EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of August
18, 1998, by and between Electropharmacology, Inc. (the "Company"), a Delaware
corporation, and Xxxxxxx Xxxxxxxxx ("Executive").
WHEREAS, the Company desires to retain Executive in its employ as the
President and Chief Executive Officer of the Gemini Biotech Division of the
Company for the period provided in this Agreement, and Executive has agreed to
employment with the Company in accordance with the contractual terms and
conditions set forth below;
WHEREAS, the Company and Executive have discussed and Executive has
agreed that this Agreement supersedes any and all agreements, oral and written,
between the parties hereto with respect to the subject hereof; and
WHEREAS, this Agreement is intended to, and shall, set forth the
definitive agreement of the parties.
NOW, THEREFORE, for and in consideration of the recitals and premises,
and the promises, covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive, and the Executive hereby
accepts such employment with the Company, for the term of employment set forth
in Section 2 hereof, all upon the terms and conditions hereafter set forth.
2. Term. Employment shall be for a term commencing on the date hereof and
subject to prior termination as provided under Sections 8, 9, 10, 12, or 13
hereof expiring on the third annual anniversary of this date (the "Term").
However, the Term shall automatically be renewed and extended for one additional
year upon the third and subsequent annual anniversaries of this date, upon the
terms and conditions set forth herein, unless prior to any such anniversary
date, either party to this Agreement gives the other party written notice
(delivered in accordance with Section 21 hereof and at least 90 days prior to
the expiration of the previous term) of such party's intention not to further
extend the Term. For purposes of this Agreement, any reference to the "Term"
shall include the original term and any renewal and extension thereof.
3. Duties of Executive. Executive shall serve as the President and Chief
Executive Officer of the Gemini Biotech Division of the Company. Executive shall
perform such executive duties as a President and Chief Executive Officer of a
Division of the Company would normally perform or as otherwise specified in
applicable provisions of the By-Laws of the Company in effect on the date of
this Agreement, and shall perform, in addition thereto, such other reasonable
duties as the Board of
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Directors (the "Board") may reasonably request. Except as may otherwise be
approved in advance by the Board and except during vacation periods of absence
due to sickness, personal injury or other disability, Executive shall devote
substantially all of his normal working time and his best efforts to the
performance of his duties hereunder. Notwithstanding the foregoing, nothing
contained herein shall preclude Executive from (i) serving on the boards of
directors of other companies or organizations with the approval of the Board
(not to be unreasonably withheld) or (ii) pursuing his personal, financial and
legal affairs provided that such activity does not materially interfere with the
performance of Executive's obligations hereunder. It is agreed and understood
that Executive shall have full control of and authority over the day to day
operations of the Gemini Biotech Division of the Company.
4. Compensation.
(a) For the period commencing on the date of this Agreement and ending
on December 31, 1998, Executive's base salary shall be $120,000 on
an annualized basis. The Executive's base salary shall be reviewed
at least once per calendar year by the Board to determine whether
an increase in Executive's base salary is warranted, and if so,
the amount of the increase, provided that in no calendar year
shall Executive's base salary, on an annualized basis, be less
than one hundred and three percent (103%) of the Executive's base
salary, on an annualized basis, for the prior calendar year.
It is further agreed that Executive's base salary, in an annualized
basis, shall be raised to $150,000 upon the earlier of (a) the
consummation of one or more equity financings by the Company that
aggregate at least $2,000,000, or (b) twelve consecutive months of
monthly revenues of the Gemini Biotech Division of the Company which in
the aggregate exceed $1,000,000. Monthly revenues shall mean monthly
gross revenues from persons and entities not affiliates of the Company
as determined under generally accepted accounting principles.
It is further agreed that the Executive's base salary, on an annualized
basis shall be raised to $200,000 upon the earlier of (a) the
consummation of one or more equity financings (in addition to the above
financings) by the Company that aggregate at least $4,000,000, or (b)
twelve consecutive months of monthly revenues of the Gemini Biotech
Division of the Company which in the aggregate exceed $3,000,000.
Such base salary shall be payable at the times and in the manner
consistent with the Company's general policies regarding compensation
of executive employees, but in no event less frequently than
bi-monthly.
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(b) In addition to the base salary provided by Section 4(a) above,
Executive shall be eligible annually to receive any incentive
bonus whether in cash or property, (the "Bonus"), that the Board
may grant to him based on the Company's executive compensation
plan then in effect, based on the Board's assessment of
Executive's individual performance, which decision shall be made
by the Board in its sole discretion. Any such Bonus shall be
payable on the next date on which Executive is entitled to receive
a payment of his base salary. The Board may from time to time
authorize such additional compensation to Executive, in cash,
property, options or warrants as the Board may determine in its
sole discretion to be appropriate.
