EMPLOYMENT AGREEMENT
EXHIBIT
10.1
AGREEMENT
made as of the 1st day of
July, 2007 by and between Xxxxxxxx Xxxxxx, MD (hereinafter referred to as the
“Employee”) and SignPath Pharma, Inc., a Delaware Corporation.
WITNESSETH:
WHEREAS,
SignPath Pharma, Inc. (the “Company”) is engaged in the business of drug
development; and
WHEREAS,
the Company desires to employ the Employee for the purpose of securing for the
Company the experience, ability and services of the Employee; and
WHEREAS,
the Employee desires to be employed by the Company pursuant to the terms and
conditions herein set forth, superseding all prior oral and written employment
agreements and term sheets and letters between the Company, its subsidiaries
and/or predecessors and Employee.
NOW,
THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
ARTICLE
I
DEFINITIONS
1.1 Accrued
Compensation. “Accrued Compensation” shall mean an amount
which shall include all amounts earned or accrued through the “Termination Date”
(as defined below) but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for business expenses incurred by the
Employee on behalf of the Company, pursuant to the Company's expense
reimbursement policy in effect at such time, (iii) expense allowance, (iv)
vacation pay per Company Policy, and (v) bonuses and incentive compensation
earned and awarded prior to the Termination Date.
1.2 Cause. “Cause” shall mean:
(i) willful disobedience by the Employee of a reasonable, material and lawful
instruction of the Board of Directors of the Company consistent with the duties
and functions of Employee’s position; (ii) conviction of the Employee of any
misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii) fraud, gross negligence or willful misconduct in the performance of any
material duties to the Company; or (iv) excessive absences from work, other than
for illness or Disability; provided that the Company shall not have the right to
terminate the employment of Employee pursuant to the foregoing clauses (i),
(iii) or (iv) above unless written notice specifying such breach shall have been
given to the Employee and, in the case of breach which is capable of being
cured, the Employee shall have failed to cure such breach within thirty (30)
days after his receipt of such notice.
1.3 Change in
Control. “Change in Control” shall mean any of the following
events:
a. (i)
An acquisition (other than directly from the Company) of any voting securities
of the Company (the “Voting Securities”) by any “Person” (as the term person is
used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) immediately after which such Person has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
0000 Xxx) of forty percent (40%) or more of the combined voting power of the
Company’s then outstanding Voting Securities; provided, however, that in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a “Non-Control Acquisition” (as defined below) shall not
constitute an acquisition which would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (1) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity
securities
or equity interest is owned directly or indirectly by the Company (a
“Subsidiary”), or (2) the Company or any Subsidiary.
(ii) Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because a
Person (the “Subject Person”) gained Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number of
Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
b. The
individuals who, as of the date this Agreement is approved by the Board, are
members of the Board (the “Incumbent Board”), cease for any reason to constitute
at least two-thirds of the Board; provided, however, that if the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered and defined as a
member of the Incumbent Board; and provided, further, that no individual shall
be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual “Election Contest” (as described
in Rule 14a-11 promulgated under the 0000 Xxx) or other solicitation of proxies
or consents by or on behalf of a Person other than the Board (a “Proxy
Contest”); or
c. Approval
by stockholders of the Company of:
(i) A
merger, consolidation or reorganization involving the Company, unless: (1) the
stockholders of the Company, immediately before such merger, consolidation or
reorganization, own, directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from such merger or consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation or
reorganization, (2) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds of the members of
the board of directors of the Surviving Corporation, and (3) no Person (other
than the Company, any Subsidiary, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the Surviving Corporation or
any Subsidiary) becomes Beneficial Owner of twenty percent (20%) or more of the
combined voting power of the Surviving Corporation’s then outstanding voting
securities as a result of such merger, consolidation or reorganization, a
transaction described in clauses (1) through (3) shall herein be referred to as
a “Non-Control Transaction”; or
(ii) An
agreement for the sale or other disposition of all or substantially all of the
assets of the Company, to any Person, other than a transfer to a Subsidiary, in
one transaction or a series of related transactions.
