EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made this 1st day
of September, 2002 by and between Xxxxxxx X. Xxxxxxx, Ph.D. ("Xx. Xxxxxxx") and
BioDelivery Sciences International, Inc. (the "Company").
WHEREAS, the Company is engaged in the business of researching and
developing drug delivery technologies; and
WHEREAS, the Company and Xx. Xxxxxxx are willing to continue the employment
relationship, on the terms, conditions and covenants set forth in this
Agreement;
NOW, THEREFORE, in consideration of Xx. Xxxxxxx'x continued employment with
the Company and other good and valuable consideration, receipt of which Xx.
Xxxxxxx and the Company hereby acknowledge, Xx. Xxxxxxx and the Company agree,
as follows:
1. Position. Xx. Xxxxxxx agrees to continue his employment as Executive
--------
Vice President, Chief Scientific Officer, and Director of Research and
Development of the Company. He further agrees to perform the job duties and to
carry out the responsibilities of that position, as determined by the President
from time to time. Xx. Xxxxxxx'x reporting responsibilities are shown in Exhibit
A, the Company's organizational chart.
2. Xx. Xxxxxxx'x Effort. Xx. Xxxxxxx agrees to devote his full working time
--------------------
and best efforts, skill and attention to his position and to the business and
interests of the Company.
3. Salary. The Company shall pay Xx. Xxxxxxx compensation for services
------
rendered in the amount of Two Hundred and Ten Thousand Dollars ($210,000) per
annum payable on a biweekly basis. Further, the Company, from time to time,
shall pay Xx. Xxxxxxx such bonuses, additional compensation or other benefits as
may be determined by the Executive Compensation Committee of the Board of
Directors. Any changes in Xx. Xxxxxxx'x duties or compensation, shall not in any
way affect the promises of Xx. Xxxxxxx as set forth in this Agreement.
Furthermore, Xx. Xxxxxxx shall be reimbursed for expenses properly documented as
per the Company's policy.
4. Termination. This Agreement and the status and obligations of Dr.
-----------
Xxxxxxx thereunder as an employee of the Company (except for the provisions of
paragraph 5 through 9 inclusive, 11 through 14 inclusive) shall cease and
terminate effective upon the close of business September 1st, 2005 unless
further extended by the parties hereto in writing; provided, that upon such date
said termination shall not affect all rights that Xx. Xxxxxxx may have pursuant
to any of the Company's retirement plans, supplementary retirement plans, profit
sharing and savings
20
plans, healthcare, 401 (k) any other employee benefit plans sponsored by the
Company, which, in accordance with its terms, is applicable to Xx. Xxxxxxx.
4.1 Death or Disability. This Agreement shall automatically
-------------------
terminate upon the death of Xx. Xxxxxxx and all of his rights
hereunder, including the rights to receive compensation and benefits,
except as otherwise required by law, shall terminate. The Company may,
at its option, terminate this Agreement in the event that Xx. Xxxxxxx
shall be physically or mentally incapacitated which shall make him
unable to perform the duties assigned to him for more than ninety (90)
days in any one hundred eighty (180) day period. In the event of a
dispute as to whether Xx. Xxxxxxx is physically or mentally unable to
perform his duties hereunder, the Company shall select an impartial
physician to make a determination as to Xx. Xxxxxxx'x incapacity, if
any. Xx. Xxxxxxx agrees to submit to appropriate medical examinations
for the purposes of such determination. Such termination shall not
affect Xx. Xxxxxxx'x rights and obligations under paragraphs 5 through
9 inclusive, 11 through 14 inclusive, all of which shall survive the
early termination or expiration of this Agreement.
4.2 The Company's Right to Terminate with Notice. The Company
--------------------------------------------
may terminate this Agreement upon twelve months prior notice to Xx.
Xxxxxxx. In case of termination under this section, the Company may
elect to pay Xx. Xxxxxxx a base rate of $210,000 for the notice period
in lieu of permitting him to continue working. Aside from payment as
herein provided, the Company shall have no further obligations to Xx.
Xxxxxxx following termination. The period during which Xx. Xxxxxxx
shall not compete with the Company in the event of termination under
this section shall be shortened from three (3) years to one (1) year
from date of termination.
