EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") dated as of February 28, 2003
and effective as of January 1, 2003 (the "Effective Date"), is made and entered
into between Helix BioMedix, Inc., a Delaware corporation ("the Company") and
Xxxxx Xxxxxx ("the Executive").
WHEREAS, the Company wishes to enter into an agreement with the
Executive governing the terms and conditions of his employment, and the
Executive is willing to be employed on the terms and conditions set forth in
this Agreement;
NOW THEREFORE, in consideration of the promises and the mutual
covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. EMPLOYMENT. The Company shall employ the Executive, and the
Executive shall serve in the full-time employ of the Company, on the terms and
subject to the conditions set forth in this Agreement. The Executive shall serve
in the position of Chief Financial Officer with duties and responsibilities
customary for that position plus any additional duties and responsibilities
which may be assigned to the Executive from time to time by the Board of
Directors or the Chief Executive Officer of the Company. Executive's duties will
include, but are not limited to, preparing regulatory reports, handling
accounting functions and preparing financial projections. The Executive shall
devote his best efforts and all of his business time and attention to the
business of the Company. Executive shall not engage in any other business
activity (except the management of personal investments and charitable and civic
activities that in the aggregate do not interfere with the performance of
Executive's duties) without first obtaining the written consent of the Board or
Directors, and such consent shall not unreasonably be withheld. Executive
further agrees to abide by all by-laws, policies, practices, procedures, or
rules of the Company. The Executive shall perform his duties and
responsibilities under the direction and supervision of, and shall report
directly to, the Chief Executive Officer of the Company or such other officer as
the Chief Executive Officer determines.
2. TERM. The term of this Agreement shall be continuous from and
after the Effective Date for a period of two (2) years, unless extended in
writing by both the Company and the Executive or earlier terminated in
accordance with Section 4 ("the Term").
3. COMPENSATION. During the Term of this Agreement, the Executive
shall be compensated by the Company as follows:
(a) Annual Base Salary. The Company shall pay Executive
an annual base salary for the Executive's actual period of employment at a rate
of Eighty Thousand Dollars ($80,000) per year commencing from and after the
Effective Date. Executive's annual base salary shall increase to a rate of
Ninety Thousand Dollars ($90,000) per year commencing on June 1, 2003. The
Executive's base salary shall be paid in accordance with the Company's normal
payroll policies for senior management as are from time to time in effect. The
Company agrees to reconsider compensation upon receipt of licensing revenues.
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(b) Vacation and Fringe Benefits. During the Executive's
actual period of employment, the Executive shall be eligible for three (3)
weeks' paid vacation per year. In addition, the Executive shall be entitled to
participate in any and all group medical, dental, vision, retirement, or
disability benefit plans which are from time to time maintained by the Company
for its senior executive employees, in accordance with the terms and conditions
of such plans or programs as they may be amended from time to time. Nothing
herein contained shall be construed as requiring the Company to establish or
continue any particular benefit plan in discharge of its obligations under this
Agreement.
(c) Stock Options. The Company and the Executive shall
enter into a Stock Option Agreement granting Executive options to purchase
common stock subject to the terms and conditions of the Company's Amended Stock
Option Plan. The Stock Option Agreement shall be dated February 28, 2003. The
Stock Option Agreement shall grant Executive 90,000 options to purchase common
stock at $1.00 per share. Fifteen thousand (15,000) options shall vest upon
signing this Employment Agreement. The remaining 75,000 options shall vest
pursuant to the Company's Amended Stock Option Plan.
(d) Incentive Compensation. Executive shall be entitled
to participate in a manner consistent with all other senior management
participation in any incentive compensation plan that may be adopted by the
Company.
(e) Business Expenses. The Executive shall be reimbursed,
in a manner consistent with the policies of the Company, for all reasonable
business expenses incurred in the performance of his duties pursuant to this
Agreement, to the extent such expenses are substantiated in writing, and are
consistent with the general policies of the Company relating to the
reimbursement of expenses of executive-level employees of the Company. Expenses
for items that are reasonably deemed to be personal by the Company shall not be
reimbursed by the Company and are the sole responsibility of the Executive.
(f) Insurance. The Company will maintain a policy of
insurance for directors' and officers' liability with such coverage as may be
determined by the Board. Executive will be included within that policy of
insurance with the premiums paid by the Company.
(g) Deduction and Withholding. All compensation and other
benefits to or on behalf of the Executive pursuant to this Agreement shall be
subject to such deductions and withholding as may be agreed to by the Executive
or required by applicable law, rule or regulation.
4. TERMINATION.
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(a) Termination by Executive. The Executive may terminate
his employment with the Company at any time, for any reason, with or without
cause.
(b) Termination by the Company. The Company shall have
the right to terminate the Executive's employment at any time, for any reason,
without or without cause.
