Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is made effective as of the
17th day of May, 2000, by and between Photogen Technologies, Inc., a Nevada
corporation ("COMPANY"), and Xxxxx X. Xxxxxxxx, Ph.D. ("TJW").
RECITALS
A. TJW has experience as president and chief operating officer of a
public company in the biotechnology and pharmaceutical field and other
experience relevant to acting as the chief executive officer of the Company;
and
B. The Company desires to employ TJW as President and Chief
Executive Officer of the Company and TJW agrees to serve in that capacity
subject to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. The following terms have the meanings set
forth below:
(a) "COMPETITIVE BUSINESS" means engaging in the
management, research, development, sale, lease, marketing, financing or
distribution of technology, products or services competitive with the
Company's products or services in the Field anywhere in the world.
(b) "CONFIDENTIAL INFORMATION" means, subject to 1(b)(ii)
below, any and all non-public information that has or could have value or
utility to the Company or any of its affiliates, whether or not reduced to
written or other tangible form and all copies thereof, relating to the
Company's or its affiliates' private or proprietary matters, confidential
matters or trade secrets (including information developed by or at the
direction of TJW). For purposes of illustration, Confidential Information may
be contained in various media, including, without limitation, records of
research data and observations, records and results of preclinical and
clinical trials, patent applications, regulatory filings, computer programs,
manuals, plans, drawings, designs, specifications, supply and customer lists,
internal financial data and other documents and records of the Company or its
affiliates, whether or not labeled or identified as "Confidential."
(i) Confidential Information includes, but is not limited to,
the following: (A) the Company's Technical Information; (B) except to
the extent publicly disclosed without any fault directly or indirectly
of TJW, information relating to the Company's Patents; (C) business
information, such as information concerning any products,
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customers, suppliers, production, developments, costs, purchasing,
pricing, profits, markets, sales, accounts, customers, financing,
acquisitions, strategic alliances or collaborations, expansions; and
(D) other information relating to the Company's or any of its
affiliates' business practices, strategies or policies.
(ii) Confidential Information does not include information
that is or becomes generally known to the public or in the industry
without any fault directly or indirectly of TJW, or information in
which the Company ceases to have a legally protectable interest.
(c) "DEVELOPMENTS" means any and all Patents and Technical
Information that during the Term of this Agreement and for twelve (12) months
after termination (regardless of the reason for termination), TJW conceives,
reduces to practice, discovers or makes, alone or with others (i) by use of
the Company's equipment, facilities, Confidential Information, Technical
Information, Research Materials or other intellectual property, through a
research project sponsored or funded by the Company or otherwise; or (ii)
which are directly or indirectly related to or result from TJW Duties.
(d) "FIELD" means the use of electromagnetic energy
(including light generated by ultra fast lasers or other sources, x-rays and
other sources of radiation), alone or in combination with photoactive
compounds or targeting agents, to treat, diagnose or image human or animal
tissue and/or disease.
(e) "PATENTS" means patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof.
(f) "RESEARCH MATERIALS" means and includes, without
limitation, photoactive compounds, targeting agents, lasers, proprietary
software and other materials provided to or used by any of the Company's
employees, agents or consultants.
(g) "TECHNICAL INFORMATION" means technical information or
other intellectual property (whether or not subject to patent or other
registration with any governmental office), including research and
development, methods, trade secrets, know-how, formulas, compositions,
protocols, processes and techniques, discoveries, machines, inventions,
ideas, computer programs (including software and data used in all such
programs), drawings, and specifications, including information relating to
Patents.
2. TJW DUTIES.
(a) During the Term of this Agreement, TJW shall use his
best efforts and devote his full working time and attention to competently
and faithfully promote the Company's best interests, develop the Company's
products and perform all duties of a chief executive officer, and he shall
accept all reasonable responsibilities incidental to such position, and he
shall
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perform such other reasonable duties as may be set forth in the Bylaws for
the chief executive officer or assigned to him by the Board of Directors of
the Company, to which he shall report regularly ("TJW DUTIES").
(b) TJW may perform the TJW Duties from his home base in
the Philadelphia area, provided that TJW shall travel from time to the
Company's Boston, Massachusetts and Knoxville, Tennessee offices and
elsewhere as may be necessary to properly and fully perform his duties.
(c) The Company will recommend TJW's election to the Board
of Directors and appointment as President of the Company as soon as
practicable after the effectiveness of this Agreement.