(c) The Company shall grant to Executive, pursuant to the
Company's Stock Option Plan, a stock option to purchase 250,000
shares of the Company's common stock at a price equal to the last
reported sales price of the Company's common stock for the date
hereof as reported in the OTC Bulletin Board. Such stock option
shall be immediately exercisable with respect to 20% of the shares
covered thereby and such stock option shall be exercisable with
respect to an additional 25% of the shares covered thereby on each
of the first and the second anniversary dates of this Agreement ,
and an additional 30% of such shares shall be exercisable on the
third anniversary of the date of this Agreement. Notwithstanding
the foregoing, in the event Executive's employment hereunder is
terminated by the Company other than for Cause (as defined herein)
or by Executive by Permitted Resignation (as defined herein) prior
to the end of the Term, such stock option shall immediately vest
and become exercisable in accordance with Section 11(c) hereof. If
Executive is terminated for Cause, all stock options, whether or
not vested, shall immediately terminate without any payment made
therefor. If Executive resigns (other than by Permitted
Resignation), all unvested stock options whether or not vested,
shall immediately terminate without any payment made therefor.
Upon Executive's death or Disability (as defined herein), all
unvested stock options that are to vest on the next anniversary
date of this Agreement shall immediately vest and become
exercisable and all other unvested stock options shall immediately
terminate without any payment made therefor. The Agreement
evidencing such stock option shall be substantially in the form
attached hereto as Exhibit A.
5. Executive Benefits.
(a) In addition to the compensation described, in Section 4, the
Company shall make available to Executive and his eligible
dependents such benefits as are comparable to those provided to
other executive employees of the Company, including without
limitation, any group hospitalization, health, dental care or sick
leave plan, life or other insurance or death benefit plan, travel
or accident insurance, retirement income or pension plan, employee
stock option plan or other present or future group employee
benefit plan or program of the Company for which key executives
are or shall become
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eligible, and Executive shall be eligible to receive during the
Term all benefits for which executives are eligible under every
such plan or program to the extent permissible under the general
terms and provisions of such plans and programs and in accordance
with the provisions thereof. Executive shall be eligible to
participate in any Company incentive plan or program, including an
employee stock option plan, deferred compensation, or other
management incentive program under the terms and conditions
applicable to other executive and management employees and in a
manner commensurate with Executive's position and level of
responsibility with the Company as compared to the position and
level of responsibility of other executive employees of the
company as determined by the Board in its sole discretion,
provided that, except to the extent specifically set forth in
Sections 11, 12, and 13, the Executive shall not be permitted to
participate in termination pay programs.
(b) In addition to any life insurance coverage made available to
Executive under Section 5(a) hereof, the Company shall provide, at
its sole cost and expense, term life insurance contract on
Executive's life as dictated by the Benefit Life Insurance Company
Loan requirements.
(c) The Company shall pay to Executive an automobile allowance in the
amount of $500 per month during the Term.
(d) The Executive will accrue vacation time at a rate which results in
20 days (160 hours) of paid vacation time per year. The Executive
may carry over from year to year up to 10 days (80 hours) of
unused vacation time. Notwithstanding anything herein to the
contrary, the Executive may not take more than two (2) weeks'
vacation during any twelve (12) week period without the prior
written permission of the Board, which shall not be unreasonably
withheld.
6. Expenses. The Company shall also pay or reimburse Executive for all
reasonable and necessary expenses incurred by Executive in connection with his
duties on behalf of the Company in accordance with the general policies of the
Company and his employment by the Company pursuant to this Agreement.
7. Place of Performance. Unless otherwise agreed by Executive, Executive shall
be based at the principal executive offices of the Gemini Biotech Division of
the Company which shall be located in Xxxxxx County, Texas, or in adjacent
counties, provided that the Executive shall be required to travel as reasonably
required for Company business.
8. Termination. The Company may terminate Executive's employment hereunder at
any time with or without Cause. For purposes of this Agreement, Cause shall
mean.
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(a) Executive's conviction by, or entry of a plea of guilty or nolo
centendere in a court of competent and final jurisdiction for any
crime involving moral turpitude or punishable by imprisonment in
the jurisdiction (provided that if Executive's conviction is
subsequently overturned, and the Company has terminated Executive
pursuant to this Section 8(a), such termination shall be deemed to
be without Cause and Executive shall be entitled to receive the
payments and benefits set forth in Section 11, together with
interest at the prime rate in effect from time to time as reported
in the Wall Street Journal, from the date such payments would have
been due to Executive had such termination been without Cause
until the date such payments are made to Executive);
(b) Executive's breach of any of the covenants contained in
Exhibit B referred to in Section 25 of this Agreement;
(c) Executive's commission of an act of fraud whether prior to or
subsequent to the date hereof, upon Employer;
(d) Executive's continuing repeated willful failure or refusal to
perform his duties as required by this Agreement, provided that
termination of Executive's employment pursuant to this
subparagraph (d) shall not constitute valid termination for cause
unless Executive shall have first received written notice from the
Board stating with specificity the nature of such failure or
refusal and affording Executive at least fifteen (15) days to
correct the act or omission complained of;
(e) Gross negligence, insubordination or material violation by
Executive of any duty of loyalty to the Company or any other
material misconduct on the part of Executive, provided that
termination of Executive's employment pursuant to this
subparagraph (e) shall not constitute valid termination for cause
unless Executive shall have first received written notice from the
Board stating with specificity the nature of such failure or
refusal and affording Executive at least fifteen (15) days to
correct the act or omission complained of;
(f) A material breach of this Agreement by Executive provided that
if such breach is curable, the Executive has been given written
notice of such alleged breach, and not less than thirty (30) days
to cure such alleged breach or such longer period as may be
reasonably necessary to cure such breach provided that Executive
is diligently pursuing such cure.
