EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 10th day of December,
2001 by and between XX. XXXX XXXXXXX X'XXXX (the "Employee"), and ASTRALIS LTD.,
a Delaware corporation (the "Employer").
WITNESSETH:
WHEREAS, Employee has dedicated the past fifteen years endeavoring
to find a cure for the disease Psoriasis and is the owner of a United States
patent application filed with the United States Patent and Trademark Office on
or about March 15, 2001, entitled "Compositions and Methods for the Treatment
and Clinical Remission of Psoriasis;" and
WHEREAS, Employee has granted Employer an exclusive right and
license to use and exploit his patent pursuant to a License Agreement dated as
of April 26, 2001; and
WHEREAS, Employer is a start-up phase biotechnology company formed
to engage in research and development of treatments for immune system disorders
and skin diseases and its first produced candidate id a new drug named Psoraxine
which is based entirely upon Employee's research and development efforts; and
WHEREAS, SkyePharma PLC, a corporation organized under the laws of
England and Wales, proposes making a US $20,000,000 equity investment in
Employer provided that Employer and Employee execute this Agreement and agree to
be bound by the terms hereof; and
WHEREAS, the Employer desires to employ Employee on a full time
basis and employee desires to accept such engagement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. EMPLOYMENT
The Employer hereby employs the Employee and the Employee hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. TERM
Subject to the provisions of this Agreement respecting termination
of employment hereinafter set forth, the term of the Agreement shall be for a
period of three (3) years commencing on the date of this Agreement and
terminating on the third anniversary of the date hereof (the "Term"). Employer
and Employee agree that beginning six months prior to the expiration of the
Term, either party at its option may request to renew the Agreement for an
additional term of up to three (3) years, in which case the parties will
initiate good faith negotiations with respect to the terms and conditions of a
possible renewal or extension of this Agreement. Any such extension or renewal
of this Agreement shall be evidenced by a new written agreement and shall
contain such terms and conditions as the parties shall mutually agree in
writing.
3. DUTIES
(A) Office. The Employee shall serve the Employer during the Term as
Chairman of the Board of Directors and Employees shall report to the Board of
Directors.
(B) Time. During the Term, the Employee shall devote his entire
time, energy and skill to the affairs of the Employer and to the promotion of
its interests. Employee will apply on a full time basis all of his skills and
experience to the performance of his duties in such employment, and Employee
shall have no other employment and, without the consent of the Employer's Board
of Directors, no outside business activities that require the devotion of
material amounts of the Employee's time.
(C) Place. The Employee shall perform his services in Caracas,
Venezuela and at Employer's current executive offices in Florham Park, New
Jersey, and shall engage in such reasonable travel as the performance of his
duties on behalf of Employer may require.
4. COMPENSATION
(A) Base Salary. Subject to the provisions of this Agreement, the
Employer shall pay or cause to be paid to the Employee, during the term of this
Agreement, a base salary (the "Salary") at a rate of not less than U.S. $150,000
per year. The Employer annually may increase, but not decrease, Employee's base
salary based upon the Employee's performance during such year and in accordance
with the Employer's corporate policies. The Salary shall be earned and shall be
payable at such intervals and otherwise in such manner as is consistent with the
normal practice of the Employer for remuneration of its employees. The Employer
will also pay or reimburse the Employee for all documented reasonable business
expenses actually incurred or paid by Employee in the performance of his duties
hereunder in accordance with Employer's policies for incurring such expenses,
upon presentation of expense statements or vouchers or such other supporting
information as Employer may reasonably require of Employee.
(B) Bonus. In addition to payment of his salary, the Employee may
from time to time receive payment of a bonus, the amount, terms and conditions
of which shall be determined by Employer's Board of Director's in its sole
discretion based upon Employee's performance.
(C) Benefits. During the Term, except as may be otherwise provided
herein, the Employee will be entitled to participate in such benefit plans as
may be maintained by the Employer for the benefit of senior management employees
of the Employer, such participation to be on terms and conditions at least
equivalent to terms and conditions upon which such benefits are provided to
other full-time senior management employees of the Employer. Without limiting
the foregoing, the Employee shall be entitled to medical benefits, group life
insurance, holiday,
-2-
vacation or similar rights, and such privileges as are from time to time
provided by the Employer to its full-time senior management employees.
(D) Withholding. The Employer shall be entitled to withhold amounts
from any compensation or other form of remuneration or benefit payable by the
Employer to the Employee that the Employer reasonably believes it is required to
withhold under any federal, state, local or foreign tax law to which the
Employer is subject.