3. COMPENSATION.
(a) Company shall pay TJW an annual base salary of
$265,000.00, payable in monthly installments of $22,083.33, in accordance
with normal Company payroll procedures and subject to deductions and
withholdings required by law or by agreement with TJW ("BASE SALARY"). The
Base Salary shall be reviewed annually by the Board of Directors or an
appropriate committee of the Board for increase based on performance in the
sole discretion of the Board of Directors or an appropriate committee of the
Board; provided, however, that the Base Salary shall be increased on each
annual anniversary date of this Agreement to reflect any increase in the
Consumer Price Index published by the United States Department of Labor for
the Philadelphia area for the previous year. The Base Salary shall not be
lowered from the previous year during the Term. Company will reimburse TJW
for reasonable and necessary business expenses in accordance with the
Company's policies.
(b) The Board of Directors or an appropriate committee of
the Board shall review TJW's performance each year for purposes of paying a
bonus, which determination shall be in the sole discretion of the Board of
Directors or an appropriate committee; provided, however, that a bonus shall
be payable at the first anniversary of this Agreement for the prior year's
service in the amount of at least $66,250.00.
(c) Concurrently with the execution of this Agreement,
Company and TJW will execute an Incentive Stock Option Award Agreement
("Award Agreement") providing for the Company to grant TJW a total of
3,000,000 options to acquire Company common stock, pursuant to Company's
Senior Executive Long Term Incentive Compensation Plan. The options will vest
in accordance with and in all other respects be subject to the provisions of
the Award Agreement and the Plan, copies of which are attached as Exhibits A
and B hereto.
(d) TJW will be eligible to participate in and receive
benefits provided under Company's insurance and benefit plans as set forth on
Exhibit C, in accordance with their respective provisions; provided, however,
that subject to a reasonable premium, TJW shall be
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provided term insurance by the Company at its cost on his life equal to two
times his salary on the effective date and each anniversary thereof during the
Term.
(e) The following terms are defined for purposes of this
paragraph:
(i) "Business Combination" means a transaction described in
Sections 2(g)(i) or 2(g)(iii) of the Senior Executive Long Term
Incentive Compensation Plan, including clauses A, B and C of Section
2(g)(iii).
(ii) "Option Value" means the spread between the option
exercise price per share and the fair market value per share of the
Company's Common Stock subject to options pursuant to TJW's Award
Agreement as of the date of the closing of a Business Combination,
multiplied by the number of shares subject to vested options pursuant
to the Award Agreement.
If the Company engages in a Business Combination approved
by the Board of Directors during the Term or within 24 months after the
termination of the Term, the Company will pay TJW a "Special Bonus" equal to
0.7% of the aggregate consideration paid by the buyer if any Business
Combination closes during the first year of the Agreement, 1.4% of such
consideration if the Business Combination closes during the second year of
the Agreement, or 2.1% of such consideration if the Business Combination
closes during the third or subsequent year of the Agreement or within 24
months after the termination of the Term; provided, however, that the amount
of the Special Bonus shall not exceed $10,000,000 and the Special Bonus shall
be reduced dollar for dollar by the Option Value. Notwithstanding anything to
the contrary, under no circumstances will any Special Bonus be due or payable
if the Option Value equals or exceeds $10,000,000 as of the closing of the
Business Combination. The Special Bonus will be payable to TJW in cash in a
lump sum by the end of the day of the closing of a Business Combination
pursuant to the terms and conditions of this paragraph. The fair market value
of Common Stock subject to TJW's Award Agreement and the value of any
non-cash consideration received in a Business Combination shall be determined
by the Company's Board of Directors in good faith based upon the opinion or
advice of independent outside experts. TJW shall not be entitled to vote as a
director (but he may participate in Board meetings and may be counted towards
a quorum) in connection with any Business Combination pursuant to which he
would receive a Special Bonus.
4. COVENANTS AND REPRESENTATIONS. TJW represents and warrants to, and
covenants with, the Company as follows:
(a) During the Term, TJW will render his services only to the
Company and will not without the written consent of the Board of Directors enter
into any other agreement, arrangement, understanding, or other relationship
pursuant to which TJW is obligated to render advice and services or to devote
his time and attention during working hours to any third party.
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(b) TJW is under no contractual or other obligation or
restriction which is inconsistent with TJW's obligations under this Agreement
or the performance of the TJW Services. TJW's pre-existing relationships with
governmental, commercial, educational or other institutions are listed in
Exhibit D. TJW has terminated all employment, consulting and similar
affiliations and relationships with the persons or entities listed on Exhibit
D.