4.3 Termination for Cause. Notwithstanding the immediately
----------------------
preceding paragraph or anything elsewhere herein contained to the
contrary, the Company may terminate this Agreement and all of its
obligations to Xx. Xxxxxxx, provided that written notice of termination
allows 60 days for Xx. Xxxxxxx to correct the action for cause, in the
event that: (i) Xx. Xxxxxxx breaches any term of this Agreement; (ii)
if Xx. Xxxxxxx is convicted of or enters a no contest plead to any
felony or crime involving moral turpitude, or if he pleads guilty to a
lesser included offence or crime in exchange for withdrawal of a felony
indictment, felony charge by information, or is charged with a crime
involving moral turpitude, whether the charge arises under the laws of
the United States or any other state therein; (iii) Xx. Xxxxxxx fails
to perform the duties and obligations assigned him by the Board of
Directors or Chief Executive Officer of the Company and for which
duties the Company has provided reasonable staffing support; (iv) the
Company reasonably suspects that he has engaged in illegal drug or
substance use or abuse; (v) he wrongfully appropriates for personal use
or benefit any property or money of the Company entrusted to him by the
Company; (vi) he disregards any legal directions of the Chief Executive
Officer or the Board of Directors of the Company; (vii) he materially
violates Company policies or procedures; (viii) he takes any actions
21
that might damage the reputation of the Company or its ability to
receive approvals of its drug delivery systems from the Food and Drug
Adminstration (excluding, however, actions protected by "whistleblower"
legislation); or (ix) Xx. Xxxxxxx resigns his employment. In the event
of termination for any of the reasons set forth herein Xx. Xxxxxxx
shall be bound by all of the terms of this Agreement that survive
termination.
5. Confidentiality. Xx. Xxxxxxx shall keep confidential for a period of
---------------
three years for patented technology and five years for patent-pending
technology, except as the Company may otherwise consent in writing, and not
disclose, or make any use of except for the benefit of the Company, at any time
either during or subsequent to Xx. Xxxxxxx'x performance of services for the
Company, any trade secrets, knowledge, data or other information of the Company
relating to products, processes, know how, technical data, designs, formulas,
test data, customer lists, business plans, marketing plans and strategies, and
product pricing strategies or other subject matter pertaining to any business of
the Company or any of its clients, customers, consultants, licensees or
affiliates which Xx. Xxxxxxx may produce, obtain or otherwise learn of during
the course of Xx. Xxxxxxx'x performance of services and after its termination
(collectively "Confidential Information"). Xx. Xxxxxxx shall not deliver,
reproduce, or in any way allow any such Confidential Information to be delivered
to or used by any third parties without the specific direction or consent of a
duly authorized representative of the Company. The terms of this paragraph shall
survive termination of this Agreement.
6. Return of Confidential Material. Upon the completion or other
-----------------------------------
termination of Xx. Xxxxxxx'x services for the Company, Xx. Xxxxxxx shall
promptly surrender and deliver to the Company all records, materials, equipment,
drawings, documents, lab notes and books and data of any nature pertaining to
any invention, trade secret or confidential information of the Company or to Xx.
Xxxxxxx'x services, and Xx. Xxxxxxx will not take with him any description
containing or pertaining to any Confidential Information, knowledge or data of
the Company which Xx. Xxxxxxx may produce or obtain during the course of his
services. The terms of this paragraph shall survive termination of this
Agreement.
7. Assignment of Inventions. Xx. Xxxxxxx shall assign and transfer to the
------------------------
Company his entire right, title and interest in and to all Inventions (as used
in this Agreement, "Inventions" shall include, but not be limited to, ideas,
improvements, designs and discoveries), whether or not patentable and whether or
not reduced to practice, made or conceived by Xx. Xxxxxxx (whether made solely
by Xx. Xxxxxxx or jointly with others) during the period Xx. Xxxxxxx performs
services for the Company which relate in any manner to cochleate or other forms
of delivery technologies or to the actual or anticipated business, work or
research and development of the Company or its affiliates, or result from or are
suggested by any task assigned to Xx. Xxxxxxx or any work performed by Xx.