(iii) The
stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.
d. Notwithstanding
anything contained in this Agreement to the contrary, if the Employee’s
employment is terminated prior to a Change in Control and the Employee
reasonably demonstrates that such termination (i) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control (a “Third Party”) or (ii) otherwise occurred in
connection with, or in anticipation of, a Change in Control, then for all
purposes of this Agreement, the date of a Change in Control with respect to the
Employee shall mean the date immediately prior to the date of such termination
of the Employee’s employment.
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1.4 Continuation
Benefits. “Continuation Benefits” shall be the
continuation of the Benefits, as defined in Section 5.1, for the period from the
Termination Date to either (i) the later of the Expiration Date, or the end of
the month in which the one-year anniversary of the Termination Date occurs, or
(ii) such other period as specifically stated by this Agreement (the
“Continuation Period”), at the Company's expense, less any normal payroll
deductions, on behalf of the Employee and his dependents; provided, however, if
any of the Benefits required to be provided by the Company during the
Continuation Period under the Company’s benefit plans are, pursuant to the terms
of such plans, not available to non-employees of the Company, the Company, at
its sole cost and expense, less any normal payroll deductions, shall be required
to provide such benefits as shall be reasonably available and substantially
similar to the benefits provided to employees of the Company. The Company’s
obligation hereunder with respect to the foregoing benefits shall also be
limited to the extent that if the Employee obtains such benefits pursuant to a
subsequent employer's benefit plan, the Company may reduce the coverage of any
benefits it is required to provide the Employee hereunder as long as the
aggregate coverage and benefits of the combined benefit plans is no less
favorable to the Employee than the coverage and benefits required to be provided
hereunder. This definition of Continuation Benefits shall not be interpreted so
as to limit any benefits to which the Employee, his dependents or beneficiaries
may be entitled under any of the Company's employee benefit plans, programs or
practices following the Employee's termination of employment, including, without
limitation, retiree medical and life insurance benefits.
1.5 Disability. “Disability”
shall mean a physical or mental infirmity which impairs the Employee's ability
to substantially perform his duties with the Company for a period of three
consecutive months, and the Employee has not returned to his full time
employment prior to the Termination Date as stated in the “Notice of
Termination” (as defined below).
1.6 Good Reason. “Good Reason”
shall mean without the written consent of the Employee: (A) a material breach of
any provision of this Agreement by the Company; (B) failure by the Company to
pay when due any compensation to the Employee; (C) a reduction in the Employee’s
Base Salary; (D) failure by the Company to maintain the Employee in the
positions referred to in Section 2.1 of this Agreement; (E) assignment to the
Employee of any duties materially and adversely inconsistent with the Employee’s
positions, authority, duties, responsibilities, powers, functions, reporting
relationship or title as contemplated by Section 2.1 of this Agreement or any
other action by the Company that results in a material diminution of such
positions, authority, duties, responsibilities, powers, functions, reporting
relationship or title; (F) relocation of the principal office of the Company or
the Employee’s principal place of employment to a location outside a 60 (sixty)
mile radius of the present location in New York City, New York, without the
Employee’s written consent; or (G) a Change in Control, provided the event on
which the Change of Control is predicated occurs within 120 days of the service
of the Notice of Termination by the Employee, it being understood that Employee
shall have the right to terminate his employment under this Section 1.6 (G) for
any reason or no reason within such 120 day period; and provided further,
however, that the Employee agrees not to terminate his employment for Good
Reason pursuant to clauses (A) through (F) unless (a) the Employee has given the
Company at least 30 days’ prior written notice of his intent to terminate his
employment for Good Reason, which notice shall specify the facts and
circumstances constituting Good Reason; and (b) the Company has not remedied
such facts and circumstances constituting Good Reason to the reasonable and good
faith satisfaction of the Employee within a 30-day period after receipt of such
notice.
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1.7 Notice of
Termination. “Notice of Termination” shall mean a written
notice from the Company, or the Employee, of termination of the Employee’s
employment which indicates the specific termination provision in this Agreement
relied upon, if any, and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated.
1.8 Severance
Payment. “Severance Payment” shall mean an amount equal to six
months of the greater of (A) the Employee's Base Salary in effect on the
Termination Date and (B) the highest Base Salary in effect at any time during
the ninety (90) day period prior to the Termination Date. The Severance Payment
shall be payable as provided in Section 9. For purposes of computing
the Severance Payment, Base Salary shall include any automatic increases to Base
Salary to which the Employee would have been entitled had this Agreement not
been terminated.
