EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 1st day of April 2004 (the
"Agreement"), between Chemokine Therapeutics Corp. a Delaware Corporation and
its wholly owned subsidiary Chemokine Therapeutics (BC) Corp. a BC Corporation
(collectively the "Company"), and Xx. Xxxxxx Xxxxxx (the "Employee or the
Executive").
RECITALS
A. Employee is engaged in the business (the "Business" or the
"Employee's Business") of research and development of therapeutic
products based on the biology of chemokines.
B. Company desires to engage the services of Employee as its Chairman,
President and Chief Executive Officer ("CEO") and Employee is
willing to agree to these terms.
C. Employee desires to obtain the compensation and, bonus opportunity
and other benefits provided for in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties agree as follows:
1. ENGAGEMENT. The Company hereby engages the Executive, and the
Executive agrees to be engaged as Chairman, President and CEO.
Changes may be made from time to time by the Company in its sole
discretion to the duties, reporting relationships and title of
Executive, in which will require the Executive' full consent.
Executive will devote full time and attention to achieving the
purposes and discharging the responsibilities as may be described
from time to time by the Board of Directors of the Company.
Executive will comply with all rules, policies and procedures of
Company as modified from time to time, including without limitation,
rules and procedures set forth in any Executive handbook,
supervisor's manuals and operating manuals as may be adopted by the
Company from time to time. Executive will perform all of Executive's
responsibilities and will ensure that his work are in compliance
with applicable laws.
2. TERM OF ENGAGEMENT. The term of engagement will be for the five-year
period commencing on April 1, 2004 and ending April 01, 2009 ("the
Term"), unless sooner terminated in accordance with the terms and
conditions of this Agreement. Thereafter, unless terminated in
writing, Executive's engagement under this Agreement will
automatically renew for an additional term, subject to the terms and
conditions of this
1
Agreement. Notwithstanding those periods, this Agreement will remain
enforceable and in effect until all the parties' rights and
obligations have been satisfied, terminated or have expired, as
provided herein. For the purpose of this agreement each term is five
(5) years.
3. COMPENSATION. For the duration of Executive's engagement hereunder,
the Executive will be entitled to compensation, which will be
computed and paid pursuant to the following subparagraphs.
3.1 CASH COMPENSATION. Executive will be financially compensated
by way of monthly salary. The Company agrees to pay Executive
Two Hundred Fifty Thousand Dollars ($250,000) per year until
the termination of this Agreement. Executive's financial
compensation could be adjusted from time to time as per other
senior employees of the Company. At no time the base
compensation package could be reduced regardless of the change
of Executive's title and duties. The Executive has the right
to choose the method of cash compensation at its sole
discretion.
3.2 STOCK OPTIONS. Executive shall be entitled to participate in
any stock option, stock bonus, phantom stock right, or other
such plans or arrangements, which may exist during the term of
his engagement, provided that Executive's entitlement will
depends on the terms of any such arrangement or plan. At no
time the Executive's stock option package can be less than the
highest senior employees of the Company, regardless of the
Executive's change of title and duties.
4. OTHER BENEFITS; BUSINESS EXPENSES.
4.1 CERTAIN BENEFITS. Executive will be eligible to participate in
all Executive benefit programs established by Company that are
applicable to management personnel on his choice, on a basis
commensurate with Executive's position and in accordance with
Company's policies from time to time, but nothing herein shall
require the adoption or maintenance of any such plan.
4.2 VACATIONS, HOLIDAYS AND EXPENSES. For the duration of
Executive's engagement hereunder, Executive will be provided
such holidays, sick leaves and vacation as Company makes
available to its management level Executives generally.
Company will reimburse Executive in accordance with company
policies and procedures for reasonable expenses necessarily
incurred in the performance of duties hereunder against
appropriate receipts and vouchers indicating the specific
business purpose for each such expenditure.
2
5. TERMINATION OR DISCHARGE BY COMPANY.
5.1 FOR CAUSE. Company will have the right to immediately
terminate Executive's services and this Agreement for cause.