5. DISABILITY; DEATH
(A) Disability. If during the Term the Employee shall become
incapable of performing his duties and fulfilling his obligations hereunder
because of injury or physical or mental illness ("Disability"), and such
Disability shall continue, or reasonably may be expected, upon competent medical
opinion, to continue for more than six months, or for shorter periods
aggregating more than six months in any twelve-month period, the Employer shall,
nevertheless, continue to pay the Employee his Salary through the last day of
the sixth consecutive month of Disability or, if applicable, the date upon which
the shorter periods of Disability shall have aggregated more than six months in
the twelve-month period (in either event, the "Disability Date"). The Employer
may, at any time on or after the Disability Date, terminate this Agreement and
all obligations on the part of either party hereto, other than the obligations
of the Employee under Section 6 hereof, which obligations shall continue in
effect for the period therein stated.
(B) Death. If the Employee shall die during the term of this
Agreement, this Agreement shall terminate on the date of Employee's death except
that the Employee's estate shall be entitled to receive the Salary provided in
Section 4(B) to the last day of the month in which his death occurs and the
balance of any amounts that would have been payable hereunder. Such termination
shall not affect any vested rights which the Employee may have at the time of
his death pursuant to any insurance or other death benefit plans or arrangements
of the Employer or any affiliate of the Employer.
6. PROTECTION OF CONFIDENTIAL INFORMATION AND NON-COMPETITION
(A) Confidential Information. The Employee acknowledges that his
employment by the Employer will, throughout the term of this Agreement, bring
him into close contact with its Confidential Information of the Employer, which
term shall include but not be limited to information about costs, profits,
markets, sales, past, present and future products, key personnel, pricing
policies, product designs and plans, processes, operational methods, technical
processes, designs or other technical data, other business affairs and methods
and plans for future development, and other information not readily available to
the public. The Employee further acknowledges that the services to be performed
under this Agreement are of a special, unique, unusual, extraordinary and
intellectual character. In recognition of the foregoing, the Employee covenants
and agrees:
(i) that he will keep secret all Confidential
Information of the Employer and will not disclose such Confidential Information
to anyone outside of the Employer, either during or after the Term, except with
the Employer's prior written consent, and
-3-
he will not use such Confidential Information at any time in any way which might
be detrimental to the interest of the Employer; and
(ii) that he will deliver promptly to the Employer at
any time the Employer may so request, all memoranda, notes, records, reports and
other documents (and all copies thereof) relating to or containing Confidential
Information, or the business of the Employer, which he may then possess or have
under his control.
(B) Non-Competition. The Employee shall not, for a period of one (1)
year from the date this Agreement is terminated (regardless of whether this
Agreement has been terminated prior to the Term), anywhere in the United States,
(i) directly or indirectly, own, manage, become an employee of, operate, join or
control, or participate in the ownership, management, operation or control of,
any business, firm, corporation, partnership, proprietorship or other entity
which is engaged in the business of developing drugs for treatment of immune
system disorders or skin diseases (although nothing herein shall prohibit
Employee from conducting clinical research), (ii) solicit employment of any of
the employees, consultants, agents or independent contractors of the Employer
(for this purpose the terms "employees," "consultants," "agents" and
"independent contractors" shall include any persons having such status with
regard to the Employer at any time during the six (6) months preceding any
solicitation in question), or (iii) solicit, interfere with or endeavor to
entice away from the Employer any customer of the Employer. The foregoing
restrictions in subclause (B)(i) shall not apply to investment in shares of
stock traded on a national securities exchange or on the national
over-the-counter market which shall, at the time of acquisition, constitute less
than five percent of the outstanding shares of such stock.
(C) Assignment of Inventions, Techniques. Employee assigns to
Employer his entire right, title and interest in any invention, technique,
process, device, discovery, improvement or know-how, patentable or not, that
Employee conceives, solely or jointly, while working for Employer: (a) that
relates in any manner to the actual or anticipated business of Employer; (b)
that is suggested by or results from any task assigned to Employee or work
performed by Employee for or on behalf of Employer; or (c) for which Employer's
equipment, supplies, facilities, information or materials are used. Employee
shall disclose any such invention, technique, process, device, discovery,
improvement or know-how promptly to Employer. Further, Employee shall execute a
specific assignment of title to Employer and do anything else reasonably
necessary to enable Employer to secure patent, trade secret or any other
proprietary rights in the United States or foreign countries.