1.9 Termination Date. Termination
Date shall mean (i) in the case of the Employee’s death, his date of death; (ii)
in the case of Good Reason, 30 days from the date the Notice of Termination is
given to the Company, provided the Company has not remedied such facts and
circumstances constituting Good Reason to the reasonable and good faith
satisfaction of the Employee; (iii) in the case of termination of employment on
or after the Expiration Date, the last day of employment; and (iv) in all other
cases, the date specified in the Notice of Termination; provided, however, if
the Employee's employment is terminated by the Company for any reason except
Cause, the date specified in the Notice of Termination shall be at least 30 days
from the date the Notice of Termination is given to the Employee, and provided
further that in the case of Disability, the Employee shall not have returned to
the full-time performance of his duties during such period of at least 30
days.
ARTICLE
II
EMPLOYMENT
2.1 Subject
to and upon the terms and conditions of this Agreement, the Company hereby
agrees to employ the Employee, and the Employee hereby accepts such employment
in his capacity as President and Chief Executive Officer. The Company
shall nominate Employee, and use its best efforts to have Employee elected to
the Board of Directors of the Company (the “Board”) throughout the term of this
Agreement. The Employee agrees to resign from the Board upon the termination of
employment for any reason.
ARTICLE
III
DUTIES
3.1 The
Employee shall, during the term of his employment with the Company, and subject
to the direction and control of the Board, report directly to the Board and
shall exercise such authority, perform such executive duties and functions and
discharge such responsibilities as are reasonably associated with his executive
position or as may be reasonably assigned or delegated to him from time to time
by the Board, consistent with his position as President and Chief Executive
Officer. In general, Employee shall have management authority with
respect to, and responsibility for, the overall operations and day-to-day
business and affairs of the Company and all major operating units and executives
of the Company shall report, either directly or indirectly (through other
executives of the Company or its subsidiaries who report directly to the
Employee) to the Employee.
3.2 During
the term of this Agreement and excluding periods of vacation and sick leave to
which the Employee is entitled, the Employee agrees to devote substantially all
of his business time and attention to the affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned hereunder, use his
best efforts in the performance of his duties for the Company and any subsidiary
corporation of the Company. During the term of this Agreement the
Employee may, so long as it does not materially interfere with his duties
hereunder: (i) subject to Article VII hereof, serve on the board of directors
(or equivalent bodies) of civic, non-profit, or charitable organizations or
entities unaffiliated with the Company, (ii) deliver lectures or otherwise
participate in speaking engagements, and (iii) manage his personal investments
and affairs.
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3.3 Employee
shall undertake regular travel to the Company’s executive and operational
offices, and such other occasional travel within or outside the United States as
is or may be reasonably necessary in the interests of the
Company. All such travel shall be at the sole cost and expense of the
Company and all airplane travel shall be first or business class, or otherwise
fully reimbursed at cost, to the extent that such reimbursements do not exceed
the approximate equivalent published fare for first or business class
travel.
ARTICLE
IV
COMPENSATION
4.1 During
the term of this Agreement, Employee shall be compensated at the rate of
$200,000 per annum, subject to such increases to be determined by the Board, or
if the Board so designates, a compensation committee of the Board, in its
discretion, at the commencement of each of the Company’s fiscal years during the
term of this Agreement (the “Base Salary”). Base Salary shall be paid
to the Employee in regular installments on each of the Company's regular pay
dates for executives, but no less frequently than monthly.
4.2 Employee
shall be eligible to receive a bonus (the “Bonus”) in the discretion of the
Board, or if the Board so designates, a Compensation Committee of the Board
based on the annual performance of the Company. The Bonus will be
based on Employee’s achievement of revenue and income targets and other key
objectives established at the commencement of each fiscal year by the Board or
if the Board so designates, the Compensation Committee of the Board and
reasonably acceptable to the Employee.
4.3 The
Bonus shall be paid to the at such time as the amount of the Bonus for such
period can reasonably be audited by the Company’s independent accountants, as
may be determined by the Board. The Company shall deduct from Employee’s
compensation all federal, state, and local taxes which it may now or may
hereafter be required to deduct under applicable law.