"Cause" means: any material breach of this Agreement by
Executive, including, without limitation, breach of
Executive's covenants in Sections 8 and 9 or conviction of a
felony or failure to contest prosecution for a felony. Upon
termination of Executive's engagement hereunder for cause,
Executive will have no right on any unvested benefits or any
other compensation or payments after the termination date. In
the event of termination due to death or disability of
Executive, Executive's family will have the right to any
unvested benefits or any other compensation or payments after
the last day or the month in which Executive's death or
disability occurred. For purposes of this Agreement,
"disability" means the incapacity or inability of Executive,
whether due to accident, sickness or otherwise, as determined
by a medical doctor and confirmed in writing by such doctor,
to perform the essential functions of Executive's position
under this Agreement, without reasonable accommodation
(provided that no accommodation that imposes undue hardship on
Company will be required) for an aggregate for ninety (90)
days during any period of one hundred eighty (180) consecutive
days.
5.2 WITHOUT CAUSE. Company may terminate Executive's engagement
under this Agreement without cause and without advance notice;
provided, however, that Company will pay the Executive the
amount of Five Hundred Thousand Dollars (US$500,000). In
addition, Company will, within thirty (30) calendar days after
Executive's termination by Company under this Section 5.2, pay
to Executive an additional lump sum (hereafter "Additional
Pay") equal to Executive's then current base compensation for
a period of one (1) year commencing on the day of Executive's
termination. Any non-renewable of this Agreement, for any
reason, shall be deemed to be without cause.
All such payments will be made by Company within 30 days of the
termination date. Upon termination, Executive will have no rights to any
unvested benefits or any other compensation or payments except as stated
in this paragraph.
6. TERMINATION BY EXECUTIVE. Executive may terminate Executive's
engagement under this Agreement for any reason provided that
Executive gives Company at least thirty (30) days' notice in
writing. Company may, at its option, accelerate such termination
date to any at least two weeks after Executive's notice of
termination. Company may, at its option,
3
relieve Executive of all duties and authority after notice of
termination has been provided. All compensation, payments and
unvested benefits will cease after the termination date.
7. TERMINATION UPON COMPANY REORGANIZATION, MERGER OR SALE.
Notwithstanding Section 5.1 and 5.2 of this Agreement, in the event
Executive's engagement is terminated for any reason, including
resignation of Executive or non-renewal of this Agreement, but
excluding termination of cause, during the one (1) year period
following the effective date of: (1) a consolidation or merger of
the Company with another corporation or entity; (2) the sale to a
third party of stock of the Company which, when issued and outstand,
will constitute more than 50% of the issued and outstanding stock of
the Company; (3) the sale of all or substantially all of the assets
of the Company to a third party; or (4) the liquidation,
dissolution, reorganization or commencement of any proceeding under
federal or state bankruptcy or insolvency laws by the Company, the
Company will pay Executive all earned but unpaid base cash
compensation (prorated to the date of such termination), all accrued
but unused vacation time, and any not yet reimbursed business
expenses incurred for services provided through the date of
termination. Company will pay the Executive, the amount of one
million Dollars ($1,000,000). The payments made pursuant to this
Section 7 shall be in lieu of payments provided for in Section 5.1
or Section 5.2.
In addition, upon termination of Executive's engagement with
Company pursuant to this Section 7, Executive will be entitled to
the following (hereafter "Additional Section 7"): (1) within thirty
(30) calendar days of termination pursuant of this Section 7 herein,
a sum equal to Executive's then-current base cash compensation for a
period of two (2) years; (2) all stock options grants to Executive,
if any, granted pursuant to any stock option agreement will become
immediately vested and exercisable.