9. Resignation.
(a) In the event that the Company shall during the Term (i) fail
to continue Executive as President and Chief Executive Officer of
the Gemini Biotech
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Division of the Company, (ii) reduce Executive's base salary below
the minimum amount specified in Section 4(a) without Executive's
prior written consent, (iii) breach any material term of this
Agreement, which breach, if curable, is not cured within thirty
(30) days after the Company receives notice of such alleged breach
or such longer period as may be reasonably necessary to cure such
breach as long as the Company is diligently pursuing such cure, or
(iv) Relocate (as defined herein) the Executive, without the
Executive's prior consent, within one year after the closing of
and due to a Change of Control event (as defined herein) not
proposed or recommended by the Executive, then the Executive, at
his sole option, may give notice to the Company of his election to
resign and terminate this Agreement ("Permitted Resignation")
effective immediately upon receipt of such notice (delivered in
accordance with Section 21 hereof), or effective upon such other
date (not later than ten(10) days following such notice) that the
Executive may designate in such notice, provided that if the
Executive does not give such notice within ten (10) days after the
occurrence of the event giving rise to such right to
terminate(which ten (10) day period, in the case of (iii), shall
not commence until the termination of any applicable cure period),
the Executive shall be deemed to have irrevocably waived such
right to cause a Permitted Resignation.
(b) For Purposes of Section 9(a), the term "Relocate" shall mean a
move of more 30 miles from the then place of performance of
Executive, as set forth in Section 7 and a "Change of Control"
shall mean the occurrence during the term of this Agreement of any
of the following events:
(i) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization less
than fifty percent (50%) of the combined voting power of the
then outstanding securities entitled to vote generally in the
election of directors ("Voting Stock") of such corporation or
person immediately after such transaction are held in the
aggregate by the holders of Voting Stock of the Company
immediately prior to such transaction; or
(ii)The Company sells or otherwise transfers all or
substantially all of its assets to another corporation or
other legal person, and as a result of such sale or transfer
less than fifty percent (50%) of the combined voting power of
the then outstanding Voting Stock of such corporation or
person immediately prior to such sale or transfer; or
(iii) If, during any period of two consecutive years, (1)
individuals who at the beginning of any such period constitute
the directors of the Company and (2) such other persons as are
nominated or elected by a vote of the directors of the
Company, collectively, cease for any reason (other than
voluntary resignation, death or removal by the stockholders
for incompetence) to constitute at least a majority of the
directors of the Company; provided, however, that for purposes
of this clause 9(b)(iii) each director who is first
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elected, or first nominated by a vote of the Board (or a
committee thereof) then still in office who were directors of
the Company at the beginning of any such period will be deemed
to have been a director of the Company at the beginning of
such period.
10. Death. The term of this Agreement shall terminate on the death of Executive.
11. Termination Payments and Benefits. If Executive's employment hereunder is
terminated by the Executive by Permitted Resignation or by the Company other
than for Cause, prior to the end of the term of this Agreement, then the Company
shall be obligated to pay to Executive certain termination payments and make
available certain benefits as follows:
(a) Termination Payment. The Company shall pay to the Executive a lump sum
in cash, payable within ten (10) business days after the effective date
of such termination, (1) equal to 85% of an amount equal to the
remaining portion of the base annual salary to which Executive would
have been entitled hereunder during the unexpired portion of the Term,
excluding any renewals.
(b) Special Change in Control Termination Payments. Notwithstanding 11(a),
if there is a Permitted Resignation following a Relocation due to a
Change in Control as provided in Section 9(a)(iv), the payment to the
Executive under Section 11(a) shall be limited to the Executive's base
salary pursuant to Section 4(a) plus the Executive's average annual
bonus granted pursuant to Section 4(b) hereof during the two-year
period (or such shorter period during which the Executive is employed
by the Company) immediately preceding the Executive's termination.
(c) Stock Options. Notwithstanding any provision to the contrary in any
option agreement or other agreement or in any plan (1) all of
Executive's outstanding stock options shall immediately vest and become
exercisable and Executive shall have the full term of the option to
exercise any of the Executive's stock option, and (ii) all restrictions
on any other equity awards relating to continued performance of
services shall lapse.
(d) Benefits. Subject to Section 15, following the termination of
Executive's employment, the Company shall use its reasonable best
efforts to maintain in full force and effect for the continued benefit
of the Executive all group hospitalization, health and dental care
plans and life insurance plans in which Executive was entitled to
participate immediately prior to Executive's termination or shall
arrange to make available to Executive benefits substantially similar
to those which Executive would otherwise have been entitled to receive
if his employment had not been terminated until the earliest to occur
of the following: (i) one year after the Executive's date of
termination; (ii) the end of the Term; or (iii) Executive is
reemployed. Such
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benefits shall be provided to the Executive on the same terms and
conditions (including, without limitation, employee contributions
toward the premium payments) under which Executive was entitled to
participate immediately prior to his termination. and the Company shall
not be required to make any additional insurance premium payments
pursuant to Section 5(b). Notwithstanding the foregoing, with respect
to Executive's continued coverage under the Company's medical and
dental plan, or a successor plan, pursuant to this provision,
Executive's "qualifying event" for purposes of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") shall be his date of
termination from the company.