(c) Termination due to Death or Disability. The
Executive's employment pursuant to this Agreement shall terminate automatically
on the date of the Executive's death or disability. For purposes of this
Agreement, the Executive shall be deemed to be disabled (as determined in good
faith by the Board), if for a period of at least four (4) consecutive months he
is unable to substantially perform the essential functions of his position with
the Company with or without reasonable accommodation. The Executive and the
Company acknowledge that Executive's ability to perform the duties specified in
Section 1 is of the essence of this Agreement. If the Executive's employment
terminates by reason of his disability, his employment termination date shall be
deemed to be the last day of the four (4) month period described in the
immediately preceding paragraph.
5. TERMINATION PAYMENTS. In the event of termination of the
employment of Executive, all compensation and benefits set forth in this
Agreement shall terminate, except as specifically provided in this Section 5.
(a) Termination by the Company With Cause. Upon
termination by the Company With Cause (as defined below), the Company shall pay
Executive any unpaid annual base salary, earned but unused vacation, and
incentive compensation due (if any), for services already performed to the
effective date of termination of employment, subject to normal withholding or
other deductions.
(b) Termination by the Company Without Cause. Upon
termination by the Company Without Cause (as defined below), the Company shall
pay Executive any unpaid annual base salary, earned but unused vacation, and
incentive compensation due (if any) for services already performed to the
effective date of termination of employment, subject to normal withholding or
other deductions. In addition, the Company shall pay Executive his base salary
for a period of six (6) months in accordance with the Company's regular payroll
practices then in effect, subject to normal withholding and other deductions.
The Company will issue and file appropriate tax documents in connection with any
severance payments. Payment of the above-described severance compensation and
benefits is conditioned on Executive executing a full mutual release of all
claims relating to his employment with or termination from the Company in a form
provided by the Company. Executive will have the duty to use reasonable effects
to mitigate the costs to the Company by attempting to obtain other employment
within a reasonable time after termination. Executive's compensation from such
other employment will be credited against the amounts due from the Company to
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the extent the combined compensation from Executive's new position and Company's
payments under this Section 5(b) would otherwise exceed Executive's base salary
with the Company at the effective date of termination. Executive has a duty to
notify the Company when he obtains new employment.
(c) Termination by Executive Without Good Reason. Upon
termination by Executive Without Good Reason (as defined below). Executive shall
receive the compensation set forth in Section 5(a) and shall not be entitled to
any other compensation, benefits or payments.
(d) Termination by Executive With Good Reason. Upon
termination by Executive With Good Reason (as defined below), Executive shall
receive the compensation set forth in Section 5(b) and shall not be entitled to
any other compensation, benefits or payments.
(e) Termination as a Result of Death or Disability. In
the event of termination of Executive's employment pursuant to Section 4(c),
Executive or his estate shall be paid the compensation set forth in Section 5(a)
and shall not be entitled to any other compensation, benefits or payments.
(f) Definition of "Cause". "Cause" as used in this
Agreement shall mean a determination by the Board of Directors that one or more
of the following has occurred: (i) willful misconduct, or dishonesty in the
performance of Executive's duties that results in a material adverse effect on
the Company; (ii) conviction of Executive of a felony involving an act of
dishonesty, moral turpitude, deceit or fraud; or (iii) current use by the
Executive of illegal substances.
(g) Definition of "Good Reason". "Good Reason" as used in
this Agreement shall mean the occurrence of any of the following events, without
the consent of the Executive: (i) a demotion or other material reduction in the
nature and status of Executive's responsibilities; or (ii) a material reduction
in Executive's annual base salary or any failure by the Company to satisfy its
duty to compensate the Executive as required under this Agreement.
6. INTELLECTUAL PROPERTY. The Company shall own all right, title
and interest (including patent rights, copyrights, trade secret rights, mask
work rights, sui generis database rights and all other intellectual rights of
any sort throughout the world) relating to any and all inventions (whether or
not patented or patentable), discoveries, works of authorship, mask works,
designs, know-how, ideas and information made or conceived or reduced to
practice, in whole or in part, by Executive during the Term (collectively
"Inventions") to and only to the fullest extent allowed by RCW 49.44.140, which
provides that this Agreement does not apply to any such inventions, discoveries
and any patent, patent application, copyright or other intellectual property
right for which no equipment, supplies, facility or trade secret information of
the Company was used and that was
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developed entirely on the Executive's own time, unless (a) the inventions,
discoveries and any patent, patent application, copyright or other intellectual
property right relates (i) directly to the business of the Company; or (ii) to
the Company's actual or demonstrably anticipated research or development; or (b)
such inventions, discoveries and any patent, patent application, copyright or
other intellectual property right results from any work performed by the
Executive for the Company. Executive will disclose all Inventions to the Company
so the Company can make an independent assessment about the application of RCW
49.44.140. Executive shall assist the Company, at the Company's expense, to
executive such documents and perform such other acts as the Company deems
necessary or appropriate for the Company to obtain patents or copyrights on such
Inventions and to assign to the Company or its designee such Inventions and any
patent and copyright applications and patents and copyrights relating thereto.