4.4 Employee
may receive such other additional compensation as may be determined from time to
time by the Board including bonuses and other long term compensation
plans. Nothing in this subparagraph 4.4 shall be deemed or construed
to require the Board to award any bonus or additional compensation.
ARTICLE
V
BENEFITS
5.1 During
the term hereof, the Company shall provide Employee with the following benefits,
as such benefits may change from time to time (the “Benefits”): (i) group health
care and insurance benefits as generally made available to the Company’s senior
management; and (ii) such other benefits (including insurance related benefits,
holiday, sick leave, personal days, etc.) obtained by the Company or made
generally available to the Company’s senior management;
5.2 The
Company shall reimburse Employee, upon presentation of the Company’s standard
expense report accompanied by appropriate vouchers and other suitable
documentation, incurred by Employee on behalf of the Company, provided such
expenditure is consistent with Company policy.
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5.3 In
the event the Company wishes to obtain Key Man life insurance on the life of
Employee, Employee agrees to cooperate with the Company in completing any
applications necessary to obtain such insurance and promptly submit to such
physical examinations and furnish such information as any proposed insurance
carrier may request.
5.4 For
the term of this Agreement, Employee shall be entitled to paid vacation at the
rate of (4) weeks per annum.
ARTICLE
VI
NON-DISCLOSURE
6.1 The
Employee shall not, at any time during or after the termination of his
employment hereunder, except when acting on behalf of and with the authorization
of the Company, or when required by law or legal process, or where appropriate
in response to regulatory authorities, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company’s business, finances,
marketing, computerized payroll, accounting and information business, personnel
and/or employee leasing business of the Company and its subsidiaries, including
information relating to any customer of the Company, or any other nonpublic
business information of the Company and/or its subsidiaries learned as a
consequence of Employee’s employment with the Company, except for information
available publicly or from other non-confidential
sources (collectively referred to as the “Proprietary
Information”). The Employee acknowledges that Proprietary
Information, as they may exist from time to time, are valuable and unique assets
of the Company, and that disclosure of any such information would cause
substantial injury to the Company. Proprietary Information shall
cease to be Proprietary Information, as applicable, at such time as such
information becomes public other than through disclosure, directly or
indirectly, by Employee in violation of this Agreement.
6.2 If
Employee is requested or required (by oral questions, interrogatories, requests
for information or document subpoenas, civil investigative demands, or similar
process) to disclose any Proprietary Information, Employee shall,
unless prohibited by law, promptly notify the Company of such request(s) so that
the Company may seek an appropriate protective order.
ARTICLE
VII
RESTRICTIVE
COVENANTS
7.1 In
the event of the termination of Employee’s employment with the Company at any
time, Employee agrees that he will not, for a period of one (1) year following
such termination, directly or indirectly, enter into or become associated with
or engage in any other business (whether as a partner, officer, director,
shareholder, employee, consultant, or otherwise), which business is primarily
involved in developing
proprietary formulations of curcumin, a naturally occurring compound found in
the root of curcuma longa (tumeric) plant, for application in malignant diseases
that are the same or substantially similar to the business of the Company in
competition with the Company, or which the Company was in the process of
developing during the term of Employee’s employment with the Company and such
development is based on actual or demonstrative anticipated research (a
“Competitive Business”). Notwithstanding the foregoing, the ownership by
Employee of less than two percent of the shares of any publicly held corporation
shall not violate the provisions of this Article VII. In furtherance of the
foregoing, Employee shall not during the aforesaid period of non-competition,
directly or indirectly, in connection with any Competitive Business solicit any
customer or employee of the Company who was a customer or employee of the
Company within one year of the Termination Date.
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7.2 Except
as otherwise may be agreed by the Company in writing, in consideration of the
employment of Employee by the Company, and free of any additional obligations of
the Company to make additional payment to Employee, Employee agrees to
irrevocably assign to the Company any and all inventions, software, manuscripts,
documentation, improvements or other intellectual property whether or not
protectable by any state or federal laws relating to the protection of
intellectual property, relating to the present or future business of the Company
that are developed by Employee during the term of his/her employment
with the Company, either alone or jointly with others, and whether or not
developed during normal business hours or arising within the scope of his/her
duties of employment. Employee agrees that all such inventions,
software, manuscripts, documentation, improvement or other intellectual property
shall be and remain the sole and exclusive property of the Company and shall be
deemed the product of work for hire. Employee hereby agrees to
execute such assignments and other documents as the Company may consider
appropriate to vest all right, title and interest therein to the Company and
hereby appoints the Company Employee’s attorney-in-fact with full powers to
execute such document itself in the event employee fails or is unable to provide
the Company with such signed documents. Notwithstanding the
foregoing, this provision does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the Company was used and
which was developed entirely on Employee’s own time, unless (a) the invention
relates (i) to the business of the Company, or (ii) to the Company’s actual or
demonstrably anticipated research or development, or (b) the invention results
from any work performed by Employee for the Company.