12. Other Termination. If the Company terminates this Agreement for Cause or if
Executive terminates this Agreement for any reason other than by Permitted
Resignation or if Executive dies or in the event of Executive's Disability, then
the Company and Executive shall have no further obligation hereunder except as
follows or except as specifically provided in any available plan, program or
agreement. The Company shall pay Executive his then current minimum base salary
through the effective date of such termination. If Executive terminated this
Agreement other than by Permitted Resignation, he shall receive such benefits,
if any, as are afforded by the Company under its then existing policies
applicable to employees who voluntarily terminate their employment; and
Executive shall have the rights set forth in Section 13 hereof in the event of
termination of this Agreement upon his Disability.
13. Disability. During the term of this Agreement, the Company shall have an
obligation to reasonably accommodate Executive, if Executive becomes disabled.
If despite such reasonable accommodation, Executive is unable to perform the
essential functions of this job, Executive's duties and obligations hereunder
shall cease and the Company shall pay to Executive in cash, for each calendar
year until Executive reaches the age of 65 and at times at which Executive would
have received payment of his base salary, an amount equal to 60% of the
Executive's highest annual base salary pursuant to Section 4(a) then in effect
for the period prior to Executive's Disability. For this purpose, the Company
shall maintain in full force and effect during the term of this Agreement an
insurance policy with an insurance company that shall provide for the payment of
such amounts to Executive upon his Disability. "Disability" shall be defined as
in the insurance policy referenced in Section 13(a) hereof. For the period
during which Executive is entitled to receive payments under this Section 13,
the Company shall use its reasonable best efforts to maintain in full force and
effect for the continued benefit of Executive all employee welfare benefit
plans, as provided for under the insurance policy limits, except for life
insurance provided for under Section 5(b); and except for the automobile
allowance set forth in Section 5(c). Such welfare benefits shall be provided to
Executive on the same terms and conditions (including employee contributions
toward the premium payments) under which Executive was entitled to participate
immediately prior to this Disability. The Company shall have no monetary
obligation under this Section 13 if the Executive is not insurable under an
insurance
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policy with a reasonably priced premium, as determined by the Company in its
sole and absolute discretion.
14. No Other Termination Compensation. Except as specifically provided in
Sections 11, 12 and 13 hereof, upon termination of this Agreement for any
reason, Executive shall not be entitled to any severance pay or to any other
compensation or payments (by way of salary, damages or otherwise) of any nature
relating to this Agreement or otherwise relating to or arising out of his
employment by the Company.
15. Arbitration. Any dispute between the parties under this Agreement shall be
submitted to binding arbitration in Xxxxxx County, Texas and such arbitration
shall be conducted in accordance with the commercial arbitration rules of the
American Arbitration Association. The determination of the arbitrators shall be
conclusive and binding upon the parties and judgment upon the same may be
entered in any court having jurisdiction thereof. The expenses of arbitration,
including reasonable attorneys' fees, shall be borne by the losing party or as
the arbitrators shall otherwise equitably determine.
16. Indemnification. To the maximum extent permitted under the corporate laws of
the State of Delaware, or, if permitted by applicable law and more favorable,
the By-Laws of the Company as in effect on the date of this Agreement, (a)
Executive shall be indemnified and held harmless by the Company, as provided
under such corporate laws or such By-Laws, as applicable, for any and all
actions taken or matters undertaken, directly or indirectly, in the performance
of his duties and responsibilities under this Agreement or otherwise on behalf
of the Company, and (b) without limiting clause (a), the Company shall indemnify
and hold harmless Executive from and against (i) any claim, loss, liability,
obligation, damage, cost, expense, including attorneys fees, action, suit,
proceeding or cause of action (collectively, "Claims") arising from or out of or
relating to Executive's performance as an officer, director, employee or agent
of the Company or any of its affiliates or in any other capacity, including,
without limitation, any fiduciary capacity, in which Executive serves at the
request of the Company, and (ii) any cost or expense (including, without
limitation, fees and disbursements of counsel) (collectively, "Expenses")
incurred by Executive in connection with he defense or investigation thereof. If
any claim is asserted or other matter arises with respect to which Executive
believes in good faith Executive is entitled to indemnification as contemplated
hereby, the Company shall pay the Expenses incurred by Executive in connection
with the defense or investigation of such Claim or matter (or cause such Expense
to be paid) on a monthly basis, provided that Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the then current prime
rate as reported in the Wall Street Journal as in effect from time to time,
compounded annually, if Executive shall be found, as finally judicially
determined by a court of competent jurisdiction, not to have been entitled to
indemnification hereunder.
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17. Agreement. This Agreement supersedes any and all other agreements, either
oral or written, between the parties with respect to such subject matter, and
Executive has received legal counsel regarding the entirety of the Agreement.
18. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to law.