Executive agrees to disclose any Inventions created by the Executive prior to
Executive's employment with the Company. If Executive uses or discloses
Executive's own (except where excluded pursuant to this Section) or any third
party's Inventions when acting within the scope of Executive's employment, the
Company will have, and Executive grants the Company, a perpetual, irrevocable,
worldwide, royalty-free, non-exclusive, sublicensable right and license to
exploit and exercise all such Inventions rights. To the extent allowed by law,
this Section includes all "moral rights" "artist's rights" or the like. To the
extent that Executive retains any such moral or artist's rights Executive hereby
ratifies and consents to any action that may be taken with respect to such
rights by or authorized by the Company and agrees not to asserts any such rights
with respect thereto. Executive will confirm any such ratifications and consents
from time to time as requested by the Company.
7. PRIVACY. Executive recognizes and agrees that Executive has no
expectation of privacy with respect to the Company's telecommunications,
networking or information processing systems (including, but not limited to,
stored computer files, email messages and voice mail) and that Executive's
activity and any files or messages on or using any of these Company-owned
systems may be monitored and/or copied at any time without notice.
8. CONFIDENTIALITY OF INFORMATION.
(a) Scope. During the term of his employment with the
Company and thereafter the Executive shall not at any time, whether during or
after his employment by the Company, take or use, or otherwise disclose to
anyone, any Confidential Information, except as necessary to perform his duties
hereunder, as permitted by the Chief Executive Officer of the Company, or as
required by any court or governmental agency.
(b) Definition. "Confidential Information" shall mean any
and all trade secrets, ideas, suggestions, innovations, conceptions,
discoveries, strategies, improvements, technological developments, methods,
processes, specifications,
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formulae, compositions, techniques, systems, computer software and programs,
notes, memoranda, work sheets, lists of actual or potential customers and
suppliers, pricing information and policies, works of authorship, products,
data, and information in any form, which concern or relate to any aspect of the
actual or contemplated business of the Company and which are stamped
"confidential" or are otherwise treated as confidential by the Company, except
for such items as the Executive can prove through clear and convincing evidence
were in the public domain, being publicly and openly known, prior to the date of
commencement of the Executive's employment by the Company or, subsequent to such
date, became part of the public domain, being publicly and openly known, through
lawful and proper means.
(c) Restrictions. The Executive agrees that the
restrictions set forth in this paragraph are reasonable and necessary to protect
the Company.
9. NONCOMPETITION AND NONSOLICITATION.
(a) Scope. During the Term and for a period of two (2)
years from the effective date of termination of employment, the Executive shall
not, directly or indirectly, as principal, agent, employee, officer,
shareholder, consultant or otherwise, engage in any business that competes
directly with the Company, and will not solicit or aid in soliciting, endeavor
to obtain as a customer or client, accept sales, marketing, financial, or
consulting business from, or perform sales, marketing, consulting or related
business for any person, firm, corporation, association or other entity: (i)
that is or was a Company customer for whom Executive performed any services for
with whom Executive had maintained substantial business contacts at any time
during the Term; or (ii) whose business Executive solicited, either alone or in
conjunction with others, on behalf of the Company or any of its subsidiaries
during the Term.
(b) Consideration. Executive acknowledges that his
employment with the Company, his receipt of Confidential Information and
information about Inventions from the Company and his training with the Company
all constitute consideration for the agreements in this Section.
(c) Reform. If a court of competent jurisdiction should
declare any or all of this Agreement unenforceable because of any unreasonable
restriction of duration and/or geographical area in subparagraph 9(a), then such
court shall have the express authority to reform subparagraph 9(a) to provide
for reasonable restrictions and/or to grant the Company such other relief, at
law or in equity, as are reasonably necessary to protect the interests of the
Company.
10. NONSOLICITATION OF EMPLOYEES. During the Term and for a period
of two (2) years from the effective date of termination of employment, the
Executive shall not, directly or indirectly, employ, solicit or induce or
attempt to influence any employee of the Company or any affiliate of the Company
to terminate his or her employment with
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the Company or any affiliate of the Company or to work for the Executive or any
other person or entity.
11. RESPONSIBILITIES UPON TERMINATION. Upon the termination of his
employment by the Company for whatever reason and irrespective of whether or not
such termination is voluntary on his part:, the Executive shall promptly deliver
to the Company all of its data, designs, drawings, plans, manuals, notes,
memoranda, work sheets, specifications, customer lists, supplier lists, pricing
information, computer programs, and all other materials which are or have become
the property of the Company and all copies or reproductions of any such.