(c) Except as described in Exhibit E hereto, the
performance of the TJW Duties does not and will not breach any agreement
which obligates TJW to keep in confidence any confidential or proprietary
information of any third party or to refrain from competing, directly or
indirectly, with the business of any third party. TJW shall not disclose to
Company or use in providing TJW Duties hereunder any confidential or
proprietary information of any third party. All Developments of TJW will be
free and clear of any valid claim or encumbrance by any third party. TJW owns
no items of intellectual property in the Field that are not subject to
paragraph 5, below
(d) In performing the TJW Duties, TJW shall comply with all
legal and regulatory requirements established by the Securities and Exchange
Commission, Food & Drug Administration and all other applicable governmental
authorities.
5. OWNERSHIP OF DEVELOPMENTS
(a) TJW hereby assigns and transfers to the Company all of
TJW's right, title and interest in and to all Developments for the Company's
ownership and use without restriction or additional compensation. TJW agrees
to sign and deliver to the Company (during and after the Term) other
documents the Company considers necessary or desirable to evidence its
ownership of Developments. All copyrightable works that are Developments,
whether or not works made for hire (as defined in 17 U.S.C. Section 101),
shall be owned by the Company and it may file and own the same as the author
throughout the world. If the Company is unable after reasonable efforts to
secure TJW's signature on any document necessary or desirable to apply for,
prosecute, obtain, or enforce any patent, trademark, service xxxx, copyright,
or other right or protection relating to any Development, TJW hereby
irrevocably designates and appoints the Company and each of its duly
authorized officers and agents, as TJW's agent and attorney-in-fact to act
for and in TJW's behalf, name and stead to execute and file any such document
and to do all other lawfully permitted acts to further the prosecution,
issuance, and enforcement of patents, trademarks, service marks, copyrights,
or other rights or protections with the same force and effect as if
personally executed and delivered by TJW. TJW agrees that this power of
attorney is irrevocable and is coupled with an interest and thereby survives
TJW's death or disability.
(b) TJW shall keep and maintain complete written records of
all Developments and Technical Information done or carried out by TJW. TJW
agrees to promptly and fully disclose in writing to the Company's Board of
Directors, all Developments and Technical Information. These records shall be
works made for hire, and shall remain the exclusive property of Company. TJW
may keep one copy of these records in TJW's files during
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the Term of this Agreement solely for reference purposes; however, all
originals of such records shall be turned over to the Company promptly and
regularly and no less frequently than monthly.
6. CONFIDENTIALITY.
(a) The Company has developed and will develop Confidential
Information over a substantial period of time and at substantial expense. The
Confidential Information is of great importance to the Company's business.
During the Term, TJW may develop, become aware of, or have access to the
Confidential Information. TJW acknowledges the Company is and shall at all
times remain the sole owner of the Confidential Information.
(b) During the Term and at all times thereafter, TJW will
hold in trust, keep confidential and not disclose, directly or indirectly, to
any third parties or make any use of Confidential Information for any purpose
except for the benefit of the Company in the performance of the TJW Duties,
and then only in a manner consistent with the Company's instructions. Upon
termination of the Term (regardless of the reason for termination), TJW will
immediately return to the Company all tangible Confidential Information and
any other material made or derived from Confidential Information, including
information stored in electronic format and handwritten notes, which are in
TJW's possession or control or which TJW delivered to others. TJW may
disclose the Confidential Information if required by law to do so or by
subpoena or other order of a court of competent jurisdiction, provided that
in either case, reasonable advance notice is given to the Company before any
such disclosure is made and TJW cooperates with the Company to obtain
confidential protection.
(c) During the Term and thereafter, TJW shall exercise all
commercially reasonable precautions to physically protect the integrity and
confidentiality of the Confidential Information. Except to the extent
necessary to perform his duties, TJW will not remove any Confidential
Information or copies thereof from the Company's premises or the other places
TJW is authorized to perform the TJW Duties.
(d) TJW will comply with Company's policies concerning
publication with respect to his work for the Company.