Company agrees to request any successors or successors to all or
substantially all of the business and/or assets of Company (whether
direct or indirect, by purchase, merger, consolidation, liquidation
or otherwise), upon or prior to such succession, to expressly assume
and agree to perform this Agreement in the same manner and to the
same extent that Company would be required to perform it if no such
succession had taken place. A copy of such assumption and agreement
will be delivered to Executive promptly after its execution by the
successor. Failure by Company to obtain such agreement from
successors on or before the effective date of any such succession
transaction shall entitle Executive to such benefits and pay the
Company in the same amounts as Executive would be entitled in
Section 7 herein as if Executive had been terminated without cause
of the day prior to the effective date of such transaction
4
upon termination. Any assumption by a third-party of the Company's
obligation under this Agreement shall not release Company from its
obligations under this Agreement.
8. COVENANT NOT TO COMPETE. During Executive's engagement by Company
and for a period expiring one (1) year after the termination of
Executive's engagement for any reason, Executive covenants and
agrees that Executive will not:
8.1 Directly, indirectly, or otherwise, own, manage, operate,
control, serve as a consultant to, be employed by, participate
in, or be connected, in any manner, without the ownership,
management, operation or control of any business that uses
chemokines as therapeutic drugs.
8.2 Here, off to hire, entice away or in any other manner persuade
or attempt to persuade any office, Executive or agent of
Company to alter or discontinue a relationship with Company or
to any act that is inconsistent with the interests of Company;
8.3 Except on behalf of Company, directly or indirectly solicit,
divert, take away or attempt to solicit, divert or take away
any customers of Company; or
8.4 Except on behalf of Company, directly or indirectly solicit,
divert, or in any other manner persuade or attempt to persuade
any supplier of Company to alter or discontinue its
relationship with Company.
For the purposes of this Section 8, businesses that are deemed to compete
with Company's Business are business that are engaged in the research and
development of Chemokine agonists and antagonists in the treatment of
cancer or for the purpose of stem cell mobilization, neutrophils
mobilization or platelets mobilization. Further, the use of chemokines
agonists or antagonists in the growth and stimulation of stem cells or
white blood cells. Executive can own or manage/consult business that are
not involved in chemokines.
Company and Executive agree that: this provision does not impose an
undue hardship on Executive and is not injurious to the public; that this
provision is necessary to protect the business of Company; the nature of
Executive's responsibilities with Company under this Agreement require
Executive to have access to confidential information which is valuable and
confidential to all of the Business; the scope of this Section 8 is
reasonable in terms of length of time and geographic scope; and adequate
consideration supports this Section 8, including consideration herein.
5
9. CONFIDENTIAL INFORMATION. Executive recognizes that Company's Business
and continued success depend upon the use and protection of confidential
and propriety business information, including, without limitation, the
information and technology developed by or available through licenses to
Company related to the Company's Business, to which Executive has access
(all such information being "Confidential Information"). For purposes of
this Agreement, the phrase "Confidential Information" includes for Company
and its current or future subsidiaries and affiliates, without limitation,
and whether or not specifically designated as confidential or proprietary:
all business plans and marketing strategies; information concerning the
development of new products and services; and technical and non-technical
data related to software programs, designs, specifications, compilations,
inventions, improvements, methods, processes, procedures and techniques;
provided, however, that the phrase does not include information that (a)
was lawfully in Executive's possession prior to disclosure of such
information by Company; (b) was, or at any time becomes, available in the
public domain other than through a violation of this Agreement; (c) is
documented by Executive as having been developed by Executive outside the
scope of Executive's engagement and independently; or (d) is furnished to
Executive by a third party not under an obligation of confidentiality or
Company. Executive agrees that during Executive's engagement and after
termination of the Agreement irrespective of cause, Executive will use
Confidential Information only for the benefit of Company and will not
directly or indirectly use or divulge, any Confidential Information for
any reason, except as authorized by Company. For the purpose of this
agreement, the Confidential Information means, the use of chemokines in
the treatment of cancer and the use of chemokines in haematology.