12. SEPARATE AGREEMENTS. The covenants of the Executive contained
in paragraphs 6, 8, 9, 10 and 11 of this Agreement shall be construed as
separate agreements independent of any other agreement, claim or cause of action
of the Executive against the Company, whether predicated on this Agreement or
otherwise, and no other agreement, claim or cause of action asserted by the
Executive shall constitute a defense to the enforcement by the Company of these
covenants. The covenants contained in this Agreement are necessary to protect
the legitimate business interests of the Company. Damages for the violation of
any such covenants will not give full and sufficient relief to the Company. In
the event of any violation of any such covenants, the Company shall be entitled
(i) to injunctive relief against the continued violation thereof, and (ii) to
its actual damages. In any dispute concerning whether or not the Executive has
violated any of such covenants, the prevailing party shall be entitled to
payment from the other party for any and all expenses, including attorneys' fees
and expenses, incurred by the prevailing party in connection with such dispute.
13. GENERAL.
(a) Survival. The covenants of the Executive contained in
paragraphs 6, 8, 9, 10 and 11 of the Agreement, shall survive the term of the
Executive's employment under this Agreement.
(b) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which, taken together, shall constitute one instrument.
(c) Headings. All headings used in this Agreement are for
convenience only and shall not in any way affect the construction of or be taken
into consideration interpreting this Agreement.
(d) Notices. All notices, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time the same is delivered in person or is
mailed by registered or certified mail addressed as follows:
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To the Company: Xxxxx Xxxxxx, President and CEO
------------------------------------------
Helix BioMedix, Inc., 00000 00xx Xxx. XX,
Xxxxxxx, XX 00000
To the Executive: Xxxxx Xxxxxx
------------------------------------------
00000 X.X. 000xx Xxxxx
Xxxxxxxxxxx, XX 00000
Either party wishing to change the address to which notices, requests, demands
and other communications under this Agreement shall be sent shall give written
notice of such change to the other party.
(e) Dispute Resolution. Any controversies or claims
arising out of or relating to this Agreement shall be fully and finally settled
by arbitration in the city of Seattle, Washington in accordance with the
Employment Arbitration Rules of the American Arbitration Association then in
effect ("the AAA Rules"), conducted by one arbitrator either mutually agreed
upon by the Company and Executive or chosen in accordance with the AAA Rules,
except that the parties shall have any right to discovery as would be permitted
by the Federal Rules of Civil Procedure for a period of 90 days following the
commencement of such arbitration, and the arbitrator shall resolve any dispute
that arises in connection with such discovery. Judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction. In any such
dispute, the prevailing party shall be entitled to its or his attorneys' fees
and costs, in addition to any other relief that may be awarded.
(f) Governing Law. This Agreement shall be governed by
the laws of the State of Washington without regard to any rules governing
conflicts of laws.
(g) Waiver. The waiver or failure of either party to
insist in any one or more instances upon performance of any term, covenant or
condition of this Agreement shall not be construed as a waiver of future
performance of any such term, covenant or condition, but the obligations of
either party with respect to such term, covenant or condition shall continue in
full force and effect. No course of dealing shall be implied or arise from any
waiver or series of waivers of any right or remedy hereunder.
(h) Severability. Each provision of this Agreement shall
be interpreted where possible in a manner necessary to sustain its legality and
enforceability. If any provision of this Agreement shall be unenforceable or
invalid under applicable law, such provision shall be limited to the minimum
extent necessary to render the same enforceable or valid. The unenforceability
of any provision of this Agreement in a specific situation, or the
unenforceability of any portion of any provision of this Agreement in a specific
situation, shall not affect the enforceability of (i) that provision or
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portion of provision in another situation or (ii) the other provisions or
portions of provisions of this Agreement if such other provisions or the
remaining portions could then continue to conform with the purposes of this
Agreement and the terms and requirements of applicable law.
(i) Assignment. Except as may be provided under Section 3
above, this Agreement is personal to Executive and shall not be assignable by
Executive. If the Company changes its name or changes to another corporate form,
this Agreement will remain in effect between the Executive and the Company's
successor. All the terms and provisions of this Agreement shall be binding on
and shall insure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.
(j) Amendments. This Agreement shall not be amended
orally, but only by a written instrument executed by each party to this
Agreement.
(k) Entire Agreement. This Agreement, including documents
referenced herein, and any amendments or extensions to those agreements embodies
the entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior oral and written agreements and
understandings between the Company and the Executive with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HELIX BIOMEDIX, INC.
By:
/s/___________________________________
R. Xxxxxxx Xxxxxx
President and CEO
EXECUTIVE
/s/ _______________________________________
XXXXX XXXXXX
