NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
March 15, 2001 by and between NEUROBIOLOGICAL TECHNOLOGIES, INC., a Delaware
corporation ("NTI") and Xxxx X. Xxxxxxx ("Xxxxxxx").
BACKGROUND
A. NTI desires to continue to retain the services of Xxxxxxx as President
and Chief Executive Officer of NTI, commencing March 15, 2001 (the "Effective
Date").
X. Xxxxxxx is willing to be employed by NTI on the terms and subject to the
conditions set forth in this Agreement.
X. Xxxxxxx is currently employed as President and Chief Executive Officer.
It is the intent of the parties to induce Xxxxxxx'x commitment to the Term
specified in this Agreement in exchange for NTI's payment of the Retention
Bonus, and that the terms of this Agreement control Xxxxxxx'x continued
employment.
THE PARTIES AGREE AS FOLLOWS:
1. Positions and Duties.
1.1 President and Chief Executive Officer. Xxxxxxx shall be employed
by NTI as its President and Chief Executive Officer, and NTI agrees to employ
and retain Xxxxxxx in such capacity.
1.2 Duties. Xxxxxxx shall devote all of his business time, energy, and
skill to the affairs of NTI; provided, however, that reasonable time for
personal business, charitable or professional activities shall be permitted, so
long as such activities do not materially interfere with Xxxxxxx'x performance
of services under this Agreement.
2. Terms of Employment.
2.1 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Accrued Compensation" shall mean any accrued Total Cash
Compensation, any benefits under any plan of NTI in which Xxxxxxx is a
participant to the full extent of Xxxxxxx'x rights under such plans, any accrued
vacation pay, and any appropriate business expenses incurred by Xxxxxxx in
connection with the performance of Xxxxxxx'x duties hereunder, all to the extent
unpaid on the date of termination.
(b) "Base Salary" shall have the meaning set forth in Section 3.1
hereof.
(c) "Termination For Cause" means termination by NTI of Xxxxxxx'x
employment by reason of Xxxxxxx'x dishonesty or fraud, gross negligence in the
performance of his duties hereunder, material breach of this Agreement,
intentional engagement in acts seriously detrimental to NTI's operations, or
conviction of a felony involving moral turpitude.
(d) "Termination Other Than For Cause" means termination by NTI of
Xxxxxxx'x employment for any reason other than as specified in Sections 2.1, (d)
or (f) hereof.
(e) "Total Cash Compensation" shall mean Xxxxxxx'x Base Salary (as
defined in Section 3.1) plus any cash bonuses, commissions or similar payment
accrued during any single calendar year.
(f) "Voluntary Termination" means termination of Xxxxxxx'x
employment by the voluntary action of Xxxxxxx.
2.2 Employee at Will. Xxxxxxx is an "at will" employee of NTI, and
Xxxxxxx'x employment may be terminated at any time upon a Termination For Cause
or a Termination Other Than For Cause by the giving of written notice thereof to
Xxxxxxx, subject to the terms and conditions of this Agreement.
2.3 Termination For Cause. Upon Termination For Cause, NTI shall pay
Xxxxxxx Accrued Compensation, if any, and Xxxxxxx shall refund the Retention
Bonus within 30 days of such termination.
2.4 Termination Other Than For Cause. Upon Termination Other Than For
Cause, NTI shall pay Xxxxxxx all Accrued Compensation.
2.5 Voluntary Termination. Xxxxxxx shall have the right to effect a
Voluntary Termination by giving at least 30 days advance written notice to NTI.
During such period, Xxxxxxx shall continue to receive regularly scheduled Base
Salary payments and benefits. Following the effective date of a Voluntary
Termination, NTI shall pay Xxxxxxx Accrued Compensation, if any, and Xxxxxxx
shall refund the Retention Bonus within 30 days of such termination.
2.6 Timing of Termination Payments. Unless expressly provided
otherwise, the foregoing termination payments shall be made at the usual and
agreed times provided for in Section 3.1 of this Agreement.
3. Compensation and Benefits.
3.1 Base Salary. As payment for the services to be rendered by Xxxxxxx
as provided in Section 1 and subject to the provisions of Section 2 of this
Agreement, NTI shall pay Xxxxxxx a Base Salary ("Base Salary") at the rate of
$200,000 per year, payable on NTI's normal payroll schedule.
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3.2 Additional Benefits.
(a) Benefit Plans. Xxxxxxx shall be eligible to participate in
NTI's benefit plans as are now generally available or later made generally
available to senior officers of NTI, including, without limitation, medical,
dental, life, and disability insurance plans.
