUTICALS, INC.
By: /s/XXXXX X. XXXXXXXXX
--------------------------------
Xxxxx X. Xxxxxxxxx
Chairman of the Board, President and
Chief Executive Officer
EXECUTIVE:
/s/XXXX X. XXXXXX
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Xxxx X. Xxxxxx
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