Xxxxxxx for or on behalf of the Company or any of its affiliates. All Inventions
are the sole property of the Company. The terms of this paragraph shall survive
termination of this Agreement.
8. Disclosure of Inventions: Patents. In connection with Inventions:
---------------------------------
22
(a) Xx. Xxxxxxx will disclose all Inventions promptly in writing to the
person to whom Xx. Xxxxxxx reports at the Company, with a copy to the President
of the Company, in order to permit the Company to enjoy rights to which it may
be entitled under this Agreement.
(b) Xx. Xxxxxxx will, at the Company's request promptly execute a written
assignment of title to the Company for any Invention, and Xx. Xxxxxxx will
preserve any Invention as confidential information of the Company: and
(c) Upon request, Xx. Xxxxxxx will assist the Company or its nominee (at
the Company's expense) during and at any time subsequent to Xx. Xxxxxxx'x
performance of services for the Company in every reasonable way in obtaining for
its own benefit patents and copyrights' for Inventions in any and all countries,
which Inventions shall be and remain the sole and exclusive property of the
Company or its nominee, whether or not patented or copyrighted. Xx. Xxxxxxx will
execute such papers and perform such lawful acts as the Company deems to be
necessary to allow it to exercise all rights, title and interest in such patents
and copyrights.
The terms of this paragraph shall survive termination of this Agreement.
9. Execution of Documents. In connection with paragraph 8(c), Xx. Xxxxxxx
----------------------
will execute, acknowledge and deliver to the Company or its nominee upon request
and at its expense all such documents, including applications for patents and
copyrights and assignments of inventions, patents and copyrights to be issued
therefore, as the Company may determine necessary or desirable to apply for and
obtain letters, patents, and copyrights on Inventions in any and all countries
and/or to protect the interest of the Company or its nominee in Inventions,
patents and copyrights and to vest title thereto in the Company or its nominee.
The terms of this paragraph shall survive termination of this Agreement.
10. Maintenance of Records. Xx. Xxxxxxx will keep and maintain adequate and
----------------------
current written records of all Inventions made by Xx. Xxxxxxx (in the form of
notes, sketches, drawings and as may be specified by the Company), which records
shall be available to and remain the sole property of the Company at all times.
11. Prior Inventions. It is understood that all Inventions, if any,
-----------------
patented or unpatented which Xx. Xxxxxxx made prior to the time the Company and
Xx. Xxxxxxx began to consider Xx. Xxxxxxx'x possible performance of services are
excluded from the scope of the Agreement . To preclude any possible uncertainty,
Xx. Xxxxxxx has set forth on Exhibit B attached hereto a complete list of all
such prior inventions, including numbers of all patents and patent applications,
and a brief description of all unpatented inventions which are not the property
of another party (including, without limitation a current or previous
contracting party). The list is complete with the exception of the pre-existing
patents which Xx. Xxxxxxx has assigned to the Universities and to which the
Company is the exclusive licensee and if no items are included on Exhibit B, Xx.
Xxxxxxx has no such prior inventions. Xx. Xxxxxxx will notify the Company in
23
writing before Xx. Xxxxxxx makes any disclosure or performs any work on behalf
of the Company which appears to threaten or conflict with proprietary rights Xx.
Xxxxxxx claims in any such invention or idea. In the event of Xx. Xxxxxxx'x
failure to give such notice, Xx. Xxxxxxx will make no claim against the Company
with respect to any such inventions or ideas. The terms of this paragraph shall
survive termination of this Agreement.