(b) Expense Reimbursement. NTI agrees to reimburse Xxxxxxx for all
reasonable, ordinary and necessary travel and entertainment expenses incurred by
Xxxxxxx conjunction with his services to NTI consistent with NTI's standard
reimbursement policies. NTI shall pay travel costs incurred by Xxxxxxx in
conjunction with his services to NTI consistent with NTI's standard travel
policy.
(c) Vacation. Xxxxxxx shall be entitled, without loss of
compensation, to the amount of vacation per year generally available or later
made generally available to senior officers of NTI.
3.3 Retention Bonus. In exchange for Xxxxxxx'x commitment to the Term
of this Agreement, NTI shall pay Xxxxxxx a Retention Bonus ("Retention Bonus")
of $250,000 on the Effective Date of this Agreement. Xxxxxxx acknowledges and
agrees that payment of the Retention Bonus is a material element of this
Agreement and is in consideration for Xxxxxxx'x commitment, and without such
commitment, NTI would not have paid the Retention Bonus. Xxxxxxx acknowledges
his obligation to refund the entire Retention Bonus as provided for in Sections
2.3 and 2.5 of this Agreement.
3.4 Bonus. Xxxxxxx shall participate in any management bonus plan
adopted by NTI on terms comparable to other senior officers of NTI.
4. Miscellaneous.
4.1 Waiver. The waiver of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of the same or other provision hereof.
4.2 Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by personal or courier delivery,
facsimile or first class mail, certified or registered with return receipt
requested, and shall be deemed to have been duly given upon receipt if
personally delivered or delivered by courier, on the date of transmission if
transmitted by facsimile, or three days after mailing if mailed, to the
addresses of NTI and Xxxxxxx contained in the records of NTI at the time of such
notice. Any party may change such party's address for notices by notice duly
given pursuant to this Section 4.2.
4.3 Term of the Agreement; Renewal of the Agreement. The Term of this
Agreement ("Term") will commence on the Effective Date and will continue for a
period of one year. Not less than 90 days prior to expiration of this Agreement,
the parties agree to negotiate in good faith with regard to potential renewal of
this Agreement under similar terms and conditions.
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4.4 Headings. The section headings used in this Agreement are intended
for convenience of reference and shall not by themselves determine the
construction or interpretation of any provision of this Agreement.
4.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed within the State of California by
California residents.
4.6 Arbitration. Any controversy or claim arising out of, or relating
to, this Agreement or the breach of this Agreement will be settled by
arbitration by, and in accordance with the applicable National Rules for the
Resolution of Employment Disputes of the American Arbitration Association and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction. The arbitrator(s) will have the right to assess,
against a party or among the parties, as the arbitrator(s) deem reasonable, (a)
administrative fees of the American Arbitration Association, (b) compensation,
if any, to the arbitrator(s) and (c) attorneys' fees incurred by a party.
Arbitration hearings will be held in San Francisco, California. The provisions
of California Code of Civil Procedure Section 1283.05 will apply to any
arbitration.
4.7 Survival of Obligations. This Agreement shall be binding upon and
inure to the benefit of the executors, administrators, heirs, successors, and
assigns of the parties; provided, however, that except as herein expressly
provided, this Agreement shall not be assignable either by NTI (except to an
affiliate or successor of NTI) or by Xxxxxxx without the prior written consent
of the other party.
4.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
Agreement.
4.9 Withholding. All sums payable to Xxxxxxx hereunder shall be
reduced by all federal, state, local, and other withholdings and similar taxes
and payments required by applicable law.
4.10 Enforcement. If any portion of this Agreement is determined to be
invalid or unenforceable, such portion shall be adjusted, rather than voided, to
achieve the intent of the parties to the extent possible, and the remainder
shall be enforced to the maximum extent possible.
4.11 Entire Agreement; Modifications. Except as otherwise provided
herein or in the exhibits hereto, this Agreement represents the entire
understanding among the parties with respect to the subject matter of this
Agreement, and this Agreement supersedes any and all prior and contemporaneous
understandings, agreements, plans, and negotiations, whether written or oral,
with respect to the subject matter hereof, including, without limitation, any
understandings, agreements, or obligations respecting any past or future
compensation, bonuses, reimbursements, or other payments to Xxxxxxx from NTI.
All modifications to the Agreement must be in writing and signed by each of the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date set forth in the first paragraph.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By: /s/Xxxxxxx Xxxxx
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Title: Chairman of the Board
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/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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