(D) Specific Remedies. If the Employee commits a breach of Section
6(A), (B) or (C) of this Agreement, the Employer shall have (i) the right and
remedy to have such provisions specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach will cause
irreparable injury to the Employer and that money damages will not provide an
adequate remedy to the Employer, and (ii) the right and remedy to require the
Employee to account for and pay over to the Employer all compensation, profits,
moneys, accruals, increments or other benefits (collectively, "Compensation")
derived or received by the Employee as the result of any transactions
constituting a breach of any of the provisions of Section 6(A), (B) or (C), as
the case may be, and the Employee hereby agrees to account for and pay over such
benefits to the Employer.
-4-
7. TERMINATION
Except for, and subject to, the provisions of Section 5 and 6
hereof, this Agreement and all of the liabilities and obligations of the
Employer to the Employee hereunder, shall terminate upon the earliest happening
of any of the following events, to wit:
(i) The date upon which the employment terminates
pursuant to Section 2 hereof.;
(ii) Termination by the Employee at any time provided
Employee gives Employer six (6) months prior written notice prior to the date of
Employee's termination;
(iii) Termination by the Employer without cause provided
it gives Employee ninety (90) days prior written notice prior to the date of
termination;
(iv) Death of the Employee, subject to the provisions of
Section 5(B), hereof;
(v) Termination by the Employer of this Agreement due to
the Disability of the Employee, subject to the provisions of Section 5(A),
hereof; or
(vi) Termination of this Agreement for cause.
For purposes of this Agreement, "cause" shall mean (i) the failure
or inability of the Employee to cure, within 10 days of receipt of written
notice on behalf of the Board, the Employee's failure to substantially perform
the primary duties of his employment hereunder; (ii) Employee's conviction
(including a plea of guilty or nolo contendere) of a felony or any crime of
theft, dishonesty or moral turpitude under state or federal criminal laws; (iii)
the good faith determination of the Board that the Employee has become unable,
as a result of alcohol or drug use, to carry out the responsibilities of his
employment; (iv) the commission by the Employee of any act of fraud, or material
act of malfeasance, disloyalty or breach of trust against the Employer, as
determined by the Board in good faith; or (v) the violation by the Employee of
his covenants contained in Section 6. In the event this Agreement is terminated
for cause the Employee shall be entitled to receive all amounts and benefits
accrued under this Agreement to the date of such termination, but no further
benefits shall thereafter accrue to the Employee under this Agreement.
8. NOTICES
All notices, requests, consents and other communications, required
or permitted to be given hereunder, shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by prepaid telegram, or
three days after being mailed first-class, postage prepaid, by registered or
certified mail, as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith):
If to the Employer:
Astralis Ltd.
-5-
000 Xxxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
If to the Employee:
Xx. Xxxx Xxxxxxx X'Xxxx
c/o Astralis Ltd.
000 Xxxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board of Directors
9. INDEPENDENCE, SEVERABILITY AND NON-EXCLUSIVITY
Each of the rights and remedies enumerated in Section 6 shall be
independent of the other and shall be severally enforceable and all of such
rights and remedies shall be in addition to and not in lieu of any other rights
and remedies available to the Employer under the law or in equity. If any of the
covenants contained in Section 6 or if any of the rights or remedies enumerated
in Section 6, or any part of any of them, is hereafter construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, or rights or remedies, which shall be given full effect without
regard to the invalid portions. If any of the covenants contained in Section 6
is held to be unenforceable because of the duration of such provision or the
area covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form said provision shall then be enforceable.
10. MISCELLANEOUS
(A) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
(B) Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
-6-
(C) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior negotiations, agreements, arrangements and understandings,
written or oral, between the parties.
(D) No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
(E) Assignability. This Agreement, and the Employee's rights and
obligations hereunder, may not be assigned by the Employee, but is nevertheless
binding on Employee's heirs, executors and administrators and on Employer's
successors and assigns.
(F) Severability. The provisions of this Agreement shall be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement shall not in any way be affected or
impaired but shall remain binding in accordance with their terms.
(G) Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party granting such waiver. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
-7-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
/s/ Xxxx Xxxxxxx X'Xxxx
----------------------------------
Xx. Xxxx Xxxxxxx X'Xxxx
Chairman of the Board of Directors
/s/ Xxxx Ajnsztajn
----------------------------------
Xxxx Ajnsztajn
Chief Executive Officer
-8-