19. Successors and Binding Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company, by agreement in form and substance satisfactory to Executive acting
reasonably, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement will be binding upon and inure
to the benefit of the Company and any successor to the Company, including,
without limitation, any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase,
merger, consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed the "Company" for the purpose of this Agreement). This
Agreement will inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees. The rights of the Company under this Agreement may
without the consent of Executive, be assigned by the Company in its sole and
unfettered discretion (a) to any person, firm, corporation, or other business
entity which at any time, whether by purchase, merger, or otherwise, directly or
indirectly, acquires all or substantially all of the assets or business of the
Company, or (b) to any subsidiary or affiliate of the Company (the "Company
Group"), or any transferee, whether by purchase, merger or otherwise, which
directly or indirectly acquires all or substantially all of the assets of the
Company or any other member of the Company Group.
20. Notices. For all purposes of this Agreement, all communications, including,
without limitation, notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or two business days after having been sent by a
nationally recognized overnight courier service such as Federal Express, UPS, or
Purolator, addressed to the Company (to the attention of the Secretary of the
Company) at its principal executive offices and to Executive at his principal
residence, or to such other address as any party may have furnished to the other
in writing and in accordance herewith, except that notices of changes of address
shall be effective only upon receipt.
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21. Governing Law. The validity, interpretation, construction and performance of
this Agreement will be governed and constructed in accordance with the
substantive laws of the State of Texas.
22. Severability and Reformation. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be constructed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance therefrom, and, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance herewith.
23. Survival of Provisions. Notwithstanding any other provision of this
Agreement, the parties' respective rights and obligations under any provisions
that provide a party with rights (including, without limitation, rights to
receive payments) that have not been fully satisfied as of such termination or
expiration, will survive any termination or expiration of this Agreement or the
termination of Executive's employment for any reason whatsoever.
24. Nondisclosure; Competitive Activity. The agreement attached as Exhibit A
shall be in full force and effect and inure to the benefit of the Company and
Executive.
25. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Executive and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto or compliance with any condition or
provision of this Agreement to be performed by such other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. Unless otherwise noted, references to "Sections" are
to section of this Agreement. The captions used in this Agreement are designed
for convenient reference only and are not to be used for the purpose of
interpreting any provision of this Agreement. Nothing contained in this
Agreement shall, in any manner whatsoever, be construed to alter or influence
the rights or obligations of Executive under the terms of the Capital
Contribution Agreement between the Company, EPi HealthTech Inc., Gemini Biotech
Ltd., Gemini Biotech, Inc. Xxxxxxxxxx Xxxxxxxxx and Executive dated June 18,
1998, the Master Agreement between the Company and Executive et. al dated June
28, 1998, as amended on August 3, 1998, the Registration Rights Agreement
between the Company and Executive et.
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al dated June 28, 1998, and the Limited Partnership Agreement of Gemini Health
Technologies L.P. between Epi HealthTech Inc., Executive and Xxxxxxxxxx
Xxxxxxxxx dated June 18, 1998.
26. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of
the day and year first above written.
ELECTROPHARMACOLOGY, INC. EXECUTIVE:
By: /s/ Xxxx Xxx /s/ Xxxxxxx Xxxxxxxxx
------------- ----------------------
Its: Chairman & CEO Xxxxxxx Xxxxxxxxx, Ph.D.
Date: ___2/23/99 __________ Date: __ 2/19/99______________
Attachments:
Exhibit A: Employee Non-Disclosure, Confidentiality and Noncompetition Agreement
Exhibit B Incentive Stock Option Agreement
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Exhibit A of Exhibit 10.1
ELECTROPHARMACOLOGY, INC.
EMPLOYEE NONDISCLOSURE, CONFIDENTIALITY AND NONCOMPETITION
AGREEMENT
This Agreement (the "Agreement") is made between Electropharmacology, Inc., a
Delaware Corporation including its Gemini Biotech Division (collectively the
"Company") and Xxxxxxx Xxxxxxxxx (the "Employee").
RECITALS
A. The Employee recognizes and agrees that the Company is and will be
engaged in research, development, production or commercialization of
products and technologies that are valuable assets of the Company. The
Company is engaged in a very competitive business. Because of the
nature of this business, the Company may be irreparably harmed by
certain activities of the Employee. These activities include
unauthorized disclosure of Company's confidential information, entering
into a business, that competes with the Company, during or following
the term of employment of the Employee by the Company, appropriating or
diverting business or customers of the Company and inducing employees
and/or independent contractors of the Company to leave the employment
or engagement of the Company, all of which are in violation of the
Employee. Employees may be able to do these unfair acts because of
information which is learned and contacts which are made by the
Employee while in the employment with the Company. Therefore, the
Company desires to protect itself by requiring the Employee to agree to
reasonable restrictions concerning certain of the Employee's activities
during and after termination of employment with the Company. These
restrictions are intended to prevent harm directly or indirectly to the
Company (its directors, employees, independent contractors whose
business or compensation depends upon the continuos success of the
Company).
B. The Employee understands and agrees that:
1. As part of his or her employment by the Company, the
Employee is (or may be) expected to make or develop
new contributions and/or Inventions, as further
defined in Section 10 that are of value to the
Company and that are intended to belong to the
Company.
2. Employment by the Company creates a relationship of
confidence and trust between the Employee and the
Company with respect to any information applicable to
the business of the Company.