7.3 If
any court shall hold that the duration of non-competition or any other
restriction contained in this Article VII is unenforceable, it is our intention
that same shall not thereby be terminated but shall be deemed amended to delete
therefrom such provision or portion adjudicated to be invalid or unenforceable
or, in the alternative, such judicially substituted term may be substituted
therefor.
ARTICLE
VIII
TERM
8.1 This
Agreement shall be effective upon execution by both parties hereto and the
employment term (the “Initial Term”) shall commence on June 1, 2007 (the
“Commencement Date”) and terminate on May 31, 2009 (the “Expiration Date”),
unless sooner terminated upon the death of the Employee, or as otherwise
provided herein.
8.2 The
Company shall notify in writing the Employee of the Company’s intention to
continue Employee’s employment beyond the Expiration Date no less than 90 days
prior to the Expiration Date. Upon termination of the Employee’s employment with
the Company, the Company shall pay Employee, in addition to any other payments
due hereunder, the amounts due under Article IX.
ARTICLE
IX
TERMINATION
9.1 The
Company may terminate this Agreement by giving a Notice of Termination to the
Employee in accordance with this Agreement:
a. for
Disability;
b. for
Cause
c. without
Cause.
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9.2 Employee
may terminate this Agreement at any time by giving 30 days prior written Notice
of Termination to the Company in accordance with this Agreement.
9.3 If
the Employee’s employment with the Company shall be terminated, the Company
shall pay and/or provide to the Employee (or his estate) the following
compensation and benefits:
a.
if the
Employee was terminated by the Company for Cause, or the Employee terminates
without Good Reason, the Accrued Compensation;
b.
if the
Employee was terminated by the Company for Disability, the Accrued Compensation,
the Severance Payment and the Continuation Benefits; or
c.
if
termination was due to the Employee’s death, the Accrued Compensation;
or
d.
if the
Employee was terminated by the Company without Cause or the Employee terminates
this Agreement for Good Reason, (i) the Accrued Compensation; (ii) the Severance
Payment; and (iii) the Continuation Benefits.
e.
In the
event the Company fails to notify the Employee in accordance with Section 8.2,
or after notifying the Employee fails to reach an agreement on a new employment
agreement prior to the Expiration Date, Employee’s employment shall terminate on
the Expiration Date and the Company shall pay the Employee the Severance
Payment; Accrued Compensation, and the Continuation Benefits.
9.4 The
amounts payable under Section 9.3, shall be paid as follows:
a. Accrued
Compensation shall be paid on the first regular pay date after the Termination
Date (or earlier, if required by applicable law).
b. If the
Continuation Benefits are paid in cash, the aggregate amount of the Continuation
Benefits shall be paid as follows: 25% in one lump sum on the first regular pay
date after the Termination Date, and the balance in five equal monthly
installments commencing one month after the Termination Date (or earlier, if
required by applicable law) on the Company’s regular pay
dates.
c. The
Severance Payments shall be paid as follows: 25% in one lump sum
within five business days of the Termination Date, and the balance in five equal
monthly installments commencing one month after the Termination Date (or
earlier, if required by applicable law) on the Company’s regular pay
dates;
d. Notwithstanding
the foregoing, in the event counsel for the Employee advises the Employee that
any payments should be deferred for six months after the Termination Date, the
Company shall defer the payment of all such payments for six months (the
“Deferral Period”), and pay, in one lump sum on the sixth month anniversary of
the Termination Date, all payments deferred during the Deferral Period, and
thereafter all payments shall continue as otherwise provided in this
Agreement.
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9.5 The
Employee shall not be required to mitigate the amount of any payment, including
the value of any Continuation Benefit, provided for in this Agreement by seeking
other employment or otherwise and no such payment shall be offset or reduced by
the amount of any compensation or benefits provided to the Employee in any
subsequent employment except as provided in Sections 1.4.