Executive agrees to deliver to Company immediately upon termination of
Executive's engagement, or at any time Company so requests, all tangible
items containing any Confidential Information (including, without
limitation, all memoranda, photographs, records, reports, manuals,
drawings, blueprints, prototypes, notes taken by or provided to Executive,
and any other documents or items of a confidential belonging to Company),
together with all copies of such material in Executive's possession or
control. Executive agrees that in the course of Executive engagement with
Company, Executive will not violate in any way the rights that any entity
has with regard to trade secrets or proprietary or confidential
information. Executive's obligations under this Section 8 are indefinite
in term and shall survive the termination of this Agreement.
10. INVENTIONS, IDEAS, PATENTS AND COPYRIGHTS
10.1 DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND WORKS. "Inventions"
means all discoveries, improvements and ideas, whether patentable or not
in the filed of chemokines, conceived or made by Executive, solely or
jointly with others, at any time during Executive's engagement by Company
or within three
6
months after Executive's engagement by Company, including, but not limited
to, any formulas, methods, techniques, devices, equipment, products,
product development and engineering, research, processes, and marketing
programs. "Works" means all tangible work product, whether patentable or
copyrightable or not, developed or under development by Executive, solely
or jointly with others, at any time during Executive's engagement by
Company or within three months after Executive's engagement by Company or
within three months after specifications, compilations, programs,
documentation, manuals, flow charts, diagrams, drawings, photographs,
designs, business or marketing plans, articles for publication, contracts,
and reports. Executive shall promptly disclose to Company all inventions
or works pertain to chemokine biology, whether made or developed during
Executive's normal working hours. Executive will keep and maintain written
records concerting such Inventions and Works and make these records
available to Company to all times. Company shall hold such written records
with the same degree of care as it does other business documents of a
confidential nature. Subject to the limitations started in Section 10.3,
Executive acknowledges and agrees that all Chemokine related technology,
Executive shall have no proprietary interest in Inventions and Works and
that Inventions are the sole and exclusive property of Company, and
Executive hereby irrevocably assigns and agrees to assign to Company and
its successors, assigns or nominees all right, title and interest of
Executive in the Inventions worldwide on chemokine. Executive agrees that
the Works are to be deemed "works-made-for-hire," and that Company shall
be deemed the author and, subject to the limitations stated in Section
10.3 Company shall own all proprietary rights in the Works and have the
right to obtain and hold in its own name all trademarks, copyrights,
registrations, or such other protection as may be appropriate to the
subject matter, and any extensions and renewals thereof. To the extent
that title to the Works may not, by operation of law, vest in Company or
that Works may not be considered "work-made-for-hire," subject to the
limitations started in Section 10.3, Executive hereby irrevocably assigns
and agrees to assign to Company and its successors, assigns or nominees
all right, title and interest of Executive in the chemokine science
worldwide.
10.2 LICENSE. If and to the extent that Executive makes use, or has
made use, in the course of Executive's engagement by Company, of any
intellectual properties owned by Executive in the filed of chemokines, Executive
hereby grants to Company a nonexclusive, royalty-free, perpetual, irrevocable,
worldwide license (with right to sublicense) to make, use, sell, offer for sale,
copy, distribute, import, modify, and other to practice and exploit any and all
such intellectual properties. In the course of Executive's engagement by
Company, Executive shall not use or induce Company to use any information that
infringes any patent, trademarks, copyright, trade secret or other proprietary
rights of others and shall not disclose to Company or induce Company to use any
secrecy or confidential information of others, including former company, to whom
Executive has obligations of secrecy.
10.3 EXCLUDED INVENTIONS. Executive has been given the opportunity
to prepare and attach hereto a list of all inventions, patent applications and
patents made
7
or conceived by Executive prior to the date of Executive's engagement by
Company, which are subject to prior agreements or which Executive desires to
exclude from the Agreement. If no such list is attached, Executive hereby
represents and warrants to Company that there are no such inventions, patent
applications or parents. Additionally, Executive understands and acknowledges
having been given notice herein that, in accordance with Company's policy and
British Columbia (BC) law, this Agreement does not apply to, and that Executive
shall have no obligation to assign to Company, any Invention or Works for which
no Company trade secrets and no equipment, supplies, or facilities of Company
were used and which as developed entirely on Executive's own time, unless: (i)
the Invention or Works relate directly to the business of Company (i.e.