3. The Company possesses and may acquire information,
which has commercial value in the business in which
the Company is engaged. All such information is
hereinafter called "Proprietary Information". By way
of illustration, but not limitation, Proprietary
Information includes trade secrets, processes,
designs, concepts, know-how, improvements, proposals,
Inventions (as further defined herein below) whether
patentable or not, techniques, marketing plans,
strategies, forecasts, financial and cost information
and customer lists.
A-1
A G R E E M E N T
NOW THEREFORE, in consideration of the foregoing and of the Employee's
employment or continued employment by the Company, as the case may be, and the
compensation or other benefits received by the Employee from the Company during
the course of such employment, the Employee hereby agrees as follows:
1. For purposes of this Agreement, the business of the Company
shall be deemed to be the design, development and
commercialization of (i) drugs or diagnostics based on amino
acids or nucleosides and (ii) drug delivery or tissue repair
by electromagnetic signals or mild electric currents. The
business as described herein may be amended by the Company
based on licensing, acquisitions and other transactions by the
Company relating to technologies, products or businesses.
2. The Employee agrees that while employed by the Company, the
Employee will not engage in any other employment or business,
which would interfere with performance of the Employee's
duties to the Company.
3. The Employee agrees not to take any steps preliminary or
otherwise to set up or engage in any business enterprise that
would be in competition with the Company's business until
after termination of employment with the Company. The
restriction in this section shall include, but not be limited
to, plans to set up, establish or engage in a business
enterprise in competition with the Company and plans to seek
or accept employment from anyone in competition with the
Company.
4. Employee agrees to inform the Company of any business
opportunities relating to the business of the Company, which
comes to the attention of the Employee.
5. The Employee agrees that during the period of his or her
employment under this Agreement and for a period of one (1)
year after termination of his or her employment with the
company for any reason, he or she shall not directly or
indirectly own, manage, operate, control, be employed by, be a
shareholder of, be a director of, be an officer of,
participant in, contract with or be connected in any capacity
or any manner with any business that directly or indirectly
(whether through related companies or otherwise) competes with
the Company's business in any state in the U.S. or any
province or prefecture, as the case may be, in a foreign
country with the Company.
6. The Employee agrees that during the period of his employment
under this Agreement and for a period of one (1) year
following the termination of his employment with the Company
for any reason, he or she shall not supervise, manage, hire,
cause to be hired or otherwise induce any employee or
independent contractor of the Company to leave the employment
of the Company.
A-2
7. The Employee agrees that during the period of his or her
employment and for a period of one (1) year after termination
of his or her employment with the Company for any reason, he
or she shall not appropriate, divert or assist another to
appropriate or divert any business or customer away from the
Company or attempt to do any of the foregoing.
8. The Employee agrees that all Proprietary Information is the
sole property of the Company and the Company is the sole owner
of all intellectual property rights related thereto. The
Employee hereby assigns to the Company all rights the Employee
may have in such Proprietary Information. At all times, both
during employment by the Company and after any termination,
the Employee will keep in confidence any and all Proprietary
Information, and will not use or disclose any Proprietary
Information or anything relating to it without the prior
written consent of the Company, except as may be necessary in
the ordinary course of performing the Employee's duties for
the Company.
9. In the event of a termination of employment, for any reason,
the Employee will immediately deliver to the Company all
documents and data of any nature pertaining to work with the
Company and Proprietary Information and all copies thereof
which the Employee has in his or her possession and the
Employee will not take any documents or data of any
description or any reproduction of any description containing
or pertaining to any Proprietary Information.
10. The Employee shall promptly disclose to the Company any and
all improvements, inventions, whether or not patentable,
formulas, processes, techniques, know-how, and data, made or
conceived or reduced to practice or learned by the Employee,
either alone, or jointly with others, during and prior to the
period of the Employee's employment with the Company,
including but not limited to, any and all such inventions made
or acquired by Delargen or Gemini Biotech, Ltd. All such
improvements, inventions, formulas, processes, techniques,
know-how and data are hereinafter referred to as "Inventions".
11. The Employee agrees that all Inventions shall be the sole
property of the Company, and the Company shall be the sole
owner of all intellectual property rights related thereto. The
Employee hereby assigns to the Company all of the Employee's
rights, title and interest in and to all Inventions. The
Employee further agrees as to all such Inventions to assist
the Company in every proper way (at the Company's expense) to
obtain, and from time to time enforce, rights to the
Inventions. Employee agrees to render such assistance even if
and after his or her employment should terminate.
12. (a) The Employee represents that performance of all the
terms of this Agreement and/or employment by the
Company does not, and will not breach any agreement
with any other person or entity, including, without
limitation, any agreement to keep in confidence
proprietary information of third parties acquired by
the Employee in confidence or in trust prior to
employment by the Company. The Employee
A-3
has not brought and will not bring to the Company, or
use in the performance of his/her responsibilities at
the Company any materials or documents of a former
employer that are not generally available to the
public. The Employee also agrees that, in connection
with his or her employment with the Company, the
Employee is not to breach any obligation of
confidentiality that the Employee has to former
employers.
(b) The Employee is not a party to or otherwise bound by
an agreement or arrangement, or subject to any
judgment, decree or order of any court or
administrative agency, (i) that would conflict with
the Employee's obligation to diligently promote and
further the interest of the Company, or (ii) that
would conflict with the Company's business as now
conducted or as proposed to be conducted.