9.6 For
a period of three years following the termination of this Agreement, Employee
agrees that he will not make any negative or derogatory statements in verbal,
written, electronic or any other form about the Company, including, but not
limited to, a negative or derogatory statement made in, or in connection with,
any article or book, on a website, in a chat room or via the internet except
where such statement is required by law or regulation. During such
three year period, none of the executive officers and directors shall make any
negative or derogatory statements in verbal, written, electronic or any other
form about the Employee, including, but not limited to, a negative or derogatory
statement made in, or in connection with, any article or book, on a website, in
a chat room or via the internet except where such statement is required by law
or regulation.
ARTICLE
X
TERMINATION
OF PRIOR AGREEMENTS
10.1 This
Agreement, and any stock option, bonus plan and benefit plans, sets forth the
entire agreement between the parties and supersedes all prior agreements,
letters and understandings between the parties, whether oral or written prior to
the effective date of this Agreement, except for the terms of employee stock
option plans and option certificates.
ARTICLE
XI
RESTRICTED
STOCK AND OTHER EQUITY AWARDS
11.1 The
Company issued Employee 1,500,000 shares of Common Stock of the Company (the
“Original Shares”) on July
1***, 2007 (the “Issue Date”). Employee agrees that simultaneously with
the execution of this Agreement, as further consideration for the consideration
and benefits being paid by the Company hereunder, that the Original Shares shall
be subject to the vesting requirements described herein. It is hereby agreed by
the Company and Employee that fifty percent of the Original Shares shall vest
upon the six month anniversary of the Issue Date and the remaining fifty-percent
shall vest upon the twelve month anniversary of the Issue Date. Except as
specified in Section 11.2, if Employee renders continuous service to the Company
from the date hereof to a vesting date, on each such vesting date the Company
shall deliver to Employee a certificate representing such number of the Original
Shares as shall vest on such date. Other than as provided for in Section 11.2,
the termination of Employee’s employment prior to any vesting date shall
automatically result in the cancellation of the unvested portion of Employee’s
Original Shares and such unvested Original Shares shall be returned to the
status of authorized but unissued shares effective as of such termination
date.
11.2 In
the event of a (i) Change of Control, as defined in Section 1.3, or (ii)
termination of Employee’s employment with the Company without cause, pursuant to
Section 9.1(c) or by the Employee for Good Reason, then the conditions to the
vesting of the Original Shares shall be deemed void and all such Original Shares
shall be immediately and fully vested and delivered to the
Employee.
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11.3 To
the extent that Employee is eligible to sell the Original Shares, Employee
agrees that during the initial term of this Agreement (as defined in Section
8.1) and for a period of twelve months following any termination or expiration
of the original term of this Agreement, Employee hereby agrees to restrict sales
of the Original Shares which shall have vested as of the date of such
termination or expiration, such that the number of shares Employee can publicly
sell shall be equal to the number of shares Employee would be eligible to sell
pursuant to the volume restrictions of Rule 144 (as in effect on the
Commencement Date) adopted by the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended. Notwithstanding the foregoing
restrictions, Employee shall be permitted to transfer Original Shares without
regard to the resale restrictions specified herein in connection with (i)
private transactions exempt from the registration requirements of the Securities
Act of 1933 by virtue of Section 4(1) thereof, (ii) transfers for estate
planning purposes or (iii) bona fide gifts, so long as
any such transferee signs a written instrument satisfactory to the Company in
its sole discretion evidencing such transferee’s agreement to be bound by the
provisions of this Section 11.3 with respect to the Original Shares so
transferred. Employee further agrees that the certificates representing the
Original Shares shall bear a legend substantially as follows:
“The
securities represented by this certificate are subject to certain restrictions
set forth in that certain Employment Agreement, dated as of __________, 2007, as
may be amended or modified from time to time, by and between SignPath and
Xxxxxxxx Xxxxxx, MD.”
11.4 Employee
shall be eligible to receive additional equity compensation awards under the
Company’s equity compensation plans as such awards may be granted by the
Company’s Board of Directors or board committee established for the purpose of
administering any such compensation plans, in their sole discretion. Any such
awards shall be based on Employee’s duties and responsibilities and other
criteria established by the Board of Directors or committee and the amount and
terms of such awards, if any, shall be subject to the terms and conditions of
the Company’s equity compensation plans and such additional terms as may be set
forth in a certificate representing the award.