Chemokine), (ii) the Invention or Works relate to actual or demonstrably
anticipated research or development work of Company, or (iii) the Invention or
Works result from any work performed by Executive for Company.
11. REMEDIES. Notwithstanding other provisions of this Agreement regarding
dispute resolution, Executive agrees that Executive's violent of any of
Sections 8 or 9 of this Agreement would cause Company irreparable harm
which would not be adequately compensated by monetary damages and that an
injunction may be granted by any court or courts having jurisdiction,
restraining Executive from violation of the terms of this Agreement, upon
any breach or threatened breach of Executive of the obligations set forth
in any of Section 8,9 or 10. The preceding sentence shall not be construed
to limit Company from any other relief or damages to which it may be
entitled as a result of Executive's breach of any provision of this
Agreement, including Section 8 or 9. Executive also agrees that a violent
of any of Section 8, 9 or 10 would entitle Company, in addition to all
other remedies available at law or equity, to recover from Executive any
and all funds, including, without limitation, wages and compensation,
which will be held by Executive in constructive trust for Company,
received by Executive in connection with such violation.
12. DISPUTE RESOLUTION. Except for the right of Company and Executives to seek
injunctive relief in court and to the fullest extent permitted by law, any
controversy, claim or dispute of any type arising out of or relating to
Executive's engagement or the provisions of this Agreement shall be
resolved in accordance with this Section 12 regarding resolution of
disputes, which will be the sole and exclusive procedure for the
resolution of any disputes. Matters subject to these provisions include,
without limitation, claims or disputes based on statute, contract, common
law and tort and will include, for example, matters pertaining to
termination, discrimination, harassment, compensation and benefits.
Nothing in this provision is intended to restrict Executive from
submitting any matter to an administrative agency with jurisdiction over
such matter.
12.1 COMPLIANCE WITH COMPANY POLICY. Executive and Company will
make a good faith attempt to resolve all disputes in
accordance with any dispute resolution policy adopted by
Company before resorting to any other dispute resolution
procedure.
8
12.2 ARBITRATION. If any claim or dispute has not been resolved in
accordance with Section 12.1 and Section 12.2, then the claim
or dispute will be determined by arbitration in Vancouver, BC,
in accordance with the then-current national rules for the
resolution of engagement disputes by arbitration, except as
modified herein. The arbitration will be conducted by a sole
neutral arbitrator who has had both training and experience as
an arbitrator of general engagement and commercial matters and
who is and for at least ten (10) years has been, a partner, a
shareholder, or a member in a law firm. If Company and
Executive cannot agree on an arbitrator, then the arbitrator
will be selected by the judge applying the criteria in this
provision.
No person who has served as a mediator under the mediation
provision, however, may be selected as the arbitrator for the
same claim or dispute. Reasonable discovery will be permitted
and the arbitrator may decide any issues as to discovery. The
arbitrator may decide any issues as to whether or as to the
extent to which, any dispute is subject to the dispute
resolution provisions in Section 12 and the arbitrator may
award any relief permitted by law. The arbitrator must base
the arbitrator award on the provisions of Section 11 and
applicable law and must render the award in writing, including
an explanation of the reasons for the award. Judgment upon the
award may be entered by any court having jurisdiction of the
matter, and the decision of the arbitrator will be final and
binding.
The statute of limitations applicable to the commencement of a
lawsuit will apply to the commencement of an arbitration under
Section 12.2.
13. FEES. Unless otherwise agreed, the prevailing party will be entitled
to its costs and attorneys' fees incurred in any litigation relating
to the interpretation or enforcement of this Agreement.
14. DISCLOSURE. Executive agrees fully and completely to reveal the
terms of this Agreement to any future Company or potential Company
of Executive and authorizes Company, at its election, to make such
disclosure.