12. Competition - For purposes of this Agreement "Competitive Activity"
-----------
shall mean the development, manufacturing or sale of any lipid based drug
delivery system.
a. Xx. Xxxxxxx will not do, or intend to do, any of the
following, either directly or indirectly, during Xx. Xxxxxxx'x employment with
the Company and during the period of three (3) years after Xx. Xxxxxxx'x
cessation of employment with the Company, anywhere in the world. In the event
that Xx. Xxxxxxx improperly competes with the Company, the period during which
he engages in such competition shall not be counted in determining the duration
of the the three (3) year non-compete restriction.
i. Own, manage, operate, control, consult for, be an officer or
director of, work for, or be employed in any capacity by any company,
eleemosynary institution or any other business, entity, agency or
organization which is in any way involved in the research, development,
distribution, sale or commercialization of lipid based drug delivery
technologies. Provided, however, that during his employment by the company
and during his non-compete period follwing departure from the company, the
employee may serve as a director, consultant, or scientific advisor of an
entity that is either a BDSI licensee and for non-licensees for which
capacity the employee has the written permission of the Board of BDSI.
ii. Solicit prior or current customers of the Company or any entities
with which the Company has undertaken joint studies or developmental
activities for any purpose in competition (as defined herein) with the
Company; or
iii. Solicit any then current employees employed by the Company
without the Company's consent.
Xx. Xxxxxxx and Company agree that the phrase "Xx. Xxxxxxx'x cessation
of employment with the Company" as used in this Agreement, refers to any
separation from his employment at the Company either voluntarily or
involuntarily, either with cause or without cause, or whether the separation is
at the behest of the Company or Xx. Xxxxxxx (hereinafter referred to and defined
as "Xx. Xxxxxxx'x Cessation of Employment") provided, however, that if Xx.
Xxxxxxx'x employment contract is terminated by the Company without cause
pursuant to Section 4.2, Xx. Xxxxxxx'x non-compete will be limited to a
24
for-profit business and shall be for a period equal to the greater of (i) one
year from termination or (ii) correspond to the compensation period for which he
is receiving compensation, in accordance with Section 4.2., which non-compete
period can be extended by the Company with the additional payment to Xx. Xxxxxxx
on a pro rata basis at the rate of $210,000 per year. Nothing in this agreement
shall preclude him from employment at a not-for-profit (University) or
governmental institution). Provided that no for-profit business involved in
lipid-based drug delivery directly or indirectly derives a benfit from Xx.
Xxxxxxx'x employment.
b. This Agreement expressly authorizes and permits Xx. Xxxxxxx
to continue his present relationship with the University of Medicine and
Dentistry of New Jersey provided Xx. Xxxxxxx assign any salary compensation
received from the University of Medicine and Dentistry of New Jersey over to the
Company. Xx. Xxxxxxx'x participation in licensing income from the pre-existing
exclusive license between the Company and the Universities is specifically
excluded from this assignment of income to the Company and said royalty income
shall belong to Xx. Xxxxxxx.
13. Other Obligations.
-----------------
(a) Xx. Xxxxxxx acknowledges that the Company from time to time may
have agreements with other persons or with the U.S. Government, or agencies
thereof, which impose obligations or restrictions on the Company regarding
inventions made during the course of work thereunder or regarding the
confidential nature of such work. Xx. Xxxxxxx will be bound by all such
obligations and restrictions and will take all action necessary to
discharge the obligations of the Company thereunder.
(b) All of Xx. Xxxxxxx'x obligations under this Agreement shall be
subject to any applicable agreements with, and policies issued by the
Company to which Xx. Xxxxxxx is subject.
14. Trade Secrets of Others. Xx. Xxxxxxx represents that Xx. Xxxxxxx'x
-----------------------
performance of all the terms of this Agreement as employee to the Company does
not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Xx. Xxxxxxx in confidence or in
trust, and Xx. Xxxxxxx will not disclose to the Company, or the Company to use,
any confidential or proprietary information or material belonging to any other
person or entity. Xx. Xxxxxxx will not enter into any agreement, either written
or oral, which is in conflict with this Agreement.
15. Injunctive Relief. Xx. Xxxxxxx acknowledges that any breach or
------------------
attempted breach by Xx. Xxxxxxx of this Agreement or any provision hereof shall
cause the Company irreparable harm for which any adequate monetary remedy does
25
not exist. Accordingly, in the event of any such breach or threatened breach,
the Company shall be entitled to obtain injunctive relief, without the necessity
of posting a bond or other surety, restraining such breach or threatened breach.
16. Modification. This Agreement may not be changed, modified, released,
------------
discharged, abandoned, or otherwise amended, in whole or in part, except by an
instrument in writing, signed by Xx. Xxxxxxx and by the Company. Any subsequent
change or changes in Xx. Xxxxxxx'x relationship with the Company or Xx.