7. NONCOMPETITION; NONSOLICITATION. During the Term, and for 24
months after termination of the Term (regardless of the reason for
termination), TJW agrees not to, directly or indirectly, (i) own (except as
owner of 2% or less of stock of a publicly registered and traded entity),
manage, control, participate in, consult with, be employed by, render
services for, any person or entity engaged in a Competitive Business or in
any manner or in any capacity engage in any Competitive Business, (ii)
solicit, induce or attempt to influence any other person or entity to engage
in any Competitive Business or to curtail or cease any business or employment
relationship with the Company, its affiliates, employees or independent
contractors, or (iii) disparage the Company, its affiliates, employees,
independent contractors or its or their services or products.
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8. TERM AND TERMINATION.
(a) Unless terminated earlier pursuant to paragraph 8(b)
below, this Agreement shall be in effect for an initial term of three years
beginning on the effective date hereof (the "INITIAL TERM"). This Agreement
may be renewed for successive renewal terms of one year (the "RENEWAL TERMS")
upon the mutual written agreement of the parties prior to the beginning of
any Renewal Term; provided, however, if the Company declines to renew and TJW
desires to renew on substantially identical terms, TJW shall be provided one
year's severance; further, provided, that if the Company desires to renew on
substantially identical terms and TJW does not, no severance shall be
provided to TJW. The Initial Term and any Subsequent Renewal Terms are
collectively referred to as the "TERM."
(b) This Agreement and TJW's employment by the Company may
be terminated before the expiration of any Term as follows:
(i) By the Company in the following events (terminations under
(1) and (2) below are deemed "for cause"):
(1) TJW commits a material breach of this
Agreement where such breach, if curable, is
not remedied to the Company's reasonable
satisfaction within thirty (30) days after
written notice to TJW (and termination shall
be effective as of the end of such 30-day
period); or
(2) TJW is convicted (or pleads guilty or no
contest) for committing an act of fraud,
embezzlement, theft or another act
constituting a felony or moral turpitude
(and termination shall be effective upon
written notice to TJW); or
(3) TJW dies or becomes mentally or physically
disabled such that TJW cannot, in the
opinion of an independent physician selected
by the Company, perform his duties (with
reasonable accommodation to the extent
required by law) for a period of the next 12
consecutive months (and termination shall be
effective on the date TJW dies or 30 days
after the Company gives written notice that
the Company has determined he is disabled
under the foregoing criteria);
in which case: (A) the Company shall pay TJW his Base
Salary and any other amounts required by applicable
law to be paid through the effective date of
termination but the Company shall have no other
obligations under this Agreement as of the effective
date of the termination, and (B) the
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Company shall permit TJW or his beneficiary to
exercise vested options to acquire Company stock in
accordance with and subject to the Award
Agreement.
(ii) By TJW, provided TJW shall give the Company at least
ninety (90) days prior written notice thereof (and termination shall be
effective as of the end of such 90-day or longer period); in which case
(A) the Company shall pay TJW his Base Salary and any other amounts
required by applicable law to be paid through the effective date of
termination but the Company shall have no other obligations under this
Agreement as of the effective date of the termination, and (B) the
Company shall permit TJW to exercise vested options to acquire Company
stock in accordance with and subject to the Award Agreement.
(iii) By the Company at any time and for any reason other than
as set forth in paragraphs 8(b)(i)(1), 8(b)(i)(2) or 8(b)(i)(3), in
which case the Company shall pay TJW a severance payment equal to his
then current Base Salary if so terminated in his first year of
employment: 1.5 times his then current Base Salary if so terminated in
his second year of employment; and 2 times his then current Base Salary
if so terminated in his third year of employment and thereafter.
Further, all granted options shall vest and be available for exercise
during the remaining life of the options. A significant reduction in
TJW Duties or his reporting responsibilities to the Board of Directors
shall be deemed a termination for reasons other than as set forth in
paragraphs 8(b)(i)(1), 8(b)(i)(2) or 8(b)(i)(3).
(c) Notwithstanding anything to the contrary, the
obligations under this Agreement which by their terms survive termination,
including, without limitation, the applicable Developments, Confidentiality,
Noncompetition, and Nonsolicitation provisions of this Agreement as set forth
in paragraphs 5, 6 and 7 hereof, shall survive termination; and the
representations and warranties, including without limitation the provisions
of paragraph 4 hereof, shall survive termination. Upon termination, TJW shall
return immediately to the Company all property belonging to the Company.