13. (a) This Agreement shall be effective as of the
earlier of the first day the Employee is employed by
the Company or date of execution of this Agreement.
(b) This Agreement shall be binding upon the Employee,
the Employee's spouse, heirs, executors, assigns and
administrators and shall inure to the benefit of the
Company, its successors, and assigns.
(c) This Agreement shall be construed under and according
to the laws of the State of Florida. In the event of
any dispute arising out of this Agreement, the
prevailing party will be entitled to its reasonable
attorneys' fees.
(d) The parties agree that in the event of Employee's
breach of Employee's obligations, Employer would be
irreparably damaged, and therefore, in addition to,
other remedies available to Employer, the Employer
shall be entitled to injunctive relief against
Employee, provided, however, that at the request of
the Company, such dispute shall be resolved in
accordance with the commercial arbitration rules of
the American Arbitration Association by binding
arbitration held in Gainesville, Florida.
(e) In the event that any provision hereof shall be
determined by any court of competent jurisdiction to
be unenforceable or otherwise invalid as written, the
same shall be enforced and validated in a re-written
form permitted by the applicable law. The provisions
hereof are severable and the unenforceability or
invalidity of any provision hereof shall not affect
the remainder of the provisions of this agreement.
Furthermore, the unenforceability or invalidity of
any provision in one jurisdiction shall not affect
the enforceability or validity of such provision in
any other jurisdiction.
(f) Nothing herein shall obligate the Company to continue
to retain the Employee in the Company's employment or
limit or impair the Company's ability to terminate
the employment of the Employee at will with or
without cause for any reason. The Employee is an
employee at will.
A-4
(g) In the event of a violation of this Agreement, if the
Employee is prevented by a court from committing any
further violation, whether by a temporary restraining
order, injunction or otherwise, the time periods set
forth in this Agreement shall be computed by
commencing the periods on the date of the applicable
court order and continuing them from that date for
the full period provided.
(h) The Employee shall have the right to request a waiver
of all or part of the restrictions contained in this
Agreement by providing the Company with a written
statement containing all relevant details. The
Company may, in its sole discretion, waive all or
part of the restrictions contained in this Agreement
on such terms and conditions, and to such extent, as
it, in its sole discretion, deems appropriate.
Such waiver must be in writing.
(i) For one (1) year following the termination of this
Agreement for any reason, the Employee agrees to show
this Agreement to any person or entity before he
directly or indirectly owns, manages, operates,
controls, becomes employed by, becomes a shareholder
of, becomes a director of, becomes an officer of,
participates in, contracts with or becomes connected
in any capacity or in any manner with such person or
entity.
AGREED TO and ACCEPTED this 18th day of August, 1998.
EMPLOYEE: ELECTROPHARMACOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxx
--------------------- ------------------------
Title: Chairman & CEO
_______/s/____________________________ ____/s/ __________________________
(Witness) (Witness)
A-5
Exhibit B of Exhibit 10.1
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of August 18, 1998, by and between
Electropharmacology, Inc., (the "Company") and Xxxxxxx Xxxxxxxxx ("Optionee").
WITNESSETH
WHEREAS, pursuant to the 1993 Stock Option Plan, as amended on November 1, 1996,
(the "Stock Option Plan"), the Plan Committee of the Board of Directors of the
Company (the "Plan Committee") has authorized the granting to Optionee of an
incentive stock option to purchase the number of shares of Common Stock ("Common
Stock") of the Company specified in Paragraph 1 hereof, at the price and
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated;
NOW, THEREFORE, in consideration of the promises and of the undertaking of the
parties hereto contained herein, it is hereby agreed:
1. Number of Shares: Option Price. Pursuant to said action of the Plan
Committee, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of said Stock Option
Plan, all of any part of 250,000 shares of Common Stock of the Company for
cash at the price of $1.06 per share.
2. Term. This Option shall expire at the close of business on August 18, 2008
unless such Option shall have been terminated prior to that date in
accordance with the provision of the Stock Option Plan or this Agreement.
The terms "Parent" and "Subsidiary" herein mean a parent corporation or a
subsidiary corporation, as such terms are defined in the Stock Option Plan.
3. Vesting. Shares subject to exercise shall be 50,000 immediately, 62,500 on
each of the first and second anniversaries of the date hereof and the
remaining 75,000 on the third anniversary of the date hereof. All shares
shall thereafter remain subject to exercise for the term specified in
Paragraph 2 hereof, provided that Optionee is then and has continuously
been an employee of the Company, a Parent or Subsidiary, subject, however,
to the provisions of Paragraph 5 hereof.
4. Exercise. The Option may be exercised by written notice delivered to the
Company stating the number of shares with respect to which the Option is
being exercised, together with a check made payable to the Company in the
amount of the purchase price of such shares plus the amount of applicable
federal, state and local withholding taxes and the written statement
provided for in Paragraph 9 hereof, if required by said Paragraph 9. Not
less than 100 Shares may be purchased under such Option at the time. Only
whole shares may be purchased.
B-1
5. Exercise on Termination of Employment. In the event Optionee's employment
is terminated, Optionee's right to exercise his/her options, if any, shall
be governed by Section 7 of the Stock Option Plan.