Xxxxxxx'x compensation shall not affect the validity or scope of this Agreement.
17. Entire Agreement. Xx. Xxxxxxx acknowledges receipt of this Agreement,
----------------
and agrees that with respect to the subject matter thereof, it is Xx. Xxxxxxx'x
entire agreement with the Company, superseding any previous oral or written
communications, representations, understandings with the Company or any office
or representative thereof.
18. Severability. In the event that any paragraph or provision of this
------------
Agreement shall be held to be illegal or unenforceable, the entire Agreement
shall not fall on account thereof, but shall otherwise remain in full force and
effect, and such paragraph or provision shall be enforced to the maximum extent
permissible.
19. Successors and Assigns. This Agreement shall be binding upon Dr.
------------------------
Xxxxxxx'x heirs, executors, administrators or other legal representatives and is
for the benefit of the Company, its successors and assigns.
20. Governing Law. This Agreement shall be governed by the laws of the
--------------
State of New Jersey except for any conflicts of law rules thereof that might
direct the application of the substantive law of another state.
21. Counterparts. This Agreement may be signed in two counterparts, each of
------------
which shall be deemed an original and both of which shall together constitute
one agreement.
22. Arbitration. In the event that the Company or Xx. Xxxxxxx, his spouse
-----------
or any other person claiming benefits on behalf of or through Xx. Xxxxxxx, has a
dispute or claim based upon this Agreement including the interpretation or
application of the terms and provisions of this Agreement, the sole and
exclusive remedy is for that party to submit the dispute to binding arbitration
in accordance with the rules of arbitration of the American Arbitration
Association in New Jersey. Any arbitrator selected to arbitrate any such dispute
will have the power to interpret this Agreement. Any determination or decision
by the arbitrator shall be binding upon the parties and may be enforced in any
26
court of law. The expenses of the arbitrator will be paid 50% by the Company and
50% by Xx. Xxxxxxx, his spouse or other person, as the case may be. The parties
agree that this arbitration provision does not apply to the right of Xx. Xxxxxxx
to file a charge, testify, assist or participate in any manner in an
investigation, hearing or proceeding before the Equal Employment Opportunity
Commission or any other agency pertaining to any matters covered by this
Agreement and within the jurisdiction of the agency.
23. No Waiver. No waiver by the Company of any breach of this Agreement by
---------
Xx. Xxxxxxx shall constitute a waiver of any subsequent breach.
24. Notice. Any notice hereby required or permitted to be given shall be
------
sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party at the address of such party or such
othis address as shall have been designated by written notice by such party to
the other party.
27
EXECUTED as of the date set forth below.
Dated: September 1, 2002
-----------------
BIODELIVERY SCIENCES INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx, Xx.
Title: President, CEO
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xx. Xxxxxxx X. Xxxxxxx, Ph.D.
28
EXHIBIT A
ORGANIZATIONAL CHART
[GRAPHIC OMITTED]
29
EXHIBIT B
---------
PRIOR INVENTIONS
BIODELIVERY SCIENCES INTERNATIONAL, INC. (the "Company")
Gentlemen:
The following is a complete list of all inventions or improvements patented or,
unpatented, that have been made or conceived or first reduced to practice by the
undersigned alone or jointly with others prior to the time the Company and the
undersigned first began to consider the undersigned's performance of services
for the Company. The undersigned desires to remove the inventions and
improvements listed, if any, from the operation of the foregoing Agreement.
Check one:
No inventions or improvements.
-------
X As follows:
-------
United States Patent 6,048,531
Xxxxxxx , et al. April 11, 2000
________________________________________________________________________________
Immunogenic composites capable of stimulating production of anti-peptide
antibodies, pharmaceutical compositions employing these composites and methods
of selectively inducing production of anti-peptide antibodies
Additional sheets attached.
---------
Dated: September 1, 2002 /s/Xxxxxxx X. Xxxxxxx
----------------------------- ------------------------------------
Xxxxxxx X. Xxxxxxx, Ph.D.
30