ARTICLE
XII
ARBITRATION
AND INDEMNIFICATION
12.1 Any
dispute arising out of the interpretation, application, and/or performance of
this Agreement with the sole exception of any claim, breach, or violation
arising under Articles VI or VII hereof shall be settled through final and
binding arbitration before a single arbitrator in the State of New York in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the American Arbitration Association and shall
be an attorney-at-law experienced in the field of corporate law. Any
judgment upon any arbitration award may be entered in any court, federal or
state, having competent jurisdiction of the parties.
12.2 The
Company hereby agrees to indemnify, defend, and hold harmless the Employee for
any and all claims arising from or related to his employment by the Company at
any time asserted, at any place asserted, to the fullest extent permitted by
law. The Company shall maintain such insurance as is necessary and
reasonable (with minimum coverage of not less than $2,000,000) to protect the
Employee from any and all claims arising from or in connection with his
employment by the Company during the term of Employee's employment with the
Company and for a period of six (6) years after the date of termination of
employment for any reason. The provisions of this Section are in addition to and
not in lieu of any indemnification, defense or other benefit to which Employee
may be entitled by statute, regulation, common law or otherwise.
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ARTICLE
XIII
SEVERABILITY
If any
provision of this Agreement shall be held invalid and unenforceable, the
remainder of this Agreement shall remain in full force and effect. If
any provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.
ARTICLE
XIV
NOTICE
For the
purposes of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given
when (a) personally delivered or (b) sent by (i) a nationally recognized
overnight courier service or (ii) certified mail, return receipt requested,
postage prepaid and in each case addressed to the respective addresses as set
forth below or to any such other address as the party to receive the notice
shall advise by due notice given in accordance with this paragraph. All notices
and communications shall be deemed to have been received on (A) if delivered by
personal service, the date of delivery thereof; (B) if delivered by a nationally
recognized overnight courier service, on the first business day following
deposit with such courier service; or (C) on the third business day after the
mailing thereof via certified mail. Notwithstanding the foregoing, any notice of
change of address shall be effective only upon receipt.
The
current addresses of the parties are as follows:
IF
TO THE COMPANY:
|
Xxxxxxxx
Xxxxxx, MD.
|
0000
Xxxxxxxxxx Xxxx
|
|
Xxxxxxxxxx,
Xxxxxxxxxxxx, 00000.
|
|
WITH
A COPY TO:
|
|
IF
TO THE EMPLOYEE:
|
Xxxxxxxx
Xxxxxx, MD
|
0000
Xxxxxxxxxx Xxxx
|
|
Xxxxxxxxxx,
Xxxxxxxxxxxx, 00000.
|
ARTICLE
XV
BENEFIT
This
Agreement shall inure to, and shall be binding upon, the parties hereto, the
successors and assigns of the Company, and the heirs and personal
representatives of the Employee.
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ARTICLE
XVI
ENTIRE
AGREEMENT; WAIVER
This
Agreement contains the entire agreement between the parties
hereto. No change, addition, or amendment shall be made hereto,
except by written agreement signed by the parties hereto. The waiver by either
party of any breach or violation of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach of construction and
validity.
ARTICLE
XVII
GOVERNING
LAW; JURISDICTION
This
Agreement has been negotiated and executed in the State of New
York. The law of the State of New York shall govern the construction
and validity of this Agreement. Any or all actions or proceedings which may be
brought by the Company or Employee under this Agreement shall be brought in
courts having a situs within the State of New York, and Employee and the Company
each hereby consent to the jurisdiction of any local, state, or federal court
located within the State of New York.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement and affixed their hands and seals
the day and year first above written.
SignPath,
Pharma, Inc.
|
|||
By:
|
/s/ Xx. Xxxxxx Xxxxxx
|
||
Xx.
Xxxxxx Xxxxxx,
|
|||
Board
of Director
|
|||
Employee
|
|||
/s/ Xxxxxxxx Xxxxxx, MD
|
|||
Xxxxxxxx
Xxxxxx, MD
|
|||
Employee
|
12