6. Nontransferability. This Option may not be assigned or transferred except
by will or by the laws of descent and distribution, and may be exercised
only by Optionee during his/her lifetime and after his/her death, by
his/her representative or by the person entitled thereto under his/her will
or the laws of interstate succession.
7. Optionee Not a Shareholder. Optionee shall have no rights as a shareholder
with respect to the Common Stock of the Company covered by such Option
until the date of issuance of a stock certificate or stock certificates to
him upon exercise of the Option. No adjustment will be made for dividends
or other rights for which the record date is prior to the date such stock
certificate or certificates are issued, except as provided in Section 10 of
the Stock Option Plan.
8. Modification and Termination. The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 7
and 10 of the Stock Option Plan.
9. Restrictions on Transfer of Shares. Securities Law Restrictions. Optionee
represents and agrees that upon his/her exercise of the Option, in whole or
in part, unless there is in effect at that time under the Securities Act of
1933, a registration statement relating to the shares issued to him, he/she
will acquire the shares issuable upon exercise of this Option for the
purpose of investment and not with a view to the resale or further
distribution, and that upon such exercise thereof he will furnish to the
Company a written statement to such effect, satisfactory to the Company in
form and substance. Optionee agrees that any certificate issued upon
exercise of this Option may bear a legend indicating that its
transferability is restricted in accordance with applicable state and
federal securities laws. Any person or persons entitled to exercise this
Option under the provisions of Paragraph 4 and 5 hereof shall, upon each
exercise of the Option under circumstances in which Optionee would be
required to furnish such a written statement, also furnish to the Company a
written statement to the same effect, satisfactory to the Company in form
and substance.
10. Plan Governs. This agreement and the Option evidenced hereby are made and
granted pursuant to the Stock Option plan and are in all respects limited
by and subject to the express terms and provisions of that Plan, as it may
be amended from time to time and construed by the Plan Committee of the
Board of Directors of the Company. It is intended that this Option shall
qualify as an incentive stock option as defined by Section 422 of the code,
and this Agreement shall be construed in a manner which will enable this
Option to be so qualified. Optionee hereby acknowledges receipt of a copy
of the Stock Option Plan.
B-2
11. Notices. All notices to the Company shall be addressed to the President of
the Company at the principal office of the Company at 0000 X.X. 00xx
Xxxxxx, Xxxxxxxxxxx, Xx 00000, and all notices to Optionee shall be
addressed to Optionee at the address of Optionee on file with the Company
or its subsidiaries, or to such other address as either may designate to
the other in writing. A notice shall be deemed to be duly given if and when
enclosed in a properly addressed sealed envelope deposited, postage
prepaid, with the United States Postal Service. In lieu of giving notice by
mail as aforesaid, written notice under this Agreement may be given by fax
or personal delivery to Optionee or to the President (as the case may be).
12. Sale or Other Disposition. Optionee understand that, under current law,
beneficial tax treatment resulting from the exercise of this option will be
available only if certain requirements of the Code are satisfied, including
with limitation, the requirement that no disposition of shares of Common
Stock of the Company acquired pursuant to exercise of this Option be made
within two years from the grant date or within one year after the transfer
of such shares to him/her. If Optionee at any time contemplates the
disposition (whether by sale, gift or exchange, or other form or transfer)
of any shares acquired by exercise of this option, he or she will first
notify the Company in writing or such proposed disposition and cooperate
with the Company in complying with all applicable requirements of law,
which, in the judgment of the Company, must be satisfied prior to such
disposition. In addition to the forgoing, Optionee hereby agrees that if
Optionee disposes (whether by sale, exchange or gift, or otherwise) of any
shares acquired by exercise of this Option within two years of the grant
date or within one year after the transfer of such shares to Optionee upon
exercise of this Option, then Optionee shall notify the Company of such
disposition in writing within 30 days from the date of such disposition.
Said written notice shall state the date of such disposition, and the type
and amount of the consideration received for such shares or shares by
Optionee in connection therewith. In the event of any such disposition, the
company shall have the right to require Optionee to immediately pay the
company the amount of taxes (if any) which the Company is required to
withhold under federal and/or state law as a result of the granting or
exercise of the subject Option in the disposition of the subject shares.
13. Holdback. In accepting the grant of the Option, Optionee hereby agrees
that, in the event of any underwritten public offering of the Company's
securities pursuant to which any of its securities are registered pursuant
to the Securities Act of 1933, as amended, and to the extent the
underwriter of such offering requests that certain shareholders of the
Company agree to do so, the Optionee will agree not to sell any of the
Common Stock issued or issuable upon exercise of this Option for such
period of at least 12 months after the closing of such public offering, and
to sign a 12-month holdback agreement to that effect.
B-3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
ELECTROPHARMACOLOGY, INC.
/s/ Xxxx Xxx
------------------------------
Title: Chairman & CEO
------------------------------
OPTIONEE:
/s/ Xxxxxxx Xxxxxxxxx
------------------------------
Signature
Xxxxxxx Xxxxxxxxx
------------------------------
(Typed or Printed Name)
Address:
------------------------------
------------------------------
------------------------------
B-4
