1
EXHIBIT 10.22
XX. XXXXXXXXX EMPLOYMENT AND NONCOMPETITION AGREEMENT
MYCO PHARMACEUTICALS INC.
0 XXXXXXXX XXXXX
XXXX XXXXXXXXXX, XX 00000
As of January 1, 1992
Xx. Xxxxx X. Xxxxxxxxx
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
This letter is to confirm our understanding with respect to (i) your
employment by Myco Pharmaceuticals Inc. (the "Company"), (ii) your agreement not
to compete with the Company and (iii) your agreement to protect and preserve
information and property which is confidential and proprietary to the Company
(the terms and conditions agreed to in this letter shall hereinafter be referred
to as the "Agreement"). In consideration of the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, we have agreed as
follows:
1. Employment. The Company will employ you, and you agree to work for
the Company, as its President and Chief Executive Officer and to perform such
services and discharge such duties and responsibilities consistent with such
positions as may be prescribed by the Board of Directors of the Company. You
shall devote your full business time and best efforts in the performance of the
foregoing services, provided that you may participate in such other activities
not in conflict with your obligations to the Company, including service as a
director of and/or scientific advisor to one or more entities.
2. Term of Employment.
(a) Your employment hereunder shall commence on January 1,
1992 and shall continue thereafter; provided, however, that your employment
hereunder shall be terminated by the first to occur of the following:
(i) Immediately upon your death;
(ii) Upon notice from the Company following your failure, due
to illness, accident or any other physical or mental incapacity, to
perform the services provided for
2
hereunder for an aggregate of 90 business days within any one year
period during the term hereof;
(iii) By the Company upon notice, for Cause, as defined
herein, and as set forth below;
(iv) By the Company, upon notice subject to Section 3
hereof, without Cause; or
(v) By you, upon notice to the Company, provided, that if you
do not give at least 60 days prior written notice of your intention to
terminate your employment hereunder, you will forfeit all unused
vacation, prepaid benefits, any earned but unpaid incentive
compensation, and any stock options which have not vested as of the
date such notice is given.
The right of the Company to terminate your employment hereunder without
cause to which you hereby agree, shall be exercisable by written notice sent to
you by the Company and shall be effective as of the date of such notice.
The Company may, immediately and unilaterally, terminate your
employment hereunder for Cause at any time upon ten (10) days' advance written
notice to you. Termination of your employment by the Company shall constitute a
termination for Cause if such termination is for one or more of the following
reasons: (i) your continuing failure to render services to the Company in
accordance with your assigned duties consistent with Section 1 of this Agreement
and such failure of performance continues for a period of more than 120 days
after notice thereof has been provided to you by the Board of Directors; (ii)
your willful misconduct or gross negligence; (iii) you are convicted of a
felony, either in connection with the performance of your obligations to the
Company or which conviction materially adversely affects your ability to perform
such obligations, materially adversely affects the business activities,
reputation, goodwill or image of the Company; (iv) willful disloyalty,
deliberate dishonesty, breach of fiduciary duty or breach of the terms of this
Agreement or the other covenants executed by you regarding competition against
the Company or the assignment of inventions to the Company; (v) the commission
by you of an act of fraud, embezzlement or deliberate disregard of the rules or
policies of the Company which results in significant loss, damage or injury to
the Company; (vi) your willful unauthorized disclosure of any trade secret or
confidential information of the Company; or (vii) your willful commission of an
act which constitutes unfair competition with the Company or which induces any
employee or customer of the Company to break a contract with the Company.
- 2 -
3
In making any determination under this Section, the Board of Directors
shall act fairly and in utmost good faith and shall give you an opportunity to
appear and be heard at a meeting of the Board of Directors or any committee
thereof and present evidence on your behalf. For purposes of this Section, no
act, or failure to act, on your part shall be considered "willful" unless done,
or admitted to be done, by you in bad faith and without reasonable belief that
such action or omission was in the best interest of the Company.
In the event you are terminated for Cause, you shall be entitled to no
severance or other termination benefits, or any other benefits (except for any
health insurance benefits required by applicable law).
3. Salary.
(a) The Company shall pay you as your base compensation for
your services and agreements hereunder during the first year of this Agreement a
base salary at the rate of $195,000 per year, payable at such intervals as may
be agreed upon by the Company and you, less any amounts required to be withheld
under applicable law. Such salary will be reviewed and subject to increase on an
annual basis as agreed by the Board of Directors. Such compensation will be
reduced by any disability payments which you receive, after taking into account
the tax benefits (if any) of such payments.
(b) In addition to your base compensation, the Company will
pay you an annual bonus of up to $28,500 per year as agreed by the Board of
Directors, or such greater amount as agreed by the Board of Directors.
(c) Upon execution of this Agreement the Company will issue to
you 860,000 shares of the Company's Common Stock, $.001 par value, at a purchase
price of $.001 per share, pursuant to a Stock Purchase and Repurchase Agreement
in the form enclosed with this letter. Such shares shall be subject to the terms
of such agreement.