15. REPRESENTATION OF EXECUTIVE. Executive represents and warrants to
Company that Executive is free to enter into this Agreement and has
no commitment, arrangement or understand to or with any party that
restrains
9
or is in conflict with Executive's performance of the covenants,
services and duties provided for in this Agreement.
Executive agrees to indemnify Company and to hold it harmless
against any and all liabilities or claims arising out of any
unauthorized act or acts by Executive that, the foregoing
representation and warranty to the contrary notwithstanding, and in
violation, or constitute a breach, of any such commitment,
arrangement or understanding.
16. ASSIGNABILITY. During Executive's engagement, this Agreement may not
be assigned by either party without the written consent of the
other; provided, however, that Company may assign its rights and
obligations under this Agreement without Executive's consent
pursuant to a successor by sae, merger or liquidation, if such
successor carries on the Company's Business substantially in the
form in which it is being conducted at the time of the sale, merger
or liquidation.
This Agreement is binding upon Executive, Executive's heirs,
personal representatives and permitted assigns and on Company, its
successors and assigns.
17. NOTICES. Any notice required or permitted to be given hereunder are
sufficient if in writing and delivered by hand, by facsimile or by
registered or certified mail, to Executive at 000 Xxxxxxx Xxxxx,
Xxxxx, XX, X0X 0X0 or such other address as may be provided by
Executive.
18. SEVERABILITY. If any provision of this Agreement or compliance by
any of the parties with any provision of this Agreement constitutes
a violation of any law, or is or becomes unenforceable or void, then
such provision, to the extent necessary so that it is no longer in
violation of law, unenforceable or void, and such provision will be
enforced to the fullest extent permitted by law. If such
modification is not possible, said provision, to the extent that it
is in violation of law, unenforceable or void, shall be deemed sever
able from the remaining provisions of this Agreement, which
provisions will remain binding on the parties.
19. WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder will operate as a
waiver thereof; nor will any single or partial waiver of a breach of
any provision of this Agreement operate or be construe as a waiver
of any subsequent breach; nor will any single or partial exercise of
any right or remedy hereunder
10
preclude any other further exercise thereof or the exercise of any
other right or remedy granted hereby or by law.
20. GOVERNING LAW. The validity, constructions and performance of this
Agreement shall be governed by the laws of the Province of British
Columbia without regard to the conflicts of law provisions of such
laws.
The parties hereto expressly recognize and agree that the
implementation of the Section 19 in essential in light of the fact
that Company has its corporate headquarters and its principal
executive offices within the Province of British Columbia, and there
is a critical need for uniformity in the interpretation and
enforcement of the engagement agreements between Company an its key
Executives.
21. CHANGE OF DUTY. Executive may at its sole decision accept the change
in title and duty, acceptable to the Company. Upon the change of
duty and title, the Company shall continue to provide the Executive
with the sale financials compensation, and stock options as
otherwise would have received under the position of Chairman,
President and CEO.
22. SURVIVAL. Notwithstanding the provisions of Paragraphs 5, 6 or 7,
the provisions of Paragraphs 8, 9, 10, 11, 12, 13, 14, 15, 16, 17,
18, 19 and 20 shall survive the termination of this Agreement.
23. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties with respect to the relationship between Executive and
the Company and supersedes all prior agreements and understandings,
and there are no other representations or agreements other than as
stated in this Agreement related to the terms and conditions of
Executive's engagement.
This Agreement may be changed only by an agreement in writing signed
by the party against whom enforcement of any waver, change,
modification, extension or discharge is sought, and any such
modification will be signed by the CEO of the Company.
11
IN THE WITNESS WHEREOF, the parties have duly signed and delivered this
Agreement as of the day and year first above written.
COMPANY
CHEMOKINE THERAPEUTICS CORP
________________________________________________
On behalf of the Board of Directors
Name: Xxxxxxx Xxxxxx, Director, Chair of Executive Compensation Committee
EXECUTIVE (Employee)
________________________________________________
Xx. Xxxxxx Xxxxxx
Chairman, President &CEO
12