9. MISCELLANEOUS.
(a) This Agreement and the rights and obligations hereunder
may not be assigned, delegated or transferred by TJW without the prior
written consent of the Company. The Company may assign this Agreement to an
affiliate of the Company or to an acquirer or successor in connection with
the merger, consolidation, or sale of all or substantially all of its assets
or business, and this Agreement shall inure to the benefit of the Company's
assignee; provided, however, that the Company shall continue to be obligated
hereunder.
(b) This Agreement may not be amended or modified, or any
provision hereof waived, except by a written instrument duly signed by both
parties contemporaneously or after the date of this Agreement. This Agreement
(together with its exhibits) constitutes the entire
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agreement between the parties concerning the subject matter hereof and
thereof, and supersedes all prior written or oral negotiations,
representations and agreements concerning such subject matter which prior
matters shall not be binding on the parties.
(c) TJW acknowledges that a breach of paragraphs 5, 6 or 7
would cause the Company and its affiliates irreparable harm. Accordingly, in
the event of a breach or threatened breach by TJW of any of the provisions of
paragraphs 5, 6 or 7, TJW agrees that the Company shall be entitled to seek
injunctive relief restraining TJW and any individual or entity from
participating in such breach or threatened breach or an order compelling
compliance with this Agreement. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available at law or
in equity for any breach or threatened breach of this Agreement.
(d) Any waiver of a breach of any provision of this
Agreement shall not operate as a waiver of any other breach of such provision
or any other provision, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision.
(e) If any provision of this Agreement is deemed in a final
order by a court of competent jurisdiction to be unenforceable or invalid,
the enforceability and validity of all other provisions shall not be affected
and that court shall modify the unenforceable or invalid provision to the
extent necessary to render it enforceable and valid and that provision shall
be enforced as modified. TJW agrees that the time period and scope of the
covenants in paragraphs 5, 6 and 7 of this Agreement are reasonable and
appropriate under the circumstances of the Company's business and TJW's
executive-level position with the Company.
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IN WITNESS WHEREOF, TJW and the President of the Company have signed
this Agreement as of the Effective Date.
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COMPANY TJW
Photogen Technologies, Inc.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------- ------------------------------
Xxxxxxx X. Xxxxx, Ph.D., President Xxxxx X. Xxxxxxxx, Ph.D.
Address: 0000 Xxx Xxxxx Xxxxxxx Address:
Suite B --------------------------------
Xxxxxxxxx, XX 00000 --------------------------------
Telephone: 423/000-0000
Telecopier: 423/769-4013 Telephone:
E-mail: xxxxx@xxxxxxxx.xxx ----------------------
Telecopier:
---------------------
E-mail:
-------------------------
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EXHIBITS
A Award Agreement
B Senior Executive Long Term Incentive Compensation Plan
C Benefits
D TJW's Preexisting Relationships
E Exceptions to TJW's Duties
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EXHIBIT C
Photogen Technologies, Inc. and Subsidiaries
Employee Benefit Programs
As of April 30, 2000, employee benefits offered are:
(1) Participation in the company sponsored 401(k) plan. There is no
company matching. The plan is with Transamerica Asset Management
and employees may begin participating immediately upon employment.
Employee salary reductions are limited to the lessor of 15% of
compensation (by the plan) and $10,500 annually (by law).
(2) Coverage by company paid group medical coverage. This coverage is
currently with Principal Mutual Insurance, but the company is
constantly reviewing and comparing coverage with other plans.
Current coverage includes not only medical coverage but also dental
and life insurance of $25,000.
(3) Paid vacation for 4 weeks.
EXHIBIT D
TJW'S PRE-EXISTING RELATIONSHIPS
1. Naval Medical Research Institute Employee
2. Magainin Pharmaceutical Company Employee
3. Panax/InKine Pharmaceutical Company Employee
4. Demegen Consultant
EXHIBIT E
EXCEPTIONS TO PERFORMANCE OF TJW'S DUTIES
1. Through 2003, TJW is subject to a contractual obligation not to solicit
employees from some or all of the following entities:
Naval Medical Research Institute, Magainin Pharmaceutical Company,
Panax/InKine Pharmaceutical Company, Demegen
2. TJW is subject to confidentiality agreements with InKine Pharmaceutical
Company and Demegen.
3. Through 2003, TJW is subject to non-competition restrictions in some or
all of the following areas:
Purgatives and Laxatives; certain inflammatory mediators as they relate
to Inflammatory Bowel Disease; Idiopathic Thrombocytapenia (ITP);
Thrombospondin Technology; certain peptide antibiotics