(d) In the event your employment shall be terminated by the
Company without Cause at any time, or in the event that you terminate your
employment hereunder by reason of a material change in your duties imposed by
the Board of Directors of the Company, or by reason of any material breach by
the Company of its obligations to you, the Company shall continue to pay you
your base salary and the cost of your health insurance for a period of one year
following any such termination, less any amounts earned by you during such
period from full time employment with another entity during such period (which
employment you agree to make a good faith effort to locate). All
- 3 -
4
payments made under this Section 3(d) shall be payable monthly at the rate
specified in Section 3(a) hereof.
(e) In the event your employment shall be terminated by the
Company for Cause, no further compensation or benefits of any kind shall be
payable to you hereunder; provided, however, that you shall continue to be bound
by the terms and conditions of this Agreement, other than Section 1.
4. Reimbursement of Expenses and Benefits.
(a) You shall be entitled to reimbursement for all ordinary
and reasonable out-of-pocket business expenses which are reasonably incurred by
you in furtherance of the Company's business.
(b) The Company shall reimburse you for up to $20,000.00 of
your reasonable out-of-pocket moving expenses for relocation to the greater
Boston, Massachusetts area or other principal place of business of the Company.
(c) The Company shall provide you and maintain during your
employment hereunder, at its cost, with not less than $1,000,000 of life
insurance with the proceeds payable to you or your designee and health insurance
reasonably satisfactory to you.
(d) The Company shall provide you with a monthly automobile
allowance of $400 per month and the Company shall pay or reimburse your for the
payment of all maintenance and insurance costs for an automobile of your choice.
(e) You shall be entitled to such amount of vacation leave as
agreed by the Company and you.
(f) In addition to the foregoing, you shall also be entitled
to participate in any employee benefit plans which the Company provides or may
establish for the benefit of its executive employees generally.
5. Prohibited Competition. We have discussed, and you recognize and
acknowledge the competitive and proprietary nature of the Company's business
operations.
You acknowledge and agree that a business will be deemed competitive
with the Company if it engages in a line of business in which it performs any of
the services or manufactures or sells any of the products provided or offered by
the Company in the Company's Field of Interest (such business to be referred to
as a "competitive business"). The term Company's "Field of Interest" currently
means the development of products or processes as anti-
- 4 -
5
infective therapeutics or diagnostics with an initial emphasis on anti-fungals
and commercial use of fungi or yeasts in drug screening, production, development
or testing.
You further acknowledge and agree that during the course of performing
services for the Company, the Company will furnish, disclose or make available
to you confidential and proprietary information related to the Company's
business and that the Company may provide you with unique and specialized
training. You also acknowledge that such confidential information and the
training to be provided by the Company have been developed and will be developed
by the Company through the expenditure by the Company of substantial time,
effort and money and that all such confidential information and training could
be used by you to compete with the Company.
Accordingly, you hereby agree in consideration of the Company's
agreement to engage you hereunder and your compensation thereof and in view of
the confidential position to be held by you, the unique and specialized training
which the Company may provide you and the confidential nature and proprietary
value of the information which the Company may share with you, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, as follows:
During the period during which you perform services for or at the
request of the Company (the "Term") and for a period of eighteen months
following the expiration or termination of the Term (the "Restricted Term"),
whether such termination is voluntary or involuntary, you shall not, without the
prior written consent of the Company:
(i) For yourself or on behalf of any other, directly or
indirectly, either as principal, agent, stockholder, employee,
consultant, representative or in any other capacity, own, manage,
operate or control, or be concerned, connected or employed by, or
otherwise associate in any manner with, engage in or have a financial
interest in any business whose primary line of business is in the Field
of Interest, or in any other business in which you have any direct
operating or scientific responsibility in the Field of Interest within
the World (the "Restricted Territory"), except that nothing contained
herein shall preclude you from purchasing or owning stock in any such
competitive business if such stock is publicly traded, and provided
that your holdings do not exceed three (3%) percent of the issued and
outstanding capital stock of such business.
(ii) Either individually or on behalf of or through any third
party, solicit, divert or appropriate or attempt to solicit, divert or
appropriate, for the purpose of competing
- 5 -
6
in the Field of Interest with the Company or any present or future
parent, subsidiary or other affiliate of the Company which is engaged
in the Field of Interest, any joint venture or collaborative research
partners, customers or patrons of the Company, or any prospective
customers or patrons with respect to which the Company has developed or
made a presentation for the use or exploitation of products or
processes in the Field of Interest (or similar offering of services)
within eighteen months, located within the Restricted Territory.
(iii) Either individually or on behalf of or through any third
party, directly or indirectly, solicit, entice or persuade or attempt
to solicit, entice or persuade any other employees of or consultants to
the Company or any parent or future parent or affiliate of the Company
to leave the services of the Company or any parent or future parent or
affiliate for any reason.
You further recognize and acknowledge that (i) the types of employment
which are prohibited by this paragraph are narrow and reasonable in relation to
the skills which represent your principal salable asset both to the Company and
to your other prospective employers, and (ii) the specific but broad
geographical scope of the provisions of this paragraph is reasonable, legitimate
and fair to you in light of the Company's need to market its services and sell
its products in a large geographic area in order to have a sufficient customer
base to make the Company's business profitable and in light of the limited
restrictions on the type of employment prohibited herein compared to the types
of employment for which you are qualified to earn your livelihood.
If any part of this section should be determined by a court of
competent jurisdiction to be unreasonable in duration, geographic area, or
scope, then this section is intended to and shall extend only for such period of
time, in such area and with respect to such activity as is determined to be
reasonable.
6. Protected Information. Upon execution of this Agreement, you shall
execute and deliver a Confidentiality Agreement in the form attached hereto as
Annex A.
7. Continuing Obligations. Your obligations under this Agreement other
than the provisions of Section 1 of this Agreement shall not be affected by any
termination of your employment arrangement, including termination upon the
Company's initiative, subject to the Company's performance of its obligation to
make payments to you pursuant to Section 3 hereof.
- 6 -
7
8. Records. Upon termination of your relationship with the Company, you
shall deliver to the Company any property of the Company which may be in your
possession including products, materials, memoranda, notes, records, reports, or
other documents or photocopies of the same.
9. No Conflicting Agreements. You hereby represent and warrant that you
have no commitments or obligations inconsistent with this Agreement and you
hereby agree to indemnify and hold the Company harmless against any claim based
upon circumstances alleged to be inconsistent with such representation and
warranty.
10. Waiver of Provisions. Failure of any party to insist, in one or
more instances, on performance by the other in strict accordance with the terms
and conditions of this Agreement shall not be deemed a waiver or relinquishment
of any right granted hereunder or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by or on behalf of the waiving party.
11. Notices. Any notice or other communication required or permitted
hereunder shall be deemed sufficiently given if sent by facsimile, overnight
courier, certified mail, postage and fees prepaid, addressed to the party to be
notified as follows: if to the Company to its address set forth above, with a
copy to Xxxxx X. Xxxxxx, Esquire, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 and if to you to your address set
forth above, or in each case to such other address as either party may from time
to time designate in writing to the other. Such notice or communication shall be
deemed to have been given four business days after being deposited with the
United States Postal Service.
12. Governing Law. This Agreement together with the Stock Purchase and
Repurchase Agreement and Confidentiality Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without application of the conflicts of law provisions thereof.
13. Entire Agreement. This Agreement, together with the Confidentiality
Agreement and Stock Purchase and Repurchase Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
oral or written agreements and understandings relating to the subject matter
hereof. No statement, representation, warranty, covenant or agreement of any
kind not set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this Agreement.
- 7 -
8
14. Invalidity. This Agreement, together with the Stock Purchase and
Repurchase Agreement and Confidentiality Agreement of even date, is intended to
be performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations. If any provision of this
Agreement, or the application thereof to any person or circumstance, shall, for
any reason and to any extent, be invalid or unenforceable, the remainder of this
Agreement and the application of such provisions to other persons or
circumstances shall not be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.
15. Injunctive Relief. You hereby expressly acknowledge that any breach
or threatened breach of any of the terms and/or conditions set forth in Section
5 of this Agreement will result in substantial, continuing and irreparable
injury to the Company. Therefore, you hereby agree that, in addition to any
other remedy that may be available to the Company, the Company shall be entitled
to injunctive or other equitable relief by a court of appropriate jurisdiction
in the event of any breach or threatened breach of the terms of Section 5 of
this Agreement.
16. Assignment. The Company may assign its rights and obligations
hereunder to any person or entity who succeeds to all or substantially all of
the Company's business or that aspect of the Company's business in which you are
principally involved. Your rights and obligations under this Agreement may not
be assigned without the prior written consent of the Company.
17. Expenses. Should any party breach this Agreement, in addition to
all other remedies available at law or in equity, such party shall pay all of
any other party's costs and expenses resulting therefrom and/or incurred in
successfully enforcing this Agreement, including legal fees and expenses.
18. Modification and Amendment. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf of the parties
hereto.
19. Parties Benefitted. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company and any parent,
subsidiary or other affiliate of the Company, and their respective successors
and assigns, and shall be binding upon and inure to the benefit of you and your
heirs, executors, administrators, successors and permitted assigns.
20. Headings. Section and other headings contained in this Agreement
are for reference purposes only and are in no way intended to define, interpret,
describe or otherwise limit the scope, extent or intent of this Agreement or any
of its
- 8 -
9
provisions each of which shall be deemed an original, but all of which together
shall constitute one and the same document.
21. Counterparts. This Agreement may be executed in one or more
counterparts each of which will be deemed an original, but all of which together
shall constitute one and the same instrument.
If the foregoing accurately sets forth our agreement, please so
indicate by signing and returning to us the enclosed copy of this letter.
Very truly yours,
MYCO PHARMACEUTICALS INC.
By:________________________________
Xxxx Xxxxxxxx, Chairman
Accepted and Approved
______________________
Xx. Xxxxx X. Xxxxxxxxx
Dated:________________
- 9 -
